FAMILY LAW CASE NOTES Craig Nicol and Keleigh Robinson Accredited family law specialists Editor and co-editor of The Family Law Book
Children – Court did not reconcile relocation order with expert recommendation that relocation not occur until child was nine In Denham & Newsham [2021] FamCAFC 141 (6 August 2021) the Full Court (Ainslie-Wallace, Ryan & Aldridge JJ) allowed a father’s appeal from a decision of Carew J to permit a mother to relocate with a three year old child from Australia to Belgium from March 2022. The hearing occurred in February 2020. The orders included provision for the father to travel to Belgium at least three times a year and that the child return to Australia each year. The Full Court said (from [28]): “[The single expert psychiatrist] … gave evidence that the child was too young to sustain significant separations from his father … ( … ) [35] … [T]he single expert … did not give evidence that the child would develop the … capacity to sustain significant gaps of contact if there was an additional two years of regular contact … Her evidence was … relocation should not be considered before the child was eight or nine years of age. This evidence … was of signal importance to the central question and had to be considered. … [I]f the … judge determined that … this evidence should not be accepted, it was necessary to explain why not. … This did not occur and the challenges … have been established. ( … ) [51] … [T]he documents issued by the Australian Department of Home Affairs … record that the availability of regular air travel should not be assumed and … that flights have reduced. [52] Had this evidence been placed before the … judge, it compelled a finding that the mother’s proposals for the child’s time with the father could not be assured and that any prediction for face-to-face contact between the child and the father … would be no more than mere speculation. … This … undermined the findings to the effect that the child and the father would maintain a meaningful relationship if the child moved to Belgium in 2022.”
Property – Creditor of discharged bankrupt has standing to bring section 79A application
Property – Where a valuer has provided a range of values, the court is free to make its own findings as to value
In Valder & Saklani [2021] FamCAFC 142 (6 August 2021) the Full Court (Ryan, Aldridge & Watts JJ) allowed an appeal from a decision of Rees J dismissing an application by a creditor to set aside consent orders.
In Samper [2021] FamCAFC 140 (5 August 2021) the Full Court (AinslieWallace, Watts & Austin JJ) dismissed with costs a husband’s appeal from a decision of Judge Smith where each party owned a business.
The history included proceedings before the High Court, and the husband owing the creditor $594,028.25, plus costs of over $250,000.
The husband’s business operated from rented premises. A single expert valuer opined that the business would have goodwill of $100,000 to $150,000 if the husband obtained a lease with a minimum term of 5 years ([18]) and that the plant and equipment of the business was worth $45,624.
The husband and wife entered into consent orders, pursuant to which the husband transferred his interest in a real property to the wife. The husband then declared himself bankrupt. The creditor obtained leave from the Federal Court of Australia (pursuant to s 58(3)(b) of the Bankruptcy Act) to issue a s 79A application in the Family Court. The Full Court said (from [19]): “A discharge from bankruptcy operates to release the bankrupt ‘from all debts … provable in the bankruptcy’ as per s 153(1) of the Bankruptcy Act. [20] … [T]he Bankruptcy Act continues to refer to the person who … has a right to prove as a creditor. The Bankruptcy Act goes on to provide such creditors … with various rights … which continue after any discharge of the bankrupt … [21] … [T]he bankrupt being discharged from … bankruptcy, does not mean that … creditors cease to be ‘creditor’ for all purposes ( … ) [29] … [When] the appellant commenced … proceedings … she was entitled to do so. … As well as being ‘a person affected by an order’ for the purposes of s 79A(1), [she] is also a ‘party’, a ‘creditor’ and a ‘person whose interests would be affected by the making of the instrument or disposition’ for the purposes of s 106B(4AA)(a), (b) and (c) of the Act. ( … ) [47] … If it was found that the consent orders had been entered into with the intention of defeating creditors, we do not see why an appropriate variation … could not see the provision for the payment of those creditors … The court would be astute to make orders to overcome fraud on it ( … )”
The Court found the business was worth a total of $162,093 being: i) the plant and equipment of $45,624; plus ii) $125,000 for goodwill (being the average between the $100,000 and $150,000 range); with a 5 per cent discount to reflect there being no signed lease. The husband appealed. The Full Court said (from [22]): “It was within the ‘specialised knowledge’ of the … valuer to provide his opinion … by way of a range of the value of the business if a new lease was entered into, or … available ( … ) [23] ( … ) Given the … judge found the opportunity … to obtain a new lease was ‘very likely’, it was open to his Honour to adopt a range of values that assumed that … [24] … [W]here a valuer has provided a range … the court is free to form its own view as to the proper value ... It is usually inappropriate to … select the mean of two valuations ( … Commonwealth v Milledge [1953] HCA 6; … ). However … both parties submitted that the … judge pick the mid-point, albeit of different ranges. … ” [25] The husband argues that … it was not within the … judge’s expertise to make an allowance for a lease being available or unavailable … when there was no evidence from the landlord as to his intention to continue the lease ( … ) [29] Given the … judge concluded that there was a high probability that there could be a new lease, it was open … to select the discount …”
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