Marklew & Marklew

[2009] FamCA 753

FAMILY COURT OF AUSTRALIA

MARKLEW & MARKLEW [2009] FamCA 753

ORDERS - DISCHARGE - husband seeks discharge of orders which require him to pay child support and spouse maintenance from the date to which those orders stand paid - wife lives in America and has not adduced any evidence nor participated in these proceedings - husband’s financial circumstances deteriorated markedly not long after the child support and spouse maintenance orders were made - the Court is satisfied on the available evidence that the circumstances justify the discharge of the spousal maintenance orders as from the date to which those orders stand paid - the Court is satisfied that the husband has proven his case for a discharge of the child support orders as from the date to which they stand paid

Family Law Act 1975 (Cth) s 83

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

Gyselman & Gyselman (1992) FLC 92-279
Katsilis v Broken Hill Pty Ltd (1977) 18 ALR 181
Marriage of Ravasini (1982) FLC 91-312
Marriage of Warwick (1983) FLC 91-342
Pera v Pera (2008) FLC 93-372

APPLICANT: Mr Marklew

RESPONDENT: Ms Marklew

FILE NUMBER: MLF 10951 of 1993

DATE DELIVERED: 13 August 2009

PLACE DELIVERED: Newcastle

PLACE HEARD: Melbourne

JUDGMENT OF: The Hon. Justice Austin

HEARING DATE: 4 August 2009

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Lethbridge SC and
Ms Devine

SOLICITOR FOR THE APPLICANT: Kelly & Associates Family Lawyers

Orders

IT IS ORDERED:

1. That Orders 3, 4 and 5 made by Justice Frederico on 21 June 2000 are discharged.

2. That Order 1 made by Justice Carter on 11 July 2000 is discharged.

3. That Order 20 made by Justice Purdy on 20 June 1997, as varied by Order 5 made by the Full Court of the Family Court of Australia on 15 July 1998, is discharged from the date to which it stands paid.

4. That for the period up to and including the date of these Orders, the total amount of spousal maintenance payable by the husband for the benefit of the wife is set at the amount equal to the monies already paid up to this time, including the value of any non-agency payments credited for that period, with the effect that no spousal maintenance arrears remain payable and no overpayment is created.

5. That Orders 27 and 28 made by Justice Purdy on 20 June 1997, and Order 6 made by the Full Court of the Family Court of Australia on 15 July 1998, are discharged from the date to which they stand paid.

6. That for the period up to and including the date of these Orders, the total amount of child support payable by the husband for the benefit of the children of the marriage is set at the amount equal to the monies already paid up to this time, including the value of any non-agency payments credited for that period, with the effect that no child support arrears remain payable and no overpayment is created.

7. That within 14 days of the date of these Orders, and subject to implementation of Orders made by the Court on 3 August 2009, the wife shall do all things and sign all documents as may be necessary to transfer all of her legal and equitable right, title and interest in shares, held jointly with the husband, in Invensys PLC and the ANZ Bank, to the husband solely.

8. That if the wife fails or refuses to sign the documents necessary to implement Order 7 hereof, then pursuant to s 106A of the Family Law Act the Registrar or a Deputy Registrar of the Family Court of Australia at Melbourne is hereby appointed to execute all such documents in the name of the wife and do all such acts and things necessary to give validity and operation to all documents so as to implement Order 7.

9. That the husband’s costs of and incidental to the prosecution of his Further Amended Application filed on 10 July 2009 are reserved.

NOTATION:

A.It is requested that the Child Support Agency remit all penalties associated with the liability of the Husband for child support and spousal maintenance pursuant to these Orders and previous Orders of this Court.

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

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER:  MLF10951 of 1993

MR MARKLEW

Applicant

And

MS MARKLEW

Respondent

REASONS FOR JUDGMENT

Introduction

1. The litigation in this case has followed a long and tortuous path.

2. The parties married in the United States of America in 1980 and later moved to Australia.  Five children were born within the marriage before the parties finally separated on 8 November 1994.

3. The initial phase of litigation between the parties concluded on 20 June 1997 when Purdy J made a series of final parenting and property adjustment orders on that date, following upon a contested hearing.  Thereafter followed a multitude of applications to the court by both parties dealing with various aspects of their matrimonial dispute.

4. The application calling upon the court’s determination in this instance is the applicant husband’s Further Amended Application filed on 10 July 2009.  That Application amends and supersedes earlier Applications filed by the husband on 1 June 2000, 4 August 2000 and 18 June 2007.  The husband’s pending application essentially seeks 3 outcomes, namely:

   (a)discharge of child support orders from the date to which those orders stand paid;

   (b)discharge of spousal maintenance orders from the date to which they stand paid;

   (c)the grant of further procedural orders to enforce substantive property adjustment orders made by Purdy J on 20 June 1997.

Non-appearance of the respondent wife

1. As will be seen from the dates I have cited above, the husband’s application has been pending for a protracted period.

2. On 8 October 2007 the wife filed an Application in a Case seeking, in part, dismissal of the husband’s Amended Application filed on 18 June 2007.  That document maintained the position that had been adopted by the wife since 14 July 2000, when she filed an Application for Final Orders seeking, in part, the setting aside of orders made on 21 June 2000 with relevance to the child support and spousal maintenance issues. The wife’s position had always been to retain the child support and spousal maintenance orders.

3. After a lengthy period of abeyance of the parties’ competing applications, progress of the matter was revived and procedural orders came to be made by Registrar Field on 26 June 2009.  On that date Registrar Field made orders and notations, including the following:

   2.That this matter be listed for a final hearing before the Honourable Justice Monteith on 3 August 2009 at 10.00 am as the first case in a rolling list (“hearing date”).

   3.        That the applicant and the respondent appear on the hearing date.

   4.That the applicant file and serve the following documents on the respondent by sending them by pre-paid post to […, T], Oklahoma, USA […] by 10 July 2009;

   a)Amended Application for Final Orders setting out with precision the orders he seeks;

   b)        Any affidavit material that he intends to rely upon;

   c)        Update Financial Statement;

   d)        A sealed copy of these orders.

   5.That the respondent file and serve the following documents by 27 July 2009:

   a)Amended Response to the Application for Final Orders in which an address for service in Australia is identified;

   b)Any Affidavit material she intends to rely upon;

   c)Updated Financial Statement;

   6.In the event that the respondent does not comply with paragraphs 3 and 5 of these orders, the applicant have liberty to apply to have his application proceed on an unopposed basis.

   NOTATIONS

   A.The current proceedings were commenced by Application for Final Orders filed 4 August 2000 and subsequently amended 18 June 2007. Orders were made on the 4 July 2007 for the respondent to file a Response 14 days after service of the Amended Application but no such Response appears to have been filed.

   C.The issues in dispute are limited to child support, spousal maintenance and enforcement of property orders that provided for transfer of shares to the applicant by the respondent.

   D.The lawyer for the applicant and the US attorney for the respondent were advised of the trial date by the court by email on the 11 June 2009 and the court will forthwith provide the respondent’s US attorney by email a scanned copy of these orders.

4. At the time of hearing, the husband tendered a series of emails between Registrar Field and a person described as “Mike Linscott” who ostensibly communicated as the US attorney for the wife (Exhibit H1).  The contents of those emails demonstrate that the wife, through her US attorney, was aware of the listing arrangements being made to bring these current proceedings to a conclusion.  The contents of the emails also prove fulfilment of the service of the procedural orders made on 26 June 2009 by Registrar Field upon the wife, as contemplated by Notation D set out within those orders.

5. In support of his case, the husband read the affidavit of his solicitor, Ms Leanne Elizabeth Kelly filed on 24 July 2009.  The contents of that affidavit prove service of documents upon the respondent wife in fulfilment of Order 4 made by Registrar Field on 26 June 2009.

6. The wife failed to appear before the court on Monday 3 August 2009, either in person or via a legal representative.  On that day I proceeded to deal with an outstanding application as between the husband and his former solicitors, and stood over the application pending between the husband and wife to 4 August 2009.  Again on that date the wife failed to appear, either in person or via a legal representative.

7. I am satisfied on the evidence that the wife was aware that the proceedings were listed for hearing before the court on 3 August 2009, that she had been properly served with the documents relevant to that hearing, and that she had voluntarily absented herself from the hearing.

8. The wife was also plainly in default of Orders 3 and 5 made by Registrar Field on 26 June 2009.

9. As a consequence of those circumstances, I granted leave to the husband to proceed with his pending application on an unopposed basis, as contemplated by Order 6 made by Registrar Field on that date.

Documents relied upon

1. In support of his case the husband relied upon the following documents:

   (a)       Further Amended Application for Final Orders filed 10 July 2009;

   (b)Affidavit of Leanne Elizabeth Kelly filed 24 July 2009;

   (c)Affidavit of the applicant husband filed 10 July 2009;

   (d)Financial Statement of the husband filed 10 July 2009.

2. In further support of his case, the husband tendered in evidence:

   (a)Minutes of Orders sought by the husband (Exhibit H2), which Minutes the husband supplanted for the orders proposed in his Further Amended Application filed on 10 July 2009;

   (b)Financial Statement of the respondent wife sworn on 30 May 2007 in the State of Oklahoma, USA, which document had been served but not filed by the wife in the proceedings (Exhibit H3);

   (c)Affidavit of the wife filed on 8 October 2007 (Exhibit H4);

   (d)Document entitled “[Marklew] – child and spousal maintenance liability breakdown as at 31/07/2009” (Exhibit H5);

   (e)Document entitled “Addition to Minutes” (Exhibit H6), which document was intended to supplement the Minute of Orders (Exhibit H2);

   (f)Affidavit of Mr F filed 23 January 1998 (Exhibit H7).

Relevant history of the litigation

1. As I have mentioned, final orders were made as between the parties by Purdy J on 20 June 1997.  Those orders included the following:

   20.The husband pay or cause to be paid to the wife the weekly sum of $500 by way of spousal maintenance, such liability to commence 1 July 1997, the first payment to be made on 7 July 1997, or as the wife or her legal advisors may direct.

   21.That Order 10 made by this court on 20 March 1996 continue in operation.

   22.That the wife’s entitlement to spouse maintenance pursuant to Order 19 (sic) above, shall be secured over and is hereby secured over the fund constituted by Order 10 of this court of 20 March 1996.

   23.The above order shall not be construed so as to relieve the husband from payment of spouse maintenance pursuant to Order 20 above from funds in the husband’s control.

   24.That the husband do all acts and things and sign all documents as may be required to cause the wife’s superannuation entitlement (and the assets referable thereto) to be transferred or rolled over (as the case may be) to a superannuation fund or other trustee nominated by the wife, or give effect to any other nomination by the wife permitted by law.

   25.That there be a departure from child support assessment dated 9 July 1996 (save as to any arrears due up to the date of this order).

   26.That the child support agreement made on 10 October 1995 and registered with the Child Support Registrar be set aside (save as to any arrears due up to the date of this order).

   27.That the husband pay child support in each child support year on the basis of liability for the support of the parties children –

   [A] born […] January 1981

   [B] born […] April 1984

   [C] born […] May 1985

   [G] born […] May 1993

   on the basis that the husband’s child support income amount is calculated in accordance with the formula contained in section 42 of the Child Support (Assessment) Act.

   28.That the departure order above shall remain in force until the child [G] attains the age of 18 years or until further order of the court.

2. The husband appealed against the orders made by Purdy J.  That appeal was determined and the Full Court made further orders on 15 July 1998, including the following with relevance to spousal maintenance and child support:

   5.That Order 20 of the said orders be varied by substituting the sum of $150 for the sum of $500 therein appearing.

   6.That Order 27 of the said orders be discharged and in lieu thereof the following order be made:

   That the child support income amount to be used by the Registrar of Child Support and calculating the husband’s liability to pay child support in respect of the children of the marriage [A] born […] January 1981; [B] born […] April 1984; [C] born […] May 1985; and [G] born […] May 1993 be the sum calculated using the formula contained in section 42 of the Child Support (Assessment) Act.

3. On 18 June 1999 Dessau J made further orders between the parties permitting the wife to relocate to the United States of America with the three youngest children. Thereafter, the parties remained in almost continual dispute concerning issues related to the children.

4. On 21 June 2000 the matter came back before the court at which time Frederico J made further orders, including the following:

   3.That Order 20 of the orders made on 20 June 1997 (as varied by Order 5 of the orders made 15 July 1998), be and is hereby discharged and that all arrears of spousal maintenance that may have accrued pursuant to that order be discharged.

   4.That Order 6 of the orders made on 15 July 1998 be and is hereby discharged and that all arrears of child support accrued to date be discharged.

   5.That the husband pay child support pursuant to the Child Support (Assessment) Act 1989 for the children of the marriage [B] born […] April 1984, [C] born […] May 1985 and [G] born […] May 1993 pursuant to the Child Support (Assessment) Act 1989 based on the formula as it relates to the husband’s income in each child support year.

5. It will be seen that the intended effect of the orders made on 21 June 2000 by Frederico J was to entirely discharge any liability of the husband to the wife for spousal maintenance, to discharge any outstanding liability of the husband for child support, and to reassess the husband’s liability to the wife for the payment of child support in respect of the three youngest children by reference to his actual income rather than a notional maximum income under the child support legislation.

6. The matter came back before the court only several weeks later on 11 July 2000 at which time Carter J made further orders, including the following:

   1.        That until further order, the operation of the orders made by Frederico J on 21 June 2000 be stayed.

7. The effect of the orders made by Carter J was to revive the original orders of Purdy J, as varied by the Full Court, by staying the operation of the orders made by Frederico J.

8. The litigation between the parties eventually came before Wilczek J, apparently for case management, on 25 May 2001.  On that day Wilczek J did several things.

9. Firstly, he noted that the husband was seeking an order that Order 6 of the orders made by the Full Court on 15 July 1998 be discharged and that all arrears of child support accrued to that day be discharged (Notation 3(c)).

10. Secondly, he noted that the wife was seeking that the orders made on 21 June 2000 be set aside (Notation 3(d)).

11. Thirdly, he ordered that on or before the end of August 2000 the husband have leave to file any further application to clarify the relief that he seeks, and the basis upon which he seeks such relief, in relation to child support matters, inter alia, to specify what particular assessment he asserts should apply for what particular periods and the grounds relied on (Order 5).

12. Apart from a further application made by the husband in 2002 about contact between himself and the youngest child G, for reasons which are largely unexplained, nothing further occurred with respect to the current contentious issues until late 2006. 

13. In November 2006 and February 2007 some further procedural orders were made concerning the parties compliance with the orders made by Wilczek J on 25 May 2001.

14. A trial date of 4 June 2007 before Carter J was fixed and later vacated. Thereafter the husband filed his Amended Application on 18 June 2007, which was later superseded by his current Further Amended Application filed on 10 July 2009.  In answer to the husband’s Amended Application filed on 18 June 2007, the wife filed her Application in a Case on 8 October 2007.

15. From there, the matter progressed slowly to the point of the procedural orders being recently made by Registrar Field on 26 June 2009, to which I have already referred. As recorded in those orders, the matter came before the court for hearing on 3 August 2009.

Absence of evidence from the wife

1. As I have noted, the wife declined to attend and participate in the hearing.  As a consequence, she adduced no evidence in the case.  The history as I have recited it demonstrates that she has declined to file and serve evidence in accordance with past procedural orders.

2. It was submitted to me by the husband’s senior counsel that the wife bore an “evidential” onus to adduce evidence in rebuttal of the husband’s case, in the absence of which the court could be more comfortably satisfied about the cogency of the evidence adduced in the husband’s case.  I find that I am only able to agree with that submission in part, although it may be that our difference of opinion is semantic rather than substantive.

3. It is uncontentious that the husband, as applicant in the proceedings, bears the “legal” burden of proving his case.  Given the nature of the issues now at stake, in my view, the circumstances are not such as to give rise to any “evidential” burden borne by the wife.  She either chooses to adduce evidence bearing upon the issues at stake or she does not.  If, as she has chosen, she adduces no evidence then the evidence adduced by the husband is no stronger.  Rather, the evidence of the husband may simply be capable of more ready acceptance in view of the fact that it is uncontested.  The “legal” burden of proof borne by the husband remains his from first to last.

4. It was submitted, and I accept, that in the absence of evidence from the respondent wife, or at least a plausible explanation for her failure to adduce it, the court is entitled to draw an inference that any evidence available to the wife would not have advanced her case.  That inference, of course, is to be differentiated from an inference that the evidence would have been detrimental to her case. 

1. The permissible inference is only that the evidence available to the wife, which she has not adduced and chosen not to explain the failure to adduce, would not have advanced her case.  As was said by Barwick CJ in Katsilis v Broken Hill Pty Ltd (1977) 18 ALR 181 at 197:

   …it can properly be said that the failure of a party to give or produce evidence which, in the circumstances of the case, that party in its own interest would be expected to give or produce, warrants the conclusion that, if given or produced, the evidence would not support that party’s case.  Indeed, in some circumstances it might be inferred that it would support the opponent’s case; but, if so, it must depend very much on the circumstances.  But, in any case, the inference would depend upon some element of conscious repression or withholding of the evidence.  The warrant for the inference must depend upon the deliberation with which the evidence is withheld and the appreciation or likely appreciation of the party of its significance in the case.  In my opinion, these propositions are in accord with the decided cases which I have taken occasion to examine.

2. The meaning of that principle is discerned to be that the relevant party should adduce some evidence as a matter of common prudence – not because of the existence of any “evidential” onus (Cross on Evidence at para.7210).

3. An “evidential” onus will only be created when a party needs to raise an issue in the proceedings, which is not already raised in the case of the opponent, and which issue the opponent bears a “legal” onus to disprove.  There is no need for the opponent to address and disprove that particular issue, in satisfaction of the “legal” onus, unless some evidence is adduced by the other party, in satisfaction of the “evidential” onus, to warrant it (Cross on Evidence at para.7015).

4. In any event, the wife failed to adduce any evidence in these proceedings, which choice was a deliberate one having regard to her knowledge of the hearing and the procedural orders made in anticipation of it.  Moreover, there is nothing before the Court to explain why she has made that choice.

5. As invited by the husband, I draw the inference that any evidence available to the wife would not have assisted her to refute the case advanced by the husband.  I am therefore more comfortable about accepting the veracity of the evidence he has adduced to prove his case.

Financial circumstances of the husband

1. The husband deposes to his historical financial circumstances in his affidavit filed on 10 July 2009, from paragraphs 30 to 61 inclusive.

2. At the time the original orders were made by Purdy J on 20 June 1997 the husband was in employment earning a handsome income, sufficient to warrant the Court ordering that he pay child support in respect of the children at the ceiling rate prescribed by the child support legislation.

3. Within little over a year of those orders the husband became unemployed and entitled to receipt of a Newstart Allowance from Centrelink.  Over the next few years until mid 2002 the husband was alternatively employed and unemployed.  His evidence, which I accept, discloses that he was employed for approximately 14 months in the period between late 1998 and mid 2002.

4. During that period the husband entered into a Part X composition under the Bankruptcy Act 1966 (Cth). The process of that composition began on 14 April 2000 and concluded on 21 August 2001.

5. During 2001 the husband conceived a business which he called “[Marklew International]”, but that business did not generate any income of significance until the 2002/2003 financial year.  The husband was self employed within that business from that time, but his income was very modest in the financial years ended June 2003 and June 2004.

6. The business described as “[Marklew International]” ceased operation during 2004 and was superseded by a corporate entity named “[Marklew Financial] Pty Ltd”.  The husband appears to have conducted his business affairs within the context of that corporation from that time on.  His personal income continued to be quite modest in the financial year ended June 2005, although his income began to escalate from the following financial year.

7. The husband disclosed in his affidavit that the income tax returns for himself and the company had not been completed for the financial year ended June 2009, but during the course of the hearing the husband’s counsel conceded from the bar table that the husband’s current income is estimated at $140,000.00 gross per annum.

8. The husband’s Financial Statement filed on 10 July 2009 sets out his estimates of current income and personal expenditure.  Although the husband has recovered from his financial woes in past years, his income is still significantly less than the income that he enjoyed years ago when the orders were originally made by Purdy J.

Financial circumstances of the wife

1. As I have already indicated, the wife has chosen not to adduce any evidence in these proceedings, including any evidence as to her past and present financial circumstances. 

2. The husband has tendered in evidence documents formerly filed in the litigation by the wife, which contain information about her financial circumstances at certain points in history.  Those documents include the Financial Statement sworn by the wife in the United States of America on 30 May 2007 (Exhibit H3) and the affidavit of the wife filed on 8 October 2007 (Exhibit H4).

3. Paragraph 13 of Exhibit H4 contains information about the wife’s gross income between the years 2000 and 2006, as asserted by the wife.  If that information is accurate, the wife has experienced real financial difficulties.

4. The husband presumably tendered that affidavit of the wife to demonstrate fairness on his part and to avoid any suggestion that the evidence he adduced in the proceedings was distorted.  However, the husband calls into question the veracity of the wife’s affidavit. He asserts that the Court should look upon the wife’s evidence in that Exhibit with some circumspection because of its inherent improbability.  By way of example, the husband points to the wife’s evidence that in the two full years between 2003 and 2005 her total gross income was $1,086.00.  That factual assertion is difficult to accept at face value, because it seems incredible.

5. The husband also invites the Court to acknowledge that the wife’s assertions about her income across that period are wholly uncorroborated by verifying documents in the nature of tax returns, notices of assessments, and the like.  Because the wife has been a resident of the United States of America since mid 1999 the husband has effectively been precluded from investigating the wife’s financial circumstances by use of orthodox forensic techniques such as subpoena.

6. The tender of the wife’s affidavit as Exhibit H4 was, in my view, ethically commendable, but the effect of the tender is that the wife’s assertions now form part of the evidence.  Having regard to the husband’s submissions about the quality of that evidence, I do not repose any great weight in it. However, conversely, there is no evidence from which I could properly draw an inference that the wife enjoyed a comfortable financial position up until 2006.

7. Exhibit H3 is the Financial Statement to which the wife deposed on 30 May 2007.  At that time she estimated her average weekly income at $1,143.00, her weekly personal expenditure at $388.00, and her average weekly expenses at $712.00.  Because she deposed to her Financial Statement in the United States, it is unclear whether those figures are expressed in Australian or US dollars.  Irrespective, even taken at face value, the wife was clearly in a position from at least that point in time to adequately support herself because her income exceeded her expenses.

8. The evidence discloses that the only child of the marriage living with the wife after 2002 was the youngest child G.  After 2002, the eldest four children were either living with the husband or independently.  G returned from the United States to live with the husband in Australia as from December 2008.

9. The evidence adduced by the husband, and the failure of the wife to adduce any evidence, leads me to infer that the wife has been capable of supporting herself financially from at least as early as 30 May 2007.

Spousal maintenance

1. In order to discharge the spousal maintenance orders of 20 June 1997 and 15 July 1998 the husband must rely upon the provisions of s 83 of the Family Law Act. In order to sustain his case the husband accepts that he needs to establish a material change in circumstances pertaining to himself, the wife, or both of them, which would justify the discharge (see s 83(2)(a)). The husband does not rely upon any of the other criteria under that section to establish his case.

2. The husband furthermore relies upon s 83(6) so as to discharge the spousal maintenance orders retrospectively, with the discharge to take effect from the date to which the spousal maintenance orders currently stand paid. That proposal of the husband is motivated by an intention that there should be no accrued arrears which may be enforced against him, and conversely, no overpayment to the wife which could be recovered from her.

3. It is now clear that the wife has had the capacity to support herself from at least as early as 30 May 2007.  Equally clearly, she was unable to properly support herself when the spousal maintenance orders were originally made by Purdy J on 20 June 1997.  Were it otherwise, a spousal maintenance order would not have been initially made.  It is inevitable in those circumstances that there has been a significant change in financial circumstances for the wife, although the evidence does not permit any conclusion to be drawn as to when it was between June 1997 and May 2007 that that change in financial circumstances actually took place. 

4. I have already addressed the historical financial circumstances of the husband.  His current income is still significantly less than the income he enjoyed over 12 years ago when the original spousal maintenance orders were made against him.  In view of the financial tribulations which he has endured in the interim period, it is beyond argument that his financial circumstances have materially changed since the time the orders were made.

5. The only child of the parties who remains a minor, being G, returned from the United States to reside with the husband in December 2008.  His changed residential circumstances also affect the analysis of the parties’ respective current positions.

6. Given that the evidence substantiates the changed circumstances for which the husband contends, the question arises as to whether the changed circumstances are sufficiently material to warrant the discharge of the orders sought by the husband, and the time from which any such discharge should take effect.

7. The spousal maintenance order was apparently a registrable maintenance liability under the Child Support (Registration and Collection) Act 1988.  Exhibit H5 is a composite schedule, ostensibly prepared by the Child Support Agency, which includes the spousal maintenance liability incurred by the husband over time, in addition to the child support liability incurred.  It is apparent from that Exhibit that payments and credits attributable to the husband have been allocated by the Child Support Agency to both the child support and spousal maintenance liabilities.  It is impossible to discern from the schedule the manner in which such payments and credits have been apportioned between the child support and spousal maintenance liabilities.  Consequently, it is impossible on the evidence to identify the date to which the spousal maintenance order (or the child support order) presently stands paid.

8. All that can be discerned from Exhibit H5 is that the total liability of the husband for both child support and spousal maintenance, calculated up to 31 July 2009, is $422,471.06.  Against that total liability, the husband has been credited with payments and discharges amounting to $279,522.85.  The net overall liability it therefore $142,948.21, to which penalties of $64,773.83 have been added.

9. The liabilities of the husband far exceeded his assets from as early as 2000, when the process of his composition under Part X of the Bankruptcy Act began.  The husband also suffered a paucity of income for an extended period of years, continuing until about 2005.  Although the husband’s financial position has begun to recover in recent years, it is tolerably plain that the material change in his circumstances began at a time reasonably proximate to the making of the spousal maintenance orders in 1997, and the variation of those orders in 1998.

10. The husband has paid, or been credited for, an amount which approximates two-thirds of his overall primary combined liability for spousal maintenance and child support.  Some 12 years have elapsed since the spousal maintenance orders were first made.  The change in at least the husband’s financial circumstances occurred only a relatively short period into that time frame. Assuming a lineal calculation, the husband’s change of circumstances occurred well before he ceased making payments or receiving credits.

11. I am satisfied on the available evidence that the circumstances justify the discharge of the spousal maintenance orders as from the date to which those orders stand paid.

Child support

1. The effect of the child support orders made by both Purdy J on 20 June 1997 and the Full Court on 15 July 1998 was to require the calculation of the child support payable by the husband in respect of the children at the ceiling rate provided for in the child support legislation.

2. That was the effect of s 42 of the Child Support (Assessment) Act 1989 in the form that it stood at the time the orders were made in June 1997.  It capped the child support liability of high income earners.  The Act is in a different form now as a consequence of its intervening amendments.

3. As I have already mentioned, from a time reasonably proximate to the making of those orders, the husband’s income has been well below the level which would properly justify the calculation of his child support liability at the ceiling rate.  His child support liability has therefore been assessed hypothetically with no bearing upon the actuality of his financial circumstances.  Presumably, the child support orders were made in that form in expectation that the husband would continue being a high income earner in the future.  That expectation did not eventuate.

4. As was the case with spousal maintenance, the husband presses for an order which will discharge the existing child support orders from the date to which his child support liability stands paid.

5. To sustain the case for which he contends, the husband submits that he must satisfy the Court of the criteria imposed by s 117 of the Child Support (Assessment) Act 1989.

6. The requirements of that section are numerous and conjunctive.  The criteria that ought to be established to permit the husband’s success with his application are as follows (Gyselman & Gyselman (1992) FLC 92-279):

   (a)In the special circumstances of the case (s 117(1)(a)), there are grounds for departure on numerous available bases (s 117(1)(b)(i); s 117(2)), and

   (b)It would be just and equitable for all concerned (s 117(b)(ii)(A); s 117(4)), and

   (c)It would be otherwise proper (s 117(b)(ii)(B); s 117(5))

7. I have had regard for those legislative provisions.  Without repeating the evidence to which I have adverted, some trite observations may be made.  The husband experienced a significant financial impost in maintaining contact with the children after they left with the wife to live in the USA.  The husband’s financial circumstances deteriorated markedly not so long after the child support orders were made, thereby compromising his ability both to support them and maintain contact with them.  The husband’s financial resources must have been drained by the continuation of litigation between himself and the wife, principally concerning the children, in both Australia and the USA.  The payments made by, and credits afforded to, him in all likelihood covered his child support liability for a period which extended significantly beyond the time at which his financial circumstances fell into serious disrepair.

8. The eldest four children have not lived with the wife since 2002.  From that time onwards they either lived with the husband, or lived independently of their parents.  The youngest child G now lives with the husband, and so far as the evidence goes, no child support is now paid by the wife to the husband for that child’s support.

9. I am persuaded that the husband has presented a reasonably comprehensive picture of both his income and asset position over time.  His senior counsel submitted that there could be no suspicion of sham on his part.  I accept that submission.  The evidence does not permit any rational inference that the husband deviously manipulated his financial circumstances so as to present a more persuasive case.

10. I am satisfied that there are proper grounds for departure in the circumstances of the case, and that it would be just and equitable, and otherwise proper, to grant the orders sought by the husband.  I am satisfied that the husband has proven his case for a discharge of the child support orders as from the date to which they stand paid.

Child Support Agency administrative penalties

1. Exhibit H5 discloses that penalties totalling $64,773.83 have been imposed upon the husband administratively by the Child Support Agency.  It was submitted by the husband that, upon eventual payment, the recipient of those penalties is the Child Support Agency, not the child for whom child support is payable, nor the spouse for whom spousal maintenance is payable.

2. On the evidence adduced at hearing, there is no suggestion that the Child Support Agency has ever instituted any enforcement action against the husband for the payment of either child support or spousal maintenance, which enforcement action would have necessarily incurred administrative costs on behalf of the Child Support Agency.  The penalties imposed by the Child Support Agency appear to have been imposed simply because of the failure of the husband to meet his liabilities to the Agency.  In those circumstances, it could not be asserted with any sense of cogency that the Child Support Agency has actually sustained any significant costs in the administration of the orders which the penalties are designed to reimburse.

3. At least in the context of the current litigation, the Court does not have power to discharge those penalties. The husband accepts that to be so.  Notwithstanding the absence of power of the Court to make an order discharging those arrears, the husband seeks that the Court issue a request to the Child Support Agency to remit those penalties.  The husband has tendered a minute of the form of request sought by him (Exhibit H6).  I will accede to his request and make such a request of the Child Support Agency.

Procedural property orders

1. The orders made by Purdy J on 20 June 1997 included final property adjustment orders as between the spouses.

2. Order 24 effected a division of the spouse’s respective interests in the Marklew Superannuation Fund, of which fund the parties were joint trustees.

3. The superannuation fund contained numerous assets, including shares and banking accounts.  Two of the shareholdings held by the superannuation fund were in the ANZ Bank and BTR Nylex Ltd.  It was submitted by the husband, and I accept, that the shareholding in BTR Nylex Ltd subsequently became a shareholding in Invensys PLC by reason of a corporate restructure of that entity. 

4. Exhibit H7 is an affidavit sworn by Mr F and previously filed in these proceedings on 23 January 1998.  The purpose of Mr F’s affidavit was to value the superannuation interests of the parties in the Marklew Superannuation Fund as at 30 June 1996.  His affidavit discloses the shareholdings of the fund in the ANZ Bank and BTR Nylex Ltd.

1. The parties implemented Order 24 made by Purdy J on 20 June 1997.  At some point following those orders the Wife had transferred or rolled over, as nominated by her, an amount representing her interest in the Marklew Superannuation Fund.  The payment to her out of the superannuation fund was made in cash form rather than as a transfer of assets in specie from the fund.  The amount of the cash payment made at the direction of the wife pursuant to Order 24 was calculated by reference to the valuations of the parties’ respective interests in the superannuation fund, presumably in accordance with the evidence of Mr F.

2. Following such payment out to the wife pursuant to Order 24, the superannuation fund retained investments which then, by definition, constituted the entirety of the husband’s superannuation interest in the fund.

3. Many years later, additional shares in both the ANZ Bank and Invensys PLC were issued in the parties’ joint names in the form of either a shareholders rights issue or dividend reinvestment plan.

4. A parcel of 18 ordinary shares in Invensys PLC was issued to the parties jointly on 7 August 2006.  That is evident from Exhibit DJM 50, referred to in paragraph 78 of the husband’s affidavit filed 10 July 2009.

5. A single extra share in the ANZ Bank was also issued jointly to the parties on 3 July 2006, which was added to their existing parcel of 46 shares.  That is evident from Exhibit DJM 51, referred to in paragraph 79 of the husband’s Affidavit filed 10 July 2009.

6. For whatever reason, no steps were taken after the orders were made in 1997 to change the existing parcel of 46 shares in the ANZ Bank from the joint names of the parties into the sole name of the husband.

7. In the history of this litigation, the husband fell into dispute with his former solicitors.  At one point, those solicitors obtained injunctive orders precluding the husband from altering or transferring the ownership of assets held by him or the Marklew Superannuation Fund.  After the time that those injunctive orders were made there was obviously a prohibition on the husband taking steps to transfer shareholdings held by the superannuation fund from the joint names of the parties into his sole name.

8. The dispute between the husband and his former solicitors was conditionally concluded by way of consent orders made before the Court on 3 August 2009.  Subject to compliance with those orders, the earlier injunctive orders to which I have referred will be discharged as from 18 August 2009.  After that point in time it will be possible to transfer the shareholdings held by the superannuation fund from the joint names of the parties into the sole name of the husband.

9. In respect of the shareholding in Invensys PLC, the additional allotment of shares only arises out of the property owned by the parties jointly as trustees of their superannuation fund antecedent to the final property adjustment orders being made by Purdy J on 20 June 1997.  The orders now sought by the husband in respect of those shares are procedural in nature, and not fresh substantive orders.  Were it otherwise, the Court would not have jurisdiction to grant the orders sought by the husband (Pera v Pera (2008) FLC 93-372; Marriage of Warwick (1983) FLC 91-342; Marriage of Ravasini (1982) FLC 91-312).

10. In respect of the existing parcel of shares in the ANZ Bank, and the additional share issue in 2006, the same situation presents.  The original shares existed antecedent to the final property adjustment orders made in 1997.  The change of that shareholding from the joint names of the parties to the sole name of the husband is a procedural step to implement the existing substantive orders.  The additional single share allotted to the parties arises out of the existing shareholding, and the transfer of it into the sole name of the husband from the joint names of the parties is also a matter of procedure rather than substance.

11. I will make the procedural orders sought by the husband in respect of those shareholdings, with such orders to take effect upon the dissolution of the injunctive orders made on 18 August 2009.

Costs

1. The husband has been substantially successful with the three applications he has pressed under his Further Amended Application filed on 10 July 2009.

2. He additionally sought an order for costs against the wife (see Order 5).

3. Despite the terms of his Further Amended Application, the husband submitted that his costs ought to be reserved.   The husband indicated through his senior counsel that it was not his intention to return to the Court seeking an order for costs against the wife, but that he wished to reserve his position in that regard, lest the wife sought in the future to reactivate the proceedings in some way.

4. I will accede to the husband’s request to simply reserve generally the question of his costs in respect of the determination of his Further Amended Application filed on 10 July 2009.

Conclusion

1. For the reasons given, I make the orders set out at the beginning of this judgment.

I certify that the preceding one hundred (100) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Austin

Associate: 

Date:  13 August 2009