Lao and Lao

AMENDED PURSUANT TO RUL 17.02 OF THE
FAMILY LAW RULES 2004
FAMILY COURT OF AUSTRALIA

LAO & LAO

[2014] FamCA 275

FAMILY LAW – Parenting – variation.
FAMILY LAW – Child support – departure where unsatisfactory evidence about income but considerable real property interests – Section 127 order concerning private school fees – Wife seeks lump sum child support through sale of property – Draconian approach refused – As an alternative, order for husband to charge his interest.

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

APPLICANT:

Ms Lao

RESPONDENT:

Mr Lao

FILE NUMBER:

MLC

7475

2010

DATE DELIVERED:

30 April 2014

PLACE DELIVERED:

Melbourne

PLACE HEARD:

Melbourne

JUDGMENT OF:

Cronin J

HEARING DATE:

17 April 2014

REPRESENTATION

THE APPLICANT:

In person

THE RESPONDENT:

In person

Orders

That paragraph 1 of the orders made on 4 June 2013 is discharged.
For the avoidance of doubt, paragraph 4(a) to (f) remain discharged.
That the children B born … 2000 and C born … spend time with the husband as follows:
(a)Each alternate weekend from the conclusion of school on the Friday (or 3.30pm if it is not a school day) until 5.00pm on Sunday;
(b)In the other week from the conclusion of school on the Tuesday (or 3.30pm) until the commencement of school on the following Wednesday morning (or 9.00am if that is not a school day).
The orders referred to above shall continue during all school term and long summer holidays until the first day of the 2017 school year.
The commencement days of the orders in paragraph (3) above shall be the continuation of the existing orders.
As and from the commencement of the school year in 2017, the husband spend time with the said children for one half of all term holidays and one half of the long summer holidays.
If the parties do not agree on which half, the husband shall have the second half in each case.
For the avoidance of doubt, if the husband does not collect the children from school, he shall collect them from the front gate of the wife’s residence and the wife shall collect them from the front gate of the husband’s residence at the conclusion of the time if it is not a school day.
That pursuant to s.65DA(2) and s.62B, the particulars of the obligations these orders create and the particulars of the consequences that may follow if a person contravenes these orders and details of who can assist parties adjust to and comply with an order are set out in the Fact Sheet attached hereto and these particulars are included in these orders.
That there be a departure from the administrative assessment of child support dated 21 November 2013 which assessment period is said to be from 1 December 2013 to 28 February 2015 according to the order hereafter.
That for the period 1 December 2013 until 30 June 2015, the husband pay child support for the children B born … 2000 and C born … fixed in the total sum of $325 per week with the first payment retrospectively due on 1 December 2013 and the husband shall only be credited with any periodic payments made subsequent to 1 December 2013 towards paragraph 11 of these orders.
Pursuant to s 124 of the Child Support (Assessment) Act 1989 (Cth), the husband pay:
(a)One half of all tuition fees and levies at D School for the child B; and
(b)As and from the commencement of the school year 2015, one half of the tuition fees and levies at D School for the child C.
That the payments by the husband in respect of school tuition fees and levies referred to in paragraph 12 of these orders, shall not be credited against periodic child support obligations arising under paragraph (11) of these orders.
To better secure the payment of the non-periodic payments in paragraph (12) of these orders, at the expense of the wife, the husband execute a charge (such document to be drawn by the wife) as to all of his interest in the real property at E Street, Suburb F, for the purposes of ensuring his obligations to pay the non-periodic payments are met.
That forthwith, the husband pay to the wife the sum of $215 to satisfy his obligations pursuant to paragraph 12 of the Federal Circuit Court orders made 20 May 2013.
That the application filed 7 March 2014 and the response thereto filed 21 March 2014 are otherwise dismissed.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Lao & Lao 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 MELBOURNE

FILE NUMBER: MLC 7475 of 2010

MS LAO

Applicant

And

MR LAO

Respondent

REASONS FOR JUDGMENT

In October 2013, the Federal Circuit Court transferred the dispute between Mr Lao (the husband) and Ms Lao (the wife) to this Court. The parties were unable to explain why the transfer occurred. Each party appeared before this Court without legal representation and with complicated documents apparently prepared by lawyers. The file was contained in a large box and has several folders as the parties have been litigating for a number of years.
Each of the husband and wife has a Country G cultural heritage but each is tertiary educated, has no language barriers and on any view, each has amassed considerable wealth. Despite that wealth, they chose to appear unrepresented in relation to a modest parenting dispute, a child support dispute arising out of orders made by the Federal Circuit Court and finally, the enforcement of that Court’s own property orders.
The husband and wife dislike one another and do not communicate at any reasonable level. That made their task of cross-examining each other difficult. Each descended into argument with the other whilst trying to speak over each other. Any person who is required to endeavour to follow any future transcription of the proceedings will find much of the evidence and argument incomprehensible.
The written evidence was convoluted referring in minute detail to the various events in their lives both before and after the various hearings in the Federal Circuit Court but also relating to their challenging disputes with the Child Support Agency and the administrative processes surrounding that.
The proceedings in the Federal Circuit Court were always contested and it was hard to find any orders that had been made with consensus. There were arguments before me about what a particular federal magistrate meant despite what he said. There was a hearing where another Federal Circuit Court Judge amended the earlier orders of another judicial officer but only after he (at the parties’ request) consulted his colleague to find out what that judge had meant (as distinct from what he had written).
There were various interim orders along the way about who was obliged to pay what mortgage payments and what was to happen with rental monies collected by each or either of the parties. But even there, the parties could not agree about whether the final orders of the Federal Circuit Court reflected the correct position. That lead to arguments about what balances of unpaid mortgages were outstanding, how they had arisen (including claims of what occurred before the proceedings had occurred in the Federal Circuit Court) and how this Court should revisit the various orders and rectify the problems. Paragraphs of orders were discharged leaving other paragraphs open to be relied upon by the parties and each saw their position as right. Needless to say, there had been no appeals lodged in respect of those various orders. The view of the parties was simply that this Court should sort it all out.
It is trite to say that a court is obliged to look for evidence to assist the most disorganised of litigants because it may be that a miscarriage of justice may occur because of being such a disorganised person. But here, the attachments to affidavits and the various statements in affidavit form had to be trawled through to try and get to the bottom of the dispute.
As a witness, the wife was defensive but well organised. She was able to point to the issues she wanted determined. Nothing about her made me think that she was not truthful. Her subjective view about things complicated her case but that was no doubt made more difficult because she was doing things based on legal advice she had been given. In respect of financial matters, she knew the figures well and nothing I heard or saw suggested that she was exaggerating. Indeed, she was largely not challenged on most of the costs of living issue.
The husband was a garrulous witness who conveyed quickly that he had a strong position that he would do things his way. He stalled the cross-examiner so that he could find exactly the passages in documents that she wanted him to answer questions about and then gave explanations rather than answers. His unashamed view was that he was financially unable to pay child support in the terms of what the wife was seeking. His view was that his income was transparently clear and that was the end of the story. However, he wanted the Court to accept that his figures were based on assessments he made. He acknowledged that his taxable income (such as it was) had been based on a negative gearing system. His rental collections were sometimes received in cash and other times by deposits into a joint bank account with his partner. He “owned” some properties through a trust and others, personally. He said that sometimes the student tenants gave his brother the rental money. He did not have the relevant receipt books even though he said these tenants were given receipts. How receipts were issued if the money was paid into the joint account with his partner remained unclear. He factored into his calculations that there were sometimes vacancies in the properties so he allowed a percentage deduction for that to calculate not only his income but also his expenses. That was very unsatisfactory.
The husband estimated his expenses and in some cases divided them with his partner. His figures were confusing and I find, unreliable. Part of the dilemma is that his tax returns have not been lodged recently. The husband maintained that the trust return was lodged in May but his personal return was lodged in the October before that May. How that was possible if he was a beneficiary remained a mystery. The beneficiaries of the family trust were described as himself and older and younger generations of his family but just exactly how he distributed income was also unclear. He said that there were losses in the trust because of the negative gearing and therefore they could not be distributed. Part of the problem in this case was that there were some Federal Circuit Court orders made on a final basis for the sale of real properties which were negatively geared but later orders altered those provisions so that the properties were transferred (or intended to be transferred) in specie. The change in that regime presumably altered the taxation arrangements, his income and his deductions. His tax returns would have been useful and I suspect he knew it. He provided no accountant’s advice.
The husband’s view is that he needed to buy a home because at the moment he is renting a property. He said he had a moral obligation to provide accommodation for his elderly parents and he made mention of how a million dollar property on the eastern side of Melbourne was not salubrious because some of them were simply brick veneer properties. This moral dilemma arises in the context of the two children attending private schools. The older child is already at that private school and that obligation was the subject of final orders of the Federal Circuit Court after a contested hearing. No appeal was lodged against the order albeit that the parties went back to court because it was at least the husband’s view that what the order said was not necessarily what it meant.
The younger child who has not yet commenced private schooling is also the subject of that order and nothing I heard indicated that there was any apparent change of circumstances since the order was made. Despite that, the husband strongly articulated that his younger daughter should not go to the school of her older sister unless she won a scholarship. The husband’s reasoning was difficult to follow but it related to his impecuniosity in income terms but he strongly argued also that private schooling was very expensive. He pointed to good state schools in the same area.
For the reasons that follow, having found no change of circumstances since the orders were made by the Federal Circuit Court, there is no justifiable reason for this Court to re-open that philosophical issue. The question remains as to whether the husband can justify an alteration of the payment obligations under the Federal Circuit Court orders but that too raises the dilemma of:
(a)What is the husband’s income?
(b)What is the wife’s income position on the basis that the husband argued that, as she was an architect, she had a better earning capacity than he did because she had chosen not to pursue her career?; and
(c)What should be done about the fact that there are significant property values here that could be used to not only satisfy regular child support payments but also school fees?
I propose to wade through the issues sequentially. Before doing so, the following factors represent the parties’ background so far as it is relevant. The wife was the applicant. She is a qualified architect who had moved a business to her home but she has not operated it for over a year. She gave plausible explanations for why that was so. She is 46 years of age. She has the predominant parenting role in relation to B aged 13 and C aged 9.
The husband is aged 48 and described himself as unemployed. He is an engineer by qualification. He has also run some sort of a shop but now does not do that. He, like the wife, lives off rental from property that has been amassed.
The parties married in 2003 after a relationship before that of about 7 years. They separated in 2010. They have litigated ever since.
The issues are best divined from summarising the orders each party sought as follows.
By the wife’s application filed on 7 March 2014, she sought the following:
(a)That previous parenting orders be discharged and the husband spend time with the children from Friday to Sunday each alternate weekend and then from Tuesday to Wednesday in the alternate week. She then sought that holidays be shared equally but not until the younger child turns 13 which is obviously years away;
(b)That there be a departure from the existing child support assessment (of $58 per week) so that the husband pay $200 per week per child until 30 June 2015 or in the alternative, an undefined capital sum for that period;
(c)That the Federal Circuit Court orders be discharged relating to non-periodic payments so that the husband pay one half of all tuition fees and levies for [B] but that she be responsible for stationary, books, clothing and the like;
(d)That the wife pay all tuition fees and levies for [C] at the private school when she commences there in 2015(but see the next order);
(e)That the [Suburb F] property (which the husband was to become to sole proprietor of in the Federal Circuit Court distribution of assets) be sold and a regime be followed relating to the dispersal of the proceeds including that $250,000 be set aside in a trust account for [C’s] school fees. Those proceeds should also be used to satisfy what was said to be outstanding payments under orders and thereafter, the proceeds of the property sale be paid to the husband;
(f)That the payment in (e) satisfy 100 per cent of the husband’s child support obligations (that is, after 2015, there be no periodic payment);
(g)That the husband pay $18,519 to satisfy outstanding obligations under orders of the Federal Circuit Court in August and November 2012;
(h)That the husband travel to [Country G] and satisfy a requirement to transfer to the wife a [Country G] real property;
(i)That the wife comply with her obligations under orders once the husband had complied with his;
(j)The husband pay $1,443 because the wife had incurred “extra travel costs” in her going to [Country G] to sort out property issues;
(k)The husband pay the wife’s costs;
(l)The husband pay into a line of credit $8,148 to satisfy obligations from previous court orders and the orders be otherwise altered so that remaining debt be paid from the sale of a property in [Suburb H] and that those proceeds also be used to pay other things such as capital gains tax.
By the husband’s response filed 21 March 2014, he sought:
(a)That the husband have the children each alternate weekend until the Monday morning but otherwise, the extant parenting orders remain in place;
(b)Child support be as per the agency assessment (that is $58);
(c)That the orders be altered in respect of non-periodic payments so that he continue to pay half of the [B] fees but only half of [C’s] fees if she is successful in obtaining a scholarship but in any event, the wife pay the other incidentals;
(d)The property sale orders be varied to make provision for specific payments including tax;
(e)The wife transfer to him the [Suburb F] property and discharge the mortgage secured by the [J Pty Ltd] Loan. Failing that, a s 106A order;
(f)That the wife pay into the [J Pty Ltd] account $2,238 “in satisfaction” of interest accumulated since October 2013;
(g)That the conveyancers release the title to the husband and do work as directed by any orders.
Each party relied upon an affidavit and a financial statement. The wife made alterations to her financial statement in her evidence. She also filed an affidavit by a psychologist who had been treating B and the husband did not seek that the psychologist be cross-examined nor did he make any significant reference to her in his affidavit. He did not challenge the wife in cross-examination about the attendances by B. Accordingly, that evidence is unchallenged and in respect of the parenting dispute, carries some weight.
As each party had been a litigant numerous times before, each had prepared comprehensive affidavit material including (in the husband’s case) responding to the wife’s material and, each acknowledged that they had legal advice (and in the wife’s case, advice in the preparation of her affidavit), it was not necessary for me to explain in detail the process. Each was well familiar with it.
As I observed in the hearing, where there were significant assertions and allegations made by a party, they were required to prove them to the requisite standard. The standard of proof is the balance of probabilities. Thus, in respect of the findings that follow in these reasons, I have applied that standard.
For my convenience, it is preferable to break the various issues up into their component parts.

The parenting dispute

As will already be evident, the parenting dispute was modest. It concerned when the children’s time with their father concluded on alternate weekends but also the duration of various holiday periods. In respect of the latter, the problem arose as a result of the husband previously leaving the children unattended whilst he conducted his business. According to the wife although denied by the husband, that caused great distress. The husband’s position was that he had not seen such a difficulty but acknowledged that it would not happen in the future because apart from anything else, he now had his parents living with him. He conceded however that notwithstanding he was unemployed, he was going to start up a business.
The fact that in the past, a problem had arisen is evident from the fact that in May 2013, the parties were back before the Federal Circuit Court, only this time before Judge Burchardt. His Honour noted the dispute between the parties and expressed concern about what the husband was doing with the children during school holiday periods. Two observations must therefore be made. His Honour ordered that the husband was to be in “substantial” attendance during all times that the children were in his care. The second observation was that the final children’s orders which were made on 24 August 2011 by consent, were not altered.

Both parties seemed to say that the orders of Judge Burchardt made on 20 May 2013 were interim orders and indeed, that is what the cover sheet says. However, not only does the paragraph of the order indicate otherwise but common sense dictates that it was intended to be for the long term rather than the short.
As the complaint of the wife related to the distress of the children, the evidence of Ms K, psychologist, is important. As earlier indicated, the evidence was unchallenged.
Ms K assessed B in November 2010 for anxiety. That anxiety was described as high. In April 2013, B spoke to Ms K about her discomfort at the extended time being spent at her father’s home. At that time, the orders related to five nights per fortnight and half of the school holidays. The manifestation of the problem was described as bad dreams which included reference to a dead body, packs of cards turning into blood and her mother being attacked by a man with an axe. She described her father’s behaviour as mean and said that he would easily become angry. B told Ms K that she would sometimes cry because her father’s house was not like her mother’s house and she made less than complimentary remarks about his domestic capabilities. However, the focus was on B being upset for being left alone during which time she was expected to care for C. Her father told her that she was the babysitter.
In June 2013, B told Ms K that her father blamed her for his loss (whatever that was) of the proceedings in court. She described being sent home to her mother. She said that her father changed his mind about things and sometimes she missed him but other times he was horrible to them. Interestingly, she referred to the fact that her father seemed to be critical of her failure to be successful in competitions such as a piano competition. There is a distinct similarity between this complaint and the husband’s evidence before me of the importance of the children getting scholarships because otherwise significant sums of money on school fees were being wasted.
By September 2013 B was described as very distressed because of an incident at which the wife and the children were leaving Australia to fly to Country G and were stopped from boarding the aircraft. This evidence was not controversial in the proceedings. An airport watch order had been in place and not removed and the husband chose to stand by it. This caused B to be upset with her father but more importantly, she felt scared and embarrassed by being stopped by the police and humiliated as she had told her friends that she was going to Country G. This incident too was consistent with the husband’s fixed view about things and I find he did not act as a responsible parent that day particularly bearing in mind that there was no suggestion that the trip to Country G had any permanence about it or any risk of failure to return. The damage to the parent and child relationship ought be obvious but I am not sure the husband understood.
In March 2014, Ms K saw B again and described the fact that the husband had taken the children to the L Town for a holiday as a way of balancing out his refusal to allow them to travel to Country G. Perhaps unsurprisingly, she thought that this was some sort of a bribe. B had earlier described her father as mean and she had not changed her mind.
B indicated happiness with the duration of the fortnightly time with her father and sadly, described being able to cope with her father in “small doses”. The bad dreams had gone and everything was much better. Her father however was noted by B as not working and her grandparents were living there as well. She said they were nice but spoke little English so communication was difficult.
Perhaps also unsurprising, Ms K indicated that conflict between parents had a bad impact on these children and there was no sign of that abating. The impression given by B however was that the precipitator of the problem was her father rather than her mother. She described her mother as understanding her needs but her father being inflexible and focussing on his own needs.
Ms K recommended that the duration of time remain the same. Any increase in time would cause great distress. The fact that the husband now has his parents living with him so that he would have someone to “babysit” the children whilst he worked, is hardly satisfactory having regard to the comments that B made about her ability to communicate with her grandparents.
The wife’s position was that dividing the holiday periods equally should not occur until C turned 13 years of age. I think that is unnecessary. B complained about anxiety and the fact that she had to care for C. C seems to be in a slightly different position and as B grows older, she will make a choice as to whether she spends time with her father during holiday periods in any event. As she decides her own future, C will not have the problems of looking after any other children and presumably by that time, the communication skills with the grandparents might be better. I note that the children attend Country G school on Saturday for that purpose.
In the meantime, nothing suggests that B’s views should not be followed and indeed, if she decides that she wants to spend more time with her father during the holidays, no doubt she will. As the husband has made clear, he intends to be absent for work purposes. It would concern me if C was left not only unattended but without any specific direction or occupation. The presence of the paternal grandparents gives me little comfort as there is no evidence as to what role they can play. Much of the husband’s focus was on the words imported into the order by Judge Burchardt of “substantial attendance”. The very fact that he wanted definitions, indicated his intentions are to be absent but he came up with no solution if his absence was going to be significant. He was unable to give any evidence as to what times he would or would not be available. Having regard to the complaints by B about his absence, I see no reason why I should conclude that in the future, the husband will not be absent for long periods of time. Putting the child or children in a holiday program to some extent solves the problem but even there, B seemed more concerned about the absence of her father than what she was occupied doing. It is the anxiety of the child that troubles me most and on that basis, I think the time should be reduced at least for the next two years by which time, B will be 15 and no doubt can make up her own mind what she wants to do.
The second issue relates to the alternate weekends. The husband’s position was that it should be until Monday morning. In 2011, the consent orders showed a build-up process to a position where the time was alternate weeks from Friday through to Wednesday. That order was altered by Judge Burchardt on 4 June 2013 to reduce the time back from Friday through to Sunday but with the Tuesday night into the Wednesday morning in the alternate week. That order arose out of a report prepared and ordered pursuant to s 11F of the Family Law Act 1975 (Cth) (“the Act”) in May 2013. After that alteration, the parties filed their respective proposals as outlined in their application. The husband’s position was that he wanted the Sunday to be extended to Monday morning. The wife opposed that extension indicating that because the children were in different schools, B had to go by public transport and did not like it or alternatively, if B was driven, it would be early in the morning because of her schooling obligations and that would mean that C would have to get up early as well. The wife described the fact that the children were forgetting things and there were problems about clothing. The husband complained that the wife did not send sufficient clothing and if he bought things, the children wore them back to their mother because otherwise, they would have to return in school clothing.
The husband’s focus was on himself. There was little evidence about his care of the children and he seemed to simply dismiss the problem raised by the wife about having to get the children up early. Combined with the fact that his future business arrangements remain unclear, I consider it might be better for the stability of the children if the existing arrangement of Friday through to Sunday and then the overnight in the alternate week became permanent.

The legal principles

The objects and principles that underpin Part VII of the Act are clear. The legislation is designed to make the Court focus on ensuring the best interests of children are met by having their parents being involved in their lives in a meaningful way such that they benefit from that involvement and that parents fulfil their obligations and provide adequate and proper parenting to help the children achieve their full potential. In addition, the best interests of children are met by protecting them from physical and psychological harm from being subjected to, or exposed to, abuse, neglect or family violence. As was observed by Ms K, at least B sees her parents in high conflict. It would seem that whatever the Court does here, the objects just mentioned are unlikely to be met to any great extent. The high conflict between the parents will continue as was evident from the way they argued with each other and talked over one another even in the courtroom. The husband in particular was dismissive of the wife when she was endeavouring to make a point but at the same time, the wife was prepared to argue vociferously if she thought she was right. I find that there is every likelihood that the parents will argue in front of the children particularly over money issues. The impact of that conflict on the children ought be self-evident. B’s dreams as reported to Ms K are a clear indication of her concern particularly for her mother.
One of the principles that underlies the objects of Part VII is that parents share duties and responsibilities as well as agree on future parenting. None of that is happening here nor is there any likelihood that there will be any change in the future.
Section 60CA of the Act provides that in deciding whether to make a particular parenting order, the Court must regard the best interests of the child as the paramount consideration. Whilst it is clearly not the only interest to be considered, it is certainly the focus in a primary way.
To determine what is in the best interests of a child, the Court is obliged to consider the considerations set out in s 60CC. The first of those is the benefit to the children of having a meaningful relationship with both of their parents. All of the evidence supports the conclusion that they know who their parents are and that they have a different relationship each with the other. B’s indication to Ms K shows that she wants a limited period of time with her father but when he does focus on particular interests, B at least, really enjoys it. I find there is a meaningful relationship with both parents at the moment and the benefit that the children receive from it is different in each case. In the case of the husband, the benefit that can be obtained by the children lies in a limited period of time where he is obliged to focus on the needs of his children.
Another consideration is protecting the children from psychological or physical harm for the reasons outlined above. Here, whilst there does not seem to be any suggestion of physical violence, the message should be clear to both parents that they need to refrain from not only exposing the children to conflict but involving them in the conflict relating to their financial dispute. The evidence of Ms K would suggest that at least B understands that her father is involved in court proceedings and he is prepared to tell her about them. Limitation of time between a parent and child will not stop that but on finding as I do here, it is occurring, I am entitled to find that that is irresponsible parenting.
The additional considerations are the views expressed by a child. How much weight is given to those views depends upon the level of a child’s maturity and understanding. There is no evidence here that would enable me to make any finding in relation to C but B clearly understands what is going on and knows what she wants. I propose therefore to follow B’s views and limit the time that she is obliged to spend with her father.
Another consideration is the nature of the relationship between the children and each of the parents as well as other persons. I find on the evidence above that the role that each of the parents plays is very different. The children see the wife as their primary source of security and as the provider of needs but I am not at all sure that I understand the nature of the relationship between the two children and the husband. There seems to be little relationship between the children and their parental grandparents at this stage.
The Court is also obliged to take into account how the parents have participated in decision-making over the various things that affect children’s lives. It is clear that the wife is the primary source of decision-making and she is far more focussed than the husband in relation to long-term issues such as education. That determination affects parental responsibility.
Another consideration which is distinctly linked with parental responsibility is the extent to which each of the parents has fulfilled or failed to fulfil their obligations to maintain the children. Much time was spent in cross-examination about whether the husband had fulfilled his child support obligations. I shall turn to that in some detail below but I find that his self-interest always comes to the fore rather than his being concerned about the maintenance of the children. Documents show that the arrears of child support exceeded $10,000 at one time and the husband did periodically pay in a lump sum. When he was pressed to make payments, he sought to have payments associated with debts and mortgages offset against his child support obligations. That occurred after the Court made a departure order and left the Child Support Agency in a situation where they had to determine whether there was mutual intention of the parties to include those debts and commitments as child support obligations. The husband’s justification for his position was that they had always done that in the past after separation but it was the fact that he did not consult with the wife about it that was concerning. His view was that the wife had enough funds from rental to provide for the daily needs of the children and then of course, there were the private school fees. There is little doubt that the children did not suffer as a result of this dispute between their parents but on any view, I find that the husband was far less responsible than he should have been. His explanations for why he was in the position he was, are rejected. Even accepting that he had problems with employment, he still chose to maintain properties and pay mortgages rather than put food on the table to fulfil child support obligations.
It is appropriate at this time that I refer again to the husband’s argument that the redirection of the money to mortgages and so forth was not a problem. In cross-examination, he produced an email which he said the wife had sent to him agreeing to the non-payment course of action to justify that he did not have to make the child support payment. This created something of a problem. There was no reference to the document in his affidavit. The husband did not put the document to the wife in cross-examination. It came about when he was giving evidence and being cross-examined by the wife. As such, she had no opportunity to give evidence and be tested about it. It was abundantly clear however from the dialogue between the parties during that cross-examination that the wife denied she ever sent the document. The husband said he could prove that it did come from the wife but no such proof was forthcoming. In some circumstances, it might have been sensible to adjourn the proceeding to allow that to occur but, a little like the financial matters to which I have already alluded about the husband’s paucity of documentary evidence concerning his own financial position, I find that it would not assist to allow the wife to have to go back and give evidence again and be tested about the document. It seems to me that the most appropriate course of action is to say that on any view of what was happening at the time, the wife was not agreeing to the course of action under which the husband was avoiding his child support obligations because she was pursuing him through the Child Support Agency. That is inconsistent with her saying to the husband that he did not have to pay. In the circumstances, I propose to place no weight on the email produced by the husband.
As part of the child support question that I have to determine, the issue of parents fulfilling obligations to maintain children becomes relevant. The husband is currently paying $58 per week for the support of the children. On any view of the evidence mentioned below, that is insufficient. The husband constantly referred to the fact that he had no income other than the rental income. For reasons which follow, I reject his evidence that his evidence is an accurate reflection of his current income. He had ample opportunity to produce documents to prove his income and he failed to do so. More importantly, he has property and has a desire to keep it for a variety of reasons including being able to ultimately buy a home for his elderly parents. He saw that as a cultural moral obligation. It follows therefore that I find that it has been the wife who has maintained the children and, while she has probably more capital than the husband, her income position is not much different.
The Court is also obliged to consider the likely effect of any changes in the child’s circumstances including the effect of separation from their parents. In this case, the best evidence really comes from Ms K. Anxiety in a child from being separated from her mother at the age that B currently is, is very concerning. It is important therefore that in determining what time the husband spends with the children, I take that into account.
There is no dispute in this case that the children are to live with the wife on a permanent basis and therefore the capacity to provide for the needs of the children including emotional and intellectual needs is not relevant.
The children’s cultural entitlements are being catered for by the wife who has organised the Country G school on the weekend.
The attitudes of the parents and the responsibilities they have towards parenthood can clearly be seen in this case by the matters to which I have just referred. I find the wife is a responsible parent and would do anything for the children including take on the responsibility for private education if the husband did not pay. Whilst private education in this country is a privilege not a right and indeed in many cases as here, a luxury, the wife made very clear that she would do anything to ensure that her children succeeded. I am not at all sure that I understand what the husband’s attitude is. The evidence in relation to him leaving B to be the babysitter and putting the children in holiday programs when they could quite easily have stayed with their mother and done activities, does not reflect well on the husband.
There are no family violence considerations in this case that are relevant.
It is an important consideration in parenting cases that children be given an opportunity to settle into a routine after a separation of their parents and for that routine to be disrupted as little as possible. These children have had the exact opposite experience. The whole philosophy of Part VII of the legislation is to impose upon parents the obligation of not only caring for their children but making decisions about them. Courts should only have to intervene in circumstances where parents either fail to reach that standard or proposals are not in the children’s best interests. Here, the children have been in and out of health professionals’ hands whilst their parents litigated. Orders have been altered and are still disputed. It is time for these orders to bring to an end all of the disputes over the children and for that reason, I find it is preferable in this case to make an order that does end all of those disputes to preclude further proceedings for the sake of the children.

Because I intend to make a parenting order, s 61DA requires that I apply a presumption that it is in the children’s best interests for their parents to have equal shared parental responsibility. The rebuttal of that presumption may arise if it is not in the best interests of the children for the parents to have that responsibility. In this case, the parents do not agree on anything in relation to their children and the private school issue is a very good example. Their behaviour towards each other in the court room is indicative of the way in which they would behave towards each other if indeed they had to make any decision in relation to health, schooling, residential location or indeed religion. I find in those circumstances, that it is not in the best interests of the children that their parents have equal shared parental responsibility for the purposes of the legislation. That does not mean that an order cannot be made and in this case, I am not asked to make such an order.
Section 65DAA provides that if the parents do have equal shared parental responsibility, the Court must consider equal time and then in due course, significant and substantial time. In this case, neither of those positions is being advocated by either party and in those circumstances, it is not necessary for me to take the matter any further. As equal shared parental responsibility was not agitated, I do not propose to reopen that particular issue. The order already remains in force from 2011.
In my view it is in the best interests of the children that the contact between the husband and the children occur from Friday after school until Sunday at 5.00pm in each alternate week and in the other week, from Tuesday after school until the commencement of school on the Wednesday morning. As those orders are in place, there is no need for me to make any other order again.
In relation to the school holidays however, for the reasons I have articulated, sharing of the holidays is not appropriate. In my view the holidays should be, at least for the next two years, on the basis that the husband spends three days in each of the fortnights. That is consistent with the alternate weekend orders. I propose that orders be that the husband have alternate Friday afternoons until Sunday evening in week one and Tuesday night into Wednesday morning in week two regardless of whether the children are on holiday or not for the next two years. As from 1 May 2016, the orders will revert to half of all school holidays. These orders obviously impact on the wife having holiday time with the children but to the extent that that is a problem, she will have to work out a way with the husband so that adjustments can be made. If no agreement can be reached, then for the next two years, the children will have to have their holidays within the framework of those orders.

Child support

The child support issue concerned the existing assessment. It was not disputed that there is an assessment in place and it runs until 30 June 2015. It is for that period and retrospectively to 2013, the wife seeks a departure. Section 116 of the Child Support (Assessment) Act 1989 (Cth) provides that a parent has to undertake an administrative pathway before being eligible to come to the Court except in one circumstance. In this case, the parties have argued before the various agency and administrative bodies and do not seem to be able to agree on anything. It is notable that the Court has had to make a departure order before. In August 2012 Connolly FM departed from the nil assessment and ordered the husband to pay $125 per week for each child until 30 June 2013. When that assessment expired, the administrative system took over and after disputes, the current assessment was put in place.
Section 116 of the Child Support (Assessment) Act provides that if there is an application pending in a court and the court is satisfied that it would be in the interest of the parents to deal with the matter, jurisdiction is enlivened. I find that is the case here. It was not disputed by either party that the Court should deal with the matter notwithstanding the focus of the proceedings were otherwise on enforcement of property orders.
Section 117 provides that to depart from an assessment, there must be special circumstances and then, the Court must be satisfied there is a ground for departure as set out in the Act. Even at that point, if a ground is established, the Court must be satisfied that it is just and equitable as regards the child, the payer and the payee and otherwise proper, to make the order.
Although not clearly articulated, I understand the wife’s ground for departure is that in the special circumstances of this case, the administrative assessment results in an unjust and inequitable determination of the level of financial support to be provided by the husband because of the income, property and financial resources of both of them.
There was some suggestion in cross-examination about earning capacity which would no doubt affect a formulaic approach but I am able to find at this stage, the wife’s earning capacity is as she portrays it in her financial statement. The husband’s financial position is extremely unclear and one about which I have considerable scepticism.
The special circumstances that are applicable in this case concern the fact that regardless of what the parties do, they will litigate about what they have and what they should each pay for the support of their children. It is difficult to apply the assessment process in circumstances where parties have trusts and property which is negatively geared and indeed real property of some substance.
Section 3 of the Child Support (Assessment) Act provides that parents of a child have the primary duty to maintain the child and that that duty is not of a lower priority than the duty to maintain any other person and has priority over all other commitments of the parents other than the commitments to enable them to support themselves. The objects of the Act are clear. Parliament intended that parents ensure that the level of financial support to be provided by parents was to be determined according to their capacity to provide that support and that parents with a like capacity, provide like amounts of financial support. Importantly, the level of that financial support should be determined in accordance with the cost of the children. In this case, the wife set out the costs of maintaining the children and that evidence was largely unchallenged.
The legislation also provides that the person who provides ongoing daily care for the children should be able to have their financial support determined without the need to resort to court. Whilst that is an ideal situation, this case exemplifies the fact that parties with conflictual relationships, philosophical disagreements about the level of support and complicated financial structures, need to resort to courts.
I am satisfied that there is a ground established namely the inadequacy of the assessment because it is based upon income. The income is reflected in the assessment. The current assessment applies for the period from 1 December 2013 to 28 February 2015. It is calculated on the basis of that the husband’s taxable income is fixed at $37,266 and the wife’s at $6272. Neither of those is accurate. That justifies a conclusion that the assessment is not just and equitable to the children because it then shows a weekly rate of $57.46.
The wife’s financial statement shows that she currently has income of $1000 per week from rental and then a small government family allowance. The husband said that his income, which came from rent and from a trust, was $2189 per week. Whilst I have grave doubts about that income, on any view, it is inconsistent with what the child support agency was working on.
The wife’s income largely comes from rental of one of the properties that she received in the property settlement. The husband challenged the wife in cross-examination about her earning capacity suggesting that as an architect, she could work successfully in the building construction area. The wife indicated that she had not worked for eighteen months, was concentrating on her children and her elderly father and there had been a downturn in the building industry. Nothing I heard suggested that she was deliberately not working or not earning an income to avoid any obligation she might have under the child support system. I accept her income is approximately $52,000 per annum.
The husband’s position is far more complicated. He set out that he was receiving $1036 per week direct from tenants in relation to properties in his name. Against that sum however there was a deduction for expenses which included rates, maintenance costs and body corporate fees. With the body corporate fees were also electricity and insurance for the common areas and he calculated these without formally proving it that they totalled $310 per week. However, part of that is an expense incurred by his partner who is also a proprietor with him. The wife did not accept any of these figures and no documents had been provided.
More disconcertingly, the husband has in place a trust structure, details of which were scant. Tax returns for the trust have not been lodged. He said that the trust earned $1153 per week but he took 20 per cent off to cover what he described as major renovation costs that need to be undertaken and then of course, there is tax. There are a variety of properties all of which are tenanted although he argued that he did not have a 100 per cent occupancy rate. He produced no records. Some of the tenants paid in cash and sometimes into the joint bank account. None of these documents were produced and whilst the wife said that she had asked for the documents, nothing was forthcoming. The husband knew these proceedings would revolve around his earning capacity and his income. He made no secret of the fact that his taxable position was affected by the negative gearing arrangements that he had in place. He acknowledged having an accountant yet no material was produced to show the current position. Absent some material documentary evidence, I would not accept the husband’s income is accurately portrayed as $95,000 per year. That $95,000 comes from his concession based on $60,000 coming from the trust and $35,000 coming from the properties that are in his name.
In circumstances where the income of a parent in a child support dispute cannot be relied upon, a court should take an holistic approach and look at the total financial position as is indicated in s 117 of the Child Support (Assessment) Act. Here, the husband has property interests which on his own evidence, showed an equity of approximately $1.9 million. He has qualifications and, as he conceded, he has run a business in the past.
The wife too has considerable property interests. She quantified her interests as about $2.3 million. On any view therefore, even allowing for disputes over the precise nature of the valuations of those real properties and indeed, the liabilities secured against them, there is not a significant difference between the parties’ financial positions in a capital sense. How the parties fund the support of their children ought therefore be a matter for them to work out rather than the Court trouble itself about the niceties of the collection problem from income. The Court should therefore focus on the needs of the children and how they should be met. I find that the husband’s income is greater than the wife and the wife’s capital position is slightly better than that of the husband.
The costs of maintaining the children were set out in the financial statement filed by the wife and the figures were not challenged. I have considered the figures and there is little in them that I could see is controversial. Excluding education expenses because they are dealt with elsewhere, the costs of maintaining these two children is approximately $800 per week from the wife’s perspective. From the husband’s perspective, he said that he spent money on the children including food, clothing, holidays and activities and leaving education expenses aside, he spent $420 or thereabouts per week but that included child support. None of these figures is entirely accurate nor could they be having regard to the fact that children’s needs and expenses change often rapidly. I find however that on the combined expenses of the children, it is costing the parties (absent education expenses) somewhere in the vicinity of $1350. I find the wife is carrying the majority of those expenses not only because she is paying them with little assistance from the husband but also because of the fact that she has the children the bulk of the time. She did not challenge the husband’s figures of $100 per week for food and there is a sense of irony in that because she spends $140 per week on the children for food and has them 11 nights out of 14.
I see no reason why the expenses should not be borne equally between the parties. It is not a precise science but in my view each of the parties should be paying $675 per week and as the husband is currently contributing $350 when he has the children, he should be contributing $325 per week to the household of the wife. The next issue relates to the question of whether the husband can afford to pay that. Having regard to his unreliable income figures but more importantly, the extensive property interests that he has, I find that he does have the means and ability to make the payment.
Accordingly, I propose to make an order that the husband pay $325 per week as a more accurate assessment of the needs of the children instead of the assessment as it currently stands. The assessment was for the period from 1 December 2013 to 28 February 2015. I see no reason why the order should not be for that period including from 1 December 2013 until now and then until 30 June 2015.
The second issue relates to the question of school fees. Earlier in these reasons, I set out the positions of the parties. Although the husband wanted to articulate his position that whether or not the children attended private school should be the Court’s focus, I am satisfied that that determination was made by Connolly FM on 17 August 2012. No appeal was made against that order and his Honour did not set a sundown clause. The husband therefore needs to show that there has been a change of circumstances since that time. In August 2012, the properties of the parties were extensive and the subject of a property dispute culminating in orders. The assessment from which the Court departed was a nil assessment. The husband’s 2011-2012 adjusted taxable income was nil. Subsequent child support assessment documents show that the husband’s taxable income in 2012 was $55,980. All of that information must have been available to Connolly FM. In his reasons for judgment (at paragraph 57) his Honour said of the husband:
He is 46 years of age and, whilst a qualified a engineer (sic), he has done little to generate income during the last three years other than from rental income and I do not have an optimistic view that he is likely to make more efforts to generate income in the future, albeit that he says he should be able to make $60,000 per year.
Thus, I find that there has been little or no change in the financial circumstances of the husband such as would justify a conclusion for which he agitates that he does not have the capacity to pay. Connolly FM made an order for child support and contribution towards private schooling and against those orders, the husband did not appeal. His Honour found that the husband had an income in the $60,000 range and I have found that it is much higher. It is not appropriate therefore that the matter be completely relitigated. Despite that, it was the wife’s application that the Federal Circuit Court order be amended but only in respect of C. In respect of B, she sought that the order remain the same. In respect of C, she wanted the Court to order that she pay all of the tuition fees and levies commencing in 2015 but then, that the husband’s Suburb F property be sold and she have $250,000 to be used for private school fees for C. The wife anticipates that C will be attending the private school at the commencement of 2015. The husband’s position was that the August 2012 and May 2013 orders be discharged but his intention was that he pay one half of the tuition fees for C if the child obtained a scholarship equivalent to at least one half of the school fee. If that was to occur, each of the parties would then effectively pay one quarter of C’s fees each and the other half would be met by the scholarship.
The dispute is modest. The wife’s application was predicated on the basis that the husband will not pay the fees based upon his track record of not only not paying on time after a court order, but also his use of his capacity to manipulate his income for formula purposes under child support assessments.
In the wording of the orders proposed by the husband, he made clear that if the scholarship was not obtained by C, another school should be chosen by agreement between the parties. The difficulty with that position is that it is unlikely that the parties will reach agreement about anything. In addition, B is already attending the school admittedly on a scholarship. The fees in Year 5 for one child are about $23,000 and there is then a special year at which a further $21,000 or more is needed to be paid. Without a scholarship, the exercise would be extremely expensive. As I earlier indicated, the parties litigated in the Federal Circuit Court on the basis that the children were to both attend the same school and the focus before this Court was on the payment of fees rather than on the philosophy of who should attend which school. Having regard to the fact that the issue about the school was determined in the Federal Circuit Court, I find that the only relevant question is whether there has been a change of circumstances of a financial nature to justify a variation of the payment obligations by each parent. In cross-examination, the wife made clear that if the husband did not pay, she would. Thus, on any view, C will be attending the same school as her sister.
On the basis that there will be a period from 2015 onwards where both girls are at the same school, the fees are likely to be as high as $60,000 per year.
Section 124 of the Child Support (Assessment) Act makes it clear that the Court must be satisfied that it would be just and equitable as regards the child and both parents as well as otherwise proper to make the order otherwise than in the form of a periodic payment. If so satisfied, then the Court can make the order. Section 124 (2) provides that the Court must have regard to the administrative assessment in force and other obligations arising out of departure orders as well as the public purse consideration relating to whether a pension entitlement is being received. I take into account here that apart from a modest amount that the wife receives, neither party is a social security recipient. I intend to make an order for the ensuing financial year together with the period back to last December so that the husband will be paying $16,900 per year for financial support before any consideration is given to school fees. Bearing in mind that there seemed to be consensus that, at its highest, the parties would be paying a total of $60,000 per year for both children to be at the school, the question remains whether or not the husband can afford to find another $30,000 during that special year (the school camp year) making his child support obligation something in the vicinity of $47,000 per year.
Section 124(3) provides that in determining whether it would be just and equitable, the Court must take into account and have regard to the matters set out in s 117(4), (6), (7), (7A) and (8). Those matters require the Court to have regard to the nature of the duty of the parent to maintain the child, the proper needs of the child, any hardship that would be caused and again, the full financial position of the parties not only in terms of income, earning capacity and commitments but also property and financial resources. The Court must take into account whether it is proper to make the order. Another consideration concerns the proper needs of the child and that includes the manner in which the child is being, and in which the parents expected the child to be, cared for, educated or trained. That issue seems to me to have been determined by the Federal Circuit Court. It is significant to point out that the husband disputed the meaning of Connolly FM’s order and the parties went back before Judge Burchardt who indeed altered the order to make its meaning not only clear, but consistent with what the husband was arguing. I find therefore that there is little doubt that the parents expected the children to be educated at this private school and indeed, to the extent that the husband had any equivocation about it, the issue was determined by the Federal Circuit Court and should not be reopened.

Section 124 also requires the Court to regard all of the financial matters that I have earlier mentioned in respect of the departure application. Taking those matters into account, it is clear that the husband’s income is somewhere in the vicinity of his own admission of $96,000 but then he has property in excess of $1 million.
Section 124 also requires the Court, when having regard to the income, property and financial resources of a parent, to have regard to the capacity of the parent to derive income from assets that do not produce income. In this case, I am not able to say what assets the husband has that are capable of producing income because he did not produce the relevant documents but more importantly, he acknowledged that the assets that he did have, were the subject of an income minimisation arrangement. The husband also attacked the credibility of the wife because she had a unit (which has been declared in her financial statement) in Country G but which is in the husband’s mind, not producing market rent. The wife’s explanation for that was that the tenant had been in the property for seven years, had always paid in advance and undertook the maintenance. She observed that even if an increase was contemplated, after all of those expenses were taken into account, the increase would only be $100 per week or $5000 per year. In my view, that is not going to assist the husband’s argument here because it is such a modest amount.
In his financial statement, the husband wanted an allowance in excess of $500 per week towards a mortgage so that he could buy a house including a property that could house his parents. He is currently renting a property whilst obviously collecting the rent from the properties that he owns. If he were prepared to set aside $500 per week, that is a substantial portion towards the $30,000 or so obligation that he would have if the order was made that he pay half of the levies and tuition fees of both children. Bearing in mind my finding that his income is in the vicinity of $100,000, the husband claimed weekly expenses of (ignoring the expenses associated with earning that income and also loans encumbering investment properties), about $1707 per week. That includes an obligation of $375 for child support which I propose to make. Obviously that is predicated on the basis that he decides to keep the rental properties because as he said, they derive his source of income. He could of course, choose to work in his previous profession or indeed draw income from a business that he now seems to be proposing although he did not give details. The husband’s taxation position is difficult to assess even though he allowed himself $265 per week because he is not paying tax. He said he paid his tax once a year. Thus, he has an excess of income over expenses. He could, if he wished, dispose of property and would therefore have ample capital to put aside to provide for the future education costs of his children. Either way, the husband may choose to find the way to make the payment but in my view, he has the necessary resources to contribute towards half of the tuition and levies for both of the children.
Section 124 of the Child Support (Assessment) Act also entitles (but does not oblige) the Court to determine the earning capacity of each of the parties and to also assess whether it is greater than reflected in the income declared for the purposes of the child support scheme. On any view, the husband’s income is more than is reflected in his taxation returns back at least to 2012.
In my view, it is just and equitable to make an order because nothing really has changed since the orders were originally made and I find that the husband does have the capacity to make the payment of one half of the tuition fees and levies for both children.
The second part of the wife’s application however was that a lump sum should be taken from the sale of the husband’s Suburb F property and held in trust. In my view, the evidence does not warrant such a draconian measure because although there has been substantial litigation and constant disputes within the Child Support Agency, the orders I propose to make are simply matters which should be enforced if the husband does not comply, as and when the accounts from the school fall due. The husband’s justification for his recalcitrance in relation to past payments was explained by his view about prioritising obligations. He can no longer be under any misapprehension about what his new obligations will be. I indicated in discussion that I would be reluctant to make an order for the sale of a property as the wife intended but that I would contemplate the husband charging a property to secure the order. Such a charge would entitle the wife to lodge a caveat to better secure the charge so that, for the period of the school fees, if the husband did not make the payments, he would then lose the property to cover those fees. Whilst that is a draconian measure, the evidence strongly supports the finding that the husband does have the capacity to pay but is reluctant to see the money spent on private schooling. I have no confidence that the husband will pay on time. His attitude to punctual payment justifies the wife having the security whilst at the same time, the husband knows he risks losing his property if he does not pay on time. The retention of the property rather than its sale enables the husband to continue his pursuit of capital whilst earning the income from it. These children will not be in school for many years and the husband having had the opportunity to obtain that wealth, (and being given the opportunity now to retain it) the children have a right to have their education protected by it. The husband opposed the sale of the home but did not argue that the charge was a compromise. I have presumed he opposed it as well but because of the findings I have made, it is just and equitable to all parties and the children that such an order be made. The implementation of it is a matter for the wife. The wife who is in a similar financial position to the husband, has no qualms about making the payments even to the extent of presumably, losing her properties.

Enforcement of property orders

Each of the parties bandied figures around which they asserted arose from the various orders of the Federal Circuit Court and which they alleged remained either unpaid or, more importantly, had arisen outside of the Federal Circuit Court orders and which therefore justified some sort of offsetting arrangement or variation of the orders. As I observed, in my view, all of the property of the parties was altered by the orders of the Federal Circuit Court and the powers in s 79 of the Family Law Act have been exhausted. Nothing I read indicated that these were machinery provisions that they were endeavouring to alter. Indeed, what the parties were endeavouring to do was to either reduce the interests of the other or, increase their own benefit by having the other party take on obligations relating to loans.
The wife gave evidence that orders had been made in May 2013 that rental incomes from investment properties were to be deposited into a particular account and that the husband was to commence making loan payments on that account. When the Suburb H house was sold under an order, it settled on 18 October 2013. The court orders provided for the distribution of funds which included the discharge of mortgages.
In what had been the initial financial final orders, made on 17 August 2012, the parties were obliged to sell a number of properties and then upon the settlement of all of those properties, the mortgages were to be paid out. One of those mortgages was the J Pty Ltd Line of Credit which was said to have an amount of $709,000 outstanding. The parties seemed to have problems with the orders that had been made by Connelly FM and went back before him in November 2012 where they consented to a discharge of the original sale orders, divided the other properties on a transfer basis and then made provision for the disbursal of the sale proceeds of the one property that was to be sold. Curiously, it was the parties who seem to have drawn these orders. The order provided that upon the settlement of the sale, the sale proceeds be distributed inter alia:
Fourthly, to discharge mortgage at the [J Pty Ltd] Line of Credit account with $709,000 owing.
It transpired in the evidence before me that the $709,000 was not the figure owing at 5 November 2012 but a figure from a much earlier time. That led to arguments about how the J Pty Ltd Line of Credit had been used by both parties and who had failed to make payments into it. The husband tried to say that the wife had drawn $135,000 against the J Pty Ltd Line of Credit but that related to a period prior to the orders. The husband accused the wife of not making payments and the rental seems not to have gone where it should have. The real question is whether or not the Court should, or indeed can, alter the order which reads that $709,000 is to be paid. The wording of the order is directed to “discharging the mortgage” presumably on the basis that the mortgage was securing the loan. The words “with $709,000 owing” could on any view be seen as superfluous because the primary obligation was to discharge the mortgage. No doubt the mortgagee would not discharge the mortgage unless it was fully paid the money it was owed. In my view, the correct interpretation of paragraph 7 of the orders is that whatever sum is required to be provided should be paid from the Suburb H property sale proceeds. The dilemma is that the order provided that if the settlement proceeds were insufficient to discharge all of the mortgages or to meet capital gains tax requirements, then the husband and wife were responsible for the relevant shortfalls in a percentage way. In my view therefore, if the parties have fiddled with the account, the Court has to look to whether or not there is an obligation that can be enforced because otherwise, the Court would be exercising s 79 powers to alter the entitlements of the parties by increasing (or indeed reducing) their respective liabilities for the mortgage.
The wife pointed to paragraph 5(d) of the orders made on 17 August 2012 which read:
That on or before the discharge of all of the mortgages referred to in paragraph 4(b) the husband shall:
(d)pay to the wife the sum of $209,769.05 inclusive of the $10,000 add-back referred to in paragraph 12.
Part of the dilemma is that paragraph 4(b) relates to the discharges of mortgages upon the settlement of the sale of all of the properties. The properties were to be sold under paragraph 1 of the original order but by consent of the parties, the orders on 5 November 2012 discharged those orders. The question is whether paragraph 5(d) can thereafter stand alone. In my view, it probably can. The $8148 that the wife sought related to payments charged by the bank on 1 December 2013 and a further $1029 for another mortgage to the M Bank in November 2013. In addition to those two sums, when the parties went back before Judge Burchardt in 2013, they had a dispute over the rental income and his Honour ordered (by consent) that the rental from the property that the husband was retaining was to be deposited into the J Pty Ltd Line of Credit and from another property owned by a company, directed into the N Bank business account.
It was the wife’s evidence that the J Pty Ltd payment in December 2013 and the M Bank payment in November 2013 were not paid by the husband. He did not make the monthly loan repayments in September and November 2013 and had only paid a portion of the monthly payment in June 2013. The wife referred to the fact that between December 2011 and May 2012, the husband retained rental incomes of approximately $55,900 while she only retained approximately $15,800 and each paid their respective outgoings from the properties that they were then caring for. The wife observed that this line of credit which was supposed to be serviced by the husband, was secured against her residential property in Suburb O. The source of the J Pty Ltd loan was irrelevant because the only thing the Court was concerned about was how it was to be serviced. That loan was to be discharged and the wife would have had an unencumbered property had the Suburb H property sale discharged the mortgage which secured the J Pty Ltd Line of Credit. Instead, only $709,000 was paid out. As I said earlier, that seems to be a misreading of paragraph 7 of the orders made on 5 November 2012.
The evidence presented by the wife as to how she came to be owed $8148 was convoluted. I find it impossible to decide whether it is an outstanding liability of the husband bearing in mind the wording of the orders of the Federal Circuit Court. The wife has therefore failed to prove that claim. In his response, the husband sought a discharge of the Federal Circuit Court order relating to the payment of periodical payments under the mortgage and simply sought that the money held in trust from the sale of the Suburb H property be used to discharge the balance owing to the J Pty Ltd Line of Credit account. The husband’s evidence was that there was $45,000 still outstanding being the balance after the $709,000 had been paid out. The husband tried to show the different figures that were due at various times and observed that the wife had refused to have any amount of money paid out other than the $709,000. The husband observed that as he had been unemployed when the orders were made and as the J Pty Ltd loan account was a line of credit, he elected to put most of the rental proceeds into the repayments of those loans as a priority.
For the reasons articulated in relation to the wife’s evidence, I have no way of knowing whether payments were correctly made or not and I have therefore declined to endeavour to do the mental mathematical gymnastics to try and work it out. It seems to me that the focus of attention should be on the wording of the orders. The wife’s position was that the only amount of money that should have been paid out to the J Pty Ltd Line of Credit was $709,000. As indicated earlier, that is a misreading of the order. The order required the discharge of the mortgage not the loan amount. On that basis, the proceeds of the sale currently held in trust should be used to pay whatever is outstanding on the J Pty Ltd Line of Credit.
The wife then sought orders that the Court direct the husband to travel to Country G concerning the transfer of the Country G property. In my view there is no power for the Court to make such an order and the wife did not indicate any power that the Court could so use. She then said that the husband should pay her $1443 because she incurred extra travel costs when she went to Country G in September 2013. Nothing in the previous orders indicates that is an obligation that the Court could enforce. Accordingly, I decline to make those orders.
Another order that the wife sought read as follows:
That the respondent husband pay into the wife’s nominated personal account $215 within five days of the date of making of these orders to comply with paragraph 12 of the orders made by the Federal Circuit Court on 20 May 2013.
Paragraph 12 of the orders of that day reads as follows:
Order 17(a) of the orders made on 17 August 2013 be amended by adding the words “half of” after the words “[B] and”.
This last dispute related to the primary school fees for C. The husband was to pay one half of the fees. More importantly, paragraph 18 of the orders made 17 August 2012 (which were amended by the orders just mentioned) read as follows:
The husband shall pay the non-periodic child support referred to…hereof directly to the provider concerned or if an expense has been paid by the wife then into a bank account nominated by the wife within seven days of a request for payment being made by the wife.
It seems the clear intent of that order was that if the wife paid the fee, she could claim half back from the husband. She said in her evidence that she wrote to the husband twice and he refused to pay. The husband did not cross-examine the wife but in his affidavit, he denied the allegation. He said that the wife refused his earlier direct child support payment to offset his liability and refused to pay him back money in early 2013 and that since that time all money including the school fee was exchanged through the Child Support Agency. He said he did not want to pay the wife directly because she failed to acknowledge his payments. He said that if the Child Support Agency credited $215 as child support, he would update his account to offset the outstanding money. Again this is an indication of the husband determining how he will interpret court orders. Whatever money the wife owed the husband is irrelevant. If the Court orders an amount to be paid, it must be. The husband must therefore pay the $215 regardless of what might be said by the Child Support Agency because it was not a matter for the Child Support Agency to collect. This was a non-Agency payment because it was a non-periodic payment under a court order.
In the same way, the wife chose not to transfer the property that the husband was entitled to in Suburb F. The obvious reason for that was that she saw the prospect of that property being sold to satisfy the school and child support issues earlier mentioned. In my view, there was no basis for the wife to adopt that position (much the same as what the husband had adopted in relation to her $215) because the order required her to transfer the property forthwith. The difficult feature is that the order also required a discharge with respect to the mortgage secured by way of the J Pty Ltd loan account. That loan is outstanding because the wife interpreted the order to mean that only $709,000 was to be paid. In my view that was wrong and the account should be paid immediately. That will then free up the Suburb F property which is the property that I have earlier mentioned I propose to allow the wife to demand a charge over from the husband for the life of the children’s private schooling.
The wife also sought costs.
I accept that in this case the wife has sought legal advice and presumably had assistance in the drafting of documents even though she was not represented at the hearing.
Section 117 of the Family Law Act provides that in proceedings in this Court, each party shall pay their own costs unless there are circumstances to justify a departure from that principle. If there is such a justifying feature, the Court must examine before it makes such an order, the matters set out in s 117(2A) of the Act. Having regard to the fact that neither party in this case covered themselves in glory in relation to not only the way in which the case was conducted but their attitude to litigation generally. I do not consider there are justifying circumstances. No attempt has been made by either party to endeavour to resolve the matter. Indeed, I note in the reasons for judgment by Judge Burchardt that he said that the parties bordered on vexatious. They will need to be very careful about that because I agree with his Honour and to the extent that the Court is further engaged in this litigation, it might seriously contemplate using the new provisions of the Family Law Act to prevent further litigation to protect its own resources let alone preventing the parties continuing their financial war. In my view, there is no basis for the Court to make any order for costs in this case.
Out of an abundance of caution, I shall make orders that in relation to the non-periodic payments under the orders I propose shall not be credited against any obligation under these orders for periodic child support. Because the parties are unrepresented, they must understand that the payment of $375 per week that I propose to order is a stand-alone order and payments in respect of school fees are not to be credited against that sum. It is not the Court’s function to comment outside of the matters litigated but to the extent that it is of assistance to persons reading these reasons, it is extraordinary that the Child Support Agency had to descend into argument about non-Agency payments. In my view, the Agency should simply look to the orders made by the Court and to the extent that the parties are dissatisfied with whether or not a payment has been made, they can use the relevant enforcement provisions.

In his response, the husband also sought orders that the conveyancers release to him the Certificate of Title to P Street, Suburb Q and that they complete the various tasks outstanding. As I observed, the conveyancers are not parties to these proceedings and in my view, the Court has no role to play in making those orders. I do not know whether R Pty Ltd are lawyers. If they are not, the Court does not have any control over them at all. However, it ought to be obvious that conveyancers might act for both parties but they should decline to act if there are conflicts over court orders and instructions are not given by one of their clients consistent with those orders. There is little doubt in my view that the final orders of the Federal Circuit Court divided the relevant properties and there should no longer be any argument about them.
The husband sought an order under s 106A of the Family Law Act that a registrar sign any necessary transfer to give effect to the orders that the Federal Circuit Court made in relation to the Suburb F property. In my view, that is inappropriate. I would not put a registrar in a position of trying to deal with the parties as litigants in person having regard to their vexatious natures and the convoluted way in which each of them portrays their respective positions as being correct. To the extent that the wife does not comply with the order previously mentioned about the Suburb F property, the husband should take enforcement action and the wife would need to consider her position because it may be that her refusal after reading these reasons is bordering on contemptuous.
I make the orders set out at the start of these reasons.

I certify that the preceding One Hundred and Eleven (111) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Cronin delivered on 30 April 2014.

Associate:

Date: 30 April 2014

[2014] FamCA 275

Key Legal Topics

Areas of Law

Family Law

Statutory Interpretation

Legal Concepts

Appeal

Costs

Damages

Jurisdiction

Remedies

Statutory Construction