Greystoke and Greystoke

FAMILY COURT OF AUSTRALIA

GREYSTOKE & GREYSTOKE

[2007] FamCA 699

FAMILY LAW - CHILD SUPPORT – LEAVE TO APPEAL – The trial judge made child support orders varying a 1995 child support agreement whereby the husband was considered to have fulfilled all child support requirements upon the transfer of real estate to the wife, part of which was to be held on trust for the children. Having regard to the children’s special needs and the husband’s income and assets, it was ordered that child support be paid in accordance with the administrative formula from 1 January 2002 (the year the wife sought assistance from the husband) and that the husband pay 50 per cent of the children’s medical expenses – The wife’s application for leave to appeal was motivated by the effect the arrangement placing the property on trust for the children had on their ability to obtain means tested social security payments – This difficulty did not give rise to any basis to vary the agreement – Whilst the trial judge approached her task via s 117(2) of the Child Support (Assessment) Act1989 (Cth) the proper approach should have been via s 129 – This error was immaterial to the outcome – The applicant has not demonstrated that the trial judge has made any error in findings or in the application of legal principles – Application for leave to appeal dismissed – Costs of the appeal to be determined on further submissions – The slip rule was applied to correct the date from which child support was to run, from the incorrect date of 28 August 2002 to 1 January 2002, to correspond with the trial judge’s reasons for judgment

Child Support (Assessment) Act1989 (Cth)
Family Law Act 1975 (Cth)

Gilmour and Gilmour (1995) FLC 92-591; (1994) 18 Fam LR 646
OP v HM (2002) FLC 98-017; (2002) 29 Fam LR 251
Wild and Ballard (1997) FLC 92-771; (1997) 22 Fam LR 291

APPELLANT:

MS GREYSTOKE

RESPONDENT:

MR GREYSTOKE

FILE NUMBER:

PTW2039

1992

APPEAL NUMBER:

WA13

2006

DATE DELIVERED:

13 July 2007

PLACE DELIVERED:

Perth

JUDGMENT OF:

Bryant CJ, Kay and Thackray JJ

HEARING DATE:

18 June 2007

LOWER COURT JURISDICTION:

Family Court of Western Australia

LOWER COURT JUDGMENT DATE:

28 July 2006

LOWER COURT MNC:

[2006] FCWA 79

REPRESENTATION

COUNSEL FOR THE APPELLANT:

Self Represented

COUNSEL FOR THE RESPONDENT:

Mr Walker

SOLICITORS FOR THE RESPONDENT:

Max Beckerling,
DCH Legal Group

ORDERS

That the wife’s application for leave to appeal the orders made by the Honourable Justice Penny on 28 July 2006 be dismissed.
That order 3(b) of the above mentioned orders be varied by substituting the words “1 January 2002” for the words “28 August 2002” therein appearing.
That the respondent husband file and serve any submissions in relation to costs relating to the application for leave to appeal and the appeal within fourteen (14) days of receipt of these reasons for judgment.
That the applicant wife file and serve any submissions in response thereto within a further fourteen (14) days.
That the respondent husband file and serve any submissions in reply within a further seven (7) days.

IT IS NOTED IN CONNECTION WITH THESE ORDERS that the judgment of the Full Court delivered this day will for all publication and reporting purposes be referred to as Greystoke and Greystoke.

THE FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT PERTH

Appeal Number: WA13 of 2006
File Number: PTW2039 of 1992

MS GREYSTOKE

Appellant

And

MR GREYSTOKE

Respondent

REASONS FOR JUDGMENT

This is an application for leave to appeal child support orders made by Penny J on 28 July 2006.
In particular the orders that are the subject matter of the application for leave to appeal are as follows:
3.In relation to the Form 63 departure application filed 12 December 2002:
(a)paragraph 5 of the Child Support Agreement is varied to delete the words “the children attain the age of 18 years” and substitute “31 December 2001”;
(b)from 28 August 2002 the husband is to pay child support for the three children of the marriage [C] born…August 1986, [D] born…August 1988 and [M] born…September 1989 (“the children”) calculated pursuant to the provisions of the Child Support (Assessment) Act 1989;
(c)there be a departure from the administrative assessment pursuant to s 117 of the Child Support (Assessment) Act 1989 so that the husband shall pay 50% of the medical expenses incurred by the wife for the children which have not been recovered by Hospital Benefit Fund or Medicare rebate, such liability to commence on 1 January 2002;
…
(e)the husband shall pay child maintenance until such time as [C] either:
(i) completes his Certificate III…; or
(ii) is certified fit for employment; and
otherwise this order will be reviewed on 1 December 2006
4.The husband shall have 30 days after the Child Support Agency issues an assessment of the arrears created by these orders to make a lump sum payment to the wife in the sum assessed by the Child Support Agency.
Despite the copious amount of paperwork that this application has generated, it was not abundantly clear from the proposed notice of appeal nor the oral argument before us as to precisely what it was that the applicant sought to achieve if she could persuade us that the trial judge’s orders should be set aside or varied in some way. We will return to the substance of the application in due course.

LEAVE TO APPEAL

An appeal only lies to a Full Court of the Family Court from the decree of a Family Court of a State made under the provisions of the Child Support (Assessment) Act 1989 (Cth) by way of leave (see section 102 Child Support (Assessment) Act1989 (Cth)). The reported decisions which are conveniently set out in OP v HM (2002) FLC 98-017; (2002) 29 Fam LR 251 at paragraph 18 establish that in determining whether or not to grant leave the court should not be too restrictive if the court perceives that there has been an error of principle which has significantly affected the applicant’s substantive rights.

BACKGROUND

The applicant and the respondent were formerly husband and wife. They married in 1982 and separated in 1991.
There are three surviving children born of the marriage that were the subject of the child support proceedings, namely C born in August 1986, D born in August 1988 and M born in September 1989.
After the parties separated they entered into an informal arrangement for the provision of child support. Eventually the applicant wife applied for an administrative assessment of child support and the husband was assessed to pay child support in the sum of $8,541 per annum from February 1994.
At the time the parties separated they owned a property at K Street, Western Australia.
By early 1995 the parties had reached an agreement which was reflected in a Child Support Agreement, an agreement executed pursuant to section 86 of the Family Law Act1975 (Cth) and an Agreement executed pursuant to the provisions of section 66ZC of the Family Law Act 1975 (Cth). Those documents together basically provided that the K Street property was to be subdivided into two lots described as “the front portion” containing the matrimonial home and “the rear portion”. It was agreed that the properties be transferred solely into the name of the wife. The rear portion was to vest in her absolutely subject to a condition that upon its sale the husband would receive $20,000. The front portion was to be held in trust by the wife for the children. The husband was to be relieved from paying any further child support for the children.
The operative provisions of the Child Support Agreement were as follows:
1.That upon subdivision of the former matrimonial home into two separate titles the titles will be transferred solely into the name of the wife;
2.The rear portion of the subdivision is to vest to the wife absolutely. The front portion upon which the former matrimonial home is situated is to be held in trust by the wife for the children;
3.Upon registration of this Deed in the Family Court of Western Australia and transfer of the titles into the name of the wife, the husband shall pay no further maintenance in relation to the children of the marriage;
4.The wife shall execute a Declaration of Trust in relation to the front portion of the subdivision in favour of the children of the marriage;
5.The child support paid by the husband pursuant to the provisions hereof shall be credited against the husband's liability under any relevant administrative assessment and the child support is to be counted for 100% of the annual rate of child support payable under any relevant administrative assessment until the children attain the ages of eight (18) years [sic]; [and]
6.The parties seek to have this Deed registered for acceptance as a Child Support Agreement and the parties seek to have the Deed registered in the Family Court of Western Australia.
The front portion was subsequently transferred into the wife’s name and she executed a Declaration of Trust in favour of the children as tenants in common in equal shares. Before the rear portion was transferred into the sole name of the wife it was sold to an arms length purchaser. From the proceeds of sale the husband received $20,000 in September 1995 and the wife received the balance of the proceeds of sale of approximately $54,000.
By late 1997 it was apparent that the wife was dissatisfied with the agreement that saw the entirety of the former matrimonial home being held on trust for the children and she sought the husband’s permission to vary the terms of the trust. Orders were pronounced by consent on 24 December 1997 in proceedings between the husband and the wife that provided for a variation of the section 86 Agreement and the section 66ZC Agreement so that the front portion of the subdivision was to be held as to 75 per cent in trust for the children of the marriage and that upon its sale the wife would pay the husband $10,000. It was intended by those orders that the wife would achieve a 25 per cent holding of the property in her own right.
A further Declaration of Trust was executed by the wife in May 1998 in which the wife purported to declare that she held the property in trust for herself and the children as tenants in common in equal shares. The children’s entitlement was reduced to a 75 per cent share of the property and the wife was granted a life interest in it.
The child C has been diagnosed with a mild intellectual disability and has special needs. After separation the child D developed very significant health issues.
Attempts by the children (presumably via their wife) to obtain social security payments such as a youth allowance, unemployment benefits and a disability pension were hampered by the existence of the trust. It would appear that the authorities took the view that the children’s entitlement to a share of the front portion of the property had to be taken into account in relation to means tested pensions to which they were seeking access.
In August 2002 the wife wrote to the husband asking him whether he would “amend the documents” so that the children could claim the various allowances free from the hindrances that had been created by the existence of the trust.
In December 2002 the wife filed an application seemingly seeking to set aside the Child Support Agreement. In March 2003 she filed a further application seeking to set aside the section 86 Agreement, the Declaration of Trust and the Child Support Agreement “pursuant to section 79A(1)(a)(d)”. The application went on seemingly to seek that the wife receive a property settlement equivalent to 80 per cent of the value of the parties’ assets and the remaining 20 per cent, that would otherwise belong to the husband, should also belong to the wife but be credited against any arrears of child support calculated from January 1995, less the $20,000 that the husband had already received from the sale of the rear portion.
When the matter first came on for hearing before the trial judge Penny J early in 2005, her Honour was concerned that the children should be separately represented as the effect of the wife’s claims if they were granted, would mean that the children would lose their interest in the former matrimonial home that had been created by the trust.
The adjourned matter returned for trial in September 2005 with all interested parties represented. In the course of those proceedings it was said to be agreed that the trusts created by 1995 and 1998 declarations should be revoked. Before that agreement could be given effect the wife abandoned her claim to seek orders revoking the 1995 declaration of trust.
In the trial judgment delivered 28 July 2006, her Honour ordered that the 1998 Declaration of Trust be revoked on the basis that the wife had no authority to depart from the terms of the 1995 trust and did not obtain the court’s approval to reduce the children’s entitlement pursuant to section 90 of the Trustees Act1962 (WA). There is no appeal from the trial judge’s order revoking the 1998 Declaration of Trust.
The relief the wife sought in respect of the child support was ultimately contained in an amended minute of final orders filed on 6 July 2006 as follows:
8.Upon hearing and determination of the Form 63 applications filed on December 12th, 2002 the following orders are sought:

8.1That pursuant to s 98 and with s 95, s 129, s 129(3)(d)(c) and s 136(1) of the Child Support Assessment Act 1989 (Cth), and s 79A(1)(a), (b), (c) [and] (d) of the Family Law Act 1975, the Child Support Agreement executed by the parties on the 13th January 1995 undated but bearing the State Taxation Office inscription "Instrument dated 13/1/95 and 13/1/95" be nullified and declared void ab intio [sic] from 13/1/1995 ("the Child Support Agreement”);

8.2That in the special circumstances of the case, there be such departure from administrative assessment pursuant to s117 of Child Support Assessment Act 1989 in the following terms:

8.2.1That for the period 13/1/1995 to the 31/03/2003 for the children of the marriage [C], [D] and [M]:

(a)that the husband pay the periodic child support payments of the husband's child support liability as assessed by the Annual Administrative Assessment of Child Support Agency, as detailed in letter dated 9th July 2004 and tendered into evidence at trial by consent of the parties, for the period from 13/01/1995 till 31/03/2003 which equals a total amount payable under a formula assessment during the period of the Agreement of $84,434.71 plus interest calculated annually on the amounts, at the annual CPI rate for Perth during the above named period, by periodic monthly payment into a nominated bank account by the wife;

8.2.2For the period 01/04/2003 to 10/08/2004 for [C], [D] and [M]:

[Mr Greystoke] and [Ms Greystoke] agree that [Mr Greystoke] will pay child support to [Ms Greystoke] of $1056.91 per month, being $352 per month for [C], $352 per month for [D] and $352 per month for [M] for the period from 1/4/2003 to 10/8/2004 by periodic monthly payment into a nominated bank account by the wife.

The annual amount assessed by CSA for [C], [D] and [M] is $1058.91 per month which equates to $352 per month (per child) or $88 per week (per child) for [C], [D], [M]. That is the minimum payment required to meet the requirements of Family Assistance Act Policy reference: FA Guide 3.1.5.30 Taking Reasonable Maintenance Action, 3.1.6.70 Child Support Collection, 3.1.7.11 Assessable Maintenance Income.

8.2.3For the period 11/8/2004 until 30/09/2005:

[Mr Greystoke] and [Ms Greystoke] agree that [Mr Greystoke] will pay child support to [Ms Greystoke] of $452 per month for [D] and $392 per month for [M] for the period from 11/8/2004 to 30/9/2005 by periodic monthly payment into a nominated bank account by the wife.

The annual amount assessed by CSA for [D] and [M] is $9,422 which equates to $785 per month or $392 per month for [D] and $392 per month for [M] – That is the minimum payment required to meet the requirements of Family Assistance Act Policy reference: FA Guide 3.1.5.30 Taking Reasonable Maintenance Action, 3.1.6.70 Child Support Collection, 3.1.7.11 Assessable Maintenance Income ([C] is excluded from this assessment because he turned 18 yrs).
That the amount for [D] is $15 per week or $60 per month more than the administrative assessment in recognition of his special medical needs and is not included as the minimum amount as per Family Assistance Legislation.

8.2.4That for the period 1/10/2005 until 26/08/2006:

[Mr Greystoke] and [Ms Greystoke] agree that [Mr Greystoke] will pay child support to [Ms Greystoke] of $263 per month for [D] and $263 per month for [M] for the period from 1/10/2005 to 26/8/2006 by periodic monthly payment into a nominated bank account by the wife.

The annual amount assessed by CSA for the period 1/10/2005 until 26/08/2006 for [D] and [M] is $6,309 which equates to $526 per month or $131 per week for [D] and [M]. That is the minimum payment required to met the requirements of Family Assistance Act Policy Reference: FA Guide 3.1.5.30 Taking Reasonable Maintenance Action, 3.1.6.70 Child Support Collection, 3.1.7.11 Assessable Maintenance Income.

8.2.5That for the period 26/08/2006 to 26/08/2007:
[Mr Greystoke] and [Ms Greystoke] agree that [Mr Greystoke] will pay child support to [Ms Greystoke] $182 per month for [M] for the period from 26/08/2006 to 26/8/2007 by periodic monthly payment into a nominated bank account by the wife.

26/08/2007 is the end or termination date of Child Support liability for [M].

The annual amount assessed by CSA for the period 26/08/200 until 26/08/2007 for [M] is $2,189 which equates to $182 per month or $45.60 per week for [M]. That is the minimum payment required to met the requirements of Family Assistance Act Policy reference: FA Guide 3.1.5.30 Taking Reasonable Maintenance Action, 3.1.6.70 Child Support Collection, 3.1.7.11 Assessable Maintenance income.

Note: This CSA assessment is based on the Annual income of wife of $91,000 which consists of ($62,600 net plus $29,000 credited in Salary sacrifice dollars (Net salary sacrifice dollars are $15,000 in the hand they are doubled for Child Support and Centrelink purposes of calculating annual income of parties)).
Husband's salary sacrifice as disclosed in subpoena from [his workplace] is has not added to his annual income for assessment by Child Support thus his income assessed is less the salary sacrifice amounts (which are doubled for child support purposes). This is tax evasion of the Commonwealth by either the company for failing to file annual returns disclosing the amounts or failure of the husband to include the amount which has to be included on annual group certificates.

8.2.6That the husband pay all amounts assessed for periodic maintenance and arrears pursuant to s 66W of Family Law Act and in accordance with the legislative provisions the Family Assistance reference: FA Guide 3.1.5.30 Taking Reasonable Maintenance Action, 3.1.6.70 Child Support Collection 3.1.7.11 Assessable Maintenance Income as a lump sum payment within 30 days of the Order.

8.2.7That the husband [Mr Greystoke] pay for the period 12/12/2002 until 28/09/2007 the Child Support terminating event for the last of the children of the marriage the following:

(a)50% of the annual cost of Private Hospital insurance for the children of the marriage [C], [D] and [M]. (currently with Medibank Private at basic cover rate and annual co-contribution of $500);

(b)50% of the annual cost of Ancillary Cover at basic level (as at present) for the children of the marriage [C], [M]. (presently with HBF and paid by the wife since trial – basic cover); [and]

(c)that these amounts assessed be paid as a lump sum payment within 30 days and cannot be attributed to reduce the minimum periodic child assessment due to Family Assistance Legislative requirements.

8.2.8That the husband [Mr Greystoke] pay for the period 12/12/2002 until 28/092007 which is the Child Support terminating event for the last of the children of the marriage [M] the following:

(a)the difference between any hospital, medical, dental, orthodontic, pharmaceutical, optical, educational and like expenses in respect of the children of the marriage [C], [D] and [M] and any Medicare or private health insurance refunds in respect thereof of the children of the marriage, [C], [D] and [M] for the period 12/12/2002 until 28/09/2007; [and]

(b)that the payment be made as a lump sum payment for arrears until the day of the order and arrangements agreed for the payment of such orders to have effect until the child support terminating event in 2007.

8.2.9That pursuant to the application filed pursuant to Division 7 [of] Part VII of the Family Law Act of 1975 in particular sub-section F s 66L and s 66W on a Form 2 application filed 10^th August 2004 the following Orders be made noting that [C] is in receipt of a Youth Disability Support Pension (NOT a Disability Support Pension) because of his disability…and has met all the requirements of the Act in regard to disability the following orders be made in regard to that application:

(a)[Mr Greystoke] and [Ms Greystoke] agree that [Mr Greystoke] will pay child support to [Ms Greystoke] pursuant to s 66L of the Family Law Act of 1975 of $240 per month for [C] for the period from 10/8/2004 to 10/8/2007;

(b)that pursuant to s 66W any arrears due under this agreement be paid as a lump sum and future maintenance be by periodic monthly payment into a nominated bank account by the wife; [and]

(c)that these provisions meet the requirements of the Centrelink and Family Assistance Act and are attributed to the child [C’s] disability...

8.2.10That pursuant to s 66W any arrears of periodic child support due under this agreement as detailed in Paragraph 8 and its sub-sections be paid as a lump sum to the wife within 30 days. This is in accordance with provisions within the Family Assistance Act and future maintenance be by periodic monthly payment into a nominated bank account by the wife.

8.2.11That these provisions be detailed in the Court Order made upon a declaration of nullity of the Child Support Agreement.

This application for leave to appeal is concerned with the trial judge’s treatment of the child support issues.

THE TRIAL JUDGMENT INSOFAR AS IT RELATED TO CHILD SUPPORT

The child support issues are dealt with in paragraphs 77 to 103 of the judgment. The trial judge commenced by making reference to the operative provisions of the Child Support Agreement set out in paragraph 10 above.
The trial judge observed that the Agreement itself was anything but clear:
[77]It is impossible to say whether it is the Declaration of Trust in relation to the front portion of the subdivision which is held by the wife by way of child support for the children, or the rear portion as well. In any event, paragraph 5 says that whatever amount supposedly received by the wife is to be accounted for as 100% of the annual rate of child support payable under any relevant administrative assessment until the children attain the ages of 18 years. The wife seeks an order that the Child Support Agreement “be nullified and declared void ab intio [sic] from 13/1/1995”.
The trial judge noted that the husband had commenced to pay voluntary child support at the rate of $6,000 per annum from March 2005. Her Honour further noted that the child support that would have been payable from January 1995 to July 2004, were it not for the existence of the Child Support Agreement, was $97,137. The trial judge then determined that the appropriate approach for her Honour to take in deciding whether, and if so how, to vary the Child Support Agreement was to follow the decision of the Full Court in Gilmour and Gilmour (1995) FLC 92-591; (1994) 18 Fam LR 646 and examine whether the evidence established that a ground for departure existed pursuant to section 117(2) of the Child Support (Assessment) Act1989 (Cth). The trial judge concluded that the children’s special needs together with the extent of the husband’s income and assets established the existence of grounds for departure.
Section 95(3)(a) of the Child Support (Assessment) Act1989 (Cth) provides that where a registered Child Support Agreement includes provisions for a party to provide child support otherwise than in the form of periodic amounts, then:
The provisions have effect, for the purposes of Part V as if they were an order made by consent by a court under section 124 (Orders for provision of child support otherwise than in the form of periodic amounts paid to carer entitled to child support)…
Section 98(1) then provides:
Where:
(a)under section 95, provisions of a child support agreement have effect, for the purposes of Part V, as if they were a court order of a particular kind; and
(b)the agreement, or those provisions of the agreement, are registered in a court having jurisdiction under this Act;
the provisions may be discharged, suspended, revived or varied by the court in the same manner and in like circumstances as the court could discharge, suspend, revive or vary an order of that kind made by it.
Section 129 of the same Act (in so far as is relevant) provides:
(1)If an order under section 124 is in force in relation to a child (whether or not all things ordered to be done by the order have been done):
(a)the court that made the order; or
(b)another court having jurisdiction under this Act in which the order has been registered;
may under this section, by order:
(c)discharge the order; or
(d)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
(e)if the operation of the order has been suspended under paragraph (d)--revive its operation wholly or in part; or
(f)subject to subsection (3), vary the order (including any statement included in the order under section 125) in any way.
(2)The court must not make an order under subsection (1) in relation to the order under section 124 unless the court is satisfied, having regard in particular to any statement included in the last‑mentioned order under section 125, that it would be:
(a)just and equitable as regards the child, the carer entitled to child support and the liable parent concerned; and
(b)otherwise proper;
to make the order.
(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
(b)that the custodian entitled to child support has made an application under section 128 and the order is no longer proper or appropriate; 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.
…
(5)In determining whether it would be just and equitable as regards the child, the carer entitled to child support and a liable parent to make an order under subsection (1), the court must have regard to the matters mentioned in subsections 117(4), (6), (7), (7A) and (8).
The Child Support Agreement did not provide for periodic payments but made provision for the transfer of property from the husband, partly to the wife and partly on trust for the children, in lieu of his obligation to pay periodic amounts for child support. It seems to us the appropriate approach when seeking to vary the provisions of the Agreement is via section 129 of the Child Support (Assessment) Act1989 (Cth) rather than section 117 (see Wild and Ballard (1997) FLC 92-771 at 84,497; (1997) 22 Fam LR 291 at 308). However, the husband has not filed a cross appeal nor sought to challenge the exercise of power by the trial judge. In any event both roads lead to the court taking into account the same considerations namely those set out in subsections 117(4), (6), (7), (7A) and (8) of the Act in determining whether it is just and equitable to make an order. It appears in any event, had the trial judge approached this case via section 129 her Honour would have clearly been satisfied that the original agreement reached by consent was no longer proper or adequate.
Having determined that it was appropriate to re-examine the issue of what child support should be paid by the husband and when it should be paid from, the trial judge found:
·None of the children had a capacity to earn any income at the present time. C and D were unlikely to have a capacity to work in the future and the children’s interest in the former matrimonial home could not be accessed by them for years to come;
·The husband was earning in excess of $50,000 per annum, had a half interest in a home and some superannuation;
·The wife has at times earned in excess of $60,000 per annum but had not been able to save or accumulate any assets for herself;
·The wife had normal day to day expenses in caring for the children together with medical expenses involved in the care of the children; and
·The children were in dire need of financial support particularly given their disabilities.
The trial judge concluded:
[102] The orders sought by the wife effectively seek to set aside the Child Support Agreement from the date it was made and the husband pay child support from that time. In my view, the creation of an obligation to pay child support from 1995 for the husband would not now be appropriate. Both the husband and wife proceeded on the basis that the husband would not pay child support and that the children would be the beneficial owners of the front portion of the property. No claim was made upon the husband until 2002 when the wife filed her Form 63 application seeking a variation of the Child Support Agreement so that the husband would be liable to pay child support. While the children had a need for child support before that date, the husband was entitled to believe he had been relieved of that obligation by way of the agreement. There should be a variation of the Child Support Agreement such that from 1 January 2002, the year when the wife sought some assistance from the husband, he should pay child support at a sum assessed pursuant to the provisions of the Child Support (Assessment) Act 1989. This would create arrears of child support up until June 2004 of approximately $25,648. Further arrears will have accrued from that time.
[103]The wife has sought in addition to periodic child support that the husband pay 50% of the medical expenses incurred by the children which have not been covered by hospital benefits. In my view, given the significant difficulties suffered by [C] and [D] which have involved the wife paying a large amount by way of medical expenses, the husband should be responsible for 50% of those costs since 22 August 2002. I am satisfied that not only have the grounds for such payment been made out pursuant to s 117 of the Child Support (Assessment) Act 1989, but that it is just and equitable and otherwise proper to make such an order.

THE APPLICATION FOR LEAVE TO APPEAL

It should be immediately noted that at paragraph 102 of the trial judgment, the trial judge said that the Child Support Agreement should be varied from 1 January 2002 and that in paragraph 103, the husband should be responsible for 50 per cent of C and D’s medical expenses from 22 August 2002 whereas the orders her Honour then pronounced were that the child support was to run from 28 August 2002 and the husband’s liability for 50 per cent of the medical expenses was to commence on 1 January 2002.
The husband has not sought leave to cross appeal even though the order for his liability for medical expenses is greater than that which appears in the reasons for judgment.
We think that the wife has properly established that the orders pronounced do not reflect the reasons for judgment. Whilst that aspect of this application for leave to appeal is of comparatively small compass, we think that it can be conveniently dealt with by an application of the slip rule. Rather than putting the parties to the unnecessary expense of applying to the trial judge to make the appropriate amendments to the orders issued, we should as part of this application, make the appropriate adjustment even if we are otherwise intending to dismiss the application.
In due course we propose to order that order 3(b) of the orders pronounced by the Honourable Justice Penny on 28 July 2006 be varied by inserting “1 January 2002” for “28 August 2002”.

Some further background matters

After the wife commenced the proceedings in the Family Court of Western Australia in 2002 she brought an action against her former solicitor in the Supreme Court of Western Australia claiming damages for negligent advice which she asserted had caused her to lose Centrelink benefits, periodic child support and to inadequately adjust her property rights as between herself and her husband. Those proceedings were eventually settled on 22 May 2007 when the solicitor’s insurers agreed to pay the wife $82,500. That settlement was achieved at a mediation session held with a Registrar of the Supreme Court of Western Australia. On the same day a Deed of Settlement was signed between the husband and the wife in which the parties agreed as follows:
1.[The wife] will abandon her pending appeals to the Full Court of the Family Court of Australia;
2.[The wife] will forthwith take such steps as are necessary to secure an order from a court to set aside ab initio the trust created in the Deed between [the wife] and [the husband] dated 13 January 1995 and the Child Support Agreement. [The husband] will cooperate in that application and consent to the orders so sought;
3.[The wife] and [the husband] agree to bear own costs of all proceedings between them in any court and the foreshadowed proceedings in paragraph 2 above;
4.Orders 3(b), (c), (d), (e), 4 and 8 of orders of Family Court of Western Australia dated 28 July 2006 be discharged from effect from 22 May 2007;
5.[The wife] shall make no further claims against [the husband] and [the husband] will make no further claims against [the wife] for:
5.1child support and adult child maintenance;
5.2spousal maintenance;
5.3lump sum child support and adult child maintenance;
5.4lump sum spousal maintenance; or
5.5 property settlement.
6.The terms of this deed are conditional on performance by the parties of all of their obligations so that no party shall be entitled to insist upon performance of any obligation without performance of all obligations by both parties;
7.All arrears payable by [the husband] in accordance with the orders of 28 July 2006, including arrears of child support, adult child maintenance and contribution to the children’s medical expenses, be and are hereby discharged;
8.Both [the wife] and [the husband] forthwith do all things and sign all documents necessary to give meaning and effect to paragraph 7 hereof, including a Child Support Agreement, if necessary; [and]
9.All applications pending before the Family Court of Western Australia and the Family Court of Australia be dismissed.
Sometime in 2006 the wife had filed an application to have the Family Assistance Office review decisions that had been made to:
·Reduce her rate of family payment for the period 28 February 1995 to 31 March 1998;
·Reduce her rate of family allowance for the period 1 April 1998 to 30 June 2000; and
·Reduce her rate of family tax benefit from 1 July 2000 to 20 July 2006
due to the amount of capitalised child support she has been assessed as receiving.
On 21 December 2006 an Administrative Review Officer published his decision about the wife’s applications, concluding that various departmental officers had been correct in calculating the amount of capitalised child support based upon the full value of the former matrimonial home that had been transferred firstly from the husband and wife to the wife and then held on trust for the children. The value that was attributed for those purposes was not simply the husband’s interest in the property but the total value of the property, said to be $170,000. Precisely why it was, as a matter of operation of law or logic, that the full value of the property rather than the husband’s interest in it should be treated as capitalised child support is not explained in the review officer’s discussion.

Further discussion

As we indicated at the commencement of this judgment the issue that we need to identify in determining whether or not leave to appeal should be granted is whether the applicant’s substantive rights have been significantly affected by an error of principle made by the trial judge.
Apart from a minor complaint about the form of the order concerning medical expenses to which we shall return shortly there is no complaint about the quantum of child support ordered in relation to the children although there is a complaint about the duration for which the order has effect. The trial judge’s key findings were:
·The husband had surrendered his interests in both the front and rear blocks in return for $20,000 and an immunity from a child support liability until the children turned 18;
·The wife had made no complaints or demands about that position until mid 2002;
·The husband, together with a partner with whom he had been living since 1993, had managed to acquire an interest in a property by together accumulating $78,000 over a period of 6 years including the $20,000 the husband received from the sale of the parties’ subdivided block in 1995;
·The husband was aged 58 years and suffered with emphysema; and
·Before child support demands had been made upon him, the husband had salary sacrificed to build his superannuation up in excess of $85,000.
In those circumstances the trial judge concluded that the appropriate starting date for the husband’s revisited child support liability should be 1 January 2002. This was an appropriate exercise of discretion properly explained by the trial judge which an appeal court cannot interfere with unless it has been demonstrated that it had been reached relying upon errors in findings or upon a misapplication of principle. No such error has been demonstrated to us in the course of the argument and accordingly we are not persuaded that the wife has been able to demonstrate that her substantive rights have been significantly affected by any error made by the trial judge about the commencement date. In any event it appeared from the oral argument that the wife seemed more concerned with ensuring that in the future the children’s social security entitlements are not unduly hampered by the arrangements the parents had reached when agreeing to place the property on trust for the children. To the extent that the outcome of the review does unfairly encroach upon those children’s rights, the remedy does not lie in proceedings in the Family Court of Western Australia under the provisions of the child support legislation but rather with the Administrative Appeals Tribunal or the Social Security Appeals Tribunal.

An issue concerning medical expenses

In the applicant’s July 2006 minute of proposed orders the wife had sought that the husband pay:
The difference between any hospital, medical, dental, orthodontic, pharmaceutical, optical, educational and like expenses in respect of the children of the marriage [C], [D] and [M] and any Medicare or private health insurance refunds in respect thereof of the children of the marriage, [C], [D] and [M] for the period 12/12/2002 until 28/09/2007.
The wife also sought a contribution of:
(a)50% of the annual cost of private hospital insurance for the children of the marriage [C], [D] and [M] (currently with Medibank Private at basic cover rate and annual co-contribution of $500); [and]
(b)50% of the annual cost of ancillary cover at basic level (as at present) for the children of the marriage [C], [M] (presently with HBF and paid by the wife since trial – basic cover).
The wife deposed in her financial statement filed 23 August 2005 that her weekly expenditure for private hospital insurance was $24. The husband deposed in his financial statement filed 25 July 2005 that he was paying $39 per week for health cover including $21 per week for HBF ancillary cover for the children. At the appeal hearing the wife conceded that the husband had maintained ancillary cover for the children.
It seems that the trial judge may have overlooked the wife’s claim for further contribution from the husband towards the children’s medical insurance. That her Honour might have done so is entirely understandable given the mass of material that this case had already produced. Nonetheless the wife was entitled to have that aspect of her case attended to.
The trial judge found that the children were in dire need of financial support and that the husband should be seen to be sharing in the support of the children. As the evidence indicated the husband has been contributing towards the children’s medical insurance, we conclude that the failure of the trial judge to deal with this aspect of the case did not amount to an error in principle that justifies a grant of leave to appeal.
The wife expressed concern that the form of the order as to the payment of medical expenses was imprecise and did not deal with matters that she wished to include under medical expenses such as dental and pharmaceutical expenses. We do not read the trial judge’s orders nor her Honour’s reasons for judgment as precluding such a claim and we think the issue is best left to be adjudicated on an enforcement application if any real dispute ever arises between the husband and the wife as to what expenses are to be included.

A potential bar to the appeal

Finally, in his summary of argument prepared for this case the husband raised the spectre of seeking to rely upon, as a bar to the appeal, the Deed of Settlement that the parties had executed in May 2007 during the processes adopted by the Supreme Court of Western Australia in endeavouring to settle both the wife’s damages claim against her solicitors, and the husband and wife’s litigation in the Family Court of Western Australia. Eventually however, neither party sought to rely upon the terms of settlement in the agreement other than clause 6 which provided that the terms of the Deed were conditional upon the performance by the parties of all of their obligations. Once the wife refused to be bound by the agreement the husband no longer sought to argue that he was bound by it either. Accordingly, not only has this application for leave to appeal been allowed to proceed but the husband remains at large to continue with his claims for costs arising out of the proceedings before the trial judge that were discontinued by the wife. Those matters await adjudication.

THE COSTS OF THIS APPEAL

We indicated to the parties that we would invite submissions relating to the costs incurred by the parties in the appeal process after our reasons for judgment had been delivered.

ORDERS

Accordingly we propose to order as follows:
1.That the wife’s application for leave to appeal the orders made by the Honourable Justice Penny on 28 July 2006 be dismissed;
2.That order 3(b) of the above mentioned orders be varied by substituting the words “1 January 2002” for the words “28 August 2002” therein appearing;
3.That the respondent husband file and serve any submissions in relation to costs relating to the application for leave to appeal and the appeal within fourteen (14) days of receipt of these reasons for judgment;
4.That the applicant wife file and serve any submissions in response thereto within a further fourteen (14) days; and
5.That the respondent husband file and serve any submissions in reply within a further seven (7) days.

I certify that the preceding forty-nine (49) paragraphs are a true copy of the reasons for judgment of this Honourable Full Court

Associate:

Date: 13 July 2007

[2007] FamCA 699

13 July 2007

Key Legal Topics

Areas of Law

Family Law

Civil Procedure

Legal Concepts

Appeal

Costs

Jurisdiction