Eastland & Eastland

[2021] FCCA 888

FEDERAL CIRCUIT COURT OF AUSTRALIA

Eastland & Eastland [2021] FCCA 888

File number:

MLC 11017 of 2015

Judgment of:

JUDGE O'SHANNESSY

Date of judgment:

9 March 2021

Catchwords:

FAMILY LAW – Child support – where husband seeking to vary existing child support orders – where husband’s circumstances have changed – wife’s summary dismissal application – application dismissed.   

Legislation:

Child Support (Assessment) Act 1989 (Cth), s 117

Family Law Act 1975 (Cth)

Federal Circuit Court Act 1999 (Cth), s 17A

Cases cited:

Gyselman & Gyselman [1991] FamCA 93

Lindon & Commonwealth (No 2) [1996] HCA 14

Savery & Savery [1990] FamCA 30

Number of paragraphs:

18

Date of hearing:

9 March 2021

Place:

Melbourne

Counsel for the Applicant:

Mr R Weil

Solicitor for the Applicant:

Schembri & Co Lawyers

Counsel for the Respondent:

Dr R Smith

Solicitor for the Respondent:

Suke & Associates

ORDERS

MLC 11017 of 2015

BETWEEN:

MR EASTLAND

Applicant

AND:

MS EASTLAND

Respondent

ORDER MADE BY:	JUDGE O'SHANNESSY
DATE OF ORDER:	9 MARCH 2021

THE COURT ORDERS THAT:

1.The Summary Dismissal Application is dismissed.

2.The proceedings be adjourned to 30 June 2021 at 10:00am for Final Hearing (with an estimated hearing time of 2 days) at the Federal Circuit Court of Australia at Melbourne.

3.The matter be listed for a compliance mention by telephone on 18 June 2021 at 9:30am.

4.The party responsible for the payment of any fee including a setting down or hearing fee pay or cause to be paid such of the fees as shall be payable by that party in accordance with, and within the time specified in the Family Law (Fees) Regulation2012.

5.The Applicant file and serve any Amended Application and trial affidavit upon which he relies on and an updated Financial Statement by no later than 28 days prior to the Final Hearing.

6.The Respondent file and serve any Amended Response and trial affidavit upon which she relies on and an updated Financial Statement by no later than 14 days prior to the Final Hearing.

7.Each of the parties be at liberty to file a short affidavit in reply by no later than 7 days prior to Final Hearing.

8.Each party file and serve a case outline by no later than 7 days prior to trial and provide a copy in Word format to: associate.judgeo'[email protected]. 

AND THE COURT NOTES THAT:

A.If in any proceedings there are allegations of family violence and the provisions of section 102NA of the Family Law Act 1975 apply (see attached Family Violence Information Sheet), any unrepresented party will not be permitted to personally cross-examine the other party/parties.

B.Affected unrepresented parties may apply to the Commonwealth Family Violence and Cross-Examination of Parties Scheme ("the Scheme") for representation but any such application must be made at least 12 weeks prior to the final hearing.

C.Further information about the legislation and the Scheme can be found at Part 4 of the attached Family Violence Information Sheet.

D.If s102NA applies and a party becomes unrepresented after trial directions have been made, that party is required to promptly advise the Court.

Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.

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

EX TEMPORE
REASONS FOR JUDGMENT

JUDGE O’SHANNESSY

1. These are the settled reasons of an ex tempore decision I made immediately following the hearing on 9 March 2021.  The question I must determine is whether, taking the Husband’s case at its highest, I should summarily dismiss the Husband’s application to vary a child support departure order without further hearing the case.

2. My decision is to dismiss the application for summary dismissal.  I note that I will be fixing this matter for final hearing.  I will adopt significant parts of the law as elegantly set out by Dr Smith (counsel for the Respondent Wife) in his outline of argument and not disputed by Mr Weil (counsel for the Applicant Husband). 

3. The test for a variation of an existing departure order is as follows and I recite and adopt paragraphs 22, 23 and 24 of Dr Smith's written submissions:

   Periodic Child Support Order

   22.The variation of an existing departure order is governed by s 117 of the Child Support (Assessment) Act (‘Assessment Act’). Section 117 requires the Court to determine the following:

   22.1.There are ‘special circumstances’ which justify a departure under s 117;

   22.2.It is ‘just and equitable’ within the meaning of s 117(4) to make a particular order; and

   22.3.It is ‘otherwise proper’ to make an order within the meaning of s 117(5).

   23.With respect to variation of existing departure orders, the Full Court in Firth & Hale-Forbes [2014] FamCAFC 187 held as follows:

   [84]Before we discuss the other factors relied upon by the father, it is useful to point out that once an order has been made departing from an administrative assessment, before there can be a variation or departure from that existing order, not only must a change in circumstances be established, that change must constitute “special circumstances” as that term is described in s 117(2) of the Act (Liesert v Nutsch (1996) FLC 92-665, Bryant & Bryant (1996) FLC 92-690, Wild v Ballard (1997) FLC 92-771). The point being, that it is not enough that the father established a change in circumstances which might be special if measured against an assessment issued by the operation of the administrative scheme, the changes needed to be special when measured against his liability as set by a departure order. Thus, and by way of example, the particular expenses to a person of modest means whose child support liability is set by reference to the administrative formula may well amount to special circumstances but be inconsequential for a person with a significant income whose child support is set by reference to an order made by departure.

   24.It is therefore first necessary to identify a change in circumstances that is ‘special circumstances’ as contemplated by s 117(2) of the Assessment Act.

4. The change of circumstances that may be sufficient, as put in the Husband's case, is the significant change of his health.  I will recite those paragraphs of his affidavit filed 5 October 2020 where he sets out the change of his health. 

   Injury

   [11]In March 2020 I suffered a stress related injury that impacted my ability to work as a Manager of Employer B. At the time I was feeling anxious, depressed, run down and stressed. Having had shingles in the previous months, being in considerable pain and as a result and not being able to work, was one of the causes of my stress injury. My inability to sleep finally caused me to see a doctor. I guess that the first round of COVID-19 restrictions was another contributing factor.  The restrictions were putting enormous pressure on my business and finances. The restrictions were also impacting my ability to visit my children and other family members, and my ability to exercise. The economic effect of COVID-19 on my business and staff has been significant. I have had many examples of staff crying in my office expressing their fears for their financial future. This had a direct impact on me and how I was coping.

   [12]On 24 March 2020 I went to my usual General Medical Practitioner, Dr C, (''my GP'') to seek assistance in relation to how I was feeling.  My GP diagnosed me as being severely stressed, anxious and depressed. My GP referred me to a psychologist and prescribed me Diazepam to assist with my anxiety.

   [13]On the same date, 24 March 2020, I lodged an insurance claim with my insurer D Insurer as a result of my injury. On 28 April 2020, my GP completed a "Doctor's Initial Opinion' Form (''the Form'') in support of my insurance claim with D Insurer. At that time my GP wrote on the Form that my current clinical presentation was 'severe anxiety, poor coping, poor concentration, low mood, poor sleep, restless and no patience'.

   [14]D Insurer assessed my claim and advised me on 24 June 2020 that my claim was approved. I was assessed as eligible to receive $9,645.95 gross per month from 22 June 2020. I received my first monthly payment on 25 June 2020 and am still receiving this monthly amount. These insurance payments will continue until I receive a clean bill of health. I will continue to attend upon and be assessed by my GP monthly to determine whether I have a clean bill of health. My GP also reviews my medication and assesses if it is successfully assisting me to recover from my injury.

   [15]Prior to my injury I was earning approximately $12,500.00 gross per month from Employer B. I stopped working with Employer B on 25 June 2020 on the advice of my GP. As a result of stopping work, my income from Employer B was suspended. My last fortnightly payment from Employer B was received on 17 July 2020. Employer B has made one payment to me between the 17 July 2020 and the current date. That payment was on 16 September 2020 for the amount of $2,837.35. This amount comprised Job Keeper payments that Employer B had allowed to accumulate. I have not received any income payments from Employer B since the 16 September 2020.

   [16]My GP has recommended that I take 25mg of the anti-depressant Valdoxan. I had also been prescribed, but am no longer taking Diazepam. I also see a psychologist, Dr E on a regular basis. My next appointment with Dr E is on 14 October 2020.

   [17]I am also due to be re-assessed again by my GP in relation to my injury on 14 October 2020. Depending on the outcome of the assessment, I may or may not be able to return to work for Employer B. As a result, my income and earning capacity are extremely unpredictable at this time.

   [18]For the moment at least, Employer B has very little ongoing work and minimal income as a result of Employer B’s ongoing liabilities exceeding its income. Employer B is currently being propped up by Job Keeper payments. Even if Employer B were able to win new work, the work would have to be completed before we were paid.

   [19]Notwithstanding the fact that Employer B’s liabilities currently exceed its income, my treating medical practitioners and I are hopeful that I will be able to work on at least a part-time basis in the future. This would result in my income being comprised of a wage from Employer B based on the number of hours I work and my insurance payments which would be reduced by the wage I receive from Employer B. I am unable to say with any certainty, if and when, this may occur. 

5. His case is put that as a result of his health he cannot work and has not worked.  That has led to the sale of the business.  That has led to his income being limited to his income protection insurance and the income protection insurance has within it some uncertainty because that is a month to month proposition.  Implicit in that is in the event that he is well enough to return to work he will lose the income protection insurance but I do not have any evidence as to what his ability to earn an income would be. 

6. What is significant to me is that Dr Smith's case has rested upon the fulcrum of his income being recited in his Financial Statement of 20 May 2016 of $2,183 per week, being $480 rent, $1,403 income from Employer B and $300 from a motor vehicle.  Compared to his known income at the moment, that is from April, of $2,225 per week.  It being notorious that the additional income that he has had of JobKeeper will cease at the end of March, or it is a matter I can take notice of because it is a matter set out as a matter of law.  

7. Neither party should take any comfort from these circumstances that the Husband's case is strong, weak or otherwise.  However, were it a weak case, provided that it has not been demonstrated to me that there is no reasonable prospect in terms of section 17A(1) under the Federal Circuit Court Act 1999 (Cth) (‘the Federal Circuit Court Act’), it may succeed.

8. The circumstances of the Husband currently being in poor health (or poor mental health) and has been assessed as unable to work and the sale of the business, are in my view capable of amounting to special circumstances in the sense of special circumstances as defined in what is the common ground defining authority of Kay J in Savery & Savery [1990] FamCA 30 and Gyselman & Gyselman [1991] FamCA 93: that being facts peculiar to the case that set it apart from other cases. In my view, those circumstances as outlined as sufficient for that to be arguable.

9. Dr Smith placed much weight upon the income protection insurance and of the quantum of that insurance as dissipating the Husband’s change of health, that he cannot work and the sale of the business (netting out at $500,000 or thereabouts).

10. The submissions of Mr Weil were to the effect that as at the time of the comparison, as at the time of the orders, I must make the Husband had a universe of difference: There has been a dramatic change in circumstances, primarily hinged around his health. 

11. Dr Smith’s counterpoint to that, was as the Husband's argument is solely as to the effect on his income and that he now has a circumstance of income protection insurance for the moment, the Husbands argument falls away.  In my view, the uncertainty of that income is also a matter that may, in combination with the other circumstances, amount to a special circumstance, at least at this point.

12. The further matter is the circumstance that Mr Weil pointed to.  He says by inference in the Husband’s affidavit sworn 26 February 2021 at paragraph [36] where he referred to what he has paid in the past and Mr Weil's point that he no longer has the resources of the company to call on which, from my point of view, would include some ability to borrow or draw on the resources of the company.  He had 51% not 100% to call on the resources of the company from time to time to fund expenditures.

13. What is central to Dr Smith's case is that the key comparison is the weekly income alone when it is the Husband’s case that he has drawn on company resources by way of loan accounts which has led to the pressure of what he has to repay.  The reality, in my view, is that that company may, and this is not a finding, may have provided ability for the Husband to smooth out the demands upon his resources.

14. So in those circumstances I find that there may be, taking the Husband's case at its highest, special circumstances such as to justify the application and differentiate it from section 17A of the Federal Circuit Court Act. If there is, there may be circumstance that would mean it is just inequitable to make that order and, if there be special circumstances, there may be circumstances, upon the full exploration of the case, such that it would be otherwise proper within section 117(5) of the Assessment Act.

15. At the time of the ex tempore reasons I had limited time available.  I also rely upon the discussions with each counsel to further illuminate these reasons.  I need to make it clear that it is common ground that I look at section 17A of the Federal Circuit Court Act through the prism of Lindon & Commonwealth (No 2) [1996] HCA 14 (‘Lindon’).  It is reasonable that I can infer that Parliament can be taken to it being aware of that circumstance when using those words in section 17A.  All of those principles from Lindon are set out in Dr Smith's submissions, and I am grateful to him for that. 

16. The date that I have given for a trial is not a special fixture; the case will have some company.  My order is that Dr Smith's client's application is dismissed.  I am going to reserve the parties' costs.

17. I will note that in the event the parties wish to refer to exhibits that have already been filed, that they may do so simply because they have already been printed out and put in a folder for me and we will not have to go through that again.  So the affidavits will be new but exhibits of previous documents can be referred to in the affidavit rather than re-annexing or re-exhibiting documents. 

18. My orders will set out trial directions for the filing of material. 

I certify that the preceding eighteen (18) numbered paragraphs are a true copy of the Reasons for Judgment of Judge O'Shannessy.

Associate:

Dated:       3 May 2021