MARSH & SINCLAIR

[2015] FCCA 1361

FEDERAL CIRCUIT COURT OF AUSTRALIA

MARSH & SINCLAIR [2015] FCCA 1361

Catchwords:
CHILD SUPPORT – Application by father to vary a child maintenance order made in 1997 so as to discharge arrears of $23,000.00 – mother choosing not to take part in the proceedings – court satisfied that the father’s circumstances justify varying the order as proposed.

Legislation:

Child Support (Registration & Collection) Act 1988, s.67
Child Support (Assessment) Act 1989
Family Law Act 1975, ss.66L, 66W

Applicant: MR MARSH

Respondent: MS SINCLAIR

File Number: NCC 1579 of 2014

Judgment of: Judge Terry

Hearing date: 31 March 2015

Date of Last Submission: 31 March 2015

Delivered at: Newcastle

Delivered on: 1 June 2015

REPRESENTATION

Counsel for the Applicant: Mr Duane

Solicitors for the Applicant: NLS Law

The Respondent: No appearance

ORDERS

1. The order made by the Family Court of Australia at Newcastle on 20 February 1997 is varied to provide that from 5 August 1999 to [omitted] 2006 the father pay maintenance for the child [X] born [in] 1988 fixed in the total amount of $23,608.28.

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

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT NEWCASTLE

NCC 1579 of 2014

MR MARSH

Applicant

And

MS SINCLAIR

Respondent

REASONS FOR JUDGMENT

Introduction

1. Mr Marsh seeks an order which will relieve him from liability for a debt of $79,767.24 which the Child Support Agency (CSA) is trying to recover from him.

2. The debt consists of $23,229.48 arrears of child maintenance owing pursuant to a Family Court order made in 1997 and $56,537.76 late payment penalties.  

3. Ms Sinclair, the person entitled to payment pursuant to the 1997 order, was served with the application but has not filed a response. She sent a letter to the court on 19 December 2014 advising that she did not intend to take part in the proceedings because of health problems and concerns for her safety and understood that the court would make a decision in her absence.

Background

1. Mr Marsh and Ms Sinclair have one child, [X], born on [omitted] 1988. They were never married and never lived together[1] and as [X]’s birth pre-dated the commencement of the Child Support (Assessment) Act 1989

   
   

   Mr Marsh’s liability to financially support [X] was governed by Division 7 of Part V11 of the Family Law Act 1975.

   [1] From file NCF 3420 of 1996

2. On 22 September 1992 an order was made in the Local Court at Newcastle requiring Mr Marsh to pay Ms Sinclair child maintenance of $60.00 per week for [X].

3. In 1996 Ms Sinclair commenced proceedings in the Family Court at Newcastle seeking what appears from the documents on the file to have been enforcement of this order.[2]

   [2] See file NCF 3420 of 1996

4. The proceedings were finalised by orders made on 20 February 1997 which provided for Mr Marsh to pay Ms Sinclair:

   ·a lump sum of $3,080.00;

   ·periodic child maintenance of $90.00 per week from 12 May 1997 to 13 January 1999 and thereafter of $110.00 per week. The amount was to be varied as of 20 February each year in line with variations in the Consumer Price index.

5. The orders required Mr Marsh to deposit $25,000.00 into a bank account and provided for the periodic payments to be drawn from that account until it was exhausted. Thereafter Mr Marsh was required to make periodic payments to the Clerk of Court at the Local Court at Newcastle.

6. In the affidavit he filed in the current proceedings Mr Marsh said that he was made redundant in 1997. He said that he agreed to the orders because he thought that he would soon obtain employment but this did not happen and in 2000 (presumably when a redundancy payment ran out) he commenced receiving Newstart Allowance.  

7. Mr Marsh said that he stopped paying maintenance in August 1999. On my calculation the $25,000.00 if paid as required should not have been used up by then but Mr Marsh did not clarify exactly what happened in that regard.

8. At some point the orders were registered with the CSA which took on the role of collecting the maintenance.

9. Mr Marsh said that after he commenced receiving Newstart Allowance the CSA would periodically garnishee anywhere between $10.00 and $45.00 from his benefits. He assumed from the amount they were taking that they had taken his unemployment into account and believed that once [X] turned 18 on [omitted] 2006 the garnishee would stop.

10. However the 1997 orders made no provision for the periodic amount to be varied if Mr Marsh commenced receiving Centrelink benefits. Arrears accrued between August 1999 and [omitted] 2006 and while pursuant to s.66L(3) of the Family Law Act 1975 Mr Marsh’s liability to pay periodic maintenance ceased on [X]’s 18^th birthday pursuant to s.66W (1) the arrears remained collectible and the garnishee continued.

11. Mr Marsh was slow to react; it was not until 2008 that he went to the CSA to find out why the garnishee was still in place. He was told to obtain legal advice but after making some desultory inquiries he became discouraged by the complexity of forms and rejections by solicitors and let it go.

12. The CSA did not let it go however. On 26 September 2013 it removed $15,000.00 from the Mr Marsh’s bank account which contained $5,000.00 of his savings and $10,000.00 he had inherited.

13. Even then Mr Marsh did not take swift action but finally on 23 June 2014 after the CSA threatened to commence legal proceedings against him he commenced these proceedings.

Mr Marsh’s circumstances

1. Mr Marsh is 67 and is in receipt of an aged pension of $398.00 per fortnight. He owns an unencumbered home at [omitted] which he estimated to be worth $200,000.00, household contents with an estimated value of $1,000.00 and savings totalling $757.00. He has no superannuation and no liabilities save for the child maintenance debt.

Ms Sinclair’s circumstances

1. [X] was 11 in August 1999 when the Mr Marsh ceased voluntarily paying child support and the amounts garnished from him absent the amount taken in 2013 when [X] was an adult totalled $8,608.28 in total. Ms Sinclair therefore received limited financial assistance from

   
   

   Mr Marsh for the support of [X] during the remainder of [X]’s childhood and adolescence. 

2. However Ms Sinclair did not file any documents and I have no idea of her current circumstances, whether there was anything which suggested that Mr Marsh had deliberately avoided his obligation to support his son or whether anything about her circumstances was relevant to whether the order sought by Mr Marsh should be made.

The applicable law

1. Mr Marsh relies on s.66W(2) of the Family Law Act 1975 which provides as follows: 

   (2)If arrears are due under […] an order when the order ceases to be in force, the court may, by order, retrospectively:

(a)discharge the order if there is just cause for doing so; or

(b)vary the order so as to increase or decrease the arrears to be paid under the order if the court is satisfied that:

(i)  the circumstances of the person liable to pay the arrears are such as to justify the variation; or

(ii)  the circumstances of the person entitled to receive the arrears are such as to justify the variation; or

(iii)  in the case of an order that operated in favour of, or that was binding on, a legal personal representative--the circumstances of the estate are such as to justify the variation.

Discussion

1. The obvious ground for Mr Marsh to rely on is s.66W (2) (b) (i) which requires me to consider whether his circumstances are such as to justify a variation of the orders so as to reduce the arrears to nil. If I am satisfied of this I must then separately consider whether in the exercise of my discretion I should make the order sought.

2. Mr Marsh owes $23,229.48 and the only way he could pay it would be by selling his home. His case was that if he had applied to vary the orders after he began receiving Newstart Allowance it was very likely that the amount he was required to pay would have been reduced to an amount commensurate with his benefits and arrears would never have accrued. Given that the CSA had already taken more from him than he should by all rights have been required to pay it would be unjust if he was forced to sell his home to pay the arrears.

3. There is merit in this argument. There was no evidence that Mr Marsh had deliberately remained unemployed to avoid paying child maintenance and no evidence that he had accumulated significant assets or grown rich by not meeting his child maintenance obligations. It would be unjust if he had to sell his home to pay a debt which might not exist had he taken action earlier.

4. Mr Marsh was very dilatory in making his application and if he had sought to recover from Ms Sinclair any of the money taken by the CSA this delay might have counted against him when it came to considering whether in the exercise of my discretion I should make the order. However all he seeks is to have the remaining arrears discharged and I am satisfied that it is appropriate to make an order which will facilitate that.

5. The late payment penalties have been imposed pursuant to s.67 of the Child Support (Registration & Collection) Act 1988. The Child Support Registrar has the power to remit the penalties and it is reasonable to assume that if the arrears owing under the order are discharged the late payment penalties will be remitted.

6. For all of the above reasons the orders of the court are as set out at the beginning of this judgment.

I certify that the preceding twenty-six (26) paragraphs are a true copy of the reasons for judgment of Judge Terry

Associate:   

Date:  1 June 2015