Medhurst and Sabell

[2013] FCCA 481

FEDERAL CIRCUIT COURT OF AUSTRALIA

MEDHURST & SABELL [2013] FCCA 481

Catchwords:
CHILD SUPPORT – Enforcement of child support departure orders – interim orders – payment of arrears.

Legislation:
Child Support (Assessment) Act 1989 (Cth)

Applicant: MS MEDHURST

Respondent: MR SABELL

File Number: SYC 3944 of 2009

Judgment of: Judge Scarlett

Hearing date: 5 June 2013

Date of Last Submission: 5 June 2013

Delivered at: Sydney

Delivered on: 5 June 2013

REPRESENTATION

Solicitor for the Applicant: Ms Morozov

Solicitors for the Applicant: Barkus Doolan Kelly

Counsel for the Respondent: Mr Schonell

Solicitors for the Respondent: Michael Saunders & Associates

ORDERS

1. The Husband shall do all acts and things and sign all documents as necessary to instruct Michael Saunders & Associates to make the following payments from the proceeds of the sale of the property at [W]:

   1.1The sum of $28,609.42 to [K] School by solicitor’s trust account cheque;

   1.2The sum of $7,821.00 to the Wife or as she may direct in writing by solicitor’s trust account or bank cheque.

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

FEDERAL CIRCUIT COURT OF AUSTRALIA

AT SYDNEY

SYC 3944 of 2009

MS MEDHURST

Applicant

And

MR SABELL

Respondent

REASONS FOR JUDGMENT

Application

1. This is an Application in a Case brought by the wife seeking an injunctive order “freezing” the net proceeds of sale of the husband’s property in [W]. The Application has been brought in some circumstances of urgency, as it was believed at the time that settlement of the sale was due to take place on Friday 7^th June. As it has turned out, settlement is now not expected until Tuesday 11^th June at the earliest.

2. The Application is brought in the context of a substantive Application by the husband which was last before the Court on 14^th May this year, seeking the discharge of Orders made by Rose J in the Family Court on 30^th June 2011, being a departure from child support administrative assessment in respect of the parties’ two daughters. Those Orders provided for:

   a)payment by the Husband of periodic child support in the sum of $400.00 per week;

   b)payment by the Husband of the girls’ school fees and associated costs of their attendance at Primary School at [K] School; and

   c)payment by the husband of health insurance for the children and gap medical expenses.

3. The Husband was living in Hong Kong at the time of the Orders and remains living there. He has remarried. He was working for [omitted], but was made redundant on 12^th December 2011. The redundancy took effect on 16^th March 2012, at which time he received a redundancy payout totalling AUD101,234.17. He deposed in his affidavit of 15^th February 2013 that he has actively sought other employment but has so far been unsuccessful.[1]

   [1] Affidavit of Mr Sabell 15 February 2013 at paragraphs [1]-[15]

4. The Husband also sought a stay of the Orders until the final hearing of his Application.

5. On the return date of the Application, 14^th May 2013, the Court was told that the Husband was significantly in arrears in respect of the Orders. He had listed a home unit in [W] for sale but, although he had had offers, had not exchanged contracts. As there were no proceedings on foot to enforce payment of the arrears, I declined to order a stay at that time. The Application was adjourned to 17^th June for mention and orders were made by consent that:

   1.The Husband shall notify the Wife of the exchange of contracts within 48 hours of such occurring in respect of Property [W] and provide to the Wife within 7 days a copy of the contract for sale and shall thereafter keep the Wife informed of the settlement date.

   2.The Husband shall use his best endeavours to obtain the documents at paragraphs 11 and 15 of the Wife’s Notice to Produce dated 10 May 2013.

6. The Husband was continuing to pay the children’s health insurance and he was making reduced payments of $100.00 per week on account of child support.

7. The current Application arose because the Husband’s solicitor advised the Wife’s solicitor on 24^th May 2013 that contracts had been exchanged to sell the property at [W]. In the ensuing correspondence the wife sought that the net proceeds of sale of the unit should be held in a controlled monies account. The husband did not agree.

8. The order sought by the Wife is:

   That pending determination of the present proceedings the whole of the net proceeds of sale of the property registered in the sole name of the husband Mr Sabell at [W], being the whole of the land contained in folio identifier [omitted] on settlement of the sale be deposited in a controlled monies account established by the wife’s solicitors Barkus Doolan Kelly in the name of Barkus Doolan Kelly as trustee for the parties, on the basis that there be no withdrawal of funds otherwise than by written consent of the parties or order of this court, with all interest to accumulate pending that agreement or order.

Evidence and Submissions

1. The Applicant Wife relied on her affidavit of 4^th June 2013.

2. The Respondent husband relied on his affidavit of 5^th June 2013.

3. In her affidavit, the Wife deposed that the current arrears were:

   (a)    periodic payments: approximately $4,234.00;

   (b)educational expenses: $28,609.42. Attached and marked with the letter “B” is a copy of the most recent statement of fees from [K]; and

   (c)     medical and extra-curricular expenses: $3,587.[2]

   [2] Affidavit of Ms Medhurst 4.6.2013 at paragraph [11]

4. The Wife set out in her affidavit that the parties’ elder child had recently been awarded a scholarship which will cover the costs of her tuition at [K] until she completes Year 12. However, there will still be other costs for her education, including uniforms, text books, stationery and extra-curricular activities.

5. However, she deposed that she had concerns about the impact on the parties’ younger child if she were not able to continue at [K] for financial reasons.

6. The Wife also deposed:

   I anticipate that I will also be filing an application for payment of a lump sum for future child support obligations.[3]

   [3] Affidavit of Ms Medhurst 4.6.2013 at [33]

7. She also deposed at paragraph [35] of her affidavit that if the Husband was unsuccessful in his application she intended to seek enforcement of the arrears.

8. Counsel for the Husband conceded the amount of arrears owing.

9. The Husband deposed in his affidavit of 5^th June;

   I contacted [K] school on 1 November 2012 and explained my financial situation and they agreed to allow me to stop paying the school fees for now, and for the bill to run up throughout 2013. The situation was to be reviewed later in the year towards the end of term 3, for the next year.[4]

   [4] Affidavit of Mr Sabell 5.6.2013 at [22]

10. The Court was told that it was anticipated that the net proceeds of sale of the unit would amount to approximately $211,000.00.

11. Counsel for the Husband submitted that the Application for an injunction should be dismissed because no undertaking as to damages had been provided. Ms Morozov for the Wife said that she had instructions to give such an undertaking.

Conclusions

1. As I told the parties during the hearing, an application to “freeze” the net proceeds of sale, amounting to some $211,000.00, appeared to be rather draconian, noting that the arrears under the child support agreement amount to an agreed figure of $36,430.42. I was not satisfied that I should make the Orders sought.

2. At the same time, it was quite clear that the Husband would be able to pay the arrears in full quite quickly out of the proceeds of sale of the [W] property.

3. I did not see any reason why the amount of the arrears should be paid into a controlled monies account when they were due and payable, notwithstanding the fact that the Husband had obtained agreement from the school that they would not take any action to enforce payment of the school fees until the end of the year.  

4. As there appears to be no issue that the children are doing well at [K], it appears to me to be in their best interests for the children’s school fees to be paid out of the proceeds of sale. Such a step will take some of the urgency out of the situation, as the children’s school fees will be significantly lower from 2014 as a result of the older child gaining a scholarship.

5. There are other arrears amounting to $7,821.00 which are owed directly to the Wife. There does not seem to be any good reason why that amount should be paid into a controlled monies account. The arrears are owing now. They should be paid as soon as funds are available to pay them, which should be on 11^th June or later that week, when the sale is settled.

6. If the arrears owing under the Orders of 30^th June 2011 are paid out of the proceeds of sale of the [W] property, there will be no need for the Wife to commence proceedings for the enforcement of payment of the arrears, which will avoid unnecessary legal costs.

I certify that the preceding twenty-five (25) paragraphs are a true copy of the reasons for judgment of Judge Scarlett

Associate: 

Date:  7 June 2013