Bock and Bock (No 2)

[2008] FamCA 1267

FAMILY COURT OF AUSTRALIA

BOCK & BOCK (NO. 2) [2008] FamCA 1267

FAMILY LAW – CHILD MAINTENANCE – application by the husband seeking to have an overseas order for child maintenance varied pursuant to regulation 36 of the Family Law Regulations 1984 (Cth) – where there was no appearance and no documents filed by the wife – where the order for maintenance was made in the husband’s absence – where the husband’s financial position was not made known to the overseas court – where the maintenance order was registered with the Child Support Agency in Australia – where there has been a sufficient change in circumstances since the order and/or material facts withheld from the Court that made the order such as to allow for variation of the order – order varied – pursuant to regulation 38 order is provisional and requires confirmation by the foreign court

FAMILY LAW – CHILD MAINTENANCE – application by the husband seeking that arrears of child maintenance accrued pursuant to an overseas order be discharged and that enforcement of the order be stayed – variation of order backdated – Child Support Agency restrained from enforcing the overseas order during the time the variation order remains provisional

Family Law Act 1975 (Cth) s 66B & 66S
Child Support (Regulation and Collection) Act 1998 (Cth) s 111C
Family Law Regulations 1984 (Cth) regs 36, 38, 38A & 38B

APPLICANT: Mr Bock

RESPONDENT: Ms Bock

FILE NUMBER: DNC 163 of 2008

DATE DELIVERED: 10 September 2008

PLACE DELIVERED: Darwin

PLACE HEARD: Darwin

JUDGMENT OF: STRICKLAND J

HEARING DATE: 10 September 2008

REPRESENTATION

COUNSEL FOR THE APPLICANT: Ms Roennfeldt

SOLICITOR FOR THE APPLICANT: Withnalls

COUNSEL FOR THE RESPONDENT: No appearance

Orders

1. That pursuant to Regulation 36 of the Family Law Regulations and Section 66S of the Family Law Act the order providing for the husband to make payments to the wife on behalf of the children C born … July 1993 and R born … March 1996 of aliment (child maintenance) at the rate of THREE HUNDRED AND EIGHTY POUNDS [₤380.00] per calendar month made at P in Scotland in the United Kingdom on 27 July 2005 be varied so as to provide as follows:

   a.   from 27 July 2005 the husband pay to the wife on behalf of the said children aliment (child maintenance) at the rate of TWENTY DOLLARS [$20.00] per week;

   b.   from 27 July 2005 the husband pay the cost of the return airfares and all associated expenses for the children to travel annually from Scotland to Australia and return.

2. That this order is a provisional order pursuant to Regulation 38 of the Family Law Regulations.

3. That pursuant to Section 111C of the Child Support (Regulation and Collection) Act the Child Support Agency be restrained during the time that this order remains provisional from enforcing the said order made in P, Scotland on 27 July 2005.

4. That all applications be dismissed and removed from the active pending cases list.

IT IS NOTED that publication of this judgment under the pseudonym Bock & Bock is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)

FAMILY COURT OF AUSTRALIA AT DARWIN

FILE NUMBER: DNC 163 of 2008

MR BOCK

Applicant

And

MS BOCK

Respondent

EX TEMPORE REASONS
(CONTINUED FROM 4 SEPTEMBER 2008)

1. Perhaps it might be worthwhile for me just to briefly recap what I have dealt with so far, but not in any detail. I have referred to the application that is before the Court, made comment about the respondent's position and intimation to the Court about not attending and leaving it up to the Court. I have dealt with the history of the order made in Scotland and its subsequent registration in Australia. I have identified the evidence before me in terms of the affidavits the husband is relying upon and I have referred to regulation 36 of the Family Law Regulations which is the regulation under which the husband is proceeding, and I have dealt with the issues relating to that, particularly given the change of legislation that occurred last year which had an impact upon that.

2. Further, I particularly note the circumstances of how the order was made in Scotland, namely, at the end of the day the husband's inability to present any material to that Court including his financial position for reasons that I have already referred to.   Indeed I do not even know what was before the Court from the wife save and except presumably an application of some sort, but what I am referring to is I do not know what specific factual information was put before the Court by the wife not only in relation to her position and the position of the children, but whether she herself said anything to the Court about the husband's position.  

3. Thus I proceed on the basis that the husband's financial position was not made known to that Court and also what was not made known to that Court was the arrangement that the husband says he had with the wife in relation to the payment of child support or child maintenance, call it what you will, namely, that in lieu of such payments he would meet the travel expenses of the children spending time with him given their relocation from Australia to Scotland.

4. Now what the husband seeks to do is to vary that order made in Scotland in 2005 to provide that he pay a total sum of $20 Australian dollars per week and that he pay the cost of return airfares from Scotland to Australia and all associated expenses of the two children annually.

5. He also seeks that the arrears accrued pursuant to that order be discharged.  Now, I have some difficulty with that and I have raised that with the husband's counsel in that the question of arrears does not seem to be dealt with in Regulation 36(2).  However what Ms Roennfeldt has submitted to me is that I could effectively deal with that on the basis of backdating any variation.  Obviously the husband would want the backdating to occur to the time of the original order and I see that as an option which is open to me.  However to do that, and I will come to this in more detail in a moment, I need to address the husband's financial position from the time of that order to now. 

6. What happens under the Regulations is that if I do, for example, make an order varying the overseas maintenance order then Regulation 38 provides that such an order is provisional if the relevant reciprocating jurisdiction is one of a number of jurisdictions including the United Kingdom, and that order only becomes final once it is confirmed by the relevant Court in the original jurisdiction. 

7. Thus the order obviously has to be transmitted to the foreign court for consideration as to whether it is to be confirmed or not, and that is done through readily understood channels.  The Registrar of the Court sends a certified copy of the order to the Secretary of the relevant department, and the Secretary sends a certified copy of the order to the foreign court.  Sub-regulation 38A(6) then provides, “If the foreign court confirms the order with or without modification, the order has effect in Australia as so confirmed."

8. Now I know this is getting ahead of ourselves, but I note of course Regulation 38B which allows for the foreign court to, in effect, remit the order back to this Court for the taking of further evidence if the foreign court deems that that is necessary to enable the foreign court to confirm or otherwise the order made. 

9. Now, to return to Regulation 36, that provides in sub-regulation 36(4) that the law to be applied is the law in force in Australia under the Act.  Under the Family Law Act the relevant section is s 66S which provides as follows:

   Modification of child maintenance orders

   (1)   This section applies if:

   (a)there is in force an order (the first order ), for the maintenance of a child (whether or not made under this Act and whether made before or after the commencement of this section):

   (i)     made by a court; or

   (ii)    registered in a court; and

   (b)a person (being someone who could apply for a child maintenance order in relation to the child) or persons (each of whom could do that) apply to the court for an order under this section in relation to the first order.

   (1A) With the consent of all the parties to the first order, the court may, subject to section 111AA, make an order:

   (a)discharging the first order; or

   (b)suspending its operation wholly or in part and either until further order or until a fixed time or the happening of a future event; or

   (c)if the operation of the order has been suspended under paragraph (b) or (2)(b)--reviving its operation wholly or in part; or

   (d)varying the order:

   (i)so as to increase or decrease any amount ordered to be paid by the order; or

   (ii)in any other way.

   (1B)         However, the court must not make an order under subsection (1A) that allows any entitlement of a child or another person to an income tested pension, allowance or benefit, to affect the duty of that child's parents to maintain the child.

   Note: For the duty of a parent to maintain a child, see section 66C.

   (2)   In any other case, the court may, by order:

   (a)discharge the first order if there is just cause for so doing; or

   (b)suspend its operation wholly or in part and either until further order or until a fixed time or the happening of a future event; or

   (c)if the operation of the order has been suspended under paragraph (b) or (1A)(b), revive its operation wholly or in part; or

   (d)  subject to subsection (3), vary the order:

   (i)so as to increase or decrease any amount ordered to be paid by the order; or

   (ii)in any other way.

   (3)   The court must not vary the order so as to increase or decrease any amount ordered to be paid by the order unless it is satisfied:

   (a)     that, since the order was made or last varied:

   (i)the circumstances of the child have changed so as to justify the variation; or

   (ii)the circumstances of the person liable to make payments under the order have changed so as to justify the variation; or

   (iii)the circumstances of the person entitled to receive payments under the order have changed so as to justify the variation; or

   (iv)in the case of an order that operates in favour of, or is binding on, a legal personal representative--the circumstances of the estate are such as to justify the variation; or

   (b)that, since the order was made or last varied, the cost of living has changed to such an extent as to justify its so doing (this is expanded on in subsections (4) and (5)); or

   (c)if the order was made by consent--that the amount ordered to be paid is not proper or adequate (this is expanded on in subsection (6)); or

   (d)that material facts were 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.

   (4)   In satisfying itself for the purposes of paragraph (3)(b), the court must have regard to any changes that have occurred in the Consumer Price Index published by the Australian Statistician.

   (5)   The court must not, in considering the variation of an order, have regard to a change in the cost of living unless at least 12 months have elapsed since the order was made or last varied having regard to a change in the cost of living.

   (6)   In satisfying itself for the purposes of paragraph (3)(c), the court must have regard to any payments, and any transfer or settlement of property, previously made to the child, or to any other person for the benefit of the child, by the person against whom the order was made.

   (7)   An order decreasing a periodic amount payable under the order, or discharging the order, may be expressed to be retrospective to such day as the court considers appropriate.

   (8)   If an order (the subsequent order ) decreasing a periodic amount payable under the first order is expressed to be retrospective, amounts paid under the first order that are not payable under the first order as varied by the subsequent order may be recovered in a court having jurisdiction under this Part.

   (9)   If an order discharging the first order is expressed to be retrospective to a specified day, amounts paid under the first order since the specified day may be recovered in a court having jurisdiction under this Part.

   (10) For the purposes of this section, the court must have regard to the provisions of Subdivisions B, C and D (to the extent applicable).

   (11) The discharge of the first order does not affect the recovery of arrears due under the order when the discharge takes effect.

10. I treat this order as being a child maintenance order despite an assessment being issued by the Child Support Agency to the husband. The order made on 27 July 2005 was clearly an order for child maintenance and all the agency is doing is attempting to enforce that order.  I am also comforted in proceeding on that basis by the terms of the letter from the Child Support Agency itself which I have referred to earlier in these reasons. 

11. Section 66S is contained in Division 7 of the Family Law Act 1975. The objects of that Division are set out in s 66B as follows:

    Objects

    (1)    The principal object of this Division is to ensure that children receive a proper level of financial support from their parents.

    (2)    Particular objects of this Division include ensuring:

    (a)that children have their proper needs met from reasonable and adequate shares in the income, earning capacity, property and financial resources of both of their parents; and

    (b)     that parents share equitably in the support of their children.

12. The husband here takes no issue with the obvious proposition that the children have needs and those needs need to be met by their parents including him.  He says though, in summary, that the best way that he can contribute to the children's needs is to be able to meet the costs of their travel to Australia on an annual basis for the purpose of the children spending time with him.  He says that he simply cannot afford the amount that he has been ordered to pay and he has not been able to afford that since the day it was made.  I will come in a moment to the particular details of his income and expenses in relation to that.

13. Subsection 66S(3) provides that in effect the Court must not vary the order so as to increase or decrease the amount unless it is satisfied of at least one of a number of things.  In summary, the Court has to be satisfied that there has been a relevant change of circumstances since the previous order was made, and/or that material facts were withheld from the Court that made the order. 

14. The husband’s counsel put to me that given that the arrangement that I have referred to between the husband and the wife as to the payment of support for the children, namely, that the husband would pay that by way of meeting the costs of their travel to and from Australia, was in effect withheld from the Scottish Court, that is enough to enable me to vary the amount of maintenance that was ordered. I accept that submission although it does entail perhaps a generous interpretation of the words used in s 66S(3)(d) namely, "that material facts were withheld from the court." What has happened here is that that arrangement was not so much withheld but the Court simply was not advised of it. However, taking into account the spirit of s 66S(3)(d), I consider that this circumstance can be treated as coming within that paragraph.

15. In any event, I consider that there has been sufficient change of circumstances since the order was made to allow for a variation of that order.  The evidence that the husband has now put before me in his most recent affidavit filed on 3 September 2008 is that in the financial year ended 30 June 2005, his income was almost $79,000 and his expenses, including in relation to the children's travel, were $72,000 approximately, leaving him with an excess of around $7,000.  It might be possible though to look closely at those expenses that the husband claims and identify expenses which may not be considered reasonable in the context of an obligation to support children. Thus allowing for that, it could be said that as at 30 June 2005 the husband was in a position where he had the ability to not only pay for travel by the children but also to pay maintenance for the children.  Whether it was precisely the amount ordered by the Court in Scotland or not does not necessarily matter for these purposes. However, if one looks at his income and expenses subsequent to 30 June 2005, that paints a completely different picture and, indeed, the evidence tells me that he has been in a deficit situation in each financial year since then for a number of reasons.

16. Looking at the expenses, one primary reason for the husband's financial circumstances changing is that he appears to have purchased a home and undertaken a mortgage liability in relation to that home. 

17. With his income, since the 2004/2005 financial year it has been less, and that is explained to me on the basis that up to 2005, the husband enjoyed overtime but that he has not been able to work any overtime since then. 

18. As a result of the increase in expenses and the decrease in his income, with the expense of bringing the children out to Australia he has been spending more than he earns.  That indicates immediately that there is a significant change of circumstances in relation to the husband's finances, and that would justify a variation of the order.  An issue could be raised as to whether the husband should have purchased a home after the order was made in Scotland.  However, at this point I note that the wife has chosen not to attend this hearing and not to be involved at all at any level.  In those circumstances I do not see it as the task of this court to argue her case. In any event I go back to the circumstance which has really been the driving influence in this case and that is the arrangement that the parties made that in lieu of the husband paying child maintenance he would meet the significant costs of bringing the children out from Scotland to spend time with him. He obviously needed appropriate accommodation where they could live whilst they were with him, and he purchased a house in October 2005 which has provided that ongoing accommodation for the children.

19. Accordingly, I am satisfied that there has been either a sufficient change of circumstances and/or that there have been material facts withheld from the Court that made the order which allows for a variation to the order.

20. In determining what variation to make, there is a three stage approach.  The first stage is to determine the reasonable and/or necessary expenses of the children.  Here there is no evidence before me as to the expenses of the children because the wife has chosen not to be involved in these proceedings at all.  The husband is not in a position to tell me what the expenses of the children are in Scotland.  He obviously knows what their expenses have been when they have been out here with him, but that is not what this is referring to.  I attempted to have the husband's counsel make a concession about that but she was reluctant to do so, understandably, and I will come back to that issue when I deal more specifically with the evidence of the husband's income and expenses since 2005.

21. The other two stages of the requisite approach entail a consideration of the ability of each parent to meet the reasonable needs of the children.  Now again there is a difficulty that I obviously have in addressing those matters in this case, namely, the mother has chosen to not put any information whatsoever before the Court.  She could have at least filed a document setting out her financial position and that of the children, but she has chosen not even to do that although I have given her ample opportunity to do so.  Thus all I have before me is the husband's evidence as to his financial circumstances and therefore all I am able to do is determine the level of support that he can provide towards meeting the children's needs, whatever they may be.

1. Turning to that issue, to repeat, the husband's affidavit of 3 September 2008 sets out his income and expenditure from and including the financial year 2004/2005 up to the current time.  Obviously I have more detail about his current financial position than, for example, his position back in 2006 or 2007 because in support of his application the husband has filed an affidavit and a statement of financial circumstances setting out his current position, but I am nevertheless satisfied with the evidence that the husband has provided me in the schedule annexed to his affidavit of 3 September 2008, and I proceed on the basis of the accuracy of that schedule.  The mother of course is not here to challenge any of that, but obviously I have an obligation to look critically at the income and expenditure that the husband sets out given that the context of this application is looking to meet the reasonable needs of children for which their parents have responsibility.

2. Looking at that schedule of income and expenditure, the first relevant financial year is 2005/2006, and in that financial year the husband's income was $61,497 and his total expenditure was $89,832, a deficit of $28,335. The most significant expenditure was for mortgage repayments which I have touched on already, income tax, and approximately $15,000 on the children's travel. 

3. Now, prima facie, the husband in that year was not able to afford to make any payments pursuant to of the order for child maintenance.  Even if one took out the children's travel, he was still in a debit situation and was not able to make any child maintenance payments.  Even if one went further and cast a critical eye over some of the expenses and either notionally removed some of them or found that some of the expenditure was unreasonable, it would require a significant reduction to get his expenditure down to a level which allowed him to even pay one dollar in satisfaction of the order for child maintenance.  Thus I have no difficulty in finding that in that financial year, the husband had no ability to pay anything towards the order for child maintenance. 

4. He did manage to meet the costs of the children's travel, but he tells me in his affidavit that he has only been able to do that by borrowing from his relatives and taking out a personal loan. He currently owes his sister $60,000 and he has a personal loan with the ANZ Bank of $20,000. 

5. Turning to the financial year 2006/2007, his income was $63,714, his expenditure was $89,678, and the deficit was $25,964. Again, the most significant items of expenditure were mortgage repayments, income tax and the cost of the children's travel, and the same comments can be applied to this year as I applied to the previous year.  The husband had no ability to make any payments in compliance with the order for child maintenance and he was only able to meet the costs of the children's travel by dint of him borrowing money.  I repeat that because it is an important aspect of this case, namely the husband has continued to comply with the arrangement that he initially had with the wife as to meeting the costs of the children's travel.  As a result he has not only been unable to meet any order for child maintenance but he has had to put himself into significant debt to meet his ongoing expenses as well as the cost of that travel.  

6. Turning then to the most recently completed financial year, 2007/2008, his income in that year was $66,348, his expenditure was $84,230, and the deficit was almost $18,000.  Yet again that arose because of the mortgage repayments, income tax, and the cost of the children's travel.  A similar picture is presented in relation to his financial position for this year as in the previous financial years, and the same comments that I have made in relation to those financial years apply here as well.  Again, for the reasons that I have already expressed, I find that in this financial year the husband has been unable to make any payment towards the order for child maintenance.  He has continued, though, of course, to have the children travel to Australia and meet that expense.  He has continued to borrow money for this purpose, and it is apparent that he is now in a relatively dire financial position.  He has attempted to meet those liabilities by selling his home but he has been unsuccessful at this point in doing that. He wants to move to Melbourne where he hopes to be able to live less expensively than he is able to in Darwin and to better enable him to meet the travel costs on an ongoing basis for the children to come out and spend time with him.  

7. I have no difficulty in finding that at the present time the husband is not able to make any payment towards the order for child maintenance.

8. The husband, though, seeks an order that he does pay something, namely, he seeks that the order made in Scotland be varied down to AUD$20 per week.  I cannot see how the husband can afford even that amount but I proceed on the basis that he will do that either by borrowing further or cutting corners with expenses so he can contribute to the support of his children.

9. It should also be noted that it is not just a case of the husband meeting the travel costs of the children out to Australia.  Whilst they are out here he has to support them and he supports them without any financial assistance from the wife. He has accepted his responsibilities and carried out the arrangement that he had with the wife to meet the travel costs, but equally he has met the children's needs and their expenses and provided them with treats and gifts and the like when they have been out here.  That is all to his credit. 

10. In conclusion I am not only satisfied to make the orders sought by the husband but to also backdate the variation to the date of the order itself.  Of course, this order will be provisional and will need to be confirmed or not by the foreign Court.  That is a matter for the appropriate Court in Scotland in due course.

I certify that the preceding 31 paragraphs are a true copy of the reasons for judgment of the Honourable Justice Strickland delivered on 10 September 2008.

Associate