In 2017, a company was incorporated by three founders: The Plaintiff, and the First and Second Defendants. Each of the Plaintiff, and Defendants had holding entities that owned “their” shared in the company.
The company was formed to commercialise authentication and ID technology.
The Plaintiff was the then CEO.
A deed was entered intro by the Plaintiff and Defendants and their interests.
The Plaintiff said the founders has agreed they (or their companies) would always have an equal shareholding; a “communist model”.
The Defendants, and the Court, disagreed.
Plaintiff gave no evidence of that understanding and the deed expressly allowed for inequality.
Even if there had been such an equality it would not have survived the Deed because the deed included an “entire agreement” clause.
By July 2017 the Plaintiff was growing frustrated with the first Defendant, including about the amount of time that the First Defendant was (not) spending on the company.
Some of the issues were set out in lengthy emails.
Plaintiff’s frustration became a “burning frustration” over time.
In early 2019 a CTO other than the Plaintiff’s preference was appointed by the first and second Defendants and directed not to take instruction from the Plaintiff, which left the Plaintiff feeling undermined as CEO.
Shortly after, the Plaintiff attempted to resign as CEO, which the second Defendant did not accept, but which was eventually effective in 2019.
Plaintiff’s entity, as shareholder, brought a corporate oppression claim.
The Plaintiff’s entity failed on claims relating to the Plaintiff’s role as CEO: it was entitled to appoint a director and so participate in management that way, but had no direct rights in relation to the CEO role.
Despite some elements of the first Defendant’s conduct being unimpressive, the Plaintiff was not “forced out” as Plaintiff had resigned.
Later in 2019, the first and second Defendant’s moved to fire the new acting CEO without the Plaintiff’s knowledge, on Christmas Eve.
In January 2020 the Plaintiff objected to this and resigned in the following days.
At the time the company was in need of capital, had to retain staff, the Plaintiff had not contributed capital, and Plaintiff had elected to quit the board.
The First and Second Defendants resolved to convert their and the Plaintiff’s “wage loans” (unpaid directors fees recorded in the books as loans) into equity in the company.
Despite this, the First and Second Defendant’s made the conversion for their “wage loans” and not for the Plaintiff’s.
This conduct was found to be unfair.
Options were granted to the new CEO. Granting options to the new CEO was not unfair noting the commercial circs and the Court’s reluctance to second guess commercial decisions of directors.
Issuing options to fund-raise (thereby diluting the Plaintiff’s entity’s holdings) was not found to be unfair.
The Court sent the parties to confer on the right form of relief.
Komlotex Pty Ltd v AMP Ltd [2022] NSWSC 1525
The Defendant discovered ~29K documents in a piece of litigation and claimed ~9K were privileged.
The Court considered 27 representative documents. These included documents about an ASIC investigation regarding “fees for no service” claims.
The Defendant had to prove the documents were privileged. If privileged, the Plaintiffs had to prove privilege had been waived.
The Defendant had self-reported the “fees for no service” issue, engaged various large law firms, and itself had a big in-house legal team.
In 2017 the Defendant engaged one firm to provide the Defendant called findings and advice, claiming privilege would attach to both.
The Plaintiffs argued the firm was engaged to investigate, rather than provide advice, meaning that firm’s work would not be privileged.
The Court was also taken to an admission from the Defendant during the Hayne RC that “it did not need to receive legal advice to know that [it] cannot charge somebody for services that [it is] not providing”.
Importantly privilege is for legal advice rather than commercial or PR advice, though the concept of legal advice includes what a client should prudently or sensibly do, including in relation to an investigation.
The dominant purpose is the thrust of the privilege. A document prepared for a number of reasons, with none dominant, is not privileged.
In relation to a report sent by external lawyers, to Defendant’s in-house lawyers, and then to the Defendant’s senior executives, the Court found the dominant purpose of each email was legal advice to the Defendant. Therefore they were privileged.
Similarly, in relation to legal advice on the implications of the report, privilege attached.
The Defendant produced the report (but not the associated advice) to the ASIC without a claim for privilege.
The Plaintiffs claimed this was a waiver of privilege of all documents concerned with the firm’s engagement.
Reference to existence of privileged material is not enough for waiver, the contents of the privileged material must be relied upon for privilege to be waived.
The Court found that by waiving privilege in the report, the Defendant did not waive privilege in the advice. Privilege can by waived over the factual investigation report and maintained in the subsequent legal advice given based on that report.
The report could be understood without the help of the legal advice.
The Court found the sample documents were privileged with no waiver. Plaintiff was ordered to pay the Defendant’s costs.
Gillespie v Gillespies Cranes Nominees Pty Ltd [2022] NSWSC 1184
In the early 1980s, a trust was established. Its assets came to be worth around $55 Million.
A parent established the trust for the principal benefit of their spouse and 4 children, with the trust company as trustee.
The trust company’s shareholders were 2 of the kids, who became the Defendants in the matter.
The trust deed gave the trust company a wide discretion to make resolutions on the distribution of income. If there was no resolution, the income was to go to the principal beneficiaries. From 2009 to 2020, the trust company made no distributions to principal beneficiaries, but to entities related to the Defendants.
The Plaintiff alleged there were no resolutions appropriately passed in some years, or no resolutions passed in good faith and for proper purpose, meaning that the income should have been paid to principal beneficiaries. Therefore there was a breach of trust.
The Plaintiff claimed one fifth of the distributions made, plus interest, and that trust company “make good” the trust fund.
The trust company purported to amend its trust deed and distribute approximately $58 Million received on compulsory acquisition of some real estate on an unequal basis between the beneficiaries. This included a disparate 44% to each of the Defendants, 3% to the Plaintiff.
The Plaintiff challenged this on two grounds: purporting that the trust company breached a restriction on amending the substratum of the trust, and that the amendment and later distribution was not for good faith or proper purpose.
The Plaintiff made various other claims, including for the removal of trust company as trustee and that their 3% had still not been paid.
The Plaintiff also complained about the Defendants causing the trust company to transfer its crane business to an entity associated with them.
Importantly, claims other than the Plaintiff’s claims for their own money were derivative – they were claims of the trust company which P was seeking leave to bring.
The Defendants and trust company suggested the right to bring this application had been abolished by s 235(2) of the Corporations Act 2001 (Cth).
The Court was forced to consider whether the derivative application was available in respect of the beneficiary of a trust, or an estate – the “derivative action in equity” – and found it was available in special circumstances.
The power of the Court to grant leave for this type of derivative action arises from its jurisdiction over the administration of trusts, which the Court considered at length in the matter.
The resemblances between company law and trust law derivative actions does not make them the same.
The s236(2) abolishment of common law derivative actions does not abolish trust law derivative actions. The Court has the power to grant leave to the Plaintiff.
There was extended consideration of the crafting of Plaintiff’s claim. Some claims would not be repaid into the corpus of the trust.
A further example of a question of whether equitable compensation would be available if leave to bring the derivative application is granted to Plaintiff arose.
The Court ordered an urgent hearing about whether Plaintiff should be granted leave to bring the derivative actions.
To understand how recordings are treated in family law, we first need to look at how Surveillance Devices Act 2007 deals with recordings.
Recordings
Section 7 of the Surveillance Devices Act states that:
(1) A person must not knowingly install, use or cause to be used or maintain a listening device—
(a) to overhear, record, monitor or listen to a private conversation to which the person is not a party, or
(b) to record a private conversation to which the person is a party.
Subsection 3 clarifies that that prohibition in 1(b) does not apply if:
(a) all of the principal parties to the conversation consent, expressly or impliedly, to the listening device being so used, or
(b) a principal party to the conversation consents to the listening device being so used and the recording of the conversation—
(i) is reasonably necessary for the protection of the lawful interests of that principal party, or
(ii) is not made for the purpose of communicating or publishing the conversation, or a report of the conversation, to persons who are not parties to the conversation.
Communication or publication
Section 11 states that “A person must not publish, or communicate to any person, a private conversation or a record of the carrying on of an activity, or a report of a private conversation or carrying on of an activity, that has come to the person’s knowledge as a direct or indirect result of the use of a listening device, an optical surveillance device or a tracking device in contravention of a provision of this Part.’ [emphasis added]
Exemptions apply to this prohibition, including where it is communicated to a party to the recording or with consent of the principal party to the recording.
There is also an exemption under Section 11(2)(b) if that communication or publication is “no more than is reasonably necessary in connection with an imminent threat of serious violence to persons or of substantial damage to property.”[1]
Private Conversation
In Masri & Masri[2] the Court made clear that a conversation cannot be said to be “private” if “the parties to it ought reasonably to expect that it might be overheard by someone else” as may be the case in a public place.
Interpretation by Family Court of Australia*
Typically, the court looks at the Section 7(3) and 11(2)(b) exceptions in the context of parenting cases. The reason for this is that in family law, clients are more likely to take recordings to be used as evidence of family violence or exposure to other risks of harm to children. Family violence can still be relevant to property and financial cases where a party is pleading a Kennon argument. CROSS REF ARTICLE ON KENNON. Recordings may be used for other purposes, for example the Court has been asked to determine questions of admissibility of covert recordings to assist in resolving the question of whether a de facto relationship existed (see for example Jasper & Corrigan (No 2)[3]).
In Gin & Hing[4] a Single Judge found that the exemption in 11(2)(b) may apply in parenting cases where its application is necessary to advance the best interests of the child/children. This case has not yet been cited with authority by the Full Court of Australia nor the Federal Circuit and Family Court of Australia which was established in September 2021.
In Shelbourne and Shelbourne,[5] a Father was permitted to adduce video evidence taken of the Mother engaging in acts of family violence in circumstances where the Mother had alleged that the Father was the perpetrator of domestic violence. In allowing this material, the Court found that the Father had taken the videos to “protect [his] lawful interests” and these recordings would assist him in defending those allegations.
*Section 11 of the Surveillance Devices Act had not been considered by the newly established Federal Circuit and Family Court of Australia at the time of writing.
Providing the recording to your legal adviser
Your lawyer should be provided with all material relevant to your case and required to advise you. This is particularly so if there are factual controversies between you and the other party. Your lawyer must observe or hear the recording to advise you as to the applicability of any exemptions under the Surveillance Devices Act and whether the material is admissible in your family law matter. Furthermore, communication between you and your lawyer for the purpose of obtaining advice are covered by legal professional privilege, either common law privilege or statutory privilege.
Admissibility
In cases where the exceptions do not apply, the recording may nevertheless be admissible. This hinges on whether Section 138(1) of the Evidence Act applies. That states that “evidence obtained in contravention of an Australian law is not to be admitted unless the desirability of admitting the evidence outweighs the undesirability of doing so.” The Court will look at the following factors in answering that question:
The majority of cases where parties attempt to use recordings involve family violence. The majority of family violence occurs in private and is unseen by third parties. It follows that in many cases, evidence of family violence through alternative channels may not be obtainable. If other ways to lead evidence of what occurred during the recordings exist, this may render the recording inadmissible.[6]
In Callahan & Callahan[7] the Father attempted to adduce evidence of a call between the Mother and the child of the marriage, Z where Z had recorded that conversation. The Father alleged that the Mother attempted to pass messages to the Father through the child Z and annexed a transcript of that call to his Affidavit evidence. The Court found that the Mother had no knowledge that the call had been recorded and therefore cannot have consented. The recording was therefore obtained illegally and in breach of Section 11(1) of the Surveillance Devices Act. The Court exercised its discretion to exclude that evidence under section 138(1) of the Evidence Act and held “I am not satisfied that the desirability of admitting the evidence outweighs the undesirability of admitting evidence that has been obtained by a child recording a telephone conversation with his mother and passing it on to his father. It is not desirable to encourage or even condone a child taking a partisan attitude to proceedings between his parents.’[8]
Section 135 of the Evidence Act must also kept in mind. That Section states that:
The court may refuse to admit evidence if its probative value is substantially outweighed by the danger that the evidence might:
(a) be unfairly prejudicial to a party; or
(b) be misleading or confusing; or
(c) cause or result in undue waste of time.
A recording which a party seeks to adduce to demonstrate behaviour of the other party will often, by its very nature, be prejudicial to a party’s case. The Court has made clear in Shelbourne that the material will not be unfairly prejudicial simply because it damages their case.
The Surveillance Devices Act makes it an offence to record someone without their consent by any electronic means, including video and voice recording, unless very specific circumstances apply. The Evidence Act will only allow the admission of recordings in very limited circumstances. The Family Law Courts have been asked to apply these exceptions in family law cases. Whether the exceptions apply and whether the evidence is admissible depends on the circumstances of the case.
[1] Surveillances Devices Act, 2007 (Cth) Section 11(2)(b)(i).
[2] [2017] FamCA 539.
[3] [2017] FCCA 1467.
[4] [2019] Fam CA 779
[5] [2017] FamCA 761.
[6] Masri supra at [43].
[7] [2014] FCCA 2930.
[8] Judge Scarlett at [68]
Contact our Family Law Team for any queries regarding the use of recordings in a Family Law context.
Chamberlains Law Firm is looking for witnesses to come forward in relation to information pertaining to Clairvaux St Bernard’s Junior College, Katoomba.
Clairvaux St Bernard’s Junior College was open between February 1941 and December 1966.
The school was a boarding school and housed a number of young boys in dormitories throughout the school year. Chamberlains Law Firm acts for individuals who were allegedly sexually abused while staying at the boarding school and urge witnesses to come forward who were at the school between February 1941 and December 1966.
Child abuse in institutions is likely to have impacted at least tens of thousands, if not hundreds of thousands of children over the past decades. In a case study conducted for the Royal Commission into Institutional Responses to Child Sexual Abuse it was noted that a victim who had lived in a ‘closed’ or ‘total institution’ such as a boarding school reported that the sense of powerlessness, helplessness and betrayal they experienced may have exacerbated the impacts of the abuse.
For many survivors, as they develop into adulthood, they suffer debilitating symptoms of trauma, the effects multiply and reach outwards to families, friends, institutions and communities. It is important that these individuals are able to receive recognition for what has occurred.
Chamberlains Law Firm is happy to speak with anyone who may be able to assist.
What is supervision in the family law context?
In some matters, it may be appropriate for the time children spend with a parent to be supervised. The time can be supervised by a professional supervision service or another responsible third party, such as a friend or family member. The changeover can also be supervised to minimise the risk of conflict.
The supervisor’s role
The supervisor has an obligation to remain with the child at all times. This means the supervisor must always be able to see and hear the child.
When is supervision ordered?
The Court may make an order for supervision in circumstances where:
Legal Principles
The Family Law Act (“The Act”) does not contain a specific provision outlining when supervised time should be ordered, however, it is related to the overarching principle in parting matters; that the child’s best interests are the paramount consideration in making a parenting order.[1] The primary considerations when determining what is in a child’s best interests are:
The Court must give greater weight to the second consideration.[4]
Section 60CG of the Act states:
It therefore follows that where there is an unacceptable risk of harm to the child in a parent’s care, supervised time is an option often considered by the court.
Conflicting Evidence of Family Violence – it’s all about risk
As the Court made clear in Goode v Goode[5], it is usually the case that at an interim hearing, there are significant factual disputes between the parties and these cannot be determined without the evidence being tested in the context of a trial. In that case, the Court held that the legislative pathway requires the Court to apply a “cautious approach” but not to be “drawn into issues of fact or matters relating to the merits of the substantive case where findings are not possible. The Court also looks to the less contentious matters, such as the agreed facts and issues not in dispute and would have regard to the care arrangements prior to separation, the current circumstances of the parties and their children, and the parties’ respective proposals for the future.”
In Eaby & Speelman[6], citing Marvel & Marvel[7] the Court observed that even in cases of disputed facts where findings are not possible, the Court must not disregard evidence on the topic and determine the case solely by reference to agreed facts. In Salah, the Court clarified that even where a Judge is precluded from making findings on disputed issues and untested evidence, Section 60CG is not constrained in it’s operation despite that inability. The Section requires the Court to consider risk of family violence not determine who’s evidence is preferred.
[1] Section 60CA Family Law Act 1975 (Cth)
[2] Section 60CC(2)(a) Family Law Act 1975 (Cth)
[3] Section 60CC(2)(b) Family Law Act 1975 (Cth)
[4] Section 60CC(2A) Family Law Act 1975 (Cth)
[5] (2006) FLC 93-286; [2006] FamCA 1346.
[6] [2015] FamCAFC 104; (2015) FLC 93-654
[7] [2010] FamCAFC 101; (2010) 43 Fam LR 348
Contact our Family Law Team for any queries regarding supervision in parenting matters.
The Family Law Act of 1975 (“The Act”) established the principle that Australia is a no-fault divorce jurisdiction. The “no fault” element permeates through to property and financial cases such that if those cases involve family violence, the violence is often irrelevant to the question of how the court deals with it. There are two important exceptions.
The future needs factors section has not, at the time of writing, been used by the Court to award a higher adjustment to victims of domestic violence by virtue of their increased present and future needs caused by the family violence.
Kennon v Kennon
The Court considered whether family violence had a bearing on contributions in the case of Kennon v Kennon[1] In that case, the Court held that “Where there is a course of violent conduct by one party towards the other during the marriage which is demonstrated to have had a significant adverse impact upon that party’s contributions to the marriage, or, put the other way, to have made his or her contributions significantly more arduous than they ought to have been, that is a fact which a trial judge is entitled to take into account in assessing the parties’ respective contributions within s 79. We prefer this approach to the concept of negative contributions which is sometimes referred to in this discussion”
There are two elements the person pleading a Kennon argument must successfully make out:
The Court further noted that:
Consideration of Kennon
In Kozovska and Kozovska, Federal Magistrate Altobelli, as he was then known, noted that Kennon “focuses on conduct during the marriage, but not afterwards, which suggests that the concept was not intended to apply to post-separation contributions.”
In 2012, the Court held in Baranski & Baranski & Anor that the principle could apply to post-separation contributions. [emphasis added]. In that case, the Court found that the Husband’s violence towards the Wife post-separation had made her ability to parent the parties’ children “significantly more arduous.” The Court clarified the applicability of the principle to post-separations, concluding that “nothing in the provisions of Section 79 or in logic which suggests that post separation contributions of any kind are not relevant to determining a just and equitable apportionment of the property of parties to a marriage.”
In two subsequent cases, Damian & Damian[2] and Jarvis & Seymour[3] the Court followed the approach in Baranski and made an adjustment in favour of the Wife whose post-separation contributions were made more arduous by the Husband’s violent conduct. However, in Lad & Gittins, Justice Austin did not make any adjustment to the party whose post-separation contributions were made more arduous by virtue of violent conduct of the other. Nevertheless, Justice Austin did agree with the interpretation of Kennon in Baranski.
Conclusion
A Kennon argument must be pleaded correctly. Lawyers should pay careful attention to provide sufficient and compelling evidence to satisfy both limbs of the test. Whether a Judge makes an adjustment will depend on the facts of the case. Judges have made it clear over the past 25 years that it will be a very exceptional case indeed where the principles of Kennon are to be applied.
[1] [1997] FamCA 27.
[2] [2012] Fam CA 535.
[3] [2016] FCCA 1676.
Introduction
Many people assume that a de facto and married relationship has the same effect in family law. With respect to parenting matters, this is true. In financial matters, this may not be the case.
Parenting:
Provided there is a child of a relationship or marriage, the court has jurisdiction to hear the matter.
Financial/Property matters:
The court has jurisdiction to determine a financial matter where parties were married without having to satisfy any additional requirement. For de facto relationships however, to invoke the jurisdiction of the Family Law Act 1975 for a you are required to meet the definition of the de facto relationship pursuant to section 4AA of the Family Law Act 1975 (Cth) (“The Act”) You must be able to demonstrate satisfactorily that:
You were in a de facto relationship as defined by Section 4AA of the Family Law Act 1975 (Cth) (See below);
What is a de facto relationship?
Section 4AA of the Family Law Act defines a de facto relationship as
Conclusion
In many de facto relationships, the jurisdictional requirement for property matters is made out but you should seek legal advice if you are unsure if you satisfy the criteria.
[1] Section 90SB(a) Family Law Act 1975 (Cth)
[2] Section 90SB(c) Family Law Act 1975 (Cth)
[3] pursuant to section 90SK with
A probation period is considered a trial for the employer to assess the employee’s compatibility, skill-set and reliability for the job. In this market, employee’s equally use probation periods to determine whether their personal values align with the culture and ethos of the employer’s enterprise.
Generally, employment contracts for part-time and full-time employees will require that an employee successfully completes a probation period that ranges between three to six months.
Casual employees on the other hand, are not subject to probation periods on the basis that their characterisation of employment requires no firm advance commitment to ongoing work by the employer.
The Fair Work Act 2009 (Cth) (Act) requires part-time and full-time employees to satisfy a minimum employment period in order to access the unfair dismissal regime. Section 383 of the Act states that the minimum employment period is twelve months for small business employers with less than 15 employees at the time of dismissal, otherwise the minimum employment period is six months.
It is best practice for employers to align their probation periods with the minimum employment period that applies to the size of their business to maximise protection from unfair dismissal claims. However, this is not a bullet proof method, as highlighted in recent court decisions, such as Pacheco-Hernandez v Duty Free Stores Gold Coast Pty Ltd [2018] FCCA 3734 (“Pacheco-Hernandez”).
In Pachecho-Hernandez, Commissioner Matthews noted that “it is still possible for a dismissal to be unfair, where it occurs during a probationary period”.
The General Protections (“GP”) regime prohibits employers and principals from taking adverse action against an employee or contractor because they have exercised a workplace right or engaged in industrial activity. Minimum employment periods do not apply to GP claims.
In circumstances where an employer terminates an employee during their probation period for exercising a workplace right, including (but not limited to):
an employee is entitled to make a GP claim regardless of their employment tenure.
Employers must be mindful of the current anti-discrimination framework which applies during probation periods and hinders employers from prejudicing an employee during the probation period for discriminatory reasons relating to carer responsibilities for primary care-takers or characteristics inherent to an employee’s nationality, gender, sexual orientation religion, or disability.
In this case, a HR manager dismissed an employee who was employed for five months without providing a reason, stating that the employer was under no legal obligation to give one.
Despite the absence of a reason from the employer, the employee claimed that she was dismissed as a result of formalising a complaint regarding:
The employer claimed that the dismissal resulted from a joint decision with the Area Manager that the employee ‘did not fit within the team’. However, the employer was unable to produce evidence to this effect.
Judge Manousaridis stated that “it is difficult not to conclude that the complaints constituted or at least formed a substantial part” to her dismissal. It was therefore determined that the employee was dismissed for exercising a workplace right. The employer was ordered to pay the employee over $10,000 for lost wages, leave entitlements, superannuation, and interest.
Often employers assume that they have an automatic right to terminate during the probation period without properly considering any facts or unresolved grievances that may entitle an employee to file a GP application in the Fair Work Commission.
It is prudent that employers undertake due diligence and holistically assess the facts leading up to a termination during probation to ensure that the employee cannot justify that the dismissal was a result of a ‘prohibited reason’.
Contact the Workplace Law Team at Chamberlains Law Firm for an obligation free consultation on navigating lawful termination in the workplace.
It is well known that many victims of historic child sexual abuse do not disclose what has occurred until much later in life. This consequently has a devasting impact on the individual’s mental health and sense of self. In the Royal Commission into Institutional Responses to Child Sexual Abuse (“the Royal Commission”) Dr Quadrio gave evidence as to the sleeper effect, stating the following:
“About 20 to 40 per cent of children who have been abused won’t show any symptoms at all, and that’s because some of them are what we describe as “resilient”: children who somehow survive trauma… but some of those apparently non-symptomatic children become symptomatic later on. That’s called the sleeper effect: that they look fine at the time and then some years later something else triggers it.”
When diagnosing individuals who have experienced trauma, experts use a set of specific criteria in identifying the consequences of the abuse. It is well established that some of the long-term effects include the following:
One survivor who gave evidence to the Royal Commission noted the following:
“As a victim, I can tell you the memories, sense of guilt, shame and anger live with you every day. It destroys your faith in people, your will to achieve, to love, and one’s ability to cope with normal everyday living. It has [been] and is an enormous struggle to stay on top of life.”
At Chamberlains Law Firm we take a trauma informed approach when dealing with our clients. We often seek counselling for the individual in the early stages of the process to ensure they have the support they need.