Cooper and Kingsley
[2013] FCCA 277
•13 May 2013
FEDERAL CIRCUIT COURT OF AUSTRALIA
| COOPER & KINGSLEY | [2013] FCCA 277 |
| Catchwords: FAMILY LAW – Application for discharge of Child and Spousal Maintenance Order. |
| Legislation: Family Law Act 1975, ss.64, 65, 66, 72, 75, 81, 83 |
| Cases cited: Wreford and Caley [2010] FamCAFC 21 Mathieson & Hamilton [2006] FMCAfam 238 |
| Applicant: | MR COOPER |
| Respondent: | MS KINGSLEY |
| File Number: | NCC 3131 of 2011 |
| Judgment of: | Judge Myers |
| Hearing date: | 5 December 2012 |
| Date of Last Submission: | 5 December 2012 |
| Delivered at: | Newcastle |
| Delivered on: | 13 May 2013 |
REPRESENTATION
| Counsel for the Applicant: | Mr Levick |
| Solicitors for the Applicant: | Attwaters Solicitors |
| Counsel for the Respondent: | Mr Bateman |
| Solicitors for the Respondent: | Hunter Family Law Centre Pty Ltd |
ORDERS
By consent the document summarising the winnings and earning of the applicant from [sport omitted] over the period 2000 – 2012 shall form exhibit “f” in the proceedings.
That the spousal maintenance order made 16 January 1989 be discharged as at the date of these orders.
That the child maintenance orders made 16 January 1989 be discharged as at the date of these orders.
That the sum of $35,000.00 garnished by the Child Support Agency on or about 7 September 2011 be paid in reduction of any outstanding liability of the applicant for child or spousal maintenance and that any arrears then owing by the applicant for child or spousal maintenance be reduced to nil as at the date of these orders.
The court requests that the Child Support Registrar waive all penalties payable by the applicant resulting from the collection of monies by the Child Support Agency in respect of the spousal maintenance and child maintenance order made 16 January 1989.
IT IS NOTED that publication of this judgment under the pseudonym Cooper & Kingsley is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT NEWCASTLE |
NCC 3131 of 2011
| MR COOPER |
Applicant
And
| MS KINGSLEY |
Respondent
REASONS FOR JUDGMENT
This is a matter that came before the court for final hearing in respect of an Initiating Application filed by the applicant Mr Cooper on 1 September 2011 seeking orders to discharge an order for spousal maintenance made in the [omitted] Local Court on 16 January 1998 with effect from 19 January 1998, and discharge a child maintenance order made by the [omitted] Local Court made on 16 January 1998.
The applicant having now it would appear conceded in the applicant’s written submissions that the court lacks jurisdiction sufficient to order the Child Support Registrar to discharge any penalties the applicant seeks that the court request that the Child Support Registrar waive any penalties that may have accrued as a result of non-payment of the spouse maintenance and children’s maintenance order and that the Child Support Registrar reimburse the applicant the sum of $25,000.00 retained by the Child Support Registrar from monies garnished from the applicant’s Newcastle Permanent Building Accounts.
The respondent Ms Kingsley seeks orders that the applicant’s application be dismissed and an order for costs against the applicant.
The applicant relied on the following documents that have been read and considered by the court:
a)Initiating Application filed 1 September 2011.
b)Affidavit sworn by the applicant on 24 May 2012.
c)Financial Statement sworn by the applicant on 1 September 2011.
d)Case outline document.
e)Written Submissions.
f)Supplementary Submissions.
The applicant relies upon his oral evidence given during the course of the hearing that the court has heard and considered.
The respondent relied on the following documents that have been read and considered by the court:
a)Response to Initiation Application filed 18 October 2011.
b)Affidavit sworn by the respondent on 4 August 2012.
c)Financial Statement sworn by the respondent on 7 November 2012.
d)Written Submissions.
e)Amended Written Submissions.
The respondent relies upon her oral evidence given during the course of the hearing that the court has heard and considered.
The facts in the matter are not such that they lend themselves towards an exhaustive recital of the history of the parties for the purpose of determining the proceedings.
By way of abridged history the short facts of the matter are as follows:
a)The applicant was born [in] 1967 and was 45 years of age as at the date of the hearing.
b)The respondent was born [in] 1960 and was 51 years at the date of the hearing.
c)The parties married [in] 1986.
d)On [omitted] 1987 the parties’ first daughter [X] was born.
e)The parties separated on 17 June 1988.
f)On [omitted] 1988 the parties’ second daughter [Y] was born.
g)The applicant commenced a relationship with Ms L who remained the applicant’s defacto partner as at the date of the hearing.
h)On 16 January 1989 the applicant and respondent entered into orders for spouse maintenance and child maintenance at the Local Court at [omitted] New South Wales.
i)The applicant deposes at paragraph 6 of his affidavit that at the time the orders where entered into the applicant was employed with [omitted] and was earning approximately $60,000.00 per year gross.
j)In about 1989 the respondent caused the orders made in the Local Court to be registered for collection by the Child Support Agency.
k)Following the registration of the orders with the Child support Agency the husband commenced payment of the registered liability paying the sum of $110.00 per week by way of payroll deduction. The husband deposes at paragraph 7 of his affidavit that “at some stage or stages” he paid what he describes as “an additional $10.00 per week off arrears”.
l)The applicant deposes at paragraphs 8 and 9 of his affidavit that from 18 February 1998 he received a disability pension later known as a disability support pension as a result of what the applicant identifies as a condition known as “[omitted]”, where the applicant suffers from debilitating symptoms such as inflammation and pain in the spine and other joints.
m)The applicant deposes at paragraph 9 of his affidavit that in late 1997 or early 1998 he “got in touch” with the Child Support Agency informing them that he was going to receive a disability pension. It is the applicant’s position that in consultation with the Child Support Agency he made a lump sum payment to the agency in the amount of $1,546.70 with the effect that the agency thereafter recorded a zero balance for monies owing or payable by the applicant.
n)Annexed to the applicant’s affidavit and marked with the letter “F” is bundle of documents including Child Support Account Statements. Contained within the bundle is a Child Support Payer Transaction Statement for the period 1 June 1997 to 16 September 2011. Having read and considered the Payer Transaction Statement it is apparent that on 9 April 1998 the applicant made a payment to the Child Support Agency in the sum of $1546.70 and that this amount did create a zero balance as suggested by the applicant in his affidavit. However what is also apparent is that from 30 April 1998 the Child Support Agency began to debit against the applicant’s child support account a monthly amount of $260.89 for child support. This amount was debited against the applicant’s child support account for the months of April, May June and July 1998. From August 1998 however and on a monthly basis thereafter the Child Support Agency debited against the applicant’s child support account amounts for what are described in the statement as “Penalty, For Amount Overdue” on a monthly basis in addition to the sum of $260.89.
o)On further review of the Child Support Payer Transaction Statement it appears that the Child Support Agency began collecting the sum of $10.00 per fortnight in May 2003 by which time the running debit balance on the applicant’s account had reached $20,497.43 being a combination of the sum of $260.89 debited each month plus penalties. Monthly sums continued to be debited against the account as did penalties and the debit balance continued to grow then at what can be described as at a rapid rate where the monthly penalties were in excess of $155.73 per month.
p)In on or about 30 September 2011 the applicant received a letter dated 30 September 2011 from the Child Support Agency that is attached and annexed “D” to the applicant’s affidavit. The letter sets out an number of matters including:
i)A payer may be unable to pay their child maintenance liability if they become unemployed and that many court orders do not address this.
ii)There is an administrative option for the payer to apply to the Child Support Agency to suspend collection of periodic amounts of child maintenance, payable under a court order or court-registered agreement, during a period in which they receive a social security pension or benefit.
iii)The Child Support Agency applied a low-income non-enforcement period from 13 February 1998 to the date of the letter.
iv)The Child Support Agency raised a liability payable to the Child Support Agency for the respondent from 23 January 1998 to the date of the letter and for the children from 23 January 1989 to 12 February 1998.
v)The applicant’s liability for child support and spousal maintenance was up to 28 September 2011 an amount of $37,574.64, plus an addition sum was owed being that for late payment penalties in the sum of $32,628.71.
vi)Until 19 March 1998 most payments were paid via employer deductions after that time by way of deductions from the applicant’s Centrelink benefits.
vii)A lump sum payment of $35,000.00 was received on 9 September 2011 and as at the date of the letter that amount had been held by the Child Support Agency and had not been applied to the account.
q)The applicant deposes that as at 29 August 2011 he had two Newcastle Permanent Building Society accounts with $25,000.00 in one account and $11,332.00 in the other; at paragraph 68 of his affidavit that the monies in the two accounts were the proceeds of an inheritance from his late father’s estate; and at paragraphs 69 and 70 that “without notice to me the CSA withdrew” the sum of $25,000.00 from one account and $10,000.00 from the other.
r)Despite the contents of the letter of the Child Support Agency dated 30 September 2011 (referred to above) the court notes that the Child Support Payer Transaction Statement sets out that on 7 September 2011 the debit balance on the applicant’s account peaked at $70,026.63 until the sum of $35,000.00 was credited against the account on 7 September 2011 reducing the debit balance down to $35,026.63.
s)It is apparent that following on from the 7 September 2011 the debit balance then continued to grow.
t)The applicant deposes in his affidavit at paragraphs 72 and 73 that the withdrawal of funds by the Child Support Agency have caused the applicant financial hardship and that the applicant’s family consisting of the applicant, his defacto partner Ms L and their three sons [A], who was in year 10 as at 24 May 2012, [B], then in year 8 and [C], then in year 4 have relied on charities such as the Samaritans, St Vincent De Paul, The Salvation Army, Lifeline and Newcastle City Mission.
u)At paragraph 75 of the applicant’s affidavit he deposes that his disability pension was reduced from about $1079.60 per fortnight to about $451 per fortnight and that Ms L’s pension is about $390.00 per fortnight.
v)The court notes at Paragraph 34 of the applicant’s affidavit that he received the sum of what he describes as an “inheritance payments totally $58,000.00 and the transfer of a property at Property J from his late father’s estate. At paragraph 54 of the applicant’s affidavit he deposes that he sold the said property at Property J and annexes a copy of a settlement statement for the sale of the said property that is attached and marked with the letter “K”. The settlement statement sets out that the property at Property J was sold for the sum of $480,000.00 and that the applicant received the sum of $428,189.48 from the sale and then a further sum in the amount of $48,000.00 less the agent’s commission on the sale that is not set out in the settlement statement.
w)Attached and marked with the letter “F” to the respondent’s affidavit is a certificate issued under sub-section 116(2) of The Child Support (Registration and Collection) Act Cth 1988. That certificate sets out that as at 24 May 2012 the applicant owed to the respondent the sum of $13,404.59 in respect to what is termed in the certificate as “registered maintenance liabilities”.
Both parties have set out in within their affidavit material, details relating to their historical financial circumstances on a year by year basis.
At paragraphs 104 – 107 of the respondent’s affidavit she deposes to the applicant engaging in [sport omitted]. It was put to the applicant during the course of cross examination that his involvement in [omitted] was an enterprise that afforded him an income above that of a hobby. The respondent was critical that the applicant had failed to disclose any monies the applicant had received as a result of his involvement in [omitted]. At paragraph 77 of the applicant’s affidavit he deposes that “over the years I have [omitted]. I do this as a hobby”. The applicant maintained this position during the course of cross examination.
Tendered at the conclusion of the proceedings and forming exhibit “f” in the proceedings is a schedule prepared by the parties that summarises the winnings and earning of the applicant from [omitted] over the period 2000 – 2012. The applicant received the sum of $47,753.50 over that twelve (12) year period. Averaged over the said period the applicant would have received $3979.45 per year. The applicant gave evidence during cross examination as to the cost of [omitted] from his personal experiences. It is apparent that the figure of $47,753.50 does not take into account possible expenses of maintaining [omitted]. Having read and considered the schedule that forms exhibit “f” in the proceedings and having considered the evidence of the applicant about the cost of maintaining [omitted] and particularly when taking an average of the monies earned over the twelve year period, the court finds that the applicant’s involvement in [omitted] is that of a hobby rather than of an enterprise that afforded the applicant an income of the type that ought to have been disclosed to the respondent.
The court has read and considered those documents that form exhibits “a” to “f” in the proceedings. The court particularly notes the contents of the document forming exhibit “b” in the proceedings being a schedule of arrears. The parties agree that as at the date of the hearing there were accrued arrears (absent penalties of the Child Support Agency) in the sum of $47,720.00 for spousal maintenance and $15,223.60 for child maintenance.
The court has heard and considered the oral evidence of the parties.
The court has read and considered the Written Submissions and Supplementary Submissions provided to the court on behalf of the applicant and the Written Submissions and Amended Written Submissions provided to the court on behalf of the respondent.
The applicant relies on section 83 of the Family Law Act1975 with respect to the discharge of the spousal maintenance order.
Section 83 provides:
FAMILY LAW ACT 1975 - SECT 83
Modification of spousal maintenance orders
(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.
Specifically counsel for the applicant in submissions relies on sub-section 83(2)(a)(ii) proposing that there has been a change in circumstances and further upon sub-section 83(6) seeking that the spousal maintenance order be discharged retrospectively.
The applicant relies on section 66S of the Family Law Act 1975 in support of the orders sought by him seeking to discharge the child maintenance orders and arrears.
Section 66S provides:
FAMILY LAW ACT 1975 - SECT 66S
Modification of child maintenance orders
(1) This section applies if:
(a) there is in force an order (the first order ), for the maintenance of a child (whether or not made under this Act and whether made before or after the commencement of this section):
(i) made by a court; or
(ii) registered in a court; and
(b) a person (being someone who could apply for a child maintenance order in relation to the child) or persons (each of whom could do that) apply to the court for an order under this section in relation to the first order.
(1A) With the consent of all the parties to the first order, the court may, subject to section 111AA, make an order:
(a) discharging the first order; or
(b) suspending its operation wholly or in part and either until further order or until a fixed time or the happening of a future event; or
(c) if the operation of the order has been suspended under paragraph (b) or (2)(b)--reviving its operation wholly or in part; or
(d) varying the order:
(i) so as to increase or decrease any amount ordered to be paid by the order; or
(ii) in any other way.
(1B) However, the court must not make an order under subsection (1A) that allows any entitlement of a child or another person to an income tested pension, allowance or benefit, to affect the duty of that child's parents to maintain the child.
Note: For the duty of a parent to maintain a child, see section 66C.
(2) In any other case, the court may, by order:
(a) discharge the first order if there is just cause for so doing; or
(b) suspend its operation wholly or in part and either until further order or until a fixed time or the happening of a future event; or
(c) if the operation of the order has been suspended under paragraph (b) or (1A)(b), revive its operation wholly or in part; or
(d) subject to subsection (3), vary the order:
(i) so as to increase or decrease any amount ordered to be paid by the order; or
(ii) in any other way.
(3) The court must not vary the order so as to increase or decrease any amount ordered to be paid by the order unless it is satisfied:
(a) that, since the order was made or last varied:
(i) the circumstances of the child have changed so as to justify the variation; or
(ii) the circumstances of the person liable to make payments under the order have changed so as to justify the variation; or
(iii) the circumstances of the person entitled to receive payments under the order have changed so as to justify the variation; or
(iv) in the case of an order that operates in favour of, or is binding on, a legal personal representative--the circumstances of the estate are such as to justify the variation; or
(b) that, since the order was made or last varied, the cost of living has changed to such an extent as to justify its so doing (this is expanded on in subsections (4) and (5)); or
(c) if the order was made by consent--that the amount ordered to be paid is not proper or adequate (this is expanded on in subsection (6)); or
(d) that material facts were withheld from the court that made the order or from a court that varied the order, or material evidence previously given before such a court was false.
(4) In satisfying itself for the purposes of paragraph (3)(b), the court must have regard to any changes that have occurred in the Consumer Price Index published by the Australian Statistician.
(5) The court must not, in considering the variation of an order, have regard to a change in the cost of living unless at least 12 months have elapsed since the order was made or last varied having regard to a change in the cost of living.
(6) In satisfying itself for the purposes of paragraph (3)(c), the court must have regard to any payments, and any transfer or settlement of property, previously made to the child, or to any other person for the benefit of the child, by the person against whom the order was made.
(7) An order decreasing a periodic amount payable under the order, or discharging the order, may be expressed to be retrospective to such day as the court considers appropriate.
(8) If an order (the subsequent order ) decreasing a periodic amount payable under the first order is expressed to be retrospective, amounts paid under the first order that are not payable under the first order as varied by the subsequent order may be recovered in a court having jurisdiction under this Part.
(9) If an order discharging the first order is expressed to be retrospective to a specified day, amounts paid under the first order since the specified day may be recovered in a court having jurisdiction under this Part.
(10) For the purposes of this section, the court must have regard to the provisions of Subdivisions B, C and D (to the extent applicable).
(11) The discharge of the first order does not affect the recovery of arrears due under the order when the discharge takes effect.
Counsel for the respondent correctly submitted that it is the applicant who bears the onus of proof in persuading the court that it should exercise it discretion to discharge the spousal maintenance order and child maintenance order.
The applicant relies on the agreed fact that the applicant has been in receipt of a disability support pension in its’ various guises since on or about 19 February 1998.
The Full Court of the Family Court of Australia in Wreford and Caley [2010] FamCAFC 21considered the circumstances in which the court should exercise discretion in the context of an appeal of a decision of the Federal Magistrates Court of Australia dealing with discharging child maintenance arrears. In determination of this issue the court considered the laws relating not only to the discharge of child maintenance arrears but also in respect of the discharge of a spousal maintenance order.
At paragraphs 59 – 64 the Full Court discussed the issue finding that the exercise of the courts’ discretion required the consideration of a two stage test being firstly whether there is just cause to discharge the order and arrears and secondly whether the court ought discharge the order and arrears. The relevant paragraphs detailing the Full Courts’ consideration of the issue are set out below:
“ In Vakil (supra), the Full Court was considering the discharge of a spousal maintenance order which, irrelevantly for our purpose, had been obtained overseas. The provisions to which the Full Court referred as being appropriate to inform the Court in its consideration of whether there is, or is any, just cause to discharge a maintenance order, were general substantive provisions in relation to spousal maintenance, in particular:-
• the right of a spouse to maintenance (s 72);
• the matters to be taken into consideration in relation to spousal
maintenance (s 75);
• the duty of the court to end financial relations (s 81); and
• amongst the principles to be applied by courts – 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)).
60. In Daniels and Bell (2007) FLC 93-315 the Full Court in dealing with an appeal from a Federal Magistrate had cause to consider the meaning of “just cause” in s 66W(2) and at paragraphs 66-70 quoted with approval the passages from Lutzke and Lutzke (supra) and Vakil and Vakil (supra) to which we have referred (in paragraph 56 and 58), adding:
Section 81 of course requires the court to, as far as practicable, make such orders as will finally determine the financial relationship between parties to the marriage and avoid further proceedings.
In our view, the concept of whether it is “right” or “proper” to discharge a maintenance order readily encompasses consideration of conduct such as delay.
61. In considering the meaning of “just cause”, they raised another matter which bears some consideration. In paragraphs 64 and 65 of the reasons for judgement the Full Court considered the meaning of the term “just cause” in s66W(2) and said:
64. This submission renders necessary some consideration of the term “just cause” in section 66W(2). We repeat the terms of that subsection so far as relevant:
“2. If arrears are due under such an order when the order ceases
to be in force, the court may, by order retrospectively:
(b) discharge the order if there is just cause for doing so;
or…”Arguably, these terms provide for a dual exercise of discretion; firstly, that to be exercised in finding whether or not there is a “just cause” and secondly whether, though “just cause” has been established, the order ought or ought not be discharged. Under this approach, a factor such as the making of non-agency payments may, in a particular case, be regarded as a “just cause” for discharging the order, but nonetheless other factors such as delay, or perhaps representations or promises by the payer to the payee, may mean that notwithstanding existence of a “just cause”, in the ultimate exercise of discretion, an order is not discharged.
65. Alternatively, there is but one enquiry and that is whether “just cause” exists. If it does, the order must be discharged. Senior counsel for the father’s submission, we thought, implied this approach. This interpretation would seem to attach no significance to the words “the court may”, in the second line of the subsection. Leaving that aside, whether ultimately the two approaches would produce different results would depend upon whether the court could, in determining “just cause” under the alternative approach, take into account any or all of the factors taken into account under the two step approach.
Senior counsel for the father’s submission seems to imply a negative answer.
62. We think there is much force in the proposition as posed by the Full Court that s 66W(2) calls for a dual exercise of discretion: first, that to be exercised in finding whether or not there is a “just cause” and secondly whether, though “just cause” has been established, the order ought or ought not to be discharged. We think that is the interpretation preferred by their Honours in Daniels and Bell (supra) because of the comments in paragraph 65, where they said:
65. Alternatively, there is but one enquiry and that is whether “just cause” exists. If it does, the order must be discharged. Senior counsel for the father’s submission, we thought, implied this approach. This interpretation would seem to attach no significance to the words “the court may”, in the second line of the subsection. (our emphasis)
63. As the result of the case before them appeared not to turn upon this, their Honours did not consider it further. We think, however, there is substance in the proposition that it is a dual exercise. The effect of that would be to require his Honour to consider whether “just cause” had been established and then consider whether the order ought or ought not to be discharged.”
The Full Court in Wreford and Caley went on to consider the meaning of “just cause” at paragraphs 70 set out below:
“70.What matters then should inform the exercise of discretion in determining what constitutes “just cause”? In Mathieson & Hamilton (supra), Walters FM, in dealing with an application under the Child Support (Assessment) Act 1989(Cth) distilled what he saw as a number of principles, considerations or factors relating to enforcement of arrears of maintenance or child support. In doing so, his Honour considered, in addition to enforcement, whether there should be any discharge of the arrears. His Honour discussed three principles and a number of considerations and held:
(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.
71. His Honour concluded by saying (at paragraph 230):
The Court should be very cautious not to encourage a Payer to metaphorically sit back and ignore his/her liability for maintenance or child support, and to continue to ignore such liability “…hoping for the best.”
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.”
An examination of the principals and considerations proposed by Walters J as he was then a Federal Magistrate in Mathieson & Hamilton [2006] FMCAfam 238 are discussed below:
a)Did the applicant actually know or ought to have known of his obligation to pay maintenance or child support? The applicant states at paragraph 7 of his affidavit “Within a couple of years of the orders of 16 January 1989 being made, [Ms Kinglsey] arranged for the orders to be registered for collection with the Child Support Agency (“CSA”). All of the payments I made after the time of that registration were made through the CSA.”. The applicant states at paragraph 13 of his affidavit “it was my understanding from my discussions with officers at the CSA in 1998 was that so long as I remained in receipt of benefits as my sole source of income I had no enforceable liability for either child maintenance or spouse maintenance.”. It is apparent that the applicant then became aware in about May 2003 that he would be required to pay monies to the CSA stating at paragraph 16 of his affidavit that “at about this point in time I was informed by Centrelink or the CSA that there had been a change in the relevant legislation such that even for a person even for a person on benefits some modest amount could be and would be automatically deducted from my benefits and credited towards the maintenance debt, and that is what then occurred each fortnight and is still occurring. From this point in time the debit transactions were at a rate of $120.00 per fortnight on account of spouse maintenance, together with monthly penalties.”.
b)In the Amended Written Submission prepared by counsel for the respondent it is suggested at paragraph 57.5 that the applicant conceded during cross examination that he placed a property purchased at Property M into the name of his partner so that “the respondent could not come and take it”. Cross examination of applicant concerning this issue is found at page 43 paragraphs 25-35 of the transcript of the proceedings which provides:
Counsel: And is the reason for putting the property in the name of Ms L because you wished to avoid creditors knowing you had some property?
Applicant: No
Counsel: What’s the reason for putting the property in Ms L’s name?
Applicant: Because she put pressure on me as to thinking that [Ms Kinglsey] might come and take it, so at the time I just put it in her name.
Counsel: And when you say [Ms Kinglsey] coming and taking it, was that because you were worried about the arrears of maintenance that were building up with the child support agency?
Applicant: No.
c)Whilst the court does not accept that the placing of the property at Property M by the applicant into his partner’s name was indicative that the applicant knew or ought to have known of his obligation to pay maintenance or child support, having regard to the evidence of the applicant contained within his affidavit the court is satisfied that the applicant knew of his obligation to pay maintenance and child support.
d)The court must consider whether the respondent pressed or pursued – directly or indirectly – her rights to obtain payment of spousal and child maintenance, and whether she did so in a timely fashion.
e)At paragraphs 68 – 70 and paragraph 75 of the submissions prepared by counsel for the applicant it is suggested that the court should have regard to
“the fact that the Wife took no action to enforce the child maintenance agreement until after the Husband brought proceedings to seek repayment from the Child Support Registrar of moneys deducted by him from the Husband’s Newcastle Permanent Building Society accounts even though she was able to do so from 2006…The Wife has never sought to enforce the child maintenance order until her Response was filed on 28 October, 2011 some 5 years after the youngest child attained the age of 18 years….Further the wife does not in fact attempt to enforce the child maintenance order but rather seeks to quantify the arrears of both orders as being the sum of $25,000.00…It is submitted that the Wife’s failure to attempt to enforce the orders since 2006 is a concession by her that the Husband had no capacity to meet the spousal maintenance order or child maintenance order until such time as he received his inheritance..”
f)Having reviewed the evidence the court is satisfied that the respondent did not press or pursued either directly or indirectly her rights to child maintenance and spousal maintenance in a timely fashion.
g)The court must consider whether, by words or conduct, the respondent led or permitted the applicant to form a reasonable view that the applicant’s obligation to pay maintenance or child support would not be enforced, and whether (and in what way) the applicant was thereby induced – whilst acting in good faith – to change his financial position.
h)Having regard to the evidence in the proceeding the court is not satisfied that the respondent whether by words or by conduct led or permitted the applicant to any view whether reasonable or otherwise that payment would not be enforced.
i)The court must consider whether by words or conduct, the applicant led or permitted the respondent to form a reasonable view that the applicant’s obligation to pay maintenance or child support would be met, and whether (and in what way) the respondent was thereby induced – whilst acting in good faith – to change his/her financial position.
j)The court is not satisfied having regard to the evidence that the applicant by words or conduct led or permitted the respondent to form a view that the applicant’s obligations would be met. There is no persuasive evidence before the court that would allow the court to find that the respondent was induced whether acting in good faith or otherwise to change her financial position as a result of virtue of the conduct or words of the applicant.
k)The court must consider whether the applicant had (other) appropriate or adequate reasons for failing or refusing to pay. The court notes that from 18 February 1998 the applicant received a disability pension later known as a disability support pension as a result of what the applicant identifies as a condition known as “[omitted]”, where the applicant suffers from debilitating symptoms such as inflammation and pain in the spine and other joints. The applicant’s evidence with respect to his entitlement to a disability pension, his medical diagnosis and symptoms were not challenged. The court forms the view that the applicant’s inability to work as a result of suffering from “[omitted]” are appropriate and adequate reasons for failing to pay the total of his ongoing liability noting that from about May 2003 the Child Support Agency began deducting some monies from the disability support pension paid to the applicant.
l)The court must consider the financial circumstances of the applicant, the respondent and the children during the period of the non-payment, and at the time that the enforcement of the arrears is sought (including the applicant’s ability to pay at all relevant times). Without going into detail of the financial circumstances of the parties on a year by year basis the court has considered the financial circumstances of the applicant during the period of non-payment and at the time the arrears are sought including his ability to pay at all relevant time as set out at paragraphs 38 – 70, and 72- 76 of his affidavit including his financial statement. The court has considered the financial circumstances of the respondent and the children during the period of non-payment and at the time the time the enforcement of the arrears is sought as set out in the affidavit of the respondent at paragraphs 48 – 103. Ultimately while there may be some debate between the parties as to the capacity of the applicant to have paid during the period of non –payment and the respondent’s need perhaps for spousal maintenance during the same period the court is able to find that the applicant as at the date of the hearing has the financial means available to him being the monies from the proceeds of sale of the property at Property J to pay the whole of the outstanding arrears for child maintenance, spousal maintenance and for that matter monies levied against the applicant’s account with the Child Support Agency for what are termed by the Child Support Agency as “Penalty, For Amount Overdue Child Support”.
m)The court must consider whether the applicant has made full and frank disclosure of his/her financial position at all relevant times. The court takes relevant times to mean the period of non payment up to and including the date of the hearing in this matter.
n)In the Amended Written Submissions prepared by counsel for the respondent much criticism is levelled against the applicant under the heading “Non Disclosure by Applicant” at paragraphs 55 – 59.2.
o)The criticism level at the applicant for what is termed by the respondent as ‘non disclosure’ can be divided into that relating to the applicant’s inheritance including the property he received from his late father’s estate at Property J, the applicant’s interest in Property M and income/monies derived from the applicant’s involvement in [sport omitted].
p)Dealing with the issue of inheritance the court notes that the applicant’s late father passed away prior to the commencement of these proceedings. The applicant received both a property at Property J and also monies from his late father’s estate. The applicant’s ownership of the property at Property J is listed as an asset of the applicant in his Financial Statement. The Applicant does not seek to assign a value to the property less than what it subsequently sold for, but lists the value as “Not Known”.
q)Counsel for the respondent raises criticism in the Amended Written Submissions with respect to a failure by the applicant to disclose investment income the respondent had received from the St George Bank in the sum of $3875.52 for the financial year prior to the applicant swearing his financial statement. The foundation for such criticism appears a correct one when looking at the document forming exhibit “d” in the proceedings being a transaction listing for the applicant’s St George Bank account no. [omitted].
r)Further criticism is raised within the Amended Written submissions that the applicant failed to disclose within his financial statement investment income the applicant was receiving by way of interest received on the balance of the proceeds of sale of the property at Property J. The applicant sets out at paragraph 74 of his affidavit that the property at Property J was sold by him on or about 2 April 2012. The Settlement Statement that is attached and annexed a “K” to the applicant’s affidavit confirms the settlement date. In circumstances where the settlement of the sale was occasioned after the swearing of the applicant’s financial statement no criticism can be directed at the applicant with respect to a failure by him to disclose investment income earned from the sale proceeds.
s)The court notes that Order 10 of the orders made on 25 May 2012 required both parties to file and serve an updated Financial Statement 28 day prior to the hearing. The applicant failed to comply with this order. Had there been compliance the applicant would have or should have provided information with respect to his investment income.
t)As at the date the applicant swore his affidavit he would have been aware of the totality of the proceeds of sale from the property at Property J. While the applicant did annex to his affidavit a copy of the Settlement Statement the applicant did not disclose the total of the amount he would receive noting that the Settlement Statement notes that the Real-estate Agent on the sale holds a “deposit of $48,000.00 from which commission is to be deducted” and the balance paid to the applicant. The applicant does not further set out in his affidavit where he applied the proceeds of sale or his intentions with respect to the application of those monies. Information with respect to the proceeds and investment of monies was only elicited through examination in chief by counsel of the applicant.
u)The court notes the criticism directed towards the applicant over what the respondent describes as a failure in disclosure about the applicant’s interest he holds in the property in at Property M.
v)Counsel for the respondent suggests in the Amended Written submissions of the respondent that the caveat placed on the title of the property at Property M, being the document that forms exhibit “C” in the proceeding, gives the applicant an interest in the property that should have been disclosed by the applicant in the proceedings and particularly in the applicant’s Financial Statement. The court notes that the applicant’s financial statement does not list an interest in the property at Property M or for that matter monies being repayable to him on the sale of the property at Property M as being property owned by him.
w)The caveat lists the applicant as being the caveator. Contained within Schedule 1 of the caveat under heading “Nature of the estate or interest in land” is the description “An equitable interest representing the total purchase price of the property”. Contained within schedule 1 of the caveat is a further heading titled “By virtue of the facts stated below”. Under that heading is the description “in accordance with oral agreement made on or about 31 January 2000 the caveator provided all purchase monies towards the purchase of the property. The monies provided being repayable on sale or transfer of the property”.
x)The applicant swore in the final part of the caveat form a Statutory Declaration before solicitor Kate Kelso that to the best of the applicant’s knowledge, information and belief he has a “good and valid claim to the estate or interest set out in Schedule 1” of the caveat.
y)It is the view of the court that the applicant ought to have disclosed his interest in the property at Property M as described by the applicant in the terms set out by him in Schedule 1 of the caveat. The court finds that the applicant has failed to provide full and frank disclosure of his financial position at all relevant times.
z)The court notes the respondent’s criticism with respect to the applicant having failed to disclose income/monies derived from the applicant’s involvement in [sport omitted]. For the reasons set out at paragraph 10 and 11 of this judgement the court finds that the monies derived by the applicant in respect of his involvement in [omitted] was not of a type that would have required him to disclose such monies to the respondent or for that matter in the Financial Statement of the applicant filed in these proceedings.
At paragraphs 73 -74 of Wreford and Caley the full court stated:
“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.”
The court has considered those legislative provisions with the Family Law Act1975 being particularly sections 66B noting the objects of the division, 66C noting the principle that parents have a primary duty to maintain children, 66J being those matters set out at subparagraphs 1-4 the court must take into account in considering financial support necessary for maintenance of child, 66K being those matters to be taken into account in determining the contribution that should be made by a party and 66S being those provisions relating to the modification of child maintenance orders when determining the issue of ‘just cause’.
This is in the view of the court a matter where it would appear that the applicant has, adopting the turn of phrase of Walters J, sat back and ignored his liability and hoped for the best. In saying that though, it is the view of the court that when considering those matters set out at paragraphs 25 and 26 of this judgement that there is a just cause and that the court ought to discharge the orders and arrears in so far as the court is of the view that the monies garnished by the Child Support Agency should extinguish any liability to the respondent in respect of either spousal or child maintenance, that the court should request the Child Support Registrar to discharge and waive all penalties charged to the applicant and that the spousal maintenance and child maintenance agreement made by way of orders on 16 January 1989 should be brought to an end.
For the reasons set out in this judgment the court makes the orders and request.
I certify that the preceding thirty (30) paragraphs are a true copy of the reasons for judgment of Judge Myers.
Date: 13 May 2013
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