James and Snipper

[2015] FamCA 1104

FAMILY COURT OF AUSTRALIA

JAMES & SNIPPER [2015] FamCA 1104

FAMILY LAW – INTERIM PROCEEDINGS – Where the husband sought an order to stay any enforcement by the Child Support Agency of the husband’s obligation to make child support payments –Where the application is dismissed – Where the husband seeks to challenge the wife’s need for spouse maintenance and his capacity to pay – Where the wife has a need for the existing order –Where the court does not have a clear picture of the husband’s current income -  Where the court will not vary the order that is in place and the husband’s application is dismissed

Child Support (Assessment) Act 1989 (Cth)
Family Law Act 1975 (Cth)
Family Law Rules 2004 (Cth)

APPLICANT: Mr James

RESPONDENT: Ms Snipper

FILE NUMBER: SYC 1913 of 2012

DATE DELIVERED: 11 December 2015

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Watts J

HEARING DATE: 23 November 2015

REPRESENTATION

SOLICITOR FOR THE APPLICANT: Litigant in person

COUNSEL FOR THE RESPONDENT: Mr Batey

SOLICITOR FOR THE RESPONDENT: Harris Freidman Lawyers

Orders

1. The husband’s application filed 23 September 2015 is dismissed.

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

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYC 1913 of 2012

Mr James

Applicant

And

Ms Snipper

Respondent

REASONS FOR JUDGMENT

THE ISSUE OF PROCEDURAL FAIRNESS

1. On 16 July 2015 the husband raised what he said were urgent issues in relation to child support and the following order was made on that day:

   13. Should the husband wish to make an application in relation to child support he is to do so within 14 days and such application can be listed on 29 September 2015.

2. The husband failed to comply with that order and filed an Application in a Case on 23 September 2015. In that Application in a Case he sought the following orders:

   That pending further Order:

   1. That the Department of Human Services is granted a stay order with respect to collection of any current or future child support payments as at the date of today’s orders until further notice with respect to the account of [the husband].

   2. That order 3 of the orders dated 20 October 2014 is reduced to $800 per week or $3,466.67 per month.

   3. That order 4 of the orders of 20 October 2014 are discharged as of today’s date as it relates to the 35 per cent of any money otherwise payable by way of balance of undistributed profit payments.

3. The husband supported that application by an affidavit that was also filed on 23 September 2015.

4. The application was listed for mention on 29 September 2015 at an event where other matters between the parties were being considered.

5. On that day the wife indicated she was not in a position to deal with that application and an order in the following terms was made:

   9. I note the husband has filed an application in relation to child support out of time. The wife is to file and serve a response and any supporting material within 21 days. That matter will be listed at 9.15 on 23 November.

6. The wife filed a Response to the husband’s application on 17 November 2015 (out of time and a document to which Rule 11.02 of the Family Law Rules 2004 (Cth) applies). That response sought that the husband’s application filed 23 September 2015 be dismissed and that the husband pay the wife’s legal costs in relation to the application on an indemnity basis. The wife had previously filed an affidavit on 19 October 2015 (within time) which seems to be the supporting material referred to in order 9 of 29 September 2015. Although the husband informed me that that material was served on him out of time. The husband did not object to the wife relying upon the response and the affidavit.

7. Counsel for the wife indicated that he had been briefed in the matter on the basis that the child support matter had been set down for mention only. Counsel for the wife submitted that it would be procedurally unfair to the wife to have errors made by her lawyers visited upon her and that the matter should be adjourned. The husband opposed any adjournment.

8. There has been non-compliance with some court orders on both sides during the history of this case. When the court allocates a specific time for an interim hearing in this case, that hearing should proceed absent any good reason why it should not. The wife and counsel were in court on 29 September 2015 when the matter was set down for hearing. Directions were made in their presence which were then engrossed and forwarded shortly after 29 September to the wife. She seemed to be well aware of those directions given that she filed her affidavit on the last day allowed under the directions.

9. The husband in this case asserts that he is currently having to borrow money for living expenses through organisations such as Cash Converters. In those circumstances, I decided to hear the husband’s application on the basis of the material that had been filed.

10. Counsel for the wife said he wished to tender unspecified document(s) from subpoenaed material but he did not have the document(s) available to tender. He sought time to search subpoenaed material (I was unsure if documents were in court or another part of the court building) to locate the document so that he might be in a position to tender an unspecified document(s). The matter was listed prior to the commencement of a busy duty day. Allowing time for counsel for the wife to prepare his case, would have had the effect of eliminating the time the court had available to hear the matter on that day and would have provided the wife with the adjournment that she sought, which had been refused otherwise. In those circumstances it would have been procedurally unfair to the husband to stand the matter down.

11. I am also mindful in considering issues of procedural fairness, that if and when both parties comply with orders that have been made to get the property matter ready for a final hearing, I will be in a position to make any further adjustments that might be just and equitable between the parties once all evidence is available on a final basis and that evidence has been tested at a final hearing.

12. In the meantime the husband is requesting that the court look at whether or not the current situation is a proper interim arrangement. I determined it was proper to allow him to do so.

13. The husband made short oral submissions. Counsel for the wife, when given the opportunity, made no submissions.

THE HUSBAND’S APPLICATIONS

1. Whilst the husband initially indicated that he wished to make an application about “child support”, in reality his application is to stay any enforcement by the agency of his obligation under orders to make payments. He also wants variation of two aspects of the spousal maintenance orders.

2. In relation to enforcement of past obligations, the husband during oral submissions indicated that the present arrears that are enforceable against him have reduced to about $6,000.

3. There is a dispute between the parties as to whether or not the husband is entitled to any credits for any “voluntary” payments that the husband had made, or payments that the husband had made pursuant to the undertaking he gave to the court as noted in [7] of the orders of Justice Ryan of 14 June 2012.

4. In Reasons for Judgment delivered 20 October 2014, Rees J at [84] posed the question, “Should the order include an amount to be applied to arrears?”. At [126] of the judgment, her Honour said, “These orders make no provision for either the quantification or the enforcement of payment of arrears. That issue will await the final hearing”.

5. Given that the quantum of enforceable arrears on the books of the Department of Human Services, according to the husband’s oral submission, is $6,000, then I do not intend to interfere with the collection of those arrears. I accordingly decline the application for a stay order in relation to the collection of current arrears.

6. Given the alleged history of non-compliance of regular payment of periodic sums over the last few years, there is also no merit in the husband’s application to deprive the wife of the ability to seek the assistance of the Department of Human Services under the Child Support (Registration & Collection) Act 1989 (Cth) in collecting spousal maintenance payments.

7. The wife’s affidavit in reply filed 19 October 2015 also deals with the husband’s application to vary orders 3 and 4 made by Justice Rees on 20 October 2014. Those two orders specify the spousal maintenance obligations as determined by Justice Ryan on 14 June 2012. Justice Rees discharged order 5 made 14 June 2012 thereby removing from the husband the obligation to pay the significant periodic mortgage payment in respect of the Suburb J property. Rees J however did reset the spousal maintenance payment from $8,000 per calendar month to $11,514 per calendar month.

8. The husband in effect seeks to revisit Rees J’s finding that the wife’s need for spousal maintenance was in the sum of $2,657 per week and that he has a capacity to pay it.

9. The husband relies upon the wife’s ability to earn an income from the activities in which she is involved in S4S. That is not something I can determine on an interim basis upon the untested assertions in the husband’s affidavit. That might be something that can be explored in the context of a final hearing with proper testing of evidence, but the evidence which I have is what the wife says about her financial position in her affidavit of 19 October 2015.

10. In as much as the husband’s application is based upon an assertion that there has been a change in his capacity to pay, the wife in her affidavit raises a series of significant questions about the financial information that the husband has provided (or allegedly not provided). The wife also raises the issue that the husband’s income in his financial statement does not include profit share. Again in the circumstances of this interim application, I am unable to determine whether or not, as asserted by the wife, it is likely that the husband’s income has in fact increased from the circumstances which existed at the time that Rees J last varied the spousal maintenance order. Without proper details in relation to the situation in respect of the husband’s 2015 bonuses and in relation to the current situation in respect of the discharge of the legal costs that Ernst Young were taking as a result of the judgment that they obtained for costs against the wife arising out of the Supreme Court proceedings, it is not possible to be confident that I have a sufficiently clear picture as to the husband’s current income to find that the husband no longer has the capacity to pay.

11. The order that the wife receive 35 percent of the gross amount of profit payments from the partnership is an order that was originally made by Justice Ryan. Justice Rees by order 4 made 20 October 2014 confirmed the order, saying at [50] of her Reasons for Judgment:

    50. In relation to the issue of profit share and performance bonuses, since the husband is not currently receiving any sums from the Trust which fall within that category, and is not likely to do so before the final hearing of this matter, it is not necessary to consider that application.

12. The wife’s evidence would indicate that because the final hearing has taken longer than Justice Rees expected (largely due to the inability of the parties to obtain valuations), it is now likely that those payments are falling due.

13. The husband has provided a calculation relating to the effect of order 4 as made by Rees J on 20 October 2014. The husband asserts at [25] of his affidavit of 18 September 2015 that he receives $11 and the wife receives $35 out of every $100 that is received by way of balance of profit payments from the partnership. The wife queries the tax calculation of $54 and says that in any event, it doesn’t appear that the husband is actually making periodic payments of tax.

14. I am unable, on the information that I have from the husband and the uncertainties that are pointed to by the wife in her affidavit, to decide that it is proper to vary orders that were originally made. Again, all of that history is something that will be looked at in the final stage of the hearing.

15. The husband indicated that part of the urgency in this matter was to create a surplus of regular funds in his hands so that he could talk to the Australian Tax Office about instituting a repayment regime.

16. The husband asserts that his current liability to the Australian Tax Office is in the sum of $1,480,230. The wife indicates that she is unable to understand how that increase has occurred and sets out in her affidavit why it is she cannot understand how the debt to the Australian Tax Office is now at the level as it is. That again would be something that would need to be looked at in the context of a final hearing.

17. As Justice Rees noted in her judgment, there may be no benefit to the Australian Tax Office in bankrupting the husband if that meant that he could no longer be a partner in his accounting partnership with an ability to repay debt over time. 

I certify that the preceding thirty (30) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Watts delivered on 11 December 2015

Associate: 

Date:  11.12.2015