Attorney General's Department and Lowman and Anor

[2019] FCCA 2052

FEDERAL CIRCUIT COURT OF AUSTRALIA

ATTORNEY GENERAL'S DEPARTMENT & LOWMAN & ANOR [2019] FCCA 2052

Catchwords:
CHILD SUPPORT – FAMILY LAW – Overseas maintenance made in New Zealand – reg.39 of the Family Law Act 1975.

Legislation:

Child Support (Assessment) Act 1989 (Cth), ss.4, 24, 25, 98S(3B), 117(2)(c)(ia)

Child Support Act 1991 (NZ), s.4

Child Support (Registrations and Collection) Act 1988 (Cth), s.68

Family Law Act 1975 (Cth), s.110(2)(d)

Family Law Regulations 1984 (Cth), reg.39, 39(2), 39(4)

Family Proceedings Act 1980 (NZ), s.136

Cases cited:

Attorney General’s Department and Sciacia [2017] FamCA 692

Rogers and Rogers [2010] FamCA 1069

Applicant: ATTORNEY GENERAL'S DEPARTMENT

First Respondent: MS LOWMAN

Second Respondent: MR ODEN

File Number: MLC 2311 of 2018

Judgment of: Judge Harland

Hearing date: 24 October 2018

Date of Last Submission: 2 May 2019

Delivered at: Melbourne

Delivered on: 29 July 2019

REPRESENTATION

Solicitors for the Applicant: Mr Flynn of the Australian Government Solicitor’s Office

The First Respondent appearing in person

Solicitors for the First Respondent: Victoria Legal Aid

The Second Respondent appearing in person

ORDERS

1. The Provisional Maintenance Order of the Family Court held at City B, New Zealand made on 9 July 2015 be confirmed, pursuant to regulation 39(4) of the Family Law Regulations 1984 (Cth) with modifications.

2. All arrears payable in relation to the child maintenance order made in the Local Court at Town A on … 1998 that arise from the implementation of paragraph 3 2 of the order are hereby remitted in full.

3. Mr Oden is ordered to pay child maintenance in the sum of AUD $14,224 for the period from 4 February 2007 to 31 March 2014. The calculation of the formula assessment is to take into account the fact that [X] was in the principal day to day care of his father in New Zealand from 4 February 2007 to 20 December 2008 inclusive.

4. There be no order as to costs.

NOTATION

(A)Given the modifications referred to in the above orders it is requested that the New Zealand Inland Revenue consider remitting any penalties that have accrued.

Amended pursuant to Rule 16.05(2)(e) of the Federal Circuit Court Rules 2001 on 31 October 2019.

IT IS NOTED that publication of this judgment under the pseudonym Attorney General’s Department & Lowman & Anor is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT MELBOURNE

MLC 2311 of 2018

ATTORNEY GENERAL'S DEPARTMENT

Applicant

And

MS LOWMAN

First Respondent

MR ODEN

Second Respondent

REASONS FOR JUDGMENT

1. The Secretary of the Commonwealth Attorney-General’s Department (“the Secretary”) filed the application to register a provisional maintenance order made by the Family Court in New Zealand pursuant to its obligations under reg.39 of the Family Law Regulations 1984 (Cth).

2. The Secretary filed the initiating application on 5 March 2018. I made orders on 3 April 2018 in accordance with the minute sought by the Secretary, which provided the matter be listed for contested hearing and for the first and second respondent to file any submissions and material from which they wish to rely, and that the applicant file any submissions in reply prior to the hearing. There was no appearance by either respondent on that occasion.

3. The matter has been somewhat delayed as initially the first respondent (“Ms Lowman”) appeared without legal representation and the second respondent (“Mr Oden”) did not appear on the first return date or second return date. By agreement, the matter proceeded by way of written submissions. The time frame for submissions was extended on a couple of occasions by consent. The Secretary was due to file written submissions in response to both respondent’s submissions by 1 May 2019. The day before the written submissions in response were due the Australian Government Solicitor (“AGS”) advised that the Secretary did not intend to file any further submissions and did not seek an oral hearing. As stated in that email, if the Court required it or if the other parties sought an oral hearing they would appear. No party sought that the matter be listed for further oral hearing.

Should the New Zealand order being registered with modifications?

1. The issue I must determine is whether or not I should exercise my discretion to register the New Zealand order, and if so, should I make modifications to that order.

Orders sought by the parties

1. Ms Lowman seeks orders that the provisional order be registered with modifications. She seeks that Mr Oden pay her a lump sum of $60,000 and her costs.

2. Mr Oden also seeks that the order be registered with modifications. He seeks to pay Ms Lowman a lump sum of $14,000 and that there be no order as to costs.

3. The Secretary has no interest in the outcome of the proceedings. The Secretary tried to resolve the proceedings but that was not possible.  The Secretary has chosen not to address the respective proposals by the respondents and relies on its first submissions. In the initiating application the Secretary seeks that the order be confirmed.

Chronology

1. The Secretary prepared a detailed affidavit and written submissions which have been very helpful. They set out the history in some detail which I will not repeat here.

2. On … 1998 the Town A Local Court in NSW made orders for Mr Oden to pay $600 a month in child support for the three children.

3. On 22 March 1999 the New Zealand District Court registered the order pursuant to s.136 of the Family Proceedings Act 1980 (NZ).

4. On 24 August 2007 the New Zealand Revenue Department wrote to Mr Oden informing him that the CPI had not been applied to his child support liability in error and that as a result he owed arrears of $12,618.25 which was payable within 30 days. On 30 April 2009 Mr Oden applied to the New Zealand Family Court at City B to vary the orders with effect from 3 February 2007. Mr Oden sought legal advice and lodged proceedings in New Zealand seeking to have the arrears and penalties discharged and the amount of maintenance varied to take into account the period of time the parties’ oldest child [X] lived with him.

5. On 25 February 2009 the New Zealand Family Court at City B made orders as follows:

   “1. All arrears and penalties payable in relation to the child maintenance order made in the Local Court at Town A on … 1998 that arise from the implementation of paragraph 2 of the order are hereby remitted in full.

   2. The said order of … 1998 is varied with effect on 3 February 2008 as follows:

   2.1 Paragraphs 1, 2 and 3 are discharged and cancelled.

   2.2 Mr O is ordered to pay child maintenance effective from 4 February 2007 at a monthly rate equivalent to that which would have been applicable in accordance with the relevant provisions of both the Australian and New Zealand child support legislation as though both parents had made an application for a formula assessment, and had this accepted, on 4 February 2007. The calculation of the formula assessment is to take into account the fact that L was in the principal day to day care of his father in New Zealand from 4 February 2007 to 20 December 2008 inclusive.

   2.3 Mr O is to have six weeks from receipt of notice from the New Zealand IRD of the quantum of maintenance payable in accordance with this order covering the period from 4 February 2007 to the date of the notice in which to pay by lump sum the arrears of child maintenance then accrued from 4 February 2007. Any part of the accrued sum not paid within the said six weeks shall incur penalty interest at the rate of 15% pa.

   2.4 The suspension order made in this Court on 21 December 2007 is discharged.”

6. There was considerable delay in registering the orders in Australia. The orders made on 25 February 2009 were defective as they were described as a final and not provisional order. Only a provisional order can be registered under reg 39. It is not disputed that the jurisdictional requirements under reg 39 have been met.

7. Pursuant to reg 39(4) I have the following options:

   (4)  The court may:

   (a) confirm the provisional order (with or without modification); or

   (b)  discharge the provisional order; or

   (c)adjourn the proceedings and remit the provisional order to the court that made it with a request that the court take further evidence and further consider its provisional order.

8. On 2 February 2014 the New Zealand Department of Inland Revenue issued a child support statement of account showing a debt owing by Mr Oden in the sum of $106,164.92. The AGS says in its written submissions that it appeared that the 2009 variation orders had not been given effect to in New Zealand and that Mr Oden had not made payments since 2007.

9. On 11 March 2014 Mr Oden commenced further proceedings in New Zealand to correct this, seeking that the provisional order be made essentially in the same terms as the 2009 order. On 9 July 2015 the New Zealand District Court in City B made orders declaring the order made on 25 February 2009 as a provisional order. The text of the order is otherwise identical to the 25 February 2009 Order. That order was then transmitted to Australia for registration under reg 39 which has resulted in the proceedings before this Court.

10. After receipt of this order the AGS took action. The AGS wrote to the parties on 21 June 2017 identifying a number of difficulties with the order. It is convenient to quote from that letter which I accept accurately identifies the problems.

    “We consider that there are a number of difficulties with the proposed orders such that the Court may find that they are unworkable in their current form.

    Remission of penalties

    The first issue needs to be addressed is that the provisional order seek to discharge both arrears and penalties. We consider that the order can be validly confirmed in relation to the discharge of arrears only. There are no penalty provisions set out in the 1998 maintenance order and therefore any penalties that may have arisen did not arise under that order. It is possible that penalties were imposed under the Family Proceedings Act 1980 (NZ). If this is the case, the penalties are owed to the Crown in right of New Zealand.

    The Court has power under s 110(2)(d) of the Family Law Act 1975 (Cth) and reg 39 of the FL Regulations to confirm orders 'varying, discharging, suspending or reviving a maintenance order'. We do not consider that this extends to discharging penalties due to the Crown in right of New Zealand and therefore the Australian Court does not have the power to confirm this part of the provisional order.

    Administrative assessment of child support

    The second issue concerns the manner in which the provisional order seeks to set the monthly rate of maintenance payable. The order sets the rate as the equivalent to that which would have been payable in accordance with an administrative assessment of child support under 'the Australian and New Zealand child support legislation' (emphasis added). A number of difficulties arise from this requirement.

    First, each country has its own child support legislation which differs in significant respects. Child support assessments cannot be made under both the Australian and New Zealand legislation. It must be one or the other. The reasons for judgment of the New Zealand District Court given on 21 April 2009 refer to 'the pragmatic proposal that the quantum of maintenance to be paid from 3 February 2007 be the same as that which would apply if a formula assessment had been accepted in Australia on 4 February 2007'. We consider that this statement is a sound basis for the Court to consider that the District Court's intention was that an Australian formula assessment should be made.

    It is unclear from the orders who is to make the assessment, and in particular whether the intended assessment should be made by one of the parties, the Australian Court or a third party.

    [F]urther, it is unclear form the orders how the person who is to make the assessment is to obtain the relevant information to make the assessment.

    Having regard to these issues, we have consulted with the Australian Department of Human Services (DHS), which administers the Australian child support legislation.

    The DHS have agreed to make a notional administrative assessment of child support, and to provide the Secretary and the parties with a proposed rate of child maintenance payable. Making this assessment will require the cooperation of both parties.

    If the parties agree with the assessment, we request that you inform us of your agreement. We will then proceed to make an application under reg 39 of the Family Law Regulations, and provide the Court with an affidavit containing the relevant New Zealand documentation along with information and correspondence concerning the DHS administrative assessment. We will request that the Court confirm the provisional order, subject to such modifications as may be required to implement the notional administrative assessment to be made by DHS.

    The suggested approach depends entirely on the cooperation of the parties. You are not obliged to cooperate. However, if agreement between the parties cannot be reached, we will file the application to confirm the provisional order in its present form, as required under reg 39(2) of the FL Regulations. However, we consider it unlikely that the Court will confirm it in this form.”

11. The notional child support assessment calculated by the Department of Human Services (“DHS”) for Mr Oden’s child support obligations totalled $14,224. AGS wrote to the respondents on 23 August 2017 informing them of this and also annexed DHS calculations in reaching the $14,224 figure. They also indicated that DHS had advised that the parties would be entitled to apply to have the assessment adjusted under the usual assessment process. I do not think this is correct. I address this further at paragraph 24.

12. Mr Oden agreed to this course with the notional assessment. Ms Lowman did not. It is in those circumstances that the Secretary filed the application that is before the Court.

13. The chronology set out by AGS is not disputed.

Ms Lowman’s submissions and affidavit

1. In the affidavit and submissions filed on Ms Lowman’s behalf by her solicitor she raises many historical issues including with respect to alleged family violence during the relationship. She also refers to her poor financial circumstances.

2. Ms Lowman  makes various general statements about her beliefs about Mr Oden’s financial circumstances including that he has a farm in New Zealand, owns his own home, a beach house, has received substantial inheritances and regularly travels overseas. She does not provide the basis for these beliefs.

3. The next part of her submissions refers to reg 39(4) and s.117(2)(c)(ia) of the Child Support (Assessment) Act 1989 (Cth) which stresses departing from an administrative assessment in special circumstances of the case. Ms Lowman accepts that the intention of the 9 July 2015 order was that an Australian child support assessment should be made but disagrees with the way the notional assessment has been calculated by DHS. She contends that Mr Oden’s taxable income does not reflect his actual income because he has his own business and can make many deductions.

4. Ms Lowman further complains in her submissions that she cannot challenge the notional assessment because s.98S(3B) applies an 18 month time limit to apply to the Child Support Registrar for a change of assessment. The provisions she relied on are with respect to child support assessments. The legislative requirements which must be met for DHS to make a child support assessment are set out in the Child Support (Assessment) Act. Those provisions do not apply. The children are over the age of 18. What reg 39(4) seeks to do is give effect to the international arrangements in place between Australia and New Zealand for the collection of child support and maintenance.

5. From my reading of the affidavit and submissions of AGS is that the request the AGS made of DHS was an informal one in order to see if it was possible to resolve the dispute between the parties.

Mr Oden’s submissions and affidavit

1. Mr Oden says that the original 1998 order did not take into account the variable nature of his income, the discrepancy of seasonal conditions and being affected by periods of drought. He says his farm is heavily mortgaged. He also says that … assessed his financial circumstances and also found that their oldest son Mr C lived with him for the period he alleged.

2. What is apparent from the documents is that Mr Oden has taken proactive steps including making applications to the New Zealand Court to resolve this issue. The New Zealand Court was satisfied that Ms Lowman had been served and made a decision on the merits with reasons given.

To vary the orders or not?

1. I have given consideration as to whether or not if I modified the New Zealand order to delete the reference to the New Zealand child support legislation and leaving the rest of the order intact, but I do not think that would resolve the issue because as I read the legislation there is nothing that empowers this court to order DHS to undertake a child support assessment. It may well be that this order would be unenforceable and the respondents would be left with this issue being unresolved.

2. I accept that the objects of both the Australian and New Zealand child support legislation is to ensure that parents provide for their children financially in accordance with their capacity. [1]I am mindful of the objectives of the child support legislation and the purpose of registering overseas orders.

   [1]Section 4 Child Support Act 1991 (NZ); s4 Child Support (Assessment) Act 1989 (Cth).

3. The Secretary has identified the problem as being the reference to assessments under both the New Zealand legislation and the Australian legislation which is inherently inconsistent and contradictory. The potential would be for two conflicting assessments to be in place. I have considered whether deleting the reference to the New Zealand legislation allows for the assessment and for the parties to ventilate their arguments using the administrative process under the Child Support (Assessment) Act 1989 (Cth) which is designed for parties to navigate without the need for legal representation and without the expense of court and using court resources.

4. There is little guidance as to the operation of reg 39. Johnston J considered reg 39 in Rogers and Rogers [2010] FamCA 1069 however, that case does not assist as he was determining a forum non conveniens argument. Bennett J determined such an application in Attorney General’s Department and Sciacia [2017] FamCA 692. Bennett J held that the parties would not be able to apply for a child support assessment because they could not comply with the requirements of s.25 of the Child Support (Assessment) Act. In this case the parties cannot comply with s.24 of that Act as the children are over the age of 18.

5. I am satisfied that modifying the order simply by deleting the reference to the New Zealand child support assessment will not assist the parties as it will leave them without a resolution as it is unlikely that the order could be implemented.

6. The parties have been litigating this issue for years. The first respondent does not provide the basis for which she seeks $60,000. I cannot simply adopt a figure without there being any evidence to support it. It would not assist the parties for there to be further litigation between them. Whilst the first respondent will find this result unsatisfactory it will at least provide for her to receive a monetary amount. Whilst the first respondent is not satisfied with the notional assessment DHS carried out, it did base the assessment on financial information provided by both parties.

7. The only evidence I have with respect to what a child support assessment could have resulted in is the sum of $14,224 calculated by DHS on their notional assessment. In all of the circumstances I find it is proper to modify the 2015 Order to require Mr Oden to pay $14,224 in satisfaction of his maintenance liabilities.

Remission of penalties

1. The Court has no jurisdiction to remit the penalties charged by the Child Support Registrar in Australian child support matters. Pursuant to s.68 of the Child Support (Registrations and Collection) Act 1988 (Cth) the applicant may apply to that Child Support Registrar to have the penalties remitted if the applicant is able to satisfy the conditions referred to in that section.

2. The AGS raises the issue of the court’s power to discharge penalties owing to the Crown in New Zealand and submits that the powers the court has under s.110(2)(d) of the Family Law Act 1975 (Cth) and reg 39 did not extend to the discharge of penalties. I accept those submissions. This is something the second respondent will have to address with the New Zealand Inland Revenue office. Hopefully given the history of this matter and the result, the Revenue Office will agree to remit those penalties.

Costs

1. The first respondent sought an order for costs. The applicant and the second respondent each sought that there be no order as to costs. In the circumstances of the case it is appropriate that there be no order as to costs.

I certify that the preceding thirty-seven (37) paragraphs are a true copy of the reasons for judgment of Judge Harland

Date: 29 July 2019