Barrister-at-Law & Accredited Mediator

Category: Case

Shams & Alkaios (No 2) [2024] FedCFamC2F 620

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In this episode, I discuss the judgment of Judge Glass in Shams & Alkaios (No 2), which is the first published parenting case determined on the basis of the 2023 amendments to Part VII of the Family Law Act.

Overview

As everyone who has anything to do with family law knows, the parliament passed the Family Law Amendment Act 2023 last year, which had a particular focus on Part VII of the Family Law Act 1975.

Since the first Exposure Draft of the bill was released, there has been much discussion about the effects of the amendments.

I was on the record early with a view that the amendments were, for the most part, a simplification and rewording of the same concepts, aimed at making the provisions easier to understand for self-represented litigants, rather than a massive upheaval.  Whether I was right or wrong, my views will forever be freely available online to haunt me in a TEN Fireside Chat with Jacky Campbell.

The amendments took effect on 6 May 2024.  That day, Judge Glass of the Federal Circuit and Family Court of Australia (Division 2) in Melbourne commenced a 3-day parenting trial.  

No doubt many other judges did the same, but Judge Glass has the distinction of delivering the first published judgment applying the amended provisions.

His Honour delivered judgment in Shams & Alkaios (No 2) on 20 May 2024.

It was a fairly straightforward relocation matter where the children had been living with the father in Melbourne, and the mother sought a change of residence for the children to live with her in Queensland.

There’s nothing extraordinary about the facts of the case, but it is the first (and at the time of writing only) published decision based on the freshly amended Part VII.

So, how did Judge Glass consider and apply the new provisions?

Are there drastic impacts as a result of the new simplified objects of Part VII?  

Does the absence of a presumption in favour of equal shared parental responsibility mean that sole decision-making orders will be the new normal?

Have the section 60CC best-interests considerations changed everything?

Decision-Making

The first thing one sees when looking at the judgment is order 1, which reads:

The parties make joint decisions in relation to all major long-term issues in relation of the Children…

This is the new equivalent to the old order for equal shared parental responsibility, but in language which makes it absolutely clear that the order is about decision-making, and nothing else which might have been read into the term “parental responsibility”.

Of course, absent from the judgment is any discussion of a presumption, as none exists anymore.

Decision-making is now just another aspect of the discretionary assessment of best-interests considerations.

However, in determining the allocation of decision-making (after analysis of the best-interests considerations, which I discuss below), Judge Glass referred to the “encouragement” prescribed by section 61CA, which provides:

If it is safe to do so, and subject to any court orders, the parents of a child who is not yet 18 are encouraged: 

(a) to consult each other about major long-term issues in relation to the child; and 

(b) in doing so, to have regard to the best interests of the child as the paramount consideration. 

New s 60B – Objects of Part VII

Judge Glass noted that he was guided by the objects of Part VII, as found in section 60B, but did not otherwise refer to them.

Section 60CC Factors

The new section 60CC is much shorter and simpler than the old one.

The old language of protecting children from harm has been replaced by a focus on the safety of not only the child, but also the child’s carers.

Section 60CC(2)(a) – Arrangements which would promote the safety of the child and carers

Under this factor, Judge Glass traversed the history of the parenting arrangements, what his Honour termed as “generalised assertions” by the mother about the father in relation to abuse and controlling behaviour, allegations of physical violence, and other allegations of family violence.

His Honour also included in this part of the judgment discussion about what in this case was a lack of family violence orders.

On my reading, there was nothing novel in the discussion.  It encompassed the matters which his Honour would have discussed pursuant to the old s 60CC(2)(b) and 3(j) and (k).

His Honour was ultimately not satisfied that the father had caused harm to the children, and was therefore not satisfied that a change of residence was necessary to promote their safety.

Section 60CC(2)(b) – Views expressed by the child

In the familiar way, his Honour discussed the children’s views as relayed by the family consultant.

This is unsurprising, as the wording of the new s 60CC(2)(b) is a truncated version of the old s 60CC(3)(a).

Section 60CC(2)(c) – Developmental, psychological, emotional and cultural needs of the child

Here, his Honour’s discussion turned to the family consultant’s opinions about the care provided to the children in their primary residence, and the support the children received at home and school.

His Honour also referred to the family consultant’s evidence about potential emotional distress which would be occasioned on the children by a move from their familiar environment and community to a new life in Queensland.

Section 60CC(2)(d) – capacity of each person who has, or is proposed to have, parental responsibility for the child to provide for the child’s developmental, psychological, emotional and cultural needs

Judge Glass’s discussion of this factor is reflective of the discussion one would have expected in relation to the old s 60CC(3)(f).

It has the usual themes of parental capacity and insight, child-focus and support of the children’s relationships with the other parent.

Section 60CC(2)(e) – Benefit to the child of being able to have a relationship with the child’s parents and other people who are significant to the child, where it is safe to do so

Here, his Honour considered the nature of the children’s relationships with each of the parents and other significant adults, ultimately determining that the children had strong and sound relationships with each parent, which could be sustained despite the geographical distances between them.

Having found earlier that there was no risk to safety, the last seven words of paragraph (e), being “where it is safe to do so” had no work to do in this case.

In the absence of safety concerns, the new s 60CC(2)(d) appears to reflect the old s 60CC(2)(a) and (3)(b), (c) and (d).

Section 60CC(2)(f) – Anything else relevant to the particular circumstances of the child

This new version of the old s 60CC(3)(m) catch-all provision.

His Honour did not discuss any relevant matters.

Conclusion

No doubt, we will see more and more judgments in the coming months, which will show us how various judges in all three Court – Division 1, Division 2, and Family Court of Western Australia, are applying the new provisions.  

In time, we will get further clarification from the Full Court and eventually the High Court.

Based on this first published judgment, though, it looks like we may all be able to relax a little bit about the amendments, as nothing much seems to have changed.  

Stella & Stella [2023] FedCFamC1F 1092

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In this episode, I discuss Strum J’s recent judgment in Stella & Stella, which involved Stanford arguments, multiple pools and late inheritances.

Overview

Stella & Stella was a matter heard by Strum J in the Major Complex Financial Proceedings list.

Each of the husband and wife was in their early- to mid-50s. They had 3 adult children together.

The total value of the non-superannuation property of the parties, or either of them, was around $16 M.  There was controversy about add-backs and treatment of contingent tax issues. Around $10.5 M worth of the non-superannuation property had been obtained by the parties by way of inter vivos gifts or inheritances received from the husband’s late grandmother, or by distributions from a trust associated with her.

It’s important to note at the outset that those property interests were variously received by each of the parties, not only by the husband.

The crux of the case was how those gifts, inheritances and distributions to each of the parties were to be treated.

Positions

The husband’s position was that it was not just and equitable for there to be any property adjustment at all.  He was running what family lawyers often call a Stanford argument.

The wife contended for a 2-pool approach:

  • Pool A consisting of so-called “non-inherited interests”
  • Pool B consisting of the property interests derived from the husband’s late grandmother.

She contended that it was just and equitable for there to be property adjustment with respect to Pool A, but not with respect to Pool B. In other words, she was running a Stanford argument only in relation to Pool B.

Legal Principles

His Honour traversed the authorities in relation subsection 79(2), being the subsection which requires the Court to assess whether it is just and equitable to make a property adjustment order.

His Honour referred to the observation by the Full Court in Bevan & Bevan that subsection 79(2) is unlikely to impact most cases, as the just & equitable requirement will readily be satisfied by virtue of the parties no longer living together, and there is no longer the common use of property.

Importantly, his Honour discussed the 2017 Full Court decision in Zaruba, where it was held that, whilst in the vast majority of cases the justice & equity question is appropriately addressed without making distinctions between individual assets, “the position is likely to be different in circumstances where … the characteristics of the property and the circumstances of its acquisition, improvement and the like can be seen to differ significantly…

In relation inheritances, Strum J considered the two 2017 Full Court decisions, Holland and Calvin & McTier, which in turn referred to well-known authorities like Bonnici, and Farmer & Bramley.

The upshot is that the Court has a discretion as to how to treat late inheritances, including whether to include them in a global pool or deal with them separately, and how much weight to give to contributions made directly to the inheritance as opposed to global contributions in the relationship.

Strum J also, of course, discussed the principles arising from Gosper and Kessey, and how Chisholm J in 1997 discussed those principles in Pellegrino.

At paragraph 87 of his judgment, Strum J summarised the principles arising from the authorities.  I highly recommend that you read that paragraph in full.  

Some key points relevant to my discussion here are the following:

(q)          Whilst, in the vast majority of cases, it will be appropriate to address the s 79(2) question by ascertaining the legal and equitable interests in property without making distinctions between individual assets, the position is likely to be different in circumstances where the characteristics of the property and the circumstances of its acquisition, conservation and improvement can be seen to differ significantly and where the parties’ relationship has taken on quite different characteristics during the period to which the s 79 enquiry is directed.

(r)          The expression “any property of the parties to a marriage or either of them” in s 79(4)(a)–(b) is sufficient to encompass both the entirety of their property and their individual assets, such that if the parties’ interests in specific items of property differ, or they have made differing contributions, justice and equity may best be served by proceeding upon an asset by asset basis in the division of the property between them.

(s)          The nature of a particular interest or interests in property, and when and how it was acquired, conserved, improved, or used, may be very relevant to whether a s 79 order should be made at all; whether contributions should be assessed globally or asset by assets or by reference to two or more pools; and what is the nature and extent of each party’s contributions. This calls for the exercise of discretion, to be exercised not by reference to whether property might conveniently be described as “an inheritance” or “after-acquired” but, rather, by reference to the nature, form and characteristics of the property in question and the nature, form and extent of the parties’ contributions of all types across the entirety of their relationship. However, there is no basis for excluding from consideration any property in which the parties have an existing legal or equitable interest.

(t)          Whilst it might be convenient to describe property by reference to a characteristic (for example, as an “inheritance” or “post-separation” or “after-acquired” property), its place within the ambit of s 79 is determined by the fact that it exists as a legal or equitable interest of the parties to the marriage or either of them and that the nature, form and characteristics of it and the contributions of all types made by the party suggest that it should be treated in a particular way.

(u)          A party cannot be regarded as contributing significantly to an inheritance received very late in the relationship or after it has terminated, except in very unusual circumstances, including the care of the testator prior to death.

(x)          Where a relative of one of the parties to a marriage gifts property to both of the parties, dependent upon the circumstances of the case, it is open to the Court in such a case to look at the actuality and treat that as a “financial contribution made directly … on behalf of” the party related to the donor. In many such cases, that gift was only made because of that relationship and, in reality, as a means of benefiting that relative in the marriage. In other cases, the evidence, including evidence that the donor intended to benefit both spouse parties, may not justify that conclusion. If so, the application by the parties of that property to the marriage would, at least at that point, be an equal contribution by them.

On the facts of the case, his Honour determined that it was just and equitable to make a property adjustment order with respect to Pool A – the property which was not derived by way of inter vivos gifts or inheritances from the husband’s grandmother.

Without going into the detail, essentially, there was, irrespective of the husband’s initial contribution, jointly owned property, and no express consideration by the parties of how their property interests should be arranged.

In relation to the inter vivos gifts, Strum J held that there was insufficient evidence of the late grandmother’s intentions to find that the gifts to the wife were intended to specifically benefit her, rather than the parties jointly or the husband. 

This was despite his Honour finding that the wife and the husband’s grandmother had had a close relationship.

In relation to the inheritances, particularly the inheritance received by the wife, Strum J considered the fact that there were separate bequests to the husband and the wife (among many others).  His Honour gave significant weight to the language of the late grandmother’s will, including a reference to her “granddaughter-in-law”, as opposed to a term such as “my grandson’s wife”. 

His Honour found that the evidence established a clear intention on behalf of the grandmother to separately benefit each of the husband and the wife by her separate bequests to each of them.

On that basis, his Honour determined that it would not be just and equitable to make an adjusting order with respect to the parties’ respective inheritances from the husband’s late grandmother.

However, the same could not be said of the inter vivos gifts, which his Honour grouped with the Pool A assets, and which were therefore subject to adjustment.

Forum Disputes in Family Law

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In this episode, I discuss how forum disputes are determined in family law, and how the process can differ depending on the subject matter of the proceedings.

Overview

A forum dispute arises when two different Courts are asked to determine the same subject matter.

In the family law context, this generally means a forum dispute between the Federal Circuit and Family Court of Australia (Division 1 or Division 2), and a Court in another country.

Tests

Most Australian lawyers will be at least vaguely aware that the usual test to be applied to a forum dispute is whether the Australian Court is a clearly inappropriate forum.

We were taught a bit about that concept in law school.  We all have vague memories of authorities like Voth v Manildra Flour Mills.

However, like many other legal concepts, family law does things a bit differently.

Family Law Approach

In 1994, the High Court in ZP v PS, determined that the rule in Voth applied to all matrimonial proceeding except parenting matters.

Since then, the Full Court of the Family Court has repeatedly confirmed the approach to be taken in relation to forum disputes in family law.  

The correct test to be applied depends upon whether the forum dispute involves parenting issues. 

If parenting is in play, then it depends on whether the dispute is solely about parenting, or is about parenting amongst other matters.

In essence, if the forum dispute is solely about parenting, then the clearly inappropriate forum concept does not apply.  

In those cases, it is the usual question of the child’s best interests which will determine whether the parenting dispute is to be decided in Australia or in the other jurisdiction.

If the forum dispute involves issues other than parenting, then the clearly inappropriate forum test applies.

Interestingly, where more than parenting is involved, it is open to the Court to split the forum question, such that the forum dispute about parenting is determined separately on the basis of the child’s best interests, and the forum dispute about the balance of the issues is determined according to the clearly inappropriate forum test.

Best Interests

If the forum dispute is to be determined on the child’s best interests, those interests are assessed by the Court in the usual way.

Clearly Inappropriate Forum Test

If the clearly inappropriate forum test applies, there is guidance to be found in several Full Court decision as to what matters ought to be considered, in addition to the non-exhaustive list of considerations set out in Voth.

The matters to be addressed and considered with respect to each of the competing jurisdictions include:

  • Whether each competing Court has jurisdiction to deal with the dispute.  This is usually a given by the time the FCFCOA is asked to determine a forum dispute
  • Convenience, expense and location of witnesses.  If most of the relevant witnesses are in the foreign jurisdiction, then that would weigh in favour of Australia being a clearly inappropriate forum
  • Each party’s ability to participate in the proceedings (which can include things like language, and whether a person is required to personally attend the relevant Court)
  • Connection to jurisdictions, and issues upon which relief may depend
  • Whether each jurisdiction will recognise the other’s orders and decrees – this is an important factor when parenting is involved but the clearly inappropriate forum test applies, I’ll have more to say about this factor shortly
  •  Which forum may provide for effectively for a complete resolution of the parties’ controversy
  • The order in which competing proceedings were instituted, and costs which have been incurred
  • The governing law of the dispute
  • The place of residence of the parties
  • Availability of each forum, which includes issues like how long parties have to wait for a final hearing in each jurisdiction
  • Any legitimate juridical advantage to litigation in either jurisdiction

Recognition of orders by of other jurisdiction

The Full Court in the 2017 decision of Kent held on this point that:

If the orders of the foreign court will not be recognised in Australia, that will ordinarily dispose of any suggestion that the local proceedings should not continue.

If the matter involves parenting issues, this can be determinative of the forum dispute, so it is essential to research whether an order of the competing foreign jurisdiction will be recognised in Australia.  

We need to look s 70G of the FLA provides for the registration of “overseas child orders”.

The term “overseas child order” is defined in s 4(1) of the Act.  It means “an order made by a court of a prescribed overseas jurisdiction that…”

So what does that mean? We turn to the Family Law Regulations 1984, at regulation 14.

Sub-regulation (a) points us to Schedule 1A, and says that each country, or part of a country, set out in column 2 of that schedule is a prescribed overseas jurisdiction.

If the country, or part of the country, in which the competing court sits is not there, then the overseas child order will not be recognised in Australia.

For financial matters, the question is less clear. There is no equivalent provision to section 70G in relation to overseas property Orders.

There is, however, authority in relation to enforcement of overseas property orders.  A recent example is the 2022 decision of the FCFCOA (Div 1) sitting the Apellate Jurisdiction in the case of Yadu and Orjit, where the Full Court held that the enforcement of an overseas property order fell within a matrimonial cause for the purposes of section 114(3).

In that case, the foreign Court had made orders about property in Australia.

In my experience, it can be necessary for parties to obtain Orders in both jurisdictions.  

For example, a few years ago I was involved in a matter where the parties had property in Australia and mainland China. The parties had never lived in Australia prior to separation.

After separation, the husband had removed something like three quarters of a million dollars in matrimonial funds from China to buy real property in Australia with his new partner.

A Court in China made Orders about property owned by the parties there, but declined to make Orders about Australian property. Subsequently, my client, the wife, who had never lived in Australia, applied for property adjustment order here.

My client adduced expert evidence from her Chinese lawyer as to the inability of the Chinese Court to deal with Australian property.

The Court in Australia determined that it was appropriate for it to deal with the adjustment of the Australian property. 

These are issues which, in my view, need to be investigated and assessed in each case and in relation to each jurisdiction.

In my view, the question of the recognition by each competing jurisdiction of the other’s decrees is not likely to be determinative in property-only proceedings.  

Thinking Outside the Pool: Section 85A of the Family Law Act

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Foley's List Family Law Breakfast Flyer

I presented this paper on 10 August 2017 at the Foley’s List Family Law Breakfast.

Introduction

Section 85A

Section 85A of the Family Law Act 1975 (“Act”) permits the Court to make Orders adjusting property which falls within a settlement made in relation to a marriage.  Crucially, this means that the Court has power to adjust property interests which are outside the matrimonial property pool available for adjustment under s 79 of the Act, provided that the facts of the case fit within s 85A(1).

The section provides as follows:

85A  Ante‑nuptial and post‑nuptial settlements

(1)       The court may, in proceedings under this Act, make such order as the court considers just and equitable with respect to the application, for the benefit of all or any of the parties to, and the children of, the marriage, of the whole or part of property dealt with by ante‑nuptial or post‑nuptial settlements made in relation to the marriage.

(2)       In considering what order (if any) should be made under subsection (1), the court shall take into account the matters referred to in subsection 79(4) so far as they are relevant.

(3)       A court cannot make an order under this section in respect of matters that are included in a financial agreement.

There is limited case law in relation to s 85A.

In this paper, I rely heavily on the first-instance judgment of Cronin J in Rice.[1]  I was the solicitor for the applicant wife in that case.  To the best of my knowledge following extensive research (both in preparing the wife’s case in Rice for trial, and again in preparing this paper), there is no earlier reported case in which an application under s 85A was successful, and only a handful of cases where the section was discussed at all.  Rice is particularly interesting because it relates in its entirety to s 85A, as the matrimonial property pool was virtually non-existent.

In Rice, Cronin J found that s 85A “is intended to make certain property subject to the orders that could be made under s 79.[2]

Unlike s 106B of the Act, s 85A is not directed at ill-intended transactions.  There is no requirement of an intention to defeat a claim.  So much is clear from the wording of the section.  Cronin J confirmed in Rice that s 85A is not restricted to being “a vehicle to claw back assets which had been put beyond the power of the Court”.[3]

His Honour held that

the fundamental question is whether or not parties other than the husband and wife are holding assets which, by virtue of [the subject settlement], the assets [sic] have been put beyond the reach of the Court to such an extent that the Court cannot do justice.[4]

No De Facto Equivalent

There is no corresponding section in Part VIIIAB of the Act.  There is, therefore, no relief of the kind available under s 85A with respect to de facto financial causes.

How s 85A Works

Ancillary Power

The section does not confer an independent power upon the Court, but rather an ancillary power to another matrimonial cause.[5]  In other words, there must be some head of power to which the application of s 85A may attach.  So much is obvious from the words “in proceedings under this Act” in s 85A(1).

Requirements to Fall within s 85A

The remainder of s 85A(1) may be broken into the following elements:

  • The Court may make an order for the application of the subject property for the benefit of the parties to the marriage, or their children.  This is consistent with the Court’s power to adjust property within the matrimonial pool for the benefit of the parties’ children, as well as for the benefit of the parties.[6]
  • The subject property must have been dealt with by an ante-nuptial of post-nuptial settlement.  I discuss what constitutes a “settlement” below.
  • The settlement in question must have been “made in relation to the marriage”.  I discuss this below.
  • Any order which the Court makes under s 85A must be just and equitable.  These are the concepts of justice and equity with which we are all familiar.

How s 85A is Applied

Cronin J, in Rice, summarised the effect of s 85A(2) as follows:

If the facts do fit within s 85A, the provision is remedial and Part VIII of the Act applies rather than any other determination according to equitable principles.”[7]

In that case, the property in question (several parcels of farm land, on one of which stood the family home) had been transferred to two of the parties’ adult children, who had been joined to the proceedings, with certain rights (including a right of occupation for life) reserved to the parties.

His Honour agreed with the submissions made on behalf of the applicant wife that, if the Court found that there was a nuptial settlement in relation to the marriage in satisfaction of s 85A(1), s 85A(2) required that the matter effectively be treated as a s 79 matter as between all four parties.[8]

No Circumvention of Financial Agreements

The meaning of s 85A(3) is self-evident: s 85A cannot be used to circumvent the ousting of the Court’s jurisdiction by a financial agreement.

A Settlement in Relation to the Marriage

In Rice, Cronin J observed that a “nuptial settlement has to create a right, property or interest for at least [one of the parties to the marriage] if s 85A … is to be applied.[9]  Where “assets originally held by one of the parties to the marriage have been transferred to another person by way of an absolute gift, there is no basis to suggest that there was a settlement.[10]

Settlement

“Settlement” is not a well-defined term.  Cronin J discussed its meaning at length in Rice.[11]  The following are some of the matters which his Honour considered:

  • The definition of “settlement” found in the Settled Land Act 1958 (Vic)

includes inter alia, an agreement under which or by virtue of which instrument, any land is charged, whether voluntarily or by way of family arrangement for the benefit of other persons.[12]

  • In Gill,[13] a case involving construction of a will, Harvey J found that a personal obligation on a beneficiary to provide board for the deceased’s daughters was capable of attracting the intervention of equity.  Cronin J concluded that “Equity will intervene if a settlement requires that intervention.[14]
  • Referring to the English decision of Re Brace, Cronin J indicated that a merely precatory condition to provide a benefit would not be enough to constitute a settlement.[15]
  • Cronin J referred Burke v Dawes,[16] where Dixon J endorsed the word “tenancy” being interpreted “as ordinarily understood arising out of an agreement under which the person in possession was allowed to occupy in consideration of some kind of rent.[17]
  • His Honour found that the “right of occupation for life” retained by the wife in Ricegives rise to an equitable interest under the settlement between all of the parties.[18]
  • It did not matter that the wife’s right to remain living on the property was inalienable.  Cronin J found that there “was a quasi-contract which created an interest in the land for the wife and the husband despite the transfer of the legal title.”  His Honour contemplated whether the daughters could have sold the property while the husband and wife lived there, and reached the view that they could not.[19]
  • His Honour noted that many authorities “confirm that the question is whether the registered proprietor’s powers of alienation, devising and transmission are restrained by the limitations of the settlement.[20] (My emphasis.)  The key element is that the legal owner’s power to deal with the subject property is fettered in some way.  If the transfer to the legal owner was absolute, there is not settlement for the purposes of s 85A.

In Relation to the Marriage

Section 85A was discussed in Kennon v Spry,[21] in separate judgments, by Heydon J and Kiefel J (as her Honour then was).  The other Justices did not consider it necessary to discuss s 85A in any detail.

Heydon J found that the words “made in relation to the marriage” in s 85A(1) could not apply to a trust which was settled 10 years before the parties’ marriage.

 

Kiefel J found that a settlement made in relation to the marriage might involve:

A disposition of property for the purposes of regulating the enjoyment of settlement property … [but] it is necessary that it provide for the financial benefit of one or other of the spouses.  It may imply some kind of continuing provision for them.[22]

In Anison,[23] Hogan J summarised what her Honour apparently considered to be the most important elements of Kiefel J’s reasoning in Kennon v Spry with respect to the words “in relation to the marriage” in s 85A(1), as follows:

a)       s 85A (1) was intended to have a wide operation to property held for the benefit of the parties on a settlement and to which they have contributed and it is intended to apply to settlements whether they occur before or during marriage; and 


b)         the essential requirement of the section is that there be a sufficient association between the property the subject of a settlement and the marriage the subject of proceedings; and 


c)         s 85A (1) does not require that a settlement made prior to marriage be directed to the particular marriage at the point it is made and it is sufficient for the purposes of the section that the association of which it speaks (“made in relation to”) be present when the Court comes to determine the application of the property settled under s 85A (1).[24]

Whilst Kiefel J was part of a majority with respect to the balance of the appeal in Kennon v Spry, there was no majority view with respect to s 85A.  The question of whether a settlement which pre-dates the marriage can be a settlement “in relation to the marriage” remains unsettled.

Rice sheds no light on this, as the settlement in that case was made some 30 years after the parties married.

Where Might s 85A Apply?

The dearth of reported s 85A cases means that there are almost no examples of scenarios which clearly fall within the section.

On the other hand, s 85A is a potentially powerful weapon in the family lawyer’s armoury, which may be used to access property outside the pool as we know it.

I expect that the most common potential application of s 85A may be in relation to trust property which cannot be said to be the property of a party in the usual application of s 79.

However, it is clear from Rice that the term “settlement” encompasses more than a formally established trust.  The settlement in that case was a “quasi-contract” which arose primarily out conversations between the husband, the wife and the daughters.

I have no answers beyond the Rice scenario, but, to my mind, the following questions are interesting:

  • Where the husband and wife place property in a trust of which their children are the corpus beneficiaries, but the husband and wife are income beneficiaries only, would that trust constitute a settlement for the purposes of s 85A?
  • In the following scenario,[25] is the trust a settlement in relation to the marriage?  Is the home subject to adjustment under s 85A?
    • The matrimonial home, originally bought for the parties as a wedding gift by the wife’s parents, is subject to a mortgagee sale after the husband’s business venture fails.
    • The wife’s mother establishes a family trust of which the parties’ children, but not the parties, are the beneficiaries.  The wife’s mother funds the acquisition of the home by the new trust from the mortgagee to enable the family to continue to live there, but to protect it from further risk associated with the husband’s future ventures.
    • The wife’s mother is the appointor of the trust.  There is a corporate trustee, of which the wife and the wife’s mother are the directors and shareholders.
    • The family continues to live in the home for the remainder of the marriage.
    • At the time of trial:
      • the husband and wife are the directors and shareholders of the corporate trustee;
      • the wife is the substituted appointor of the trust; and
      • the wife continues to live in the home with the adult children.

Perhaps, some 34 years after s 85A was inserted into the Act, its time to shine will finally arrive.

[1] Rice v Rice (2015) 52 Fam LR 618 (“Rice”).

[2] Rice at [83].

[3] Rice at [82].

[4] Ibid.

[5] Greval v Estate of the late Greval; Sandalwood Lodge Pty Ltd (Intervener) (1990) FLC ¶92-132.

[6] Act s 79(1)(d).

[7] Rice at [1].

[8] See, generally, Rice at [125] – [160].

[9] Rice at [90].

[10] Rice at [83].

[11] See, generally, Rice at [100] – [117].

[12] Rice at [102].

[13] Gill v Gill (1921) 21 SR (NSW) 400.

[14] Rice at [103] – [104].

[15] Rice at [105].

[16] Burke v Dawes (1938) 59 CLR 1.

[17] Rice at [106].

[18] Ibid.

[19] Rice at [110].

[20] Rice at [113].

[21] Kennon v Spry (2008) 238 CLR 366 (“Kennon v Spry”).

[22] Kennon v Spry at 437, as set out in Rice at [120].

[23] Anison & Anison and Anor [2015] FamCA 973 (“Anison”).

[24] Anison at [69].

[25] From a real case.  The wife contended that the home was outside the pool.  The husband contended that the home was in the pool, but did not plead s 85A, and had not joined the children to the proceedings.  The children went on affidavit to assert their rights under the trust.  The matter ultimately settled on the morning of the first day of the trial.

Wallis & Manning – Use of comparable cases to inform contributions assessment

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In Wallis & Manning,[1] the Full Court of the Family Court (comprised of Thackray, Ainslie-Wallace and Murphy JJ) held that whilst

no two cases are precisely the same … comparable cases can, and perhaps should far more often, be used so as to inform, relevantly, the assessment of contributions within s 79 [of the Family Law Act 1975 (“FLA”)].”[2]

This was an appeal from a judgment of Judge Demack of the Federal Circuit Court delivered on 29 September 2015, three years after her Honour heard the matter.  This case note relates only to the Full Court’s reasons as to the third ground of appeal, particularly in relation to the appellant’s contention of discretionary error with respect to the Trial Judge’s assessment of the parties’ contributions.  Consequently, the facts of the case have no bearing, and I will not set them out.

Their Honours drew a parallel between the exercise of the discretion in assessing contributions in property matters under the FLA and sentencing discretion in criminal matters, noting that, in both, Counsel commonly refer to the “available range”.

The Full Court considered the High Court’s judgment in Barbaro,[3] where

the plurality … [pointed] out that specifying a ‘range’ for the exercise of the relevant discretion does not inform as to which ‘facts and factors’ have been taken into account in arriving at the submitted ‘range’.[4]

It found that

what the plurality said in Barbaro of the sentencing discretion is what can and should be said of assertions as to ‘the range’ … in the exercise of the relevant discretions under s 79.[5]

The Full Court noted the joint judgment of Mason CJ and Dean J in Norbis,[6] where their Honours said

To avoid the risk of inconsistency and arbitrariness … the Full Court … should give guidance as to the manner in which these [discretionary] assessments and judgments are to be made … in a way that preserves … the capacity of the Family Court to do justice according the needs of the individual case.[7]

The Full Court in Manning & Wallis considered the earlier Full Court decision in G v G,[8] and High Court decision in Mallet,[9] which, respectively, supported the proposition that the discretion ought to be guided “by a process of careful analysis and comparison of like cases[10] and that “shared experience and accumulated expertize [sic] should lead to the emergence of generally accepted concepts of what is … just and appropriate”.[11]

It contrasted that position with subsequent Full Court decisions in Petruski,[12] Daymond,[13] and Claughton.[14]

In Petruski, the Full Court, faced with submissions that departure from results in various first-instance decisions with respect to “short marriages” resulted in a “plainly wrong” decision by the Trial Judge, “[considered] such an exercise to be unhelpful.[15]

The Full Court in Daymond held that

there is no necessary basis for the overall assessment of contributions, for example, in one case, to be decided in the same way as in other cases, simply because there may be a broad similarity between the facts of those cases.[16]

In Claughton, Strickland J said that “the Full Court on at least two occasions decried” the use of comparable cases,[17] referring to Petruski and Fields & Smith.[18]

The Full Court in Manning & Wallis agreed with those judgments to the extent that “in a guided but otherwise unfettered discretion the result in another case … cannot determine the result in the case under consideration.[19]  However, their Honours found that Strickland J’s view that “any comparison with those cases is ‘unhelpful’ … is … inconsistent with both High Court … and … Full Court authority”.[20]

Their Honours reiterated that “the judgment of the plurality in Barbaro … provides … powerful guidance in respect of the use of comparable cases for the exercise of the s 79 discretion.[21]

As set out at the top of this case note, their Honours ultimately held that

comparable cases can, and perhaps should far more often, be used so as to inform, relevantly, the assessment of contributions within s 79[22]

Their Honours went on to say that

The word ‘comparable’ is used advisedly.  The search is not for ‘some sort of tariff let alone an appropriate upper and lower end of the range of orders which may be made’.  Nor is it a search for the ‘right’ or ‘correct’ result: the very wide discretion … is antithetical to both.  The search is for comparability – for ‘what has been done in other (more or less) comparable cases’ – with consistency as its aim.[23]

Their Honours, referring to submissions made regarding allegedly comparable cases, noted that

while the facts of each of those cases were … listed in the submissions, there were no submissions which sought to compare the facts there with the case under consideration. …

No argument was made to her Honour as to any consistency emerging from those authorities, nor is there any attempt to canvass a number of different authorities … so as to seek to establish any such comparability.[24]

This highlights the importance of not merely summarising comparable cases, but clearly setting out how, and why, the facts of earlier cases are similar to the case at hand, and identifying any consistency emerging from those earlier cases.

[1] Wallis & Manning (2017) FLC ¶93-759.

[2] At [67].

[3] Barbaro v The Queen; Zirilli v The Queen (2014) 253 CLR 58.

[4] Wallis & Manning at [39].

[5] Wallis & Manning at [40].

[6] Norbis & Norbis (1986) 161 CLR 513.

[7] Norbis at 519-520 cited in Wallis & Manning at [46].

[8] G v G [2001] FamCA 1453.

[9] Mallet v Mallet (1984) 156 CLR 605.

[10] G v G cited in Wallis & Manning at [48] (emphasis in original).

[11] Mallet cited in Wallis & Manning at [49] (emphasis in original).

[12] Petruski & Balewa (2013) 49 Fam LR 116.

[13] Daymond & Daymond [2014] FamCAFC 212.

[14] Claughton & Northey [2015] FamCAFC 213.

[15] Cited in Wallis & Manning at [51].

[16] Daymond at [63], cited in Wallis & Manning at [54] (emphasis in original).

[17] Cited in Wallis & Manning at [55].

[18] Fields & Smith (2015) FLC ¶93-638.

[19] At [57] (emphasis in original).

[20] At [58].

[21] At [64].

[22] At [67].

[23] At [68].

[24] At [71] – [73].

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