CHIODO & SHAW

[2011] FamCA 639

FAMILY COURT OF AUSTRALIA

CHIODO & SHAW [2011] FamCA 639

FAMILY LAW - CHILD AND SPOUSAL MAINTENANCE – Application to discharge child maintenance and spousal maintenance orders made in 1990 – Whether there is “just cause” to discharge the orders retrospectively – Whether, if “just cause” is established, the orders should be discharged – Consideration of sections 66W and 83 of the Family Law Act 1975 (Cth) and Wreford & Caley (2010) 43 Fam LR 1 – Where respondent and the children lived in parlous financial circumstance as a consequence of the applicants failure to comply with his obligations under the orders – Where the applicant has failed to give full and frank disclosure – Where applicant undertook a course of action to dispose of legal interests in assets to ensure the he neither had income nor assets against which the respondent could enforce – Where respondent’s expenditure on children reasonable – Just cause not established – Application refused.

FAMILY LAW - PROPERTY SETTLEMENT – Application to discharge property settlement orders made in 1990 – Whether applicant established a ground for relief pursuant to s 79A of the Family Law Act 1975 (Cth) –Ground for s 79A relief not established– Application refused.

FAMILY LAW - CHILD MAINTENANCE, SPOUSAL MAINTENANCE & PROPERTY SETTLEMENT – Application by respondent for enforcement of child maintenance, spousal maintenance and property settlement orders made in 1990 – Whether s 17 of the Limitation Act 1969 (NSW) applies – Barrak  and Ors & Barakak (2005) FLC 93-235 considered and applied – Where respondent’s action is an enforcement of obligation and not an action on a cause of action – Limitation Act 1969 (NSW) does not apply – Whether the Court can award a sum of more that 12 months arrears – “12 month rule” considered – Where “12 month rule” no longer the law – Where respondent did not delay in seeking to enforce the orders – Where respondent and the children lived in parlous financial circumstance as a consequence of the applicants failure to comply with his obligations under the orders – Where applicant has capacity to pay the full amount under the maintenance and property orders – Where interest is only payable on property orders – Application granted.

FAMILY LAW - COURTS & JUDGES – Recusal of Judicial Officer – Application of test in Ebner v Official Trustee (2000) 205 CLR 337 – Family association - Where judicial officer’s spouse appeared 6 years previously as the respondent’s agent in the making of orders by consent – Where circumstances do not give rise in a fair minded lay observer of apprehended bias.

FAMILY LAW - APPLICATION FOR ADJOURNMENT – Where applicant self-represented – Where applicant unlikely to have legal representation after adjournment if application granted – Where applicant had significant litigation experience in the Family Court and the Supreme Court of NSW – Where applicant had sufficient time to retain lawyers to meet arguments raised by the respondent – Application refused.

Evidence Act 1995 (Cth) ss 91, 140, 191
Family Law Act 1975 (Cth) ss 66B, 66C, 66J, 66K, 66M, 66W, 75(2), 79, 79A, 81, 83, 84(2), 105, 106, 106A, 117B
Judiciary Act 1903 (Cth), s 79

Limitation Act 1969 (NSW) s 17

Allesch v Maunz (2000) 203 CLR 172
Aon Risk Service Australia Ltd v Australian National University (2009) 258 ALR 14
Azar & Anor v Ritchie [2006] NSWIRComm 295
Barrak and Ors & Barakat (2005) FLC 93-234
British American Tobacco Australia Services Limited v Laurie (2011) 85 ALJR 348
Concrete Pty Limited v Parramatta Design and Developments Pty Limited (2006) 229 CLR 577
Dennehy (a Bankrupt) v Reasonable Endeavours Pty Ltd (formerly Asiaciti (Australia) Pty Ltd (2003) 130 FCR 494
Dixon v Cargill Meat Processor Pty Ltd [2009] NSWSC 101
Ebner v Official Trustee (2000) 205 CLR 337.
Johnson v Johnson (2000) 201 CLR 488
Laws v Australian Broadcasting Tribunal (1990) 170 CLR 70
Lutzke & Lutzke (1979) FLC 90-714
Mathieson & Hamilton [2006] FMCAfam 238
MIMA v Jia (2001) 178 ALR 421
Molier & Van Wik (1980) FLC 90-911
National Mutual v Grosvenor Hill (2001) 183 ALR 700
Ravasino & Ravasino (1983) FLC 91-312
Smits v Roach (2006) 227 CLR 423
Stephens & Stephens (2009) FLC 93-425
Strahan& Strahan (Disqualification) (2009) FLC 93-414
Vakil v Vakil (1997) FLC 92-743
Weissensteiner v The Queen (1993) 178 CLR 217
Willoughby City Council v Transport Infrastructure Development Corporation [2008] NSWLEC 231
Wreford & Caley (2010) 43 Fam LR 1

APPLICANT: Mr R Chiodo

RESPONDENT: Ms Shaw

FILE NUMBER: PAF 3138 of 1987

DATE DELIVERED: 1 August 2011

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Ryan J

HEARING DATE: 6 June 2011

REPRESENTATION

ADVOCATE FOR THE APPLICANT: Mr R Chiodo appeared in person until 11.52 am

COUNSEL FOR THE RESPONDENT: Mr Jackson

SOLICITOR FOR THE RESPONDENT: Helliars Solicitors

Orders

1. That by way of enforcement of the child maintenance order made on 15 August 1990 in relation to the children M born … August 1972, N born … August 1975, Z born … November 1978, Y born … October 1980 and D born … April 1983, Mr R Chiodo (“the applicant”) pay Ms Shaw (“the respondent”) within 30 days $66,897.13.

2. That by way enforcement of the spousal maintenance order made on 15 August 1990, the applicant pay the respondent within 30 days the amount of $102,771.43.

3. That by way enforcement of the property order made on 15 August 1990, the applicant pay the respondent within 30 days:

   i.the base amount of $40,000.00, and

   ii.interest in the amount of $47,810.47.

4. That in the event that the applicant fails to make the full payment of any monetary sum to be paid to the respondent arising from these orders:

   i.In the event that the applicant has yet to enforce Order 3 being an order of the Supreme Court of New South Wales made on […] July 2010, (being in the matter of [Chiodo and Chiodo] (matter number […] in the Equity Division)), that the applicant is ordered to do all things necessary to ensure the enforcement of such an order of the Supreme Court of New South Wales, within 60 days of the date of these orders.

   ii.In the event that the applicant fails to comply with an order referred to above in Order 4(i) of these orders to enforce the said order made by the Supreme Court of New South Wales pursuant to section 106A of the Family Law Act 1975 (Cth), a Registrar of the Family Court of Australia execute any deed or instrument in the name of the applicant, and to do all acts and things necessary to give validity and operation to the deed or instrument, in order facilitate the enforcement of the said order of the Supreme Court of New South Wales.

   iii.That the applicant thereafter transfer his right title and interest in one half of the property known as … G Street, Sydney Suburb 1 in the state of New South Wales to the respondent.

   iv.In the event that the applicant fails to comply with sub-paragraph 4(iii) above, that pursuant to section 106A of the Family Law Act 1975 (Cth), 90 days from the date of these orders, a Registrar of the Family Court of Australia execute any deed or instrument in the name of the applicant, and to do all acts and things necessary to give validity and operation to the deed or instrument, in order to transfer his half interest in the property known as … G Street, Sydney Suburb 1 in the state of New South Wales to the respondent.

   v.That in the event of a transfer to the respondent of the applicant’s half interest in the property known as … G Street, Sydney Suburb 1 in the state of New South Wales, within six months the respondent shall pay the applicant the difference between the amount to which she is entitled pursuant to these orders, plus interest and realisation costs and the sale price.

5. That pending compliance by the applicant with these orders, he shall not sell or further encumber the following real properties:

   5.1 … G Street, Sydney Suburb 1; and

   5.2 … W Street, Sydney Suburb 2

6. That pending determination of any application for costs made by the respondent the applicant is restrained from selling or encumbering his interests in … G Street, Sydney Suburb 1 and … W Street, Sydney Suburb 2.

7. That pending compliance by the applicant with these orders, he is restrained from departing or attempting to depart the Commonwealth of Australia.

8. The Australian Federal Police are requested to maintain the applicant’s name on the PACE alert system in force at all points of arrival and departure in the Commonwealth of Australia until further order of the Court.  For the purpose of this order the Court notes as the applicant may be known as … Chiodo, … Chiodo, … Chiodo and … Chiodo.

9. Subject to any application for costs all outstanding applications are dismissed.

10. That the respondent has leave to make an oral application for costs.

11. That the respondent file and serve written submissions in relation to costs within 28 days.

12. That the applicant file and serve written submissions in reply within 21 days.

13. That any submissions in response by the applicant to be filed and served within 14 days.

14. That each party note on the coversheet of his or her submissions the means of service upon the other party.

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

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: PAF 3138 of 1987

Mr R Chiodo

Applicant

And

Ms Shaw

Respondent

REASONS FOR JUDGMENT

1. These are proceedings to discharge or enforce child maintenance, spousal maintenance and property settlement orders made pursuant to the Family Law Act 1975 (Cth) (“the Act”) in 1990.

2. Mr R Chiodo (“the applicant”) commenced these proceedings with his application filed 3 August 2005.  In essence, he applied for the discharge of Orders 14 and 15 made on 15 August 1990 as at the date to which they were paid.  Order 14 required the applicant to pay Ms Shaw (“the respondent”) $50.00 per week child maintenance for each of the parties’ five children.  Order 15 required the applicant to pay the respondent $150.00 per week spousal maintenance.  From the date of the orders until the applicant departed for Italy in 1991 he partially complied with the child maintenance orders.  Since then, he has not paid child maintenance and did not ever comply with the spousal maintenance order.

3. The respondent filed her response on 26 September 2005.  Summarised, she sought dismissal of her former husband’s application and that the Court enforce the 1990 child maintenance, spousal maintenance and property settlement orders.  Order 4 of the 1990 orders required the applicant to pay her $40,000.00 by way of property settlement within one month.  While he complied with Order 1 which required him to transfer to the respondent his interest in the former matrimonial home at Sydney Suburb 3, he did not pay the money due pursuant to Order 4.  Subsequently the applicant applied for Order 4 to be discharged.

4. In addition, the respondent claims interest on arrears.  The respondent claims she is entitled to $174,828.51 plus $218,591.75 interest on the maintenance orders and $40,000.00 plus $7,150.74 interest on the property settlement orders.  Combined this is $440,571.00.  Unfortunately the respondent provided no workings for these figures and I have been unable to discern how the base figures (excluding interest) were arrived at. I have thus made my own calculations which appear in a table later in these reasons.  Also, although in her Case Outline the respondent claims $530,271.00, this calculation is incorrect.  A larger amount ($842,285.28) is said to be payable if the interest calculation is based upon compound rather than simple interest.  For reasons discussed later the respondent is not entitled to interest on the maintenance orders. 

The Hearing

1. In his Case Outline, the applicant raised issues about the Court’s power to make the orders sought by the respondent. The applicant argued that by virtue of s 17 of the Limitation Act 1969 (NSW) (“the Limitation Act”) as more than 12 years has lapsed since the 1990 orders were made, the respondent’s claim was statute barred. It was further argued that “with regard to arrears under maintenance orders, it is a long-standing rule of practice that the Court will not generally award a sum of more than 12 months arrears by way of enforcement unless justice requires that more than 12 months arrears be awarded”. In relation to the so called 12 month rule he provided copies of pages from an unidentified text current as at 1 January 2002.

2. Counsel for the respondent addressed the 12 month rule in his Case Outline. Reference was there made to s 106 of the Act and to Wreford & Caley (2010) 43 Fam LR 1, in particular, at par 91. Paraphrased, the point made was that post-2002 (the date of the text relied upon by the applicant) the law changed and the 12 month rule was “like the thylacine: extinct”. The applicant said he had not read the respondent’s Case Outline. I explained my preliminary view that in relation to this issue, the respondent’s summary of the applicable law appeared correct. Although the respondent did not address the applicant’s argument in relation to the Limitation Act I expressed a preliminary view that this argument was unlikely to assist the applicant.

3. During these early exchanges counsel for the respondent raised (before I could) a matter which required that I consider recusal.  Attached to the applicant’s affidavit filed 20 April 2011 is an engrossed copy of consent orders made in these proceedings on 31 August 2005.  Although the applicant could not have known it, the solicitor agent for the respondent is my husband.  Notwithstanding the years which had passed since his apparently limited involvement, I explained to the applicant he was entitled to ask that I not determine the proceedings.  In the exchanges which followed counsel for the respondent confirmed the limited nature of my husband’s involvement and informed the Court the respondent did not consider there was a proper basis upon which I could decline to complete the hearing.

4. Paraphrased, the applicant explained his dilemma about how he should respond by reference to his lack of knowledge, as a self-represented litigant, about the likely outcome of the substantive proceedings.  As I understood his point, it was that practitioners who regularly appeared would be better informed about how individual judges view particular applications.  Thus, he said he would address the recusal question after he had received judgment in the substantive matter.  It was explained the recusal issue would need to be addressed first.

5. The matter was stood down so that the applicant could consider his response.  When the hearing resumed he applied for an adjournment which was refused.  In relation to the adjournment he was unhappy about my indication that his Limitation Act and 12 month rule arguments might be of little comfort.  I explained that I was not satisfied if an adjournment was granted he would be represented when the hearing resumed and my preliminary view was I should hear the case.  Although the applicant said he was “uneasy” this appeared to relate to my observations about the Limitation Act and 12 months rule.  Nonetheless I considered whether I should recuse myself and decided I was obliged to hear the case. 

6. Before the hearing could continue, the applicant expressed unflattering views about courts, judges and the legal profession.  He was rude to his former wife and claimed the same fate awaited her as befell his recently deceased sister-in-law and made plain that he would not participate in the hearing.  When he was unable to be persuaded to remain, I informed him the hearing would continue even if he departed, which he did.  Natural justice requires that parties are given a reasonable opportunity to present their case.  Where a party is given yet turns down that opportunity without good reason there is no miscarriage of justice.  In other words the Court is not required to delay the proceedings merely because a party declines to appear (Allesch v Maunz (2000) 203 CLR 172). Although the applicant departed I took into account (in the manner discussed at the hearing) the affidavits and material relied upon by him in his Case Outline.

7. It had been my intention to further address these preliminary matters in my reasons for judgment.  This I will do now. 

8. The recusal question related to possible apprehension of bias the test for which is found in the joint judgment of Gleeson CJ, McHugh, Gummow and Hayne JJ in Ebner v Official Trustee (2000) 205 CLR 337. See also British American Tobacco Australia Services Limited v Laurie (2011) 85 ALJR 348. In short, the question is whether a fair-minded lay observer might reasonably apprehend that I may not bring an impartial mind to the resolution of the issues that arise in these proceedings. It involves a two step process. Firstly, identification of what it is said might lead a judge to decide a case other than on its legal and factual merits. Secondly, articulation of the logical connection between the matter and the feared deviation from the course of deciding the case on its merits. Given the nature of my relationship with the solicitor agent, resolution of this matter engaged consideration of the second step.

9. The recusal cases make plain that judges have a duty to exercise their judicial functions when their jurisdiction is regularly invoked and they are assigned to cases in accordance with the practice of his or her court. Judges are not at liberty to decline to hear cases without good cause. As was explained in Ebner judges do not choose their cases; and litigants do not choose their judges.  

10. In MIMA v Jia (2001) 178 ALR 421 Gleeson CJ and Gummow J at par 71 discussed the word ‘bias’. At par 71 their Honours said:

    Decision makers, including judicial decision makers, sometimes approach their task with a tendency of mind, or predisposition, sometimes one that has been publicly expressed, without being accused or suspected of bias.  The question is not whether a decision maker’s mind is blank; it is whether it is open to persuasion.  The fact that, in the case of judges, it may be easier to persuade one judge of a proposition than it is to persuade another does not mean that either of them is affected by bias.

11. The Full Court in Strahan& Strahan (Disqualification) (2009) FLC 93-414 adopted paragraphs 12 and 13 of Johnson v Johnson (2000) 201 CLR 488. This is where the plurality in Johnson observed that it must be remembered that “the person being observed is a ‘professional judge whose training, tradition and oath or affirmation require [the judge] to discard the irrelevant, the immaterial and the prejudicial.’”  This is to be undertaken in the context of ordinary judicial practice, which it was noted is a concept not fixed in time.  Gleeson CJ, Gaudron, McHugh, Gummow and Hayne JJ in Johnson referred to the level of knowledge imputed to the hypothetical fair minded lay observer.  This would include (as was made plain in Laws v Australian Broadcasting Tribunal (1990) 170 CLR 70 per Mason CJ and Brennan J) the imputation that the fair-minded lay observer would have knowledge of the actual circumstances of the case. In Concrete Pty Limited v Parramatta Design and Developments Pty Limited (2006) 229 CLR 577 Callinan J at par 177 said:

    It is axiomatic that the perception of a lay observer will not be as informed as the perception of a lawyer, particularly a litigation lawyer.  But the notional lay person should not be taken to be completely unaware of the way in which cases are brought to trial and tried.

12. An allied issue is the circumstance in which a judge should disclose interests and associations which may give rise to an apprehension of bias.  Kirby J in Ebner reinforced the importance of early disclosure of any potentially disqualifying interest or association.  In Smits v Roach (2006) 227 CLR 423 at par 102 his Honour explained that such an approach:

    … promotes transparency in the judicial process.  It relieves the parties of inquiring into, or otherwise investigating, judicial interests and associations.  It invites a timely and informed decision on the part of the judge, litigants and legal practitioners as to whether any disclosed interest should be waived.  It removes the cause of judicial resentment or irritation when the question of disqualification is raised belatedly, as it was in this case.  The practice of prior disclosure of any possible interests, statements, associations, relationships and extrinsic knowledge thus operates prophylactically.  It helps to maintain respect for the integrity of judicial performance in the nation, as a model for the region and the building of the rule of law globally.  This is not just a question of prudence.  It is part of the governing law.

1. The particular issue in this case was whether as a consequence of my husband appearing as the respondent’s agent in the making of orders by consent about six years ago, a fair-minded lay observer might apprehend bias. 

2. The question of apprehended bias in the familial context has been considered in a number of cases.  In Smits v Roach the High Court considered whether a trial judge was required to recuse himself from a case in which his brother was a partner in a legal firm who represented one of the parties.  It was asserted the judge had a close family relationship with a person who had a financial interest in the outcome and the notional observer would apprehend bias.  The High Court did not accept this argument and recusal was not required. In Azar & Anor v Ritchie [2006] NSWIRComm 295, a trial judge declined an application he recuse himself from determining an application where his brother-in-law was a partner in the respondent’s firm. In Willoughby City Council v Transport Infrastructure Development Corporation [2008] NSWLEC 231, a trial judge refused to recuse himself from a case in which his son was a partner in a law firm who appeared for a party. In Dixon v Cargill Meat Processor Pty Ltd [2009] NSWSC 101 a trial judge refused an application that she not hear a case in which her husband was a partner in the firm who represented the other party. It was accepted that the applicant for recusal was “...not sophisticated, nor well educated…and had a serious concern that the Judge hearing the claims would have such a close connection with a partner of the firm representing the first defendant. The proceedings were of significant importance to the plaintiff and he had a real unease” about the close personal connection between the judge and the firm. Her Honour referred to the Guide to Judicial Conduct published for the Council of Chief Justices and the categorisation of relationships there referred to. There one sees the view expressed that a relation to the judge in the first degree (spouse) may appear before his or her spouse for a party if a matter is uncontested or a relatively minor or procedural matter.

3. I was informed by counsel for the respondent that my husband’s appearance as agent nearly six years ago resulted in payment of a small fee.  The orders (which included consequential orders) restrained the Child Support Agency (“CSA”) from taking further enforcement action, restrained the applicant from leaving Australia until further order and also pending further order restrained him from dealing with his interest in L Pty Ltd.  As no further orders about these matters had been made they continued.  Before me there was potentially an issue about whether similar injunctions should be made.  This did not require consideration of the basis upon which the interim consent orders were made but consideration of the current situation.  The point being that in this hearing it was not necessary to resolve issues related to the interim consent orders.  There was no suggestion by either party of other involvement by my husband in the matter.  Thus his involvement was fleeting, concluded and related to a mention at which interim orders were made by consent.  The first notice I had of his involvement occurred when I read the applicant’s trial affidavit on the morning of the hearing.  These circumstances do not give rise in a fair-minded lay observer of apprehended bias.

4. I also considered whether my preliminary observations about aspects of the applicant’s case suggested prejudgment.  It can be unhelpful, particularly where a person is unrepresented, when statements of law seem problematic, for a judge to remain silent.  My preliminary remarks would not be viewed by the notional lay observer as indicative of a mind closed to persuasion.  Thus, although I was not formally asked to recuse myself I gave this issue careful consideration.   

5. Had I recused myself it would have been unnecessary to determine the adjournment application which is now addressed.  As was mentioned earlier, the applicant had legal representation when he started the proceedings which, given that he appeared for himself in August 2005, did not continue for long.  As I understood the applicant’s remarks he lacked funds for these proceedings.  In his Financial Statement the applicant claimed to have no income.  He disclosed an interest in real estate at G Street (about which he explained there were serious impediments to it being received by him) and a 50 per cent interest of “unknown” value in a private family company L Pty Ltd.  In his Case Outline and opening remarks, the applicant revealed he was in dispute with former legal advisors and claimed that after largely unspecified liabilities (by L Pty Ltd) were taken into account, he might end up with nothing.  As mentioned earlier I was not confident that granting the applicant an adjournment meant he was likely to have legal representation at the resumed hearing.  Although he said he wanted legal advice and representation I was not satisfied either was likely to occur.  In short I was satisfied an adjournment would achieve nothing more than occasion delay and increase the respondent’s costs. 

6. The extent of non-compliance by the applicant with the 1990 orders gave me no confidence he would comply with an order he pay the respondent’s costs thrown away if an adjournment was granted.  It appeared that through no fault of hers, the respondent had waited years to have her claim considered and there was an irreparable element of unfair prejudice in unnecessarily delaying the proceedings.  I respectfully agree with the High Court that the granting of applications for the adjournment of hearings inappropriately is likely to undermine public confidence in the judicial system and results in inefficient use of publicly funded court resources (Aon Risk Service Australia Ltd v Australian National University (2009) 258 ALR 14).

7. This was not the first time I indicated to the applicant he may have difficulty with these legal arguments.  Counsel for the respondent had previously indicated his view the case would be determined on its merits.  The applicant had significant litigation experience in this and the Supreme Court and I infer would have appreciated better than an uninitiated litigant the significance of final hearing dates.  In other words, he had earlier notice that a case could be made contrary to the legal arguments advanced by him and sufficient time to retain lawyers to meet the arguments made by the respondent.

8. For these reasons I refused an adjournment.

9. Unless I have stated differently, the balance of probabilities will determine findings of fact (Section 140 Evidence Act 1995 (Cth) (“Evidence Act”)). Where there is a conflict between the uncorroborated evidence given by the applicant and the respondent I prefer the respondent’s. Not only did she submit to cross-examination, her evidence was not inherently incredible and, not without difficulty, she demonstrated a serious attempt to gather material which to a considerable extent was in the applicant’s knowledge. As Mason CJ, Deane and Dawson JJ explained in Weissensteiner v The Queen (1993) 178 CLR 217 at 227:

   …[i]t has never really been doubted that when a party to litigation fails to accept an opportunity to place before the court evidence of facts within his or her knowledge which, if they exist at all, would explain or contradict the evidence against that party, the court may more readily accept that evidence.  It is not just because uncontradicted evidence is easier or safer to accept than contradicted evidence.  That is almost a truism.  It is because doubts about the reliability of witnesses or about the inferences to be drawn from the evidence may be more readily discounted in the absence of contradictory evidence from a party who might be expected to give or call it.

10. In their Case Outlines each party referred to factual matters not all of which were established. In relation to the respondent this seemed to incorporate findings made by White J in proceedings commenced by the applicant in the Supreme Court and Cohen J of this Court for purposes which by s 91 of the Evidence Act are excluded.  (See National Mutual v Grosvenor Hill (2001) 183 ALR 700)

Background facts

1. The applicant was born in 1949 and is thus 61 years.

2. The respondent was born in 1951 and is thus 59 years.

3. The parties married in 1972. 

4. The first of the parties’ five children, M was born in August 1972.

5. Their second child, N was born in August 1975.

6. Z, their third born, was born in November 1978.

7. The parties’ fourth child, Y was born in October 1980.

8. D, who is the youngest child, was born in April 1983.

9. It will be immediately apparent that each of the children is now over 18.  A child maintenance order stops being in force when the child turns 18 unless the order is expressed to continue in force after then (ss 66(L)(3) and 66T).  Later in these reasons the 1990 orders are set out and it will be seen the order did not continue after the subject children respectively turned 18. Although an order has ceased to be in force, arrears may be recovered (s 66W).  

10. On 27 March 1987, the parties separated but continued to reside together in their home at Sydney Suburb 3.  Physical separation occurred later that year.

11. In August 1988 the applicant ceased employment with Company 1 with whom he was employed in a skilled role.

12. On 22 October 1988, a Decree Nisi ordered in relation to the parties’ marriage became absolute.

13. After a defended hearing in which the applicant’s only sibling Mr P Chiodo, his sister-in-law, Ms Q Chiodo and L Pty Ltd intervened, final property settlement, child maintenance and spousal maintenance orders were made on 15 August 1990 (the 1990 orders).  These orders are set out below:

    1. The husband is to do all things necessary and pay all costs and expenses to transfer to the wife all his right title and interest in the land and premises known as [Sydney Suburb 3] within one (1) month of the date of this order.

    2.The husband is to pay all rates, taxes, water rates and insurance premiums presently due and owing or falling due in respect of the said land and premises between the date of this order and the date of the said transfer to the wife.

    3.The husband is to indemnify the wife and keep her indemnified from any such liability and reimburse her for any payment by her of such rates, taxes, water rates and insurance premiums.

    4.The husband is to pay the sum of $40,000.00 to the wife within one (1) month of the date of this order.

    5.I declare that the wife is the sole owner of all furniture and household effects presently contained in the premises known as [Sydney Suburb 3].

    6.The husband is to do all things necessary to transfer the registration of the Ford car presently being used by the wife into her name within one (1) month of the date of this order.

    7.I declare that the wife is the sole beneficial owner of the said Ford car.

    8.The husband is to indemnify the wife and keep her indemnified for any debt liability or payment to any bank incurred by the granting of a personal loan to the husband or the husband and wife jointly and severally to permit the purchase of a Tarago motor vehicle.

    9.I declare that the wife has no interest at law or in equity in the share in [L Pty Ltd] presently held by the husband.

    10.I declare that the wife has no right title or interest in the land and premises known as [G Street, Sydney Suburb 1].

    11.I declare that the wife has no interest at law or in equity in any insurance policy presently held in the name of the husband.

    12.I declare that the husband is the sole owner of such property of a personal nature as is presently in his custody and control.

    13.I declare that the wife is the sole owner of such property of a personal nature as is presently in her custody and control.

    14.I order the husband to pay to the wife child maintenance in the sum of $50.00 per week for each of the following children of the marriage:

    (a)[M] born […] August, 1972;

    (b)[N] born […] August, 1975;

    (c)[Z] born […] November, 1978;

    (d)[Y] born […] October, 1980;

    (e) [D] born […] April, 1987 [semble 1983].

    In each case the first payment is to be made on or before 10.00 am on Wednesday, 22nd August, 1990.

    15. The husband to pay spousal maintenance to the wife in the sum of $150.00 per week. The first payment is to be made on or before 10.00 am on Wednesday, 22nd August, 1990.

    16.I declare that [L Pty Ltd] is indebted to [Ms Q Chiodo] and [Mr P Chiodo] in the sum of $120,300.00 and order the said company to pay the said sum to [Ms Q Chiodo] and [Mr P Chiodo] within one (1) month.

    17.I refuse to make all other orders and declarations claimed by the interveners.

    18. I reserve the question of costs until after the delivery of the judgment and after the making of the orders herein.

14. At all relevant times from when the 1990 orders were made the children lived with the mother.

15. On 20 March 1991, the applicant’s appeal against the 1990 orders was finalised.  Suffice to say, his obligations under the 1990 orders did not change.

16. The applicant transferred his title in G Street, Sydney Suburb 1 (“G Street”) to his brother on 16 April 1991.  Attached to the applicant’s affidavit filed 11 March 2010 is a registered share transfer which shows the same day his interest in L Pty Ltd was transferred to his sister-in-law.  Simultaneously, the applicant’s brother borrowed $195,000.00 from the National Australia Bank which was given to the applicant.  G Street is a boarding house which was leased to L Pty Ltd who sublet the property to third parties.  In effect the sub-lessees managed the boarding house. 

17. Between 15 August 1990 and 25 April 1991 the applicant paid the respondent $30.00 per week per child maintenance.  Nothing has been paid since. 

18. On 25 April 1991, accompanied by his mother, the applicant returned to Italy where, but for a couple of visits to Australia, he lived until 2002.  The applicant did not inform the respondent about his departure and it was only through third parties that she discovered he was no longer in the country.  While they were in Italy the applicant’s mother leased W Street, Sydney Suburb 2.  It would appear that each time they returned to Australia they lived in the property at Central Coast Suburb 1 owned by L Pty Ltd.

19. Later in 1991 the respondent contacted the CSA and sought their assistance to enforce compliance by the applicant with the maintenance orders which she later registered with them.  Eventually her file was transferred to the international division.  The respondent’s contact with the CSA was sufficiently extensive she became fairly familiar with their international operations.  At different times they told her there was little that could be done to enforce compliance by the applicant with the orders.  Indeed in about 1997 CSA told her there was nothing further it could do.  Her file however remained opened and the orders continued to be registered with them

20. In 1992 L Pty Ltd sublet G Street for an annual rental of $63,597.82 subject to annual market review.  Another sub-lease executed in 1998 saw the property leased at $65,000.00 per annum subject to 5% annual increases and a market review in 2008. 

21. The applicant and his mother returned to Australia on 12 November 2002.  Thirteen days later his brother passed away.  A dispute then arose with his late brother’s wife in relation to the applicant’s interest in G Street.  As will be discussed later, the applicant commenced proceedings in the Supreme Court of NSW in relation to G Street and L Pty Ltd (which owned a property at Central Coast Suburb 1). 

22. On 3 October 2003, the respondent married Mr Shaw.  By operation of law (s 82(4)) the spousal maintenance order in her favour ceased to have effect.  To the extent the respondent makes a claim in relation to the spousal maintenance order it is limited to arrears and interest due at the time the order ceased to have effect. Notwithstanding the order ceased to have effect, her arrears claim is permissible (s 82(8)).  When the respondent remarried none of the children were under 18.

23. On 21 November 2003, the applicant and his mother returned to Italy where they remained until both returned to Australia on 21 November 2004.  The applicant has lived here ever since.

24. The CSA wrote in 2004 and 2005 to the applicant demanding payment of arrears. 

25. In August 2004, the respondent sold the former matrimonial home at Sydney Suburb 3 to D.  The property sold for $475,000.00 of which $356,250.00 was paid at settlement with the balance to be paid on or before 7 April 2013.  The balance outstanding is secured against the property.

26. From the sale proceeds, the respondent paid:

    (a)$220,000.00 to purchase a half share of her husband’s property at Sydney Suburb 4;

    (b)$40,000.00 to discharge a mortgage secured over Sydney Suburb 3;

    (c)$22,000.00 to purchase a car;

    (d)$17,500.00 to discharge Z’s HECS debt; and

    (e)$50,000.00 on various investments.

27. In April 2005, the applicant lodged a caveat with the NSW Land Titles Office to protect his claimed half interest as tenant in common in G Street. 

28. On 3 August 2005, the applicant commenced these proceedings. No reference was made by him in his Financial Statement or elsewhere about the interest claimed by him in G Street. At that time the applicant was legally represented and I infer informed of his disclosure obligations. Indeed the Financial Statement itself requires the deponent to acknowledge compliance with this obligation. I observe that the solicitors who acted on his behalf in these proceedings did not act for him in the G Street action. It is beyond dispute that the applicant’s obligation to give full and frank disclosure (r 13.04 Family Law Rules 2004) required him to reveal the interest he claimed in G Street. At page 97 of his affidavit filed the same day the applicant disclosed that he and his mother lived in the property owned by L Pty Ltd at Central Coast Suburb 1. He also expressed concern the CSA may bankrupt him.

29. At about the same time as the respondent entered an appearance in these proceedings, she revoked her earlier registration of the 1990 maintenance orders with the CSA.  The effect of this was that the applicant’s debt pursuant to these orders was no longer a debt due to the Commonwealth and became enforceable by the respondent as a debt due to her.

30. On 31 August 2005, by consent, the following interim orders were made:

    1.That the Child Support Agency be and hereby is restrained from enforcing arrears of

    1.1      child maintenance and penalties and

    1.2      spouse maintenance

    that presently exist between the parties other than in proceedings that it may issue in consolidation with these proceedings.

    2.That the husband be and hereby is restrained from leaving the Commonwealth of Australia.

    3.That the Australian Federal Police place the name of the husband [… Chiodo] also known as [… Chiodo], date of birth […] 1949, on the Airport Watch List in force at all international points of arrival and departure in the Commonwealth of Australia and maintain the husband’s name on the Watch List until further Order of the Court.

    4.That the husband within 72 hours surrender his Australian passport & to Glenn Thompson, Solicitor, such passport/s to be held and not released to the husband, without Order of the Court or written agreement of the wife and further will deliver his Italian passport to the same person under the same conditions within 21 days.

    5.That the husband be and hereby is restrained from selling, charging or in any way dealing with his interest in [L Pty Ltd], including but not limited to his shareholding in or the assets of that company, without Order of the Court or written consent of the wife.

    6.That the Court notes that the husband states he only has one Australian passport and one Italian passport and does not have a passport issued by any other country. His Italian passport is presently in Italy.

    7.That it be noted for the purpose of Order 3 the husband may be known as:

    [... Chiodo]

    [... Chiodo]

    [... Chiodo]

    [... Chiodo].

1. Following these orders the CSA (who I infer was notified about the orders) discontinued their attempts to enforce the applicant’s debt.

2. On 31 August 2006, the applicant issued a Statement of Claim in the Supreme Court of NSW against his late brother’s wife and L Pty Ltd.  The Statement of Claim is attached to the respondent’s affidavit filed on 21 April 2011.  In essence, he sought declarations in relation to his asserted half interest in G Street, reimbursement for outgoings and expenses paid by him for repairs to G Street and Central Coast Suburb 1, an account for profits by L Pty Ltd earned post 2001, damages and costs.

3. Because the proceedings commenced by the applicant in the Supreme Court had the potential to materially improve his financial circumstances, it was necessary for determination of these proceedings to await their completion.

4. On … December 2008 the Supreme Court ordered that L Pty Ltd be wound up. The ASIC extract shows that the applicant is a 50 per cent shareholder, Director and Company Secretary.  The applicant’s given address was his mother’s home at W Street, Sydney Suburb 2.

5. On 17 March 2010 the applicant gave an undertaking to this Court which restrained him from dealing with the proceeds of judgment in his favour (if any) derived from the Supreme Court proceedings. 

6. Judgment was delivered by the Supreme Court on … April 2010.  In short, the applicant succeeded and was declared entitled to a half interest in G Street.  The proceedings were adjourned with a subsequent judgment, orders and declarations made on … July 2010.  The orders and declarations made that day are set out below:

   1. Declare that the late [Ms Q Chiodo] held the property comprised in Folio Identifier […] and known as [… G Street, Sydney Suburb 1] NSW (the “[Sydney Suburb 1] property”) on trust for the plaintiff as to a one half share.

   2. Order that [Mr J Chiodo] be appointed as representative of the estate of [Ms Q Chiodo] for the purposes of these proceedings.

   3. Within 28 days of probate being granted in respect to the estate of the defendant, order that [Mr J Chiodo] deliver to the plaintiff or his solicitor a signed transfer in respect to one half interest in the [Sydney Suburb 1] property.

   4. Order that [Mr J Chiodo] take all necessary steps to obtain the consent of any mortgagee to the transfer and its registration.

   5. Order that the plaintiff pay the reasonable legal costs of [Mr J Chiodo] in relation to the transfer of the half interest in the property to the plaintiff and pay any duty, registration fees or other expenses payable for the registration of the transfer.

   6. Grant liberty to the parties to apply on reasonable notice for any consequential orders relating to the execution of these orders.

   7. Order that all other claims for relief in the summons and amended statement of claim be dismissed.

   8. Order that there be no order as to costs of the proceedings with the intention that each party bear his and her own costs.

   9. The exhibits may be returned after 28 days.

   10. Order that within seven days the plaintiff’s solicitors provide a copy of these orders to the solicitors for the plaintiff’s former wife and, unless they have already done so, within the same time provide a copy of my reasons for judgment ([Chiodo v Chiodo] [2010] NSWSC […]) to the solicitors for the plaintiff’s former wife.

The Application to discharge the Maintenance orders

1. It is appropriate to consider first the application to discharge the 1990 orders, as the outcome will materially influence the respondent’s enforcement application and claim for interest. 

2. An application to discharge a child maintenance order which has ceased to be in force is governed by s 66W. Section 66W is set out below:

   (1)  Nothing in subsection 66L(3), or in this Subdivision (apart from subsection (2) of this section), affects the recovery of arrears due under a child maintenance order in relation to a child when the order ceases to be in force.

   (2)  If arrears are due under such an order when the order ceases to be in force, the court may, by order, retrospectively:

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

   (b)  vary the order so as to increase or decrease the arrears to be paid under the order if the court is satisfied that:

   (i)  the circumstances of the person liable to pay the arrears are such as to justify the variation; or

   (ii)  the circumstances of the person entitled to receive the arrears are such as to justify the variation; or

   (iii)  in the case of an order that operated in favour of, or that was binding on, a legal personal representative the circumstances of the estate are such as to justify the variation.

3. In relation to the modification of spousal maintenance orders (which includes discharge retrospectively to such date as the Court considers appropriate), s 83 of the Act is the governing provision. Section 83 is set out below:

   (1)  If there is in force an order (whether made before or after the commencement of this Act) with respect to the maintenance of a party to a marriage:

   (a)  made by the court; or

   (b)  made by another court and registered in the first mentioned court in accordance with the applicable Rules of Court;

   the court may, subject to section 111AA:

   (c)  discharge the order if there is any just cause for so doing;

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

   (e)  revive wholly or in part an order suspended under paragraph (d); or

   (f)  subject to subsection (2), vary the order so as to increase or decrease any amount ordered to be paid or in any other manner.

   (1A)  The court’s jurisdiction under subsection (1) may be exercised:

   (a)  in any case in proceedings with respect to the maintenance of a party to the marriage; or

   (b)  if there is a bankrupt party to the marriage on the application of the bankruptcy trustee; or

   (c)  if a party to the marriage is a debtor subject to a personal insolvency agreement on the application of the trustee of the agreement.

   (2)  The court shall not make an order increasing or decreasing an amount ordered to be paid by an order unless it is satisfied:

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

   (i)  the circumstances of a person for whose benefit the order was made have so changed (including the person entering into a stable and continuing de facto relationship);

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

   (iii)  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 its so doing;

   (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;

   (ba) in a case where the order was made by consent that the amount ordered to be paid is not proper or adequate;

   (c)  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.

   (3)  Subsection (2) does not prevent the court from making an order varying an order made before the date of commencement of this Act if the first mentioned order is made for the purpose of giving effect to this Part.

   (4)  In satisfying itself for the purposes of paragraph (2)(b), the court shall have regard to any changes that have occurred in the Consumer Price Index published by the Australian Statistician.

   (5)  The court shall 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 was last varied having regard to a change in the cost of living.

   (5A)  In satisfying itself for the purposes of paragraph (2)(ba), the court shall have regard to any payments, and any transfer or settlement of property, previously made by a party to the marriage, or by the bankruptcy trustee of a party to the marriage, to:

   (a)  the other party; or

   (b)  any other person for the benefit of the other party.

   (6)  An order decreasing the amount of a periodic sum payable under an order or discharging an order may be expressed to be retrospective to such date as the court considers appropriate.

   (6A)  Where, as provided by subsection (6), an order decreasing the amount of a periodic sum payable under an order is expressed to be retrospective to a specified date, any moneys paid under the second mentioned order since the specified date, being moneys that would not have been required to be paid under the second mentioned order as varied by the first mentioned order, may be recovered in a court having jurisdiction under this Act.

   (6B) Where, as provided by subsection (6), an order discharging an order is expressed to be retrospective to a specified date, any moneys paid under the second‑mentioned order since the specified date may be recovered in a court having jurisdiction under this Act.

   (7)  For the purposes of this section, the court shall have regard to the provisions of sections 72 and 75.

   (8) The discharge of an order does not affect the recovery of arrears due under the order at the time as at which the discharge takes effect.

4. The approach to s 66W and s 83 was considered by the Full Court in Wreford & Caley. The Full Court explained that s 66W(2) calls for a dual exercise of discretion. First, whether there is “just cause” to discharge the order retrospectively and secondly, although a “just cause” has been established, whether or not the order should be discharged. Their Honours pointed out the different wording in s 66W(2)(a) and (b) in relation to which it was explained that sub-paragraph (a) neither depends on the present circumstances of the payer justifying a discharge, nor permits a discharge based only on that circumstance. Reference was made to Vakil v Vakil (1997) FLC 92-743 in which the Full Court considered “just cause” in the context of an application to discharge arrears of spousal maintenance. Their Honours in Vakil and Wreford & Caley agreed with Lindenmayer J in Lutzke & Lutzke (1979) FLC 90-714 that the words “just cause” must be interpreted in the context of the Act as a whole “and in particular with regard to the other specific provisions of the Act which relate to maintenance”. Thus a “cause” for the discharge of a maintenance order will be a “just cause” only if, having regard to the other provisions of the Act, particularly those relating to maintenance, it can be said that it is “right” or “proper” that the order should be discharged.

5. The Full Court in Wreford & Caley cited with approval remarks made by Walters FM in Mathieson & Hamilton [2006] FMCAfam 238, in particular:

   (a)The “12 months rule” is extinct.  It was, in any event, never more than a discretionary guideline or rule of practice, and the 12 months period was an arbitrary one.

   (b)The Court has a discretion, not only as to the period in respect of which accumulated arrears of maintenance or child support will be enforced, but as to whether they should be enforced at all.

   (c)The Court is not prevented from enforcing arrears of maintenance or child support simply because the time for payment of the same has long since passed, or because (in the case of child maintenance or child support) the relevant child has long since left school, commenced paid employment or otherwise ceased to require such child maintenance or child support.

   (d)In considering whether to enforce arrears (and, if so, for what period), the Court’s discretion is unfettered, but the following considerations (at least) might be considered to be of relevance:

   i)whether the party who was obliged to pay the maintenance or child support (“the Payer”) knew or ought to have known of his/her obligation to pay maintenance or child support;

   ii)whether the party entitled to maintenance or child support (“the Payee”) pressed or pursued – directly or indirectly – his/her rights to the same, and whether the Payee did so in a timely fashion;

   iii)whether, by words or conduct, the Payee led or permitted the Payer to form a reasonable view that the Payer’s obligation to pay maintenance or child support would not be enforced, and whether (and in what way) the Payer was thereby induced whilst acting in good faith to change his/her financial position;

   iv)whether, by words or conduct, the Payer led or permitted the Payee to form a reasonable view that the Payer’s obligation to pay maintenance or child support would be met, and whether (and in what way) the Payee was thereby induced whilst acting in good faith to change his/her financial position;

   v)whether the Payer had (other) appropriate or adequate reasons for failing or refusing to pay;

   vi)the financial circumstances of the Payer, the Payee and the children during the period of the non-payment, and at the time that the enforcement of the arrears is sought (including the Payer’s ability to pay at all relevant times);

   vii)whether the Payer has made a [sic] full and frank disclosure of his/her financial position at all relevant times; and

   viii)whether the Payee has made full and frank disclosure of his/her financial position at all relevant times. (par 70)

6. In relation to child maintenance, their Honours in Wreford & Caley said:

   72.While Walters FM was dealing mainly with the question of whether to enforce an order, the matters he dealt with are equally applicable to an application to discharge arrears.

   73.We would add to the matters raised by Walters FM the comments of the Full Court in Vakil (supra) that a consideration of “just cause” should include a consideration of some of the relevant sections of the Act which might pertain to these matters.

   74.These would include comparable provisions in Part VII of the Act including:-

   •s 66J which specifies the matters to be taken into account in considering financial support necessary for the maintenance of a child;

   •s 66K which specifies the matters to be taken into account in determining the contribution that should be made by a party;

   •s 66C which includes the principle that parents have the primary duty to maintain children;

   •s 66D which includes the principle that a step-parent has a duty to maintain a child only if the court has determined, by order, that it is proper for a step-parent to have that duty;

   •s 66M which specifies when a step-parent has a duty to maintain a child;

   •s 66B which describes the objects of the Division to which we were referred by counsel for the mother in the first place; and

   •s 66S which provides for the modification of child maintenance orders.

   75.We should also mention that, as the relief which the father sought was retrospective, it was incumbent upon the father to adduce evidence relative to, say, ss 66J and 66K of the Act in relation to each period during which the arrears which he was seeking to discharge accrued.

7. In relation to spousal maintenance, their Honours in Wreford & Caley agreed with Vakil that in deciding whether there is just cause to discharge a maintenance order the Court would consider, inter alia:

   ·    the right of a spouse to maintenance (s 72);

   ·    the matters to be taken into account in relation to spousal maintenance (s 75);

   ·    the duty of the Court to end financial relations (s 81); and

   ·    the need to preserve and protect the institution of marriage as the union of a man and a woman to the exclusion of all others voluntarily entered into for life (s 43(a)).

8. The applicant relies upon his allegedly parlous circumstances post the 1990 orders as well as the respondent’s and perhaps also the children’s superior or improved circumstances.  Considered individually or collectively these are said to amount to just cause and warrant the favourable exercise of the Court’s discretion to discharge the maintenance orders. 

9. Turning first to the applicant’s circumstances.  When the 1990 orders were made the applicant was unemployed and, according to him, barely able to support himself let alone contribute to the respondent and children’s expenses.  There is no dispute Company 1 terminated his employment prior to the 1990 orders.  When the 1990 orders were made he was paid $150.00 per week for his share of profits from L Pty Ltd.  The respondent does not dispute the applicant’s contention that the Court in 1990 found he had an earning capacity of about $750.00 per week. 

10. In relation to his assets and liabilities, the effect of the 1990 orders was that the applicant retained a 50 per cent interest in L Pty Ltd the other half of which his brother owned.  L Pty Ltd had management rights to G Street and owned a house at Central Coast Suburb 1.  The applicant and his brother had an equal interest in G Street.  L Pty Ltd owed the applicant’s brother and sister-in-law $120,300.00 which was to be repaid within one month of the 1990 orders.  The applicant did not give evidence about the value of the real estate.  There is no evidence either property was encumbered. 

11. From when the 1990 orders were made and until the applicant left Australia in 1991 he said his only income was $150.00 per week received from L Pty Ltd.  It will be recalled that in 1992 L Pty Ltd leased G Street for $63,597.82 per annum.  In the absence of evidence that there were significant improvements to the property between 1990 and 1992, which I infer there was not, it is more probable than not that between 1990 and 1992 G Street produced a similar return.  But for the transfer of his interest in L Pty Ltd, on this basis before expenses, the applicant was entitled to something in the vicinity of $30,000.00 per annum ($576.00 p/w) in relation to G Street alone.  It will be recalled L Pty Ltd also owned a residential property at Central Coast Suburb 1 about which the applicant is silent regarding its use.

12. As was mentioned earlier the applicant moved to Italy not long after his appeal was finalised.  He had transferred his interest in G Street in the intervening period for which he received $195,000.00.  His use of these funds is controversial.  In clause 19 of his Case Outline the applicant said he used this money to pay outstanding legal and personal expenses.  In his affidavit he said he also gave his brother $20,000.00 which was to be used to meet his obligations under the maintenance orders and outstanding bills.  Disregarding bills, this equates to 50 weeks child and spousal maintenance.  In any event, nothing was paid to the respondent.  If he was concerned about his obligations under the 1990 orders steps would have been made by him to ensure the respondent received the money.  For example, payment managed via the parties’ solicitors.  I have considerable unease about this evidence and am not satisfied the applicant left money for the respondent and children.  In his affidavit filed on 11 May 2010 the applicant gave another version; he said he took $150,000.00 to Italy to cover anticipated expenses.  In that affidavit he said that because the investment return in Italy was poor the money was remitted to Australia and deposited into his mother’s account.  In the respondent’s Case Outline reference is made to deposits by the applicant in this period placed into his mother’s account which were transferred into his brother’s NAB account.  The facts there asserted were not agreed facts, conceded by the applicant, adopted by the respondent or otherwise established and thus do not form part of the evidence.  Had those matters been established, questions nonetheless remained about his use of the advance. 

1. The 1991 transfer of the applicant’s interest in G Street and use by his brother and sister-in-law of L Pty Ltd’s income and assets was addressed by him in his claim against them in the Supreme Court.  Contrary to the evidence given by the applicant to this Court that “in about mid-1991 I sold my interest in this property to my brother, the other co-owner and received approximately $195,000.00)” (applicant’s affidavit filed 11 March 2010 page 96) he told the Supreme Court, that in or about 1991 he and his brother came to an oral agreement in the following terms:

   (a)[The applicant’s] brother would raise $195,000.00 [the principal] by way of mortgage over [G Street] property and lend those monies to the [applicant] [the loan];

   (b)[The applicant] would surrender his equitable interest in [G Street] for the duration of the loan;

   (c)[The applicant] would pay the principal of the loan together with any associated interest back to [the applicant’s] brother;

   (d)In addition to any lump sum payments made by [the applicant], [the applicant’s] share of the income of the company would be used to repay the principal and any associated interest;

   (e)Upon the repayment of the principal of the loan and any associated interest [the applicant’s] half interest in [G Street] would be restored retrospectively to the date of the loan so that all losses and gains associated with the [G Street] property over the time of the loan and into the future would be shared equally between [the applicant] and [the applicant’s] brother;

   (f)[The applicant’s] brother undertook to keep the [G Street] property in good repair whilst his brother was overseas.

   …

   [11][The applicant] travelled to Italy and between April 1991 and 1993 [the applicant] repaid the principal and associated interest to his brother.  The repayments consisted of lump sums paid by [the applicant] to his brother through their mother’s bank account together with [the applicant’s] share of the income in the company. 

2. If the applicant’s representations in the Statement of Claim are correct and the reason he transferred his interest in G Street was to raise $195,000.000 for his use secured against that property, it is difficult to understand why he and his brother engaged in such convoluted transactions.  It would have been less risky for the applicant and his brother for these funds to be borrowed by the applicant and repayment secured against his interest.  Of course, the approach they adopted meant that in the event he defaulted on his obligations under the 1990 orders, enforcement by the respondent against G Street became far more complicated, if not impossible.  Particularly with him out of the country and her rearing five children alone on welfare benefits.  Lest it be thought the respondent could enforce against the applicant’s share in L Pty Ltd, it will be recalled his shareholding had been transferred to his sister-in-law. 

3. It is also alleged in the applicant’s Statement of Claim that shortly after his brother passed away in 2002, he and his sister-in-law agreed that he “would undertake repairs to the [G Street] and [Central Coast Suburb 1] properties … and that [the applicant] would be reimbursed for any outgoings and expenses he incurred”.  It was claimed by the applicant he carried out renovations and repairs to G Street and Central Coast Suburb 1.  He claimed outgoings of $70,300.00 in relation to his repairs to G Street, plus further “outgoings and expenses” in relation to Central Coast Suburb 1.  The claim for outgoings and expenses was separate to the applicant’s claim “for his time and labour” particulars of which he said he would give later.

4. In Italy, the applicant and his mother lived on the farm which passed to her upon his father’s death.  In his first year in Italy, the applicant applied for work in his skilled trade three times.  He was unsuccessful and, thereafter, it does not appear he sought work beyond his family.  Thus in Italy the applicant worked on his mother’s property and another owned by his uncle.  He says he received little money and basically his mother supported him.  In addition he received an allowance of between $2,000.00 and $2,500.00 per annum (tax-free) from the Italian government from 1 January 1993 until 31 December 2003.

5. Additionally, whilst in Italy, the applicant ran a small unprofitable importing business selling Australian clotheslines.  These were purchased by his brother and a cousin and shipped to him.  It is the applicant’s evidence “because I was so engaged in the work on my mother’s property and in the court case surrounding that property, I was not able to put in the energy and time required to improve the business”.  I infer that rather than put any real effort into his business the applicant prioritised his desire to assist his mother over his maintenance obligations. 

6. From when the applicant returned to Australia in 2004 he lived with his mother.  He applied for but was refused Centrelink benefits.

7. As to his current circumstances, in his Financial Statement filed 20 April 2011 the applicant declares no income.  He says he is entitled to 50 per cent of the profit from L Pty Ltd’s rental income in relation to which he says he “is in dispute with probate solicitors”.  He says his total weekly personal expenses are $1,083.00.  These comprise $32.00 rates, $54.34 other rates (unit levies), $32.60 health insurance, $28.00 home and building insurance, $23.00 motor vehicle registration, $419.00 home loan repayment to St George Bank, $150.00 American Express, $50.00 Vertigo credit card plus $294.00 other expenditure.  Of these expenses, he said his mother paid the St George home loan and home insurance on his behalf.  Other than his interest in G Street and L Pty Ltd the applicant said his only other asset is a worthless 1979 motor vehicle.  He has no superannuation and declared liabilities of $346,145.00.  His liabilities include $232,494.74 to lawyers who previously acted for him and his late sister-in-law’s court costs.  He owes money to the parties’ two eldest children, small amounts to credit cards and two individuals.  I infer the applicant represented to those from whom he borrowed funds or obtained services that he was able to repay the funds advanced or meet the costs of services.  The applicant does not disclose a liability to St George Bank and the evidence does not reveal when or how he (or his mother on his behalf) established a St George home loan. 

8. As I understand it from the applicant’s Supreme Court action, he unsuccessfully claimed L Pty Ltd was indebted to him for undistributed profits earned post 2001 from G Street.  This would suggest that no later than 2001 he regained his shareholding in L Pty Ltd yet an ASIC extract shows a change in shareholding in 2004.  The later date would seem to be the latest upon which the applicant regained his shareholding in L Pty Ltd which he still has.  L Pty Ltd still owns Central Coast Suburb 1 and may still sublet G Street.  Central Coast Suburb 1 is an unencumbered holiday home.  L Pty Ltd is in liquidation and at this stage the liquidator has claims from four unsecured creditors.  The total estimated value of liabilities claimed against L Pty Ltd is about $1.6 million.  The applicant informed the Court he is in dispute with the liquidator and it is apparent he does not regard his lack of success against L Pty Ltd in the Supreme Court as determinative of his claim against the company.  It is thus highly likely that the applicant is one of the unsecured creditors.  The applicant’s lack of success in the Supreme Court for an order against L Pty Ltd suggests he will be similarly unsuccessful with the liquidator.  Nonetheless it is not possible to determine what dividend, if any, he might receive.  Excluding the liquidator’s expenses, the range would seem between half of the value of Central Coast Suburb 1 plus retained profits (if any) to nothing.  Because I do not know the identity of the other unsecured creditors it is appropriate to proceed upon the basis the applicant is unlikely to receive anything for his interest in L Pty Ltd. 

9. The applicant still has a 50 per cent interest in G Street.  I accept the opinion expressed by Mr C that G Street is worth $1.65 million.  Although Order 4 of the Supreme Court orders refers to the consent of any mortgagee being sought by the applicant’s sister-in-law’s estate (“the estate”) to the transfer there is no evidence of a mortgage or that the applicant’s half share would be devalued thereby.  My point being the effect of the 2 July 2010 Supreme Court orders is that the applicant obtained an interest in G Street worth about $825,000.00. 

10. According to the applicant it is questionable whether the estate will comply with the Supreme Court’s orders and thus he might never receive the fruits of that litigation.  Tendered in the respondent’s case is correspondence from the solicitors who represent the estate.  They reveal that the estate has attempted to implement the Supreme Court orders but that “[the applicant] has not cooperated with that process”.  They indicate they hold instructions to commence proceedings for the appointment of trustees for the sale of G Street.  I am not satisfied that responsibility for delay in the implementation of the Supreme Court orders has been caused by the estate.  It is consistent with the applicant’s divestment of assets in 1991 and failure to disclose the interest he claimed in that property that he delays registration of the legal interest in G Street until these proceedings are finalised.  So that it is clear I am satisfied that the delay in transfer to the applicant of his share in G Street relates solely to him and that the estate is ready, willing and able to comply with the orders of the Supreme Court. 

11. The applicant was served with a Notice to Admit Facts (and Authenticity of Documents) to which he did not respond.  It was there alleged that he lived at W Street, Sydney Suburb 2 in a property previously owned by his late mother and which forms part of her estate.  A series of propositions were put to the effect that he is the primary beneficiary of his late mother’s estate.  Requests made by the respondent for production of his late mother’s Will went unanswered.  The close relationship which existed between the applicant and his late mother, him being her sole surviving child and her being a widow at the time of her death persuades me that it is reasonably likely the applicant is entitled to W Street, Sydney Suburb 2.  My views in this regard are strengthened by remarks the applicant made from the bar table.  Paraphrased the applicant asserted his parents had worked hard to acquire assets for the benefit of their children and grandchildren and, in circumstances where the respondent would benefit from enforcement  it would be unjust for the Court to enforce the 1990 orders against assets recently inherited by him.

12. Because the applicant failed to give full and frank disclosure I do not know the likely value of his inheritance.  In addition to W Street, Sydney Suburb 2 this may well include property she owned in Italy.  I infer the applicant failed to disclose these and other matters because he believed disclosure would be to his disadvantage and advantageous to the respondent’s claim.  I am satisfied the applicant is likely to inherit a not insignificant sum from his late mother’s estate.

13. Turning then to the respondent’s circumstances from when the 1990 orders were made.  At that time she was in receipt of a Sole Parent Benefit.  As a consequence of the property settlement orders, she retained the former matrimonial home at Sydney Suburb 3, its contents and a car.  Between 1990 and 1995 the respondent continued to receive a Sole Parent’s Benefit which from about 1994 until 1999 included a carer’s allowance (in relation to her mother).  During these years her financial circumstances were so difficult she regularly obtained charitable assistance for food, car repairs, school clothing plus vouchers for electricity and water.  From time to time her Parish Priest financially helped her.  Her church support group gave her money for necessary living expenses and on several occasions undertook home repairs.  Arrangements were made by the respondent with the children’s private school for a waiver of school fees, subject only to a token fee for one girl in high school.

14. The respondent obtained part-time work in a school canteen and from 1993 she worked two or three nights per week at a sheltered workshop.  The elder children cared for their younger siblings whilst she was at work.  At times she took in ironing and for about three months in 1995 three nights a week she worked at a garage.  At the garage, the respondent was held up at gunpoint as a consequence of which she understandably resigned.  In relation to the garage incident the respondent received $18,000.00 compensation.  This money was used to purchase a second hand car for $10,000.00, $4,000.00 for her mother’s funeral and to take D to visit relatives in New Zealand.

15. Between 1995 and 2003 the respondent worked as a process worker. 

16. Since her marriage in 2003 the respondent has been employed by her husband from who she presently earns approximately $950.00 per fortnight.

17. The respondent denied allegations contained in the applicant’s affidavit that she earned undisclosed income.  I accept her denial. Her taxable income for the period 1989 – 2003 is contained in Annexure “B” to the applicant’s affidavit filed 11 March 2010 which is set out below:

Year	Amount	Source
1989-1990	$5,405.00	Sole Parent Benefit
1990-1991	$6,855.00	Sole Parent Benefit and school canteen work
1991-1992	$12,309.00	Sole Parent Benefit and school canteen work
1992-1993	$14,200.00	Sole Parent Benefit and sheltered workshop
1993-1994	$10,047.00	Sole Parent Benefit and sheltered workshop
1994-1995	$11,700.00	Sole Parent Benefit and sheltered workshop
1995-1996	$29,883.00	Full time employment
1996-1997	$35,473.00	Full time employment
1997-1998	$42,326.00	Full time employment
1998-1999	$40,978.00	Full time employment
1999-2000	$44,674.00	Full time employment
2000-2001	$38,650.00	Full time employment
2001-2002	$42,432.00	Full time employment
2002-2003	$42,935.00	Full time employment

1. As was earlier mentioned, the respondent remarried on 3 October 2003 from which date the spousal maintenance order ceased to have effect.  The respondent and her husband did not live together prior to their marriage.  Upon their marriage the respondent moved to her husband’s home.  This is the property in which she purchased a half share from the Sydney Suburb 3 sale proceeds.

2. The respondent’s husband is a professional person who, from when they married, employed her as a clerk. It is at this point that he became the children’s step-parent. Prior to their marriage he had no obligation to support the children or the respondent. Even if any of the children were under 18, a step-parent has a duty of maintaining a step-child under the age of 18 years only if ordered pursuant to s 66M to do so. No such order was made and none of the children were under 18 when he became their step-parent.

3. As was mentioned earlier, the respondent sold Sydney Suburb 3 to D in 2004 for $475,000.00.  The sale proceeds have previously been discussed.  It is apparent that between 1990 and 2004 the respondent increased her loan from $10,000.00 to $40,000.00, which funds I infer were used to meet her and the children’s necessary expenses.  Although the respondent does not specifically identify how much of this she needed to support herself compared to the children’s expenses, because the applicant waited so many years before he commenced these proceedings it would be unrealistic and inappropriate to expect her to produce this type of evidence. 

4. D received an $800,000.00 damages verdict in 1999, which funds were managed by the Protective Commissioner.  While D could have paid the purchase price in full, the respondent settled with $125,000.00 outstanding.  She did this so that D would have a larger sum invested to meet his long term needs.  As the size of D’s compensation payment indicates, he was seriously injured.  He has permanent brain damage, as well as reduced vision in his right eye and diminished hearing to his right side.  The respondent’s decision to delay payment of the $125,000.00 by D was a reasonable contribution by her to his support. 

5. The respondent’s current circumstances are set out in her Financial Statement filed on 21 April 2011.  Her weekly income comprises $510.00 salary and $17.00 interest.  Her total weekly personal expenditure is $261.00.  This comprises $55.00 tax, $46.00 superannuation, $130.00 rates (unit levies) and $30.00 on credit cards.  Her husband has an average weekly income of $900.00 but does not meet her expenses.  She discloses property which comprises her half interest in B Street worth $240,000.00, savings of about $24,000.00, a 2003 motor vehicle worth $6,000.00 and household contents worth about $4,000.00.  Her superannuation is worth $75,000.00 and she has $2,100.00 outstanding on a credit card.  Although she did not mention it in her Financial Statement, the respondent acknowledged D owes her $125,000.00 which she will receive in 2013.  Her husband’s share in B Street, I infer is worth the same as hers.  He is the principal in his own professional practice and I infer has a good income. 

6. Each child lived with the respondent at least until he or she turned 18.  

7. M had finished school before the 1990 orders.  He attended TAFE following which he has been employed.  M turned 18 eight days after the 1990 orders. 

8. In relation to N, the 1990 orders obliged the applicant to pay maintenance for the following three years and three days (when N turned 18).  N left school in 1992.  He repeated Year 9 and, for the period until he turned 18, he worked (on and off) in a sheltered workshop where he earned about $140.00 - $160.00 per week.  I infer when he did not have paid work N received a welfare benefit.

9. Z completed her Higher School Certificate in 1996 which is the year she turned 18.  Because Z was born in November, I infer she finished school at about the same time she turned 18.  Z attended university and it was in about 2003 that she commenced full-time employment.

10. Y completed her Higher School Certificate in 1998, which is the year she turned 18.  Like Z she was born towards the end of the year and I infer she finished school at about the same time she turned 18.  She commenced but did not complete tertiary education.  Y commenced full-time paid work the year after she finished school.  Without assistance from the applicant, the respondent paid for Y to have extensive dental work and associated reconstruction surgery.  This commenced in 1996 and was not completed until after she turned 18.  While the pre and post 18 costs are not distinguished, the total net cost of $18,000.00 suggests that prior to Y turning 18 the respondent paid a not insignificant amount for the child’s dental and medical expenses.

11. Prior to the 1990 orders, D sustained severe head injuries in a car accident.  For a period prior to D’s 1999 compensation payment, the respondent received a carer’s allowance from Centrelink.  Because of D’s special needs he attended a different private school to his elder siblings.  From when the compensation settlement was received, the Protective Commissioner allowed the respondent to draw on it for payment of his school fees, uniforms and excursions.  The remainder of D’s expenses were met by the respondent.

12. D left school after completing the School Certificate in 1999.  He then studied a trade for 12 months, the effect of which appears to be that D studied until about the end of 2000, following which he started work.

13. In his Case Outline the applicant focussed upon his claim the 1990 orders were unenforceable.  However, in his affidavits relied on in his Case Outline he referred to his inability to pay maintenance throughout the period and the respondent’s allegedly superior financial circumstances. 

1. The first question to be considered is whether the applicant established just cause to discharge the maintenance orders retrospectively. The applicant was represented when the 1990 orders were made and I am satisfied that he was aware of the orders and his obligations which there arose. Although the applicant focused upon his actual income s 66K enables the Court to take into account his earning capacity. From when the 1990 orders were made the applicant’s evidence does not demonstrate even half-hearted attempts to earn an income. This relates to operation of his importing business, via L Pty Ltd or as an employee. I do not accept that it was necessary for him to live for years in Italy to support his late mother to obtain probate of his father’s Italian estate. Although he may have felt a moral obligation to assist with her travels and litigation he had no legal obligation to do this. In contrast, the effect of s 66B and s 66C is that as a parent, his obligation to maintain his children had priority over all commitments other than commitments necessary to enable him to support himself and any other child or person he had a duty to maintain. The applicant’s asserted moral obligation to his mother is not a duty of the type referred to in the Act. Throughout the period, he had no other child or person who he was obliged to maintain.

2. The applicant has provided a variety of explanations about how he dealt with his interest in G Street, L Pty Ltd and his brother.  From remarks made by counsel for the respondent he was aware he would be cross-examined upon these matters and, as counsel made clear when the matter was listed for trial, also evidence he gave in the Supreme Court.  No attempt was made by the applicant to reconcile the apparent differences in his documents and he did not submit to cross-examination. 

3. On one version of the applicant’s evidence within two years of his departure overseas in 1991 an inference is available that he received sufficient income from L Pty Ltd and elsewhere to enable him to repay the $195,000.00 plus associated interest secured on G Street.  Calculated by reference to principal alone, he was able to support himself as well as to pay the equivalent of $1,875.00 per week towards the loan.  On this scenario he had an undisclosed income stream and earning capacity well in excess of $750.00 per week.  It follows that although the applicant could be seen as keen to repay the loan, rapid repayment of principal does not equate to meeting a commitment necessary for his support.  In other words he had ample funds to repay interest, gradually repay principal and comply with the 1990 orders (for years in relation to the maintenance orders).

4. On another version, he did not need the funds to support himself in Italy and they were returned via his late mother’s account.  On this scenario he had a significant capital sum which he could have used to comply with the 1990 orders.  He would have been able to pay the outstanding $40,000.00 property settlement adjustment plus about six years spousal and child maintenance. 

5. None of these alternatives is indicative of the applicant paying proper regard to his obligations to comply with the 1990 orders or to support his children and former spouse. 

6. There are also inconsistencies in relation to when the applicant received income from L Pty Ltd.  On one version he suggested that after he went to Italy he had no income from L Pty Ltd yet to the Supreme Court he claimed it was from 2001 that the company failed to pay him his share of profits. These inconsistencies and those discussed above add to my concern about the integrity of the applicant’s evidence and the extent to which he gave full and frank disclosure.  The inconsistencies in relation to the $195,000.00 in particular suggest dishonesty with the Court about these matters and in relation to why he failed to comply with the 1990 orders.  It renders highly unlikely mere coincidence as the explanation for the disposition of his legal interests in his assets only a few weeks after his appeal was finalised and he left Australia.  Rather, these transactions become colourable and appear part of a pattern of subterfuge to avoid compliance with the 1990 orders. 

7. The applicant’s failure to disclose the interest he claimed in G Street when he commenced these proceedings contributes to my comfortable satisfaction that from when his appeal was finalised with no change to the 1990 orders he embarked on a course to ensure, as best he could, that he neither had income nor assets against which the respondent could enforce his compliance with those orders. There is little reason to doubt that his earning capacity was considerably more than his income. Because of the manner in which the applicant approached this hearing (which includes waiting 15 years to commence the action) it is not possible to determine with precision his actual earning capacity. The property divested then reclaimed by him is appropriately taken into account pursuant to ss 66K(2) and 66K(6).

8. As to the applicant’s current circumstances he has an interest in G Street worth about $825,000.00, a not insignificant interest as beneficiary of his late mother’s estate and half interest in L Pty Ltd.  He does not disclose income and asserts he has the $346,000.00 in liabilities referred to in his Financial Statement.  It follows that even on this basis he has about $479,000.00 in net assets plus his inheritance. 

9. The respondent, on the other hand, worked to her capacity to provide for the children.  Hers was a heavy load and I am satisfied, her childcare responsibilities limited the nature of work she could perform and that her income throughout the period reflects her earning capacity.  In this regard, the income she received by a supporting parents pension and carers allowance must be disregarded.  Her home was appropriately used to accommodate her and the children and was not an asset which could, alternatively, be used to generate income.  Her victim compensation funds were similarly appropriately used.

10. According to the respondent she spent about $350.00 per week on the children’s necessary expenses from 1991 until the youngest turned 18.  While this exceeds her taxable income between when the orders were made and the 1994/1995 financial year, it will be recalled she received charitable assistance and her indebtedness increased.  In relation to the propriety of this level of expenditure, pursuant to s 66(J)(2) reference may be had to the Lee tables published by the Australian Institute of Family Studies (Coon & Cox (1994) FLC 92-464). The Lee tables are based upon a one child, one income family with a nominated average weekly earning. Lee calculated that two children cost 55 per cent more than one, whilst three children cost approximately double one. Overall, children of lower income families cost proportionately more than those of middle income families (Lee, D. (1989) Calculations of the Direct Costs of Children based on the 1984 ABS Household Expenditure Survey, Australian Institute of Family Studies, Melbourne).

11. Set out below is a table which tabulates according to Lee (and in the later years calculated by CCH Australia Limited) the average cost of one child.  Because Lee distinguishes between children across various age groups I have averaged costs across ages.  The number of children under 18 (or turned 18 during the period) and the age band width are identified in the final column.  Although I have no difficulty accepting the respondent’s evidence about her expenditure on the children’s necessary expenses, the table puts to rest any notion that $350.00 per week was extravagant or inherently improbable.  It also reinforces the notion that at $50.00 per week per child the applicant’s contribution towards their proper needs was less than equitable.  In other words, even had he complied with the 1990 orders the respondent would still have contributed more than him. 

Year	$ for one child	Children:
08/90 - 91	183	4 aged 7 – 15
08/91 - 92	197	4 aged 8 – 16
08/92 - 93	203	4 aged 9 – 17
08/93 - 94	204	3 aged 10 – 14
08/94 - 95	244	3 aged 11 – 15
08/95 - 96	230	3 aged 12 – 16
08/96 - 97	238	3 aged 13 – 17
08/97 - 98	254	2 aged 14 – 16
08/98 - 99 *	253	2 aged 15 & 17
08/99 - 00 *	268	1 aged 16
08/00 - 01 *	277	D turned 18 in 4/01

* Figures based on Lee Scale 1989, updated and published by CCH.

1. In considering whether there is just cause to discharge the child maintenance order the children’s circumstances throughout the period require consideration. 

2. From when the applicant left Australia in 1991 primary responsibility for the children’s care, welfare and development fell to the respondent.  It would appear, the children were educated and trained as she expected and considered appropriate with which I infer the applicant was content.  He would not have left the children in her care and departed the country if he was concerned that a different style of education or training was appropriate.  Thus, her decision that the children attend private schools and complete TAFE trade qualifications or remain at school until they completed their Higher School Certificates was within the parties’ expectation or an approach with which the applicant was content.  In other words, it was reasonable for the children to remain at school and/or complete TAFE qualifications rather than leave school at the first available opportunity for unskilled work.

3. Both N and D finished school before they were 18. N lived at home and worked in a sheltered workshop for minimal wages. He had periods of unemployment and was probably entitled to an income tested pension, allowance or benefit. Section 66J(3) requires that such an entitlement is disregarded. In short, N’s low income (which reflected his earning capacity) left him in need of financial support by the parties for his proper needs to be met. D had special needs which required he attend a private school. His school fees, uniforms and excursions were met, from 1999 out of his compensation. Otherwise, his compensation payment was retained by the Protective Commissioner and invested for the future. This comprised a significant capital sum which produced a return to the fund. It would seem no issue was taken by either party or D to the approach adopted by the Protective Commissioner. I infer that at least the respondent and D accepted that the severity and long-term consequences of the injuries D suffered meant a long-term and cautious approach to the use of this one-off compensation payment was appropriate. I agree. Thus, it was proper that from when the compensation payment was made, the Protective Commissioner contributed in the manner described to his proper needs but that the parties also provided him with a proper level of financial support.

4. D left school without a Higher School Certificate then studied a trade for 12 months which finished about a few months before he turned 18.  The evidence is not clear whether he started work immediately or, once he did how long this lasted.  His changed circumstances in the months before he turned 18 are not alone sufficient to amount to just cause.

5. When the parties’ and children’s financial histories from when the applicant stopped paying child maintenance and in relation to his non payment of spousal maintenance are balanced, the applicant does not establish just cause to retrospectively discharge the arrears.  For reasons previously discussed I am satisfied the applicant divested himself of assets and limited his income to avoid enforcement of his maintenance obligations.  My findings in relation to these matters carry significant weight.  The difficulties this later caused him in his dealings with his brother and sister-in-law warrant little weight.  In finding against just cause I take into account that he failed to give full and frank disclosure or reconcile the various versions about his divestment of assets.  In my view the applicant’s actions were inconsistent with the obligations imposed upon him to contribute (ultimately less than equally) to his children’s proper needs.  For those children who started work before turning 18, each had only a small income and continued to need the parties support.  As I said earlier D’s settlement resulted in his contribution to his proper needs.  However, his disabilities were such a cautious approach to the rate at which the funds were applied was appropriate and thus, he continued to require his parents’ contributions to his proper needs. 

6. The respondent’s care of the children limited her capacity for paid work. The evidence strongly established that because of her care and control of the children she was unable to support herself adequately. When s 75(2) considerations are applied to the facts it is clear that until she remarried the respondent needed and was entitled to receive spousal maintenance in the amount ordered in 1990.

7. Before he left the hearing it seemed that the applicant was keen the Court compare his and the respondent’s present circumstances.  That is, her husband has a good income, they own a home, she is employed and has savings and a car and will receive about $125,000.00 when D pays her the balance due on Sydney Suburb 3.  Unlike the applicant they are both employed.  The applicant’s net asset position has already been discussed and it is noted he does not appear to have good future employment prospects.  Even if I accepted the respondent’s current financial circumstances are superior to the applicant’s, he is not penniless and he divested assets and failed to avail himself of earning capacity so as to avoid enforcement of his maintenance obligations.  In other words his current financial situation is the direct result of this course of action.  Thus, even if I accepted his financial circumstances were somewhat more limited than are the respondent’s it would neither be right nor proper for this to be elevated to just cause. 

8. For the avoidance of doubt the matters referred to in my discussion of just cause, would have resulted in refusal to exercise my discretion in the applicant’s favour.

The Applicant’s claim to Discharge the Property Orders

1. Putting to one side s 79A of the Act and appeals, it is well settled there can be only one exercise of s 79 power. However, this power may be exercised by a succession of orders until the s 79 power is exhausted. The power is exhausted when there remains no property with respect to which orders by way of alteration of interest could be or have been made. In other words, it is only the final order which deals on a final basis with all of the parties’ known property, which exhausts the s 79 power.

2. Upon dismissal of the applicant’s appeal the s 79 power to alter the property interests between the parties was exhausted.  The order that the applicant pay the respondent $40,000.00 is a substantive and not a consequential or machinery order.  As to the definition of a consequential or machinery order, in Ravasino & Ravasino (1983) FLC 91-312 the Full Court said at p 78,127:

   A consequential order then, in a property matter, would include an order following logically or of necessity from a prior substantive order.

   What a consequential order is not is an order the effect of which is to vary the prior order for property settlement. It is not possible to suggest that even the slightest variation of the original order is a consequence of it...

   Whether what is to be done is termed a consequential order or a machinery order the result is the same. The Court has no power to vary the original order. It has power to enforce the order and to modify the machinery provisions of the order to effect enforcement provided that by so doing it does not affect the substantive rights of the parties.

   See also Molier & Van Wik (1980) FLC 90-911.

3. Hence the necessity for the applicant to establish a ground for relief pursuant to s 79A which is set out below:

   (1)  Where, on application by a person affected by an order made by a court under section 79 in property settlement proceedings, the court is satisfied that:

   (a)  there has been a miscarriage of justice by reason of fraud, duress, suppression of evidence (including failure to disclose relevant information), the giving of false evidence or any other circumstance; or

   (b)  in the circumstances that have arisen since the order was made it is impracticable for the order to be carried out or impracticable for a part of the order to be carried out; or

   (c)  a person has defaulted in carrying out an obligation imposed on the person by the order and, in the circumstances that have arisen as a result of that default, it is just and equitable to vary the order or to set the order aside and make another order in substitution for the order; or

   (d)  in the circumstances that have arisen since the making of the order, being circumstances of an exceptional nature relating to the care, welfare and development of a child of the marriage, the child or, where the applicant has caring responsibility for the child (as defined in subsection (1AA)), the applicant, will suffer hardship if the court does not vary the order or set the order aside and make another order in substitution for the order; or

   (e)  a proceeds of crime order has been made covering property of the parties to the marriage or either of them, or a proceeds of crime order has been made against a party to the marriage;

   the court may, in its discretion, vary the order or set the order aside and, if it considers appropriate, make another order under section 79 in substitution for the order so set aside.

   (1A)  A court may, on application by a person affected by an order made by a court under section 79 in property settlement proceedings, and with the consent of all the parties to the proceedings in which the order was made, vary the order or set the order aside and, if it considers appropriate, make another order under section 79 in substitution for the order so set aside.

   (1AA) For the purposes of paragraph (1)(d), a person has caring responsibility for a child if:

   (a)  the person is a parent of the child with whom the child lives; or

   (b)  a parenting order provides that:

   (i)     the child is to live with the person; or

   (ii)  the person has parental responsibility for the child.

   (1B)  An order varied or made under subsection (1) or (1A) may, after the death of a party to the marriage in which the order was so varied or made, be enforced on behalf of, or against, as the case may be, the estate of the deceased party.

   (1C)  Where, before proceedings under this section in relation to an order made under section 79 are completed, a party to the marriage dies:

   (a)  the proceedings may be continued by or against, as the case may be, the legal personal representative of the deceased party and the applicable Rules of Court may make provision in relation to the substitution of the legal personal representative as a party to the proceedings;

   (b)  if the court is of the opinion:

   (i)     that it would have exercised its powers under subsection (1) or (1A) in relation to the order if the deceased party had not died; and

   (ii)    that it is still appropriate to exercise its powers under subsection (1) or (1A) in relation to the order;

   the court may vary the order, set the order aside, or set the order aside and make another order under section 79 in substitution for the order so set aside; and

   (c)  an order varied or made by the court pursuant to paragraph (b) may be enforced on behalf of, or against, as the case may be, the estate of the deceased party.

   (2)  In the exercise of its powers under subsection (1), (1A) or (1C), a court shall have regard to the interests of, and shall make any order proper for the protection of, a bona fide purchaser or other person interested.

   (3)  In this section, a reference to an order made by a court under section 79 includes a reference to an order made by a court under section 86 of the repealed Act.

   (4)  For the purposes of this section, a creditor of a party to the proceedings in which the order under section 79 was made is taken to be a person whose interests are affected by the order if the creditor may not be able to recover his or her debt because the order has been made.

   (5)  For the purposes of this section, if:

   (a)  an order is made by a court under section 79 in proceedings with respect to the property of the parties to a marriage or either of them; and

   (b)  either of the following subparagraphs apply to a party to the marriage:

   (i)     when the order was made, the party was a bankrupt;

   (ii)    after the order was made, the party became a bankrupt;

   the bankruptcy trustee is taken to be a person whose interests are affected by the order.

   (6)  For the purposes of this section, if:

   (a)  a party to a marriage is a bankrupt; and

   (b)  an order is made by a court under section 79 in proceedings with respect to the vested bankruptcy property in relation to the bankrupt party;

   the bankruptcy trustee is taken to be a person whose interests are affected by the order.

   (7)  For the purposes of this section, if:

   (a)  an order is made by a court under section 79 in proceedings with respect to the property of the parties to a marriage or either of them; and

   (b)  either of the following subparagraphs apply to a party to the marriage:

   (i)     when the order was made, the party was a debtor subject to a personal insolvency agreement;

   (ii)    after the order was made, the party became a debtor subject to a personal insolvency agreement;

   the trustee of the agreement is taken to be a person whose interests are affected by the order.

1. The evidence does not establish a basis for s 79A relief.

The Respondent’s Enforcement Application

1. In his Summary of Argument the applicant expanded on points made in his Case Outline. In short, reliant upon s 17 of the Limitation Act it is his contention that the Court would refuse to enforce arrears because “[the respondent’s] claim is Statute Barred, as being greater than 12 years old. The claim is a fresh action on a judgment and not a Machinery Application”. He points out that s 17 “is the principal provision limiting the enforcement of judgments” and s 17(1) provides that “an action on a cause of action on a judgment is not maintainable if brought after the inspiration (sic) of a limitation period of 12 years”.

2. It is the applicant’s submission that:

   ·    A judgment normally becomes enforceable from the time it is ordered.

   ·    Judgment is defined not only a judgment of a court of New South Wales but also a judgment of a court of the Commonwealth.

   ·    The limitation period runs from the date that the judgment becomes enforceable in New South Wales. 

3. In Barrak and Ors & Barakat (2005) FLC 93-234 the Full Court considered whether by reason of s 17 of the Limitation Act a wife was precluded from enforcing orders made by this Court outside the limitation period contained in the Limitation Act. Their Honours (Faulks DCJ, Kay & Boland JJ) held that by reason of the operation of s 79 of the Judiciary Act 1903 (Cth) the Limitation Act may have application to orders made by this Court.  Because their Honours were satisfied that the Limitation Act did not apply it would seem they left for another time consideration about when in proceedings under the Act it would. Their Honours followed the reasoning in Dennehy (a Bankrupt) v Reasonable Endeavours Pty Ltd (formerly Asiaciti (Australia) Pty Ltd (2003) 130 FCR 494 and at par 56, adopted what they described as the “narrow interpretation” of the Limitation Act there referred to.  Namely, that the Limitation Act “only affects new actions upon a judgment and does not deal with steps taken in the enforcement of a judgment”.

4. In Barrak their Honours were satisfied that s 106A proceedings are proceedings in relation to enforcement and not a new action. It was significant that s 106A is found in Part XIII of the Act entitled “Enforcement of Decrees”. In this case, the respondent’s action is reliant upon s 105 which is described as relating to “enforcement generally” and, like the provision in Barrak, is found in Part XIII “Enforcement of Decrees” as well as Chapter 20 Family Law Rules, 2004 “Enforcement of Financial Orders and Obligations”. These are provisions for the enforcement of obligations by a person who has refused or failed to comply with an order. I am satisfied the respondent’s action is by way of enforcement and not an action on a cause of action. The Limitation Act does not impede her entitlement to enforce the 1990 orders.

5. In relation to the applicant’s argument the Court would generally not enforce more than 12 months maintenance arrears, as I said earlier this does not reflect the current law. In relation to enforcement of maintenance orders, s 106 of the Act provides:

   In determining whether to make an order enforcing a maintenance order, a court must not require that there be special circumstances that justify enforcing the maintenance order merely because the maintenance payable under it is more than 12 months in arrears.

6. The question which thus arises is, to what extent should the arrears be enforced?  More than once the applicant referred to the respondent’s delay in commencing enforcement action.  He pointed out that he returned to Australia on a number of occasions before his most recent return in 2004.  Perhaps he intended to convey that her failure to take action earlier caused him to believe she did not require his compliance and/or would not enforce arrears.  However, after even child maintenance ceased to be paid, the respondent contacted the CSA and sought their assistance with enforcement.  The applicant’s divestment of assets and lack of income in Australia, combined with his being primarily resident in Italy between 1991 and when D turned 18  made enforcement by the CSA or respondent all but impossible.  It would appear that once the applicant returned to Australia in late 2004, the CSA demanded payment.  Penalties for non-payment had been imposed in relation to the child maintenance orders and, it would seem in early 2005, the CSA seized $2,000.00 held in the applicant’s solicitor’s trust account.

7. The respondent’s parlous financial circumstances left her unable to pursue enforcement action in her own right.  Her decision to register the maintenance orders with the CSA was necessary and appropriate.  This does not reflect inaction by her and persuades me that the respondent has not delayed in seeking to enforce the orders.  Action earlier by either her or the CSA would probably have involved significant expense to the respondent or the tax payer to no avail. 

8. The findings made in consideration of whether the applicant established just cause to discharge the maintenance orders are relevant to the exercise of my discretion. Considered in the context of whether to enforce all, some or none of the arrears they weigh heavily in favour of enforcement of the entire amount. True it is that the children are over 18 and any amount recovered by the respondent in relation to the child maintenance orders will not be applied to the children’s benefit. However, one needs only to recall the respondent’s evidence about her income and expenditure on the children to appreciate how in order to meet their proper needs hers almost certainly went unmet. I am conscious that even if the arrears are not enforced the respondent has assets and income which provide her with a reasonable (albeit modest) standard of living. While her husband’s contribution to this outcome is not insignificant, he comprises a financial resource to her which is likely to continue. However, it would be a poor response to the maintenance provisions in the Act and the parlous situation which the respondent and children endured as a consequence of the applicant’s determination to avoid compliance with his obligations under the 1990 orders to refuse to enforce the entire sum. The only qualification relates to the applicant’s evidence the CSA seized $2,000.00 from his solicitor’s trust account. It is appropriate this amount is credited to his child maintenance arrears.

9. As I have already noted, I was unable to discern how the respondent arrived at the base figures she claims for child and spousal maintenance arrears.  Thus I have recalculated the amounts outstanding under the 1990 orders as follows:

Child Maintenance	M	N	Z	Y	D	Total
Last date maintenance payable	22/8/1990	11/8/1993	20/11/1996	13/10/1998	6/4/2001
No of days maintenance payable	8	1,092	2,289	2,981	3,887
No of weeks maintenance payable	1.14	156.00	327.00	425.86	555.29
Total maintenance payable	$57.14	$7,800.00	$16,350.00	$21,292.86	$27,764.29	$73,264.29
Less maintenance received	$30.00	$1,084.29	$1,084.29	$1,084.29	$1,084.29	$4,367.16
Maintenance owing under 1990 orders	$27.14	$6,715.71	$15,265.71	$20,208.57	$26,680.00	$68,897.13

Spousal Maintenance
Last date of spousal maintenance payable
Number of weeks of spousal maintenance	685.14
Total spousal maintenance outstanding	$102,771.43

Thus the total base amount of maintenance outstanding is $171,668.56, comprising $66,897.13 ($68,897.13 less $2,000.00 seized by the CSA) child maintenance and $102,771.43 spousal maintenance.

1. The applicant, I am satisfied, has the capacity to pay the full amount due under the maintenance orders from his interest in G Street.  If perchance he needs to utilise part of his inheritance my views about the propriety of his paying the entire sum is unaltered.  Thus, the result of receipt by the respondent of an amount in the vicinity of $172,000.00 is right and proper. 

2. Similar observations in relation to enforcement of the property settlement order are apt. That too can be paid in full from the applicant’s interest in G Street or if necessary also his inheritance. In short, in 1990 the Court was satisfied a just and equitable distribution of matrimonial assets required that the applicant pay the respondent $40,000.00. In the intervening years he withheld money from her which the Court said she should have. She was not wealthy and could ill afford refusal by him to comply. Although the applicant went to great lengths to do his best to ensure the respondent did not receive that amount, it is right and proper she now has it in full. I am conscious s 81 imposes a duty on the Court to, as far as practicable, make such orders as will finally determine the financial relationship between the parties to a marriage and avoid future proceedings between them. Orders in accordance with the applicant’s application would achieve such an outcome. However, for reasons already discussed that outcome would be neither right nor proper.

Interest

1. The respondent claims interest in relation to arrears of child and spousal maintenance, as well as property settlement. Her claim for interest is pressed reliant upon s 117B of the Act. Section 117B is set out below:

   (1)  Subject to any order made by the court under subsection (2), where, in proceedings under this Act, a court makes an order for the payment of money (other than an order for the payment by way of maintenance of a periodic sum), interest is payable, at the rate prescribed by the applicable Rules of Court, from:

   (a)  the date on which the order is made; or

   (b)  the date on which the order takes effect;

   whichever is later, on so much of the money as is from time to time unpaid.

   (2)  A court that makes an order for the payment of money as mentioned in subsection (1) may order that interest is not payable on the money payable under the first‑mentioned order or may order:

   (a)  that interest is payable at a rate specified in the order, being a rate other than the rate prescribed by the applicable Rules of Court; or

   (b)  that interest is payable from a date specified in the order, being a date other than the date from which the interest would be payable under subsection (1).

2. It is submitted by the respondent:

   That unless the Court invokes section 117B(2), which will give it a wide discretion in respect of making orders as to interest, if there is an order made for the payment of money and there is a failure to pay such money, section 117B(1) consequently standing alone makes it mandatory to order interest until there is full payment at a rate prescribed by the rules of court. (check)

3. It is argued that because the 1990 orders required the applicant to pay money to the respondent, subject to s 117B(2), the respondent is entitled to interest at the rate prescribed by the Rules in relation to the property settlement and maintenance orders. However, s 117B states that the section applies to an order for the payment of money “other than an order for the payment by way of maintenance of a periodic sum”. The child maintenance and spousal maintenance orders are, self evidently, orders “for the payment by way of maintenance”. The orders imposed an obligation upon the applicant to pay maintenance weekly which, if the word “periodic” is given its ordinary meaning also applies. The point being in relation to the payment of interest the section draws a distinction between orders for periodic (upon which interest is not payable) and lump sum maintenance (upon which, subject to s 117B(2), interest is payable). It follows that s 117B does not provide a legislative foundation for the respondent to claim interest on the 1990 child maintenance and spousal maintenance orders. In these circumstances her claim for interest on the maintenance arrears will be dismissed.

4. The effect of s 117B is that interest accrued on the unpaid $40,000.00 property settlement order. In Stephens & Stephens (2009) FLC 93-425 (May, Boland & O’Ryan JJ), in relation to a property settlement order which provided for the payment of money, their Honours said at par 413 that the effect of s 117B is:

   … interest is payable at the rate prescribed by the Rules from the date on which the order is made, or the date on which the order takes effect, whichever is later, on so much of the money as is from time to time unpaid…

5. Their Honours went on to say:

   However, the court that made the property settlement order may order that interest is not payable or may order that interest is payable at a rate specified in the order, being a rate different from the rate prescribed by the Rules, or that interest is payable from a date specified in the order…

6. At par 414, their Honours in Stephens said that the discretion conferred by s 117B(2) can only be exercised by the Court that made the order for the payment of money. It follows the discretion conferred by s 117B(2) was available to the parties to agitate before the trial Judge in 1990. According to their Honours in Stephens I cannot order that the applicant not pay interest on the unpaid property settlement from when it fell due or reduce the interest rate below the rate prescribed by the Rules.  The Court would nonetheless retain discretion to decline to enforce the full amount (including interest).

7. However, I see no reason to decline to enforce the interest component due in relation to the property settlement orders.  Firstly, the applicant provided no evidence as to why in the interests of justice the interest rate prescribed in the Rules should not be enforced.  Next, the purpose of interest is not merely compensatory and is imposed at a rate designed to ensure compliance with orders.  As their Honours in Stephens explained a commercially low rate of interest may result in a recalcitrant party liable to pay an amount of money taking advantage of an interest rate which is less than the prescribed rate. 

8. As the events of 1991 reveal, had the applicant wished to, it was within his power to raise at least $195,000.00. His evidence does not demonstrate that between when the 1990 orders were made and he raised $195,000.00 there was a material change in his circumstances. I infer, at the very least, it was open to him to raise sufficient funds to pay the respondent the $40,000.00 property settlement adjustment. Balanced against s 81 considerations each of these matters weighs heavily against the exercise of discretion in the applicant’s favour.

9. There was no reference in the 1990 orders or Act to compound interest, which is usually described as interest upon interest. If Parliament or the Court in 1990 intended this commercially punitive approach this would have been explicit. Thus s 117B interest is simple and not compound interest. At the date of the hearing $47,150.74 interest was due on the property settlement orders. Eight weeks has passed since then and a further $659.73 interest has thus accrued giving a total of $47,810.47 in interest.

Conclusion

1. The effect of my findings is the respondent is entitled to $171,668.56 in relation to the maintenance orders.  She is entitled to $40,000.00 plus $47,810.47 in relation to the property settlement orders.  From this is deducted $2,000.00 seized by the CSA from the applicant in 2005.

2. The respondent invited the Court to allow the applicant 30 days within which to pay the amount due.  Given the amount of time the proceedings have been underway and the years during which he failed to comply with the orders, 30 days is appropriate. 

3. The applicant’s history of non-compliance with orders suggests the respondent will only receive those monies she is able to seize.  By way of enforcement the respondent proposed a suite of orders the effect of which is that ultimately she receives the applicant’s interest in G Street and pays to him the difference between her entitlement and the value of his interest.  Various orders are sought in the alternative which includes a suite of orders that ultimately would result in the respondent being paid from the applicant’s interest in his late mother’s estate.  The G Street primary suite of orders is likely to be more efficient in securing compliance with these orders and generally less expensive.  The proposed orders, however, are confusing and require clarification.  While I apprehend I understand their intent, further submissions are required before the enforcement regime is ordered. 

4. Given the applicant’s history of non-compliance with orders it is appropriate and necessary until he has complied with these orders he is restrained from selling or encumbering G Street or W Street.  The respondent incurred about $60,000.00 in legal costs to bring this case to completion which, were she successful would see an application that the respondent pays her costs.  Pending determination of any costs application the respondent sought that the injunctions referred to secure a fund from which a costs order could be enforced.  Such an order is appropriate.  Similarly, it is appropriate and necessary that pending compliance with these orders, the applicant is restrained from leaving the country.

I certify that the preceding one hundred and fifty one (151) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Ryan delivered on 1 August 2011.

Associate:     

Date:              1 August 2011