Kadis & Elmore (No 2)
[2024] FedCFamC2F 1180
•19 July 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Kadis & Elmore (No 2) [2024] FedCFamC2F 1180
File number(s): MLC 3484 of 2021 Judgment of: JUDGE O'SHANNESSY Date of judgment: 19 July 2024 Catchwords: FAMILY LAW – Child support enforcement application – where Father in arrears of child support – whether a superannuation payment split order can be made pursuant to Child Support Act – superannuation payment split orders can only be in section 79 or 90SM property proceedings – parties seek to settle debt by way of cash payment and superannuation split – section 105 of Child Support (Registration and Collection) Act 1988 does not vary section 90XS & 90XT of the Family Law Act 1975 – informal procedures adopted – where final property orders have already been made – final property orders set aside by consent – see s 79A(1A) not section 79A(1)(a) applied – new property orders made – superannuation split orders made by consent – procedural fairness must be provided to Trustee of superannuation fund – after orders and reasons provided evidence of procedural fairness provided – orders made. Legislation: Child Support (Registration and Collection) Act 1988 s 105
Civil Law and Justice Legislation Amendment Act 2018 (Cth)
Family Law Act 1975 ss 79, 90XS, 90XT
Federal Circuit and Family Court of Australia Act 2021 ss 180 & 190
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 rule 1.31(1)
Cases cited: Kadis & Elmore [2023] FedCFamC2F 479 Division: Division 2 Family Law Number of paragraphs: 18 Date of hearing: 19 July 2024 Place: Melbourne Solicitor for the Applicant: Ms Hamilton-Green Solicitor for the Respondent: Mr Murray ORDERS
MLC 3484 of 2021 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MS KADIS
Applicant
AND: MR ELMORE
Respondent
ORDER MADE BY:
JUDGE O'SHANNESSY
DATE OF ORDER:
19 JULY 2024
THE COURT ORDERS BY CONSENT THAT:
1.The child support debt between the Applicant, MS KADIS, and Respondent, MR ELMORE, be varied and fixed in the sum of $30,000 to be paid in accordance with these orders, that is $18,000 in accordance with Order 3 herein and $12,000 by way of superannuation payment split as provided at Order 6 and notation A.
2.Upon the completion of the Respondent’s obligations pursuant to the ensuing Orders 3 through 5 hereof and the intended orders described at Order 6 and notation A hereof, the Respondent’s liability to pay child support to the Applicant is entirely discharged.
3.That pursuant to section 111B(1)(a) of the Child Support Registration and Collection Act 1988, within 7 days of the date of these orders, the Respondent pay to the Applicant the lump-sum of $18,000 (“the lump-sum payment”).
4.The Applicant’s solicitors shall notify the Child Support Registrar within 7 days upon completion of the Respondent’s obligation to make the lump-sum payment pursuant to Order 3 and upon completion of the superannuation split.
5.That pursuant to section 111B(1)(l), upon being advised by the Applicant’s solicitors of the Respondent’s compliance in making the lump-sum payment and completion of the superannuation splitting Order, the Child Support Registrar is directed to cancel and revoke all registered child support debts between the Applicant and the Respondent.
AND THE COURT ORDERS THAT:
6.The Respondent do all acts and things to immediately provide procedural fairness to the Trustee of the Super Fund 1 (and provide by email to the Applicant and the Associate to Judge O’Shannessy any response of the Trustee) of the parties’ application to make orders in the form of the following draft Orders:
(a)That the base amount of $12,000 is allocated, as required by s.90XT(1)(a) of the Family Law Act 1975, to the Applicant, MS KADIS, out of the interest held by the Respondent, MR ELMORE, in Super Fund 1 bearing member number ….
(b)That whenever a splittable payment within the meaning of Section 90XE of the Act becomes payable to or on behalf of the Respondent from his interest in his Super Fund 1 (“the Trustee”) shall pay the Applicant the entitlement calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001, and make a corresponding reduction in the entitlement the Respondent would have had but for these Orders.
(c)That Order 6(b) above has effect from the operative time.
(d)That the operative time is 4 business days after service of a sealed copy of these orders on the Trustee of Super Fund 1.
(e)That this Order binds the Trustee of Super Fund 1.
7.The matter is otherwise adjourned for mention before Judge O’Shannessy to 21 August 2024 at 10.00 am with such listing to be vacated when the intended final property orders, including the superannuation payment split orders, are made.
AND THE COURT NOTES THAT:
A.Upon proof of procedural fairness having being accorded to the Trustee of the superannuation fund, then subject to any submission of the Trustee, the parties having consented to, and the Court having found it is just and equitable pursuant to section 79(2) to make, Orders in the following form, the Court intends to make such Orders, as follows:
(a)Pursuant to section 79A(1A) Family Law Act 1975 (“the Act”) the previously made section 79 property settlement orders between the parties are set aside; and, the following final property settlement orders; and
(b)Pursuant to section 79 of the Act, save as provided in the orders of 19 July 2024 and in these orders, the parties retain all real and personal property in his and her possession and all and any liability relating to any such property; and
(c)Orders in the form of the draft superannuation payment split orders recited at order 6 (a) to (e) above.
(d)All extant applications are (will be) otherwise dismissed.
B.The minute of proposed consent orders provided to the court by the parties this day has been exhibited, marked ‘A’ and placed on the court file.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Part XIVB of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish an account of proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under a pseudonym has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).
EX TEMPORE REASONS FOR JUDGMENT
JUDGE O’SHANNESSY:
These are the settled reasons of a judgment delivered ex tempore. That is delivered orally immediately after the hearing. These settled reasons have been corrected from the transcript where appropriate to correct grammatical errors, to add citations, passages of authorities and evidence, and to attempt to make the orally delivered reasons easier to read. The substance is unchanged.
BACKGROUND
In the matter of Kadis & Elmore, the parties have two children; Mr F, born in 1999, and Mr G, born in 2002. The parties were married in 1996, they separated in about 2003, and they were divorced in early 2004. The Father of the children – the respondent, Mr Elmore (‘the Father’) – had some financial difficulties and a complicated history of employment, and fell into arrears of child support in regard to Mr F and Mr G. Part of that has been addressed in the previous decision in this matter, Kadis & Elmore [2023] FedCFamC2F 479.
Over the years, the children’s mother, Ms Kadis (‘the Mother’), pressed for enforcement and took enforcement action. The Father sought to review or set aside the various child support assessments on a number of occasions, the last being the previous decision to which I refer.[1] The application of the Father to revisit the child support arrears question having been dismissed, that left the issue of the enforcement alive. The matter was to have been dealt with at trial earlier this year but, sensibly, the parties requested that the matter be deferred and, with the assistance of new lawyers in the case, have been able to reach a practical solution.
[1] Kadis & Elmore [2023] FedCFamC2F 479
It is common ground that the certificate of arrears is in the sum of $41,475 or thereabouts. The Father is significantly unhappy with that quantum, but the law has fixed that amount. The Mother is unable to point to any particular asset or income of the Father against which she would be able to enforce that debt. It is common ground that the Father, now aged 56, has a not insignificant superannuation entitlement. Of course, that is not his property at this point in time to be able to reach into for the purpose of paying a child support debt. There are significant and profound policy reasons behind that legal situation.
The practical solution that the parties have come to is that, as a way of practical compromise and intending to limit further legal expense, the Mother wishes to compromise the enforcement of arrears by receiving a total sum of $30,000. The Father joins with her and says, “I want to give her that $30,000 if I can, please.” That is the substance of his position to the court today. The solicitor for the Father points to section 105 of the Child Support (Registration and Collection) Act 1988 (‘the Registration Act’) which provides the following:
Section 105 Application of Family Law Act
(1)The Family Law Act 1975 (other than Division 4 of Part V of that Act), the standard Rules of Court, the Federal Circuit and Family Court of Australia (Division 1) Rules and the related Federal Circuit and Family Court of Australia (Division 2) Rules apply, subject to this Act and with such modifications as are prescribed by the applicable Rules of Court, to proceedings under this Act (other than proceedings under subparagraph 113(c)(i)) as if:
(a) the proceedings were proceedings under that Act;
(b) the proceedings were proceedings instituted under that Act;
(c)a court having or exercising jurisdiction in the proceedings were a court having or exercising jurisdiction under that Act;
(d) a decree made in the proceedings were a decree made under that Act;
(e)matters arising in the proceedings were matters arising under that Act; and
(f) any other necessary changes were made.
(1A) In the application of subsection (1) to proceedings under this Act in relation to a child, references in paragraphs (1)(a) to (e) (inclusive) to the Family Law Act 1975 are to be taken to be references to Part VII of that Act.
(2)Where any difficulty arises in the application of subsection (1) in or in relation to a particular proceeding, the court exercising jurisdiction in the proceeding may, on the application of a party to the proceeding or of its own motion, give such directions, and make such orders, as it considers appropriate to resolve the difficulty.
The solicitor for the Father relies upon that section, and the solicitor for the Mother acquiesces that reliance. After further discussion with me, where I discussed with the parties the provisions of section 90XT of the Family Law Act 1975 (‘the Act’), a different approach was taken. The fundamental agreement of the parties was that the $30,000 arising by way of child support arrears would be paid by $18,000 immediately or within seven days in cash and the remaining $12,000 by way of a superannuation payment split.
A superannuation payment split is expressed to be in accordance with section 90XT, which provides as follows:
Section 90XT Splitting order
(1)A court, in accordance with section 90XS, may make the following orders in relation to a superannuation interest (other than an unsplittable interest):
(a)if the interest is not a percentage - only interest--an order to the effect that, whenever a splittable payment becomes payable in respect of the interest:
(i)the non - member spouse is entitled to be paid the amount (if any) calculated in accordance with the regulations; and
(ii)there is a corresponding reduction in the entitlement of the person to whom the splittable payment would have been made but for the order;
…
(emphasis added)
Section 90XT leverages or rests upon section 90XS. Section 90XS is as follows:
Section 90XS Order under section 79 or 90SM may include orders in relation to superannuation interests
(1)In proceedings under section 79 or 90SM with respect to the property of spouses, the court may, in accordance with this Division, also make orders in relation to superannuation interests of the spouses.
Note 1: Although the orders are made in accordance with this Division, they will be made under either section 79 or 90SM. Therefore they will be generally subject to all the same provisions as other orders made under that section.
…
(2)A court cannot make an order under section 79 or 90SM in relation to a superannuation interest except in accordance with this Part.
SECTIONS 79 & 90SM GOVERN SECTION 90XT
The words, “in proceedings under section 79 or 90SM with respect to the property of the spouses”, in my view, govern the superannuation splitting order power of section 90XT. As a matter of statutory interpretation, an issue is whether section 105 of the Child Support (Registration & Collection) Act 1988 overrides or provides power in addition to section 90XS of the Family Law Act 1975. Section 90XS was last amended by the Civil Law and Justice Legislation Amendment Act 2018 (Cth) (No. 130 of 2018) and commenced on 26 October 2018. Section 105 is contained in the 1988 Act but, on its face, it came into operation after 1 September 2021 [after being last amended by the Consequential Amendments and Transitional Provisions Act 2021 (No.13 of 2021, Schedule 2)]. Hence, on one view, the later section 105 could be said to override the earlier section 90XS(1). The doctrine is that a later Act, where in conflict with an earlier one, overrides[2] it. But I am not satisfied that that was the intention of section 105 before me or that is inconsistent with section 90XS.[3] The two provisions can stand together.
[2] See Statutory Interpretation of Australia Pearce D.C 10th Edition Lexis Nexis at [7.10]
[3] Further when applying the Family Law Act 1975 (Cth) to the Registration Act. This will include the essential words of limitation in section 90XS, “proceedings under section 79 or 90SM with regard to the property…”
After discussion with the parties, the parties’ solicitors adopted the joint position that the earlier – many years ago – property order between the parties should be set aside pursuant to section 79A(1A). That is, setting aside that order by consent, so that a further section 79 order could be made. Section 79(A)(1A) provides:
Section 79(A)(1A) Setting aside of orders altering property interests
…
(1A)A court may, on application by a person affected by an order made by a court under section 79 in property settlement proceedings, and with the consent of all the parties to the proceedings in which the order was made, vary the order or set the order aside and, if it considers appropriate, make another order under section 79 in substitution for the order so set aside.
A further section 79 order was pressed by consent (after discussion with me), and pressed that it would provide:
(a)That, save as provided in these orders, each party retain all real and personal property otherwise in their possession and any liability relating thereto; and
(b)There be the further superannuation payment split by way of property settlement pursuant to section 79 of the Act.
This would mean that there were then, before me, by relaxation of formal requirements, section 79 proceedings.[4]
[4] See section 189 & 190 of the Federal Circuit and Family Court of Australia Act 2021 & Rule 1.31(1) of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021.
The parties then both consent to, and press for, that order or orders, to enable the resolution of the matter between them.
PROCEDURAL FAIRNESS TO TRUSTEE
I can only make a superannuation splitting order if I am satisfied that there has been procedural fairness to the relevant superannuation fund. I am not anticipating any significant difficulty, but it may be that the superannuation fund, as not uncommonly occurs, would prefer some different wording than has been drafted by the solicitors.
On its face, the drafting of the superannuation payment splitting order meets the requirements of the Act. However, I am not satisfied that it is just and equitable to make that order until this fund has had appropriate time.
JUST & EQUITABLE ORDERS
Hence, I am satisfied that I should, by the consent of the parties, set aside the previous section 79 order – it is common ground that one had been made – and that it is appropriate, just and equitable, taking into account all of the provisions of section 79, including section 75(2), to make the property order that the parties press.
SECTION 79 ORDER PROPER TO SATISFY ARREARS OF CHILD SUPPORT
I consider it proper that a section 79 order be made for the purpose of satisfying the agreed to be paid arrears of child support. However, I will provide to the parties these orders in draft form for the purpose of being provided to the superannuation fund for the purpose of procedural fairness. Those draft section 79 orders will not be made until I have received confirmation of procedural fairness to the Trustee of the fund. I will otherwise defer making the superannuation order.
POSTSCRIPT
A few days after the delivery of these reasons the court was provided with evidence that procedural fairness have been provided to the Trustee and there was no objection to the making of the orders or their form. The court made the orders contemplated in the notation.
I certify that the preceding eighteen (18) numbered paragraphs are a true copy of the ex tempore Reasons for Judgment of Judge O'Shannessy. Associate:
Dated: 19 July 2024
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