Wedekind & Nakano
[2024] FedCFamC1F 590
•6 September 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Wedekind & Nakano [2024] FedCFamC1F 590
File number(s): ADC 6051 of 2023 Judgment of: BERMAN J Date of judgment: 6 September 2024 Catchwords: FAMILY LAW – PRACTICE AND PROCEDURE – Where the husband seeks to uplift the Family Assessment Report and a Psychiatric report and appoint a new single expert – Where the husband contends that settlement negotiations were disclosed in the reports – Consideration of s 131 of the Evidence Act – Consideration of the exceptions to the privilege rule – Where the husband has previously disclosed settlement negotiations in his affidavit – Where the report writer considered the settlement negotiations were relevant to the mother’s mental health and parenting capacity – Where the purpose of the relevant paragraphs are not to disclose negotiations but to highlight the mother’s mental health consequences following revocation of a concluded agreement – Where the Court declines to strike out the reports.
FAMILY LAW – SPOUSAL MAINTENANCE – Where the mother seeks orders for spousal maintenance – Consideration of the relevant principles – Where the mother proposes a lump sum payment – Consideration of sale of shares – Where the Court makes orders for interim settlement of property – Where the mother also seeks the sale of real property – Consideration of whether the proceeds are to be applied to legal fees – Consideration of legal fees incurred by the parties – Orders.
Legislation: Evidence Act 1995 (Cth) ss 126, 131, 134
Family Law Act 1975 (Cth) ss 90SF
Cases cited: Adlam & Noack [1999] FCA 1606
AJO & GRO (2005) FLC 93-218
Brown & Brown (2007) FLC 93-316
Duclos & Duclos [2018] FamCA1088
Edgar & Strofield (2016) FLC 93-711
Grier & Malphas (2015) 55 Fam LR 107
Hall v Hall [2016] HCA 23
Maroney & Maroney [2009] FamCAFC 45
NHC & RCH (2004) FLC 93-204
Silver Fox Company Pty Ltd v Lenard’s Pty Ltd (No 3) [2004] 214 ALR 621
State Rail Authority of New South Wales v Smith (1998) 45 NSWLR 382
Stein & Stein (2000) 25 Fam LR 727
Division: Division 1 First Instance Number of paragraphs: 147 Date of hearing: 14 August 2024 Place: Adelaide Counsel for the Applicant: Ms Boyle Solicitor for the Applicant: Jordan & Fowler Family Lawyers Counsel for the Respondent: Ms Lewis SC Solicitor for the Respondent: Kennedy Partners ORDERS
ADC 6051 of 2023 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MR WEDEKIND
Applicant
AND: MS NAKANO
Respondent
ORDER MADE BY:
BERMAN J
DATE OF ORDER:
6 SEPTEMBER 2024
THE COURT ORDERS THAT:
1.The Application in a Proceeding filed 8 August 2024 is dismissed.
2.Mr Wedekind (“the father”) shall pay spousal maintenance to Ms Nakano (“the mother”) in the sum of EIGHTY-FOUR DOLLARS ($84) per week.
3.By way of interim settlement of property, the father will within seven (7) days of the date of this order, do all acts and things necessary to liquidate publicly listed shares registered in his name (with a current estimated value of $43,000) to an amount of not less than $25,000 to be disbursed as follows:
(a)To the mother, the sum of TWENTY THOUSAND DOLLARS ($20,000);
(b)To the father, the sum of FIVE THOUSAND DOLLARS ($5,000); and
(c)Any balance remaining to be divided equally between the parties.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Part XIVB of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish an account of proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under a pseudonym has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
Berman J
INTRODUCTION
Mr Wedekind (“the father”) and Ms Nakano (“the mother”) are unable to reach agreement in respect of the future parenting arrangements for X born 2028 (“X”) and Y born 2021 (“Y”) (collectively “the children”).
In addition, each of the parties seeks orders for property settlement and division pursuant to Part VIII of the Family Law Act 1975 (Cth) (“the Act”).
By Amended Initiating Application filed 5 August 2024, the father seeks orders summarised as follows:
(1)That the parties have joint decision-making responsibilities for the children.
(2)That the children live equally between the parties in Adelaide as may be agreed or in the absence of agreement on a week about basis with handovers to occur each Wednesday at the conclusion of school/childcare during school terms and for one half of all school holidays.
(3)That by way of settlement of property, the father shall transfer to the mother his estate and interest in the property situate at B Street, Suburb C in the state of South Australia (“the Suburb C property”) or in the alternative, that the Suburb C property be sold and following the payment out and discharge of the outstanding mortgage liability and costs of sale inclusive of agents fees, commission or charges the net balance be divided equally between the parties.
(4)That the parties otherwise retain all property in their respective possession, power or control.
By Amended Response to Initiating Application filed 5 August 2024, the mother seeks the following orders summarised as follows:
(1)That the mother be permitted to relocate the primary residence of the children to New Zealand.
(2)That the following the mother’s relocation to New Zealand with the children, the father shall spend time with the children:
(a)For a period of up to five (5) consecutive nights in each school term on such dates and times as agreed between the parties and in default of agreement to occur during week 4 of school term;
(b)For eight (8) days during two of the three school term holidays, with one to occur in New Zealand and one to occur in Australia on a rotating basis;
(c)As and from Y attaining the age of 12 years or such higher age as may be determined by the relevant airline, Y is able to travel as an unaccompanied minor; and
(d)During long summer holidays in Australia as agreed between the parties but in default of agreement in 2024 for 10 days, in 2025 for 15 days and from 2026 onwards for 20 days such that in 2026 the children spend Christmas day with the mother and in alternate years thereafter and in 2027 the children spend time with the father on Christmas day and each alternate year thereafter.
The mother also seeks orders as to communication between the parties and the children together with an exchange of information in respect of medical and health issues that impact upon the children.
By way of settlement of property, the mother seeks that the total net non-superannuation assets of the parties be distributed as to 65 per cent to her and 35 per cent to the father.
The mother also seeks a superannuation splitting order as may be necessary to affect an equalisation of the superannuation entitlements of the parties.
In support of the orders sought, the mother relies upon the affidavit of Dr D (“Dr D”) filed 31 July 2024 containing a psychiatric assessment consequent upon numerous attendances by the mother for consultation and treatment.
The parties also engaged Ms E (“Ms E”) as a single expert to conduct a parenting or psychological assessment resulting in a report dated 22 July 2024.
By reference to the interlocutory orders sought by the mother as set in her Amended Response to the Initiating Application, she seeks the following substantive interim relief:
(1)That pending the finalisation of parenting and property proceedings between the parties, the mother be permitted to relocate the residence of the children to New Zealand.
(2)That in the alternative to the proposed orders for relocation of the children to New Zealand, and therefore in the event that proposed orders 1 – 7 are not made, then the mother seeks the following:
(a)The matter be listed for final contested hearing with priority listing with an estimated hearing time of three days.
(b)The children live with the mother and continue to spend time with the father in accordance with interim orders dated 23 April 2024.
In addition, the mother seeks the following further orders:
(1)That until further order, the father pay the mother interim spousal maintenance as follows:
(a)Commencing on the date of these orders and continuing on a periodic basis, the amount of $303 per week increasing on 26 August 2024 to $877 per week, into a bank account as nominated by the mother to the father from time to time; and
(b)For so long as the mother is living in Adelaide, the mother has sole use and occupation of the Suburb C property.
(2)Further and/ or in the alternative to the foregoing order, the father within 7 days of the date of these orders do all acts and things necessary to liquidate all publicly listed shares registered in his name (with an estimated value of $43,000 now referred to as “sale of shares”).
(3)That in the alternative to proposed orders 1 – 7, within 30 days of the date of these orders, the father do all such things as are necessary to sell his interest in the Suburb F property with the net proceeds of sale to be divided as follows:
(a)To pay all costs, commission and expenses of sale including the fees of the conveyancer, solicitor and the fees of the real estate agent.
(b)To discharge the mortgage encumbering the Suburb F property.
(c)The amount of $150,000 be paid to the mother with such sum to be characterised at trial.
(d)The remainder of the funds to be held on trust by the mother’s solicitors in and at call-controlled money account and Kennedy & Partners be authorised to pay the sum of $877 per week to the mother by way of periodic spousal maintenance pending written agreement between the parties or a court order.
By Application in a Proceeding filed 7 August 2024, the father seeks that the affidavits of Dr D and Ms E filed 31 July 2024 and 1 August 2024 be uplifted from the Court file and thereafter, the parties at their joint instruction and equal expense, engage Ms G (“Ms G”) as a single expert to prepare a Family Assessment Report.
The gravamen of the father’s Application in a Proceeding is to further restrain the mother by injunction from filing any document which refers to asserted privileged communications that arises from an informal mediation conference between the parties on 30 May 2024.
The mother’s Response to an Application in a Proceeding filed 12 August 2024 seeks that the father’s Application in a Proceeding be dismissed but in the alternative, and if the Court finds that s 131 of the Evidence Act 1995 (Cth) (“the Evidence Act”) has application, then paragraphs 47 and 62 of Ms E’s report be redacted. The mother seeks that the balance of the report should remain intact, and Ms E should continue in her appointment as the single expert.
The proceedings, both as to final and interim orders, were listed for hearing on 14 August 2024 in relation to the interlocutory applications as well as the possible directions in respect of the substantive orders sought.
At the commencement of the hearing, I indicated to the parties and their legal representatives that I considered there were aspects of the proceedings which might invite a decision to expedite the proceedings.
A consideration in favour of an expedited hearing was based upon the following:
(1)The relatively narrow compass of the issues to be determined both as to parenting and property settlement;
(2)The detail and evident effort involved in the preparation of comprehensive affidavits and Financial Statements;
(3)The contemporaneous nature of the reports prepared by Dr D and Ms E (subject to a finding that the reports contain privileged material);
(4)The observation from the Costs Notice filed on behalf of each of the parties that the total costs to be incurred to the conclusion of the matter is in excess of $450,000; and
(5)That on present indications, the available property of the parties is likely to be in or about the sum of $600,000.
A further relevant consideration is that counsel for each of the parties consider that the proceedings can be dealt with in three days.
I am satisfied from the submissions of counsel that whilst some further evidence may need to be presented, the issues to be determined are straightforward and an expedited hearing would assist in reducing the anxiety and distress self-evident in the presentation of the parties and likely limit the potential detriment to the children of further engagement in ongoing litigation.
BACKGROUND
The parties commenced cohabitation in 2016 and separated on 3 November 2022.
In late 2022, the mother and the children travelled to New Zealand with the consent of the father who was to join them on a pre-arranged holiday.
The father travelled to New Zealand in early 2023 and remained there for one week. The mother advised the father that she did not intend to return to Australia and whilst the father was in New Zealand the parties entered negotiations but were unable to reach agreement that the children return to Australia.
The father again travelled to New Zealand to spend time with the children in early and mid‑2023.
Following his return from New Zealand in mid-2023, the father sought assistance from the central authority resulting in proceedings pursuant to the Convention of 25 October 1980 on the Civil Aspects of International Child Abduction (“the Hague Convention”).
The Application was served on the mother’s solicitors in or about October 2023 and proceedings were subsequently commenced in the Family Court of New Zealand. On 4 December 2023, following a judicial conference, a “Consent Memorandum” was filed which provided for the children to be returned to Australia.
The mother and children arrived in Australia in late 2023. As discussed, the mother and the children have taken up occupation in the Suburb C property.
The father commenced these proceedings by Initiating Application on 19 December 2023.
DOCUMENTS RELIED UPON
The father relies upon the following documents:-
(1)Amended Initiating Application filed 5 August 2024.
(2)Notice of Risk filed 19 December 2023.
(3)Affidavit of the father filed 5 August 2024.
(4)Financial Statement filed 5 August 2024.
(5)Application in a Proceeding filed 5 August 2024.
(6)Affidavit of the father filed 7 August 2024.
(7)Outline of Case filed 14 August 2024.
(8)Cost Notice filed 13 August 2024.
The mother relies on the following documents:-
(1)Amended Response to Initiating Application filed 5 August 2024.
(2)Affidavit of the mother filed 5 August 2024.
(3)Financial Statement filed 5 August 2024.
(4)Affidavit in reply filed 13 August 2024.
(5)Affidavit of Dr D (Psychiatrist) filed 31 July 2024.
(6)Affidavit of Dr E (Single Expert witness) filed 1 August 2024.
(7)Affidavit of Ms H filed 28 March 2024.
(8)Affidavit of the father filed 19 December 2023.
(9)Notice of Risk filed 19 December 2023.
(10)Outline of Case filed 13 August 2024.
(11)Cost Notice filed 13 August 2024.
LEGAL FEES INCURRED BY PARTIES
As at the date of interim hearing, the father’s total legal fees (including GST and disbursements) up to and including the final hearing, is estimated to be in the sum of $193,000 of which $50,363 has been billed and paid.
It is estimated that the total legal fees to be incurred by the mother up to the conclusion of these proceedings will be in the sum of $302,113 of which $124,313 has been paid to date.
It is a necessary observation that the total fees to be incurred by the parties will be in the vicinity of $500,000 unless the parties are able to resolve their differences at an early stage.
Whilst I do not cavil with the right and entitlement of a party to seek legal representation to enable the best case possible to be presented on their behalf, given that the current estimate of the net property of the parties may well be in or about the sum of $600,000 it is likely that the parties will have limited financial resources going forward once the litigation has come to an end.
It is also the reality that the magnitude of legal fees, compared to the limited property held by the parties, has the potential to loom large in determining the orders to be made and may present the additional risk of the parties being unrepresented.
DOES THE OPERATION OF S 131 OF THE EVIDENCE ACT IMPACT UPON THE REPORTS AND EVIDENCE OF DR D AND MS E?
The father seeks that the reports of Dr D and Ms E filed 31 July 2024 and 1 August 2024 respectively be uplifted from the Court file and further, that Ms E be discharged as the single expert in the proceedings.
The general contention of the father is that the mother disclosed settlement negotiations between the parties with Dr D during a psychiatric consultation and with Ms E during an interview undertaken as part of the process required to prepare a Family Assessment Report.
The primary position adopted by the mother is to seek that the father’s Application in a Proceeding filed 7 August 2024 be dismissed. If, however, the Court does not dismiss the Application in a Proceeding, then the mother’s alternative position is that paragraphs 47 and 62 of Ms E’s report be redacted and that thereafter, Ms E retain her position as a single expert witness jointly engaged by the parties and that she not be disqualified.
It is apparent from the orders sought by the mother that she considers references to the settlement discussions between the parties in the report of Dr D should not be the subject of redaction.
Dr D is a Consultant Psychiatrist with an extensive curriculum vitae such that there is no challenge to her professional qualifications and expertise.
Moreover, the mother was initially referred to Dr D in her capacity as a senior Consultant Psychiatrist working in private practice from 2019. At that time, X was aged just over one year old.
Whilst not attempting to set out the comprehensive psychiatric history of the mother and her detailed engagement with Dr D, it is a relevant consideration that the mother initially sought assistance from Dr D following a brief psychotic episode likely triggered by the birth of X.
There were symptoms of low-grade paranoid thinking and relevant to her presentation at the time, was a history of two short lived episodes of psychosis.
Whilst not necessarily relevant to the current interlocutory proceedings, it is likely that as the relationship with the father deteriorated and despite the parties’ best endeavours, their differences became irreconcilable and the mother developed increasing anxiety and a difficulty in coping with her circumstances.
A theme running through the warp and weft of the reports of Dr D is the desire expressed by the mother to return initially with X and then with Y to live in New Zealand.
The mother continued to seek therapeutic assistance from Dr D whilst she lived in New Zealand for the 2023 calendar year. The following appears in a report from Dr D dated 19 February 2024:[1]
Whilst in New Zealand I continued to treat [the mother] via telehealth as it was uncertain whether it would be a temporary relocation or whether it would become more permanent. [The mother] remained hopeful that given that [the father]’s previous commitment and despite their separation, that he would still be prepared to consider residing in New Zealand.
[1] Affidavit of Dr D dated 31 July 2024 at page 17.
Upon her return to Australia in late 2023, the mother resumed face to face therapy sessions with Dr D resulting in the mother being treated with antidepressant and antipsychotic medication.
Dr D continued to see the mother after her initial report dated 24 February 2024. In her report dated 28 July 2024, Dr D reports that she has been providing regular psychiatric care to the mother and observed that the delay in the resolution of where the children will reside and whether the mother can change their residence to New Zealand has resulted in a marked deterioration in the mother’s mental health presentation.
Whilst the report sets out various specific events that Dr D considers have been significant stressors resulting in a decline in the mother’s mental health, the following paragraph in Dr D’s final updated report dated 29 July 2024 is the focus of the current application:[2]
The most challenging event has occurred more recently with [the father] agreeing (verbally and in writing) to allow [the mother] and their 2 sons to relocate to New Zealand. His more recent revocation of this agreement has resulted in [the mother] feeling controlled by [the father] and experiencing feelings of vulnerability, anguish and confusion. These events have resulted in the requirement for higher doses of medication and the ongoing need for antidepressant treatment at a higher dose. The ambivalence shown by [the father] regarding her relocation request, has made her reflect on her previous relationship with him, and led to a greater recognition that this relationship was emotionally unsafe for her.
[2] Affidavit of Dr D dated 31 July 2024 at page 42.
The concern of the father is the disclosure by the mother, as recorded by Dr D, that the parties had reached agreement whereby the father consented to the mother relocating the children to New Zealand.
At paragraph 47 the Family Assessment Report of Ms D dated 22 July 2024, the following appears:
47.If she was to relocate and [the father] was residing in Australia, [the mother] understood that the children would likely spend more of their school holiday time with him than her (e.g. two of the three mid-year breaks, half of the longer summer break), and he would be able to spend time with them in New Zealand during term if he wished. She spoke (as above) of supporting [the father] to have regular telephone contact with the children. If she was granted permission by the Court to reside in New Zealand with the children [the mother] said she had not thought about how care arrangements might look if [the father] was in New Zealand also because he has given no indication recently that he would move there as well. [The mother] thought they would work toward shared care on an age appropriate basis if that occurred. In her final interview [the mother] expressed confusion that they had indicated a conference in late May was only to go ahead if [the father] was agreeable in principle to relocation as there was otherwise no point in it occurring, and it did go ahead, but her understanding was that the relocation had become dependent on property settlement.
At paragraph 62 of the Family Assessment Report the following appears:
62.[The father] said he did put a proposal for relocation to [the mother] with regard to property settlement and the amount of time and contact he could have with the children, but while she agreed to the property split proposal, she reduced the amount of time he could have with the children, and wanted him to always be available to care for the children himself (e.g. without using family members or vacation care for example) such that he could not agree. [The father] said he wanted the option to have two of the three short school holidays with him either in Australia or New Zealand, and 18 days in the summer school holiday block either over Christmas or New Year’s Eve (i.e. alternating), as well as to be able to visit the children during school term, and to have regular contact with them by phone each week.
Section 131(1)(a) of the Evidence Act provides that:
(1) Evidence is not to be adduced of:
(a)a communication that is made between persons in dispute, or between one or more persons in dispute and a third party, in connection with an attempt to negotiate a settlement of the dispute.
As such, documents that have been prepared in connection with an attempt to negotiate a settlement of a dispute are also not admissible (s 131(2)(a) of the Evidence Act).
In Silver Fox Company Pty Ltd v Lenard’s Pty Ltd (No 3) [2004] 214 ALR 621, Mansfield J discussed the application of s 131 of the Evidence Act as follows:
36.… Section 131(1), subject to its exceptions, gives effect to the policy of ensuring the course of negotiations – whether private or by mediation – are not adduced into evidence for the purpose of influencing the outcome on the primary matters in issue. Clearly, it is in the public interest that negotiations to explore resolution of proceedings should not be inhibited by the risk of such negotiations influencing the outcome on those primary issues. It is equally in the public interest that negotiations should be conducted genuinely and realistically.
The meaning of “communication” is defined in the Macquarie dictionary as follows:
1. The act or fact of communicating transmission.
2.The imparting or interchange of thoughts, opinions, or information by speech, writing, or signs.
3. That which is communicated or imparted.
4. A document or message imparting views, information etc.
In State Rail Authority of New South Wales v Smith (1998) 45 NSWLR 382 Beazley J considered the scope of the limitation arising from the word “dispute” in s 131(1)(a) and (b) of the Act and said:
385.The language of s 131(1), which refers to communications between “persons in dispute” and “attempts to negotiate” settlements, plainly refers to communications made during the period the parties remain in dispute. Self-evidently, there ceases to be an “attempt” to negotiate an agreement once an agreement has been reached. Moreover, once an agreement has been reached, the parties cease to be “persons in dispute”. The final agreement is a product of the fact that the attempts to negotiate have been fruitful, the negotiations have been successfully concluded and the dispute has been resolved. It is trite that the settlement attempt is not a document or communication prepared or made in connection with “an attempt to negotiate” the settlement.
Equally, the disclosure of an uncontested fact does not attract privilege pursuant to s 131 of the Evidence Act.
It is a moot point that if it could be considered that the parties had reached a concluded position, whether a subsequent revocation of the agreement would attract the privilege pursuant to s 131(1) of the Evidence Act.
However, Adlam & Noack [1999] FCA 1606 is authority for the proposition that there is not a loss of privilege under s 131(2)(b) of the Evidence Act where the fact that there was a proposed settlement was disclosed but not “the substance of the terms of the proposed settlement, nor indeed any of its terms”.
There are exceptions to the rule in respect of the privilege that attaches to s 131(1)(a) of the Evidence Act as detailed in s 131(2). These include, where s 131(2) of the Act applies, the following:
(a) the persons in dispute consent to the evidence being adduced in the proceeding concerned or, if any of those persons has tendered the communication or document in evidence in another Australian or overseas proceeding, all the other persons so consent; or
(b) the substance of the evidence has been disclosed with the express or implied consent of all the persons in dispute; or
(c)the substance of the evidence has been partly disclosed with the express or implied consent of the persons in dispute, and full disclosure of the evidence is reasonably necessary to enable a proper understanding of the other evidence that has already been adduced.
It is an appropriate observation that s 131 of the Evidence Act does not permit the exercise of judicial discretion to extend the scope of the exceptions in particular where it might be considered necessary for the evidence to be given in order better understand other evidence that has been adduced.
Report of Dr D
Dr D records the wife’s assertion that agreement had been reached between the parties that would allow for the children to relocate to New Zealand. If the assertion is correct then I consider that the subsequent revocation, if that is what actually occurred, does not detract from the ability of the mother to refer to the concluded agreement. To find otherwise would create the untenable position of parties having reached an agreement but then not being able to adduce evidence as to what then occurred and what action was taken because of the potential for a party to revoke or renege upon a previously agreed dispute.
It may also be considered that either Dr D has not recorded all of the words expressed by the mother or in the absence of the father confirming that an agreement was reached, the mother may be mistaken as to whether a concluded agreement was reached.
The application of s 134 of the Evidence Act does not make the evidence inadmissible but rather, it is evidence that is not able to be adduced by the parties.
Whilst I accept that the privilege in respect of the application of s 131 of the Evidence Act is not comparable to s 126 where the privilege may be lost if the communication was necessary to gain a better understanding of other evidence, the reality is the issue could not be resolved by a redaction of the sentences objected to in Dr D’s report. What is said to have caused an exacerbation of the mother’s mental health presentation is her perception and belief that the parties had reached agreement subsequently revoked by the father.
The difficulty could not be resolved even if the entire report was uplifted because the purpose of adducing the evidence is not to reveal or disclose the negotiations but rather to highlight the mental health consequences of what the mother says was the revocation of a concluded agreement.
The reference by each of the parties to the recent attempts at a mediated settlement may be informed by earlier attempts by the parties to resolve their differences.
The following paragraphs of the father’s affidavit sealed 5 August 2024 are relevant:
42.I first visited the children in New Zealand [in early] 2023, I attempted to reach an agreement with [the mother] about the children's return, but she would not agree. We did agree to various interim matters including that the children would travel to Melbourne to spend time with my family and I over Easter. We prepared and signed a summary of our discussions. Now annexed and marked “[MW]-1” is at true copy of that document. At the end of our discussion after we signed it, [the maternal grandfather] (who was with us) asked to include a handwritten amendment saying that international and interstate travel would be with “parents/grandparents.” He sought to add in the word “grandparents”. He said he would tell [the mother] and give her a copy of the amended version.
43.On 1 March 2023, [the mother] informed me that she no longer agreed to the children spending Easter with me. She said the children were settling into their new life in New Zealand. I told her again that I did not agree to the children living in New Zealand…
It would appear that the purpose of the father referring to an attempt to reach agreement with the mother concerning the children’s return was to set out the basis upon which ultimately the father approached the Australian Central Authority in June 2023 resulting in a Hague Convention Application being lodged for the return of the children.
Without attempting to be comprehensive of the discussions between the parties, annexure “[MW]-1” is the separation agreement (possibly in draft form) signed by the parties and dated 4 May 2023.
The separation agreement notes the living arrangements for the children and records that the interim and long-term arrangements between the children as follows:[3]
[3] Father’s affidavit filed 8 August 2024 at page 23.
Interim arrangement
[The mother] and children will continue to live with [the mother]’s parents in New Zealand.
Interim daycare to be arranged for [the children].
[The father] will continue to live in the family home in Adelaide until it is on the market, and will arrange alternate accommodation in Adelaide until he moves to Melbourne.
Long term arrangement – no agreement reached this week
[The father] wants the whole family to live in Melbourne, and does not want to permanently live in New Zealand, conveyed it is [the mother]’s choice where she wants to live.
[The mother] wants the whole family to live in New Zealand, and does not want to permanently live in Australia/Melbourne, conveyed that it is [the father]’s choice where he wants to live
•No agreement reached on long term living arrangement for children, further discussions to be had in interim
Either country, [the father] proposed 50/50 shared care arrangement (separate homes for parents) – 1 week on; 1 week off, Wed – Wed (alternate weekends).
Either country, [the mother] proposed 50/50 shared care arrangement (separate homes for parents) involving both parents caring during the week eg 3 nights with one parent, 4 nights with the other (because does not want to have longer than a couple of nights away from children)
[The children] will live together in the family home(s).
The separation agreement sets out the proposals of the parties which also included the following proposal of the mother:[4]
[The mother] also proposed a 50/50 shared care arrangement where children spend school term times in New Zealand and non-school term times (holidays) in Melbourne/Australia – so both parents can live in the country they want to live in, children have equal care/time, with [the mother] and [the father] travelling necessarily with the children between countries.
[4] Father’s affidavit filed 8 August 2024 at page 24.
The agreement also concerned both interim and final arrangements for property settlement providing for an equal division of the property as between the parties.
The father relies upon the detailed terms of the separation agreement together with extensive handwritten amendments including input from the paternal grandfather.
Section 131(2)(a),(b) and (c) of the Evidence Act provides that the privilege arising in respect of the application of s 131(1) of the Evidence Act may be waived by the express or implied consent of the parties.
Given the extensive nature of the disclosure by the father of the 2023 settlement discussions, it is open to find that the mediation attempt in 2024 had as its foundation the discussions that occurred in 2023 given that the settlement agreement proposed that the parties would continue to negotiate on final arrangements.
The reference to and the reliance upon the separation agreement in 2023 by the father could be taken as implied, if not actual, consent to the settlement negotiations between the parties being disclosed and the privilege that attaches to s 131 of the Evidence Act being waived.
Report of Ms E
The considerations in respect of the application of s 131 of the Evidence Act to paragraphs 47 and 62 of Ms E’s report are more complex. There are two steps that require consideration. The first is whether privilege attaches to the aforesaid paragraphs and the second is that if the privilege is not waived, is the remedy to redact the offending remarks or has a position been reached that there is either actual bias or apparent bias such that Ms E should no longer be considered as a single expert and a different expert should be jointly appointed by the parties.
The portion of paragraph 47 as highlighted by the mother cannot be considered without reference to paragraph 46 and the entirety of paragraph 47. Whilst not the subject of objection, paragraph 46 records the mother’s proposed future care arrangements and an assertion that there was an agreement between the parties that the father would agree to a request by the mother if she was unhappy in Australia and wished to return to New Zealand. The balance of the paragraph has a striking similarity to the terms of the settlement agreement as disclosed by the father.
Similarly, paragraph 47 also provides detail as to the mother’s proposal for the children to spend time with the father either in New Zealand or in Australia.
I do not consider that the reference by Ms E to the mother’s “expressed confusion that they had indicated a conference in late May was only to go ahead if the father was agreeable in principle to relocation” is in any way a disclosure as to the negotiations or settlement discussions arising in respect of the dispute. Whilst the mother may have an understanding, mistaken or otherwise, as to the motivation of the father and what matters may or may not ultimately be persuasive as to whether agreement can be reached, all that is being reported by Ms E is that the parties have agreed to explore a resolution of the dispute without there being any disclosure as to terms, conditions or separate proposals.
Again, paragraph 62 must be read in the context of paragraphs 58, 59, 60 and 61. The matters apparently raised by the father concerning his proposal for both parenting and property are again strikingly similar to his proposal as set out in the settlement agreement.
Both counsel referred to the decision of Watts J in Duclos & Duclos [2018] FamCA1088 (“Duclos”).
Whilst initially it would seem that Duclos (supra) is similar to the current dispute, a significant difference arises in respect of how the issue of the disclosure of the settlement negotiations arose.
In Duclos (supra), the husband was asked a direct question by the family consultant consequent upon information provided by the mother that the parties were close to settling and that agreement had been reached such that the children would remain with the mother and spend five days a fortnight with the father. The husband refused to answer the question and sought legal advice. Even though the offending paragraphs were struck out, Watts J did not consider that there was any evidence to support a finding of actual or apprehended bias and as such no basis to discharge the appointment of the family consultant.
Paragraph 62 of the report of Ms E records the father’s proposal for relocation with regard to property settlement and the amount of time and contact he could have with the children. It is reported that the father considered they had agreed property settlement but there was a change such that the mother now offered the father less time with the children.
The content of paragraph 62 may well have come about as a result of the matters raised by the mother and as recorded in paragraph 47 of the report but unlike the husband in Duclos (supra), the father was prepared to openly discuss the separate proposals of the parties and the details of the negotiations.
As such, I consider that the conduct of the father is such that privilege is waived by his implied or actual consent.
In addition, I do not consider that a fair-minded lay observer might reasonably apprehend that Ms E did not bring an impartial mind to the resolution of the matter. No issue of apparent bias arises.
The task of Ms E is to consider the advantages and disadvantages of the separate proposals of the parties by using her accepted skill and knowledge in her capacity as a single expert witness.
It is the Court that ultimately makes a determination as to what is in the children’s best interests and whilst likely to be assisted by the opinion of an appropriately qualified single expert, any recommendations that may be proffered are not decisive.
Whilst I do not necessarily think it is the case, I propose to give leave to allow this judgment to be provided to Ms E so that she can consider the importance if any, that her understanding of the settlement discussions between the parties had on her expressed opinion.
Ms E may also wish to reflect upon whether she can provide assistance as to how the children would be affected if the mother’s application is unsuccessful and the children remain in Australia in close proximity and contact to the father and the alternative position namely, how they will be affected if leave is given for their relocation to New Zealand taking into account the orders sought by the mother.
SPOUSAL MAINTENANCE
The decision of Hall v Hall [2016] HCA 23 (“Hall v Hall”), the Hight Court set out the appropriate approach in considering an application for interim spousal maintenance as follows:
3. … The gateway to the operation of Pt VIII in relation to spousal maintenance is in s 72(1). That sub-section provides that “[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 … having regard to any relevant matter referred to in [s] 75(2)”.
4.The liability of a party to a marriage to maintain the other party that is imposed by s 72(1) is crystallised by the making of an order under s 74(1). That sub‑section provides that, “[i]n proceedings with respect to the maintenance of a party to a marriage, the court may make such order as it considers proper for the provision of maintenance in accordance with this Part”.
5.A court exercising the power conferred by s 74(1) is obliged by s 75(1) to take into account the matters referred to in s 75(2) and only those matters. Those matters are presented as a comprehensive checklist. They include what s 75(2)(b) refers to as “the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment”. They also include, by virtue of s 75(2)(o), “any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account”.
As noted in Hall v Hall (supra), the High Court confirmed that an applicant seeking orders for spousal maintenance carries the evidentiary burden as set out in s 140 of the Evidence Act. This can be particularly challenging in the context of an application for interim spousal maintenance. As the Full Court said in Edgar & Strofield (2016) FLC 93-711 at [15]:
15.However, the limits to an interim hearing are well known. Disputed issues of fact cannot be resolved at an interim hearing….
In this case it is not conceded that the gateway requirement referred to by the High Court in Hall v Hall (supra) is satisfied. That is, whether as a result of the health issues affecting the mother and her determination as to the extent of her necessary care of the children, she is unable to support herself adequately as contemplated by s 90SF(1)(b) of the Act.
The issues to determine are therefore:
(1)To what extent is the mother unable to support herself as a result of having the care of the children under the age of 18 years and issues relating to her mental health;
(2)What are the mother’s reasonable needs;
(3)What capacity does the father have to meet a spousal maintenance order if such an order was made;
(4)If (1)-(4) favour an order for spousal maintenance being made by the Court, what order is reasonable having regard to s 90SF(3) of the Act.
In Brown & Brown (2007) FLC 93-316 at [161] the Full Court summarised the principles to be applied as follows:
•The word “adequately” is not to be determined according to any fixed or absolute standard.
•The idea that “adequate” means a subsistence level has been firmly rejected.
•Where possible both spouses should continue to live after separation at the level which they previously enjoyed if this is reasonable, although the parties’ standard of living may have to be lower if financial resources are insufficient to maintain that standard.
•In some circumstances it may be reasonable for the parties to live at a higher standard than previously enjoyed.
•It is not necessary for an applicant for maintenance to use up all capital in order to satisfy the requirement that he/she is unable to support himself/herself adequately.
•However, an applicant is not entitled to live at a level of considerable luxury or comfort merely because the other party is very wealthy.
In that respect, I refer to Maroney & Maroney [2009] FamCAFC 45 where the Full Court said as follows:-
56.Once a party … establishes an entitlement to interim spousal maintenance, and such entitlement is quantified in accordance with that spouse’s reasonable needs, an order may be made notwithstanding that the liable spouse could only satisfy the order out of capital or borrowings against capital assets.
In an application for spousal maintenance, it is necessary to distinguish between the expenses of the spouse seeking an order for spousal maintenance and the expenses of the children of the marriage (or relationship). (See Stein & Stein (2000) 25 Fam LR 727 (“Stein”).
In determining the “reasonable ability” of a party to satisfy an order for interim spousal maintenance the Court is not confined to considering only that party’s income.
As discussed, the mother initially seeks interim spousal maintenance on a periodic basis in the sum of $351 per week increasing to $925 per week as and from 26 August 2024. The order seeking interim spousal maintenance is sought for so long as the mother remains living in Adelaide and is able to occupy the Suburb C property. If the mother is successful, either on an interim or final basis then the spousal maintenance order will cease. That is predicated upon the mother’s confidence in being able to increase her hours of employment and also having the advantage of close family support.
There is no challenge by the father that the preliminary requirements as set out in s 90SF(1) have not been satisfied. The parties separated on 3 November 2022 and the application has been brought within a two-year period namely, on 14 February 2024.
Section 90SB of the Act is satisfied in that the parties were in a relationship of more than five years together with the two children.
No issue is raised in respect of the geographical requirements given that both parties are ordinarily resident in South Australia.
The more significant consideration is the extent to which the Court can be satisfied that the mother is unable to support herself adequately.
At present, the mother is in receipt of Family Tax Benefits A and B in the sum of $250 per week and having regard to her Financial Statement, she discloses an income of $672 supplemented by Child Support in the sum of $167 per week.
The mother remains employed albeit on a remote basis with solicitors who are located in New Zealand. The mother’s working hours have been unilaterally reduced to 20 hours per week.
The mother currently has the primary care of X, aged 6 years and Y, aged 3 years. I am also aware of the mental health issues that impact upon the mother as detailed in the report of Dr D.
The mother’s current employment is undertaken remotely and she has a capacity to work increased hours. I accept the mother’s evidence that her employer has determined that there is a limitation on the work that can be offered to the mother whilst it is undertaken remotely. The mother concedes that if she was able to relocate the children to New Zealand, she is confident that her hours of employment would be significantly increased such that spousal maintenance would not be required.
I am also of the view that the obligations arising from the care of the two children is in and of itself a significant limitation on her ability to either increase her working hours (if it was offered to her) or look for other work that would be more remunerative.
I accept that there is a paucity of evidence presented by the mother in respect of her circumstances however, the reality of her mental health issues, her care of the children and my acceptance that her working hours have been reduced to 20 hours per week is sufficient to satisfy me that she is unable to support herself adequately from her income.
The mother relies upon a further affidavit filed 13 August 2024 which updates her circumstances as set out in her primary affidavit and her Financial Statement filed 5 August 2024.
As a result of the mother’s change to her estimated income, the father has now been assessed to pay Child Support in the sum of $216 per week.
There is a further amendment to Part N of the Financial Statement in that the amount recorded for educational expenses has increased to take into account the change in the childcare expenses which total $178. Accordingly, the total of expenses for the children are now in the sum of $534.
Noting that there appears to be a typographical error in the education expenses for the children recorded as $78, the figure should be $122.
The mother’s calculation of the Part N expenses needs amendment in that she sets out the total for both her and the children’s expenses to be in the sum of $958 being made up of $450 for the mother’s expenses and $448 for the children’s expenses, however given the children’s expenses now are $534 the total should be $984.
Item 32, which encompasses the total of all discretionary expenditure (Part N) at $984 and personal expenditure (Part G) at $733 results in total weekly expenditure of $1,717.
Taking into account the increase in Child Support payable by the father, the mother’s total income is in the sum of $1,138. I do not bring to account the government benefits payable in the sum of $250 leaving a notional income of $888.
The Part G expenses of the mother at $773 take into account the increased mortgage at $574 per week.
In order to determine the amount properly payable by way of spousal maintenance, I deduct from the mother’s income the current level of Child Support in the sum of $216 per week resulting in a figure of $672 by way of income.
From the mother’s total expenditure of $1,717, I deduct the children’s expenses now calculated in the sum of $534 resulting in the amount of $1,183 by way of adjusted expenditure which results in a shortfall of $511 per week.
The father’s financial circumstances are more straightforward. By reference to his Financial Statement filed 5 August 2024, he receives total income in the sum of $2,583.
There was no significant challenge to the father’s Part N expenses which totalled $811 per week and comprised of expenses for the father in the sum of $571 and the sum of $240 per week attributed to the children.
It is appropriate, having regard to the Full Court decision of Stein (supra), to not bring to account the shortfall in respect of the children’s expenses. It is also reasonable to exclude the children’s expenses as claimed by the father in the sum of $240.
Accordingly, the Part N expenses excluding children’s expenses are brought to account at $571 and the Part G personal expenditure is in the sum of $1,878 totalling $2,449.
However, as part of the Part G personal expenditure, the father has brought to account the child maintenance amount at $166 and not the new amount of $216 per week. The difference of an increase of $50 brings the total expenditure amount to $2,499. The income amount of $2,583 less the total expenditure of $2,499 leaves a modest surplus of $84.
The father is therefore able to contribute $84 per week to the mother’s shortfall of $511 per week. The amount of overall shortfall after the father’s contribution is the sum of $427 per week.
Sale of shares
The mother seeks that the father urgently sell the publicly listed shares that have an approximate value of $43,000 as advised by a share Trading Account Summary dated 27 May 2024.
The mother seeks that she receives the entirety of the net value of the sale of shares by way of lump sum spousal maintenance which is then to be applied to her living expenses together with a significant payment to her parents of $20,000, being a partial repayment of a loan. The mother then seeks to capitalise spousal maintenance with the balance to be used to meet the shortfall in living expenses in particular, when the Home Loan moratorium comes to an end. The mother’s expectation is that the maintenance payable over a period of 20 weeks at the rate of $877 produces capitalise sum of $20,000.
As considered, the amount of spousal maintenance payable to the mother is in the sum of $511 per week of which the father is able to contribute the sum of $84 per week.
There is no cogent argument presented as to why the manner in which a lump sum may be payable to either of the parties but in particular the mother, should not be categorised before trial.
I consider that it is reasonable to understand the head of power that is relied upon.
In the circumstances of this case, whilst I accept that a periodic order for spousal maintenance can be paid from capital, it is a more logical outcome for the parties to utilise their own property to assist them in meeting their day-to-day expenses including those attributed to the children. I am of the view that it would be reasonable for there to be an interim settlement of property in favour of the mother sufficient to cover the shortfall of the amount payable to the mother of $511 per week less the amount able to be paid by the father of $84 per week. As such, the sum of $427 represents a reasonable shortfall.
I bring to account the excluded expenses for the children in the sum of $534 resulting in a total shortfall of $961 per week.
If that sum is capitalised over a period of 20 weeks, the wife should receive a lump sum of $19,220.
Given the circumstances of the case and the potential for some reasonable variation, I propose to order that the mother receive the sum of $20,000 by way of interim settlement of property.
I note that I did not bring to account the average weekly expenses of the father in respect of the children in the sum of $240 per week. I propose to further order that the father receive by way of partial settlement of property the sum of $5,000.
I remind the parties that providing money received by way of interim settlement of property is appropriately spent on reasonable outgoings, it does not fall within the category of addbacks as set out in the decisions of AJO & GRO (2005) FLC 93-218, NHC & RCH (2004) FLC 93-204 and Grier & Malphas (2015) 55 Fam LR 107.
Accordingly, an order will be made that the father forthwith cause to be sold a sufficient amount of the publicly listed shares to enable payment by way of interim settlement of property in the sum of $20,000 to the mother and $5,000 to be retained by him.
It is of course open to the parties to reach a further or different agreement.
I also note that the retention of some of the shares will assist in the payment of Capital Gains Tax (CGT) as may be assessed in the 2025 financial year.
Sale of the Suburb F property
The mother seeks that the Suburb F property be sold whereas the father wishes to retain the property and it is his preference that the Suburb C property be sold. The mother and the children reside in the Suburb C property and the mother resists the sale until the proceedings have been determined.
On closer consideration, it appears that the principal basis for the mother seeking the sale of the Suburb F property is to assist in the payment of her legal fees which are estimated to be in the sum of approximately $250,000 up to and including the conclusion of any final hearing.
The circumstances of the parties in relation to their ability to retain legal representation is uncertain.
There is some issue as to whether on the current state of their separate financial resources they will be represented at trial. For various reasons, I do not consider that the parties are likely to be able to adequately represent themselves.
I make orders as appear at the commencement of these reasons.
I certify that the preceding one hundred and forty-seven (147) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Berman. Associate:
Dated: 6 September 2024