Family Law Case Notes – December 2023

Property – Valuations of rural acreage differed by $4,900,000 – leave granted to adduce adversarial evidence where single expert applied comparative sales method and adversarial expert adopted a summation method.
In Henschel & Sartre (No. 3) [2023] FedCFamC1F 1081 (15 December 2023), Berman J heard countervailing interim applications in respect of valuation issues. A single expert (“Mr LL”) had valued an interest in rural acreage (“the Town O property”) via a comparative sales method at $7,750,000. The husband had engaged an adversarial expert (“Mr MM”) who adopted a “summation method” which “focused on differing land types and the dollar value per hectare” and said that the property was worth $12,650,000 ([48] & [58]). The husband sought leave to adduce the adversarial report as evidence.

Berman J said (from [15]):
“Separate adversarial evidence can only be called with the Court’s permission subject to three exceptions to the tendering of further evidence from another expert witness on an issue already addressed by a single expert witness, namely:
If there is a substantial body of opinion contrary to any opinion given by the single expert witness …
If another expert witness knows of matters not known to the single expert witness … necessary for determining the issue.

If there is another special reason for adducing evidence from another expert witness. ( … )[19] It is not suggested that Mr MM provides his valuation report on the basis of a substantial body of opinion contrary to the opinion given by Mr LL. ( … )[58] … [I]n the exercise of valuing the Town O property Mr LL considered that a comparison or comparable sales methodology was best suited to the exercise, whilst Mr MM … adopted a summation method …[59] The result is that two appropriately qualified experts … have given emphasis to alternate valuation methodologies, resulting in a difference of $4,900,000. ( … )[62] Bringing to account the different approaches adopted by … the valuers and the outcome representing a substantial difference …, it is appropriate that leave be given … to call separate adversarial evidence from Mr MM.”

Children – Order for interim supervised time set aside on review – Mother who previously agreed to orders for unsupervised time could not have genuine concerns about the children spending unsupervised time with the father.
In Snow & Curran (No 2) [2023] FedCFamC1F 1120 (20 December 2023), Baumann J heard an application for review of orders made by a Senior Judicial Registrar in respect of the parties’ 11 and 9 year old daughters.
A number of previous interim orders as to time had been made, the first providing for paternal supervised time in circumstances where the mother’s daughter of a previous relationship had made disclosure regarding sexualised behaviour that presented a potential welfare risk.
Following a police interview that found the alleged risk was unsubstantiated, interim orders were made for unsupervised paternal time that graduated to alternate weekends.
In mid-2023, the mother withheld the children, based on new allegations of welfare risk. In August 2023, she agreed to interim consent orders that provided for unsupervised paternal time for daytime visits. Despite that order, a Senior Judicial Registrar ordered that the daytime visits be supervised.

The Court said (from [14]):
“The competing positions … came before a Judicial Registrar on 28 August 2023. … ( … )[16] … [N]o supervision for daytime visits with the father was ordered, although … there was a restraint about lying in the bed with the children…[17] … [A]t that stage, the mother was not raising a concern such that she was seeking orders for supervised time. … [D]uring the hearing before me when I raised this curiosity, I was told that I should see the consent order made … on 28 August 2023 as a ‘holding order’. It makes no sense to me, however, that if there is a ‘holding order for unsupervised time’ that there should, therefore, be any argument about supervision at some later stage unless some new evidence arose. … ( … )[32] … I have formed the view that I can not accept that the children are at risk in spending unsupervised time with the father including … overnight time, provided some conditions that I intend to impose are complied with … ”

Property – Enforcement of orders that split overseas pension interests – Court declined the appointment of an assessor pursuant to r 7.34 where it would likely need to adjudicate every stage of such an appointment.
In Gresham (No 4) [2023] FedCFamC1F 1090 (19 December 2023), Altobelli J heard an enforcement application in respect of property orders that required the parties to do all acts and things to cause a husband’s overseas pension interests to be split, so that the wife received the equivalent of 30% of the value of the husband’s interest in the pension ([3]).

The husband sought enforcement orders that the wife sign and post to “RR Pension” certified documents and details as to her address and tax file number.

The wife sought orders that varied the original order, directing the husband to facilitate payment to her of $1,300,000 by way of a lump sum ([4]).

The Court said (from [24]):
“[The husband] … lists … what steps the wife needs to take in order to facilitate compliance … and indicates that thereafter RR Pension will be able to facilitate the wife receiving her 30 per cent … ( … )[25] The wife’s case was that … the orders are impracticable based on the advice she received from a financial advisor … Mr BR … ( … )[27] The wife indicated … Mr BR instructed her not to sign them due to various issues such as ‘tax contamination’, ‘jurisdictional issues’ and the fact that there is no ‘recognising fund’ in Australia who will allow access to a pension fund at age 50 … ( … )[34] … The Court has specifically considered its power to appoint an assessor pursuant to section 102B of the Act, ‘to help it in the hearing and determination of the proceedings … or any matter arising under them’. … [T]he Court does not believe that … it would resolve the differences in expert opinion without disproportionate delay and cost. The … history of this matter leads this Court to conclude that the Court would need to intervene and adjudicate on almost every stage of the process of appointing an assessor. ( … )”

Procedure – Wife deposed that she had received advice as to having good prospects of obtaining settlement of at least 50% – No waiver of legal professional privilege as deposition an inadvertent and unintentional mistake.
In Pickford [2023] FedCFamC1F 1087 (15 December 2023), Altobelli J dismissed a husband’s argument that the wife had waived legal professional privilege in matrimonial property and parenting litigation that was part-heard.

The wife filed an affidavit that read “I have been advised that: I have a strong prima facie case and good prospects of obtaining a final property settlement of at least 50% of the non-superannuation net asset pool” and that “the amount I will ultimately receive by way of property settlement will be more than sufficient to cover the amount now sought by me for interim costs” ([2]).
The husband said that the wife had waived legal professional privilege in relation to the advice referred to in her sworn material and asked that it be produced. The wife said that she had mistakenly sworn a draft version of her affidavit, with a subsequent version of the draft deleting the paragraph that referred to her legal advice ([12]).

The Court referred to s 118 of the Evidence Act 1995 (Cth) (as to legal professional privilege) and s 122 of that Act (as to the loss of such privilege) and said (from [7]):
“The Full Court in Morris & Morris (No 3) [2023] FedCFamC1F 927 has recently summarised the relevant law … ( … )[9] The High Court described the applicable principles in Mann v Carnell [1999] HCA 66 as follows:
28. … It is inconsistency between the conduct of the client and maintenance of the confidentiality which effects a waiver of the privilege. …
29. Waiver may be express or implied. … What brings about the waiver is the inconsistency, which the courts, where necessary informed by considerations of fairness, perceive, between the conduct of the client and maintenance of the confidentiality; not some overriding principle of fairness … ( … )[13] … [T]he Court is satisfied that s 122(3) of the Evidence Act does not apply, that is that the wife did not knowingly and voluntarily, expressly or impliedly, waive the privilege that attached to the advice that she referred to. … It was an inadvertent and unintentional mistake, and the wife’s solicitors acted quickly, and reasonably, to protect confidentiality. The Court also accepts that the mistake must have been obvious and apparent to the husband, and on that basis … the privilege should not be lost …”.

Property – Court erred in double counting premature distribution of matrimonial property – Transfer from joint account to wife’s personal account of historical interest, whereas her dissipation of amounts transferred to her account of critical importance.
In Zao & Lee [2023] FedCFamC1A 232 (20 December 2023), the Full Court (McClelland DCJ, Jarrett & Riethmuller JJ) dismissed with costs a wife’s appeal against property orders made by Altobelli J that included notional add-backs totalling $636,712 ([5]).

The $636,712 was comprised of withdrawals made by the wife from a joint account, a deposit for a real property and an add-back for gambling ([7]). The wife appealed and argued that the add-backs included $403,930 of funds already on the balance sheet – that the Court had “double-dipped” ([5]).
The respondent husband agreed that the adding back of the deposit ($57,330) was sourced from the withdrawals made by the wife from the joint account, such that the inclusion of both in the balance sheet was an error. The Court adjusted the sum payable by the wife to the husband to reflect the double-dip that was agreed.

As to $145,570 of the controversial withdrawals, the Court said (from [13]):
“ … [T]he fact of the transfer from the joint account to the [wife’s] account is of historical interest only. What is of critical importance is the reason for the dissipation of amounts subsequently withdrawn from the [wife’s] account.[14] … [The wife’s] case is that [amounts included as add-backs] … were made using the $145,570 transferred to her account from the joint account – an amount already taken up … ( … )[25] … [T]he [wife] submits before us that the evidence … was that the source fund for the transactions … were ‘a myriad of transactions … ’ … [T]he … judge was given no assistance to identify how … the myriad of transactions demonstrated what the [wife] now argues. …[26] The question of whether the add-back items … were double counted is a question of fact to be determined on the evidence presented at the trial. The evidence … does not persuade us that the … judge [erred] …”

Spousal maintenance – Court erred by finding de facto wife could adequately support herself as she cut down her expenses – Reasonable standard of living under s 90SF(3)(g) does not mean subsistence.
In Qin & Donato [2023] FedCFamC1A 223 (11 December 2023), Aldridge J, sitting in the appellate jurisdiction of the Federal Circuit and Family Court of Australia allowed an appeal against Judge Jenkins’ dismissal of a de facto wife’s application for interim maintenance.

The Court noted that the appeal book spanned 1,951 pages, including 648 pages of invoices, in response to the de facto husband “taking issue with the costs of the appellant’s claimed household supplies, clothing, shoes, cleaning and other necessary commitments” ([4]).

The Court said (from [6]):
“In hearing interim spousal maintenance, the Court does not conduct an audit of the parties’ expenses … ( … )[10] … [R]equiring precise proof of … ordinary everyday expenses … does not appear to be in accordance with [the] obligation under s 67 and s 68 of the Federal Circuit and Family Court of Australia Act 2021 (Cth) … to conduct the proceedings according to law and as quickly, inexpensively and as efficiently as possible. … ”

As to the dismissal of periodic maintenance, the Court said (from [21]):
“After finding that the appellant’s expenses exceeded her income …, the … judge noted that the appellant was able to support herself without increasing her liabilities since 2 February 2022 (at [27]). ( … )[23] This led to the finding that ‘the [appellant] appears to have been able to adequately support herself without additional support since February 2022’ (at [29]). ( … )[27] … Whilst adequate needs can often be inferred from … expenses, such expenses may not extend to reasonable needs. A person with no income and who cannot pay any expenses, still has needs.[28] … [W]hat are assessed to be ‘reasonable needs’ are to be assessed having regard to the parties’ previous standard of living. ( … )[30] … [T]he … judge correctly identified the task as falling short of ‘ensuring’ that the previous standard of living was maintained, that standard remained relevant, albeit not determinative … ”

Appeal – Application to extend time to file draft index to appeal book filed 1 hour before deadline – Appeal deemed abandoned under FLR 13.14(3) despite the filing of that application – Appeal reinstated and security for costs ordered.
In Fowles [2023] FedCFamC1A 238 (20 December 2023) Austin J, sitting in the appellate jurisdiction of the Federal Circuit and Family Court of Australia, allowed an appeal against the appeal registrar’s refusal to file an Amended Notice of Appeal, an Application in an Appeal and an affidavit in support.
After a 43 day trial heard over 3 years, Bennett J made orders dividing a $7 million asset pool 60:40 in favour of the wife ([6]). The husband filed a Notice of Appeal against that order within time, but later failed to file a draft index to the appeal book within the 28 day time limit (per r 13.14). He sought to extend the time limit by 2 months.

The appeal registrar rejected the husband’s documents, explaining that where they were filed about an hour before r 13.14(3) deemed the appeal to be abandoned, the application seeking an extension of time could not be listed, served and determined before the appeal would be deemed abandoned ([15]).
The husband appealed the appeal registrar’s decision and filed an application seeking to reinstate the appeal.

The Court said (from [29]):
“ … An extension of time is not unreasonable in light of the length of the trial and the volume of documents adduced in evidence . ( … )[42] The applicant moved with commendable haste to re-instate the appeal after its deemed abandonment. No prejudice could accrue to the [wife] by the appeal’s re-instatement after such a short interlude of abandonment. …”

The Court considered the wife’s application for security for costs and said (from [58]):
“ … The [wife’s] giddy estimate of her costs of the appeal being $600,000 defies rational explanation and is preposterous. Making an order for the … payment of any sum remotely approaching that amount … would be tantamount to the Court’s endorsement of and complicity in the lawyers’ practice of rank avarice. The practice should be condemned, not encouraged.”

Spousal maintenance – No error in exclusion of compulsory expenses associated with non-income producing real estate – Contractual or unavoidable expenses validly excluded if they are unreasonable.
In Herczog [2023] FedCFamC1A 219 (7 December 2023), Aldridge J, sitting in the appellate jurisdiction of the Federal Circuit and Family Court of Australia, dismissed with costs a husband’s appeal against an order of the Magistrates Court of Western Australia that he pay $1,647 per week by way of interim spousal maintenance to the wife.

When making the order, the Court also ordered the husband to pay the wife a partial property settlement of $60,000, finding that the net asset pool had an “approximate total value of $2,329,688” ([9]).
The Court found that the husband controlled a family trust, business entities and “various real estate” interests; that he controlled how much he was paid as income (including dividends); that his disposable income was “not clear”; that his income was at least $2,770 per week via rental income and a further $6,942 per week of non-rental income; and that the companies under his control earned profits of $1.6 million in 2022 and $800,000 until May 2023 in that financial year ([11]).

The Court said (from [17]):
“The applicant’s point … is that the expenses for the properties were compulsory and therefore should not have been excluded. Yet unreasonable discretionary expenses may also be compulsory, if they are the subject of a contract. It is clear from the reasons in [Mee and Ferguson [1986] FamCA 3] … that what is meant to be included are unavoidable commitments such as taxation, Medibank levy, compulsory superannuation, and the like and necessary living expenses, but not all expenses the subject of a contractual obligation. ( … )[28] The applicant’s identification of the test, namely that all expenses that are contractual, unavoidable, compulsory or longstanding must be taken into account ignores the statutory requirement of reasonableness and the obligation to make such order as is proper. ( … )[30] … [W]here it was found without challenge that the exact amount of the applicant’s income was not clear and that he had the capacity to control his income and that it was not reasonable, in the circumstances, for the applicant to prioritise the retention of non-income earning properties the outcome cannot be described as unreasonable or plainly unjust. … ”

Craig Nicol and Keleigh Robinson
Co-editors, The Family Law Book
craig@thefamilylawbook.com.au
keleigh@thefamilylawbook.com.au