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Family Law Case Notes
Robert Glade-Wright
Property – High Court sets aside stay order – Full Court misapplied res judicata and Anshun estoppel
In Clayton v Bant [2020] HCA 44 (2 December 2020) the High Court (Keifel CJ, Bell, Gageler, Gordon & Edelman JJ) allowed with costs an appeal where the Full Court permanently stayed a wife’s application for property and spousal maintenance as she had failed to contest divorce proceedings in Dubai.
A citizen of the United Arab Emirates, the husband issued divorce proceedings in Dubai in 2014. The wife did not appear, such that a Dubai court granted the husband an “irrevocable fault based divorce” ([8]) and ordered the wife to repay an amount of an advanced dowry and costs. The husband then sought a permanent stay of the wife’s property and spousal maintenance proceedings in the Family Court of Australia, arguing res judicata. Although unsuccessful at first instance, the Full Court stayed the proceedings, finding that the Dubai proceedings had determined the same cause of action and the wife’s failure to pursue her claim in Dubai meant she was estopped from pursing a spousal maintenance claim in the Family Court. The majority of the High Court (Kiefel CJ, Bell and Gageler JJ) said (at [26]):
“Once it is appreciated that the rights in issue in the property settlement proceedings and in the spousal maintenance proceedings are the statutory rights of the wife to seek orders under ss 79(1) and 74(1) of the Act, it is apparent that the ruling made by the Dubai Court cannot give rise to a res judicata in the strict sense in which that term continues to be used in Australia. The rights created by ss 79(1) and 74(1) cannot ‘merge’ in any judicial orders other than final orders of a court having jurisdiction under the … The rights of the wife to seek orders under ss 79(1) and 74(1) continue to have separate existence unless and until the powers to make those orders are exercised on a final basis and thereby exhausted.”
Costs – Husband wins appeal of costs order – Wife’s settlement offer did not conclude all matters in issue
In Paradin [2020] FamCAFC 245 (7 October 2020) Strickland J, sitting in the appellate jurisdiction of the Family Court of Australia, set aside an order that the husband pay the wife’s costs of $62,000. The wife, sought an interim release for $40,000, a child support departure order and spousal maintenance of $600 per week; and sent a settlement offer to the husband titled “property matters” where she proposed a transfer and refinance of properties and a payment to her of $40,000. At trial, the wife’s applications for child support and spousal maintenance were dismissed, but she was to receive a cash adjustment of $146,672, which primarily formed the basis of the subsequent costs order against the husband. On appeal, the husband argued that the wife’s offer could not have been reasonably accepted by him at the time, particularly where the offer was silent as to the child support and spousal maintenance issues. Strickland J said (from [33]):
“There is ample authority to the effect that an offer must be expressed ‘with precision’ and ‘in terms which are objectively capable of being clearly understood’ (Harris and
Harris [1987] FamCA 7) ( … ) [40] The proceedings had only commenced on 26
October 2017, and the wife, both at that time, and when she filed her Amended
Initiating Application at the same time as the offer … was unable to identify for the court the order for property settlement she was seeking. ( … ) [57] … I am reminded … of what the Full Court said in Pennisi [ed. full citation:
Pennisi & Pennisi [1997]
FamCA 39], namely, it is critical to consider the context in which an offer is made … And, as was said by the Full Court in Cross &
Beaumont [2008] FamCAFC 68 … at [51] that context can be that ‘[i]f the recipient of the offer is demonstrably unable to comply with his or her obligations under the proposed settlement, it is difficult to see how the offer could be relied upon in support of an application for costs’.”
Children – Single expert – General child and family psychiatrist preferred over specialist perinatal psychiatrist
In Lambard & Lambard and Ors (No. 2) [2020] FamCA 858 (14 October 2020) McClelland DCJ considered a disagreement over the appointment of a single expert psychiatrist where the proceedings concerned the parties’ 19 month old daughter. Post-birth, the mother suffered an acute mental health episode which resulted in her attempting to take her own life and then while hospitalised, she sustained further injuries which resulted in her being confined to a wheelchair ([5]). The mother contended that any mental health concerns had been treated and were in remission, the father contending that the mother’s behaviour pre- and post-birth presented concerns as to the mother’s parental capacity and posed an ongoing risk to the child. Where the parties agreed that a single expert psychiatrist should be appointed, the Court was asked to determine whether such expert should be the specialist perinatal psychiatrist sought by the mother and maternal grandmother or any of the three general psychiatrists sought by the father and the paternal grandmother. The Court said (from [26]): [26] Having regard to the … issues, it can be seen that the postnatal aspect of the mother’s mental health is but one aspect of many issues to be considered …. It may be that a psychiatrist with specialty in perinatal psychiatry may not necessarily have expertise in respect to other potential issues including, for instance, the post-traumatic consequences of the mother’s attempted suicide and ongoing injuries and disabilities. ( … ) [34] … I am of the view that the appointment of a single expert from among the list of names of the three qualified psychiatrists proposed by the father and paternal grandmother is the appropriate course of action to pursue in this matter. That is despite the fact that it is acknowledged that none of those three psychiatrists are specialists in perinatal psychiatry. … [I] am satisfied that they each have the required training, study and experience that qualifies them as having specialised knowledge on the issue of the mother’s mental health and to provide a prognosis in respect to that issue.”
Property – Wife fails in her attempt to have a related company pay partial property settlement
In Russo and Russo & Ors [2020] FCWA 182 (15 October 2020) O’Brien J dismissed a wife’s interim application for an order that third parties make payments totalling $1.1 million to enable her to fund her litigation costs and purchase a property. The second respondent, Company A, was the trustee of Trust A. The husband and his parents were directors of Company A. The husband and his parents were shareholders of the third respondent, Company B, which operated a business on a farm of which the husband’s parents were the registered proprietors. Company B paid Company A rent for the use of farming land, such funds forming the majority of Company A’s income. The rental paid was highly inflated with the intention to quickly reduce Company A’s indebtedness. The wife deposed that Company A owed the husband and wife’s family trust $5,517,696. The wife sought payment of $1.1 million from Company A to the family trust. She also sought that Company B continue to pay the inflated rent. The Court said (from [75]):
“The application of the broad terms of s 90AE(2) is expressly limited by the conditions in s 90AE(3), and by reference s 90AE(4). [76] The limitations … in s 90AE(3)(b) and (c) are selfexplanatory …
[77] The limitation … in s 90AE(3)(a) … requires the court to be satisfied that the making of the order is either reasonably necessary to effect a division of property between the parties to the marriage, or reasonably appropriate and adapted ( … )” The Court continued (from [142]):
“The … difficult question is whether an order made on an interim basis can properly be said to be reasonably necessary, or … appropriate and adapted, to ‘effect a division of property between the parties to the marriage’. [143] The power under s 79, … is to make orders
‘altering the interests of the parties to the marriage’ in property; … ‘division of property’ is not used. [144] An interim order made pursuant to s 79 must be capable of variation or reversal without resort to s 79A or an appeal, … Gabel & Yardley [2008] FamCAFC 162 ( … ) The Court concluded (at [198]):
“… [T]he order … may only be made if it is reasonably necessary, or reasonably appropriate and adapted, to effect a division of property between the parties to the marriage; on the wife’s own case, the order is sought for the purpose of increasing the property … The distinction is … fatal to this aspect of the wife’s application (B Pty Ltd & Ors & K and Anor [2008]
FamCAFC 113).”
Robert Glade-Wright is the founder, principal author and editor of The Family Law Book, a one-volume, looseleaf and online subscription service. thefamilylawbook.com.au. He is assisted by accredited family law specialist Craig Nicol.
