FAMILY LAW – APPEAL – CHILDREN – RELOCATION – Appeal against the order of a Federal Magistrate preventing the wife from relocating from Canberra to Cairns with the two children of the marriage – Where the Federal Magistrate held that were it not for his finding that the youngest child would be less able to sustain a relationship with the husband if he had only occasional periods of contact, the wife would have been permitted to relocate – The Federal Magistrate erred as the finding was not supported by the expert evidence – Whether the Federal Magistrate erred by failing to properly consider the possibility of the husband relocating to Cairns – The Federal Magistrate’s decision to discount the possibility of the husband relocating constitutes appellable error – Appeal allowed. FAMILY LAW – APPEAL – Matter redetermined by the Full Court – In circumstances where the Federal Magistrate’s “critical finding” was not supported by the evidence – The Federal Magistrate’s other findings provided a sufficient basis on which to redetermine the matter – Wife permitted to relocate to Cairns – Matter remitted for determination of the discrete issue of the costs of travel – Costs certificates granted for both the appeal and rehearing.

Lorreck & Watts [2012] FamCAFC 75 (7 June 2012)

Last Updated: 14 June 2012

FAMILY COURT OF AUSTRALIA

LORRECK & WATTS

[2012] FamCAFC 75

FAMILY LAW – APPEAL – CHILDREN – RELOCATION – Appeal against the order of a Federal Magistrate preventing the wife from relocating from Canberra to Cairns with the two children of the marriage – Where the Federal Magistrate held that were it not for his finding that the youngest child would be less able to sustain a relationship with the husband if he had only occasional periods of contact, the wife would have been permitted to relocate – The Federal Magistrate erred as the finding was not supported by the expert evidence – Whether the Federal Magistrate erred by failing to properly consider the possibility of the husband relocating to Cairns – The Federal Magistrate’s decision to discount the possibility of the husband relocating constitutes appellable error – Appeal allowed. FAMILY LAW – APPEAL – Matter redetermined by the Full Court – In circumstances where the Federal Magistrate’s “critical finding” was not supported by the evidence – The Federal Magistrate’s other findings provided a sufficient basis on which to redetermine the matter – Wife permitted to relocate to Cairns – Matter remitted for determination of the discrete issue of the costs of travel – Costs certificates granted for both the appeal and rehearing.

Evidence Act 1995 (Cth) Family Law Act 1975 (Cth) Federal Proceedings (Costs) Act 1981 (Cth)

AMS v AIF (1999) 199 CLR 160 Goode and Goode [2006] FamCA 1346; (2006) FLC 93-286 House v The King [1936] HCA 40; (1936) 55 CLR 499

APPELLANT:

Ms Lorreck

RESPONDENT:

Mr Watts

FILE NUMBER:

CAC

23

of

2009

APPEAL NUMBER:

EA

110

of

2011

DATE DELIVERED:

7 June 2012

PLACE DELIVERED:

Perth

PLACE HEARD:

Sydney

JUDGMENT OF:

Finn, Thackray and Stevenson JJ

HEARING DATE:

30 April 2012

LOWER COURT JURISDICTION:

Federal Magistrates Court

LOWER COURT JUDGMENT DATE:

2 September 2011

LOWER COURT MNC:

[2011] FMCAfam 928

REPRESENTATION

COUNSEL FOR THE APPELLANT:

Mr Hassall

SOLICITOR FOR THE APPELLANT:

Joseph Tallarita

COUNSEL FOR THE RESPONDENT:

Mr Pierce

SOLICITOR FOR THE RESPONDENT:

Jack Herrald Solicitors

ORDERS

(1) The appeal against orders made by Federal Magistrate Brewster on 2 September 2011 be allowed.
(2) Paragraphs 3 to 10 of the orders be discharged, provided that whilst the wife remains in the Canberra region, the husband shall spend time with the children H, born July 2002, and A, born June 2007, (“the children”) in the terms set out in those paragraphs.
(3) The wife be permitted to change the children’s place of residence to Cairns.
(4) Upon the wife relocating to Cairns, the husband shall spend time with the children as follows:

• (a) During Queensland public school holidays:
  • (i) The entire Easter holidays in odd-numbered years;
  • (ii) The entire winter holidays each year;
  • (iii) The entire spring holidays each year;
  • (iv) The first half of the summer holidays in odd-numbered years from 2013;
  • (v) The second half of the summer holidays in even-numbered years from 2012; and
  • (vi) At all other times as may be agreed between the parties from time to time.
• (b) During school terms:
  • (i) Up to seven consecutive days each month in Cairns, provided that the father:
    1. Gives the mother 14 days written notice of his intention to spend such time;
    2. Causes the children to attend their usual school and extra-curricular activities during such time; and
  • (ii) At all other times as may be agreed between the parties from time to time.

(5) For the purposes of Order 4(a) above:

• (a) It is deemed that Queensland public school holidays:
  • (i) Commence on the day following the last day of school term; and
  • (ii) End on the day preceding the day the children are due to return to school; and
  • (iii) Reach the midpoint at 12 noon on the day between such days.

(6) In the event the children are living or spending time with the mother at the following times, the father may spend time with the children as follows:

• (a) For Father’s Day from 9.00 am to 6.00 pm;
• (b) For each child’s birthday;
  • (i) If falling on a school day – from after school until 6.00 pm; or
  • (ii) If falling on a weekend or holiday – from 9.00 am to 2.00 pm.
• (c) For the father’s birthday;
  • (i) If falling on a school day – from after school until 6.00 pm;
  • (ii) If falling on a weekend or holiday – from 9.00 am to 6.00 pm.

(7) In the event the children are living or spending time with the father at the following times, the mother may spend time with the children as follows:

• (a) For Mother’s Day from 9.00 am to 6.00 pm;
• (b) For each child’s birthday;
  • (i) If falling on a school day – from after school until 6.00 pm; or
  • (ii) If falling on a weekend or holiday – from 9.00 am to 2.00 pm.
• (c) For the mother’s birthday;
  • (i) if falling on a school day – from after school until 6.00 pm;
  • (ii) if falling on a weekend or holiday – from 9.00 am to 6.00 pm.

(8) Each party may communicate with the children by phone, post or email at all reasonable times when the children are in the care of the other party, and the party who has the care of the children shall facilitate and make the children available to receive such communication.
(9) The proceedings be remitted to the Federal Magistrates Court for determination of the issue concerning the costs of travel required for the husband to spend time with the children, provided that until such time as that issue is determined the costs of such travel shall be borne by the parties equally.
(10) Each party shall meet their own costs of the appeal.
(11) The Court grants to the appellant wife a costs certificate pursuant to the provisions s 9 of the Federal Proceedings (Costs) Act 1981 (Cth) being a certificate that, in the opinion of the Court, it would be appropriate for the Attorney-General to authorise a payment under that Act to the appellant wife in respect of the costs incurred by her in relation to the appeal.
(12) The Court grants to the respondent husband a costs certificate pursuant to the provisions of s 6 of the Federal Proceedings (Costs) Act 1981 (Cth) being a certificate that, in the opinion of the Court, it would be appropriate for the Attorney-General to authorise a payment under that Act to the respondent husband in respect of the costs incurred by him in relation to the appeal.
(13) The Court grants to each of the parties a costs certificate pursuant to the provisions of s 8 of the Federal Proceedings (Costs) Act 1981 (Cth) being a certificate that, in the opinion of the Court, it would be appropriate for the Attorney-General to authorise a payment under that Act to each of the parties in respect of the costs incurred by the appellant and respondent in relation to the rehearing of the application concerning the costs of travel.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Lorreck & Watts has been approved by the Chief Justice pursuant to s 121(9)(g)of the Family Law Act 1975 (Cth).

THE FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT SYDNEY

Appeal Number: EA 110 of 2011
File Number: CAC 23 of 2009

Ms Lorreck

Appellant

And

Mr Watts

Respondent

REASONS FOR JUDGMENT

Introduction

1. This is the wife’s appeal against orders of Federal Magistrate Brewster made on 2 September 2011, which prevented the wife from relocating from Canberra to Cairns with the two children of her marriage to the husband.
2. The husband’s cross-appeal against the Federal Magistrate’s order providing for the children to live primarily with the wife was abandoned. Issues raised in the cross-appeal dealing with financial matters were not pursued.

Background

3. The following background facts are drawn from the Federal Magistrate’s reasons and from uncontroversial material in the Appeal Books.
4. At the time of judgment the husband was 40 and the wife was 38 years of age. He was an employee in the Australian Armed Forces. She was a homemaker.
5. The wife was born in Cairns and lived there until 1991, when she moved to Townsville to attend university. Whilst in Townsville, she met the husband, who was employed in the Australian Armed Forces. He too had grown up in North Queensland.
6. The husband and wife were married in Townsville in 1994. In 1995 the husband was posted to Brisbane. He later had various postings in Australia, as well as international deployments. The wife accompanied him on all of his postings, save for his time overseas and during one of his stints in Sydney.
7. The husband and wife purchased a home in Canberra after the husband was again posted there in 2004. After their separation in November 2008, the wife remained in the home. The husband moved into barracks in Canberra.
8. There are two children of the marriage. H was born in July 2002, and is approaching 10 years of age. A was born in June 2007, and will therefore soon turn five. The boys remained primarily living with the wife following separation, but had regular contact with the husband.
9. The wife commenced proceedings in January 2009. Her proposal at trial was that the children would reside with her and that she be allowed to relocate to Cairns, where most of her family still live. The husband proposed that the children live primarily with him in Canberra.
10. Interim orders were made in March 2010 for a shared care arrangement (as had been suggested by an expert). This involved the boys spending eight nights each fortnight with the wife and six nights with the husband. This arrangement was in place at the time of the trial, but neither parent wanted it to continue.

The orders made by the Federal Magistrate

11. The Federal Magistrate ordered that the children live with the wife and that she have sole parental responsibility. The husband was allowed time with the children each alternate weekend, from after school on Friday until the commencement of school on Monday, as well as for four hours each Wednesday, for half of school holidays and on special occasions. The effect of the orders was that the wife would not be able to move the children to Cairns.
12. The Federal Magistrate also made property orders. The only asset of substance was the matrimonial home, in which there was equity of $281,000. His Honour ordered the home to be sold and the proceeds divided 65 per cent to the wife and 35 per cent to the husband. The husband’s superannuation benefit was “split” equally.
13. We were told there was a difficulty with the drafting of the “splitting” order, but our view was that the Federal Magistrate should be asked to resolve that difficulty under the slip rule. We were also advised there remained an issue about chattels. We would have been prepared to make a consent order dealing with that matter, but it transpired the parties could not reach an agreement.

The Federal Magistrate’s reasons

14. After providing background information, the Federal Magistrate commenced his reasons by referring to relevant provisions of the Family Law Act 1975 (Cth) (“the Act”). In doing so, his Honour said:
    9. ...The backdrop to this exercise is section 60B of the Act. It recites that one of the objects of the Act, insofar as it addresses children’s matters, is to ensure that the best interests of children are met by ensuring they have a meaningful relationship with both parents to the maximum extent consistent with their best interests. This is particularly relevant to the wife’s relocation application.
15. The Federal Magistrate then recorded that s 60CC of the Act, which sets out the matters to consider when deciding what would be in a child’s best interests, is divided into “primary” and “additional” considerations. His Honour noted that the first primary consideration is “the benefit to the child of having a meaningful relationship with both parents”. In a passage we consider of some importance, his Honour said:
    10. ...I am satisfied their having a meaningful relationship with both parents would be in their best interests. I am satisfied that no matter what order I make the children will continue to have a meaningful relationship with the parent with whom they do not live although, if the wife were to move to Cairns with the children this relationship would of course be somewhat attenuated.
16. His Honour next recorded that the second primary consideration concerns protecting children from harm from being exposed to violence or neglect. He noted that the parties agreed there had been violence in their relationship, but each had accused the other of being the perpetrator. His Honour recorded his view that “so long as the parties remain apart this will not be an issue”.
17. The Federal Magistrate then made findings concerning other relevant “additional considerations”. In our brief survey of his reasons, we will focus on those that are of most relevance to the issues raised in this appeal.
18. In dealing with s 60CC(3)(b) (the nature of the children’s relationship with each parent and with others, including grandparents), the Federal Magistrate said it was “clear that the children have a good relationship with both parents and appear to have a good relationship with their grandparents on both sides”.
19. We pause here to record that the wife’s parents live in Cairns, as do her two sisters and their families. At the time of trial, the husband’s parents were living with him in Canberra. They had moved there after the separation, and were assisting the husband to look after the children. They did not intend remaining in Canberra, and the husband had no other family in the area.
20. In dealing with s 66CC(3)(c) (the willingness and ability of each of the children’s parents to facilitate, and encourage, a close and continuing relationship between the children and the other parent), the Federal Magistrate found that:

17. ...Obviously the wife’s proposal to move to Cairns would place obstacles in the path of the children having a close relationship with their father but I am satisfied that she has good reasons for wanting to move and I do not criticise her for this proposal.

21. Importantly, especially as it had been a matter of some controversy, the Federal Magistrate went on to express his satisfaction that the wife “has the willingness and ability to foster the husband’s relationship with the children”.
22. In dealing with s 60CC(3)(d) (the likely effect of any changes in the children’s circumstances), the Federal Magistrate found that “plainly a move to Cairns would involve a significant change in the children’s circumstances in that they would be separated from their father to a much greater degree than hitherto”.
23. In dealing with s 60CC(3)(e) (the practical difficulty and expense of the children spending time with and communicating with a parent), his Honour said “plainly this would be an issue were the wife to move to Cairns”.
24. The Federal Magistrate, having next considered the balance of the s 60CC factors, then briefly discussed the conflicting allegations concerning violence. His Honour found that “a good deal of the differences in the stories” could be attributed to each party having viewed events through “his or her own subjective prism”. He nevertheless concluded that “some of the differences are so stark that one of the parties must be lying”.
25. The Federal Magistrate said that if he had to decide which of the parties was the more credible, he would “tentatively choose the wife”, although, in relation to “some events” he preferred the husband’s evidence, in particular about one incident because the husband’s testimony had been corroborated by his parents, albeit they themselves had given “inconsistent evidence”. His Honour said the only finding about which he could be confident was that “the parties had a totally dysfunctional relationship” and had been the “bane” of the local police.
26. The Federal Magistrate then briefly considered the evidence of two experts who had provided reports, namely Dr R, a psychiatrist, and Ms C, a clinical psychologist. He also briefly referred to the evidence of the wife’s psychologist, Dr N, and a psychiatrist, Dr K, who had been engaged by the wife’s solicitors to provide a report.
27. His Honour observed that Dr N and Dr K did not share the negative views expressed by Dr R and Ms C about the wife’s capacity as a parent. His Honour recorded that Dr N was “an impressive witness”, albeit he was “conscious of the fact that treating psychologists tend to be sympathetic to and supportive of their patients”.
28. Significantly, in referring to the evidence of the experts, his Honour did not record anything said by them about the impact on the relationship between the children and the husband if the wife was permitted to relocate to Cairns.
29. The Federal Magistrate then went on to succinctly explain why he had decided the wife should have the primary care of the children. He found she had been “the primary parent” and noted that this was inevitable because of the husband’s work, including his postings overseas. He went on to say:

38. ...Whilst I respect the views of Dr [R] and Ms [C] in the end I intend to rely on my own impressions of the wife who I had the advantage of seeing in the witness box for more than a day. I found her an impressive witness. It is my view that she is a competent parent. I do not believe that any deficits she may have are sufficient to justify changing a long standing status quo and making the husband the primary parent.

30. The Federal Magistrate then said he was left with three options, which he characterised as follows:
    39. ...The first is the children live with the wife in Cairns. The second is the children living with the wife in the Canberra area. The third is the continuation of the existing arrangements.
31. The Federal Magistrate quickly eliminated the third option, noting that neither party sought a continuation of the current regime. His Honour considered that such an arrangement could only work if the parties had a good capacity to communicate and reach consensus, but in this regard they were found to be “entirely lacking”.
32. The Federal Magistrate then discussed the remaining options, namely the children living with the wife in Cairns or in Canberra. In doing so, he said:
    42. The reasons the wife wishes to relocate to Cairns are firstly that this is her home town. She grew up there. Secondly it is where her family and friends live.
    43. The wife’s case to be permitted to move to Cairns is a strong one. There are a number of advantages to the children were the wife to relocate. The most important of these is that she would have the advantages of family support. I do not underestimate the difficulties involved in raising children as a sole parent in an area remote from one’s family. As I have indicated she has parents and two sisters, [D] and [J] living in Cairns. The evidence is that the wife is particularly close to [D]. There is other extended family in Cairns. My impression was that the family is a tight-knit group and I am satisfied that she would derive great support from her family were she living in Cairns.
    44. She also says that she feels isolated living in the Canberra area and does not have a close network of supportive friends. It is otherwise in Cairns. I accept her evidence.
    45. The wife has a job offer in Cairns. She is not employed at present. Nevertheless she has worked in a range of jobs up until the birth of [A] so I do not accept that she will never be able to work in the Canberra area. But the availability of a certain job is an important matter.
    46. The wife is presently living in the former matrimonial home in [the suburb J]. When it is sold she will have to re-house herself and the children. She says that if she remained in [the suburb J] she would have to pay in the order of $500 a week in rent. I accept that but [the suburb J] is near [the suburb Q] and there is no evidence as to rents in that area. However this would not be a problem in Cairns. She could, in the short term at least, live with her parents. Her ability to re-house herself is affected by the husband’s decision to take long service leave. He would be entitled to six months leave on full pay but for no objectively good reason he has chosen to take twelve months leave on half pay. This will reduce his child support payments. All of these are relevant factors.
    47. How does this affect the best interests of the children? Obviously if the wife were better off financially this would benefit the children. But of greater significance is her happiness and contentment. Dr [N] reports that ‘if [the wife] and the children relocated to Queensland this would be enormously beneficial to [the wife], as she has family and support there and she feels alone and unsupported here. The children are young enough to adjust’. It has to be said however in oral evidence Dr [N] said that the wife would be still able to function efficiently as a parent were she required to remain in Canberra. Dr [K] spoke of the negative impact on the wife if an order were made that would prevent her from moving and spoke of the benefits to her parenting capacity if she had family support. I accept that the wife will feel unhappy if she is forced to remain in Canberra and would be much more happy and content if she were in Cairns. This is a very important factor as her happiness and contentment are linked to her capacity as a parent.
33. In setting out the three options he had earlier identified, the Federal Magistrate had not made reference to the possibility of the husband moving to Cairns if the wife relocated. However, his Honour did discuss that option in the following paragraph, which is the subject of separate complaint by the wife:
    48. I turn now to the issue of the husband himself relocating to Cairns. In theory he could do so. However it would, it appears, require him to leave the [Armed Forces]. This is not as drastic as might appear as it is within his contemplation that he might take up another career. He has formed a new relationship with a woman who lives and works in Canberra and they intend to live together. She has a child and is involved in litigation about whether or not that child’s father should have contact with her. In all the circumstances I do not propose to resolve the issue on the basis that the husband could himself relocate.
34. Having decided not to consider the possibility of the husband relocating, his Honour then explained why the wife must stay in Canberra:
    49. The disadvantage to the children were they to move to Cairns is the impact that this would have on the time they can spend with the husband. That time would be confined perforce to school holidays. The husband would be unable to be involved to any meaningful extent in their school activities or sporting activities. [A] is only four years of age. A child this age benefits from frequent contact with the parent with whom he or she is not living and is less able to sustain a relationship with only occasional periods of contact.
    50. In the end, notwithstanding the cogent reasons that favour a relocation, I regard this as the most significant factor. If this case involved [H] only I would have made orders that would have permitted the wife to relocate. But this is not the case. I decline to make orders which would permit a relocation.
35. His Honour then foreshadowed his intention to make orders for the children to spend time with the husband on terms substantially as proposed by the wife. This involved them seeing the husband each alternate weekend, as well as for four hours each Wednesday. The children would also spend time with the husband for half of all school holidays, as well as on special occasions.
36. No orders were made for telephone contact, other than during the Christmas holidays. His Honour said he did not see the need for such contact because the husband would see the children each week, and because telephone contact may “end up being a source of dispute and friction between the parties”.
37. His Honour then turned to discuss parental responsibility. He determined that the wife should have sole responsibility since the parties’ relationship was such that shared responsibility would not be in the children’s best interests.

The conduct of the appeal

38. The Independent Children’s Lawyer did not seek to be heard on the appeal. This was said to be due to funding restrictions, but the Independent Children’s Lawyer also advised there was nothing she could add to the summaries of argument provided on behalf of each of the parents.
39. In her Summary of Argument the wife proposed a rehearing if we were not prepared to redetermine the matter (assuming appellate error was established). However, we were advised at the commencement of the oral hearing that the wife no longer sought a rehearing. In other words, she was resigned to staying in Canberra if we did not ourselves redetermine the matter in her favour.
40. Later in the hearing, counsel for the wife accepted that if we decided the wife could relocate, it would be appropriate to remit to the Federal Magistrates Court issues such as responsibility for the costs of travel.

Appellate principles

41. The principles governing appellate interference with discretionary judgments are encapsulated in the following passage from House v The King [1936] HCA 40; (1936) 55 CLR 499 at 504-505 per Dixon, Evatt and McTiernan JJ:

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 such a case, although the nature of the error may not be discoverable, the exercise of discretion is reviewed on the ground that a substantial wrong has in fact occurred.

42. In approaching this appeal, we also respectfully adopt the following remarks of Kirby J in AMS v AIF (1999) 199 CLR 160 at 211 (footnotes omitted):

...an appellate court, invited to review the exercise of discretion at first instance will avoid an overly critical, or pernickety, analysis of the primary judge’s reasons, given the large element of judgment, discretion and intuition which is involved. Only if a material error of the kind warranting disturbance of a discretionary decision is established is the appellate court authorised to set aside the primary decision, to substitute its own exercise of discretion or to require that it be re-exercised on a retrial.

Ground 5 – absence of evidence concerning the crucial finding

43. We will deal with Ground 5 first because it seeks to impugn what counsel for the wife described as the “critical finding”. The ground was expressed thus:

His Honour did not rely on evidence when he made findings in relation to the child [A].

44. The substance of this complaint is not discernible from its terms, but the wife’s Summary of Argument made clear that the challenge was directed to the last sentence of paragraph 49 of the Federal Magistrate’s reasons. It was submitted there was no evidence to support the proposition that “a child this age [i.e. the age of the youngest child] benefits from frequent contact with the parent with whom he or she is not living and is less able to sustain a relationship with only occasional periods of contact”. Counsel for the wife argued that in arriving at this finding:

...his Honour essentially relied on his own views about the need for children of the age of [A] to communicate in particular ways with their parents, no doubt derived from his Honour’s experience and reading, but critically, in the appellant’s submission, not specifically related to the child [A].

45. Counsel for the wife further submitted “that the only evidence that the child [A], in particular, would in fact be less able to sustain a relationship with his father in the event of relocation was adduced only in response to questioning from His Honour, and was equivocal in nature at best”. Counsel went on to say in his written submissions:
    15. Given that His Honour attached critical weight to the issue of [A’s] ability to maintain a long distance relationship with his father (and observed that if the case involved only [H] he would have permitted the wife to relocate...), it is submitted that his finding (in effect) that, because of his age, [A] would necessarily be less able to do so had an inadequate evidentiary foundation and was contrary to the limited available evidence addressing this issue. In addition, it is submitted that His Honour failed to accord procedural fairness to the parties in relation to this finding, given that he ultimately regarded it as being of decisive significance in relation to the mother’s relocation application. It is submitted that these matters are indicative of procedural error.
46. In response, counsel for the husband submitted in his Summary of Argument (references to authorities omitted):
    1. His Honour’s supposed general statement does no more than repeat the objects of Part VII (s.60B(1)(a) - also (c), (d)) and the principles underlying those objects (s.60B(a), (b)- also (c)). It is to read in the context of his Honour’s overall reasons...
    2. Further, this was evidenced during the hearing, in the presence of all parties, each of whom was legally represented. If the situation complained of had arisen (which it did not), the parties had the opportunity to adduce peer reviewed research to assist the court...or otherwise to controvert or comment upon any contentious material...
    3. In any event, there was ample evidence that [A], age 4, would benefit from frequent contact with the father (with whom he is not living as such) and is less able to sustain a relationship with only occasional periods of contact. See references to the expert evidence, above. Unlike in McCall v Clark[2009] FamCAFC 92; 41 FamLR 483, and Starr v Duggan BC200950405, [2009] FamCAFC 115 there was expert evidence and an Independent Children’s Lawyer...such as entitled his Honour to emphasise [A’s] more immediate situation in his best interests...
47. Counsel for the husband submitted that the Full Court should not be “overly critical, or pernickety” in considering the finding challenged here. He argued:
    5. Even where (which is not the case here) a court referred to background research or other materials without drawing it to the parties’ attention, such a process does not constitute appellable error. (Likewise, were there material improperly referred to, there is no appellable error where, if the proceedings were to be reheard without the adducing of the material the subject of the complaint, the result would be the same)...

The evidence relevant to Ground 5

48. The Federal Magistrate did not identify the evidence he relied upon in reaching the finding in paragraph 49 of his reasons. This alone would not permit appellate interference, so long as there was evidence to support the finding.
49. Before considering the evidence, it is important we record that it was not suggested that the finding was a matter of “common knowledge”. Even if that had been suggested, we would not have been satisfied there had been compliance with s 144(4) of the Evidence Act 1995 (Cth) which permits matters of “common knowledge” to be accepted without formal proof.
50. In our view, the nature of the disputed finding is such that evidence to support it could only have been provided by an expert. It is necessary therefore to consider what was said on the topic by the four experts who gave evidence.
51. The first of the experts to be cross-examined was Dr N, the wife’s clinical psychologist. Dr N had been engaged to see the oldest child, H, before she was consulted by the wife. The wife had been accompanied to many of her appointments by the youngest child, A.
52. We set out below that part of Dr N’s cross-examination which we consider relevant to Ground 5. It will be seen she was questioned by both Mr Herrald, counsel for the husband, and by the Federal Magistrate. (The emphasis added in this, and in later citations from the transcript, is our own).

[MR HERRALD]: You say that:

If [the wife] and the children relocated to Queensland, this would be enormously beneficial to [the wife].

[DR N]: ?---Yes.

[MR HERRALD]: And then you quickly add:

The children are young enough to adjust.

[DR N]: ?---Yes.

[MR HERRALD]: Now, the focus in these proceedings is the best interests of the children. You understand that?---Of course.

[MR HERRALD]: As I understand your report – and correct me if I’m wrong – your focus is on it’ll be enormously beneficial to [the wife] and the children are young enough, they can just cope anyway?---You could put it that way.

[MR HERRALD]: Would I be wrong?---Yes, because I have been talking to [the wife] about her children; I have been – and observing [A] quite a number of times, and so I am also interested in the wellbeing of the children.

[MR HERRALD]: But you agree that ---?---Parents do relocate, and children adjust to that, I wonder about the – you know, what is happening with – you know, the complexity of the current arrangements, and what effect that is having on the children.

[MR HERRALD]: You are completely unaware, are you not, of what the separation issues might then be for the children from the father if that was to occur?

[HIS HONOUR]: What do you mean by – you mean the impact on the children were their time with the father to be confined to school holidays.

[MR HERRALD]: Yes?---I have said in my report, as I have not observed the father in his interaction with the children, I am unable to comment upon that.And I have actually stated that in my report.

[MR HERRALD]: Yes. Would you accept that going from the current arrangement, where the children see their father on a weekly basis, to suddenly seeing their father every time there’s a school holiday, that it’s likely to be a significant impact upon them?---Yes, it will be.

[MR HERRALD]: I suspect that you would agree that that would be a negative impact upon them?---I wouldn’t hazard a guess at this point in time.

[HIS HONOUR]: You’re familiar with the, sort of, professional research on – particularly a young child like [A] of not having frequent contact with – I will call it the “non-custodial parent”, to use an old fashioned phrase - that’s not quite the case here but the – because it’s not a – sort of a shared regime. But are you familiar with the studies in relation to that? Because conventional wisdom says that children that age really need frequent contact with the other parent, and that they are not able to sustain a relationship long distance, which involves only occasional visits to the other parent?---I am not familiar with those particular studies, but I am familiar with studies about emotional attachment and the importance of attachment to a parent; and I certainly think if there is an emotional attachment to a parent then that’s really fairly strong. And I have observed a strong emotional attachment from most-particularly from [A] to his mother. (Transcript, 11 April 2011, pages 54 – 55).

53. The next expert to be cross-examined was Dr K who, as the husband’s counsel observed, does not profess to hold qualifications as a child psychiatrist. Dr K acknowledged the limitations of his report as he had seen the wife only once, and A for only 15 minutes at the end of her appointment.
54. We were not taken to any part of Dr K’s oral evidence relevant to Ground 5. However, in his report Dr K had opined that it was:

Likely both parents will, and should, remain active in parental roles, although given the clash of their personality styles and behaviour, and the likely ongoing negative effects on the children arising from this, I believe that the matter is far from satisfactorily resolved at this point and certainly [the wife’s] perception of Dr [R’s] report has left her feeling further alienated and misrepresented. Such a situation bodes poorly for an advance in the very unreconciled relationship between the parties, which of course will be likely to continue to impact negatively on the psychological development of the children in the long term, as has probably already happened in particular with [H], as noted by the psychologist Ms [N].

55. The third expert to be cross-examined was Ms C. The transcript reveals that her evidence was given by telephone, in most unsatisfactory circumstances. Apart from other difficulties, Ms C had not seen much of the material that was available to the Court, and indeed had problems in accessing her own reports during the course of her cross-examination.
56. The following passage records the answers Ms C gave to questions from both counsel for the Independent Children’s Lawyer and his Honour:

[MS BURGESS]: ...Were you able to establish whether [A] had a greater attachment to either parent – the little fellow?---Yes. In my first report, no, I wasn’t, was I. No.

[MS BURGESS]: And given his age, is it likely that he would be more attached to his mum than his dad?---Well, he has had a fairly – I mean he would be capable of sustaining a close attachment with both parents so – and he has had a shared arrangement so, no, I wouldn’t be saying that.

[MS BURGESS]: Are these boys close enough to both parents to sustain long distance relationships?---To sustain at their age, yes.

HIS HONOUR: I’m sorry. I didn’t quite follow that?---I think, yes.

[HIS HONOUR]: Why do you say at their age? The youngest child is four?---He’s four. Well - - -

[HIS HONOUR]: Conventional wisdom that I’ve - - -?---Maybe - - - - - -

[HIS HONOUR]: scrapped [sic] from psychologists say that - - -?---Yes.

[HIS HONOUR]: - - - it’s pretty – much more difficult for a child of that age to maintain an optimal relationship - - -?---Yes.

[HIS HONOUR]: - - - with a parent who that child only sees at holiday times?---Yes. I’m sorry, your Honour. I – not hearing. He – his attachment should be just about consolidated but it would be difficult for him at that age. Yes. (Transcript, 9 August 2011, pages 34 – 35).

57. The next passage records exchanges between Ms C and counsel for the wife:

[MR McPHERSON]: Thank you. She says the children are young enough to adjust and, if your last answers to Ms Burgess – if I understood them, you agree they are young enough to adjust?---I didn’t say that. No.

[MR McPHERSON]: No. What did you say?---I said that the little one’s – the youngest one’s attachment should have been – should be fairly consolidated by now - - -

[MR McPHERSON]: Yes?--- - - - just and he should have an attachment to both parents. But I didn’t – I certainly didn’t say that he would adjust to less time with his father.

[MR McPHERSON]: Yes?---I wasn’t asked that question. (Transcript, 9 August 2011, page 39).

58. Later, Ms C gave the following answers to questions from both counsel for the wife and from the Federal Magistrate:

[MR McPHERSON]: I’m sorry. Ms [C], about Ms [N’s] report, which was that the children are young enough to adjust to living in Cairns. Do you recall that?---I recall you saying that, yes.

[MR McPHERSON]: Yes, you disagreed?---Yes.

[MR McPHERSON]: Thank you.

[MR McPHERSON]: Ms - - -

[HIS HONOUR]: Well, what – it depends on what you mean by adjust, Ms [C].

[MS C]: Yes.

[MR McPHERSON]: It does.

[HIS HONOUR]: I couldn’t see any reason myself to think that they wouldn’t adjust because children generally adjust to moves. I mean, in the Armed Forces it happens all the time - - -?---Yes, I - - -

[HIS HONOUR]: - - - but the question here is the impact on the relationship, particularly the younger child with his father that relocation would involve?---Yes, your Honour.

[HIS HONOUR]: I wouldn’t - - -?---I – I guess - - -

[HIS HONOUR]: I wouldn’t have called that adjusting, so I don’t know? --- I was probably answering in terms of whether it was the optimal adjustment for them,your Honour. Yes, they would have – they – you’re correct. They would adjust but whether it’s the best adjustment for them to have to make is what I was answering, so - - -

[HIS HONOUR]: Yes?---Yes. (Transcript, 9 August 2011, page 40).

59. We next set out portion of the cross-examination of Ms C by counsel for the husband, during which the Federal Magistrate again asked questions:

[MR HERRALD]: Now, you observed [the husband] with the children both back in 2009 and in 2011? ---Yes.

[MR HERRALD]: And I think you were impressed that both children were closely attached to him? ---Yes.

[MR HERRALD]: And do I take it that your recommendation in your report echoes that if [the wife] were allowed to go to Cairns, that important attachment would be broken?---Well, it certainly would be significantly altered and would have to be managed differently. I don’t think it would be broken, but it would have to be – have to be managed in a different way.

[MR HERRALD]: One of the issues that needs to be considered - - -

[MR McPHERSON]: Can I make this observation, your Honour. The witness is – didn’t see the children with this – for the second report. Now, I understand that that was what was being put to her and that was what she agreed, but that is not the case.

[HIS HONOUR]: And what’s the point you’re making? I’m sorry.

[MR McPHERSON]: The proposition that was put to her, ‘You saw the children this time – on the second occasion,’ is not correct.

[HIS HONOUR]: I’m sorry. I didn’t realise that was part of the question. I was – if it was, then it was misconceived. Yes. I didn’t pick that bit up. I was – the question I thought was about the – whether the relation of the father and the youngest child would be broken if there was a move, to which Ms [C] said, no, it wouldn’t have but it would be impacted upon. Yes, carry on, Mr Herrald. (Transcript, 9 August 2011, pages 48 – 49).

60. We should record that in her first report, published in 2009, Ms C had said that the husband was “integral” to the children’s well-being and recommended that “in the event of the parties separating, [the husband] has liberal unsupervised contact to the boys and assumes a major role in their care”. These views need now to be considered in light of the rejection by the Federal Magistrate of Ms C’s negative assessment of the wife’s parenting capacity. We should also record that Ms C had formed a more favourable view of the wife’s parenting capacity when she saw her again in 2011.
61. The next expert to be cross-examined was Dr R, who had seen the family once in 2009, after which he had recommended shared care. He did not assess the family again before the trial, by which time both parents wanted to end the shared care regime. It will be recalled that the Federal Magistrate did not accept Dr R’s negative opinion of the wife’s parenting capacity, which had been formed on the basis of her presentation some two years earlier.
62. The following exchange between counsel for the Independent Children’s Lawyer and Dr R assumes relevance to the challenge to the finding in paragraph 49 of the reasons, especially when considered in the context of the wife’s proposals for the children to have longer periods of time with the husband during school holidays in the event she relocated:

MS BURGESS: ...In a general sense, would they – would you expect that they would be old enough to sustain a long-distance relationship?---Well, I understand that, you know, that’s perhaps one of the crucial issues here is the relocation issue and the long-distance relationship, particularly if it’s a long distance like Canberra to Cairns, is an extremely difficult one. It would really require a lot of support from both parents and that would probably be more ideal for the father, if the mother relocated with the children to Cairns or if the mother relocated and the children remained in Canberra, then ideally the parent – the non-residential parent should try and do as much of the travelling as possible, with some perhaps travelling where the children could stay for a longer period with the non-residential parent. I guess I’m thinking more theoretically but you know the distance is a tyranny, I think. (Transcript, 9 August 2011, page 55).

63. Finally, we set out responses given by Dr R to questions posed by counsel for the husband:

[MR HERRALD]: Do you agree that it is essential for the welfare of the children that they have good contact with both parents?---Yes.

[MR HERRALD]: And you agree that it’s important, therefore, that the – sorry, the residential parent has to be good at fostering that relationship?---Correct. At least has to be able to if not foster, at least allow and support to a degree rather than undermine.

[MR HERRALD]: And if in the situation where [the wife] were comfortably supported by her parents in Cairns, would you be able to express any opinion as to whether you think that that would enhance or detract from her ability to foster the relationship with the father, who – if he’s remaining in Canberra?---Yes, well, I think his Honour may have to separate out the two issues. One is the ability of the mother to cope and the extra support that she would ..... from her parents, and that’s one issue and that she would probably benefit from that extra support if she were the residential parent. The other issue which I think is separate as to how competently and actively she would be able to support a relationship and promote a relationship between the children and the father, and it could be that although she’s able to cope better and function better, she may not see the value in promoting a relationship with the father. But then again, his Honour may decide that if she’s coping better, that she is able to promote and support a relationship with the father, but my concern is that two years down the track – I mean, I had perhaps naively suggested or hoped that a shared parenting arrangement may be a way forward without having to determine one parent as being the residential parent over the other, but in cases of such ongoing conflict, I would have major concern if you add in the tyranny of distance that it would be possible to maintain a good relationship with both parents.

[MR HERRALD]: Yes. Would there be anything in the notion that – take the situation where [the wife] is now in Cairns with the children and therefore the father is 3000 kilometres away, out of sight, out of mind. Is there any likelihood that contact might just fade into less and less as time went by?---I think there would be a high risk of that.

[MR HERRALD]: And to avoid that, it would require a lot of activity on the part of [the wife] to make sure that she was cooperative and proactive in making sure those things continued?---Absolutely. (Transcript, 9 August 2011, page 71).

64. We were not taken to any other evidence we consider relevant to Ground 5.

The submissions at trial relevant to Ground 5

65. As best we can determine, the only submissions made at trial which can be seen as directly touching on the finding challenged by Ground 5 were the following brief observations by the Independent Children’s Lawyer:

The indications from the experts seemed to be yes, they would adjust. Maybe [A] is old enough to sustain a long-distance relationship. [H] ..... old enough to sustain a long-distance relationship. (Transcript, 9 August 2011, page 82).

66. Counsel for the Independent Children’s Lawyer concluded her submissions by saying:

The disadvantage of allowing the mother to go to Cairns is the distance from the father and the lack of fortnightly time with him. The advantage is colloquially this town ain’t big enough for the two of them. Some distance between them may do wonders for the children... (Transcript, 9 August 2011, page 83).

Ground 5 – discussion

67. Careful analysis of the reasons for judgment makes clear that the finding that the youngest child would be “less able to sustain a relationship” with the husband if he had only “occasional periods of contact” was the decisive factor. Were it not for this, the Federal Magistrate said he would have allowed the wife to move to Cairns, having otherwise described her case as “strong” and the reasons for relocation as “cogent”.
68. Implicit in his Honour’s reasoning is acceptance of the fact that an order allowing relocation would have been in the best interests of the eldest child. It is important we make this point, since the decision to reject the wife’s relocation application means the best interests of the youngest child effectively “trumped” the best interests of his older brother. The rationale for this being appropriate was not expressed, and for this reason alone it is appropriate we assess the evidence carefully to see if it supports the crucial finding.
69. It is also important that the crucial finding be considered in the context of his Honour having found that no matter what order he made, the children would continue to have a meaningful relationship with both parents, albeit his Honour did add the caveat that their relationship with the husband would be “somewhat attenuated” if they relocated. This is important, since the first of the primary considerations in s 60CC(2) involves assessment of the benefit to the children of having a “meaningful relationship” with both parents.
70. It will be seen from the transcript references above that the Federal Magistrate held the view that “conventional wisdom” and/or “professional research” supports the proposition that children of A’s age “really need frequent contact with the other parent, and that they are not able to sustain a relationship long distance, which involves only occasional visits to the other parent”. But it will also be seen that while that view was put to two experts, neither adopted it.
71. The Federal Magistrate put his proposition first to Dr N, who he found to be “an impressive witness”. Dr N’s curriculum vitae reveals she holds Honours and Masters degrees in psychology, as well as her PhD, and that she has been a psychologist for over 40 years. Dr N said she was “not familiar” with the research to which his Honour alluded.
72. Dr N had earlier said she was unable to comment upon the likely impact on the children if their time with the husband was confined to school holidays. Her reason was that she had not observed the children’s interaction with their father. The inference we would draw from this and from the balance of Dr N’s evidence, is that the impact of a relocation on the children’s relationship with their father would depend on a number of factors. Hence, she was not even prepared to “hazard a guess” on whether there would be a “negative impact” on the children if there was a change in the frequency of contact between the husband and the children. She was, however, of the view that the children were “young enough to adjust” to the relocation.
73. Ms C was the other expert to whom the Federal Magistrate put his proposition about the impact on children of seeing a parent only during school holidays. However, prior to that intervention by his Honour, Ms C had twice said, without qualification, that she agreed both boys were “close enough to both parents to sustain long distance relationships”.
74. We accept Ms C then agreed with the proposition, which his Honour acknowledged may have been “scrapped [sic] from psychologists”, that “conventional wisdom” suggests “it’s...much more difficult for a child of [A’s] age to maintain an optimal relationship with a parent who that child only sees at holiday times”. However, Ms C later said that the youngest child’s attachment with both parents “should be fairly consolidated by now” and that the children “would adjust”, although she queried whether it was “the optimal adjustment for them”. Under further questioning about whether the children’s “important attachment” with their father would be broken if they went to Cairns, Ms C said she did not think it would be broken, but rather that it would “be significantly altered and would have to be managed differently”.
75. To the extent that part of Ms C’s evidence might be seen as providing support for the finding challenged by Ground 5, we do not consider it was unfair for counsel for the wife to observe that it emerged only in response to prompting from his Honour. In any event, putting her evidence at its highest, Ms C considered even the youngest child would adjust to the move to Cairns, although she doubted it would be the “optimal adjustment”. She considered the children’s relationship with their father would be “significantly altered”, but was nevertheless of the view their attachment to him would not be “broken”, and that it would “have to be managed in a different way”.
76. Our analysis of the evidence of the experts who were asked to comment on the Federal Magistrate’s proposition that later became the finding in paragraph 49, establishes that one did not accept it, and the other provided, at best, equivocal support. In those circumstances, given that the judgment clearly turned on the finding, we consider his Honour needed to explain why he preferred the evidence of Ms C (assuming her evidence supported the finding) over that of Dr N, who did not accept the validity of such a general proposition. In this regard it is noteworthy that at no stage did his Honour indicate he accepted the evidence of Ms C. On the contrary, he rejected her assessment of the wife, and made orders contrary to her recommendation.
77. Ultimately, we are not persuaded the evidence supported the crucial finding in paragraph 49 of the Federal Magistrate’s reasons. Nor do we consider the finding can be saved by reliance on the objects and principles set out in s 60B of the Act. Were the statutory provisions alone to be considered sufficient to support the Federal Magistrate’s general proposition, it would follow that his Honour was in error in saying he would have permitted the oldest child to relocate. This was not contended on behalf of the husband.
78. Furthermore, as was pointed out in Goode and Goode [2006] FamCA 1346; (2006) FLC 93-286 at 80,889, while the objects and principles in s 60B “provide the context in which the factors in s 60CC are to be examined, weighed and applied in the individual case”, the best interests of each individual child remains the paramount consideration in deciding to make a particular order. Those best interests must be assessed by regard to admissible evidence.
79. We also do not accept the husband’s submission that the fact the Federal Magistrate made known, during the trial, his own understanding of “conventional wisdom” or “professional research” cast any obligation on the wife to “adduce peer reviewed research to assist the Court”. Absent support for it from the expert witnesses, the onus to provide adequate evidence to support his Honour’s proposition must surely have fallen on the husband.
80. In this regard it is important to recognise that the research to which the Federal Magistrate referred during the trial was not at any stage identified. It was unknown to a well qualified expert witness. His Honour himself admitted that his understanding of the research may have been “scrapped [semble scraped] from psychologists”. No application was made to us to introduce further evidence in the form of uncontroversial research to support the one proposition that tipped the balance in the husband’s favour.
81. We are also not persuaded by the further proposition which we understand to have been advanced by the husband that the result would be the same were the case to be reheard without regard to the matter sought to be impugned by Ground 5. On the contrary, it could be expected that the wife’s case for relocation would remain “strong” and the reasons for it “cogent”.
82. For these reasons we are satisfied Ground 5 has been made out.
83. We should also note a further difficulty we perceive with the approach adopted by the Federal Magistrate in paragraph 49 of his reasons, albeit we recognise it was not the subject of specific complaint. This arises from his Honour’s failure to identify, in his reasons, the proposals dealing with the time the husband would spend with the children if the wife was permitted to relocate.
84. The wife’s amended Application contained the specific times she proposed the children would spend with the husband if she relocated. These involved the husband having the children for the whole of the three mid-year holidays (save for the Easter holidays each alternate year) and one half of Christmas holidays (save for 2011 and 2012 when she proposed the Christmas holiday time for A be limited to two weeks). The wife further proposed that the husband have additional time with the boys during school terms for “up to seven consecutive days each month in Cairns”.
85. In his amended Response, the husband indicated he would “accept” the wife’s proposals for contact, save that he disagreed with his time with A being limited to two weeks in the 2011 and 2012 Christmas holidays. (He also proposed the wife pay all of the costs of travel, whereas the wife had proposed that the costs be shared equally).
86. Putting aside the minor issue of the 2011 and 2012 Christmas holidays, it can be seen that both parents were proposing that the husband should spend more time with the children during school holidays than was ultimately ordered. Both proposals also envisaged the husband being able to spend up to seven consecutive days with the children every month during school terms, although we note the Federal Magistrate found that the husband’s time “would be confined perforce to school holidays” if the wife and children relocated.
87. Given the importance placed by the Federal Magistrate on the impact on the youngest child of a reduction in the frequency of the visits, we would have thought it appropriate for him to have given consideration to whether the feared negative effect would be ameliorated by the husband spending additional time with the children every year during school holidays. Ultimately, however, we consider it would not be proper to place any significance on this, given it was not the subject of specific complaint.

Ground 1 – failure to follow the recommendation of the ICL

88. Ground 1 complains that the Federal Magistrate erred in failing to take into account the recommendation of the Independent Children’s Lawyer, namely that the wife and children should be permitted to relocate to Cairns.
89. In considering this complaint it should be recorded that the trial took place over two days in April 2011 and two days in August 2011. Regrettably, the ICL was represented by different counsel at the second part of the trial, and the new counsel had a transcript of only one day of the first part of the trial. In making her submissions, counsel for the ICL properly emphasised that she had not seen the wife give evidence, nor had she been present for the cross-examination of the wife’s witnesses.
90. The Federal Magistrate nevertheless called on counsel for the ICL to state her position early in her closing address. She responded by saying that although she could not be “definitive”, on the basis of what she had read and heard, she considered the children should primarily reside with the wife. When asked in what location the children should reside, counsel for the ICL responded by saying, “my inclination is to say in Cairns”.
91. It will be apparent this ground lacks merit. As was properly conceded by counsel for the wife, there is no obligation on a trial judge to accept any recommendation made by an Independent Children’s Lawyer, especially in the circumstances we have outlined.

Ground 2 – failure to consider the husband moving to Cairns

92. Ground 2 complains about the alleged failure of the Federal Magistrate to “attribute weight to the husband’s stated willingness during cross-examination to relocate to Queensland and find employment there”.
93. The passage of cross-examination initially relied upon to establish that the husband was willing to relocate is set out below. In order to provide context, we record that the husband was on long service leave at the time he gave evidence in August 2011. Although he was entitled to six months’ long leave, he had elected to take 12 months on half pay.

[THE HUSBAND]: ---Because basically I’m at the back end of my career, and by the end of my long-service I would anticipate that I will probably have other employment.

[MR McPHERSON]: So what you’re going to do now is to run out your long-service leave and, somewhere towards the back end of that, as you would say, you will start looking for employment outside of the [Armed Forces]?---I can’t be [an employee of the Armed Forces forever].

[HIS HONOUR]: I’m sorry, I didn’t hear what you said.

[MR McPHERSON]: ‘I can’t be [an employee of the Armed Forces] forever’?---I said I can’t be [an employee of the Armed Forces] forever.

[MR McPHERSON]: All right. Now, what might you be doing?---Well, I’m sure that I will become a public servant here.

[MR McPHERSON]: Right. Have you contemplated working in Cairns?---There’s no employment. High unemployment. I’ve done the figures.

[MR McPHERSON]: Have you?---Yes.

[MR McPHERSON]: Have you made applications to any companies up there?---No. Nor have I made applications down here.

[MR McPHERSON]: You keep answering and then smiling. Is there something amusing?---No, I just - anyway. No, I’m not even going to respond to you. It doesn’t matter.

[MR McPHERSON]: Thank you. I don’t anticipate it would help. You haven’t applied for jobs anywhere in Queensland, I take it, then?---No.

[MR McPHERSON]: Why wouldn’t you do that?---Because I don’t need to apply for jobs in Queensland.

[MR McPHERSON]: But what if your children move there?---Well, then I would have to possibly consider that. But I have my own life and I have – building my own life, and therefore, I have to get on with my own life. I can’t tag behind [the wife] forever.

[MR McPHERSON]: Well, what about - - -?---Because she has a personal desire.

[MR McPHERSON]: Well, what about if your children move to Cairns with [the wife]? What if his Honour decides that that’s the case?---Then I will tackle that bridge when it comes.

[MR McPHERSON]: Does that mean that you will then start looking for jobs in Far North Queensland?---That means I will tackle the bridge as it comes.

[MR McPHERSON]: Okay. I’m not going to give you any more chances. I have asked the question fairly and squarely. But that’s the best answer you can give to the question I’ve asked you, is it?---Yes. (Transcript, 8 August 2011, page 69).

94. It will be noted that, in the course of these answers, the husband said he could not “tag behind [the wife] forever”. There was no evidence he had ever done so. On the contrary, he acknowledged that while the wife had been agitating throughout the marriage to live in North Queensland, or at the very least in Brisbane, he had specifically asked not to be posted to North Queensland.
95. Counsel for wife properly conceded before us that the husband had not gone so far as to say in his evidence that he was willing to move to Queensland if the wife relocated. He accepted that the husband had indicated only an intention to consider that option.
96. Counsel for the wife nevertheless submitted that the Federal Magistrate had erred in failing to consider “more closely” the possibility of the husband “moving to Cairns or at least...somewhere where he would be able to have more regular access to the children if the wife was permitted to relocate to Cairns”.
97. Before discussing this complaint, it will be useful to repeat the paragraph in the reasons where the Federal Magistrate dealt with the possibility of the husband moving to Cairns:
    48. I turn now to the issue of the husband himself relocating to Cairns. In theory he could do so. However it would, it appears, require him to leave the [Armed Forces]. This is not as drastic as might appear as it is within his contemplation that he might take up another career. He has formed a new relationship with a woman who lives and works in Canberra and they intend to live together. She has a child and is involved in litigation about whether or not that child’s father should have contact with her. In all the circumstances I do not propose to resolve the issue on the basis that the husband could himself relocate.
98. We begin our discussion by observing that it could be suggested the husband was doing more than “contemplating” a career change, given his statement that he was “sure” he would become a public servant. Ultimately, nothing turns on this, since the primary reason the Federal Magistrate decided not to consider the option of the husband moving seems to have been associated with his new relationship, rather than anything to do with his work in the Armed Forces.
99. We need next to consider relevant extracts from the transcript. In order to understand these it must be appreciated that the husband had not disclosed, in his evidence-in-chief, his association with a woman he was contemplating marrying. Nor had this been disclosed when he was cross-examined about his proposed arrangements for the care and accommodation of the children.
100. The first mention of the husband’s new partner came in cross-examination by counsel for the Independent Children’s Lawyer, when the husband made a passing reference to his “new partner” when explaining why he had decided to take extended leave. In response to further questioning, the husband disclosed they had been in a relationship since “mid February [2011]” and planned “on moving in together”. He further disclosed that his partner:
     • worked as a researcher ...;
     • had spent a “lot of time” with H and A; and
     • has a daughter aged four years, whose father did not see her “as often as he probably should”, which turned out to be “basically once a month...roughly”.
101. In response to propositions advanced by both counsel for the Independent Children’s Lawyer and counsel for the wife that the husband ought to have disclosed details of his relationship earlier, the Federal Magistrate made firmly known, on a number of occasions, his view that “too much is made of these things”. His Honour said at one point:

...look, really, the only – very, very occasionally – god, it’s years since I’ve struck this – a new partner becomes relevant. If that new partner – it’s usually when it is a male – has a string of convictions or something...Otherwise, it is rare in the extreme for a new partner to add or subtract anything to a case. (Transcript, 8 August 2011, page 112).

102. But his Honour went on to say that if counsel was going “to make a fuss about it”, he would invite counsel for the husband to call the “new partner” to give evidence. However, his Honour went on to caution, “I don’t want this rabbit chase to go too far”, to which counsel for the wife responded “I’m not chasing a rabbit down the hole, with the greatest respect, your Honour. There is someone who is going to be a carer and residing in the same home”.
103. On the next day, the Federal Magistrate was informed that the “new partner” was outside the courtroom. Counsel for the husband advised his Honour, “I’ve spoken to her briefly this morning. If my friend wants to see who she is, well, I’m happy for her to...”, at which point his Honour said, “Yes. Make sure she didn’t come here by a broomstick”. His Honour then invited comment from counsel for the wife, who said:

[MR McPHERSON]: Your Honour, that’s very unkind. Again, with respect, I object to that. If my client was moving to Queensland to live with another man, everyone would have wanted to see him, and I – I don’t know whether I need to... (Transcript, 9 August 2011, page 15).

104. The Federal Magistrate then said, “I just think that too much fuss is made of these things, I must confess”. His Honour then withdrew his “facetious remark” and apologised. He then adjourned briefly, after which counsel for the Independent Children’s Lawyer disclosed she had a previous professional involvement with the “new partner”, who was then identified as “Ms [F]”.
105. Counsel for the ICL also informed the Federal Magistrate that Ms F was engaged in ongoing proceedings with the father of her young daughter, which involved an issue concerning child pornography. In the course of discussion, the following exchange occurred between his Honour and counsel for the ICL:

[HIS HONOUR]: The relevance – the relevance, as it would seem to me, of her and her child – and this is what my questions were directed to yesterday – was that, in the event that the submission be made that the husband is free to relocate, his personal circumstances being tied up with her, her personal circumstances including the contact that may be ordered or happen in relation to her child, is relevant. It sounds like – sounds like there’s no conclusion can be drawn as to whether there will be any contact and so she becomes more of a neutral factor in the case.

[MS BURGESS]: The - - -

[HIS HONOUR]: In that sense – in the sense of her child, I am simply unable to make a finding as to whether it’s practical for her to relocate or not from the point of view of a situation vis-a-vis her child from what you tell me. But - - -

[MS BURGESS]: The only other area where there may be some relevance in relation to this matter is that Ms [F] is, in my observations, a delightful, vulnerable woman and it may be - - -

[HIS HONOUR]: Well, why are you telling me these things ..... ?

[MS BURGESS]: Because it may be that the issue of her personality type may be of interest to Ms [C] and Dr [R] if anyone is going down a pattern of asking your Honour to find that the father in this matter is a controlling and abusive person who would seek out that sort of personality.

[HIS HONOUR]: Well, I haven’t re-read - - -

[MS BURGESS]: I don’t – I’m just - - -

[HIS HONOUR]: I haven’t re-read the report insofar as they address this sort of an issue, so is that - - -

[MS BURGESS]: They don’t. I’m suggesting that at least one of my friends at the bar table will be - - -

[HIS HONOUR]: I think we’re – I think we’re taking this case far too far, if we’re getting down that line.

[MS BURGESS]: Okay.

[HIS HONOUR]: I have to say that the game is not worth the candle. We would have to adjourn the matter. Assuming she would consent, Ms [F] would have to see both of them at the additional expense, delay and all that goes with it, so, no, we’re not re-opening that aspect of the case, and I think, given that this doesn’t damage your case in any way, Mr McPherson. It helps it, if anything, given that she hasn’t filed an affidavit, etcetera, I think we might just – I’m inclined to treat her as a completely irrelevant factor. You’re more concerned of the fact that she’s going to be living with the child. I was more concerned with [U & U] situation.

[MR McPHERSON]: Yes. There is one other issue and I suppose there’s no need for me to be coy about it. As I understand it, the parties – the – [the husband] and Ms [F] intend to marry and to live in her premises. Now, if I can get some – we get some clarification on that, perhaps that – what your Honour says is not much that I will cavil with. (Transcript, 9 August 2011, pages 18 – 20).

106. The Federal Magistrate then allowed the husband to be recalled to be cross-examined concerning his association with Ms F. In the course of this, the husband said he anticipated that he and Ms F would marry “in time”, and they would live in her home. He also said Ms F was earning about $100,000 per annum. After the husband stepped down, his Honour said “get a message to Ms [F] that you can leave if you want”. (His Honour had been earlier informed she had a plane to catch). Nobody at the bar table objected to this instruction, and thus Ms F never gave evidence.
107. Little reference was made to Ms F in closing addresses at trial, other than that the evidence indicated it was likely the husband would move in with her. Nothing was said to suggest that the husband’s association with her should be relevant in determining whether the husband could move if the wife relocated.
108. Having set out this background to the complaint, we turn now to the submissions made in support of Ground 2. Apart from making comparisons with the facts of other “relocation cases”, the wife’s written submissions did little more than draw attention to relevant portions of the evidence. Counsel for the husband was right in submitting that references to the fact situations in other cases are unhelpful. We will therefore deal only with the proposition advanced in the oral submissions that his Honour failed to give proper consideration to the possibility of the husband moving to Cairns.
109. Given the many remarks made by the Federal Magistrate concerning the irrelevance of the husband’s new partner to the outcome of the proceedings, it seems surprising to us that his Honour then apparently decided not to consider the possibility of the husband moving to Cairns largely, if not entirely, on the basis of matters associated with the husband’s new partner.
110. In our view, the option of the husband himself relocating to Cairns could not be quickly discounted. The option of both parents relocating will commonly require consideration in “relocation cases”, but here it demanded consideration. We say this in light of the facts that the husband was planning to leave the Armed Forces and that the wife had followed him around Australia during his military career. Out of fairness to his Honour, whilst the prospect of the husband moving had been canvassed in cross-examination, no emphasis was placed on this option in the closing addresses. Indeed, the ICL’s position was that it might be better for the children if the parents lived in different cities. However, as we will later discuss, that proposition was not considered either.
111. We have concluded that his Honour’s failure to adequately consider the possibility of the husband relocating constitutes appellable error. This is especially so in circumstances where his Honour had led the parties to believe that the husband’s new partner would have no impact on the outcome.
112. We should make clear we are not suggesting that his Honour should, or could, have ordered the husband to move to Cairns. The error we have identified arises from the failure to adequately consider whether there was any impediment to him doing so, albeit we recognise this would need to be considered in light of the matter we will discuss when dealing with Ground 7.

Grounds 3, 4 and 7 – challenges as to weight

113. By these grounds it was asserted that the Federal Magistrate failed to attribute adequate weight to:
     • the detrimental effect on the wife’s health of remaining in the Canberra area and the impact this would have on the children in the long term (Ground 3);
     • the wife’s need for family support (Ground 4);
     • the evidence that distance between the two parents might make it less likely that the children would be further exposed to abusive behaviour between the parents (Ground 7).
114. Examination of the Federal Magistrate’s reasons reveals that he placed great weight on the matters referred to in Grounds 3 and 4. They were clearly influential in him deciding that the wife’s case was “strong” and that, were it not for one factor, she would have been permitted to relocate. However, the Federal Magistrate found that the “cogent reasons” favouring relocation were outweighed by the impact on A of less frequent contact with his father. Had there been evidence to support the latter proposition, appellate interference may not have been warranted. However, we have found there was an insufficient evidentiary basis for that crucial finding. In those circumstances it becomes unnecessary to consider complaints about weight given to other factors, since his Honour accepted they pointed to the wife being allowed to relocate.
115. The same point can be made in relation to Ground 7, although it falls into a different category in that his Honour did not at any point discuss the possible advantage to the children of their parents living in different cities, which is the complaint advanced in this ground. This issue had been touched on during the evidence of Ms C, who agreed that if the parents lived in separate places the children would be “less exposed to the toxicity” in their relationship, which the Federal Magistrate found was “totally dysfunctional”.
116. We acknowledge that examination of the transcript reveals Ms C’s acceptance of the “exposure to toxicity” argument was guarded and qualified. (Transcript, 9 August 2011, page 30). However, counsel for the Independent Children’s Lawyer placed emphasis on this issue in her final submission in her closing address, when she said that “distance between [the parents] may do wonders for the children”.
117. That submission, of course, stood to be considered in light of all the evidence. However, one part of the evidence that we consider of particular significance in this context is that given by Dr K in his report, where he expressed concern about the likely ongoing negative impact on the psychological development of the children arising out of the “clash of [the parents’] personality styles and behaviour”. This resonates with what Dr N had said in her first report, which was prepared soon after the parties’ separated:

In my opinion, [H’s] restlessness and difficulty concentrating at school are largely a result of the disturbances and conflict between his parents, which he has observed and which is on-going, even though I understand the father is not currently living with the family.

118. In our view, this evidence further highlights why generalised propositions about the advantages to children of regular contact with both parents must be carefully analysed by reference to the facts of each case. True it is that s 60B(1) speaks of ensuring that children have “the benefit of both of their parents having a meaningful involvement in their lives”, but the section is qualified immediately by the words, “to the maximum extent consistent with the best interest of the child”. Importantly, s 60B(1) also emphasises the benefit to children of protecting them from psychological harm.
119. If indeed there is “toxicity” in the relationship of parents it cannot, in our view, be assumed that children will benefit from moving back and forward between their homes frequently. It may be that in such circumstances they would, for example, benefit from less frequent contact, but for longer periods.
120. We therefore consider there is some merit in Ground 7.

Ground 6 – error in the exercise of discretion

121. This ground asserts that the Federal Magistrate “was in error and wrongly exercised his discretion when he found that the proposed orders were in the best interests of the children”.
122. The ground constitutes little more than a complaint about the outcome and does not identify any alleged error. It does not require separate consideration.

Ground 8 – treating relocation and parental responsibility as separate and discrete issues

123. As we have found merit in other grounds, it is unnecessary to say more than that we were not persuaded Ground 8 has any merit.

The outcome and orders

124. Having concluded that the Federal Magistrate erred in the ways we have identified, we propose to allow the appeal.
125. We agree with the Federal Magistrate that the wife’s case for relocation was a strong one. Although it is unusual for a Full Court to redetermine a matter involving parenting issues, this is an unusual case. We say this because the Federal Magistrate himself said he would have allowed the relocation were it not for one factor, which we have found was not supported by the evidence. His Honour’s other findings provide a sufficient basis on which we can redetermine the matter. The husband did not seek to adduce further evidence, and the wife’s application to introduce further evidence was not pursued.
126. On the basis of the evidence before the Federal Magistrate, the proper order was for the mother to be allowed to relocate. To achieve this outcome, we propose to discharge the contact orders that were predicated on the wife remaining in Canberra and instead make the orders which the husband proposed at trial should be made if the wife was permitted to relocate. The only difference between the two proposals related to the small difference concerning the Christmas holidays in 2011 and 2012. The Federal Magistrate effectively ruled in favour of the husband on that issue, and we see no basis to interfere with that part of his decision. We also propose to make the communication order sought by the husband at trial, which was almost identical to the order sought by the wife.
127. We will order a limited remitter to allow the Federal Magistrates Court to deal with the dispute concerning costs of travel. It will be for the Federal Magistrates Court to decide whether that matter should be heard by Federal Magistrate Brewster or by another Federal Magistrate.

Costs

128. Each party sought a costs certificate under the Federal Proceedings (Costs) Act 1981 (Cth) in the event the appeal was allowed. Given the appeal has succeeded on the basis of a judicial error, we consider neither party should be required to pay the other party’s costs. It is appropriate that certificates be granted for both the appeal and for the rehearing. 

I certify that the preceding one hundred and twenty eight (128) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court (Finn, Thackray and Stevenson JJ) delivered on 7 June 2012.

Associate:

Date: 7 June 2012

FAMILY LAW – APPEAL – PROPERTY – where the husband took funds from his sister’s bank account in Germany under the terms of a power of attorney executed in Germany – where the husband purchased a property in the wife’s name with those funds – in the course of property settlement proceedings between the husband and wife to which the sister had been joined, the sister claimed that the wife held the property on trust for her – where the trial judge found that the wife held the property on constructive trust for the sister and ordered that the wife transfer the property to the sister – the wife’s claims on appeal that the husband had borrowed the funds from the sister, that a fiduciary relationship did not exist between the husband and the sister, and that the wife’s title to the property was indefeasible under the Land Title Act 1994 (Qld) were rejected by the Full Court – appeal dismissed – directions made for submissions in relation to the costs of the appeal.

Grefeld & Grefeld and Anor [2012] FamCAFC 71 (1 June 2012)

Last Updated: 14 June 2012

FAMILY COURT OF AUSTRALIA

GREFELD & GREFELD AND ANOR

[2012] FamCAFC 71

FAMILY LAW – APPEAL – PROPERTY – where the husband took funds from his sister’s bank account in Germany under the terms of a power of attorney executed in Germany – where the husband purchased a property in the wife’s name with those funds – in the course of property settlement proceedings between the husband and wife to which the sister had been joined, the sister claimed that the wife held the property on trust for her – where the trial judge found that the wife held the property on constructive trust for the sister and ordered that the wife transfer the property to the sister – the wife’s claims on appeal that the husband had borrowed the funds from the sister, that a fiduciary relationship did not exist between the husband and the sister, and that the wife’s title to the property was indefeasible under the Land Title Act 1994 (Qld) were rejected by the Full Court – appeal dismissed – directions made for submissions in relation to the costs of the appeal.

Family Law Act 1975 (Cth) Land Title Act 1994 (Qld)

Allen v Snyder [1977] 2 NSWLR 685 Bahr v Nicolay [No.2] [1988] HCA 16; (1988) 164 CLR 604 Baumgartner v Baumgartner [1987] HCA 59; (1987) 164 CLR 137 Breskvar v Wall [1971] HCA 70; (1971) 126 CLR 376 Calverley v Green [1984] HCA 81; (1984) 155 CLR 242 Chan v Zacharia [1984] HCA 36; (1984) 154 CLR 178 Consul Development Pty Ltd v DPC Estates Pty Ltd [1975] HCA 8; (1975) 132 CLR 373 Coulton v Holcombe [1986] HCA 33; (1986) 162 CLR 1 Equiticorp Finance Ltd (in liq) v Bank of NZ (1993) 32 NSWLR 50 Farah Constructions Pty Ltd v Say-Dee Pty Ltd [2007] HCA 22; (2007) 230 CLR 89 Field v Shoalhaven Transport Pty Ltd [1970] 3 NSWR 96 Frazer v Walker [1967] 1 AC 569 Hospital Products Ltd v United States Surgical Corp & Ors [1984] HCA 64; (1984) 156 CLR 41 Keith Henry & Co Pty Ltd v Stuart Walker & Co Pty Ltd [1958] HCA 33; (1958) 100 CLR 342 Marriage of Davidson (1994) 17 Fam LR 656 Martin v Martin [1959] HCA 62; (1959) 110 CLR 297 Metwally v University of Wollongong (1985) 60 ALR 68 Muschinski v Dodds [1985] HCA 78; (1985) 160 CLR 583 Neilson v Overseas Projects Corporation of Victoria Ltd [2005] HCA 54; (2005) 223 CLR 331 Picwoods Pty Ltd v Panagopoulos [2004] NSWSC 978 Poulet Frais v Silver Fox [2005] FCAFC 131; (2005) 220 ALR 211 Regie Nationale des Usines Renault SA v Zhang [2002] HCA 10; (2002) 210 CLR 491 Suttor v Gundowda Pty Ltd [1950] HCA 35; (1950) 81 CLR 418 Tara Shire Council v Garner [2002] QCA 232; [2003] 1 Qd R 556

APPELLANT:

Ms H Grefeld

1ST RESPONDENT:

Mr Grefeld

2ND RESPONDENT:

Ms J Grefeld

FILE NUMBER:

BRF

2504

of

2005

APPEAL NUMBER:

NA

90

of

2010

DATE DELIVERED:	1 June 2012

PLACE DELIVERED:

Canberra

PLACE HEARD:

Brisbane

JUDGMENT OF:

Finn, Strickland & Austin JJ

HEARING DATE:

12 August 2011

LOWER COURT JURISDICTION:

Family Court of Australia

LOWER COURT JUDGMENT DATE:

22 June 2010

LOWER COURT MNC:

[2010] FamCA 504

REPRESENTATION

COUNSEL FOR THE APPELLANT:

Mr Galloway

SOLICITOR FOR THE APPELLANT:

Peter J Sheehy Solicitors

SOLICITOR FOR THE 1ST RESPONDENT:

Mr Grefeld in person

COUNSEL FOR THE 2ND RESPONDENT:

Mr McGregor

SOLICITOR FOR THE 2ND RESPONDENT:

Jones McCarthy Lawyers

ORDERS

(1) The appeal against the orders made by the Honourable Justice Barry on 22 June 2010 is dismissed.

(2) The wife is granted an extension of time until 12 August 2011 to file a notice of appeal against the orders with respect to costs made by the Honourable Justice Barry on 22 June 2011 (“the costs orders”) and she is permitted to rely on the Further Amended Notice of Appeal filed in Court on 12 August 2011 as her Notice of Appeal against the costs orders.

(3) All other parties have 28 days from the date of the making of these orders to file any notice of appeal or cross appeal against the costs orders.

(4) As soon as mutually convenient after the expiration of 30 days from the date of the making of these orders, the Appeal Registrar shall conduct a procedural hearing for the purpose of ensuring that all necessary papers for the determination of the appeal or appeals (and any cross appeal) against the costs orders are available to all parties and to the Court.

(5) At the procedural hearing the Appeal Registrar shall direct a timetable for the filing of:

1. written submissions in support of any appeal, appeals (or cross-appeal) against the costs orders and for any submissions in response; and
2. written submissions in support of any application for costs in relation to the unsuccessful appeal against Orders 1, 2 and 3 of the orders made by the Honourable Justice Barry on 22 June 2010, (with such application to be included in the written submissions) and for any submissions in response.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Grefeld & Grefeld and Anor has been approved by the Chief Justice pursuant to
s 121(9)(g) of the Family Law Act 1975 (Cth).

THE FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT BRISBANE

Appeal Number: NA 90 of 2010
File Number: BRF 2504 of 2005

Ms H Grefeld

Appellant

And

Mr Grefeld

First Respondent

And

Ms J Grefeld

Second Respondent

REASONS FOR JUDGMENT

INTRODUCTION

1. This appeal relates to the adjudication at trial of a claim in equity brought by the second respondent (“the sister”), which claim was heard and determined byBarry J within the Court’s accrued jurisdiction appurtenant to pending property settlement proceedings under the Family Law Act 1975 (Cth) (“the Family Law Act”) between the appellant wife (“the wife”) and first respondent husband (“the husband”). “The sister” is the sister of the husband.
2. The trial judge found and declared that the wife held a parcel of real property on trust for the sister, and ordered the wife to convey the property to the sister so as to ensure the sister held both legal and equitable interest in the property.
3. The trial judge also made property settlement orders between the wife and the husband by consent under the Family Law Act.
4. The wife appeals against the orders determining the claim in equity.
5. The husband did not appeal against any of the trial judge’s orders. Nonetheless he filed comprehensive written submissions about the outcome of the appeal, from which it was quite plain he continued to support the wife’s appeal against the orders of the trial judge.
6. The husband was self-represented on the appeal, as he was at the trial. He made numerous written and oral submissions to the effect that the trial judge erred in certain ways, but in the absence of an appeal by him it is unnecessary to consider any of the husband’s submissions which go beyond the grounds of appeal contended by the wife.

BACKGROUND

7. The wife and the husband married in 1980 and finally separated in 2002 or 2003. There is dispute about the separation date but it is immaterial
   (Reasons 5).
8. The husband is the eldest of five siblings, all of whom are adult (Reasons 2).
9. The sister is the youngest of those siblings (Reasons 3).
10. In 1983 the sister granted a power of attorney to the husband in Germany
    (“the power of attorney”) (Reasons 31). The husband also held powers of attorney for his mother and his other three sisters (Reasons 2).
11. In 1984 the husband used funds provided to him by his mother to purchase and become the sole registered proprietor of a parcel of real property described as
    Property A (Reasons 4). In 2004 the husband transferred his title in that property to the sister (Reasons 6).
12. In 1996, in reliance upon the power of attorney, but without the sister’s knowledge (Reasons 69), the husband withdrew funds from the sister’s German bank account and used those funds to purchase a parcel of real property described as Property B (Reasons 34).
13. The contract to purchase Property B was in the wife’s sole name as purchaser, but the contract was executed by the husband on behalf of the wife. Once the funds (from the sister’s account) were paid by the husband to the vendor to complete the contract, title was registered in the sole name of the wife.
14. Property settlement proceedings under the Family Law Act were commenced by the wife against the husband in September 2005 (Reasons 39).
15. At that time, the wife lived in Property B, the sister lived in Property A, and the husband lived in Germany.
16. Dispute arose in the property settlement proceedings about the identity of assets available for division between the husband and the wife.
17. In September 2006 the wife joined the sister to the pending family law proceedings, and sought an order that the sister transfer Property A to her (Reasons 42). This claim was later abandoned (Reasons 3, 13).
18. Once joined to the proceedings, the sister filed a Response seeking the transfer of Property B to her. Having recently learned of the circumstances in which it had been acquired, the sister alleged the wife held that property on trust for her (Reasons 42, 69). The wife denied this claim.
19. During the proceedings the parties were directed to file pleadings in relation to the claim in equity. The sister filed a Statement of Claim in December 2008, in response to which the wife filed a Defence and later an
    Amended Defence in June 2010.
20. The husband did not file any pleading, but his position was still clear from his case outline document and his evidence. He opposed the sister’s claim and supported the wife’s contention that Property B was an asset in which the wife should enjoy both the legal and the equitable interest pursuant to the agreement reached between them in the property settlement proceedings (Reasons 15-16).
21. The husband alleged that, under the imprimatur of the power of attorney, he quite properly borrowed from the sister the funds needed to purchase
    Property B. That transaction, he contended, gave rise only to an action in debt against him at the suit of the sister. However, the husband further alleged he had subsequently repaid monies to the sister to discharge the debt he owed her (Reasons 28, 36).
22. At the time of trial, given the husband and the wife had resolved their
    property settlement dispute (Reasons 14), the Court was only called upon to determine the claim in equity made by the sister against the wife (Reasons 17).
23. The trial proceeded on 1 to 3 June 2010 and the trial judge made the orders now appealed and delivered his reasons for judgment on 22 June 2010.

THE CLAIM IN EQUITY

24. The ambit of the equity claim was necessarily apparent from the pleadings, which his Honour recited in full in the judgment (Reasons 21-24). The sister pleaded that the wife held Property B for her upon either a resulting trust or a constructive trust, which was the subject of express denial by the wife.
25. The pleadings and evidence revealed that there were many facts and circumstances which were uncontroversial at trial and which are as follows.
26. The wife was the sole registered proprietor of Property B.
27. The wife’s acquisition of title in Property B was orchestrated by the husband on her behalf. He instructed the solicitors to act on the purchase and he signed the contract of purchase for the wife.
28. The funds used to acquire Property B were provided in totality from the sister’s German bank account.
29. The funds for the purchase were withdrawn from the sister’s account by the husband in reliance upon the power of attorney.
30. The terms of the power of attorney properly entitled the husband to make that withdrawal.
31. Once withdrawn, at the husband’s direction, the funds were channelled directly to the Australian solicitors acting upon the purchase of Property B who then used the funds to complete the purchase.
32. Until about 2006, the sister was ignorant of both the husband’s withdrawal from her account and the use to which her funds were put.
33. The wife was ignorant of the true source of the funds used for the purchase of Property B. She believed the husband used funds received by him in the form of proceeds of an earlier insurance claim.
34. The pivotal issues in the case formulated by the parties, therefore, were:
    1. Whether the sister:

i) Merely acquired a personal action in debt against the husband by reason of him borrowing the funds from her and expending those funds at his discretion; or

ii) Subject to sub-paragraph (b) acquired an equitable interest in Property B by reason of the use of her funds for the express purpose of acquiring legal title in that property in the name of the wife; and

2. If the latter, whether the creation of a trust in favour of the sister was precluded by reason of the wife’s ignorance of the origin of the funds used for the purchase, as opposed to the husband, who was knowingly responsible for the use of the funds for that purpose.

35. The potential issue of the sister’s alleged indebtedness to the husband disappeared. The husband’s assertion that he had more than repaid his alleged loan to the sister, thereby warranting her repayment of monies to him, was struck out because it was not supported by any pleading and it was more appropriately dealt with in the German jurisdiction (Reasons 29, 36).
    The husband filed no appeal or cross appeal and must be taken to accept the validity of that decision. An identical claim of repayment due by the sister to the husband was made by the wife in her Amended Defence, but was withdrawn (Reasons 24).

THE REASONS FOR JUDGMENT OF THE TRIAL JUDGE

36. Albeit at the conclusion of his reasons, the trial judge recorded that the exercise of accrued jurisdiction was not the subject of objection by any party.
    As his Honour noted, it was necessary to exercise accrued jurisdiction to entertain the equity claim in order to determine whether or not Property B was matrimonial property and therefore amenable to distribution in the
    matrimonial cause between the spouses (Reasons 128-129).
37. The trial judge plainly understood the issue which required determination.
    He succinctly described it as:
    17. ...a civil claim between [the sister] as Plaintiff and [the wife] as Defendant for the transfer of the [Property B] property.
38. Although the parties relied upon a panoply of affidavits from various witnesses (Reasons 18-20), only the husband and the sister were cross examined at trial (Reasons 30). Neither the wife nor other family members were cross examined on their evidence (Reasons 12). Nonetheless, because of the conflicting evidence, credibility was a salient issue in the determination of the litigation (Reasons 88).
39. His Honour found the sister to be a “consistently honest witness”
    (Reasons 12, 90), but conversely found the husband unreliable, “primarily due to significant inconsistencies in his sworn testimony relating to important issues” (Reasons 52, 89). The inconsistencies in the husband’s evidence and approach to the case were laid bare by his Honour in the reasons
    (Reasons 44-58). No aspect of the wife’s appeal challenged the legitimacy of the trial judge’s findings about the respective credit of the husband and the sister.
40. The trial judge accurately recounted the case presented by the husband (Reasons 93-94), who was actively supported by the wife (Reasons 118).
    His Honour was aware the husband asserted that he had acted as the
    sister’s agent under the power of attorney to lend money, on the sister’s behalf as creditor, to himself as debtor, which money he intended to repay with interest as an ordinary commercial loan. His Honour was cognisant of the husband’s assertion that the mere loan of the money by the sister to him did not create a trust and invest the sister with proprietary rights in Property B. The husband’s further submission was that his intention alone determined the character of the transaction of funds between them, as the sister was not privy to his intention at that time.
41. The wife knew nothing about the circumstances in which the purchase of Property B was funded either. She believed the husband used funds of his own, derived from an insurance claim, to purchase the property. Consequently, the wife’s defence to the sister’s claim in equity heavily depended upon the evidence given by the husband, who had direct knowledge of the circumstances.
42. Before the Court were incontrovertible facts proving the flow of money from the sister’s bank account, directly through the hands of the husband and the solicitors he engaged to the vendor of Property B, in consideration for which title to the property was conveyed to the wife. As would be apparent, such facts were consistent with, and certainly did not preclude, the creation of a trust.
43. Conversely, the trial judge could identify no characteristic that would permit the transfer of money from the sister’s bank account to the husband to be construed as a loan (Reasons 95, 99, 117). The only available evidence that the transaction, under which money was taken by the husband from the
    sister’s account without her knowledge, was a loan by her to him was the husband’s bare assertion that it was such. The husband’s uncorroborated opinion about the legal characterisation of a transaction was apt to carry little weight, particularly when the trial judge found him an unsatisfactory witness.
44. The trial judge found the husband “used the monies he received pursuant to the power of attorney as if the money was his own and with no record of proper accounting” to the sister (Reasons 92, 99).
45. His Honour found the power of attorney created a fiduciary relationship between the sister and husband within this country (Reasons 102), which precluded the husband from acting in conflict with the sister’s interests or from profiting from her resources without her informed knowledge and assent (Reasons 104-105). His Honour concluded the husband breached his
    fiduciary duty to the sister by not informing her about the withdrawal of money from her account, either in the form of a loan or otherwise (Reasons 107-108). The husband’s argument that a breach of fiduciary duty was not expressly pleaded by the sister was not considered fatal by his Honour, because the
    wife’s pleading and the evidence expressly raised the probity of the
    husband’s conduct (Reasons 113-115).
46. His Honour found that the transaction between the husband and the sister was not “a case of arm’s length borrowing” and the husband’s conduct was “unconscionable”. His Honour then concluded that where Property B had been purchased entirely with the funds of the sister “the only appropriate remedy is a declaration that the property is held on trust for her” (Reasons 117-121).
47. Although the trial judge considered the species of the trust to be “somewhat academic” (Reasons 125), it is clear that his Honour was well aware of the distinction between resulting and constructive trusts. His Honour knew that the sister pleaded the existence of a resulting trust, and a constructive trust in the alternative (Reasons 21). His Honour also expressly considered the law distinguishing such trusts (Reasons 122-123).
48. His Honour found, first, the trust existed because Property B was “acquired entirely” with funds of the sister (Reasons 121), which finding,
    his Honour observed, is consistent with a resulting trust, even though no express finding to that effect was made (Reasons 127). His Honour instead found that the trust was a constructive trust (Reasons 126), because Property B was acquired with the sister’s money in circumstances involving breach of fiduciary duty (Reasons 130).
49. Pursuant to those findings the trial judge declared that the wife held title in Property B on trust for the sister (Order 1) and ordered the wife to forthwith transfer her title in the property to the sister (Order 2), in default of which the Registrar could execute documents on behalf of the wife (Order 3). These are the orders which are subject of this appeal.

GROUNDS OF APPEAL

50. At the commencement of the hearing of the appeal we gave leave, with the consent of the respondents, to the wife to further amend the grounds of appeal, primarily to introduce an appeal against orders for costs made by the trial judge on 22 June 2011, but also to amend Ground 1 of the initial grounds of appeal.
51. Although the appeal against the costs orders was out of time, the other parties took no issue about the expiration of the time prescribed for filing a
    Notice of Appeal. Ground 10 of the wife’s grounds of appeal is directed to the costs order and as will later be explained will be considered by us at a later time.
52. At the hearing of the appeal Ground 3 of the grounds of appeal was abandoned. The remaining eight grounds of appeal which were then pursued before us will be set out or otherwise explained where necessary in the discussion which follows.
53. The orders now sought in relation to the appeal are that Orders 1, 2 and 3 made on 22 June 2010 be set aside and the sister pay the wife’s costs of the appeal.

Ground 1

54. Ground 1 asserted that the trial judge erred in fact in finding that the sister had provided all of the purchase price of the Property B, in that the husband paid the deposit from his own funds and borrowed from the sister the balance of the purchase price.
55. The wife contended that not all of the funds used to purchase Property B were provided by the sister, it being suggested that the deposit of $15,000 was provided by the husband from his own resources. However, this proposition could not be sustained on the state of the pleadings and evidence, and Counsel forthe wife ultimately accepted this.
56. Thus, this ground of appeal must fail.

Ground 2

57. Ground 2 asserted in effect that the trial judge’s finding that the transaction between the husband and the sister could not be characterised as a loan was both “against” and “contrary” to the evidence.
58. In support of this ground the wife contended the trial judge was bound to find the removal of funds by the husband from the sister’s account was a loan merely because, first, the terms of the power of attorney permitted such a loan, and secondly, “money was [then] had” by the husband.
59. The term in the power of attorney which was claimed by the wife to permit a loan was as follows:

The powers of attorney are authorised to negotiate transactions in my name with themselves in their own name or as a representative of others.

60. We do not accept such an appraisal of the evidence or the law. The mere fact that a loan to the husband was possible under the power of attorney did not, without more, require or even permit the fact to metamorphose into a probability.
61. It was common ground that the power of attorney permitted the husband to act as the sister’s agent to lend the sister’s money to himself, but there was no objective evidence to characterise the transaction that occurred in February 1996 as a loan. Just because the husband asserted in evidence in these proceedings many years later that his subjective intention at the time was to borrow the funds from the sister, the trial judge was not bound to accept the veracity of the husband’s evidence. Indeed, the trial judge found the
    husband’s evidence contained “numerous inconsistencies” and was unreliable.
62. The trial judge expressly searched the evidence for corroboration of the husband’s characterisation of the transaction as a loan and found none. There were not any of the orthodox characteristics of a genuine commercial loan, such as agreement about the loan term, frequency or quantum of repayments, or interest rate.
63. Counsel for the wife submitted in effect that his Honour erred because it was open to him to find that the transaction was a loan. However, such an argument misconstrues the task of an appellate court. The test is not whether an alternative outcome was open, but rather whether the outcome found was not open. Here, it was beyond doubt that the finding that the transaction was not a loan was open to his Honour. Thus there is no merit in this ground of appeal.

Ground 4

64. By Ground 4 the wife asserted that the trial judge could not have found the existence of a fiduciary relationship between the husband and his sister.
65. It is not entirely clear, but it seems that the primary basis for this assertion is that the power of attorney was a German instrument, that it had been executed in Germany at a time when the husband and the sister were both in that country, that it related to “German funds and German assets”, and when the power was exercised by the husband the money was withdrawn from a German bank account. Thus, it is said, given there was no evidence of the effect of this document in German law it was not open to the trial judge to apply Australian law to it and to the relationship between the husband and his sister.
66. We do not accept this submission. Not only was foreign law not pleaded but there was no expert evidence presented as to what the foreign law provided.
    It is well settled that if a party wants to rely on foreign law it has to be pleaded with full particulars (Regie Nationale des Usines Renault SA v Zhang [2002] HCA 10; (2002) 210 CLR 491, 515-520), and that was not done here. Further, the onus of proving that the foreign law is different from the lex fori rests on the party alleging that, in this case the wife, and in the absence of satisfactory proof of foreign law the lex fori will be applied (Neilson v Overseas Projects Corporation of Victoria Ltd [2005] HCA 54; (2005) 223 CLR 331, at [125]). Indeed, in those circumstances it is also presumed that the foreign law is the same as the
    lex fori.
67. On that basis, applying the law of Australia, the relationship created by the power of attorney was one of agency, and that is ordinarily a fiduciary one
    (see Hospital Products Ltd v United States Surgical Corp & Ors [1984] HCA 64; (1984) 156 CLR 41 at 68, 96, 141) in which the agent is not permitted to put his interest in conflict with the principal’s, nor to act for different principals with conflicting interests, nor to profit from the agency, at least without full disclosure to the principal (see Keith Henry & Co Pty Ltd v Stuart Walker & Co Pty Ltd [1958] HCA 33; (1958) 100 CLR 342 at 350; Consul Development Pty Ltd v DPC Estates Pty Ltd [1975] HCA 8; (1975) 132 CLR 373 at 377, 392-394; Chan v Zacharia [1984] HCA 36; (1984) 154 CLR 178 at 198-199;Hospital Products v United States Surgical at 67).
68. No matter how broadly the terms of the power of attorney were drawn, its terms did not authorise the husband to act contrary to those legal principles.
    In circumstances where the husband conceded using the sister’s money, without her knowledge or consent, to acquire real property for the mutual benefit of the husband and wife, the existence and breach of the husband’s fiduciary duty to the sister were patent.
69. Thus there is no merit in this ground of appeal.

Ground 5 to 9

70. The remaining grounds of appeal were argued compendiously by the wife and it is convenient to address them similarly. They are to the following effect:
    • That the trial judge erred in failing to find, as a matter of law, that the Appellant’s title to Property B, was indefeasible (Ground 5).
    • That the trial judge ought to have determined that the sister failed to advance any case sufficient to impeach the wife’s title (Ground 6).
    • That the trial judge has given no reasons for failing to uphold the wife’s title in that he:
      1. Had before him uncontested evidence concerning the wife’s acquisition of her title; and
      2. Ought to have sought submissions or alternatively further submissions, on the sufficiency of the claim of the sister to dislodge the wife’s title (Ground 7).
    • That the trial judge erred in law in failing to have any regard to the provisions relating to the indefeasibility of the wife’s title for the subject property afforded to her by the provisions of s 184 of the Land Title Act 1994 (Qld) and failed to have any regard for the insufficiency of the case made by the sister that the wife’s title should not be indefeasible
      (Ground 8).
    • That the trial judge erred in misunderstanding the nature of a resulting or constructive trust and, in this case, erred in failing to understand that the obligations of any trust attached, if at all, to the husband, not to the property itself, nor to the registered proprietor, the wife (Ground 9).
71. The wife’s arguments were somewhat circuitous, but we perceive her submissions can be encapsulated within the following propositions: she was an innocent recipient of title in Property B, untainted by knowledge about the sister being the source of the funds to enable its purchase, and thereby acquired indefeasible title in Property B under the provisions of the Land Title Act 1994 (Qld), which could not be disturbed by any equitable interest of the sister arising by way of a resulting or constructive trust.
72. In responding to the wife’s arguments the sister relied, amongst other matters, on the proposition that the wife acquired legal title in Property B entirely through the agency of the husband. He negotiated the purchase with the vendor, he instructed the solicitors to act on the purchase, he executed the contract on behalf of the wife, and he made all of the arrangements for use of the sister’s funds to pay for the purchase. The wife only knew the husband was arranging the acquisition of the property in her name, and approved of him so doing. The husband therefore had the wife’s authority to act as necessary in order to purchase Property B for her.
73. The wife submitted, correctly it seems, that the issue of the husband’s agency for the wife in the acquisition of Property B was not the subject of direct argument before the trial judge. However, the question of the agency relationship between the husband and wife is an issue of law, and the facts pertaining to that issue were before the trial judge and were unchallenged. Accordingly, the wife conceded, again correctly in our view, that the issue of agency could be properly agitated on the appeal. It was not an issue of fact about which contrary evidence could have been raised at first instance so as to now give rise to prejudice on the appeal (see Suttor v Gundowda Pty Ltd [1950] HCA 35; (1950) 81 CLR 418 at 438; Metwally v University of Wollongong (1985) 60 ALR 68 at 71; Coulton v Holcombe [1986] HCA 33; (1986) 162 CLR 1 at 7; Marriage of Davidson (1994) 17 Fam LR 656 at 669).
74. No formality is needed to establish an agency relationship. If the facts fairly disclose that one party is acting for another by the other’s authority, the agency exists. The creation of agency does not depend upon the principal’s conscious intention to confer authority upon the agent (see Field v Shoalhaven Transport Pty Ltd [1970] 3 NSWR 96 at 103; Equiticorp Finance Ltd (in liq) v Bank of NZ (1993) 32 NSWLR 50 at 132-134; Picwoods Pty Ltd v Panagopoulos[2004] NSWSC 978 at [81-82]; Poulet Frais v Silver Fox [2005] FCAFC 131; (2005) 220 ALR 211 at 236).
75. Application of those principles to the facts leaves little or no room for argument about the husband’s status as an agent, for the wife as principal, at the time he acquired title for her in Property B.
76. A principal is bound by the acts of an agent done within the scope of the agent’s actual or ostensible authority. As against a third party, the law imputes to a principal knowledge gained by his/her agent in the course of, and which is material to, a transaction in which the agent is employed on behalf of the principal, under such circumstances that it is the duty of the agent to communicate it to the principal. The principal is precluded from relying upon personal ignorance of that knowledge (see Sargent v ASL Developments Ltd [1974] HCA 40; (1974) 131 CLR 634 at 658-659; Watts, P. G and Reynolds, F. M. B, Bowstead & Reynolds on Agency, (2010, 19th ed), Sweet & Maxwell, London, paras 8-207(1), 8-207(2)).
77. Accordingly, although the wife was ignorant of the use of the sister’s money, the husband’s knowledge of that material fact is imputed to the wife by reason of the husband acting as her agent.
78. The wife’s argument – also apparently raised for the first time on appeal – about the indefeasibility of her title in Property B proceeded from the provisions ofs 184 and s 185 of the Land Title Act 1994 (Qld), which relevantly provide as follows:
    184. Quality of registered interests
         • (1) A registered proprietor of an interest in a lot holds the interest subject to registered interests affecting the lot but free from all other interests.
         • (2) ...
         • (3) However, subsections (1) and (2) do not apply:
           • (a) to an interest mentioned in s 185; or...
    185. Exceptions to s 184
         • (1) A registered proprietor of a lot does not obtain the benefit of section 184 for the following interests in relation to the lot –
           • (a) an equity arising from the act of the registered proprietor;
79. For the purposes of that legislation, the “lot” was Property B and the wife was the sole registered proprietor of it. She thereby enjoyed an indefeasible title to the property.
80. The indefeasibility provisions of the Land Title Act 1994 (Qld), as with other State legislation dealing with land under Torrens title, confer upon registered proprietors of land indefeasibility of title in such land, affording them protection against unregistered interests in the land. However, such legislation does not deny the right of a plaintiff to bring against a registered proprietor a claim in personam founded in law or in equity that may sound in relief affecting the registered proprietor’s title (see Frazer v Walker [1967] 1 AC 569 at 585; Breskvar v Wall [1971] HCA 70; (1971) 126 CLR 376 at 384-385, 400;Baumgartner v Baumgartner [1987] HCA 59; (1987) 164 CLR 137; Bahr v Nicolay [No.2] [1988] HCA 16; (1988) 164 CLR 604 at 613, 638, 653-654;Farah Constructions Pty Ltd v Say-Dee Pty Ltd [2007] HCA 22; (2007) 230 CLR 89 at 169-171).
81. Some State legislation expressly recognises such a right, as is the case with
    s 185(1)(a) of the Land Title Act 1994 (Qld). But as the sister submitted,
    s 185(1)(a) does no more than state the pre-existing law (see Tara Shire Council v Garner [2002] QCA 232; [2003] 1 Qd R 556 at 564, 572).
82. The wife submitted that the indefeasibility of her title in Property B, conferred by s 184 of the Land Title Act 1994 (Qld), precluded the creation of an equitable interest in the property in favour of the sister by way of a trust, otherwise than through “the narrow portal” of s 185.
83. Section 185(1)(a) of the Land Title Act 1994 (Qld) expressly subjected the indefeasibility of the wife’s title to any equity arising from an act of the wife. The acts of the husband, which the trial judge found did give rise to an equity in the sister’s favour, were the acts of the wife because of the agency relationship between them. Consequently, the Land Title Act 1994 (Qld) affords the wife no protection.
84. The wife also sought to argue that her title to Property B was impregnable on the basis of principles developed or explained by the High Court in Farah Constructions, but this argument is ill-founded.
85. Farah Constructions was concerned with the indefeasibility of title enjoyed by registered proprietors of land, whose acquisition of title in the land had been facilitated by Farah Constructions Pty Ltd (“Farah”) using information about the land which Say-Dee Pty Ltd (“Say-Dee”) argued ought have been confidentially shared with it. Farah owed a fiduciary duty to Say-Dee, and
    Say-Dee submitted Farah had breached that duty in failing to disclose that information to it and instead sharing it with the registered proprietors, some of whom were alter egos of Farah and some of whom were not, and that caused the registered proprietors to hold the land upon constructive trust for it. The High Court held that, although Farah owed a fiduciary duty to Say-Dee, there was no breach of the duty because there was satisfactory disclosure to Say-Dee and no relevant provision of confidential information to the registered proprietors. Accordingly, the registered proprietors’ indefeasible title in the land was undisturbed by any constructive trust.
86. The wife sought to equate herself with the registered proprietors, the husband with Farah, and the sister with Say-Dee. However, the situation in
    Farah Constructions was materially different from the case at bar for several reasons.
87. In Farah Constructions the constructive trusts were contended to arise from the registered proprietors’ use of Farah’s knowledge that should have been confidentially imparted to Say-Dee, the failure to do so being allegedly unconscionable. That argument failed. Here, the constructive trust was contended by the sister to arise quite differently, namely from the secretive use of her money by the husband in breach of his fiduciary duty to her not to profit, or derive profit for another principal with conflicting interest, through exploitation of his agency for her without her informed consent.
88. Persons who receive trust property become chargeable if it is established they received it with notice of the trust (see Farah Constructions at 141). That is so whether the knowledge is actual or imputed. The registered proprietors in Farah Constructions retained indefeasible title in their land because the allegedly confidential information, of which they were found ignorant, could not be traced into the land they acquired. The land was not therefore the traceable proceeds of trust property (see Farah Constructions at 144). Importantly, it was neither proven nor found that Farah or its alter ego entities acted as agents for those innocent registered proprietors (see
    Farah Constructions at 147). In this case, however, the husband clearly did act as the agent of the wife in her acquisition of Property B and the sister’s funds could be traced directly into that property.
89. Finally, Farah Constructions said nothing about resulting trusts. We do not accept the wife’s submissions that Farah Constructions should be so broadly construed as to cover and restrict creation of any equitable interest, howsoever arising.
90. So it was in this case that the sister was obliged to establish her case against the wife, proving a trust arose in her favour, creating an equitable interest in Property B. The sister sought to prove the existence of either a resulting or constructive trust, and the trial judge found that the sister established her case.Farah Constructions does not prevent that finding.
91. We turn then to consider the elements of the trusts pleaded by the sister.
92. A resulting trust arises where some party other than the legal proprietor of property provides a portion or the whole of the purchase price of that property. A trust is presumed in favour of the party providing the whole or part of the purchase price and the equitable interest, which is held on trust for that party by the proprietor of the legal interest, is proportionate to the financial contribution (see Allen v Snyder [1977] 2 NSWLR 685 at 689-690; Calverley v Green [1984] HCA 81; (1984) 155 CLR 242 at 246). Of course, if the totality of the purchase price is provided by a party then the whole of the property is held on trust for that party by the proprietor of the legal interest.
93. It is as well to mention that the countervailing presumption of advancement did not apply in the circumstances of this case, and indeed no party suggested it did (see Martin v Martin [1959] HCA 62; (1959) 110 CLR 297 particularly at 303-305; 
    Allen v Snyder at 690; Calverley v Green at 268-269; Muschinski v Dodds [1985] HCA 78; (1985) 160 CLR 583 at 590).
94. To imply such a trust the Court looks to the intention of the parties, inferred as a matter of fact from their conduct and representations, but the implication of the trust will yield to the actual intention of the parties (see Allen v Snyder at 690, 691, 698).
95. The evidence disclosed that the sister had no actual intention. She was ignorant of the transaction and the use of her money. Nor did the wife have any relevant actual intention. She knew Property B was being purchased by the husband for her, but was ignorant of the true source of the funds. As for the husband, there is no doubt he actually intended to use money withdrawn from the sister’s bank account to fund the purchase. Although the husband contended his intention was to borrow the money from the sister and apply those funds at his discretion towards the purchase, the trial judge found his credibility wanting and did not accept his evidence that such was his intention.
96. The husband admitted that he contracted to purchase Property B on behalf of the wife. The contract was due for completion on 28 February 1996 and the husband deposed that he arranged to withdraw money from the sister’s account a week before that date in order to ensure completion of the purchase.
    The sister’s funds comprised the entirety of the purchase price and those funds were withdrawn by the husband from the sister’s account for the express purpose of funding the acquisition of Property B. In the face of the trial judge’s finding that the withdrawal from the account was not properly characterised as a loan, the finding of a resulting trust was well open. The factual circumstances surrounding the husband’s conduct rationally permitted an inference that the property was acquired on trust for the sister. The sister provided the funds for the purchase, through the husband acting as her agent, and the wife acquired legal title in the property, through the husband acting as her agent.
97. A constructive trust differs from a resulting trust in that it is created by operation of law without reference to the parties’ intentions. The inquiry is not as to the actual or presumed intention of the parties but rather as to whether, according to principles of equity, it would be unconscionable to allow a legal owner of property to enjoy sole beneficial ownership of that property
    (see Muschinski v Doods at 614-617, 620-621; Baumgartner v Baumgartner at 148-150).
98. His Honour concluded in the circumstances of this case that the husband breached his fiduciary duty to the sister by the manner in which he resorted to use of the sister’s money, which conduct was unconscionable (Reasons 117), and found such conduct formed a basis for a constructive trust (Reasons 126).
99. The wife conceded the trial judge’s findings about the husband’s conduct could well have formed the basis of a constructive trust pursuant to which the husband held Property B on trust for the sister, provided he was the
    legal proprietor of it. However, it was contended the wife’s legal proprietorship of the property changed the complexion of the case, in that the wife was removed from the husband’s unconscionable conduct and was not therefore caught by any such trust because “she did not receive trust monies”.
100. The answer to that submission is that the husband used the funds he acquired from the sister in his capacity as agent for the wife as principal. When an agent acts, even beyond the scope of actual or ostensible authority, by obtaining money or property of a third party, in this case the sister, and the money or property is received or applied for the benefit of the principal, in this case the wife, the principal becomes liable to the extent of the benefit received (see Bowstead & Reynolds on Agency, paras 8-201, 8-203(1), 8-203(2); Halsbury’s Laws of Australia, Vol 1(2), Butterworths, para 15-260).
101. The facts as found by the trial judge permitted the imposition of a constructive trust.
102. Nevertheless, there was little or no practical difference in this case between the imposition of a resulting or a constructive trust. That is because, in either case, the trust provided the sister with an equitable proprietary interest in
     Property B.
103. In our view, no error of law is demonstrated and the conclusions reached by the trial judge were open on the evidence.

CONCLUSION

104. Given we have found no merit in any of the grounds of appeal, the wife’s appeal against the orders made by the trial judge in respect of the equity suit must fail.
105. During the hearing of the appeal it emerged that on 22 June 2011, the
     trial judge had made orders in relation to the costs of the proceedings before him and that the appellant wife, and possibly also the husband, wished to appeal those orders. The wife’s desire to appeal the costs orders was apparent from Ground 10 and Order 3 of the Orders Sought in her Further Amended Notice of Appeal, on which she was permitted to reply at the hearing before us. As mentioned earlier no issue was taken that such an appeal might be out of time by some weeks. We therefore indicated that in this judgment we would make the usual directions for written submissions to be filed in relation to any appeal that might be pursued against the trial judge’s orders in relation to costs and also with respect to the costs of the appeal which we have determined by this judgment. Before such submissions are filed, it will be necessary for the Appeal Registrar to conduct a procedural hearing in order to ensure that all necessary papers (including any relevant transcript) are available to this Court in addition to the written submissions to enable it to determine the appeal or appeals. Our orders will so provide.

I certify that the preceding one hundred and five (105) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court delivered on 
1 June 2012.

Associate:

Date: 1 June 2012