While ever there are no orders or agreements in place for the care of the kids, you can relocate to your preferred state of residence, but I would advise against this - your former spouse would be within his right to pursue an urgent recovery order, and there is a high chance it would be successful.
What I would instead urge you to do is invite the father to mediation so that you may discuss your differences of opinion and sort out of a care arrangement that meets the best interests of the children. Even if an agreement cannot be reached, you will each receive the s60i certificate needed to commence proceedings through the court, which would begin with an initiating application probably to the Federal Circuit Court (since it's a fairly simple matter) for parenting orders.
I am a major advocate for alternative dispute resolution that keeps things away from the court because courts tend to exacerbate already delicate feelings after a separation, and leads to a rupture in what might otherwise be a workable parenting relationship between you and your former spouse. On top that, courts hate parenting cases because judges sort of see it as 'babying the parents' to act like adults for the sake of their kids. Mediation is good for avoiding this - it gives you room to discuss things in a controlled environment so there are minimal power plays, etc.
If, however, court is unavoidable, the court would make orders that it considers to be in the best interests of the child. For a complete list of the things the court considers when deciding what's in the child's best interests, see
s60CC of the Family Law Act 1975 (Cth). You would be required to argue why moving the kids to your state of choice is in their best interests, and your former spouse would need to argue why keeping them in their current state of residence would be in their best interests.
In this context, consider your statement: 'He feels that just because he has family here that this is where the kids should live'. Realistically, that's probably not the case. Based solely on the information you have provided, the father could argue that keeping the kids in your present state of residence is in their best interests because:
- He has two incomes (one of which I assume is full-time), which means his employment is more reliable and better able to support the kids;
- He has a family network in close proximity who are able and willing to provide their own support to the kids' upbringing;
- The kids will have a better opportunity to maintain a relationship with extended family if they remain in the current state of residence;
- The kids have been in the area for two years, which means they are stable and adjusted to the current lifestyle, and a relocation would likely cause them stress and rupture their relationship with their father; and
- He is better able to facilitate the kids spending time with you if you were to move because of his dual incomes (e.g. can pay for flights, etc.).
The court battle is also a very long, emotionally strenuous and expensive chore, so it really is best avoided. What you might consider doing is pitching a care arrangement that guarantees the kids see their dad on a regular basis, if he agrees to moving them, or possibly accepting a care arrangement that guarantees the kids see you on a regular basis if they stay with him.
Or you could consider simply staying in the state.
Anyway, I hope this has provided some clarity about the situation.
