CRAND & CRAND

[2016] FamCA 1154

FAMILY COURT OF AUSTRALIA

CRAND & CRAND [2016] FamCA 1154

FAMILY LAW – PROPERTY – INTERIM PROCEEDINGS – Application by the husband to discharge orders for him to pay interim spouse maintenance to the wife – Whether the husband has established a sufficient change in his circumstances pursuant to section 83 of the Family Law Act 1975 (Cth) – Where there is a lack of clarity as to the husband’s financial circumstances – Where the husband’s previously profitable company has been placed under external administration – Where the husband is now in a role of paid employment – Interim spouse maintenance order varied.

FAMILY LAW – CHILD SUPPORT – INTERIM PROCEEDINGS – Where the husband seeks a discharge of a child support departure order and a stay of the collection of any arrears – Whether the husband has established a sufficient change in his circumstances pursuant to section 129(3) of the Child Support (Assessment) Act 1989 (Cth) – Interim child support departure order varied – Application for stay dismissed – Where the wife seeks that the husband’s share of monies due to be received be lodged in the trust account of his solicitor on account of arrears of child support and spouse maintenance – Orders made.

Child Support (Assessment) Act 1989 (Cth) s 129 Child Support (Registration and Collection) Act1988 (Cth) ss 30, 111C, 113A Family Law Act 1975 (Cth) s 83
APPLICANT:	Mr Crand

RESPONDENT: Ms Crand

FILE NUMBER: SYC 5368 of 2013

DATE DELIVERED: 22 December 2016

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Stevenson J

HEARING DATE: 6 December 2016

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Sansom SC

SOLICITOR FOR THE APPLICANT: Delaney Lawyers

COUNSEL FOR THE RESPONDENT: Mr Campton SC

SOLICITOR FOR THE RESPONDENT: Newnhams Solicitors

Orders pending further order

1. Order 11 made on 29 November 2013 is varied so as to provide that the husband pay maintenance for the wife in the sum of $1,000 per week.

2. Order 12 made on 29 November 2013 is varied so as to provide that the husband pays periodic child support in the sum of $1,000 per week.

3. Order 4 made on 29 November 2013 is varied so as to allow the wife to access the funds held in Commonwealth Bank account number … for the purpose of payment of the children's school fees, excursions, uniforms, laptop computers and other education-related costs.

4. Upon settlement of the sale of the property owned by the V Trust, the husband is restrained from directing payment of his one-half share of sale proceeds to be distributed to him personally and will do all things necessary to direct the release and distribution of such funds to the Trust Account of Newhams Solicitors and to cause his solicitors to pay to the wife a sum of $85,000 on account of arrears of child support and spouse maintenance.

5. Within seven (7) days of receipt of the funds by the wife, pursuant to Order (4) above, the wife notify the Child Support Agency of a non agency payment being the amount received in reduction of the husband's child support liability.

6. Otherwise, the husband's Amended Application in a Case filed on 22 November 2016 and the wife's Further Amended Response to an Application in a Case filed on 2 December 2016 are dismissed.

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

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

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

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYC 5368  of 2013

Mr Crand

Applicant

And

Ms Crand

Respondent

REASONS FOR JUDGMENT

The proceedings

1. On 29 November 2013 Aldridge J made the following orders, inter alia, on an interim basis:

   5.That the wife is restrained from selling or encumbering, or otherwise dealing with the shares contained within the Commsec Share Portfolio No. …, other than to receive or deal with any dividends as she sees fit, without first giving the husband fourteen (14) days prior notice in writing of her intention to do so.

   …

   11.That the husband pay to the wife, or as she may direct, by way of spousal maintenance, the sum of $1,495 per week with the first payment to be made within seven (7) days hereafter and then weekly thereafter.

   12.That the assessment issued by the Child Support Registrar in respect of the children [L] born … 2004, [M] born … 2007, [N] born … 2010 and [O] born … 2012 be departed from so that the husband pay periodic child support in the sum of $1,365 per week.

2. By an Amended Application in a Case filed on 22 November 2016 the husband, Mr Crand, sought the following orders:

   Pending Further Order:

   1.That Order 11 of the Orders of 29 November 2013 be and is hereby set aside.

   2.That Order 13 12 of the Orders of 29 November 2013 be and is hereby set aside.

   For the purpose of the Child Support Agency:

   3.That pursuant to section 111C of the Child Support (Registration and Collection) Act 1988 the Assessment of the Child Support Agency number … by way of departure Order determined 29 November 2013 be stayed, including the collection of spousal maintenance, with child support reverting to the assessed according to the administrative Assessment.

   4.That pursuant to section 111C of the Child Support (Registration and Collection) Act 1988 the collection of arrears, if any, for the Assessment of the Child Support Agency number …, including the collection of spousal maintenance, be stayed.

   5.That further to or in the alternative to Orders 3 and 4 above, pursuant to Section 117 of the Child Support (Assessment) Act 1989, by way of Departure Order in relation to the Assessment of the Child Support Agency number … as at 29 November 2013, including the collection of spousal maintenance, the husband pay or cause to be paid to the wife child support only for the children as assessed according to the administrative Assessment.

   6.That the child support payable by the husband pursuant to Orders 3 to 5 above is to account for 100% of the annual rate of child support payable by him under any administrative assessment of child support to the wife.

   The Distribution of the Proceeds of Sale of the [V Trust}

   7.That it be noted:

   a.the parties expect to receive an amount of approximately $367,000.00 in or about February 2017 at settlement of the sale of the remaining property owned by the [V Trust] ("[V Trust]");

   b.the husband's parents gifted the husband the abovementioned share in [V Trust];

   c.the husband and the wife each receive an equal monthly dividend payment from [V Trust].

   8.That the parties do all things and sign all documents as may be necessary to cause the distribution of the proceeds of the remaining property owned by [V Trust] equally between the parties, with the husband's share to be directly deposited into Delaney Lawyers' Trust Account.

   9.That within seven (7) days of receipt of the proceeds of Order 8 above, the husband do all things and sign all documents as may be necessary to cause Delaney Lawyers to pay to the Child Support Agency an amount sufficient to discharge the husband's child support liability as at 23 August 2016 from the said proceeds held in Trust.

   10.That the parties do all things necessary to serve a copy of these Orders on [V Trust] within seven (7) days.

   11.That Order 5 of the Orders made by this Honourable Court on 29 November 2013 be varied to allow the wife to sell shares held in the Commsec account for the children to pay the children's school fees, excursions, uniforms, laptop computer and other education related costs and any obligation on the husband to meet these fees, if any, be set aside.

(Emphasis in original)

1. By a Further Amended Response to an Application in a Case the wife, Mrs Ms Crand, sought the following orders:

   1.The Husband's Application in a Case filed 27 May 2016 be dismissed.

   2.The orders sought by the Husband in the document headed "orders sought by the Husband" dated 23 August 2016, be refused.

   3.Upon settlement of the sale of the property owned by the [V Trust], the husband be restrained from directing payment of his one half share of sale proceeds to be distributed to him personally and shall do all acts and things and sign all necessary documents to direct the release and distribution of such funds to be paid to such funds to be paid to the Trust Account of Newnhams Solicitors on account of the husband's outstanding child support, and spouse maintenance liability, payable to [Ms Crand], with the balance of sale proceeds if any, to be held in the Trust Account of Newnhams Solicitors to meet the ongoing costs and disbursements owing from time to time to the Single Expert appointed by the parties*.

   4.Within seven (7) days of receipt of the funds by the wife, pursuant to order 3 above, the wife notify the Child Support Agency of a non agency payment being the amount received in reduction of the husband's child support liability.

   5.Should the husband fail to sign any document provided to him pursuant to Order 2 above within seven (7) days of receipt of that document by his solicitors, then a Registrar of the Family Court of Australia at Sydney be appointed pursuant to Section 106A of the Family Law Act to sign all documents in the name of the husband.

   6.A copy of these orders be served on [V Trust] Properties Campbelltown Trust within seven (7) days.

   7.Within fourteen (14) days of the date of this order the husband provide the answers and documents requested by the Single Expert in the email dated 26 September 2016.

   8.Order 4 of the orders made by this Court on 29 November 2013 be varied to allow the wife to access the funds held in trust for the children and to pay the children's' secondary school fees, excursions, uniforms, laptop computer and other education related costs should such costs not be paid by the husband.

   9.The Husband pay the Wife's costs of and incidental to this Application.

   Notation

   Order 3 above has been amended as a result of the wife's understanding that if funds are paid to the Child Support Agency to reduce the husband's child support liability, any amount paid will be assessed and distributed across all of the husband's child support liabilities, which would include any liability for the child [W Crand].

   (Emphasis in original)

2. In his Reasons for Judgment Aldridge J said, inter alia:

   6.The husband owns and operates a … business and has done so since May 2010.  He originally worked for his father after he left school, commencing firstly as a [tradesman], and then moving to a management position.  The husband controls a number of companies.  [F Pty Ltd] is said to be the head of the group which includes [I] Pty Limited] ("[I Pty Ltd]"), [H] Pty Limited ("[H Pty Ltd]") and [J] Pty Limited ("[J Pty Ltd]").  His father also has a number of companies which carry out the business …, in particular, one known as [Q] Pty Limited ("[Q Pty Ltd]").

   …

   12.The husband asserted that [F Pty Ltd] made a loss of $336 000 in the year ended June 2012.  The accounts for 2013 have yet to be prepared.  The husband provided a set of the accounts for the year ended June 2012 for [F Pty Ltd] to the wife.  These accounts do indeed show a loss of $336 625.  They show a revenue for that year of $20 736 631.  Raw materials and consumables used appear in the sum of $20 258 906.  The other expenses are described as $1 452 669.  When one turns to those expenses, one can see that rent was paid in the sum of $570 210.  Although there is a figure for staff training and welfare of $500 and employees' amenities of $11 682, there is in fact no item listed in the expenses for wages, salaries, management fees or directors' fees.

   13.It may be that raw materials and consumables referred to earlier includes such fees or subcontractor's fees.

   14.Also in evidence was a further set of the same company's accounts for the same period, but this time provided to its banker.  Although they purport to be accounts for the same period for the same company, they are quite different.  Even the formatting is different, although both sets of accounts purport to have been prepared by the same accountants.

   15.The revenue figures for the figure of raw materials and consumables are the same as in the accounts disclosed to the wife.

   16.The expenses are quite different, a total of $893 074, as opposed to $1 452 669.  The figure for rent in the accounts given to the bank is only $260 535.  An amount of $309 676 appears as management fees.  As I have said, there was no entry at all for this in the accounts given to the wife.  There are many other differences of lesser importance.  A most significant difference is that the accounts given to the bank show a profit before income tax of $204 615 and $141 527 after payment of income tax.  This is, of course, remarkably different to a significant loss.

   17.It is not presently possibly [sic] to determine which sets of accounts is correct.  It may well be that neither is at all accurate.  For present purposes, credence cannot be given to one over the other.  What can be drawn from the accounts are these, firstly, that [F Pty Ltd], on any view of both sets of accounts, has a significant turnover.  Secondly, given that the husband has apparently provided one set of the accounts of [F Pty Ltd] to the wife and a strikingly different set of the same accounts to his bankers, there must be a real concern about the quality and extent of any disclosure given by the husband and his financial circumstances.

3. Aldridge J reached the following conclusion:

   50.All this indicates that the husband has ready access to funds and assets that extend far beyond his declared wage.  Taking into account his attitude to disclosure as demonstrated by the two sets of [F Pty Ltd] accounts and his failure adequately to describe the fate of the $90,000 taken from the [Suburb C] mortgage, a less than cautious approach can be taken to findings about his capacity to meet the payment sought by the wife.

4. On 12 March 2014 a significant fire occurred at the Suburb U site.  The husband's company F Pty Ltd ("F Pty Ltd") held a contract for work at this site.  F Pty Ltd had hired equipment from Q Pty Ltd ("Q Pty Ltd") in order to carry out this work.  Certain equipment was damaged in the fire and Q Pty Ltd has evaluated this loss at $2.35 million.

5. The husband deposed that F Pty Ltd has a debt to Q Pty Ltd in an amount of $1,196,789, on account of equipment lost in the fire.  An insurance claim has been lodged by F Pty Ltd with Lend Lease, for an amount of $3,080,517 including GST (Exhibit 8).

6. On 1 September 2015 X Auditors was appointed as administrator for F Pty Ltd.  ASIC documents annexed to the husband's affidavit of 27 May 2016 show that F Pty Ltd is under external administration.

7. In May 2015 the husband entered into an arrangement with one Mr Y, who is the director of a company known as Z Pty Ltd ("ZPL").  On 17 June 2015 the husband executed a contract of employment with ZPL, whereby he took on a job as a manager on a salary package of $155,938 per annum.  The husband deposed that he receives a net salary of $1,902 per week, which is paid to him by way of a cash cheque.

8. The husband is provided with a 4WD motor vehicle by ZPL, which purchased this car in June 2015 for $180,250.  Part of the purchase price consisted of a trade-in of a car owned by Q Pty Ltd, which was previously used by the husband.  The wife continues to have use of an German motor vehicle owned by Q Pty Ltd.

9. On 12 August 2016 ZPL took out a twelve month lease on a three-bedroom plus study apartment at AA Street, Suburb BB.  This property is occupied by the husband at a monthly rental of $5,779.

10. The husband receives a sum of $173 per week from the V Trust.  It appears that this sum is deposited into his mother's bank account.  The husband maintained that he deposits a balance of his rent into his mother's account and she then transfers the total amount electronically to the letting agent.  The wife receives the same amount as a distribution from the Trust.

11. V Trust is an entity in which the parties hold a ten percent interest.  Since November 2009 they have received monthly distributions from the Trust, with the current amount being $1,500.  The last parcel of real estate owned by the Trust has been sold and settlement will occur in approximately February 2017.  The husband and the wife each will receive approximately $175,000 to $185,000 upon settlement of the sale of this property.

12. The husband stopped paying spouse maintenance and child support in September 2014.  At that time, arrears of child support amounted to $22,934.  By 14 January 2015 these arrears had increased to $53,923.  The Child Support Agency garnished sums of $603 and $745 from the husband's Commonwealth Bank account on 7 October 2015 and 13 November 2015.

13. In December 2015 the husband spent three weeks in the US.  He maintained that the purpose of this trip was "to attend two engagement parties".  The husband claimed that all expenses associated with this trip were paid by ZPL and that the travelling party stayed at a house in the US owned by his employer.  The husband adduced no evidence to corroborate his version of payment of these expenses.

14. On 22 January 2016 the husband received a demand from the Child Support Agency for payment of arrears in the sum of $134,402.  In early June 2016 the Agency placed a departure prohibition order on the husband, with a demand that he lodge a cash security of $80,583 before he could leave Australia.  The husband caused this sum to be lodged with the Child Support Agency to enable him to travel overseas in mid-2016.  He claimed that his mother provided the necessary funds but, again, adduced no corroborating evidence.

15. On 15 June 2016 the husband travelled overseas and was out of Australia until 29 July 2016.  The husband gave this evidence in relation to the source of funds for this trip:

    During this trip, I travelled to [Country CC] for employment, with expenses met by my employer and to [Country DD] to visit my family with my parents and to [Country EE], staying at my employer's house.  I stayed at my parents' home in [Country DD].

    The husband gave no other evidence whatsoever in relation to the funding of this trip.

16. On 24 November 2016 the Child Support Agency issued a certificate pursuant to section 116(2), which indicated that the current arrears amount to $228,965.  This amount consists of arrears of both child support and spouse maintenance, as the wife has registered the latter order with the Agency.

17. On 26 September 2016 the wife began work as a consultant for a company known as FF Pty Ltd.  She deposed that she is paid $80 per hour and estimated her net weekly salary at $461.  That sum, however, is net of tax, "costs" of $200 per month, Medicare levy and superannuation.  The wife deposed that this employment will cease in February/March 2017, when the company changes hands.

18. The husband is subject to a child support assessment in relation to a child W Crand, who was born in 2016.  He deposed that he engaged in "a brief relationship" with this child's mother in 2015 and that he has enquired into parentage testing.  The husband deposed that he has no current relationship with this child or her mother.  He has a child support liability of $654.25 per month support for W.

19. At the interim hearing on 6 December 2016 the wife sought to tender a bundle of documents which were divided into twelve tabs.  Objection was taken on behalf of the husband to the documents contained in tabs 1, 2, 3, 4 and 5. 

    
    

    Tab 1 contained statements for bank accounts operated by the husband's parents.  Tab 2 contained statements in relation to the husband's mother's credit card, in particular those which were said to contain gambling charges.  Tab 3 comprised one statement for a business account of F Pty Ltd and a summary of deposits and withdrawals for the period 22 May 2015 to 19 June 2015.  Tab 4 consisted of bank statements in relation to F Pty Ltd and a summary of payments to Q Pty Ltd for the period 15 July 2014 to 21 July 2015. 

    
    

    Tab 5 contained bank statements for the company I Pty Ltd and a summary of deposits.

1. I admitted these documents over the objection of the husband.  His own evidence was that he intermingles his funds with those of his mother, thus I considered it appropriate to admit the documents contained in tabs 1 and 2.  I saw no reason to exclude from evidence bank statements in relation to F Pty Ltd, which was a company under the sole control of the husband until the administration in September 2015.  I Pty Ltd was incorporated on 27 November 2013, with a former employee of the husband alleged to be sole director and shareholder.  The husband consented to the admission into evidence of the documents contained in Tabs 6, 7, 8, 9, 10, 11 and 12.

2. I considered that an important matter in relation to these documents was to avoid the speculation and inference as to their significance which characterised the material contained in the affidavits of the wife.  There was simply no evidentiary basis for much of her material.

3. After I had reserved my decision, the solicitor for the husband sought leave to re-open his case in order to tender the child support assessment in relation to W Crand.  The solicitor for the wife opposed this application.

4. At the hearing of this application for leave, the solicitor for the husband informed me that she was not in possession of the child support assessment at the time of the interim hearing on 6 December 2016.  Obviously, the husband must have been in possession of or in a position to obtain this assessment.  I accept the word of the husband's solicitor, as an officer of the Court, that she was not in possession of the assessment on 6 December 2016.

5. I granted leave as sought by the husband and admitted the child support assessment into evidence.  I took the view that the preferable course was that I have the assessment rather than vague evidence from the husband about his liability for this child.  Additionally, I considered that the income which the husband disclosed to the Agency may have relevance to these proceedings.

Consideration

Interim spouse maintenance

1. On behalf of the husband, it was conceded that the wife does not have "a complete capacity to earn income", because she cares for the parties' four children.  L, M, N and O are aged 12, 9, 6 and 4 years respectively.

2. As noted, Aldridge J placed some reliance on the fact that there were in existence two inconsistent sets of accounts for F Pty Ltd.  The husband annexed to his affidavit of 27 May 2016 a letter from his accountant, Mr GG.  This letter explained that his office produced a set of draft financial statements in approximately August 2012 and a final form of accounts, for lodgement with the ATO, in about April 2013.

3. The husband bears the onus to establish that there has been a relevant change in circumstances for the purpose of section 83(2) of the Family Law Act 1975 (Cth) (“the Act”). This subsection provides:

   83  Modification of spousal maintenance orders

   …

   (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.

1. I do not consider that the wife's recent employment is a sufficient change in her circumstances to warrant a variation of the interim spouse maintenance order of 29 November 2013.  Her uncontradicted evidence was that this work will cease in about February 2017.  She continues to be the primary carer of the parties' four children and, necessarily, she thus has a limited capacity to engage in employment outside the home.

2. The husband sought to revisit the issue of the reasonableness or otherwise of the wife's alleged expenses.  He raised this matter in the interim hearing before Aldridge J and, essentially, his submissions were rejected on that occasion.  In the current proceedings, the husband is required to establish a change in the circumstances of himself and/or the wife.  The present application does not afford the husband a second opportunity to examine the reasonableness of the wife's alleged expenses.

3. The issue is thus whether the husband has established a sufficient change in his circumstances to justify a variation to the interim order for spouse maintenance.  At the outset, I would observe that there are unanswered questions in relation to the husband's financial dealings following the fire of March 2014 which, no doubt, will receive considerable scrutiny at trial.  Obviously, the husband had no control over the events which resulted in the fire but he had oversight of F Pty Ltd until the administration.  No findings in relation to these issues can be made at an interim level and I will not act on the basis of suspicion and speculation.  In my view, however, the evidence indicated that there is a lack of clarity as to the husband's current financial circumstances.

4. Documents contained in Tab 3 of Exhibit 2 demonstrated that a total sum of $1,300,000 was withdrawn from the business account of F Pty Ltd between 22 May 2015 and 19 June 2015.  Documents contained in Tab 4 showed that a total amount of $1,797,483 was transferred from F Pty Ltd to Q Pty Ltd between 15 July 2014 and 21 July 2015.  All of these transactions occurred before F Pty Ltd was placed into administration on 1 September 2015.

5. There could well be valid reasons for these transactions but the husband elected to provide no explanation.  His counsel tendered in evidence paragraphs 24, 30 and 56 of the husband's affidavit sworn on 26 September 2014.  This material indicated that:

   ·the husband's companies paid rent and lease fees to his father's entities, at a rate below market level;

   ·F Pty Ltd paid fees for equipment hire to entities other than Q Pty Ltd;

   ·F Pty Ltd invested $200,000 in a development project of Q Pty Ltd;

   ·the Suburb U fire resulted in debts of F Pty Ltd to Q Pty Ltd for loss of equipment; and

   ·as at September 2014 an insurance claim was pending as a result of the fire.

6. The financial relationships between the husband, F Pty Ltd and Q Pty Ltd are blurred and, as noted, will no doubt attract considerable scrutiny at trial.  It is clear that substantial sums of money have moved between F Pty Ltd and Q Pty Ltd, in largely unexplained circumstances, and prior to the administration of the former company.

7. The husband's financial relationships with Mr Y and ZPL similarly are blurred and likely to come under scrutiny at trial.  There was no explanation why Mr Y and/or ZPL funded the husband's trip to the United States in December 2015.  There was no evidence in relation to the business which the husband allegedly undertook for ZPL in Country CC in June/July 2016, nor the source of funds for the rest of this trip.  There was no explanation why ZPL elected to take out a lease in respect of accommodation occupied by the husband.  There was no explanation of the arrangements between the husband, Q Pty Ltd and ZPL in relation to his luxury motor vehicle.

8. The husband has elected to intermingle his funds with those of his mother.  Documents contained in Tab 1 of Exhibit 2 showed deposits of his salary from ZPL into the account of Ms Crand Snr and withdrawals for the husband's rent and the children's school fees.  As noted, the husband claimed that his mother provided $80,583 which was lodged with the Child Support Agency to enable him to depart Australia in June 2016.

9. In these circumstances, it seems to me that the husband's parents, Mr Y and ZPL constitute a financial resource which is available to him.  It does not appear that there has been an appreciable diminution in the husband's lifestyle since F Pty Ltd entered into administration and he became an employee of ZPL.

10. The husband deposed that he has a fixed total net income of $2,075 per week, consisting of net salary of $1,902 and the trust distribution of $173.  The husband's contract of employment with ZPL (Annexure J to the affidavit of 27 May 2016) stated that he receives a "total salary package" of $155,938.  The child support assessment in relation to W stated that the husband's taxable income in 2015 was $182,464 (Exhibit 9).

11. The husband has a child support liability for W which post-dates the interim orders of 29 November 2013.  This new liability, however, must be considered in the context of the lack of clarity surrounding the husband's current financial circumstances.

12. I am persuaded that the husband has access to funds in excess of his net salary and the trust distribution for reasons set out above.  Recent history demonstrates that the husband has not met the expenses of his lifestyle entirely from his salary and the trust distribution.  On the other hand, he no longer has control of the very substantial turnover of F Pty Ltd.  Financial statements annexed to the husband's affidavit of 27 May 2016 indicated that the revenue of this company in 2013 and 2014 was $21,470,223 and $27,970,613 respectively.

13. I am satisfied that there has been a change to the husband's circumstances which is sufficient for the purposes of section 83(2) of the Act. He has moved from a position of control over an entity with an annual turnover in excess of $20,000,000 to a role of paid employment. On the other hand, I am satisfied that the husband's current financial position is unclear to both the wife and the Court.

14. In these circumstances, I am prepared to vary the interim spouse maintenance order so as to provide that the husband pay to the wife the sum of $1,000 per week.  Obviously, there is an element of arbitriness in the selection of that sum but I consider that the uncertainty surrounding the husband's financial position justifies this course.

Child support departure

1. The husband is currently required to pay child support in a total amount of $1,365 per week. The husband bears the onus to establish a change in circumstances for the purpose of section 129(3) of the Child Support (Assessment) Act 1989 (Cth) which provides:

   129  Modification of orders under Division

   …

   (3)  The court must not, by order under subsection (1), vary an order unless it is also satisfied:

   (a)  that making the variation is justified because of a change in the circumstances of the child, the carer entitled to child support or a liable parent concerned since the order was made or last varied; or

   (c)  that making the variation is justified because of a change in the cost of living since the order was made or last varied; or

   (d)  in a case where the order was made by consent—that the order is not proper or adequate; or

   (e)  that material facts were withheld from the court that made the order or from a court that varied the order, or that material evidence previously given before such a court was false.

   The husband disputed certain items which the wife claimed to be proper needs of the children in the hearing before Aldridge J, who rejected these submissions.  I did not understand there to have been a further challenge to the proper needs of the children in the interim hearing before me.  Rather, the issue which the husband raised was his alleged incapacity to pay the claimed amount of child support.

2. In my view, precisely the same considerations apply to the husband's financial position in relation to spouse maintenance and child support.  I will adopt a similar approach and vary the interim child support departure order so as to provide that the husband pay to the wife a total amount of $1,000 per week.

Stay of the Departure Order and collection of arrears

1. The husband sought a stay of the departure order and collection of arrears pursuant to section 111C of the Child Support (Registration and Collection) Act 1988 (Cth). This section provides as follows:

   111C  Stay orders

   (1)  This section applies if a proceeding has been instituted:

   (a)  in a court having jurisdiction under this Act; or

   (b)  before the Registrar under Part VII; or

   (c)  before the AAT for an AAT first review; or

   (d)  under Part 6A or 7 of the Assessment Act.

   (2)  A party to the proceeding may, subject to the Family Law Act 1975:

   (a)  in the case of a proceeding instituted in a court—apply to that court for an order under this section; or

   (b)  otherwise—apply to a court having jurisdiction under this Act for an order under this section.

   (3)  Pending the hearing and final determination of the proceeding, the court may make such orders as the court considers appropriate staying or otherwise affecting the operation or implementation of the Assessment Act and this Act if the court considers that it is desirable to do so, taking into account the interests of the persons who may be affected by the outcome of the proceeding.

   (4)  The court may, by order, vary or revoke an order made under subsection (3).

   (5)  An order under subsection (3):

   (a)  is subject to such terms and conditions as are specified in the order; and

   (b)  operates for:

   (i)  such period as is specified in the order; or

   (ii)  if no period is specified—until a decision of the court, the Registrar or the AAT determining the proceeding becomes final.

1. I am not prepared to grant the stay sought by the husband.  For reasons set out above, I consider that there are real questions which are as yet unresolved, concerning his financial position and his capacity to satisfy the interim orders from time to time.  These issues must await trial.

2. I note that the wife has registered the interim spouse maintenance order with the Child Support Agency, hence her arrears have become a debt due to the Commonwealth pursuant to section 30(1) of the Child Support (Registration and Collection) Act.  Section 30(3) provides as follows:

   30  Effect of registration

   …

   (3) If a registrable maintenance liability is registered under this Act, the payee of the liability is not entitled to, and may not enforce payment of, amounts payable under the liability other than by instituting a proceeding under section 113A to recover a debt due in relation to the liability.

1. Section 113A of the Child Support (Registration and Collection) Act provides as follows:

   113A  Recovery of debts by payees

   Payee to notify Registrar of intention to institute a proceeding to recover debt

   (1)  A payee of a registered maintenance liability may sue for and recover a debt due in relation to the liability if the payee notifies the Registrar in writing of his or her intention to institute a proceeding to recover the debt:

   (a)  at least 14 days before instituting the proceeding; or

   (b)  in exceptional circumstances—within such shorter period as the court allows.

   Note:          For provisions relating to proceedings instituted under this section, see sections 111F and 111G.

   Payee to notify Registrar of orders made

   (2)  A payee of a registered maintenance liability who has instituted a proceeding in a court to recover a debt in accordance with subsection (1) must give notice to the Registrar, in the manner specified by the Registrar, of any orders (including orders as to costs) made by the court in relation to the payee and the debt due in relation to the liability, within 14 days of the order being made.

   Note:          Section 16A provides for the Registrar to specify the manner in which a notice may be given.

   (3)  A payee commits an offence if:

   (a)  the court makes an order in relation to the payee and the debt due in relation to the liability; and

   (b)  the payee fails to notify the Registrar under subsection (2) of the order being made.

   Penalty:  10 penalty units.

   (4)  Subsection (3) is an offence of strict liability.

   (5)  It is a defence to a prosecution for an offence against subsection (3) if the person charged proves that the person gave the notice to the Registrar as soon as reasonably practicable after becoming aware of the making of the relevant order.

1. The Child Support Agency is on notice of the husband's application and of these proceedings generally (annexures I and J to the affidavit of the wife sworn on 8 November 2016) and has elected to remain at arm's length.  The solicitor for the wife served a copy of her Amended Response to an Application in a Case filed on 9 November 2016 upon the Child Support Agency by way of a letter dated 30 November 2016 (Exhibit 5).  At the interim hearing on 6 December 2016 the wife sought orders in accordance with her Further Amended Response to an Application in a Case filed on 2 December 2016.  The only difference was the wife's proposed order that she notify the Child Support Agency of receipt of funds by her from the husband's share of the proceeds of sale of the trust property.

2. The wife did not give 14 days' notice to the Agency of her intention to institute proceedings for recovery of the arrears of child support and spouse maintenance.  No submission was made on her behalf as to what exceptional circumstances warrant her being permitted to proceed, despite non-compliance with that requirement.

3. In these circumstances, the husband's proposal that the wife receive a payment of $85,000 from his share of the proceeds of sale of the trust property is a voluntary arrangement.  In my view the wife should receive this money, in circumstances where the husband has been in default of the interim orders since 2014.  I will accede to the orders proposed on her behalf, to the effect that the husband cause his share of the sale proceeds to be lodged in the trust account of his solicitor.  I accept that the wife has reason for a lack of trust in the husband.

Other issues

1. I am not prepared to make the order sought by the wife pursuant to s 106A of the Act in anticipation of a failure or refusal by the husband to execute any document necessary to give effect to the orders of the Court. Such an order involves an exercise of discretion and must take into account the circumstances which exist at the relevant time.

2. I am not prepared to trawl through the correspondence between the solicitors for the parties and the single expert Mr HH, so as to determine what additional information is required for completion of his report.  It is for the parties and their solicitors to facilitate the preparation of Mr HH's report.  I would observe that the parties have so far incurred $197,203 and $151,227 in legal fees (Exhibit 1) and a lack of proportionality appears to be a risk in the future conduct of the proceedings.

3. I am not prepared to make any orders in relation to payment of the fees of Mr HH.  The parties will each receive a distribution from the sale proceeds of the trust property in February 2017.  They should make responsible arrangements for payment of Mr HH from these funds or such other source(s) as they may elect from time to time.

Payment of school fees

1. The husband sought an order that school fees be met from the proceeds of sale of shares held in the Commsec account.  The wife sought that she be permitted to access funds held on trust for the children for that purpose.  The balance of the trust account as at 21 July 2016 was $298,847.

2. It is reasonable to anticipate that sale of shares would generate a tax liability, which would diminish the net pool of assets.  For that reason, I consider that the preferred course is that the children's school fees be met from funds held in the trust account.

I certify that the preceding fifty-seven (57) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Stevenson delivered on 22 December 2016.

Associate: 

Date:  22 December 2016