Attorney General’s Department and Sciacia

[2017] FamCA 692

FAMILY COURT OF AUSTRALIA

ATTORNEY GENERAL’S DEPARTMENT & SCIACIA [2017] FamCA 692

FAMILY LAW – CHILD SUPPORT – Overseas maintenance order – Provisional order from Canada for child maintenance – Reg 39 of Family Law Regulations – modification and confirmation

APPLICANT: Attorney General’s Department

RESPONDENT: Mr Sciacia

INTERVENOR:

INDEPENDENT CHILDREN’S LAWYER:

FILE NUMBER: MLC 6701 of 2017

DATE DELIVERED: 31 August 2017

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: Bennett J

HEARING DATE: 31 August 2017

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr K. Maat

SOLICITOR FOR THE APPLICANT: Australian Government Solicitor

COUNSEL FOR THE RESPONDENT: Ms C. Devine

SOLICITOR FOR THE RESPONDENT: Kennedy Partners

Orders

IT IS ORDERED THAT

1.Pursuant to Regulation 39 of the Family Law Regulations 1984 (Cth) the provisional order made by the Provincial Court of Province B, Canada, on 10 September 2015 in proceedings between Ms Sciacia and Mr Sciacia (“the provisional order”) be modified so that:-

a)      The respondent pay child maintenance for the children C born … 1999 (“C”) and D born … 2001 (“D”) for the period from 1 September 2012 to 6 July 2017 (both dates inclusive) (“the first period”) in a sum equivalent to the total amount already paid by the father for the first period, including the amount of overpayments received by the mother to which the mother became entitled on 10 September 2015 in the sum of $CAN7059 with the effect that there are no arrears due or owing to 6 July 2017; and

b)      The respondent pay child maintenance for the child D for the period 7 July 2017 until 18 November 2019 (both dates inclusive) by which time D will attain the age of 18 years (“the second period”) in the sum of $AU1,577 per calendar month.

2.Otherwise than as provided for in paragraph 1 of this Order, the provisional order be and is hereby confirmed.

3.The evidence of the father be transcribed and when transcribed be placed on the Court file and a copy provided to the practitioners for each of the parties.

4.The solicitors for the applicant be responsible for delivering clean copies of the following documents to the Central Authority for Australia for transmission to the Central Authority in Canada:-

a)      The father’s response to the Initiating Application filed 28 August 2017;

b)      The father’s affidavit affirmed 25 August 2017;

c)      The father’s Financial Statement affirmed 25 August 2017;

d)      A transcript of the father’s evidence given this day; and

e)      A copy of my reasons for decision given this day.

5.My reasons for decision by transcribed and when settled be placed on the Court file and a copy provided to each of the parties.

6.Otherwise the application of the Secretary, Attorney General’s Department filed 5 July 2017 and the Response of the father filed 28 August 2017 be and is hereby dismissed.

7.I reserve liberty to the parties to have this matter relisted in the event of difficulty with implementation of this Order.  Otherwise, the matter is removed from my docket.

Note: The form of the order is subject to the entry of the order in the Court’s records.

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

Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER: MLC 6701 of 2017

Attorney General’s Department

Applicant

And

Mr Sciacia

Respondent

REASONS FOR JUDGMENT

EX-TEMPORE

1. These proceedings are brought pursuant to regulation 39 of the Family Law Regulations 1984 (Cth), which sits within Part IIIC/Jurisdiction of Courts and Related Matters, and under Division 2 thereof – Maintenance. The proceedings were initiated by the application of the secretary, Attorney-General’s Department, filed on 5 July 2017, seeking that provisional orders made by the Provincial Court of Province B in Canada on 10 September 2015 be confirmed under reg 39 of the Family Law Regulations 1984 (Cth).

2. By a response filed on 28 August 2017, the respondent father sought, primarily, that the provisional order made on 10 September 2015 be discharged and, further or in the alternative, the provisional order be modified so that the respondent pay child maintenance for the subject children, who are C, born in 1999, and D, born in 2001, for the period from 1 September 2012 to 5 July 2017, in such sum as would mean that all amounts are due and payable and there are no arrears, having regard to an overpayment of some $7059 that he made under the previous order, and thereafter from 6 July 2017 to 18 November 2019 the amount of $1577 per calendar month.

3. This is the first return date of the application. Mr Maat, solicitor of the Australian Government Solicitor’s office, appears on behalf of the applicant.  Ms Devine of counsel appears on behalf of the respondent father. 

4. I will deal briefly with the chronology of the matter.  The respondent father was born in Canada, and he’s now 43 years old.  The mother was also born in Canada, and she is 42 years old.  They married in Canada in 2000.  There are two children of the relationship, whose details I have provided above.  In early 2002, when C was two and a-half years old and D was only a few months old, the mother and father separated, and have not since lived together.

5. Relevantly, on 15 May 2003, orders were made by consent in Canada which provided for the father to pay child support in Canadian currency of $650 per month until 10 July 2003, and thereafter in the sum of $920 per month in Canadian currency.  There was a spousal maintenance order of $140 per month.  For the avoidance of doubt, unless otherwise indicated, where I refer to a sum of money, it is in Australian currency. 

6. On 4 August 2004, there was a variation to the 2003 maintenance order, with the effect that all arrears were cancelled.  Child support in the sum of $587 per month was backdated to 1 September 2003, and the spousal maintenance order in favour of the mother was discharged.  Spousal maintenance has not subsequently been revived. 

7. In late 2004 and in circumstances where it was not known to the mother, the father migrated to Australia, where he has lived since.  In late 2006, the respondent recommenced making payments to the child support agency.  Some arrears accrued, but by 8 October 2008 the arrears being cleared.

RECORDED : NOT TRANSCRIBED

1. In 2008, the father commenced a relationship with Ms E, who is his de facto wife.  The father has not re-married. The mother and father were divorced on 31 October 2015 in Canada. 

2. In early 2009, the respondent commenced to pay a set amount by way of child support.  The amount was set by him at approximately $694 per month, which, on his calculation, covered the amount of child support for which he was liable in Canadian dollars, but allowed more than comfortably for exchange rate fluctuations.  In fact, with the progression of time, significant overpayments occurred, which I will deal with later.

3. It’s alleged by the father that, in December 2010, the mother completed part of a university degree.  It’s not necessary for me to look in detail at the mother’s position because, as I understand the scheme under which this application is brought, evidence of her needs has been gathered and determined in Canada.  The father alleges that in 2011 and 2014 he made extra payments to the mother, but these are not extra payments which I am asked to take into account for the purposes of today’s proceedings. The extra payments were not a component of the $694 per month.

4. In May 2013, the parents’ eldest child, C, then approximately 14 years of age, was diagnosed with diabetes.  It is a condition with which he is still afflicted. 

5. In January 2014, the father and Ms E purchased a block of land at Suburb F.  Ms E became ill and ceased to work.  In April 2015, the mother made a request of the father to release the overpayment of maintenance which had occurred by virtue of the father paying the $694 per month referred to above.  At that point, the overpayment was held by a Canadian government agency in the sum of approximately Can$7059.  I have read email or text transmissions between the parties, and see that the father did not agree to the request.  At that point, it was because the father understood that he could not obtain a divorce from the mother without her co-operation and she would not co-operate. The mother and father have since divorced.

RECORDED : NOT TRANSCRIBED

1. The counsel for the father reminds me that the father also said that he wanted to preserve the Can$7059 in case he lost his employment. The father wanted it as a fund to which the mother could have recourse during any period of his unemployment, when he would be unable to pay for child support.  It was prescient of the father who did become unemployed in 2016.

2. On 14 July 2015, the mother filed an application to vary her child support entitlement in the G Town registry of the Provincial Court of Province B.  This was not served on the father. On 26 August 2015, the mother filed a notice of motion for the release of the overpayment funds, and orders were made in those terms on 10 September 2015 by the Honourable Judge L. Smith.  Orders were also made on that day for a variation of the father’s child support liability.  In what I will refer to as the provisional order for the purpose of these proceedings, the provisional order appears at pages 22, 24 of the affidavit of Mr Maat, affirmed 30 May 2017.  It is annexure “KHM3”. 

3. The provisional order provides a declaratory finding that the respondent father’s income was imputed at Can$150,000 per annum, which is the equivalent of approximately A$150,000.  It was ordered that the 2004 order be varied from 1 September 2012 to the sum of $2104 per calendar month, payable on the 1^st of each month.  At this point, I note that the parties’ son, C, was 16 years of age.  It was further ordered that the father pay five-sixths of certain expenses each month, being extended medical, dental insurance coverage for both children, health-related expenses for C which were not covered by the extended medical, dental coverage, and $150 a month for the parents’ daughter to participate in an outdoor incentive program.  As best I recall, that equated to about Can$150 per month.

4. The provisional order also provided that, on or before 1 June 2016 and the first day of June in each year thereafter, the respondent father file with this court a complete copy of his filed income tax return and notice of assessment or equivalent document issued by the government of Australia regarding his income. 

5. The provisional order was transmitted to the Commonwealth Department of Human Services in Australia, to arrive on 2 February 2016.

6. The Commonwealth Department of Human Services is the central authority under the United Nations Convention on the Recovery Abroad of Maintenance, which entered into force for Australia in 1985.  This application, however, is brought under regulation 39 of our Regulations, and for that purpose the provisional order is a registered maintenance liability within the meaning of regulation 24A of the regulations, which was sent to Australia and received by the Commonwealth Department of Human Services as a provisional order within the meaning of regulation 39(1)(a) of our regulations.

7. Pursuant to reg 39(2), the Secretary must apply to a court for an order confirming the provisional order, which he did by the application initiating proceedings filed on 5 July 2017.

8. Now, the court may, pursuant to regulation 39(4), confirm the provisional order with or without modification, discharge the provisional order or adjourn the proceedings and remit the provisional order to the court that made it with the request that the court may take further evidence and further consider its provisional order.

9. By the response to initiating application filed by the father on 28 August 2017, to which I’ve earlier referred, the father seeks a discharge primarily, but, in default, a confirmation with modification, which would have the effect of reducing the amount payable from Can$2104 per month to $AU1,577. 

10. On 6 July 2017, the respondent father was served with the Secretary’s initiating application.  This was the first notice he had, according to him, of the variation of the order in September 2015.  By this stage, he alleges that he was unemployed or underemployed between December and July 2016.  He had been told by the Canadian child support authorities to cease paying maintenance because he was in considerable overpayment of his liability in August 2016, and he abided their request, with the effect that he has not paid any child support in periodic amounts since August 2016.

11. In February 2017, the father commenced his current employment as a project manager with an Australian company called Company H, with an annual salary of $140,000.  The father’s life partner, Ms E, became ill with a diagnosis of a tumour in May 2017.  In June 2017, C completed his secondary education, and there is a suggestion that he intends to become a tradesman.  There is no evidence that he is undertaking a course of education or training. 

12. If I could deal briefly with what appears to be some unfortunate delays in the matter.  As indicated, there is no explanation as to why it took 5 months from September 2015 to February 2016 for the provisional order to reach Australia.  Once in Australia, it was not sent to the Australian Government Solicitor in Melbourne, which is the capital city in which the father resides, until May 2017 which is a further delay of 15 months.  On 30 May 2017, the Australian Government Solicitor, who acts for the applicant, filed an application in the Family Court.  The Family Court in Australia comprise the Family Court of Australia, which is the superior court, and the Federal Circuit Court, which is effectively the trial court.  The secretary’s application was sought to be filed in the Federal Circuit Court, but was apparently retained in the registry and not actually processed for filing until 5 July 2017 (some five weeks later), when it was filed in the Family Court of Australia.  Today is the first return date of that application.

13. I draw attention to the delays in time because delay impacts upon maintenance applications and entitlements more severely than in most other areas of family law.  This is because one parent, and, in particular, the children have to do without money if proceedings are delayed, and the person from whom payments are sought tends to get on with their life without having made an allowance for a liability which might be retrospectively, or, to use the Canadian terms, “retroactively” imposed upon them. The whole procedure in this case appears to have taken about 18 months longer than it should have.

14. In any event, the application is before me today. Notably, there is agreement from the bar table that there is no authority or guidance as to how the court deals with an application under regulation 39(4) to discharge or confirm, with or without modification, the provisional order. I am referred by counsel for the father to regulation 36, not that it applies to this case, but counsel makes the point that regulation 36(4) provides that, “Where an overseas maintenance, entry liability, or a registered maintenance liability is sought to be varied”. “The law to be applied to determination of an application is the law enforced in Australia under the Act”, that is, the Family Law Act. Whilst we are here dealing with a registered maintenance liability, we are not dealing with an application to vary it per se. The application is brought under section 39 to discharge or confirm, with or without modification.

15. There are various treaties that have entered into force for Australia which deal with international law, and some of them enable courts in Australia to take law of another contracting state or law of a non-contracting state into account in its determination.  One such treaty is the Hague Convention of 19 October 1996 on Jurisdiction, Applicable Law, Recognition, Enforcement and Co-operation in Respect of Parental Responsibility and Measures for the Protection of Children.  However, as a matter of first principle, it seems to me that where the court is not expressly empowered to take into account the law of a foreign state, whether or not that state is a party to a treaty or not, the law pursuant to which issues must be determined in this court is the law of Australia. I note that there were no submissions to the contrary by counsel for the applicant or counsel for the respondent father.

16. The first matter of which I must be satisfied is that this court would, according to Australian law, have jurisdiction to make a maintenance order in relation to the children. I can only do so if these are children in respect of whom an administrative assessment of child support cannot be made in accordance with the Australian Child Support Scheme, and I am satisfied that this is such a case. In order for an administrative assessment of child support to be raised in relation to children, those children must be either citizens or Australia or residing in Australia (see section 25 of the Child Support (Assessment) Act 1989).

17. Part VII of the Family Law Act provides for proceedings in relation to children. Division 7 provides for child maintenance orders. Section 66S provides for modification of child maintenance orders. It provides that where there is an order in force for the maintenance of a child, that order may be varied so as to increase or decrease any amount ordered to be paid. The court must be satisfied of certain events or occurrences. It is conceded only subsection 66S(3)(d) is relevant, and that is “that material facts withheld from the court that made the order or from a court that varied the order or material evidence previously given before such a court was false. I’m not convinced that section 66S is strictly applicable to this case, because I am asked to modify not an order under the Family Law Act or an existing order pursuant to which anyone is paying or has received money. It is a provisional order made in Canada two years ago under an international treaty scheme wherein there is an assessment in Canada and an assessment in Australia. The two hearings are part of one process so there is no requirement and it would, in my view, be erroneous to require something like a change of circumstances between the two proceedings.

18. I am more comfortable in looking at the matters to be taken into account according to the following sections:-

    (a)66J  Matters to be taken into account in considering financial support necessary for maintenance of child

    (1)  In considering the financial support necessary for the maintenance of a child, the court must take into account these (and no other) matters:

    (a)  the matters mentioned in section 66B; and

    (b)  the proper needs of the child (this is expanded on in subsection (2)); and

    (c)  the income, earning capacity, property and financial resources of the child (this is expanded on in subsection (3)).

    (2)  In taking into account the proper needs of the child the court:

    (a)  must have regard to:

    (i)  the age of the child; and

    (ii)  the manner in which the child is being, and in which the parents expected the child to be, educated or trained; and

    (iii)  any special needs of the child; and

    (b)  may have regard, to the extent to which the court considers appropriate in the circumstances of the case, to any relevant findings of published research in relation to the maintenance of children.

    (3)  In taking into account the income, earning capacity, property and financial resources of the child, the court must:

    (a)  have regard to the capacity of the child to earn or derive income, including any assets of, under the control of or held for the benefit of the child that do not produce, but are capable of producing, income; and

    (b)  disregard:

    (i)  the income, earning capacity, property and financial resources of any other person unless, in the special circumstances of the case, the court considers it appropriate to have regard to them; and

    (ii)  any entitlement of the child or any other person to an income tested pension, allowance or benefit.

    (4)  Subsections (2) and (3) do not limit, by implication, the matters to which the court may have regard in taking into account the matters referred to in subsection (1).

b)Section 66K, which provides for matters to be taken into account in determining the contribution that should be made by a party etcetera.

66K  Matters to be taken into account in determining contribution that should be made by party etc.

(1)  In determining the financial contribution, or respective financial contributions, towards the financial support necessary for the maintenance of a child that should be made by a party, or by parties, to the proceedings, the court must take into account these (and no other) matters:

(a)  the matters mentioned in sections 66B, 66C and 66D; and

(b)  the income, earning capacity, property and financial resources of the party or each of those parties (this is expanded on in subsection (2)); and

(c)  the commitments of the party, or each of those parties, that are necessary to enable the party to support:

(i)  himself or herself; or

(ii)  any other child or another person that the person has a duty to maintain; and

(d)  the direct and indirect costs incurred by the parent or other person with whom the child lives in providing care for the child (this is expanded on in subsection (3)); and

(e)  any special circumstances which, if not taken into account in the particular case, would result in injustice or undue hardship to any person.

(2)  In taking into account the income, earning capacity, property and financial resources of a party to the proceedings, the court must have regard to the capacity of the party to earn and derive income, including any assets of, under the control of or held for the benefit of the party that do not produce, but are capable of producing, income.

(3)  In taking into account the direct and indirect costs incurred by the parent or other person with whom the child lives in providing care for the child, the court must have regard to the income and earning capacity forgone by the parent or other person in providing that care.

(4)  In determining the financial contribution, or respective financial contributions, that should be made by a party, or by parties, to the proceedings, the court must disregard:

(a)  any entitlement of the child, or the person with whom the child lives, to an income tested pension, allowance or benefit; and

(b)  the income, earning capacity, property and financial resources of any person who does not have a duty to maintain the child, or has such a duty but is not a party to the proceedings, unless, in the special circumstances of the case, the court considers it appropriate to have regard to them.

(5)  In determining the financial contribution, or respective financial contributions, that should be made by a party, or by parties, to the proceedings, the court must consider the capacity of the party, or each of those parties, to provide maintenance by way of periodic payments before considering the capacity of the party, or each of those parties, to provide maintenance:

(a)  by way of lump sum payment; or

(b)  by way of transfer or settlement of property; or

(c)  in any other way.

(6)  Subsections (2) to (5) do not limit, by implication, the matters to which the court may have regard in taking into account the matters referred to in subsection (1).

1. Of those two sections, 66K concerns me the most, because the exercise under section 66J has already been taken in Canada. In that respect, I have the evidence of Mr Maat and the sundry annexed documents, which include the reasons for decision by Judge L. Smith on 10 September 2015 (annexure KHM-13 to the affidavit of Mr Maat affirmed on 13 May 2017).

RECORDED : TRANSCRIBED

1. The father didn’t seek to give further viva voce evidence over and above his evidence which was before the court.  His evidence was his affidavit affirmed on 25 August 2017, which is a lengthy document taking into account the many pages of annexures attached to it.  It does include taxation returns for the last three years, and it includes a tabulation of moneys which he has paid by way of child support, which, on his calculation, should have stood much more in credit than $7059 as at August 2016.  The relevant figures for that appear at pages 8 to 23 of the annexures to the father’s affidavit, the pages being numbered at the top-right corner.

2. The father also affirmed a financial statement on 25 August 2017.  I asked him to give some evidence. My assessment is that he answered willingly and openly and candidly.  I will order a transcript of the evidence.  I take into account the material set out in the father’s financial statement, his income at approximately $140,000 a year without the expectation of bonuses or incentives, the fact that he shares his expenses with Ms E, who is employed for about $110,000 a year at the moment, but who has serious health issues. They have a block of vacant land at Suburb F, but are otherwise paying rent of $490 a week, they have a mortgage which is paid for by the father of $390 a week, the father has a Land Rover, which is expensive to run and on which he has instalment payments for a personal loan of $93 per week, he owes some $55,000 on credit cards, both being Visa cards, one with National Australia Bank, and in respect of those cards is $346 per week.

3. Unfortunately, these proceedings have seen him incur legal costs in excess of $13,000.  It’s understandable that he was diligent in retaining lawyers who have represented him appropriately. When the proceedings were first served on him his liability was approximated at $140,000 involving arrears. As a result of this hearing and for reasons set out below, I will modify the provisional order so that there are no arrears.

4. Looking at the father’s income, I am satisfied that he is earning money to the extent of his capacity to do so.  He has modest property and no financial resources.  He does contribute to superannuation, but he has not reached a condition of release, and those moneys are not accessible to him and will not be accessible to him until he ceases work and possibly attains the age of 60 or 65 years in Australia; that’s under a state of flux at the moment.

5. The father has commitments to his life partner, Ms E, but, at the moment, that does not include a commitment to support her, because she is able to support herself.  There isn’t anyone other than the children in this relationship who the father has a duty to maintain.  I will not include any child support for C after he has attained the age of 18 years, and that occurred on 9 July 2017, some seven or so weeks ago.  Under Australian law he would not be entitled to maintenance because he is not a child who, whilst having attained the age of 18 years, requires the maintenance because he is physically or intellectually disabled, or the maintenance is necessary for him to be able to undertake a course of training or education.

6. On the issue of arrears, I have already referred to the delays in this matter, which I consider to have been unfortunate.  It is common ground that the first that the father knew of the order that had been made on 10 September 2015 was when he was served with the documents in these proceedings.  That was some seven or so weeks ago, on 6 July 2017.  In my view, it would be unfair and inappropriate to impose upon the father a retrospective or retroactive liability for child support, calculable before the time that he knew of the order.  Therefore, my determination of his capacity to pay will date from 6 July 2017, when he knew that variation of his liability under the 2004 order was a current concern.

7. So, operating backwards, the mother obtained CAN$7059 on 10 September 2015.  Significantly, the father ceased paying any form of periodic child support in August 2016, at the request or advice of the Australian and Canadian child support agencies.  I would continue the amount payable by the father from the date that he ceased making payments until the date that he knew that there was a variation of payments, which is from 6 July 2017, at the pre-existing rate of Can$587. 

8. On my calculation, the overpayment of $7059 which was released to the mother in September 2015 covers that period of approximately one year comfortably enough for me not to consider it appropriate to make any order retrospectively or retroactively for the period August 2016 to July 2017.

9. From 6 July 2017, the father has been aware that the makings would increase.  C attained the age of 18 years within a few days of that date, being on 9 July 2017, so it seems to me that the liability that I will calculate is that referable only to the parents’ youngest child, who is D, born in 2001.  Looking at the father’s income, his financial resources, his entitlement to property, I am satisfied that the sum of $1500 per month, which has been approximately contemplated by the father in his material, and is not opposed by him through his counsel, and is not opposed by Mr Maat for the applicant.

10. It seems to me to be a generous sum in all of the circumstances, looking at the father’s expenses.  The father will have to trim his expenses considerably in order to pay the sum of $1500 a month, and it is a very large increase from the approximately $600 a month which he was paying previously, particularly coming off a base of not having paid any for some time.  However, the father readily understood that the costs of supporting his children, which have fallen on the wife solely but for the money that he has paid.  The father does not begrudge it any way.  I would say that he was an unusually understanding and obliging witness, and I would generally commend him for being prepared to cut the cloth so he can make a contribution of $1500 per month to the household of the children, referable at this point to the support of D.  My finding would, of course, change if I were considering the support of C as a child over 18 years of age in addition to D.

11. I am satisfied that the father’s capacity up to July 2017 is, and should be, nil over and above what has already been paid. Thereafter, I assess his capacity to pay at $1,577 per month (Australian dollars) for the support of D. I will order that the provisional order be modified to that effect and be otherwise confirmed. 

I certify that the preceding forty-two (42) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Bennett delivered on 31 August 2017.

Associate: 

Date:  8 September 2017