Shan & Prasad
[2018] FamCAFC 12
•1 February 2018
FAMILY COURT OF AUSTRALIA
| SHAN & PRASAD | [2018] FamCAFC 12 |
| FAMILY LAW – APPEAL – PARENTING – Family Violence – While spending time with the children the husband removed the children from Australia without the wife’s knowledge – Whether an order for the children to spend no time with the husband was contrary to their best interests – Whether the primary judge failed to consider supervised time – No error established – Order made permitting wife to relocate the children internationally without notice to the husband – Where the wife did not propose to live abroad - Appeal against parenting orders allowed in part. FAMILY LAW – APPEAL – EVIDENCE – Admission of evidence – Where the single expert witness is provided with information rejected at trial – Whether the inadmissible evidence tainted the single expert witness’s opinion – Where the evidence of the single expert witness given significant weight – Where single expert witness conducted joint interviews with witnesses and non-witnesses – Whether joint interview affected reliability of evidence – Not established that the inadmissible information affected the outcome. FAMILY LAW – APPEAL – SPOUSAL MAINTENANCE – Where the evidence in the wife’s financial circumstances was not reliable – Capacity of husband to pay spousal maintenance – Inconsistent findings – Appeal against spousal maintenance orders allowed. FAMILY LAW – APPEAL – INJUNCTIONS – Injunction made in aid of a property order – Injunction from leaving Australia – Where the primary judge failed to balance the utility of the order against the possible detriment to the husband – Appeal against injunctions allowed. FAMILY LAW – APPEAL – APPLICATION IN AN APPEAL – Application to adduce further evidence – Where evidence of a similar nature was before the primary judge – Where the evidence would not have affected the outcome of the hearing – Application dismissed. FAMILY LAW – APPEAL – COSTS – Where both parties partly successful – Where the appeal raised matters of substance – Application for costs of the wife and ICL dismissed – Costs certificates given. |
| Evidence Act 1995 (Cth) s 9 Family Law Act 1975 (Cth) ss 60B, 60CC, 69ZT, 72, 74, 75, 79, 114 |
| Amador & Amador (2009) 43 Fam LR 268 CDJ v VAJ (1998) 197 CLR 172 Day v Perisher Blue Pty Ltd (2005) 62 NSWLR 731 Gronow v Gronow (1979) 144 CLR 513 House v The King (1936) 55 CLR 499 Hickey and Hickey and Attorney-General for the Commonwealth of Australia (2003) FLC 93‑143 Kennon v Spry (2008) 238 CLR 366 Khalil & Tahir-Ahmadi (2012) FLC 93-506 Kowaliw and Kowaliw (1981) FLC 91-092 Monte & Monte (1986) FLC 91-757 Saxena and Saxena (2006) FLC 93-268 |
Stein v Stein (2000) FLC 93-004
Vass & Vass (2015) 53 Fam LR 373
Weir & Weir (1993) FLC 92-338
| APPELLANT: | Mr Shan |
| RESPONDENT: | Ms Prasad |
| INDEPENDENT CHILDREN’S LAWYER: | Helen Volk Lawyers |
| FILE NUMBER: | WOC | 581 | of | 2013 |
| APPEAL NUMBER: | EA | 12 | of | 2016 |
| DATE DELIVERED: | 1 February 2018 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Sydney |
| JUDGMENT OF: | Strickland, Ryan and Cronin JJ |
| HEARING DATE: | 28 September 2016 |
| LOWER COURT JURISDICTION: | Federal Circuit Court of Australia |
| LOWER COURT JUDGMENT DATE: | 22 December 2015 |
| LOWER COURT MNC: | [2015] FCCA 2801 |
REPRESENTATION
| COUNSEL FOR THE APPELLANT: | Mr Lethbridge SC |
| SOLICITOR FOR THE APPELLANT: | Armstrong Legal |
| COUNSEL FOR THE RESPONDENT: | Mr Alexander |
| SOLICITOR FOR THE RESPONDENT: | Verekers Lawyers |
| COUNSEL FOR THE INDEPENDENT CHILDREN’S LAWYER: | Ms Sproston |
| SOLICITOR FOR THE INDEPENDENT CHILDREN’S LAWYER: | Helen Volk Lawyers |
Orders
The application by the husband to adduce further evidence in the appeal be dismissed.
The appeal be allowed in part.
Orders 18, 19, 20, 28, 29 and 30 be set aside.
Order 4 be varied by deleting the words “or outside”.
Order 6 be varied by deleting the words “until they each attain the age of 18 years.”
Order 13 be varied so that it provides “That the father be restrained from attending upon any school or other educational facility attended by the children”.
The proceedings for property settlement, spousal maintenance and injunctions be remitted to the Federal Circuit Court of Australia for rehearing by a judge other than Judge Altobelli.
The wife’s application for costs be dismissed.
The application for costs by the Independent Children’s Lawyer be dismissed.
The court grants to the husband a costs certificate pursuant to the provisions of s 8 of the Federal Proceedings (Costs) Act 1981 (Cth), being a certificate that, in the opinion of the court, would be appropriate for the Attorney General to authorise a payment under that Act to the husband in respect of the costs incurred by him in relation to the rehearing.
The court grants to the wife a costs certificate pursuant to the provisions of s 8 of the Federal Proceedings (Costs) Act 1981 (Cth), being a certificate that, in the opinion of the court, would be appropriate for the Attorney General to authorise a payment under that Act to the wife in respect of the costs incurred by her in relation to the rehearing.
Note: The form of the order is subject to the entry of the order in the Court’s records.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Shan & Prasad has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).
| THE FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT SYDNEY |
Appeal Number: EA 12 of 2016
File Number: WOC 581 of 2013
| Mr Shan |
Appellant
And
| Ms Prasad |
Respondent
And
Independent Children’s Lawyer
REASONS FOR JUDGMENT
Introduction
By Further Amended Notice of Appeal filed on 28 September 2016 Mr Shan (“the husband”) appeals against final orders made on 22 December 2015 by Judge Altobelli in relation to parenting, property, spousal maintenance and restraint of movement. Ms Prasad (“the wife”) is the respondent to the appeal and seeks to uphold the orders.
The parenting proceedings concern the parties’ two children, X and Y (“the children”). The practical effect of the parenting orders was to give the wife absolute control of the children. That is, the orders provide for the wife to have sole parental responsibility for the children, for them to live with her and have no time or communication with the husband, save for the exchange of two letters each year. Importantly, the orders also give the wife liberty to relocate with the children within Australia, or overseas, without reference to the husband. It is to be noted that the orders reflect those sought by the Independent Children’s Lawyer (“ICL”), and largely accord with the opinion expressed by the single expert witness, Dr K. The ICL participated in the parenting aspect of the appeal and sought that it be dismissed.
Pivotal to the parenting orders are the unchallenged facts that in 2013 the husband abducted the children to India and, to enable him to spirit them out of Australia, forged the wife’s signature on one child’s passport application. After the husband and the children flew out (on return tickets), and knowing that the wife had threatened to go to the Police if the children were not returned from the day out with their father, he telephoned and told her that he and the children were on their way to India. He also told her that he had purchased an airline ticket so that she could fly out and join them the following day. Also critical to the proceedings was what this said about the husband’s attitude to the children’s relationship with their mother, whether it gave credence to her evidence that she was the victim of family violence, his capacity to meet the children’s emotional needs, and whether his protestations that he would never again take the children from her could be accepted. According to the primary judge, in doing what he did, the husband not only compromised the reliability of his evidence, he fractured any trust the wife had in his capacity to care for the children and demonstrated his lack of understanding of their emotional needs. The single expert witness and the primary judge viewed these actions by the husband as having real significance in what was viewed as a pattern of serious family violence.
Damning findings about the husband’s credibility were made by the primary judge, which are not under challenge. Given the magnitude of the husband’s deception such a challenge would have been pointless. Nonetheless it is said the abduction assumed a prominence in the decision which was not warranted and caused the primary judge’s discretion to miscarry. It is also contended that the evidence as to family violence established violence at the lower end of seriousness and could not justify orders which deprive the children of a relationship with a parent who they love and, as the single expert witness said, is of significance to them. Given that much of what was found to be family violence took place in private, the husband’s lack of candour makes the challenges to his Honour’s approach to this issue difficult to sustain. However, more importantly and as we will discuss, the decision is predominately based on the husband’s personality dysfunction and its impact on his parenting capacity rather than the risk of family violence per se.
With respect to property settlement, the primary judge found that the husband and wife owned net assets in the amount of $243,851, of which $52,163 comprised unvested superannuation, and the balance was overwhelmingly “notional” property. The notional property comprised the proceeds of sale of a property, most of which had been used to pay debts.
Orders were made that the husband pay the wife the amount of $154,688 and that she receive the entirety of the parties’ superannuation interests. The practical effect of the orders was that the wife was to retain all of the property that was in existence as at the time of trial (and more) and the husband would be left with a debt the equivalent of the amount he needed to borrow to pay the wife her entitlement. In addition, the husband was ordered to pay $650 per week spousal maintenance for a period of 150 weeks.
Background
So as to provide context to the appeal, a brief factual overview is required.
The parties were born in India. At the time of trial the husband was 38 years of age and the wife was 33 years of age. They were married in late 2005 and shortly after they moved to Country B.
In 2006 the parties moved to Australia, where their children were born in July 2010 and July 2012 respectively. Both are medical practitioners and their qualifications have been recognised in Australia so that they can and do practice medicine here.
It would seem that in early 2013 the wife and children moved to Town C and the husband remained in Sydney which is where he worked. In the months that followed the husband spent time with the children, including overnight. It was on one of his planned days out with the children that the husband managed to spirit them out of the country.
On 10 May 2013 the husband lodged the passport application on which he forged the wife’s signature.
The husband assaulted the wife on 14 May 2013.
On the husband’s case, the parties finally separated on 24 June 2013 when he took the children to India.
The wife commenced proceeding in the Federal Magistrates Court (at it then was) for recovery of the children on 5 July 2013.
In the meantime, the husband commenced proceedings in the High Court of M seeking orders that the children live with him in India. The wife opposed the application and in early July 2013 she flew to India. It was decided that Australia was the appropriate forum for determination of the parenting dispute and by early August 2013 orders were made in India for the children to be returned to the wife. The younger child, who was still breastfed when the husband took him to India, was in fact returned to the wife on 11 July 2013. However, it wasn’t until 6 August 2013 that the older child was returned. Even then, the husband refused to hand over the children’s passports and further orders were made on 26 August 2013 so that the wife was able to leave India with the children.
On 5 September 2013, interim orders were made in the Federal Circuit Court of Australia that the children live with the wife and spend time with the husband as agreed. Following the making of further interim orders on 13 November 2013 the husband commenced seeing the children under supervision. This was initially undertaken by friends and colleagues and, from December 2013, through an agency.
On 16 May 2014, following the release of the report of the single expert witness, the primary judge made orders that the children spend supervised time with the husband for four hours once each month at a contact centre. This occurred, and by reference to the contact centre reports it was established that the children enjoyed spending time with their father.
On 28 October 2014 the husband entered a plea of guilty to a charge of giving false or misleading information on the child’s passport application. It should be observed that the husband gave evidence in the proceedings in India denying that he had forged the application and said that the trip was prearranged with the wife. This is but one example of many identified in the trial reasons which resulted in the primary judge being satisfied that the husband blatantly lied and that his approach to the proceedings here and abroad was that the ends justified the means. In any event, by way of mitigation the husband placed medical evidence before the magistrate to the effect that the husband suffered from depression (which in these proceedings he disavowed [31]). The husband was placed on a good behaviour bond for a period of two years and required to attend a doctor for counselling and treatment.
The trial occurred over six days, for four days on 1 to 4 December 2014, then on 10 and 11 September 2015. Dr K, the single expert witness, gave evidence during the second tranche of the hearing, some 17 months after he saw the family and by which time the husband was no longer represented. The period of time that lapsed between when he saw the husband and gave evidence is said to raise questions about the reliability of his opinion about the husband.
During the intervening period the husband sold Property D, which he purchased after separation, without the wife’s knowledge or consent and, according to the primary judge, contrary to orders. As a result of the husband’s deception the primary judge made orders on 5 August 2015 suspending the husband’s time with the children. The children have not seen him since.
Application to adduce further evidence in the appeal
By an Application in an Appeal filed on 1 September 2016 the husband sought leave to adduce further evidence in the appeal pursuant to s 93A(2) of the Family Law Act 1975 (Cth) (“the Act”), as contained in his affidavit filed the same day; relevantly, reports of his supervised time with the children. The reports were available at the time of trial but were not relied on by anyone. The crux of the husband’s argument as to why this evidence was not introduced at trial is simply that he, who by then appeared without legal representation, did not think to do so. In the appeal senior counsel for the husband contended that while the general nature of those reports was “obliquely referred to” by the husband at trial, the reports were not put into evidence and the contents of all of the reports were not put to the single expert witness in cross-examination. That contention is correct.
Senior counsel for the husband submitted that these reports would dispel the concerns held by the single expert witness about how the husband might misuse his time with the children to undermine their relationships with their mother or expose them to a risk of harm. However, the single expert witness was provided with the reports up to 15 May 2014 and which he said showed the husband behaving in a loving and doting manner towards the children. Of the numerous reports attached to the husband’s affidavit there were seven that the single expert witness did not see.
The primary judge accepted that the children’s supervised time with the husband was “quite satisfactory” such that it was appropriate to infer that they would want to spend time with him [140].
Counsel for the wife argued that the evidence contained in the reports was contentious and would necessitate cross-examination of the supervisor and the parties, and ultimately a re-trial. This seems unlikely. The ICL maintained a neutral stance about the admission of this further evidence but pointed out that it was common ground that the children’s time with the husband under supervision had been quite positive and there had thus been no reason to burden the primary judge with evidence of an uncontentious fact.
In our view the material contained in the reports sought to be admitted is of the same nature and quality as the material in those reports which were admitted and shown to the single expert witness. We accept the submission of the ICL that this evidence would not have affected the outcome. It follows that the introduction of the further evidence would be inconsistent with the principles that emerge from CDJ v VAJ (1998) 197 CLR 172 (“CDJ”) and the application will be dismissed.
Grounds of appeal
At the commencement of the hearing senior counsel for the husband made an oral application to file a Further Amended Notice of Appeal so as to include additional grounds of appeal, and for permission to rely on supplementary written submissions in support of the additional grounds. The application was not opposed and it was granted. The wife was given leave to rely upon her amended summary of argument dated 26 September 2016 and her amended list of authorities dated 27 September 2016.
Thus the husband prosecuted 17 grounds of appeal (plus numerous sub-grounds) which fall into three categories; namely the parenting orders, the property settlement and related orders, and finally the order for spousal maintenance. We will adopt the same approach.
Before we turn our attention to these challenges, it needs to be understood that this is an appeal against an exercise of discretion which is to be determined in accordance with the principles set out in House v The King (1936) 55 CLR 499. A different view by an appellate court only on matters of weight by no means justifies a reversal of a decision of the primary judge (Gronow v Gronow (1979) 144 CLR 513 at 519). This is particularly brought into focus in respect of parenting orders which inevitably involve “predictions and assumptions about the future” (CDJ at 218).
The appeal against the parenting orders
Was the expert evidence flawed?
As is often the situation, the single expert witness was provided with material which was later rejected as being inadmissible. The single expert witness also conducted a joint interview with witnesses and a person who did not give evidence. It is said that these matters compromised the integrity of the report and the single expert witness’s opinion, particularly about the husband and his approach to relationships. Various other challenges were raised against the efficacy of the opinion expressed by the single expert witness but it is sufficient at this point to observe that there is no doubt that the primary judge placed significant weight on the opinion of the single expert witness ([41] and [78]) and, if the opinion is found to be unsafe, the basis for appellate intervention may well be established. We say this notwithstanding his Honour’s statement at [41] that the opinion of the single expert witness was not determinative. This is because on a proper reading of the trial reasons there can be no doubt that the opinion of the single expert witness as to the husband’s personality dysfunction and the impact it has had and will continue to have on his parenting capacity, and on the husband as a role model for the children, drove the outcome of the parenting proceedings ([148], [149] and [154]).
In relation to the expert evidence the husband argued that primary judge erred as follows:
1A.…[I]n admitting into evidence the report of consultant psychiatrist, [Dr K] (“the report”) without further redaction to excise from it additional matters of fact not supported by evidence.
1B.In the alternative to Ground 1A, if the report as redacted … was properly admitted it should not have been accepted:
(i)As evidence to support the Court’s findings of domestic violence and, in particular, the severity and significance of any domestic violence; or
(ii)To support any recommendation by [Dr K] flowing from his opinion that the Wife had been subject to domestic violence at the hands of the Husband.
1C.… [I]n placing any or any significant weight upon the recommendations in the report because:
(i)It was impossible to know to what degree [Dr K]’s opinions and recommendations were affected by matters or facts not before the Court; and
(ii)Giving substantial weight to those recommendations was not in the children’s interests and did not afford the Husband procedural fairness in particular where:
a) [Dr K]’s opinion was stale, being based on interviews and observations undertaken on 4 April 2014;
b)There was no effective challenge to [Dr K];
c)All observations showed the father had an appropriate and loving relationship with his children.
(iii)Analysis of the opinions of [Dr K] contained in the report show them to be flawed in significant areas.
(As per original)
Dr K is a consultant psychiatrist. On 4 April 2014 he saw the parties, the children and a number of other people such as the children’s nanny, the maternal grandmother and a friend of the wife. Dr K also spoke to the older child’s preschool teacher. He was given a large quantity of documents filed in the proceedings and on 2014 he provided his report to the court.
It was the single expert witness’s opinion that the husband has “significant personality dysfunction, with prominent anti-social and narcissistic personality traits” (original emphasis) (at paragraph 201). He did not diagnose the husband as having a personality disorder although that possibility was not ruled out.
As to the significance of these traits the single expert witness said:
204. Reflecting his antisocial personality style, the [husband] has demonstrated in his family relations a pattern of disregard for and violation of the rights of others, in particular of the [wife] and the children. In terms of antisocial personality traits, the [husband] can behave unlawfully, be deceitful, irritable and aggressive, and irresponsible. The [husband] lacks remorse, being indifferent to or rationalising having hurt or mistreated another.
205. Reflecting his narcissistic personality style, the [husband] has demonstrated in his family relations a pattern of grandiosity, need for admiration, and lack of empathy. In terms of narcissistic personality traits, the [husband] demonstrates a grandiose sense of self-importance, claims a “special” status in particular as a medical practitioner, requires excessive admiration and attention, has a sense of entitlement, is interpersonally exploitative, and lacks empathy, being unwilling to recognise or identify with the feelings and needs of others.
(Expert Report of Dr K dated 30 April 2014)
Having defined the term “family violence” as meaning “a pattern of behaviour within a family relationship that is coercive, intimidating, disrespectful, and harmful to the other” (at paragraph 253) the single expert witness expressed the view that “the relationship between the parents was characterised by a pattern of family violence perpetrated by the [husband] against the [wife]” (at paragraph 252). He thought there were at least two acts of physical violence by the husband towards the wife. Ultimately, the single expert witness’s concerns for the children if they had contact with the husband were as follows (see also paragraph 347 of the report):
292.1. The indirect effect on the children of the [husband]’s perpetuation of a pattern of family violence towards the [wife], such that she is at risk of emotional and physical harm, which can then disrupt her parenting capacity. This is particularly relevant considering the [husband’s] long history of undermining maternal parental capacity, and his more recent history of deceitfully taking away the children to India, and deceitfully seeking to present the [wife] to the courts as mentally and physically incompetent, and abusive.
292.2. The risk of the [husband] again taking the children to India, or otherwise succeeding in taking them away from the [wife]. The [husband] discounted this possibility, with an unconvincing narrative that he always intended to bring them back to Australia after a while, and an appeal to his innocent normality, and the fact that he would be arrested if he returned the children to India. But, with some validity I feel, the [wife] said, “He’s a person whom I trusted, but now he’s done such… I can’t trust this person at all… [he’s been so] premeditated and criminal”, and “he’ll run away… [he’s] not a person who’ll abide by the law… he’d put them under their family… his brother”.
292.3. The direct effect on the children of witnessing paternal disrespect and aggression towards the [wife] and others, in terms of the children’s subsequent confusion, fear or distress.
292.4The risk posed to the children from paternal neglect of their emotional needs, and/or emotional abuse. The [husband] is likely to engage positively with the children with energy and idealism whilst they are responding positively and meeting his need to feel special and valued in their eyes. But, the [husband]’s lack of empathic attunement and personal responsibility places him at risk of failing to understand or respond in an attuned way to the children’s emotional needs, and he may respond in a punitive and cruel way if the children are negative rather than positive in their response to him. The [husband]’s own emotional neediness places the children at risk of parentification and pseudomaturity, where they adapt to life with the [husband] by becoming focussed on meeting his emotional needs. In my view, this risk would be reduced if the [husband] was spending contact of substantially less than 50%, as this is more likely to remain a positive, idealised energetic time between [the husband] and children. If the [husband] had 50% or more than 50% of the time, there would be greater risk of this time becoming more ordinary, less emotionally rewarding for the [husband], and more taxing for the children.
292.5The effect on the children in terms of the [husband] modelling antisocial behaviour and relational patterns to the children, and them incorporating these into her (sic) own personality and relational patterns. As the children grow older and transition from childhood to adolescence, this risk would increase as the risk from neglect decreased.
(Expert Report of Dr K dated 30 April 2014)
The single expert witness explained that the risks to the children were “serious and difficult to quantify, monitor or mitigate” (paragraph 347.5), and as the husband’s prognosis for improvement with treatment was assessed as poor and difficult to monitor, he went on to recommend that the children have no contact or communication with the husband other than in the manner that was ordered.
His Honour’s approach to the expert’s evidence is tidily demonstrated in paragraphs 41 and 42 of the trial reasons where he said:
41. …It is a comprehensive report. As his report is an important contribution to the evidence and played a significant, albeit not determinative role in the Court’s assessment of the evidence, it is necessary to set out parts of it quite extensively. With the benefit of hindsight, and having regard to all of the evidence before the Court, many of [Dr K]’s observations and opinions were prescient and, in particular, the [husband] in evidence demonstrated many of the attributes that [Dr K] ascribed to him.
42. It should be recognised that there were parts of [Dr K]’s report that were successfully objected to when the hearing commenced. As it turns out, when these matters were put to [Dr K] in cross-examination, he confirmed that he was able to exclude these matters from his mind, but his recommendations did not ultimately change.
The single expert witness report was admitted into evidence on the first day of the trial without objection. The following day counsel for the husband (who, it will be recalled, represented the husband for the first tranche of the trial) was permitted to take objections to the report and a number of them were upheld. A copy of the report was prepared by the ICL with the material which was rejected being redacted.
By Ground 1A the husband reprised an unsuccessful objection made at trial to the admission of the single expert witness opinion. It was argued that notwithstanding Part VII Division 12A of the Act and s 69ZT(1) in particular, the effect of s 9 of the Evidence Act1995 (Cth) (“Evidence Act”) was to preserve the common law as to hearsay. On this basis, it was argued that the opinions expressed in the report were not admissible to prove the existence of any fact about the existence of which he expressed an opinion.
It is sufficient to refer to the provision itself to demonstrate why this submission should be rejected. Section 69ZT(5) of the Act provides:
(5) Subsection (1) does not revive the operation of:
a) a rule of common law; or
b) a law of a State or a Territory;
…
(Our emphasis)
It follows, as senior counsel for the husband ultimately acknowledged, that ground 1A could not be made out.
Ground 1B argues that, but for the application of s 69ZT(1), tracts of evidence contained in the single expert witness report would have been inadmissible, and thus the expert’s opinion as to family violence and his recommendations deserved no or no significant weight. The husband’s point being that because the opinion was based on facts not established by direct evidence it was necessary for the primary judge to approach the opinion, in particular as to family violence, with caution, but that did not happen. Allied to this is the contention that it was incumbent on the primary judge to identify the weight which was given to the otherwise inadmissible evidence (Ground 1C(i)). The last point is uncontentious (see Amador & Amador (2009) 43 Fam LR 268 at [66]). However, it is also well settled that in order to successfully appeal on a point of evidence the appellant must demonstrate that the evidence was in fact relied on, and how it was improperly used by the judge (see Khalil & Tahir-Ahmadi (2012) FLC 93-506 at [113]).
The first aspect of this challenge concerns the treatment of evidence gathered by the single expert witness from interviewing the wife’s friend Ms S. Ms S did not give evidence at trial. An overview of this consultation is found at page 4 of the report. Otherwise the content of the consultation as it relates to the formulation of the single expert witnesses’ opinion is set out under the headings to which the information pertains. The report demonstrates that the single expert witness relied on the information Ms S gave during her interview with him on some nine instances. However, as the ground is only concerned with the approach to family violence we need only focus on that issue. In this regard it can be seen that the single expert witness considered what he termed the husband’s “overtly antisocial behaviours” were consistent with Ms S’s description of him (at paragraph 207). This seems to be a reference to Ms S’s description of the husband as being a “good liar” and self-interested (at paragraph 249), and as someone who limited the wife’s social interactions (at paragraph 257). At paragraph 278 of his report the single expert witness accepted Ms S’s fear of retribution from the husband or his family for speaking in favour of the wife as being genuine. According to Ms S her fear of retribution was based on a discussion she had with an unidentified member of the wife’s family “who had told her that the [husband]’s extended family had sanctioned or carried out violent action against others in the past”.
Ms S’s information contributed to the single expert witness’s initial opinion as to the husband’s personality dysfunction (at paragraph 208), and inferentially against the husband’s family. The husband and the wife both provided information to the single expert witness about the other’s family which was rejected as inadmissible and redacted. It follows that Ms S’s information may have influenced the initial recommendation (made prior to redaction) that the children not have contact with the husband’s family.
Otherwise, the single expert witness was clear that the subsequent exclusion of much of Ms S’s information as reflected in the redacted report did not cause him to change his opinion about the husband or the husband’s family. It is easy to understand why. On a fair reading of the report and the single expert witness’s oral evidence it is abundantly clear that his opinion of the husband’s personality was overwhelmingly based on his history taken from the wife, the husband’s own documents (for example an affidavit filed in the proceedings in India) and the unchallenged facts concerning the removal of the children and their retention abroad. However, in relation to the husband’s family, based on other redactions made to his report, the single expert witness agreed that his recommendations against the children having contact with them could not be maintained (transcript 10 September 2015, p 396, lines 30 – 37).
Further, the primary judge did not adopt Ms S’s “evidence”. It follows that this “otherwise inadmissible” evidence was not used improperly.
The next aspect of this challenge concerns the joint interviews the single expert witness conducted with the wife, her mother, the children and the children’s nanny. Drawing support from Day v Perisher Blue Pty Ltd (2005) 62 NSWLR 731 (“Perisher Blue”), senior counsel for the husband argued that the joint interview compromised the integrity of the evidence gathered by the single expert witness as well as the evidence given by those witnesses. This is because the effect of the joint interview was that the evidence given by these witnesses would inevitably be influenced by what the others said at the joint interview. As was said in Perisher Blue at [30]:
… Thus, the evidence of one about a particular matter which was in fact true might be overborne by what that witness heard several others say which, as it happened, was not true. This seriously undermines the process by which evidence is taken. …
Unlike the situation in Perisher Blue the single expert witness’s interview was not a group conference designed to have witnesses speak with one voice. Nonetheless we accept that a joint interview may have the effect described in Perisher Blue of reviving a person’s memory or causing a witness to review his or her memory in light of what was heard.
In this case concerns had been raised about the nanny’s role in the family and the extent to which the wife relied on others to prop up her supposedly poor parenting. It was thus clinically valuable for the single expert witness to observe the children in this setting and to see who the children looked to for guidance and the extent to which the wife seemed to be in control. The report is replete with observations to this effect gleaned from the joint interview, and in this respect the process was fruitful.
But the question remains whether the joint interview compromised the integrity of the information that the wife, her mother and the nanny provided to the single expert witness and relevantly, their evidence concerning family violence. Unfortunately the report does not differentiate between information provided in the joint interview with that provided when each interviewee was seen alone. No doubt the single expert witness could have identified which was which but no one asked him to perform that task. Nor was any attempt made to adduce further evidence in the appeal, for example from the single expert witness, on the point. It follows that we cannot safely infer that the question of family violence was discussed in the joint interview. Also weighing against the notion that the joint interview resulted in the interviewees aligning their evidence so as to give a consistent but false version of events is the fact that the wife and her mother gave somewhat different versions of an incident when the husband supposedly jumped over a balustrade and rushed at the wife. There is thus no basis for us to conclude that the reliability of these witnesses evidence was adversely affected by the joint interview.
Further, the primary judge was not asked to evaluate the evidence in this fashion, and the husband cannot now complain that the primary judge erred by failing to evaluate the evidence in a manner he was not asked to undertake.
The final component of this challenge concerns the single expert witness’s reliance on affidavit evidence which was later ruled inadmissible. In particular, a portion of paragraphs 26 – 86 of the wife’s primary affidavit and paragraphs 15 – 17 of the affidavit of Mr M who is the wife’s brother. Reference was also made to wife’s mother’s affidavit but, as it was admitted into evidence in its entirety, reliance by the single expert witness on her affidavit could not establish error.
In broad terms the excluded material relates to actions attributed to the husband’s family, hearsay evidence and a few generalised statements about the husband’s behaviour. It was but a small component of detailed evidence about family violence, for example, as outlined in the wife’s evidence under the headings “verbal abuse” and “physical abuse” in her primary affidavit which recounts physical assaults on her on 26 September 2011 and 14 May 2013, the husband’s belittling behaviour such as telling the wife that “because of your status you should sleep on the floor”, verbal abuse, unfounded accusations that the wife had mental health difficulties and she had threatened to harm the children. Evidence of these incidents and behaviour was properly admitted and taken into account by the single expert witness and the primary judge. No doubt it is the existence of this type of evidence which caused senior counsel for the husband to acknowledge that his Honour’s findings as to family violence perpetrated by the husband could not be challenged.
The single expert witness was not asked to comment on whether his opinion was influenced by this excluded evidence or whether or not its exclusion gave him reason to change his opinion. Nonetheless, in the course of oral addresses before us, senior counsel for the husband sought to establish that the excluded material had a material effect on the opinion of the single expert witness. Given that the various passages were not discussed with the single expert witness or expressly relied on by him, the submission was that he had “all of this material unredacted and, presumably, took it into account because, of course, he accepted the version that the [wife] gave him” (appeal transcript 28 September 2016, p 23, lines 36 – 37). The word “presumably” was repeated and is telling. It reveals the unarguable fact that the single expert witness had specific and direct evidence about, relevantly family violence which was admitted and which he said formed the basis of his opinion. In our view this rejected material was of little consequence and was overwhelmed by direct evidence of family violence which was properly admitted.
Of course, with the primary judge and the single expert witness, the husband had the opportunity to raise these matters but did not do so. We do not accept that the husband should now be permitted to agitate a point that could easily have been dealt with at trial.
As we said earlier, for the husband to succeed on these grounds he needed to establish that the evidence was used inappropriately and could be seen to have affected the outcome. He failed to do so.
Turning then to the remainder of Ground 1C. The gravamen of this challenge is that for the reasons contained in the sub-grounds, the single expert witness’s opinion about the husband was flawed and did not justify the significant weight given to it. It bears repeating that the attribution of weight is a matter for the primary judge. However, if the challenge that the opinion was flawed is made good, particularly in relation to the husband’s personality traits and their potential impact on the children, error may flow.
The focus of this ground is on the opinion of the single expert witness of the risks to the children as a consequence of the husband’s personality traits. Again, it must be emphasised, that no challenge is made to his Honour’s finding that the husband has the personality traits about which the single expert witness gave evidence. However, it was argued that there was scant evidence to support a realistic prospect that “some” of the risks to the children identified by the single expert witness arising therefrom were likely to occur. In order to establish the significance of the “some” it is useful to identify all the risks about which the single expert witness spoke. These were helpfully summarised by senior counsel for the husband as follows:
·That the [husband]’s narcissistic and anti-social traits could lead him to significantly intrude on the [wife]’s wellbeing, erode her security and undermine her capacity possibly having a secondary effect on the children;
·There was a specific risk of the [husband] taking the children away – ie by abducting them;
·There was a risk that the children would witness paternal disrespectful and aggressive behaviour towards the [wife] or any new partner or in other settings;
·The risk of relative neglect of the children’s emotional needs which were subject to the countervailing proposition that paternal narcissism makes him a better than average parent;
·That if the [husband] had substantial time then when things got a bit mundane or boring or if he were distracted or if the children were anti-dad, there was a significant risk of the children experiencing paternal neglect or abuse; and
·The final one being a modelling of anti-social behaviour, that is, that if Dr K was accurate that the [husband] can behave in anti-social ways that as the children get older they are at less risk of things like abduction, neglect or abuse but at a greater risk of modelling and the [husband] is less useful as an adult guide for their transition into adulthood.
(Husband’s supplementary submissions, paragraph 22)
It is the risk of the first two listed matters which were said to be either inconsequential or non-existent.
The notion that there is no ongoing risk of abduction can be dealt with briefly. The argument is, that as a matter of logic, the husband’s failed attempt to take the children to India meant it would not happen again. The answer to that is obvious. Namely, and as his Honour found, the husband did not fail; he succeeded in abducting the children from Australia. Indeed, the submission does not sit at all well with the extent of planning that the husband undertook in order to abduct the children. As the primary judge explained this was no ill-considered spur of the moment deception; or to quote his Honour “[i]t is hard to avoid a finding that the [husband’s] actions in absconding with the children were calculated, based on deception and a willingness to deceive, and were quite indifferent to the needs of the children and their mother” [121].
The single expert witness found the risk of another abduction difficult to quantify and explained his reasoning as follows:
Counsel for the ICL: One of the concerns is, obviously, the risk of taking the children back to India?
[Dr K]: Yes.
Counsel for the ICL: How high do you think that risk is?
[Dr K]: I suppose I – the best predictor of future behaviour is past behaviour. It has happened once before. I think it’s likely that it happened because of the [husband]’s concern about his relative position in the parenting than any concern about the maternal mental health. So good maternal mental health and good raising of the children is not going to be insurance against that happening again, and the [husband] has a significant, I suppose, and broad support base in terms of his extended family, and it would actually be understandable that he would want to take the children back there if he was to raise the children. So I suppose I can’t quantify it, but I can’t really find a way to reassure myself that there isn’t a significant risk.
Counsel for the ICL: And with the [husband]’s recent behaviour in selling matrimonial property, would that affect that opinion at all?
[Dr K]: The difficulty is I suppose the more the [husband] was established in Australia with property and work and so on, I suppose that reduces the risk somewhat, but in my view it would not substantially reduce the risk because the [husband] has quite an entitled and superior view about his entire – he put forth to me about his entire family being superior to the [wife] and her entire family and sort of cohorts and nannies and so on. So in his mind there may even be a benefit to the children for a relative or agent to transport the children to India to be cared for primarily by someone else other than himself. So it would be difficult for me to be reassured, even if the [husband] really did set up shop in Australia.
(Transcript 10 September 2015, p 403, lines 39 – 47 and p 404, lines 1 –15)
However, his Honour did not assess the risk of abduction as being substantial, and it was evaluated as no more than a “possibility” [158].
As to the contention that there “was no evidence of the [husband] undermining the [wife’s] role with the children”, reference need only be made to the husband’s removal of the children to India and the significant steps he took to resist having them returned to the wife to establish that the submission should be rejected.
Further, the primary judge was obviously troubled by the extent to which the husband “… opportunistically [used] historical information” in relation to the wife’s mental health [124] to build his case in India and Australia that she self-harmed and was a risk to the children. As his Honour said:
153.… The affidavit that [the husband] swore in the Indian proceeding on 30 July 2013 was scarcely more than a litany of lies. There are more examples to be given, but it would be to overstate the Court’s point … He perpetrated family violence against the [wife], but maintained until the end of the proceedings that it did not occur …
There is also no doubt that the primary judge and the single expert witness were deeply troubled by the extent of the husband’s actions to cover up his mistreatment of the wife by making false allegations about her, including going so far as to create a false email where she admitted being mentally ill and wanting to harm the children. This is discussed at some length in the trial reasons, and in and of itself provides evidence of a most serious attempt by the husband to undermine the wife’s role with the children. The email is set out at [63] of his Honour’s reasons, and again below. It was relied on by the husband as evidence of the risk the wife posed to the children and to justify the abduction.
Dear hubby [Mr Shan],
I am writing this from my heart. I want to thank u and say sorry for:
Thank u- u gave me life. Married me with my medical. Condition. I was not rich. I showed me luxury, education, residence etc. all I m now is because of u. U r gentle and sober. U tolerated all my tortures in the past yrs. thanks for giving me life&lovely kids.
Sorry- I tortured u past years. I should say its all because of my depression episodes and medical condition. U supported the whole our family financially on ur own hard work.. Even u supported my parents when they needed financially. But The depression is overcoming me.. I will get sychologist support as u suggested many times. Don’t know when.. I even felt u as my enemy with no reason and also felt killing my on mother at times in the last one yr. I too feel like hurting kids sometims as my current work is stressful.. I am scared that I might do something to kids and hence request u to take them to ur parents for a few months plsss. I need some time for my own and will undergo counselling. U been tolerant to me so far … Sorry for all the trouble I have given u and spoiling ur life!
Yours only
[Ms Prasad]
(As per original)
Evidence was given by the single expert witness about the effect of the husband’s undermining on the wife. The single expert witness said:
261.After the children arrived, the [wife] found the [husband] to be judgmental, critical and unsupportive. The tone of the [husband’s] affidavits supports the [wife]’s assertion that the [husband] utilised his “expert” status as a trainee paediatrician to become a confident and ongoing critic of her parenting, but she contends that he did not offer support or encouragement to facilitate her function. He did not appear to respect the [wife]’s own successful completion of the diploma of paediatrics with him in the years leading up to her first pregnancy. At his weekly visits to the home, he would criticise her parenting whilst cutting across or ignoring her attempts to implement parenting strategies such as routines or disciplinary practices.
262.The [wife] told me that she had become accustomed to the oppressive judgemental blaming pattern of paternal behaviour towards her, and had allowed this behaviour to undermine her sense of self as a person and a parent. The [husband] lacked insight into the impact of his critical behaviour.
…
168. [That] secondary to this paternal undermining, the [wife] became insecure and worried about her capacity as a parent, and this lack of confidence became to some extent a “self-fulfilling prophecy” [my words], causing some disruption to her confidence in actively, sensitively and consistently engaging with and raising the children.
(Expert Report of Dr K dated 30 April 2014)
It follows that the six propositions which constituted the risk the husband posed to the children if he spent time with them were more than adequately supported by the evidence.
Otherwise, although it is possible that the utility of an expert’s opinion may be affected by the passage of time, there is no evidence in this case that it was. This was not a case where the children’s views were said to be pivotal to the outcome, and it was accepted that the children loved and enjoyed their time with the husband. For his part the husband rejected the diagnosis made of him and saw no need to embark on the recommended therapy. There was no need for an updated report to repeat what was already known. Of course, if the husband considered that the report needed to be updated it was open to him to ask that this be done. He cannot now complain that this did not occur. Further, as the discussion of Ground 1B shows, the single expert witness was asked to consider the evidence adduced in the later filed affidavits and in the trial. The effect of this is that he was able to express an opinion informed by the facts as they stood at the close of the evidence. The challenge based on the age of the report cannot succeed.
Ground 1C has not been made out.
The relocation orders
By Ground 1D the husband challenges Orders 4 and 5 which permit the wife to relocate with the children, including internationally, and to take or send the children outside the Commonwealth of Australia. The orders are said to be erroneous because:
a)The wife lead no evidence to support any relocation order; and/or
b)The primary judge gave no or no adequate reasons to support those orders.
The primary judge did not give reasons for either Order 4 or Order 5. However, as his Honour explained, the wife has family who live abroad and to whom she is close. The wife has visited her family in India and members of her family visited the wife and children in Australia; for example, the wife’s mother and her brother who resides in Country T. In circumstances where the primary judge would go on to make an order for sole parental responsibility in favour of the wife as well as for the husband to not spend time with the children, it can be inferred that he was satisfied that it was in the best interests of the children to be able to travel overseas and, relevantly, maintain family ties.
Although the same inference may be drawn in relation to his Honour’s decision to permit international relocation, a decision of that type is of a magnitude and carries such significant consequences for the lives of the children that it must be supported by carefully considered reasons. The husband is quite correct that the wife did not give evidence of plans for the children to live abroad and there was an insufficient basis upon which his Honour could be satisfied that such an order would be in the best interests of the children. The order permitting relocation outside of the Commonwealth of Australia will be set aside.
Sole parental responsibility
Ground 1 challenges the order for sole parental responsibility made in favour of the wife. It is said that the primary judge erred in failing to consider or adequately consider the circumstances which would warrant an order for sole parental responsibility and did so without providing any or any reasonable means by which the husband could ensure the receipt of any relevant information concerning the children.
The allocation of parental responsibility was considered by the primary judge after he decided that the husband would have no face to face or telephone contact with the children and only limited written communication. These circumstances meant that an order for equal shared parental responsibility “was not reasonably practicable” [159]. Even if it was, his Honour was satisfied that an order for equal shared parental responsibility was not in the children’s best interests and an order for sole parental responsibility in favour of the wife should be made. We observe that, in any event, as a consequence of the findings as to family violence the presumption of equal shared parental responsibility did not apply.
We understand his Honour’s reference to “not reasonably practicable” to mean that as the husband would have no ongoing role in the children’s lives he would lack the foundational knowledge required to participate in decision making for them. In the unusual circumstances of this case, his Honour did not need to say more than he did to justify the order for sole parental responsibility in favour of the wife.
We accept the submission by senior counsel for the husband that it is common practice for an order for sole parental responsibility to be accompanied by an order which requires the parent with whom the children live, to keep the other parent informed of major changes in the children’s lives, for example, changes to schools, where the children live and major medical treatment. The husband did not seek such an order. However, by Order 7, the wife is to ensure that the children write to their father twice annually and that he is given “photographs, school reports and relevant news about the [c]hild’s development and life”. Albeit, under the guise of communication between the husband and the children, the husband will receive the type of communication that is often ordered.
Ground 1 has not been made out.
The effect of denying the children a relationship with their father
Grounds 2, 3 and 4 were addressed together and, in essence, contend that the primary judge erred by:
·Failing to consider the effect on the children of terminating a loving relationship with their father;
·Failing to consider supervised time; and
·Making orders (for no time) until each of the children attained the age of 18 years which were contrary to the children’s best interests and plainly wrong.
Turning to the effect on the children of being deprived of a loving relationship with the husband, the essence of the challenge was stated as follows:
His Honour, like the expert witness, gives very little attention to the effect on the children of not knowing their father, in circumstances where the relationship was, on the evidence, a loving relationship which the children greatly enjoyed. It is a major failing in the analysis, given [h]is Honour had noted the opinion of the expert at paragraphs 85 & 86 of the reasons (AB1:63) that the relationship was positive, the children had an attachment to him, and it was “excited and idealised.”
(Husband’s summary of argument, paragraph 10)
It is useful to recall that after the children were returned to the wife in India, they did not see the husband for three months. Weekly supervised time of four hours duration then commenced in December 2013. In mid-May 2014 this changed to supervised time at a contact centre for four hours once a month. The children’s time with the husband stopped altogether in July 2015.
In relation to changing the children’s circumstances so as to re-establish face to face time with the husband, his Honour said at [145]:
At a simplistic level, the [wife] and Independent Children’s Lawyer’s proposal of no contact means there is minimal change for the children. The same conclusion can probably be derived having regard to the [husband’s] proposal for time. The more important evidence is that of [Dr K] who suggested that, provided the children were properly cared for by their mother, they could probably cope with the absence by their father in their childhood. The Court recognises that this is less than ideal for the children. But the Court must also take into account [Dr K]’s conceptualisation of the problem as being a cost-benefit analysis, i.e. if the potential cost to the children spending time with their father is so great for them in an emotional sense, then the benefit does not justify the potential cost. Regrettably, that is the evidence before the Court. Whilst the Orders proposed by the Mother and Independent Children’s Lawyer will mean that, for all practical purposes, until the children are much older they will have no relationship with their father, that this is a best interest outcome for them is based on all the evidence before the Court, including a consideration of all of the s.60CC factors.
It can thus be seen that the primary judge considered the benefits to the children of having a meaningful relationship with their father but was satisfied that those benefits were outweighed by the risk of harm “derived from the [husband]’s personality dysfunction, namely anti-social and narcissistic personality traits” [134]. Further, the primary judge was satisfied that the husband was unable to consider the children’s emotional needs [148] and the reasons for judgment are replete with examples of behaviour by the husband which demonstrated his lack of understanding of those needs.
The single expert witness explained the effect on the children of a loss of the husband from their lives as follows:
333.In my view, the children would adapt to a total separation from the father without significant developmental damage, if they were in the adequate and nurturing care of the mother. They would experience loss of their current excited and idealised relationship with him, and as they grew older the knowledge and experience of the loss inherent in growing up without connection with their biological father.
334.There would also be loss of the richness and opportunity of knowing both parents, each with their own characteristics, strengths and weaknesses. In my view, the benefit of such a knowledge in the father’s case is limited by his personality dysfunction, and there are risks which need to be weighted against any benefit, in terms of both the impact of and the potential for modelling of personality dysfunction.
335.In my view, the risks to the children posed by time with the father during their childhood and adolescent years outweigh the benefits. The children may have something to gain as adults from connection with the father, but in my view it is better that they are allowed to first be raised into a strong and competent adulthood without disruption of themselves or the mother. As adults, the children will be more able to engage with the positive aspects of their father’s interest in their lives, on their own terms and whilst putting into context and protecting themselves from the father’s personality vulnerabilities.
(Expert Report of Dr K dated 30 April 2014)
The single expert witness was clear in his opinion that it would not be in the children’s interest to develop an attachment relationship with the husband (paragraph 336) because of the risks which we discussed at 56 – 65.
No doubt it was the combined effect of the children’s enjoyment of their time with the husband evidenced in the contact centre reports, and the risk of losses of the type discussed by the single expert witness that caused the primary judge to consider the possibility of supervised time. However, in deciding against supervised time, his Honour said:
135. This is, regrettably, a case where the need to protect the children from the adverse consequences of their father’s personality dysfunction is greater than any benefit to them of having a meaningful relationship with him. The Court has considered, as has [Dr K], the benefits to the children of spending limited, but supervised time with their father, perhaps three or four times yearly. On the one hand this would be an attempt, albeit in a minimalist sense, of seeking to achieve a meaningful relationship. On the other hand, it also brings with it a range of problems, particularly for the children, but also to the [wife] of the [husband] coming in and out of their minds. It is questionable, in any event, whether such limited contact with their father achieves the statutory aim of meaningful relationship.
136. The harm that the children need to be protected from is, in any event, a difficult one to manage. It is a personality dysfunction, something which [Dr K] observed to be more difficult to treat than any other form of mental illness. The threat to the children is far more subtle, and thus, the Court believes much harder to monitor.
137. The [husband]’s lack of meaningful (as opposed to tokenistic) acknowledgement that there is a problem in his personality simply exacerbates the risk issues for the children.
138. For these reasons, the Court does not believe that the risk issues are obviated by ordering occasional supervised time.
Thus, it can be seen that the primary judge gave careful and nuanced consideration to the available options for the children to have an ongoing relationship with the husband. The findings made against supervised time and in support of there being no time were available. It is not the point that another judge in the position of the primary judge might have favoured an order for supervised time so as to preserve the children’s relationship with the husband while he re-considered the single expert witness’s recommendation that he engage a therapist to address his personality dysfunction. Although that approach may have been available, other than in one respect outlined below so too was the approach adopted by the primary judge.
We agree with senior counsel for the husband that Order 6 should not have been expressed to operate until each of the children attains the age of 18 years. Certainly the single expert witness recommended that neither of the children should spend time with the husband until they attain the ages of 18 years, but in our view, his Honour erred in accepting that recommendation without any critical analysis.
Although we agree with his Honour that it is in the best interests of the children to not spend time with the husband now, the effect of the recommendation was to prevent the children from seeing their father for the entire balance of their respective minorities. Given the evidence of the nature of the relationship between the children and their father, that is not an outcome that can be justified as being in their best interests. Plainly, there is no telling whether the reasons for there being no time spent with the husband now will continue to be present until the children attain 18 years, but the recommendation in effect assumes that that will be the case. That is highly speculative, as is the opinion of the single expert witness that the children will cope with having no relationship with their father during their childhood.
Further, in his report and oral evidence, the single expert witness sought to justify his recommendation by applying what his Honour described as a “cost-benefit” analysis, and his Honour merely adopted that approach in his reasons for judgment. His Honour said this at [145]:
… The more important evidence is that of [Dr K] who suggested that, provided the children were properly cared for by their mother, they could probably cope with the absence of their father in their childhood. The court recognises that this is less than ideal for the children. But the court must also take into account [Dr K]’s conceptualisation of the problem as being a cost-benefit analysis, i.e. if the potential cost to the children spending time with their father is so great for them in an emotional sense, then the benefit does not justify the potential cost …
In simple terms, we agree with senior counsel for the husband that that is not the law. It is not a proper consideration of the relevant factors under s 60CC of the Act, nor of the objects and principles set out in s 60B.
Further, given its literal meaning, it also wrongly suggests that in relation to the older child, the order will operate after she has reached 18 years of age. That is until her younger brother turns 18. It is thus misleading in material respects.
For all these reasons the order should be varied by the deletion of the words “until they each attain the age of 18 years”.
Was the restraining order justified?
Ground 5 challenges Order 13 which provides:
That the [husband] be restrained from assaulting, molesting, harassing, interfering, stalking or intimidating the [wife], or any member of her household or family, or entering any place at which she may work or live, or attending upon any school or other educational facility attended by the Children.
It is the position of the husband that there was no basis for the primary judge to make this order and it is not adequately explained in the judgment. In support of this the husband contends there was no evidence before the court of any current threats made by him or actual violence perpetrated by him towards the wife, the children or the wife’s family.
The submission that there was no evidence of physical violence is obviously wrong. However, we accept that there was no evidence of current or recent threats of harm by the husband and that his Honour’s reasons for judgment failed to explain why the restraint in so far as it applied to the wife was now warranted. That said, we accept the submission of counsel for the ICL that the order gives effect to his Honour’s primary findings concerning the totality of the risks that the husband posed to the welfare of the children. This included the possibility that the husband might make another attempt to abduct the children [81].
This ground is partially made out and Order 13 will be partially varied so that operates solely in relation to the children.
The appeal against the financial orders
In relation to the orders for the settlement of property the husband only appeals against Orders 19 and 20.
Having decided that it would be just and equitable to make a property settlement order, the primary judge applied the well settled approach to the determination of that issue discussed in cases such as Hickey and Hickey and Attorney-General for the Commonwealth of Australia (2003) FLC 93‑143. His Honour’s findings and analysis of the assessment of contributions in accordance with s 79(4)(a) – (c) of the Act culminated with the finding that the parties’ contributions to their property were equal. Pursuant to s 75(2) of the Act an adjustment of 50 per cent was then made in favour of the wife. This meant that the wife would receive all the property; however, as this was overwhelmingly non-existent, an order was made for the husband to pay the wife the amount of $154,668 within 28 days of the date of the orders, together with interest on any amount outstanding. Thus, the wife received more property than existed and the husband was in effect required to create property in order to comply with the order. As we will shortly discuss the approach to the property settlement orders was flawed and the orders cannot stand (see Monte & Monte (1986) FLC 91-757).
The husband also appeals against Orders 18 and 28-30 relating to spousal maintenance and injunctions. Pursuant to s 74(1) of the Act, Order 18 requires the husband to pay spousal maintenance in the amount of $650 per week for 150 weeks. The duration of the order meant that the obligation to pay spousal maintenance would expire when the wife expected to complete her professional training. Orders 28 – 30 have the combined effect of restraining the husband from leaving Australia until the amount payable pursuant to s 79 was paid. The approach to spousal maintenance and the injunctions was also flawed and these orders will also be set aside.
There are five grounds of appeal raised against the property orders and two against the order for spousal maintenance. The focus of the property appeal arises in Ground 6 and concerns the treatment of a “concession” by the husband that $169,688 should be added to the list of assets in circumstances where the parties and the primary judge knew that that sum no longer existed, and with the exclusion of that amount, the net property was worth $74,163 (including superannuation). Given the modest value of the property available for distribution, if this challenge is established, the appeal against the property orders must succeed.
The other grounds of appeal relate to the adequacy of reasoning (Ground 7), the findings about financial disclosure (Grounds 8 and 9) and the adjustment made in the wife’s favour as a result of s 75(2) (Ground 10).
In essence, the primary judge found that the property of the parties comprised the proceeds of sale of the Property D and superannuation. As we will shortly discuss, the proceeds of sale of Property D were included at an amount which was illusory and vastly exceeded the balance ($15,000) which in fact remained.
So as to give context to the appeal against the orders for the settlement of property, his Honour’s findings as to the property available for distribution are set out below:
| ASSETS | ||||||||||||||
| Ownership | Description | Court’s value | ||||||||||||
| 1 | Husband | [Property D] sold for $685,000. Balance agreed subject to adjustment | 169,688 | |||||||||||
| 2 | Wife | [Property V] - vacant land – India | 20,000 | |||||||||||
| 5 | Joint | Household contents | 2,000 | |||||||||||
| Total | $191,688 | |||||||||||||
| SUPERANNUATION | ||||||||||||||
| Member | Name of Fund | Type of Interest | Court’s value | |||||||||||
| Wife | P Super | Accumulation | 10,100 | |||||||||||
| Husband | P Super | Accumulation | 42,063 | |||||||||||
| Total | $52,163 | |||||||||||||
| NETT TOTAL ASSETS (including superannuation) | $243,851 | |||||||||||||
It was common ground that Property D was purchased in the husband’s sole name in June 2013, after the parties separated. The purchase price of $506,990 was funded from a personal loan in the amount of $50,000 that the husband borrowed from the Commonwealth Bank and the balance through a loan he raised with the National Australia Bank. The husband met the loan repayments and other outgoings of the property without contribution by the wife.
In other words (and consistent with the wife’s evidence at paragraphs 271 – 274 of her affidavit affirmed on 14 November 2014), the wife did not contribute to the acquisition of the Property D.
The wife also purchased real estate after separation, being two apartments in Town C. The first apartment, “number 3”, was purchased not long before she affirmed her November 2014 affidavit, for $445,000. The wife had some savings and borrowed $396,000 from the Commonwealth Bank to complete the purchase. The primary judge was not satisfied about the integrity of the evidence of the wife and her brother concerning their financial dealings; however, in circumstances where the subject property was excluded from the property available for distribution, he proceeded on the basis that it was not necessary for him to decide whether the wife’s brother provided a small sum towards the purchase price.
The wife purchased a second apartment, “number 8”, in April 2015. The purchase price was $437,500, of which the wife applied $21,875 she had in savings and borrowed $393,000 from the Commonwealth Bank. The wife’s evidence that she borrowed the balance required to complete the sale from her brother suffered the same fate as her evidence on that topic concerning number 3.
Otherwise his Honour rejected the submission made by counsel for the wife that the two properties the husband had owned in India, and which he said were sold in late 2013, should be included in the property available for distribution. According to the husband, in about 2010 his parents gave him a block of land which was referred to as the “E Land”. He understood that the land was acquired for approximately $6,500 which is the amount for which he said it was sold.
The other property excluded by his Honour was an apartment known as the “Ms A unit”. This apartment was purchased in his sole name for about $101,000, and the husband paid a deposit for the property a few months prior to separation. In order to complete the purchase the husband borrowed $50,000 from the Commonwealth Bank, used $25,000 from savings with the balance provided as a gift from his parents. According to him, he sold the unit for $79,500 and used the entire proceeds of sale to repay a personal loan raised for legal fees.
Although these properties were excluded from the property available for distribution they were taken into account against the husband pursuant to s 75(2)(o).
The formulation of the property pool
The gravamen of Ground 6 is the primary judge erred in the application of s 79(4) of the Act, and in particular that he erred:
(a)In finding that the husband conceded adding back the amount of $169,688 as notional property;
(b)By including as property available for division “notional property”;
(c)By excluding the equity in properties purchased by the wife post-separation;
(d)In finding that the wife contributed to Property D whereas the husband had not contributed to the properties acquired by the wife; and
(e)In finding that the husband sold Property D in breach of an order and taking this into account against him.
By way of explanation, the amount of $169,688 comprised the proceeds of sale of Property D and the reference to “notional property” is to the fact that notwithstanding those proceeds of sale were used to repay debts, the primary judge proceeded on the basis that the money was property which was available for distribution.
Further, it needs to be understood that on 3 November 2014, only one month before the trial started, an order was made which restrained the husband from “further encumbering” Property D. Although the wife suggested at trial that when the order was made the mortgage stood at $460,000, she knew that the husband had borrowed a further $32,000 against the equity. It was uncontroversial that by then the husband had failed to make a number of mortgage repayments and that he defaulted on even more.
There is no doubt that the November orders did not restrain the husband from selling Property D. However, given that the wife sought orders in relation to it, we accept that the husband should have disclosed his intention to sell it. In any event, in June 2015, the husband sold Property D (which had been tenanted) for $685,000. The unchallenged evidence was that the proceeds of sale were disbursed as set out in paragraph 15 of the wife’s primary affidavit. Although the wife did not accept that these funds were necessarily appropriately dispersed, her evidence was that (save for perhaps $5,000) she knew the money was no longer in the husband’s possession.
The husband was cross-examined about $39,359.65 which he received from the proceeds of sale (transcript 10 September 2015, p 495, lines 10 – 30). His evidence was that he deposited it with the Commonwealth Bank to “pay the personal loan”. It is tolerably clear that this is a reference to his liability to the Commonwealth Bank for a personal loan in addition to the Property D mortgage (disclosed in his financial statement filed on 18 July 2014 in the amount of $42,766).
The effect of this is that the evidence before the primary judge was that the proceeds of sale had overwhelmingly been used to repay legitimate third party loans and only $15,973.47 remained. Yet the primary judge proceeded on the basis that the amount of $169,688 was notional property available for distribution. The question to be answered is whether, as his Honour found, the husband agreed that this approach should be adopted.
The husband’s concession was misapplied
During cross-examination the husband agreed that after discharging the mortgage of $506,000 and paying expenses of about $10,000 there was $163,000 which remained from the sale (later agreed to be $169,668). Having established these figures, his Honour asked the husband whether he acknowledged that he knew that this meant the “equity ([in Property D]) would not be available” to the wife as she sought in her application for property settlement. The husband replied:
The husband: … So my intention after selling the house or just before selling the house is you sell the house and disclose all the money – whatever I gained from the house to be included in the final financial statement and consider – still consider the matrimonial pool as a – combined everything. And make a decision from your Honour’s thing. That was my intention.
His Honour: All right. So I want to make sure I understand that, [the husband]. You’re saying that even though the property was sold…?
The husband: Yes.
His Honour: …your intention was that when I made the order dividing the property between…?
The husband: Yes.
His Honour: …the two of you…?
The husband: Yes.
His Honour: …I should pretend that it was still there?
The husband: Yes, please.
His Honour: All right. So you want me to treat it, you know, as the net equity is still there for the purposes…?
The husband: Yes.
His Honour: …of the property settlement?
The husband: If you consider the gain from the property. I presume it’s – that’s how it works. I’m not familiar. Like take the tax out and consider the gained profit of the property.
(Transcript 11 September 2015, p 501, lines 43 – 47 to p 502, lines 1 – 16)
(Our emphasis)
The apparent concession by the husband was then taken up by counsel for the wife at as follows:
Counsel for the wife: Do you say that the amount of $163,000 should be included in the pool?---Yes.
(Transcript 11 September 2015 p 503, lines 10 – 11)
On appeal, senior counsel for the husband submitted that the primary judge should not have “misdirected” the husband into believing that it was the general approach at law to deal with property that way. In response, counsel for the wife submitted that the husband had conceded the sum should be “added to the pool” and there was no reason to go behind the concession.
The trial transcript established the husband did make that concession, however that is not the end of the matter. First, as we mentioned earlier, taking into account the debts that were paid from the proceeds of sale the bank statements for the sale adduced by the wife showed that the $169,668 had been largely disbursed. In answering the questions of both the primary judge and counsel for the wife, it can be seen that the husband distinguished between money being added to “the pool” and an order for property settlement. If there was any doubt about this it was made absolutely clear in the husband’s closing address, when in response to his Honour’s question of what orders should be made, the husband said:
… if [the wife] is wanting superannuation, I am happy to give 100 per cent superannuation, and if [the wife] wants the remaining 15,999, I am happy to give that one straight away, and this is all I have.
(Transcript 11 September 2015, p 568, lines 31 – 34)
At no stage did the husband agree that the liabilities paid from the proceeds of sale could be ignored and the concession should have been interpreted as conceding an adjustment should only be made from the net proceeds.
Ground 6(i)(b) requires consideration of the manner in which the primary judge went on to deal with this non-existent property. The first thing his Honour did was treat the $169,688 as “notional” property available for distribution.
In analysing what interests in property there was to alter, the primary judge said:
183. … [Property D] was sold during the course of these proceedings, between the end of day four on 4 December 2014, and the commencement of day five on 10 September 2015. It was sold without the [wife’s] knowledge or consent. It was sold contrary to the terms of an Order made by the Court. The sum listed at item 1 is a notional value because, in reality, the only cash left over from the sale proceeds was about $15,000, currently held in the [wife’s] solicitor’s trust account pursuant to an Interim Order made by this Court. The evidence suggests that, but for the money currently held in trust, all of the rest of the money was applied by the [husband] for his own purposes. There is no need to go into this evidence, in circumstances where he concedes it should be added back, and treated as a notional asset.
The primary judge found that the “tangible assets available for distribution” were “minimal” [207] and that the net proceeds of the sale of Property D ($15,999) was much less than the $169,688 conceded by the husband. His Honour said:
207. … When the [husband] conceded to its inclusion on the balance sheet at the value stated, it was in the face of sustained, and very effective criticism in cross-examination of the manner in which he sold [Property D] contrary to an order of the Court, and thereafter the manner in which he dissipated those monies in repaying personal debts, or purported personal debts.
208. … The effect of his actions was to deprive the [wife] of access to the only property that could have been used to satisfy her claim under s.79. In cross-examination he admitted that he knew that. For all practical purposes, the Court treats the [husband] as having the difference between $169,688, and the moneys held in trust ($15,000) or at least having access to it.
The use of the word “treats” reveals that at this point the primary judge proceeded on the basis that the husband had applied the Property D proceeds of sale to discharge debt but chose to ignore that fact.
On behalf of the husband it was submitted that it was a “plain error” to “add back” the money and a “plain error” to require the husband to pay it all to the wife. It was submitted that in ordering the husband to pay the wife “100 per cent of notional property”, was well outside the reasonable exercise of discretion. In response, counsel for the wife said:
The rationale for the order made is clearly set out at Paras 209-230 Judgment at AB 209-230 (sic). It is the submission of the wife that the approach adopted by the judge had regard to the size of the pool, to the contributions of the parties and to the principles set out in Stanford and Stanford (2012) FLC 93-518 to the extent to which they emphasise a consideration of whether the settlement is just and equitable.
(Wife’s summary of argument, paragraph 38)
Paragraphs 209 – 230 of the trial reasons comprise his Honour’s assessment of contributions and the application of s 75(2). It is self-evident that the submission by counsel for the wife does not come to grips with this challenge.
As we have explained, notwithstanding that the husband conceded the amount of $169,688 should be added to the property of the parties, the evidence (and concession) did not support the conclusion that the liabilities paid from the proceeds of sale could be ignored (which is what occurred). Whilst the primary judge referred to the husband having access to the net proceeds of sale, that conclusion could only be justified if there was an evidentiary basis to find that the funds remained at his disposal (that is that the debts had not been paid out) or were disposed of in the sense of wastage (Kowaliw and Kowaliw (1981) FLC 91-092 (“Kowaliw”)). His Honour noted the wife’s submission (based on Kowaliw) to the effect that the husband had wasted money but apart from a passing reference to that argument [178], no such finding was made. Thus it would seem that the primary judge proceeded on the fictional basis that the husband had access to the funds, ignoring the largely third party debts which the wife said bank records for the sale showed had been paid.
Yet, sometime later, at [227], the primary judge described the payment of debts from the proceeds of sale as “certainly suspect” (which ones were not identified). The findings become more inconsistent when the primary judge addressed the wife’s application for spousal maintenance. In this context his Honour found that these debts had been paid from the proceeds of sale [244] and thus the husband had the capacity to pay spousal maintenance. The inconsistency continues when it is appreciated that the injunction against the husband being able to leave Australia until he complied with the property settlement order and for him to surrender his passport, was predicated on the “total absence of other assets against which the order for payment may be secured” [233]. These inconsistencies require that the financial orders be overturned.
The approach to the add-back of notional property was discussed by the Full Court in Vass & Vass (2015) 53 Fam LR 373 relevantly at [139]:
The decisions referred to seek to remind the Court that, however the exercise of discretion might seek to deal with property that is said to be the subject of “add back”, proper consideration must be given to existing interests in property, and the question posed by s 79(2) as a separate inquiry from any adjustment to property interests by reference to s 79(4) if a consideration of s 79(2) reveals that it is just and equitable to alter existing interests in property.
The approach adopted in this case did not “give proper consideration” to the parties “existing interests in property”, in fact that important consideration was virtually ignored. A court cannot create property for the purposes of alteration. Section 79 empowers a court to alter interests of the parties to the proceedings in property. Property is defined in s 4 of the Act to mean:
…[In] relation to the parties to a marriage or either of them – means property to which those parties are, or that party is, as the case may be, entitled, whether in possession or reversion.
As French CJ said in Kennon v Spry (2008) 238 CLR 366 at 390, “‘property’ in s 79 is to be read as part of the collocation ‘property of the parties to the marriage’”. It is to be read widely and conformably with the purposes of the Act. Gummow and Hayne JJ said at 397 that “the term ‘property’ is not a term of art with one specific and precise meaning”. The purpose of the Act as set out in s 79(1) is to alter interests in property to which a party has an interest in possession or reversion.
Even with the “concession” of the husband, the primary judge could not have altered the interests in the proceeds of sale which had been disposed of, when the husband had no such interest either by way of possession or reversion. There is therefore substance to the submission of the husband that it was an error to order the husband to pay the money “added back”.
Capital gains tax
We agree that the primary judge was required but failed to consider the husband’s capital gains tax liability arising from the sale of Property D. It was common ground that Property D was an investment property and the husband was resident in Australia for taxation purposes.
In cross-examination the husband was asked about capital gains tax as a result of the Property D sale. The husband said “I think may be around 40, 50 thousand” (Transcript 11 September 2015, p 486, line 9).
It follows that it was incumbent on the primary judge to give consideration to the husband’s potential liability for capital gains tax (Elgin v Elgin (2015) 54 Fam LR 31).
Grounds 6(i)(a) and (i)(b) have merit.
The wife’s other properties
The wife owned two apartments, one of which she lived in and the other was rented out as an investment property. Each property was encumbered by mortgage. The primary judge acknowledged that they were purchased after separation and then found:
192. … It cannot be said, in any meaningful way, that the [husband] has contributed towards the acquisition of these properties. In order to simplify the s.79 process, therefore, the Court proposes to exclude from the balance sheet both the asset and liabilities …
Whilst we acknowledge his Honour was entitled to exclude property from the property to be distributed, the inconsistency in approach by including Property D but excluding the wife’s post-separation acquisitions is not adequately explained. There is merit in the husband’s challenges in Grounds 6(ii) and (iii).
Property D was not sold contrary to an order
The primary judge was wrong when he found that the home was sold in breach of an order ([183] and [207]). There is no doubt that this erroneous finding influenced his Honour’s findings as to the identification of the property available for distribution as well the application of s 75(2). Ground 6(iv) is established.
That being so, we are satisfied that Ground 6 is made out.
The application of s 75(2)
Grounds 7, 8, 9 and 10 challenge the approach taken to the application of s 75(2). We are satisfied that as a consequence of the errors already established, the property settlement orders must be set aside and the question of the application of s 75(2) need not be considered in significant detail. That is so, if for no other reason than in this case the s 75(2) exercise was undertaken by reference to a materially overvalued property pool. Thus, it does not now matter how his Honour came to the view that the wife should receive 50 per cent of a miscalculated property pool.
However, we do agree with the challenges raised in Grounds 8 and 9, which are to the effect that his Honour misapplied Weir & Weir (1993) FLC 92-338 (“Weir”). The principle emanating from Weir is that once it has been established that there has been a deliberate non-disclosure the court should not be unduly cautious about making findings in favour of the innocent party. As best we can tell, the finding as to the husband’s lack of financial disclosure relates to the sale of Property D allegedly contrary to an order, the failure to corroborate the loans paid to third parties therefrom, and the failure to disclose both the ownership and value of the two properties in India.
The inconsistent findings made in relation to the payment of liabilities from the Property D proceeds of sale renders the application of the principles in Weir to those transactions unsound. This leaves the question of the properties in India. The wife did not accept the husband’s evidence that these properties had been sold and rejected as insufficient documents he provided by way of corroboration.
Thus, on the wife’s application and after the evidence had closed, the husband was directed to produce contracts for sale and or transfers. Documents were produced by the husband in relation to which the primary judge said:
189. At the conclusion of submissions, the [wife] sought Orders that the [husband] produce documents relevant to the land. He eventually did so, on 21 October 2015, one of the post-hearing interlocutory events. The documents became exhibit R4. These documents do not clarify the issues before the Court. It is unclear as to what is their legal status. If these documents purport to evidence a transfer of the properties, the strong inference is that it was not an arms-length transfer.
190. The further evidence not assist the Court, in any event, in establishing a value for these properties. In a case where the [wife] makes serious allegations of non-disclosure against the [husband], the Court believes it preferable to treat the [husband’s] interest in Indian properties as a s.75(2)(o) consideration, rather than to somehow artificially treat it as notional property, and hypothesise about value. Accordingly, item 6 should read nil.
The dilemma here lies in the fact that even if his Honour was justified in his criticism of the husband for not providing documents which resolved the question of ownership to his satisfaction, his Honour failed to consider the financial consequences of that non-disclosure. The circumstances of the acquisition of these properties have already been set out. In short, the wife made no contribution to the acquisition of either property and, even if they were still owned by the husband, one was worth in the vicinity of $6,500 and the other had equity of approximately $50,000. However, if the Ms A unit was treated as still in the husband’s possession, this also meant that the $79,500 loan the husband said he paid from the proceeds of sale remained outstanding. It follows that however the primary judge analysed the situation concerning the parcels of land in India there was either no equity therein, or the liabilities exceeded their combined value.
Further, the wife’s evidence in relation to her financial dealings was found wanting and she was far from an “innocent party” as that term is applied in Weir.
We agree that Weir was misapplied.
By Ground 10, the husband challenged his Honour’s approach to the treatment of post separation legal costs incurred by the wife recovering the children. As presently advised, we are inclined to agree with the submission of the counsel for the wife that it may have been permissible for his Honour to take into account the costs she incurred in recovering the children. However, the issue is complex and was not fully addressed in argument.
But once again the findings in relation to this issue were inconsistent. The primary judge dealt with the wife’s evidence concerning her legal expenses as follows:
198.Indeed, a close examination of the [wife’s] brother’s evidence does not satisfy the Court that whatever monies he provided the [wife] were for the stated purpose of the legal costs incurred in India. A source and application of funds analysis of the brother’s evidence simply adds to the confusion. Indeed, it seemed as if some of the money that the brother allegedly borrowed in order to pay his sister purportedly for the legal costs in India were, in fact, borrowed well after the event.
…
200. It is probably the case that both the [husband] and the [wife] incurred substantial legal costs during the India, and even the Australian proceedings. It was incumbent on them to provide clear, probative, and cogent evidence about these liabilities. The [husband] does not assert that he has any formal liabilities in this regard, and even if he paid them from the sale proceeds of [Property D], the add-back at item 1 adequately accounts for this.
Having rejected the wife’s evidence that she was indebted to her brother in relation to legal fees, it was therefore difficult for the primary judge to conclude that the wife had any repayable debt in relation to her costs of the recovery proceedings. In our view, the findings whereby the wife’s claims of such a liability were rejected cannot be reconciled with an allowance in her favour for an unspecified amount in relation to the same liability. These inconsistent findings are sufficient to establish Ground 10.
Conclusion as to the property appeal
As we said earlier, the property appeal will be allowed, the effect of which is that Orders 19 and 20 will be set aside.
It was common ground that in the event the orders were set aside it was necessary for the proceedings to be remitted for rehearing before a different judge. We agree. However, we could not in all conscience fail to encourage each of the parties to consider the utility and financial consequence of any rehearing. In our opinion they should seriously consider whether a case for the further adjustment of property interests can be made out.
The husband was restrained from leaving Australia
Ground 13 was presented in two parts but Ground 13.1 was abandoned. Therefore the challenge to the restraint on the husband became as follows:
13.That the learned Judge erred in making Order 28 of the Orders of 22 December 2015 as a consequence of errors of principle, namely:
13.2.In concluding that upon a proper construction of section 114(3) of the Family Law Act 1975 (Cth) that the mischief that the learned trial Judge saw fit to cure by the application of that section necessitated the restriction on the Applicant Father’s freedom of movement as occasioned by Order 19, and further that the balance of convenience so strongly favours not making such orders that in making the Order His Honour was plainly wrong in the exercise of that discretion.
Orders 28 – 30 provide:
(28) That the passport of the Father be held at the Sydney Registry of this Court until the Father makes the payment set out in Order 19 and the passport only be released to the Father upon the Solicitors for the Mother confirming to the Court in writing that he has made such payment in accordance with these Orders.
(29) That the Father be restrained from applying for a further passport or travel document until he has complied with Order 19 above.
(30) That the Father be restrained from travelling outside of the Commonwealth of Australia until such time as he has made the payment required by Order 19 of these Orders.
Although the orders do not identify the source of power on which they rest, the trial reasons disclose that the primary judge relied on s 114(3) of the Act. Section 114(3) gives a court exercising jurisdiction under the Act the power to issue injunctions which are in support of or in aid of some other form of matrimonial relief; for example, in aid of enforcement of an order for the settlement of property. There being no question about power, the issues raised by Ground 13.2 devolve to the exercise of his Honour’s discretion in making the order. It was argued that in considering whether to make the injunction his Honour failed to take into account matters relevant to the exercise of the discretion, such that the decision was plainly wrong.
His Honour explained the reasons for making the orders as follows:
233. … Matters that point towards the imposition of the restriction include the total absence of any other assets against which the order for payment may be secured, the [husband]’s limited income whilst he continues his paediatric training, the adverse credit findings made against him, and the findings about non-disclosure made against him …
234. One can understand the [wife]’s concerns that if he is allowed to leave Australia, he might never return, particularly in circumstances where he faces an order for payment, and where he will have no contact, and limited communication with his children. The [wife] would also be entitled to think that by keeping him here in Australia, her chances of security payment are greater because the [husband] might be able to access resources available to him in India, and also because his medical career will be enhanced with the completion of his training.. [sic].
235.There are indicators to the contrary, however. If the [husband] travelled to India, never returning to Australia, it would interrupt his training to become a paediatric consultant. This is a significant sacrifice to make for a person who the Court considers to be career focused. Of course, he might be able to continue his training outside of Australia, but not necessarily in India. The fact is that some of his training has already been conducted in [Country B].
236.The matter is finely balanced. The Court’s discretion is broad. Nonetheless, features of this case, particularly the [husband]’s conduct, justify the discretion being exercised in the [wife’s] favour. The Court did consider the option of making a time-limited order, but has decided against it as it would be a disincentive for the [husband] to comply with the order.
Elsewhere, the primary judge acknowledged that the orders sought involved “a drastic restriction” on the husband’s freedom of movement, including visiting his family in India and his new wife [231]. Because the order was so drastic it was necessary that the findings which justified an order of this type were clear.
We have discussed the inconsistencies concerning the treatment of the proceeds of sale of Property D and land in India. We accept the submission by senior counsel for the husband that in deciding where the balance of convenience lay, it was necessary to give close attention to the capacity of the husband to make the payment. An order as draconian as this could not proceed on the fiction inherent in “notional property” being available to make the payment. Indeed, whatever financial capacity the primary judge considered the husband may have was eroded by the spousal maintenance order he would go on to make. Unless this balancing exercise was properly undertaken, his Honour could not, as the provision requires, be satisfied that it would be “just or convenient” for the orders to be made.
The injunctions made by his Honour had a significant and serious impact on the husband, operating to prevent him from leaving Australia for an indefinite period. In coming to that determination, the primary judge was obliged to balance the utility of the order against the possible detriment to the husband. As we said, this exercise required careful consideration by reference to clear findings of fact, in relation to those matters. This was not done and, his Honour’s discretion miscarried.
This challenge is made out and these orders will be set aside.
Spousal maintenance
Pursuant to s 74(1) of the Act, by Order 18 the husband was ordered to pay spousal maintenance in the amount of $650 per week for 150 weeks. Grounds 11 and 12 assert that the primary judge erred in finding:
·That the wife was unable to support herself adequately (Ground 11); and
·That the husband had the capacity to pay spousal maintenance in the amount ordered or at all (Ground 12).
Although an order for spousal maintenance is made pursuant to s 74(1), the right of a spouse to maintenance is determined by reference to s 72 of the Act. It is the application of that provision which is central to the challenges raised in these grounds.
Section 72 provides:
Right of spouse to maintenance
(1) A party to a marriage is liable to maintain the other party, to the extent that the first‑mentioned party is reasonably able to do so, if, and only if, that other party is unable to support herself or himself adequately whether:
(a) by reason of having the care and control of a child of the marriage who has not attained the age of 18 years;
(b) by reason of age or physical or mental incapacity for appropriate gainful employment; or
(c) for any other adequate reason;
having regard to any relevant matter referred to in subsection 75(2).
(2) The liability under subsection (1) of a bankrupt party to a marriage to maintain the other party may be satisfied, in whole or in part, by way of the transfer of vested bankruptcy property in relation to the bankrupt party if the court makes an order under this Part for the transfer.
In Saxena and Saxena (2006) FLC 93-268, Coleman J explained that whether an order for spousal maintenance should be made requires a four step process as follows:
·Can the applicant support himself or herself adequately?
·If not, what are the applicant’s reasonable needs?
·What capacity does the respondent have to meet those needs?
·What order is reasonable having regard to s 75(2)?
There can be no liability to pay spousal maintenance unless the applicant has first established that the applicant “is unable to support herself or himself adequately” (s 72(1)).
In relation to this threshold question, the primary judge said:
238.It must be said that not a great deal of attention was focused on this issue during the hearing, as there were other obviously larger and more difficult issues. The [wife] was thus not cross-examined in detail about her Financial Statements, the first one sworn 14 November 2014, the latest one 3 September 2015. She did explain, however, the significant reduction in her income between the two periods, and the fact that she is working less to be more available for the children. She deposes to an income of $1,963, and expenses of $4,036, leaving a shortfall of $2,073. Whether or not she was cross-examined about her expenses, the Court is entitled to scrutinise these expenses for itself. Repayment of debt is a major component of personal expenditure, and some of these are attributable to the cost of the legal proceedings, including the Indian proceedings. This conclusion is the inevitable inference to be drawn from her own evidence.
239.But this liability has already been taken up, so to speak, as a s.75(2)(o) factor. It would be inappropriate to then count it again for the purposes of establishing her need for maintenance. Nonetheless, when one has regard to her claim for personal expenses at part N, they are quite modest and reasonable. Even if the blue pencil were extensively applied to the [wife]’s Financial Statement, she would have no difficulty in establishing a need of $650 per week.
The reference to the wife’s income of $1,963 and her expenses of $4,036 is founded on the wife’s financial statement filed 4 September 2015, or more particularly, the Financial Summary at Part B of that financial statement. It needs to be understood that Part B was an accurate summation of everything contained in the financial statement. It can also be seen that the statement addressed both the wife’s application for property settlement and her claim for spousal maintenance. Although there is some overlap in the relevance of the information to both applications, a considerable portion of the information had little to do with the application for spousal maintenance, and as we will demonstrate, the broad brush approach adopted by the primary judge led to his taking into account matters which were irrelevant to the question of the wife’s ability to support herself adequately and her needs. In this regard, although as his Honour correctly observed, the wife’s expenses were not the subject of cross-examination, even limited scrutiny of her financial statement demonstrates that proceeding on the summary was insufficient and a somewhat deeper analysis was required.
Of the wife’s stated weekly income, $1,200 came from salary, whilst $450 was rent from her investment property, offset against which was a mortgage payment of $513. Investment strategies are matters of choice but s 72 entitles a spouse to maintenance only if unable to support himself or herself adequately. Even if there was justification for including the rental income, it was inappropriate on an adequacy test to allow a deduction for any investment shortfall where the mortgage payment exceeded the rent. If the investment was to be ignored so too were the other tax-related expenses identified in the financial statement. However, although the wife’s expenses included rates and levies she failed to distinguish between those attributable to the property she lived in and those expenses attributable to her investment property. The same must be said of insurance expenses associated with insuring the mortgage loans.
Also included in the wife’s income was an amount of $313 per week for child support. It was inappropriate to include child support paid by the husband as part of the wife’s income for the purpose of spousal maintenance. Those funds were designated for the support of the children. To the extent that that sum was insufficient to meet the needs of those children (and in this case, the wife had claimed $499 per week for the children) that shortfall should not be included as part of the wife’s need for maintenance for her own support (Stein v Stein (2000) FLC 93-004).
The wife deposed to credit card debts of about $2,800 which she said were being repaid at the rate of $1,075 per week. On that basis her credit card liability would be fully paid out within three weeks. However, given the wife’s declared income the asserted weekly repayment does not withstand scrutiny. It is self-evidently impossible.
Whilst the total of the wife’s other expenditure for living expenses was $1,026 per week, this included the expenses of the children.
It is not appropriate that we guess at what was reasonable or, as the primary judge said, to use a “blue pencil”. While such an approach might be justified if the order was of short duration, it is not appropriate for a final order. It is sufficient for us to say that the evidence contained in the wife’s financial statement, even on a cursory examination, was not reliable and could not have discharged the onus borne by her.
Ground 11 is made out and the order for spousal maintenance will be set aside.
Given that outcome, it is not strictly necessary to consider Ground 12. However, it is useful that we address the approach adopted to the question of the husband’s capacity to pay spousal maintenance.
At [241] his Honour said:
The focus turns to whether the [husband] has a capacity to pay. It is regrettable that he did not update his Financial Statement filed 1 December 2014. It is clear from the evidence, however, that there have been significant changes to his financial circumstances since then. Despite some of the uncertainties that surrounds the evidence the [husband] gave about his financial circumstances, the evidence that he gave about the salary he earns as a paediatric registrar was plausible.
Thus, the primary judge accepted the husband’s income at $2,153 per week.
In terms of expenses, his Honour said:
244.He no longer has debts, as these appear to have been paid using the sale proceeds of [Property D]. Again, this issue must be treated with care, because he is already ordered to pay a lump sum in respect of funds which he agrees he has already dissipated. He has insurance policies on his life, on his boat and motor vehicle and in respect of his health. He claims personal living expenses of $480 per week. Even when generous allowances are made, and all of these expenses taken into account, he is still left with the financial capacity to meet the order sought by the Mother. The Court does not overlook the fact that he has now remarried, but the onus was on him to provide evidence about the circumstances, financial or otherwise, of this.
Taking into account income tax in the vicinity of $600 (on a weekly income of $2,153), accommodation at $500, insurances at $62, child support at $313 and living expenses of $480, the husband’s total weekly expenditure was approximately $1,955. Of course, this does not take into account capital gains tax or repayments for the loan which the husband was obliged to raise in order to comply with the property settlement order.
Senior counsel for the husband submitted that these figures demonstrated the husband did not have the capacity to pay any spousal maintenance. We agree.
Error as asserted by Ground 12 has been established.
Conclusion And Costs
Other than in relation to the order which permits the wife to relocate the children internationally, and the scope of Orders 6 and 13, the husband failed to establish error in relation to the parenting orders. The husband has established error in relation to the orders for property settlement, spousal maintenance and the injunctions which restrain him from leaving Australia. Those orders will be set aside and the proceedings remitted for rehearing before a judge other than Judge Altobelli.
As is customary, we sought submissions from the parties and the ICL on the question of the costs of the appeal to save the time and expense of them making those submissions at a later time. On behalf of the husband, it was submitted that the parties and ICL should meet their own costs and requested certificates pursuant to the Federal Proceedings (Costs) Act1981 (Cth) in relation to the appeal and any rehearing. The wife sought costs against the husband as did the ICL in the event that the parenting appeal was dismissed. The husband resists an order for costs on two bases; namely that the appeal raised matters of substance and secondly that he does not have the financial capacity to satisfy any order for costs.
The issue of costs of an appeal is governed by s 117(1) of the Act which provides that each party to a proceeding under the Act bear his or her own costs, unless the court is of the opinion that the circumstances justify the making of a costs order (s 117(2)). In determining what order (if any) should be made under s 117(2), the court must have regard to the relevant factors in s 117(2A). Although the husband achieved only minor success in the parenting aspect of the appeal, our reasons demonstrate that the parenting appeal raised matters of real substance and the appeal was at least arguable. The nature of the orders under challenge could not be of greater significance to the welfare of the children and it is not at all difficult to understand why the husband pursued the appeal. Although we accept he does not have the financial capacity to meet an order for costs, in relation to the wife we give less weight to that factor than we do to the nature and substance of the appeal.
Of course, the husband has been successful in the financial aspect of the appeal, indeed resoundingly so. When the appeal is considered in its entirety we are satisfied that the parties should each bear their own costs.
Section 117(4)(b) of the Act provides that a court must not make an order for costs in favour of an ICL against a party if the court is satisfied the party would suffer financial hardship if he or she would have to bear a proportion of the costs of the ICL. We are satisfied that an order for costs would cause financial hardship for the husband and the application for costs by the ICL will be dismissed.
This then invites consideration of the applications for costs certificates. We are not persuaded that costs certificates for the appeal would be appropriate. However, if the parties decide to pursue the remitted rehearing it is appropriate that each has the benefit of a costs certificate and we will order accordingly.
I certify that the preceding one hundred and eighty-six (186) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court (Strickland, Ryan and Cronin JJ) delivered on 1 February 2018.
Associate:
Date: 1 February 2018
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