Joint Custody in Australia – Equal Time (and what do we mean by Shared Parenting?)

http://www.kidshelp.com.au/grownups/news-research/hot-topics/shared-custody.php

http://www.familylawwebguide.com.au/spca/pg/start

http://www.aifs.gov.au/institute/pubs/fm2003/fm65/em.pdf

http://www.austlii.edu.au/au/legis/cth/consol_act/fla1975114/s65daa.html

http://www.findlaw.com.au/articles/2170/a-goode-thing-cowling-is-dead.aspx

‘The concepts of “residence” and “contact” were of course discarded when the Family Law (Amendment) Act came into force on 1 July 2006.’

http://www.australianmensrights.com/Newspaper_Articles/Australian_Family_Law-Shared_Equal_Parenting_Laws-Newspaper_Articles.aspx

Joint custody recommendations win praise

Bevan & Bevan [2013] FamCAFC 116 – How the Family Court deals with ‘notional add-backs’ and ‘wastage’ in the post-Stanford era

Section 79 of the Family Law Act (Cth) 1975 essentially deals with the distribution of property when a marriage relationship breaks down.

It was relatively well-settled law that in certain circumstances, a Court exercising jurisdiction under s 79 could notionally ‘add-back’ property which had been prematurely dissipated or ‘wasted’ from the asset pool.*

This is, however, arguably no longer the case.

The recent Full Family Court case of Bevan & Bevan [2013] FamCAFC 116, and the High Court case of Stanford v Stanford [2012] HCA 52 on which the Full Court relies, casts grave doubts as to whether it is at all appropriate for a Court exercising jurisdiction pursuant to s79 to ‘add back’ property to the pool which is no longer in existence.

Pertinently at [79] of Bevan, Thackray J and Bryant CJ observe that:

…“notional property”, which is sometimes “added back” to a list of assets to account for the unilateral disposal of assets, is unlikely to constitute
“property of the parties to the marriage or either of them”, and thus is not
amenable to alteration under s 79. It is important to deal with such disposals
carefully, recognising the assets no longer exist, but that the disposal of them
forms part of the history of the marriage – and potentially an important part.
As the question does not arise here, we need say nothing more on this topic,
save to note that s 79(4) and in particular s 75(2)(o) gives ample scope to
ensure a just and equitable outcome when dealing with the unilateral disposal of property.

(emphasis added).

Further, [160] per Finn J notes, at [160} of Bevan that:

These reminders that the jurisdiction under s 79 is a jurisdiction to alter
individual interests in title to property and that there is no community of
property in this country, might also call into some question the current practices
in relation to the treatment of property which is no longer in existence but
which one party has had the use of (the so called “addbacks”), and perhaps also
of the unsecured liabilities of one or both parties. It may well be that these
matters should more strictly be considered in making findings under s 79(4)(e)
(i.e. s 75(2)), or in an extreme case, when considering the question under
s 79(2) as to whether it is just and equitable to make any order under s 79. But
these questions do not arise in the present case, and are thus for another day.

(emphasis added).

If, therefore, the ‘four-step process’ is still the correct approach for the majority of family law property cases (and this is by no means certain following the High Court’s comments in Stanford) it appears that, rather than dealing with ‘wastage’ in the first step (that is, identifying and valuing the property of the parties), the correct approach is to deal with it during the third step (and, more specifically, with reference to s75(o)).

It may be that if we are being true to the legislation, there is in fact no such thing as a ‘notional asset.’ This is a question that remains unanswered in light of the decision in Bevan.

* See, especially ‘Enlarging the Asset Pool – Adding Back Notional Assets‘ by the Honourable Justice Judy Ryan.

Marc Testart

Principal Family Lawyer

Testart Family Lawyers

Experience. Excellence. Compassion.

Useful links:

Shared care, joint custody and equal time – what does Equal Shared Parental Responsibility really mean?

At family law in Australia there is a presumption of what is known as ‘Equal Shared Parental Responsibility’. This presumption raises many questions.

Does this mean that there is a presumption that each parent will spend equal time with the children? Is there a presumption at family law that there should be ‘shared care’? Does Equal Shared Parental Responsibility necessarily lead to joint custody?

The short answer is ‘no’, but there is a lot of confusion surrounding what is meant by Equal Shared Parental Responsibility. Put at its most simple, ‘Equal Shared Parental Responsibility’ is about parents making joint decisions about ‘major long-term issues’; things such as childrens’ health or education or religion. ‘Equal time’ is about the actual time that the parents spend with the children. And while some people might think that shared care, joint custody or 50/50 time is the ‘fairest’ outcome for parents, it is not necessarily in the best interests of the children.

Indeed the law recognises this. In a seminar paper delivered in 2009, Federal Magistrate Phipps (as he then was) points out 3 main categories of cases where Equal Shared Parental Responsibility may not be in the best interests of the children. Briefly, these are:

  • family violence
  • abuse of children
  • when parents are incapable of consulting with each other and making joint decisions.

There has been a great deal of criticism of the presumption of Equal Shared Parental Responsibility. Professor Belinda Fehlberg argues that the presumption is confusing:

‘that many people now mistakenly assume the starting point is that children should spend equal time with each parent. Parents and lawyers report fathers feeling entitled to 50-50 care and believe the reforms have favoured fathers.

The legal starting point is in fact equal shared parental responsibility or major decision-making.’

This concern is shared by His Honour Family Court Judge Richard Chisholm and the Australian Greens. For example, the Greens have been concerned that:

‘…while ‘equal shared parental responsibility’ and ‘equal time’ are not one and the same, they are inter-related in a way that creates an unacceptable formula in the bill… [and]…that with a starting point of a child spending ‘equal time’ or ‘substantial and significant time’ with each parent this will be a de facto presumption of equal time…’

This post is not suggesting that the presumption of Equal Shared Parental Responsibility should be repealed. There are many situations where it is perfectly appropriate for both parents to make major decisions such as the childrens’ health and education and religion jointly. There are also many situations where equal time is in the best interests of the children. However in seeking joint custody, shared care, or 50/50 time, it is important to understand that the best interests of the children are paramount. The Court must look at each case on its merits, and that while there is a presumption of Equal Shared Parental Responsibility, it can be rebutted, and there is no presumption, per se, of joint custody or shared care.

Marc Testart

Principal Family Lawyer

Testart Family Lawyers

Experience. Excellence. Compassion.

Useful links:

Strahan v Strahan [2011] FamCAFC 126 – The Principles Behind Making Interim (Property) Orders in Family Law

Interim orders affecting the rights of parties in Family Law matters are common-place, but their impact can be extraordinary. If litigation drags on for 1-2 years (and often longer), the implications of the decisions of the trial judge or federal magistrate before trial are, of course, magnified. The case of Strahan (Leave to Appeal Interim Orders and Appeal Against Costs Orders)* describes the principles applied in making interim (property) orders pursuant to Family Law proceedings.

This appeal arose from the decision of Dawe J, who refused to exercise her discretion to make an interim property settlement of $9 million in favour of the Wife. This seems like an incredible amount of money, but originally the Wife was asking for an interim payment of $24 million, and the Husband had conceded that the asset pool was $78 million (the Wife claimed that there were substantial assets overseas in addition).

Exercising the Discretion to Make Interim Orders Pursuant to s 79(6) of the Family Law Act (Cth) 1975 (‘the Act’)

In dismissing the appeal, the Court (consisting of Coleman, May and Murphy JJ) referred [at 32] to the decision of FM Reithmeuller in Wenz v Archer[2008] FMCAfam 1119 with approval:

‘Her Honour, again, with respect correctly, referred to the “balancing of the risks of unduly limiting the final orders that can be made (or even potentially defeating parties’ claims or legitimate expectations) against the circumstances said to show that it is just and equitable to make interim orders”, as discussed by Federal Magistrate Reithmuller in Wenzand referred to by the Full Court (per Boland and O’Ryan JJ) in Strahan & Strahan(2009) 42 Fam LR 203.’ (Note the similar case name; they were collateral proceedings!).

In Wenz, the issue was dealt with in incredible depth by the learned Federal Magistrate, who conducted a thorough survey of the authority at the time** (including further still collateral proceedings regarding the ‘Strahans’!***)

Synthesising the principles in the authority, and having regard to s 79 of the Act, FM Reithmuller’s articulated the test at [52], being:

‘Whether it is just and equitable to make interim orders will require a balancing of the risks of unduly limiting the final orders that can be made (or even potentially defeating parties’ claims or legitimate expectations) against the circumstances said to show that it is just and equitable to make interim orders.’

His Honour FM Reithmuller went on to say at [57]:

A review of the legislation and authorities allow for a number of comments to be made concerning the appropriate approach to applications for interim property settlement orders:

– There is power to make interim property orders under s.79, which should be exercised when ‘appropriate’: s.79(1) and (5).
-In order to determine whether it is ‘appropriate’ to exercise the power, the case must be analysed as required by s.79 through the usual 4 step process of identifying the pool, contributions, s.75(2) factors, and whether the ultimate orders are ‘just and equitable’.
– As it is an interim hearing careful consideration must be given to the potential impact of any disputed facts and circumstances. Consideration must be given to the claims of the parties and their legitimate expectations. Whether the orders could later be reversed, bearing in mind the need to ultimately be in a position to make ‘appropriate’ orders that are ‘just and equitable’, will often be a significant, but not necessarily determinative consideration. For example the sale of an asset may not be reversible, but may be inevitable on any version of the facts of the case. In other cases the present needs may be so compelling as to outweigh these risks.
– The reasons for making interim orders must be identified and assessed to allow them to be properly weighed against the risk that interim orders may pose to the parties’ claims or legitimate expectations.
– Orders under s.79 are to provide relief to parties to the marriage by ensuring that they receive ‘appropriate’ shares of the matrimonial resources. It would be naïve to overlook the significant power differential between parties in many cases as a result of access to financial resources in the interim, pending final orders under s.79. It may well be unjust and inequitable for one party to be denied access to matrimonial property for a substantial period whilst awaiting a trial. Similarly, it may be unjust and inequitable to require the sale of a matrimonial home in the interim where a party has no other assets and can not reasonably purchase an alternative home until the quantum of the final orders is determined. In this sense regard must be had to the positions of the parties at the time of the application for interim orders.

Conclusion

Ultimately the Wife in Strahan failed, mainly because the trial judge was not satisfied as to the size of the asset pool (see below). Perhaps of note too was the issue that the application was for $24 million and that the $9 million ‘fall back position’ was never actually articulated by Counsel for the wife (at [28]-30]). The proceedings being adversarial, it did not fall to the learned trial judge to award the Wife $9 million dollars, and the Full Family Court declined to impeach her decision (at [31]):

‘The proceedings before the trial Judge were adversarial. The parties were both represented by Senior Counsel. Absent any indication to the contrary, her Honour was entitled to consider the wife’s claim, and was not required to explore possible claims which the wife had not made.’

Further, the Full Family Court held (at [38]) that:

‘Her Honour recorded, again accurately… that there is considerable dispute about the likely final property settlement order because of the dispute about the assets to be considered, the Court cannot at this stage determine that it is in the interests of justice to make a further interim property order. The circumstances which currently exist do not make it appropriate for the Court to exercise the power available to it.’

The appeal was dismissed.

Marc Testart, Principal Family Lawyer

*Strahan & Strahan (Leave to appeal interim orders and appeal against costs order) [2011] FamCAFC 126 (10 June 2011)

** Most notably at [30] refering to:

Further at [33] referring to Bearup and Bearup [1993] FamCA 72 (per Baker J, who spoke of the caution which needs to be exercised before selling matrimonial property);

Further at [34] referring to: Bonisoli and Bonisoli [1996] FamCA 45 (Ellis, with whom Fogarty and MayJJ agreed);

Further at [37] referring to Pedersen and Pedersen [2003] FamCA 625 (per Ellis, Rowlands and Finn JJ); and

Further at [38] refrering to Spoke & Spoke [2008] FamCAFC 59  (per Warnick, May, and Boland JJ).

*** Note the following citations:

At the date of the hearing of Strahan & Strahan (Leave to appeal interim orders and appeal against costs order) [2011] FamCAFC 126, each party had expended in excess of $10 million dollars in legal fees!


Warren v Child Support Registrar and Anor [2011] FamCAFC 95 – Costs, Appealable Error, and the Child Support Agency in the Family Jurisdiction

Normally, in civil jurisdictions, costs follow the event. That is, if a party is wholly successful, the other party will be liable for its costs (on a party-party basis). This is not so in the Family Law jurisdiction, as the recent Full Family Court of Australia in Warren & Child Support Registrar (‘Warren‘) illustrates.

The case is also illustrative of some other notable fundamental principles, namely:

  • a party’s liability for child support is a debt due to the Commonwealth, not the other ‘spouse’ (or of course former spouse as the case may be); and

  • there is always a presumption (which is of course rebuttable) that when a decision is appealed, it is correct until the appellant demonstrates an appealable error.

Costs Under the Family Law Act (Cth) 1975 (‘the Act’)

s 117 of the Act is the source of power in the Family jurisdiction in which to award costs. Notably, s 117(1) says):

(1) Subject to subsection (2)…each party to proceedings under this Act shall bear his or her own costs.

Thus the default position in Family Law matters is that the Family Court is, in general practice, a ‘no-costs’ jurisdiction.

Having said that, the Court has a discretion under s 117(2) to award costs, having to take into account such things in s 117 (2A), for example, as the financial circumstances of the parties (and whether they were legally aided), their conduct, whether they were in breach of orders, wholly unsuccessful, their conduct, and ‘any other matters that the court considers relevant’ (s 117 (2A(g))).

This is a very broad discretion indeed. The High Court has held (in Penfold v Penfold [1980] HCA 4 at [14]):

‘[s117(2)] does not in our view as a matter of law require the judge to specify the circumstances which justify the making of an order. It does not expressly say so, and in the context of the making of an order for costs there is no sufficient basis for making an implication. Judges very frequently make orders for costs without giving reasons or making findings, even when costs are in issue. The absence of reasons or findings does not in itself indicate that a judge has erroneously exercised his discretion to award costs, though it will place an appellate court in the position of examining the circumstances and of determining for itself whether the circumstances show that the discretion was erroneously exercised (Kent v. Kent (1970) 92 WN (NSW) 503, at p 505 ). Accordingly, in the absence of some positive legislative indication we should not attribute to Parliament the requirement that a judge must make particular findings in relation to an order for costs.

In Warren, the Appellant Father was wholly unsuccessful in his case against the Child Support Registrar (‘CSR‘). Unsurprisingly, the CSR sought costs, and, less surprising, the Appellant resistant.

The Full Court took a very measured view in light of the dicta in Penfold. Their approach is noteworthy, and, with respect, shows a great degree of procedural fairness (perhaps taking into account that the Appellant was ‘in-person’). It said at [36]:

‘Beyond asserting that it would be “unfair, unjust and inequitable to impose costs” on the appellant in his “endeavour to offer the children access to himself”, the appellant merely asserted that he “lives carefully on a very limited potential retirement income”.

As is not in doubt, the appellant’s challenge to the decision of the learned Federal Magistrate has been wholly unsuccessful and totally misconceived, as was his appeal to the Federal Magistrates Court. Those circumstances, to which regard can properly be had pursuant to the provisions of s 117(2) of the Act, provide a compelling basis for forming the opinion required by s 117 of the Act.

The Court is, however, also obliged to consider financial circumstances in the course of determining the costs application. Nothing placed before this Court by the appellant provides a basis for concluding that his financial circumstances are such that the Court should decline to exercise the discretion to make a costs order against him.’

At this stage of the Court’s reasoning, it would appear likely for it to award costs against the Appellant. But the Court continued [at 39]:

‘The Court will however order that the appellant have leave to file and serve submissions in opposition to the making of a costs order against him and a verified financial statement disclosing his assets and liabilities, income and fixed expenditure. A period of 21 days in which to file any such submissions and/or affidavit of financial circumstances would be reasonable in the circumstances.

In the event that any further submissions and/or evidence of financial circumstances filed by the appellant may be likely to disincline the Court to make a costs order against him, the Court will advise the CSR who may then make further submissions with respect to costs.’

This is an approach markedly different from that countenanced in Penfold.

Child Support is a Debt to the Commonwealth

In Warren the Appellant complained that the Wife was not involved in the proceedings. The Court explained [at 4]:

The appellant’s former wife took no part in the proceedings either before the learned Federal Magistrate, or in this Court. Although the appellant took issue with his former wife’s failure to participate in the proceedings, his concerns in that regard are misconceived. As is not in doubt, the appellant’s liability for child support is a debt due to the Commonwealth, and only enforceable and recoverable by it, through the CSR (see section 30 of the Child Support (Registration and Collection) Act 1988 (Cth). The appellant’s former wife’s non-participation in the proceedings could in no way advance his appeal to this Court. Nor could it have advanced his appeal to the Federal Magistrates Court.

In terms of general appelate principles, the Court was in no doubt that at [6] that:

‘there is a presumption that the decision of the Court below was correct (see Australian Coal & Shale Employee’s Federation & The Commonwealth [1953] HCA 25; (1953) 94 CLR 621). As is also not in doubt, in order to be successful in this Court, the appellant must demonstrate appealable error. What is capable of constituting appealable error is not in doubt as the High Court made clear in House v The King [1936] HCA 40;(1936) 55 CLR 499,and has re-affirmed on numerous occasions since.’

Although the Full Family Court did not expressly state this ‘doubtless principle’ they were no doubt (in my mind at least :)) referring to the famous dicta in House v The King where the majority of Dixon, Evatt and McTiernan JJ said:

The manner in which an appeal against an exercise of discretion should be determined is governed by established principles. It is not enough that the judges composing the appellate court consider that, if they had been in the position of the primary judge, they would have taken a different course. It must appear that some error has been made in exercising the discretion. If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so. It may not appear how the primary judge has reached the result embodied in his order, but, if upon the facts it is unreasonable or plainly unjust, the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law reposes in the court of first instance.’

In Warren the Court, ‘anxious to avoid giving the appellant any basis for impugning its determination of his appeal by relying upon material or evidence which was not before this Court’ (at [9]) was clear [at 26]:

‘Nothing to which this Court has been referred establishes that any finding of fact made by the learned Federal Magistrate with respect to this topic was not reasonably open to her. Nor has any conclusion reached by her Honour in reliance upon those findings of fact been shown to have been other than reasonably open to her. This Court has not been referred to any evidence which, if accepted, would render problematic any finding of fact made or conclusion reached by the learned Federal Magistrate…’

Thus on all questions (save for costs, as explained above) the Appellant in Warren failed.

Marc Testart, Principal Family Lawyer

Overcoming Langford v Coleman: When can consent orders be set aside in Family Law proceedings?

If a party enters into consent orders which the party feels do not reflect the agreement of that party, can the orders be set aside? Can the party ‘get out of the orders?’

The general proposition appears to be ‘no’, unless:

a) there has been miscarriage of justice under s79A of the Family Law Act (Cth) 1975; or

b) the agreement itself underlying the orders can be invalidated itself in some way pursuant to the Court’s inherent jurisdiction.

Langford v Coleman

The case of Langford v Coleman 1992 16 FAM LR 228  is the starting point. This case suggests that there is a rule in family law that consent orders cannot simply be set aside, for example, on the grounds of mistake.

In Langford the Husband and Wife ran a florist shop. After separation the wife commenced proceedings for property settlement and orders were made (by consent) which (i) formally terminated the florist shop partnership between the husband and wife, (ii) confirmed the wife as sole proprietor of that business and (iii) indemnified the wife against certain debts including debts arising out of the florist shop business. The husband appealed, unsuccessfully from the orders, principally on the basis that there was a mistake in the interpretation of the indemnity and the wife should indemnify him against the debts arising out of the florist shop from the date upon which she had taken over the business as sole proprietor.

The Principle

In Langford, Nygh J (with whom the rest of the Full Court agreed), said:

the proposition that at least in matrimonial causes once any financial agreement reached between the parties is embodied in consent orders, it is to these orders alone that the Court must look. The Court cannot take into account whatever agreement might or might not have been reached between the parties which led to the making of the consent orders.

The authority for that proposition is found in the opinion of the Privy Council on appeal from Hong Kong in de Lasala v. de Lasala (1980) AC 546 at 560, where Lord Diplock said:

“Financial arrangements that are agreed upon between the parties for the purpose of receiving the approval and being made the subject of a consent order by the court, once they have been made the subject of the court order no longer depend upon the agreement of the parties as the source from which their legal effect is derived. Their legal effect is derived from the court order.”

That principle was applied by the English Court of Appeal in the case of Thwaite v. Thwaite, (1981) 3 WLR at 96 and I refer particular to the judgment of Lord Justice Ormrod, as he then was, at page 101, where his Lordship said:-

“The effect of eliminating the contractual basis of these consent orders should simplify the problems. If their legal effect is derived from the court order it must follow, we think, that they must be treated as orders of the court and dealt with, so far as possible, in the same way as non-consensual orders.”’

Exceptions to Langford – Getting Around the Principle

s79A

Although enacted before Langford, s79A of the Act does not seem to have been given any consideration.

Section 79A of the Act gives the Court a broad discretion and clearly sets out grounds where the court may vary an order. These include a miscarriage of justice by reason of situations including:

a) fraud;

b) duress;

c )suppression of evidence; or

d) any other circumstancei

Though it does not appear to expressly include a mistake, it appears possible that it would fit into the ‘any other circumstances’ provision.

In the Marriage of BF and DA Simpson

Langford does not seem to pay regard to the case of In the Marriage of B F and D A Simpson – (1982) 8 Fam LR 467, which, although only the decision of a single judge and prior to Langford, was not expressly overruled by Langford, contradicts it, and nevertheless sets out a different approach to the law.

In Simpson O’Leary AJ set aside orders made having found that there was a miscarriage of justice. In his words, ‘the fact that the agreement of compromise was void, and the orders made on it invalid, was a circumstance by reason of which there has been a miscarriage of justice.’ In Simpson the orders were found to be void for uncertainty.

In Simpson the Court applied the s79A framework and referred to the Cour’t’s inherent jurisdoction to set-aside consent orders as described in the High Court of Australia decision of Harvey v Phillips (1956) 95 CLR 235

Harvey v Phillips

Although Harvey was a personal injuries case, the High Court, consisting of Dixon McTiernan, Williams, Webb and Fullagar, cited the English case of Huddersfield Banking with approval:

The question whether the compromise is to be set aside depends upon the existence of a ground which would suffice to render a simple contract void or voidable or to entitle the party to equitable relief against it, grounds for example such as illegality, misrepresentation, non-disclosure of a material fact where disclosure is required, duress, mistake, undue influence, abuse of confidence or the like. The rule appears rather from positive statements of the grounds that suffice (cf Halsbury’s Laws of England, Vol 26, 2nd ed, pp 84, 85); but there is a dictum of Lindley LJ which is distinct enough: “. . . nor have I the slightest doubt that a consent order can be impeached, not only on the ground of fraud but upon any grounds which invalidate the agreement it expresses in a more formal way than usual . . . To my mind the only question is whether the agreement on which the consent order was based can be invalidated or not. Of course if that agreement cannot be invalidated the consent order is good”: Huddersfield Banking Co Ltd v Henry Lister & Son Ltd (1895) 2 Ch 273, at p 280.

Here the use of the phrase ‘not only of fraud but of any grounds which invalidate the agreement it expresses’ is most interesting. This, on the face of it, seems to contradict the decision in Langford. It also seems to extend the Court’s ability to void consent orders on any ground which would void the underlying agreement, which would include in some circumstances mistake, frustration of contract, and estoppel.

Conclusion

The decision in Langford is a sensible decision. Courts would be flung into chaos if orders were resiled from simply because one party sought to re-open the case. It would involve introducing new evidence to show why the consent orders ought to be impeached and place a huge strain on an already under-resourced jurisdiction, where parties are encouraged to reach agreements putting their disputes at an end.

Nevertheless in some circumstances it may be necessary to scrutinise the situation beneath the consent orders. While on the face of it, Langfordappears to dismiss this possibility, there appears to be authority available to circumvent the strict application its rule.

Marc Testart, Principal Family Lawyer

is79A(1)(a).