BONDELMONTE & BONDELMONTE
[2014] FamCAFC 29
•27 February 2014
FAMILY COURT OF AUSTRALIA
| BONDELMONTE & BONDELMONTE | [2014] FamCAFC 29 |
FAMILY LAW – APPLICATION FOR LEAVE TO APPEAL – Application for leave to appeal from an appeal of an interlocutory decree – Where the application is opposed by the respondent – Where the appellant asserts an inability to comply with the orders of the trial judge – Where a lack of discernible reasons and necessary findings of fact worked a substantial injustice to the appellant – Leave granted.
FAMILY LAW – APPEAL - Appeal against interim spousal maintenance and child support departure orders – Where the orders of the trial judge required the appellant to pay maintenance and child support exceeding his disclosed income – Where there was no finding as to the appellant’s ability to draw upon undisclosed financial resources - Where the trial judge made findings of credit against the appellant without reference to evidence in support of that conclusion – Where spouse maintenance was ordered to allow the respondent to undertake a course of training in circumstances where the respondent had confirmed no intention to re-enter the workforce – Appeal allowed – Remitted for rehearing.
| Child Support (Assessment) Act 1989 (Cth) |
| Allesch v Maunz (2000) 203 CLR 172 |
| APPELLANT: | Mr Bondelmonte |
| RESPONDENT: | Ms Bondelmonte |
| FILE NUMBER: | SYF 4839 of 2011 |
| APPEAL NUMBER: | EA 139 of 2013 |
| DATE DELIVERED: | 27 February 2014 |
| PLACE DELIVERED: | Brisbane |
| PLACE HEARD: | Sydney |
| JUDGMENT OF: | May, Murphy and Benjamin JJ |
| HEARING DATE: | 3 December 2013 |
| LOWER COURT JURISDICTION: | Family Court of Australia |
| LOWER COURT JUDGMENT DATE: | 16 September 2013 |
| LOWER COURT MNC: | [2013] FamCA 725 |
REPRESENTATION
| COUNSEL FOR THE APPELLANT: | Mr Schonell SC |
| SOLICITOR FOR THE APPELLANT: | Karras Partners Lawyers |
| COUNSEL FOR THE RESPONDENT: | Mr Gould |
| SOLICITOR FOR THE RESPONDENT: | Broun Abrahams Burreket Family Lawyers |
Orders
The appellant husband is granted leave to appeal.
The appeal is allowed.
The orders made by Fowler J on 16 September 2013 in paragraphs 1, 2, and 3 are set aside.
The applications of the respondent wife for interim spousal maintenance and interim child support departure orders are remitted to the Family Court of Australia for rehearing.
The Court grants to the appellant husband a costs certificate pursuant to the provisions of s 9 of the Federal Proceedings (Costs) Act 1981 being a certificate that, in the opinion of the Court, it would be appropriate for the Attorney-General to authorise a payment under that Act in respect of the costs incurred in relation to the appeal.
The Court grants to the respondent wife a costs certificate pursuant to the provisions of s 6 of the Federal Proceedings (Costs) Act 1981 being a certificate that, in the opinion of the Court, it would be appropriate for the Attorney-General to authorise a payment under that Act in respect of the costs incurred in relation to the appeal and cross-appeal.
The Court grants to each of the parties a costs certificate pursuant to the provisions of s 8 of the Federal Proceedings (Costs) Act1981 being a certificate that, in the opinion of the Court, it would be appropriate for the Attorney-General to authorise a payment under that Act to each of the parties in respect of the costs incurred by the appellant and respondent in relation to the rehearing.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Bondelmonte & Bondelmonte has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
| THE FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT SYDNEY |
Appeal Number: EA 139 of 2013
File Number: SYF 4839 of 2011
| Mr Bondelmonte |
Appellant
And
| Ms Bondelmonte |
Respondent
REASONS FOR JUDGMENT
MAY & BENJAMIN JJ
By notice of appeal filed 11 October 2013, Mr Bondelmonte (“the husband”) sought leave to appeal against interim spousal maintenance orders payable to Ms Bondelmonte (“the wife”), and child support departure orders, made by Fowler J on 16 September 2013.
Order 1 provided that the husband pay to the wife by way of spousal maintenance $1,000 per week ($4,333 per month) pending further order (“the spousal maintenance order”). Orders 2 and 3 provided for child support departure, the sum payable by the husband in total for three children of $1,200 per week ($5,200 per month) for a period of 12 months or until final determination of the proceedings, whichever is the earlier (“the child support departure order”). Further, the husband’s undertaking to continue paying to the wife an additional $1,635 per week to cover the children’s school fees, private health insurance, school books, and extra-curricular activities is noted in order 4.
The total amount payable by the husband pursuant to this order is $3835 per week ($16,618 per month) or about $200,000 per year.
The husband’s evidence in relation to his income was that on average it was $3365 per week, that his personal expenditure was $4437 per week which included some expenses of the children. The amount ordered clearly exceeded the husband’s income.
The wife opposes the application for leave to appeal and asks that the trial judge’s decision remain undisturbed.
There are no parenting applications presently before the Court. The substantive proceedings are essentially confined to the distribution of property, spouse maintenance and child support.
On 1 March 2013 the husband and wife separately filed competing applications in a case seeking interim financial orders. The wife filed an amended application on 23 April 2013 and the matter first came before the trial judge on 14 June 2013. It was then adjourned until 30 August 2013 to allow for cross-examination of the parties.
Background
The parties commenced cohabitation in mid-1996, married in 1997, and divorced in November 2012. Initially the wife and children remained in the former matrimonial home at C Street, Suburb B, which the husband had vacated following separation in 2010. The property at Suburb B is owned by D Pty Ltd as Trustee of the D Trust. The wife deposes to having believed throughout the marriage that the property was purchased in the parties’ names.
On 23 March 2013, the wife purchased a unit for $850,000 at Suburb F, where she presently resides. The wife used money from a National Australia Bank (“NAB”) term deposit for that purpose. Following the purchase of the Suburb F property, the wife closed the NAB term deposit, and held the remaining $94,562.27 in a separate NAB account. By the time of trial, these funds had diminished to $13,323.16.
There are three children of the marriage: R Bondelmonte (born in 1999), S Bondelmonte (born in 2001), and T Bondelmonte (born in 2004). The two youngest children live primarily with the wife. The residency of the eldest child, R, however, was a contentious issue at trial, with the husband asserting that R commenced living permanently with him on 12 August 2013.
The wife ceased employment as a healthcare worker in June 1999 following the birth of R. The husband asserts that he acts as the “director of numerous companies which are trustees of trusts”. The husband regularly receives distributions from three trusts - he asserts they are under the control of his brother Mr V. The husband said he assumes the distributions “arise in part due to [his] having undertaken those director roles though there has never been any agreement” to that effect.
The husband’s financial circumstances were the main issue in the interim hearing before the judge. The needs of the wife and children were of relatively little moment as an issue before the trial judge. The quantum of those needs was not an issue in the appeal.
Application for leave to appeal
Subsection 94AA(1) of the Family Law Act 1975 (Cth) (“the Act”) and regulation 15A(1) of the Family Law Regulations 1984 (Cth) provides that leave to appeal is required before an appeal from an interlocutory decree of the Family Court may lie to this Court. It is uncontroversial in these proceedings that the husband requires leave to appeal.
The court in Waugh and Waugh (2000) FLC 93-052 discussed the principles governing the grant of leave to appeal from interlocutory orders and at [23] and [25] explained that an application for leave to appeal should be granted where the proposed appeal has merit regarding an error of principle and/or the orders appealed may work a substantial injustice to one of the parties.
The basis for seeking leave contained the same grounds as the appeal, with the addition of the assertion that the husband is unable to comply with the orders by reason of his income and financial resources.
Counsel for the wife opposed the husband’s application for leave to appeal submitting that the application had failed to demonstrate substantial injustice. Counsel for the husband submitted that inconsistences in the fact finding exercise and a lack of reasons amounted to an error of law which worked a substantial injustice to the husband.
The effect of the trial judge’s orders is that the husband has been ordered to pay to the wife a sum per week significantly greater than the husband’s disclosed income. The proposed appeal has merit based on errors of legal principle, namely a lack of discernible reasons for the decision and an injustice occasioned by the absence of necessary findings of fact. Leave should be granted.
Grounds of appeal
The husband relied on the proposed grounds of appeal (with the exception of ground 6) and an amended summary of argument which was handed to us at the appeal hearing.
The grounds of appeal are as follows:
1.That His Honour erred in failing to give reasons for the finding at [27] that the Husband did not tell the whole truth nor was he, in answering questions, committed to a full and frank disclosure.
2.That His Honour erred in finding at [91] that a payment of maintenance would enable the Wife to undertake a course of education or training in circumstances where the Wife gave no evidence of an intent to do so and further gave evidence that she had no intention to re-train or seek any form of employment.
3.That His Honour erred in finding at [53] that the Husband was able to maintain the Wife based on his income and financial resources but gave no reasons for doing so in circumstances where the Husband’s income was $3,365 gross per week and His Honour made an order that he pay child support and spousal maintenance totalling $3,835 per week.
4.That His Honour erred in finding at [53] that the Husband had alleged financial resources but gave no reasons or explanation as to what it was constituted the financial resources of the Husband.
5.That His Honour erred in failing to give any reasons for his finding at [67].
…
7.That His Honour erred in determining that the Husband’s insouciance was a relevant factor in determining his credibility or had any relevance to such determination.
8.In circumstances where each of the parties contended that the child [R] lived with them and His Honour determined that he could not made a finding as to where [R] would live permanently (at [78]) nor that the current arrangements for [R] would be permanent (at [44]), His Honour thus erred in making any order for child support in favour of the Wife for the [R].
Counsel for the husband argued grounds 1, 5 and 7 together, grounds 3 and 4 in combination, and grounds 2 and 8 individually.
The first group of grounds relate to absence of reasons and findings in relation to the husband’s credibility. The second, grounds 3 and 4, are also complaints about an absence of reasons, in particular that there is no explanation for how an order could be made for an amount in excess of the husband’s stated income and where there was no cross-examination challenging the husband’s stated expenses. The third category in ground 2 related to his Honour’s findings that the payment of spouse maintenance would enable the wife to undertake a course of education when the wife gave evidence that she did not intend to do so. Finally in ground 8, it is complained that the decision to make a child support departure order for R was made despite the evidence that he was then living with his father.
Reasons for judgment of the trial judge
After some brief background about the parties and noting the evidence before him, his Honour made findings as to the credit of the parties. His Honour concluded that:
25.The evidence of both the husband and the wife raised doubts as to the reliability of each of them.
26.The wife conceded some inaccuracies in her evidence and made admissions against her interest during cross-examination, notably with respect to her claimed expenses for the children.
27. The husband’s oral evidence, while truthful, gave the impression that what he told the Court was not the whole truth. He tended to take refuge in a very narrow and precise view of the questions asked of him and did not appear committed to a full and frank disclosure.
(Emphasis added)
Later in the reasons at [67] his Honour said:
In the Court’s view, the husband’s lack of knowledge, alleged ignorance and his insouciance with respect to the sources of his income lacks credibility.
His Honour considered the applicable law relating to spousal maintenance referring to s 72(1) of the Act, concluding at [31] that ‘[t]he liability of one party to maintain the other only arises when the person seeking maintenance is unable to support himself or herself “adequately” and the person from whom they seek maintenance is “reasonably able” to maintain them’.
His Honour then rejected the husband’s argument that the wife “chose to place herself in a position of impecuniosity” by using the funds held in the NAB Deposit to purchase the Suburb F property, finding her conduct to be reasonable.
When giving evidence the wife said that she did not intend to re-train or look for work in the near future. It was also part of her case that she was unable to work by reason of the medical and educational needs of the children.
The trial judge found at [42] that the needs of the children did not “form a reason as to why the wife cannot support herself adequately”, but the wife’s absence from the paid workforce for 15 years did place “her in a position where she has little or no prospect of earning an income through paid employment based on her lack of recent training and experience” [at 45]. A conclusion was reached at [46] that the wife was unable to adequately support herself as her earning capacity was impeded, but that this would not continue indefinitely.
At [48] to [53] his Honour contemplated the husband’s ability to contribute to the wife’s maintenance. The trial judge set out several factors at [49] which the wife’s counsel submitted as being indicative of the husband’s capacity to support the wife:
a)the husband “by and large” appears to have had access to approximately half a million dollars from 30 June 2012 to 30 June 2013, based on the ING bank statements that became an exhibit
b)the explanations given by the husband as to the debts listed in his Financial Statement are questionable
c)the husband’s brother, who could have shed light on and corroborated the husband’s assertions, has not given any evidence
d)the husband has been unable to say how much the entities in which he is involved pay him, notwithstanding that he is involved in some 70 entities (either as a director, secretary or in some other capacity) from which he says he receives “benefits” and
e)the husband was able to gift to Ms [U] $30,000 yet tells the Court he is unable to pay for the utilities of the wife and children.
His Honour concluded at [53]:
On the evidence before it, the Court finds that the husband is reasonably able to maintain the wife based on both his income and his financial resources. In reaching this conclusion, the Court has had regard to relevant matters in section 75(2). Its consideration of those matters is set out in greater detail below.
(Emphasis added)
His Honour then considered the factors contained in s 75(2) of the Act. When considering the income, property and financial resources of each of the parties, the wife was found to have a weekly income of $326.98 being child support payments from the husband (disregarding government benefits) and property with a value of $998,571.16.
The husband said in a financial statement filed on 28 August 2013 that he received an average weekly income of $3,365. The husband valued his property interests at $499,484, comprising primarily of an investment loan to the wife in respect of legal fees unrelated to these proceedings amounting to $415,403. The husband further asserted liabilities of $4,808,450 including at Item 49, an amount of $3,410,947 being income tax assessed and unpaid in previous financial years.
The husband, his Honour noted, travels extensively in fulfilment of his role as company director, the expenses of which are reimbursed by the various entities the husband claims are in his brother’s control. The husband also receives some non-cash benefits from the companies in which he acts as director including petrol and mobile phone expenses.
At [75 – 80], his Honour considered whether either party has the care and control of a child of the marriage who has not yet attained 18 years. Although it was generally agreed that the two youngest children, S and T, lived predominantly with the wife, the residency of the eldest child R was an issue at trial. Although it was agreed that R had lived with the husband since around 12 August 2013 to the date of trial, the wife submitted that in the future R would live with her, whilst the husband maintained that the arrangement was permanent.
Having earlier in the reasons [44] found that “[t]here is insufficient evidence before the Court to find that the present arrangement for [R] will necessarily be permanent” his Honour found at [78] “[o]n the current state of the evidence the Court is unable to find that [R] will or will not continue to live with the husband permanently. It is inclined, however, to accept the evidence of the wife over that provided by the husband”. This finding was supported by the husband’s frequent travel, which, his Honour found, was ‘relatively frequent, not entirely within his control and generally of a duration that would impact on his ability to care for a child who has not attained the age of 18 years” (at [80]).
After considering several other relevant factors, his Honour then turned to consider s 75(2)(h) of the Act, namely, the extent to which the payment of maintenance would increase the earning capacity of a party by enabling the wife to undertake a course of education or training. The trial judge came to the following conclusions:
91.The wife refers to her lack of skills and training as a hindrance to her gaining appropriate, gainful employment. The Court is of the view that, if she were in receipt of spouse maintenance, she would be able to undertake a course of education or training to increase her potential to find employment.
92.It is noted, however, that the wife in cross-examination conceded that she had not applied for any jobs and does not intend to seek any form of employment. Necessity and a desire for a higher standard of living may well promote effort on the wife’s part in the future.
At [100] the trial judge no doubt correctly found that “the roles which were assumed by the parties during the marriage affected to a large extent the wife’s earning capacity”.
It is clear that his Honour appreciated that under the proposed orders, the husband would be liable to pay to the wife $1,200 per week in periodic child support, and an additional $1,635 per week to cover the cost of the children’s school fees and extra-curricular activities (at [109]).
At [114], the trial judge noted that the wife had claimed personal expenses of $1,026 per week and whilst there may have been some inaccuracies in relation to the children’s expenses, “no concession was made by her for personal expenses” [at 115]. His Honour accepted the evidence of the wife as being accurate, and “determined that the sum of $1,000 per week represents an amount of spousal maintenance for the wife that is proper in the circumstances of this case” [at 116].
His Honour then moved to consider the wife’s application for a child support departure order.
The wife’s financial statement had asserted expenses of $2,156 per week for the three children. During cross-examination the wife conceded some claimed expenses being met by the husband and that others were excessive (see [119]). Counsel for the husband maintained that a more realistic figure was $1,100 for the three children, but that this figure should be reduced to account for R living with the father (see [121]).
As already mentioned, in relation to the child R, the trial judge found at [44, 78, and 123] that it was likely that the wife would have the care and control of R in the future. The trial judge did not explain how he came to the conclusion that the child would return to the mother’s residence other than by reference to the husband’s travel commitments.
His Honour found he had jurisdiction to make the proposed order under s 116(1)(b) of the Child Support (Assessment) Act 1989 (Cth) (“the Assessment Act”), noting that it is in the interests of the parties “for the issues that have been raised to be determined, given that the Court seeks to procure the resolution of this dispute, particularly in relation to children, at the earliest opportunity”.
We would note that one of the apparent difficulties in this matter is that it was an interim hearing with all the restrictions of such a limited hearing. In our opinion such a hearing was not an ideal means to determine the difficult question of the husband’s capacity to pay spouse maintenance and child support from income and financial resources. There was no suggestion of urgency in respect of either issue. The better course would have been to find trial dates within a reasonable time frame, although that may not have been possible.
The trial judge considered the matters contained in s 117 of the Assessment Act and those as expressed by the Full Court in Gyselman & Gyselman (1992) FLC 92-279, summarising the principles at [131]:
i)it must be found that “in the special circumstances of the case” one or more of the grounds for departure listed in section 117(2) exists
ii)the Court must then find that it would be “just and equitable” to make a departure order in accordance with the provisions of section 117(4)
iii)the Court must also find that it is “otherwise proper” to make a departure order in accordance with the provisions of section 117(5).
At [135] of his reasons, the trial judge set out the matters which he considered amounted to the special circumstances of the case:
a)the unusually high financial resources available to the husband, including the provision of clear benefits to him from trusts which he says are controlled by his brother but in respect of which control there is no corroborative evidence (and the Court notes here that it is of the view that such evidence would have been available to the husband)
b)the husband’s support of Ms [U] who has an income and whom he does not have presently a duty to maintain
c)the lack of income presently derived by the wife and the unlikelihood of her deriving any income in the near future
d)the husband’s transfer to Ms [U] by way of gift $30,000 which might otherwise have been available for the provision of child support to the wife and
e)the husband’s reduction of outstanding liabilities and the consequent improvement in his financial position at the expense of the children being supported at an appropriate level, having regard to the standard of living which for these children is reasonable.
His Honour then referred to s 117(2)(c)(ia) and (ib) of the Assessment Act at [138], which provides the following:
(c)that, in the special circumstances of the case, application in relation to the child of the provisions of this Act relating to administrative assessment of child support would result in an unjust and inequitable determination of the level of financial support to be provided by the liable parent for the child:
(i)…
(ia)because of the income, property and financial resources of either parent; or
(ib)because of the earning capacity of either parent; or
(ii)…
At [139] the trial judge found the husband to have “unusually high financial resources available to” him from the “various entities with which he is associated” such that the “application of provisions of the Assessment Act to the children of the marriage would result in an unjust and inequitable determination of the level of financial support provided by him”.
At [142], the trial judge found that, after accounting for the wife’s concessions during cross-examination, her actual expenses for the children were in the vicinity of $1,212. His Honour then considered hardship. His Honour found no hardship to the husband “based on the income which he says he earns from the [K Trust] together with the Court’s finding that, in addition to that income, he has significant financial resources available to him” [at 142]. His Honour concluded that the proposed child support departure order was just and equitable.
At [149] his Honour found that it is otherwise proper to make an order for child support departure, completing the ‘three step process’. The trial judge at [150] concluded that the child support departure order would amount to $1,200 per week, being $400 per child.
Grounds 1, 5 and 7 – Absence of reasons and adverse credit finding against the husband
Mr Gould on behalf of the wife submitted that, taking into account this was an interlocutory application and within those confines of time and other constraints, the trial judge correctly made the orders and provided sufficient reasons. Mr Gould described the circumstances in which the parties had lived prior to the separation including living in an expensive home and the family enjoying a high lifestyle. While this may be historically correct, the difficulty remains that there was no evidence before his Honour that the husband had the capacity to meet the sums asked by the wife other than from some source external to his stated income. We were taken to the cross-examination of the husband by counsel for the wife before the trial judge in an effort to persuade us that there were reasons for his Honour to conclude that the husband had not made full disclosure. However, no parts of this cross-examination or a description of it can be seen in the reasons.
It was correctly submitted by counsel for the husband that the adverse credit findings against the husband appears to have formed the basis of his Honour’s ultimate findings as to the husband’s capacity to pay spousal maintenance and child support from resources rather than income. It is also accepted that the reasons do not reveal how the trial judge came to a conclusion that the husband’s evidence was not truthful, by reference to his written or oral evidence. Counsel referred to the three occasions his Honour commented upon the husband’s credibility to which we have referred at the commencement of these reasons. In our view counsel is correct in describing the reasons as merely an “unarticulated impression”.
Grounds 3 and 4 – Absence of reasons – The capacity of the husband to pay
It is submitted that it is not apparent how his Honour decided that the husband should pay child support and spouse maintenance beyond his stated income and that such an order was not open to the judge on the evidence. It is contended by counsel that there is no identification in the reasons of the financial resources available to the husband to meet such expense.
As counsel submitted it is important to understand in this context that the wife did not contend that the husband was in control of the trusts or that the legal relationships were any different from those represented by the husband. For example, it was not put to the husband that the various corporate vehicles were other than as represented by him and in particular that the husband had them under his control.
Ground 2 - Maintenance for the wife to undertake a course of training
Counsel referred us to the evidence of the wife in relation to her history of employment including that she would not be able to return to work as a healthcare worker without extensive retraining. However, the wife also clearly said that she did not intend to retrain or to look for work.
It was submitted by Mr Gould that considering that the wife had been out of the workforce for many years it was reasonable to expect that she might return to some form of retraining.
It may well be that this was a piece of gratuitous advice from his Honour. However, counsel for the husband correctly submitted that it unfortunately formed in part, the reasons for his Honour making an order for spouse maintenance.
Ground 8 – A departure order for child support for R
In relation to R - it was submitted on behalf of the wife that the judge was correct in taking into account the history of the husband travelling between five and nine times a year overseas on business. Further we were urged to consider the reality of the situation in particular that the child had moved out of his mother’s house only a short time before the trial.
It was submitted on behalf of the husband, and is clearly correct, that if R was residing with the husband then most likely he would not be a liable parent for the purposes of paying child support. We have referred to the evidence in relation to R and his Honour’s findings. It is correct that there are some differences in the findings made by his Honour in the relevant paragraphs. On one hand his Honour suggested that the court was unable to find whether R will live with his father but then later decided that most likely he would be living with the mother. In our view, for a departure order to be made in relation to R it was necessary for his Honour to determine that the child would be living largely with the mother. If a finding on the evidence could not be made about the residence of R it was an error of his Honour in making an order for a departure from the child support payments in relation to that child.
Discussion
To the extent that this is an appeal from a discretionary judgment we are reminded of the guiding principles of appellate intervention as described by the High Court in House v The King (1937) 55 CLR 499 (at 504-505):
… It is not enough that the judges composing the appellate court consider that, if they had been in the position of the primary judge, they would have taken a different course. It must appear that some error has been made in exercising the discretion. If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so. It may not appear how the primary judge has reached the result embodied in his order, but, if upon the facts it is unreasonable or plainly unjust, the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law reposes in the course of first instance. In such a case, although the nature of the error may not be discoverable, the exercise of the discretion is reviewed on the ground that a substantial wrong has in fact occurred.
It is clear that for his Honour to make orders requiring the husband to pay to the wife a sum exceeding the husband’s disclosed income and where there was no real challenge to his expenses, the trial judge must have concluded there was some financial resource for the husband to draw upon to meet his financial obligations to the wife, his own maintenance, and the maintenance of the children when they are in his care.
On page 4 of the husband’s amended summary of argument, we were directed to the decision of Bennett and Bennett (1991) FLC 92-191. In that judgment this Court quoted at 78,266 a passage from the Victorian decision of Sun Alliance Insurance Ltd v Massoud (1989) VR 8:
[R]easons will… be inadequate if: --
(a) the appeal court is unable to ascertain the reasoning upon which the decision is based; or
(b) justice is not seen to have been done.
The two above stated criteria of inadequacy will frequently overlap. If the primary Judge does not sufficiently disclose his or her reasoning, the appeal court is denied the opportunity to detect error and the losing party is denied knowledge of why his or her case was rejected.
It is not discernible to us from the trial judge’s reasons how his Honour came to the conclusion that any undisclosed financial resources of the husband were of such a degree to enable payment well beyond the income of the husband as in his evidence. His Honour’s finding appears unsupported by the evidence and was therefore not open to him.
The husband was not cross-examined as to the control of the trusts from which the husband has enjoyed frequent distributions. This ultimately may have impeded the trial judge in his determination and is a problem indicative of matters dealt with at an interim level generally. However, in the absence of reasons it is not possible to discern how his Honour reached the conclusion that the husband had the capacity to pay the sums ordered by way of spousal maintenance and child support.
Further, the finding of the husband as a liable parent for the support of the child R, where the ongoing residency of the child R was uncertain, was not a proper order to be made in terms of the child support legislation.
For these reasons, the appeal must succeed. In these circumstances, there appears to be no alternative other than to remit the matter for rehearing. No doubt, if possible the best course would be to have these issues heard at the same time as the trial of the substantive proceedings and at the earliest possible opportunity.
We will make orders setting aside paragraphs 1,2, and 3 of the trial judge’s orders. We have not disturbed order 4, as neither party raised any issue about the husband’s undertaking to meet the extra-curricular expenses of the children. The husband continues to be obliged to pay the child support, as assessed for all three children.
Costs
Counsel for the husband submitted that, if we uphold the appeal on an error of law, the wife should pay the husband’s costs, or alternatively, that a costs certificate under the Federal Proceedings (Costs) Act 1981 (Cth) would be appropriate.
In light of our decision to allow the appeal largely on the basis of absence of reasons each party should have a costs certificate for the appeal and the re-hearing.
MURPHY J
I have had the advantage of reading in draft form, the reasons of May and Benjamin JJ. Those reasons set out comprehensively the background to this application for leave to appeal and the reasons of the court below.
What Issues Are Raised in This Application?
Leave to Appeal
The orders under challenge are “interlocutory decrees” within the meaning of the Act. Leave to appeal is required. The parties are agreed that the application for leave and the appeal should be heard together. Central to a determination of the granting of leave is whether the appeal sought to be argued substantiates an error of principle or works a substantial injustice to the appellant.
For reasons about to be discussed, I am of the view that his Honour erred such that the orders may “work a substantial injustice” to the husband. Leave should be granted.
The Proposed Grounds of Appeal
If leave is granted, the grounds of appeal challenge both the orders for interim spousal maintenance and the order for interim child support departure. By their terms, grounds 2 and 3 are directed specifically to the former; ground 8 is directed specifically to the latter. Ground 4 challenges a finding (reasons at [53]) as to the husband’s capacity to pay spousal maintenance which is central to his Honour’s reasons and central to the arguments on this appeal. Grounds 5 and 7 are not directed specifically to either order but assert error in credit findings adverse to the husband and can be seen to apply to both orders. Ground 6 was abandoned.
The grounds raise the following issues:
(a)Were findings about the husband’s credit open on the evidence before his Honour? (grounds 5 and 7). If so, are his Honour’s reasons adequate to elucidate those findings (ground 1);
(b)Was there a sufficient evidentiary basis for the specific finding made by his Honour that the ordered interim maintenance would permit of the wife undertaking a course of education or training (ground 2);
(c)Was there a sufficient evidentiary basis for the finding made by his Honour that the husband had the capacity to pay the interim spousal maintenance ordered. If so, were his Honour’s reasons adequate to elucidate the basis for the relevant findings (grounds 3 and 4);
(d)Did his Honour err in making a child support departure order in respect of R in light of the evidence, and the findings made, as to where he was residing (ground 8).
The appellant’s written and oral argument on this appeal mirrors the thrust of the arguments made below; primary attention was focussed on what might broadly be described as the husband’s capacity to pay. The wife contends that the income, property and financial resources sworn to by the husband are not a true representation of his capacity to pay; the husband contends the opposite.
That issue is relevant to each of the orders, although, of course, the principles applicable to each application (and the statutory parental duties applicable to each) are different.
The Application’s Context: Appeals from Interim Orders
This court said In the Marriage of Redman (1987) FLC 91-805, at 76,081 that:
…[t]his was an interim order. Whilst we agree with the view expressed in Ashton that in principle such an order is one under sec.74, to which the principles of sec. 72 … may be applicable … the very fact that the order is limited in time imports certain different considerations … Another consequence is that on an application for interim maintenance, the court conducts “not as final or exhaustive a hearing as would be the case if one were hearing the matters finally”: In the Marriage of Williamson (1978) FLC 90-505 at 77,650 per Fogarty J. The evidence need not be so extensive and the findings not so precise having regard to those factors and the general injunction sec. 97(3), the court should in such matters have a greater degree of flexibility than it possesses in applications for maintenance which are intended to last for an indefinite period and can only be varied under sec. 83.
(Bold emphasis added).
Citing that decision, this court said in In the Marriage of Wilson (1989) FLC 92-033 at 77,454, per Nygh J:
…It follows that the trial Judge has considerable discretion and the appellate tribunal would be much more reluctant to interfere than would be the case with an order for indefinite maintenance…
The principles enunciated in those (and other) authorities can be seen to be apposite to the instant case, noting that his Honour permitted what he described as “some testing of the parties’ evidence through cross-examination” (reasons at [4]).
Yet, recognition of the necessarily truncated nature of interim proceedings does not lead to a conclusion that impression or judicial instinct can take the place of direct evidence or inferences properly drawn from evidence, even if that evidence “need not be so extensive”, nor the findings “so precise”, as what might apply in applications for final relief.
The Husband’s Credibility
His Honour found, at [27]:
The husband’s oral evidence, while truthful, gave the impression that what he told the Court was not the whole truth. He tended to take refuge in a very narrow and precise view of the questions asked of him and did not appear committed to a full and frank disclosure.
It is contended that there is inconsistency in those findings because his Honour found that the husband’s oral evidence was “truthful” but caveated that finding with an “impression” that the husband was not telling the “whole truth”.
I am not persuaded of any inconsistency. The finding is to the effect that such evidence as the husband was prepared to give was truthful but his evidence was not “the whole truth” by reason of what was omitted. The oath taken by a witness to tell “the truth, the whole truth and nothing but the truth” recognises the distinction between some truth and the whole truth. The distinction drawn by his Honour is in my view a valid one, provided there is a proper foundation for the finding.
The appellant challenges the foundation for the finding, asserting that, in the absence of “… examples or reason” for the “impression” or “appearance” referred to by his Honour, there is no basis for the credit findings. At [67] of the reasons, his Honour found that “the husband’s lack of knowledge, alleged ignorance and his insouciance with respect to the sources of his income lacks credibility”. Ground 5 asserts there were no reasons for that finding and ground 7 asserts that a finding of “insouciance” is irrelevant to a determination of the husband’s credit.
His Honour determined that “some testing of evidence” by cross-examination was appropriate. It is clear from that direction that his Honour considered – unusually for interim proceedings – that observation of the parties under questioning and their answers to those questions would assist him. The adoption of that course was, of itself, an indication that an assessment of credit was important to his Honour and that the impressions gained from the evidence of the parties would inform findings as to credit. His Honour was, in the circumstances of this case, plainly correct to regard the husband’s credibility – specifically in respect of his income, property and financial resources – as centrally important to the decision in respect of both applications.
The High Court has suggested that there is now an increased awareness of a judge’s limitations in assessing credibility by reference to a witness’s demeanour and has noted that “…in many cases today, judges at first instance expressly ‘disclaim the resolution of factual disputes by reference to witnesses demeanour’” (Devries v Australia National Railways Division (1993) 177 CLR 472 at 480, per Dawson and Deane JJ).
Yet, importantly, their Honours also said (at 479):
An appellate court which is entrusted with jurisdiction to entertain an appeal by way of rehearing from the decision of a trial judge on questions of fact must set aside a challenged finding of fact made by the trial judge which is shown to be wrong. When such a finding is wholly or partly based on the trial judge’s assessment of the trustworthiness of witnesses who have given oral testimony, allowance must be made for the advantage which the trial judge has enjoyed in seeing and hearing the witnesses give their evidence. The “value and importance” of that advantage “will vary according to the class of case […]” If the challenged finding is affected by identified error of principle or demonstrated mistake or misapprehension about relevant facts, the advantage may, depending on the circumstances, be of little significance or even irrelevant. If the finding is unaffected by such error or mistake, it will be necessary for the appellate court to assess the extent to which it was based on the trial judge’s conclusions about the credibility of witnesses and the extent to which those conclusions were themselves based on observation of the witnesses as they gave their evidence as distinct from a consideration of the content of the evidence … However, this does not deny that in many cases, a trial judge’s observation of the demeanour of witnesses as they give their evidence legitimately plays a significant and even decisive part in assessing credibility and in making factual findings…
(Emphasis added. Citations omitted).
More broadly, it is important to bear in mind what was said by Dawson, Gaudron and McHugh JJ in Louth v Diprose (1992) 175 CLR 621 at 641 about first instance findings as to credit - principles which, again, have real resonance by reason of the nature of the proceedings before his Honour:
Because of the process involved in the conclusions reached by the trial judge, they are not, as was suggested by Matheson J. in the Full Court, “inferences (drawn) from ... undisputed facts”. Nor, as his Honour thought, are they inferences which an appeal court is in “as good a position (to draw) as the judge at the trial”. They are findings which were substantially dependent on the trial judge’s assessment of character and credit and which were reached having regard to the demeanour of the parties in the witness box. As such and as the authorities repeatedly acknowledge, they are findings which, unless some error is to be discerned, an appeal court must respect...
(References to authorities and citations omitted).
It may validly be argued that the reasons in the instant case do not record either fulsomely or with great precision the foundations for his Honour’s ultimate impression. However, I am not persuaded that they are inadequate in illuminating his Honour’s conclusions; the principles enunciated in Redman and Wilson earlier outlined pertain. The finding of “insouciance” informs the finding that the husband was not telling “the whole truth” and the circumstances of this case, within the context of his Honour’s reasons read as a whole, render that specific finding relevant to his Honour’s ultimate credit findings. I reject the challenge to its relevance.
A lack of precision in the reasoning ought not, however, survive appellate challenge if, in fact, there is no proper foundation for the ultimate conclusions. Here, reference to the transcript of the husband’s cross-examination provides, in my view, more than ample justification for his Honours findings as to the husband’s credit generally and his Honour’s specific findings that the husband was not telling the whole truth and that he was “insouciant” (in the sense that he was less than concerned about providing fulsome answers to questions he was asked). Specific examples include the husband’s evidence as to: an asserted debt owing by him (transcript of proceedings, 30 August 2013, pp 37-39); rent from the property in which the parties resided (transcript of proceedings, 30 August 2013, pp 36-37); his account of monies gifted by him to his partner from the sale of a luxury motor vehicle (transcript of proceedings, 30 August 2013, pp 40-41); and evidence about the nature, extent and regularity of his income (transcript of proceedings, 30 August 2013, pp 35, 41-43).
Nothing to which this court was taken suggests that his Honour’s findings in respect of the credibility of the husband and, in particular, the specific finding as to the husband’s “insouciance” should attract the intervention of this Court. As a corollary, his Honour was, in my view, entitled to use the challenged credibility findings in respect to the husband so as to inform an ultimate decision about the husband’s capacity to pay.
In my view, grounds 1, 5 and 7 fail.
The Husband’s Capacity to Pay
It was uncontroversial before his Honour, and is uncontroversial on this appeal, that the husband had a capacity to meet child related expenses of $1635 per week and a child support assessment of $327 per week. The husband gave a formal undertaking before his Honour to continue paying the former; he has not challenged the latter.
The husband swore in his financial statement, that his income was $3365 per week and that his expenses (which included the payments just referred to) were $4437 per week. He deposed to having assets valued at $499,484; superannuation interests of $238,121; and, liabilities of $4,808,450.
The central finding made by his Honour in respect of the husband’s capacity to pay spouse maintenance is found at [53] of the reasons:
On the evidence before it, the Court finds that the husband is reasonably able to maintain the wife based on both his income and his financial resources. In reaching this conclusion, the Court has had regard to relevant matters in section 75(2). Its consideration of those matters is set out in greater detail below.
That finding appears under the heading “[t]he husband’s ability to maintain the wife”. No findings in respect of that issue precede the finding at [53]; paragraphs [48] to [52] of the reasons merely record the arguments, submissions or contentions of each of the parties.
As foreshadowed at [53], the succeeding paragraphs of the reasons embark upon a consideration of s 75(2) of the Act. Relevant to the issue of the husband’s capacity to pay, his Honour said:
71.The husband is employed as a company director at present and there appear to be no physical or mental barriers to his capacity for appropriate, gainful employment. It has been difficult for the Court to gain a clear picture of the nature of the husband’s role within each of the entities he is associated with, but it appears he has ample experience in managing and directing companies.
72.During cross-examination the husband said that he “look[s] after a very large number of entities” yet he found it difficult to answer financial questions in relation to some of those entities without being able to see documentation.
73.The husband travels extensively in his capacity as a company director, including to the USA almost every second month. He incurs expenses on his credit card for work travel but is reimbursed for those costs, which are paid for by trusts or entities which he says are in his brother’s control. As the husband explained, “[Mr V] makes the decision as to which entity will pay for it”.
74.The husband also receives non-cash benefits in the form of a mobile phone, e-tag and petrol card from at least one entity, that being the [Company M] of which he is presently a director.
Each of those paragraphs appear under a heading referencing s 75(2)(b) of the Act, which requires consideration of, relevantly, “[t]he income, property and financial resources of each of the parties”. Other paragraphs of the reasons under that same heading address matters that can be seen as relevant to the issue of the husband’s capacity to pay. For example:
·reference to the husband’s sworn income “derive[ing] wholly from [a trust] and includes trust distributions” (reasons at [65]);
·the husband’s evidence that “…he did not receive regular monthly payments of $10,000 from [a company]” and that “according to the husband, his brother distributes funds to him and it is irrelevant to the husband where those funds come from…” (reasons at [66]);
·the ownership of real property in California which the husband swears is owned in partnership and in which the value of his interest is nil (reasons at [70]);
·the husband’s “assert[ion] that he has liabilities of $4,408,450…” (reasons at [70]); and
·the matters referred to in [71]-[74] of the reasons quoted above.
Yet, while those matters are referred to by his Honour, no findings are made about them. Instead, his Honour records the “claims” or “assertions” by the respective parties. For example, issues were raised as to whether the husband’s claimed liabilities of over $4.8 million should be accepted. His Honour makes no finding about that issue, merely recording (at [70]) that “this is also a point of contention between the parties”. So, too, while the wife advanced arguments below founded upon the husband’s failure to properly disclose his financial details, no finding is made in respect of that issue – despite his Honour quoting, at [50], part of the wife’s argument to that effect and despite what is otherwise said at [71] and [72] of the reasons.
As I have earlier said, I consider that the findings made by his Honour adverse to the husband’s credit were open to his Honour and could inform an ultimate finding as to capacity to pay. However, I am unable to discern from his Honour’s reasons any findings, apart from the findings as to the husband’s credit already referred to, that might lead to the ultimate finding made at [53]. It might be possible in a particular case for credit findings alone to justify a conclusion such as that reached by his Honour at that paragraph. If that was to be the case, the path by which the specific credit findings lead to the ultimate result should be readily apparent in the reasons. In my view, in this case the postulated result neither flows from the credit findings made by his Honour nor can I see how those credit findings could, of themselves, sound in that ultimate finding.
That can be seen to be all the more so when account is taken of evidence which was before his Honour but to which no reference was made in his Honour’s reasons. For example, the income received by the husband (consisting of – or “including” as his Honour found – trust distributions) is received within a corporate/trust structure. A trust owns real property the subject of contention. The husband’s sworn evidence is that the trusts are controlled by his brother and that the husband has neither any control of those entities nor any meaningful “say” in them. It was not suggested to the husband that this evidence was false. Nor was it suggested to the husband in cross-examination that the trusts were shams, or that the structure more broadly was a sham, or the husband’s brother was his “alter ego”.
Are Findings with Respect to Child Support Departure Relevant?
His Honour’s reasons can be seen to be divided into two dispositive parts, the first headed “Spouse Maintenance” and the second “Child Support Departure”. Of course, as his Honour recognised, different principles apply to each (and different statutory duties upon the parties apply to each). There is, though, the potential for issues to overlap, including, relevant to this case, the husband’s capacity to pay. His Honour identified the relevant grounds of departure as s 117(2)(c)(ia) and (ib) of the Assessment Act. Only the former, dealing with the “income, property and financial resources of either parent” is relevant to the arguments on this appeal.
As his Honour correctly identified, a pre-condition for the establishment of the relevant ground is that departure is merited because of the “special circumstances of the case”. His Honour nominated a number of distinguishing features which led to the conclusion (at [136]) that “the circumstances of this case are special”. Those features were outlined at [135] of the reasons:
a)the unusually high financial resources available to the husband, including the provision of clear benefits to him from trusts which he says are controlled by his brother but in respect of which control there is no corroborative evidence (and the Court notes here that it is of the view that such evidence would have been available to the husband);
b)the husband’s support of Ms [U] who has an income and whom he does not have presently a duty to maintain;
c)the lack of income presently derived by the wife and the unlikelihood of her deriving any income in the near future;
d)the husband’s transfer to Ms [U] by way of gift $30,000 which might otherwise have been available for the provision of child support to the wife; and,
e)the husband’s reduction of outstanding liabilities and the consequent improvement in his financial position at the expense of the children being supported at an appropriate level, having regard to the standard of living which for these children is reasonable.
Although not an argument advanced before us by counsel for the wife, it might be said that, despite the division of the dispositive parts of the reasons into two parts, his Honour intended his reasons to be read as a whole and for findings with equal applicability to the different applications to be read accordingly. Support for that argument might be seen to come from his Honour expressly eschewing the need to repeat, in the context of the child support departure application, findings said to have been made earlier in the reasons in respect of the spousal maintenance application (see, reasons at [142] and the incorporation of s 75(2) findings made in respect of maintenance at [142(d)] and [142(e)]).
However, even if such an argument is accepted, the relevant findings are, in my view susceptible to the same challenge as those pertaining to the findings as to the husband’s capacity to pay spouse maintenance.
For example, I am unable to discern the findings by which his Honour concludes that the husband has “available to him” the “unusually high financial resources” referred to by his Honour, nor can I discern findings which might sound in that expression being quantified or more closely defined. So, too, I am unable to discern in the reasons any findings leading to a conclusion that the husband’s income, property or financial resources are other than that to which he has sworn.
With the greatest respect to his Honour, I am left with a strong suspicion that his Honour has accepted assertions made by the wife but about which he makes no findings.
Further in that respect, it is not clear to me whether the finding at [135(a)] quoted above is intended to suggest that corroborative evidence was required of the husband (when it was not) or whether (by reference in particular to the contents of the parenthesis) his Honour was suggesting that he had drawn a “Jones v Dunkel inference” from the failure of the husband to adduce evidence from his brother (noting that the wife contended below for such an inference).
If the latter, there are no findings by his Honour as to whether the failure to call the brother was unexplained. Further, the proper inference to be drawn, if it was in fact available, was not that the husband was in control of entities contrary to his sworn evidence but that the brother’s evidence would not have assisted him. It cannot be presumed that the uncalled evidence would have been damaging (see, for example, Murdock and Madden [2011] FamCAFC 219 at [68]-[69]). Importantly, if any such inference was to be drawn, it ought be averted to specifically, as ought its weight when compared to the sworn evidence of the husband earlier referred to and the absence of cross-examination suggesting to the contrary.
Conclusion
I repeat that I am conscious that, consistent with authority, a lack of precision and detail in a court’s reasons might be forgiven, or perhaps even expected, in proceedings of this type. Notwithstanding that latitude, I am not, with respect, persuaded that any proper evidentiary foundation exists for the conclusions just referred to or that his Honour’s reasons are adequate to explain how those conclusions are reached by reference to the evidence before him and findings made in respect of any such evidence.
In my view grounds 3 and 4 are made out.
I consider that there is the potential for “substantial injustice” to have occurred as a result. I would grant leave to appeal and allow the appeal on that basis.
The Course of Education or Training
Ground 2 alleges error in respect of the specific finding made by his Honour at [91] of the reasons which is as follows:
The wife refers to her lack of skills and training as a hindrance to her gaining appropriate, gainful employment. The Court is of the view that, if she were in receipt of spouse maintenance, she would be able to undertake a course of education or training to increase her potential to find employment.
That paragraph appears under a subheading in the reasons that refers directly to a subparagraph of s 75(2), the provisions of which his Honour was obliged to take into account to the extent considered relevant. It is but one of a number of factors required to be taken into account and but one of a number of factors which his Honour did in fact take into account. The finding at [91] could not fairly be said as central to his Honour’s decision.
Furthermore, that finding needs to be seen in context. At [64] of the reasons, his Honour records that the wife has “…been out of the paid workforce for around 15 years and would need to undergo retraining and advance her skill set before being able to return to work of the nature that she used to perform.” His Honour there went on to say that there appears to be “no physical or mental barriers to the wife taking immediate steps to start that retraining process to the extent that her commitments to the children allow her”. In addition, his Honour made explicit his awareness that the wife “does not intend to seek any form of employment” although his Honour noted that “necessity and a desire for a higher standard of living may well promote effort on the wife’s part in the future” (at [92], emphasis added).
The finding the subject of the challenge in ground 2 does no more in my view than record, to the extent that his Honour considers it relevant, his consideration of that specific subparagraph of s 75(2).
I am not persuaded of any error as asserted in ground 2.
Child Support Departure
The sole ground challenging his Honour’s order relating to the wife’s child support departure application is ground 8. As has been seen, the ground refers specifically to the issue of the relevant child’s residence.
As has also been seen, his Honour makes a number of specific findings at [135] which provide the foundation for his Honour concluding that there are “special circumstances” warranting a departure from the administrative assessment. The findings at that paragraph address matters which are, via grounds 3 and 4, the subject of specific challenge to the spousal maintenance order in this appeal. Yet, no ground of appeal challenges the finding of special circumstances in respect of the child support departure order made by his Honour.
That circumstance is rendered all the more odd when reference is had to the transcript of the proceedings below. Submissions in respect of child support departure focussed on matters central to the husband’s capacity to pay and the wife’s asserted needs (transcript of proceedings, 30 August 2013, pp 92-96) and the asserted need to define the period of any interim order for child support (transcript of proceedings, 30 August 2013, p 96).
The ground, as pleaded, appears at first blush, to assert a factual error in the finding made by his Honour as to the child’s living arrangements. However, the written outline of argument filed on behalf of the husband asserts, it seems, errors of law:
16.In determining the wife’s application for child support, his Honour was required to determine as a matter of fact whether or not the child […] was a member of the wife’s household and thus whether she was an eligible carer.
…
19.At judgment [44], his Honour determined as follows:
There is insufficient evidence before the court to find that the present arrangement for [the child] will necessarily be permanent.
20.There, his Honour was referring to [the child] currently living [sic] his father’s household. By clear implication the evidence could not lead to the alternative conclusion either. His Honour then sets out some matters and at the end of [44] says:
This issue is discussed again later in these reasons.
21.At judgment [78], his Honour, this time states:
On the current state of the evidence the court is unable to find that [R] will or will not continue to live with the husband permanently.
22.This is different to his Honour’s finding at [44]. In circumstances whereby his Honour determined that the evidence was as stated as [78] there is thus insufficient evidence to determine that [R] was a member of the wife’s household and in these circumstances the husband was not a “liable parent”.
(Italics in original).
The ultimate contention appears to be that his Honour erred in law in finding that the wife was an “eligible carer” and that the husband was a “liable parent” when, the argument proceeds, it ought to have been concluded that each was not. Each error was informed, the contention proceeds, by his Honour failing to make findings on the evidence as to a fact central to each such finding, namely with which parent was the child residing.
Reference to the transcript reveals the following as the sole mention of the issue of the child’s residential arrangements in the submissions advanced below by then counsel for the husband:
Next, there’s the issue about whether … [the child] is a member of her household and there is a real question about that issue and at this stage all of the evidence is even contending as to whether he will return [from his father’s household] or not, but he is not…
(Transcript of proceedings, 30 August 2013, pp 92-96).
The argument on behalf of the husband encapsulated in the written outline of argument earlier quoted, and in the brief oral argument addressed to this issue before us, raises matters not raised in argument before the trial judge.
The failure by the husband to raise before his Honour the issue now raised in ground 8 presents difficulties to the appellant in respect of this ground (see, for example, University of Wollongong v Metwally (1984) 158 CLR 447). The difficulties might be overcome if, as appears to be contended in the written outline, the challenge before this Court is directed to a point of law and error is established (see, for example, Water Board v Moustakas (1988) 180 CLR 491).
Error of Law?
The application before his Honour was not, as paragraph 16 of the husband’s written outline asserts, “an application for child support”; it was an application for departure from a child support assessment. The difference is not a matter of semantics or sophistry. A child support departure application is a particular form of statutory remedy directed towards a particular purpose, namely the amount payable by way of child support if, upon satisfaction of strict statutory criteria, it is established that it ought be in an amount different to the child support assessment made pursuant to the Assessment Act.
The assessment is the axis around which departure – and, indeed, the whole child support regime – revolves. For example, the predominance of the assessment underpins the necessity for establishing not only that a s 117 ground is made out but that “special circumstances” exist and that justice and equity requires an amount other than the assessment ordered. The predominant role of the assessment is also underscored by provisions of the Assessment Act which direct changes to the assessment to be undertaken or applied for administratively in the first instance and that, in turn, has been underscored by decisions of this Court.
In In the Marriage of Nguyen (1990) FLC 92-171, the facts were not dissimilar to those here. A child support assessment had been obtained by a husband while the children were residing with him. Subsequent to that assessment, orders of the court provided for the children to live with the wife. The wife sought an order for child support departure based on those circumstances. Kay J held, at 78,167:
It seems to me that the proper remedy that should have been sought by the wife, if a curial remedy was indeed required, was a declaration under sec. 107 of the Child Support (Assessment) Act that the applicant was not, under sec. 25 of that Act, a person entitled to make application for a child on the basis that he was not an eligible custodian [since 1995, “eligible carer”] being the person who was the sole or principal provider of ongoing daily care for the child.
(Bold emphasis added. See also In the Marriage of Mansfield (1991) FLC 92-206).
It is common ground that there was before his Honour a relevant assessment. The issuing of the Child Support Assessment renders axiomatic that the wife had satisfied the child support Registrar of the Assessment Act’s requirements and that, by the issue of the assessment, she was an “eligible carer” (ss 5, 7B, 25, and 26 of the Assessment Act). Further, and contrary to that which is contended at [16] of the written outline of argument on behalf of the husband earlier quoted, it is the administrative assessment of child support that renders the husband as the “liable parent” (see, s 5 of the Assessment Act).
We have been taken to nothing by either party to suggest that there had been any application made by the husband to the child support Registrar, as provided for in the Assessment Act, to amend the child support assessment by reason of an asserted change in the child’s residential arrangements or any change in the division of care of him by his parents (see, ss 5, 7B, 26, 74 and 75 of the Assessment Act.) The court was not made aware of any application by the husband for a child support departure order (whether asserting a ground based on an alleged change in the child’s living arrangements or otherwise).
If the husband asserted, by reason of the child’s residential arrangements, or any change in those residential arrangements, that there should be an impact upon the child support assessment made in respect of him, it was for the husband to seek to alter the assessment by application to the child support Registrar. Nothing to which this Court was taken suggests that the husband has taken any step to do so. Should the husband have been dissatisfied with any decision made by the Registrar, it is open to then take such curial steps as he might be advised. Further, it was not suggested before us that the husband had sought before his Honour a declaration of the type referred to by Kay J in Nguyen, above.
By reason of the matters just discussed, it is in my view incorrect to assert – as the husband implicitly does here – that the issues of whether the wife was an “eligible carer” or the husband a “liable parent” within the meaning of the Assessment Act were issues joined between the parties in the proceedings before his Honour.
For the same reasons, it is in my view incorrect to assert, as does paragraph 16 of the written outline of argument quoted above, that his Honour was required to determine whether or not the child was “a member of the wife’s household …”
R’s living circumstances may have been relevant to other issues joined before his Honour. For example, that issue may have been relevant to the issue of whether it was “just and equitable” or “otherwise proper” to make the departure order sought by the wife (respectively ss 117(4) and (5) Assessment Act). However, nothing to which this Court was taken, nor does reference to the transcript reveal, that any such case was run before his Honour. No ground of appeal makes any such assertion.
In my view, ground 8, as pleaded, must fail.
Is Error Otherwise Apparent?
It is the duty of this court to correct error if the “… appellant can demonstrate that, having regard to all of the evidence now before the appellate court, the order that is the subject of the appeal is the result of some legal, factual or discretionary error…” (Allesch v Maunz (2000) 203 CLR 172 at 180. See also, CDJ v VAJ (1998) 197 CLR 172 at 200). An earlier High Court said in Warren v Coombes (1979) 142 CLR 531 at 553, per Gibbs ACJ, Jacobs and Murphy JJ:
…However, if the law confers a right of appeal, the appeal should be a reality, not an illusion; if the judges of an appellate court hold the decision of the trial judge to be wrong, they should correct it.
Although not the subject of any ground of appeal challenging his Honour’s order for child support departure, there can be little doubt that his Honour’s findings as to the husband’s capacity to pay and, more broadly, his “income, property and financial resources” was an issue relevant both to that order as well as to the order for spousal maintenance.
The findings made by his Honour at [135] and [136] earlier quoted in respect of the child support departure application are, in my view, attended by the same errors as those relating to the husband’s capacity to pay spousal maintenance which are discussed earlier in these reasons. Each of the considerations referred to above pertaining to grounds 3 and 4 and his Honour’s orders relating to spousal maintenance have direct application to his Honour’s orders in respect of child support departure.
Notwithstanding that those errors are not the subject of a specific ground or grounds of appeal, I consider, with respect, that those same matters determine that his Honour’s order is attended by error productive of injustice to the husband and it ought be discharged.
I would grant leave to appeal on that basis, allow the appeal against the child support departure order and order that it be discharged.
Conclusion
In my view, grounds 1, 2, 5, 7 and 8 are not made out.
Grounds 3 and 4 of the appeal are made out. In addition, error has been identified in the child support departure orders made by his Honour.
Each of the identified errors have the potential for significant injustice to the applicant husband. I would grant leave to appeal and allow the appeal on those bases.
It is not contended by either party, in the event that leave is granted and the appeal allowed, that this Court can make “such decree or decision as, in [our] opinion…, ought to have been made in the first instance” (s 94(2), the Act). It is accepted that, in that event, the matter must be remitted for rehearing by a Judge other than Fowler J.
The result, then, is that paragraphs 1, 2 and 3 of the orders made by his Honour should be discharged and the matter be remitted for rehearing.
Costs
I agree with the orders in respect of costs proposed by May and Benjamin JJ and with their Honours’ reasons for so ordering.
I certify that the preceding one hundred and forty-five (145) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court delivered on 27 February 2014.
Associate:
Date: 27 February 2014
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