MOORCROFT & MOORCROFT (No.5)

[2020] FCCA 2917

FEDERAL CIRCUIT COURT OF AUSTRALIA

MOORCROFT & MOORCROFT (No.5) [2020] FCCA 2917

Catchwords:
FAMILY LAW – Property – Third Party Debt Notice – stay ordered – pay office deducts anyway – husband seeks recovery of money from wife – intention of court.

Legislation:

Family Law Act 1975 (Cth)

Federal Circuit Court Rules 2001, rr.16.05

Applicant: MR MOORCROFT

Respondent: MS MOORCROFT

File Number: BRC 5266 of 2012

Judgment of: Judge Coates

Hearing date: 31 July 2020

Date of Last Submission: 17 August 2020

Delivered at: Brisbane

Delivered on: 28 October 2020

REPRESENTATION

Applicant: Self-represented

Counsel for the Respondent: Mr G. Shoebridge

Solicitors for the Respondent: Stewart Family Law

ORDERS

1. That the Application in a Case filed 15 April 2020 be dismissed.

2. That the Order dated 25 March 2020 be amended pursuant to r.16.05(2)(e) of the Federal Circuit Court Rules2001 to show that the stay of the Third Party Debt Notice take effect from the first pay period after 29 March 2020.

IT IS NOTED that publication of this judgment under the pseudonym Moorcroft & Moorcroft (No.5) is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT BRISBANE

BRC 5266 of 2012

MR MOORCROFT

Applicant

And

MS MOORCROFT

Respondent

REASONS FOR JUDGMENT

1. Final property orders were made in this matter on 22 March 2018 pursuant to reasons for judgment delivered on 23 February 2018. Those orders have been through the appellate process with the appeal being dismissed on 17 April 2020, the original orders made on 22 March 2018 being upheld.

2. Among other orders associated with the proceedings was a Third Party Debt Notice, served on the husband’s employer, B Ltd (“B Ltd”).

3. That was based on a declaration that the husband owed, as a debt, the sum of $130,893.04 to the wife being made up of a $10,000 costs order made by the Full Court of the Family Court of Australia on 17 October 2018, $3,734 being costs of the Applications in a Case filed by the wife on 3 August 2018 and 22 November 2018, and $117,159.04 expended by the wife.

4. The order indicating that a Third Party Debt Notice would issue was made on 23 May 2019.

5. The debt notice then issued on 13 June 2019.

6. The wording of the Third Party Debt Notice required B Ltd to pay the wife from the husband’s periodic income, the sum of $4,544.55 per pay, until the amount of $130,893.04 had been paid.

7. The Third Party Debt Notice was based on the husband’s usual or normal annual wage, and it contained a protection clause whereby the husband was assured of receiving the minimum sum of $2,982.37 in wages.

8. There is no dispute between the parties that B Ltd complied with the payment to the wife pursuant to the Third Party Debt Notice while the husband retained full employment and normal wages.

9. However, due to the COVID-19 pandemic, B Ltd indicated that the husband would be stood down and his pay reduced.

10. He was subsequently stood down from his position during March 2020.

11. Upon the husband’s applications to the court (filed 20 March 2020 and 15 April 2020), the Third Part Debt Notice order was suspended on 25 March 2020.

12. The suspension order was made on the basis that his pay had been markedly reduced, and it was not known when his regular pay would recommence, with indications from B Ltd that staff were to use up their leave.

13. Uncontested evidence was that the husband provided a copy of the suspension order of 25 March 2020 to B Ltd on 26 March 2020, and that the airline’s pay office confirmed to him that the deductions from his pay would cease immediately.

14. However, when the husband received his pay on 27 March 2020 for the pay period 16 March 2020 to 29 March 2020, the amount of $4,544.55 had been withheld by B Ltd and paid to the wife (pursuant to the Third Party Debt Notice).

15. The husband then filed an Application in a Case seeking an order that the wife refund the sum of $4,544.55, on the ground that an order had been made to suspend the operation of the Third Party Debt Notice.

16. The wife seeks that the application be dismissed and that she retain the sum of $4,544.55 as paid to her by B Ltd.

17. In an affidavit filed 2 June 2020, the husband supplied a copy of his payslip for the pay period ending 29 March 2020, which is the first time the court saw the documentary evidence of his pay for the purposes of the orders made.

18. His total gross pay was $34,542.72 per fortnight and his taxable gross pay was $34,317.40 per fortnight. Tax deducted was in the amount of $15,074 and other deductions in the amount of $8,512.13.

19. The payslip sets out those other deductions which amounted to $8,512.13. These were child support being $558.24, the garnishee amount under the Third Party Debt Notice being $4,544.55, an entry entitled Super Fund E being $854.91, car parking at $45.43, social club being $9, an entry called Bank 2 being $500 and an entry called Bank 3 being $2,000.

20. His net pay was $10,956.59 per fortnight.

21. The husband has been self-represented at all times, and I took time to understand the case he was presenting.

22. I should state that not all of the submissions or the evidence have been relevant, with the husband wanting to rely on five affidavits and disputes as to what is required erupting between the parties.

23. Reduced to its most simple form, the dispute is as follows:

    a)The husband applied for and was granted a stay and suspension of the Third Party Debt Notice;

    b)The order was made on 25 March 2020;

    c)The following day the husband notified his employer B Ltd;

    d)The husband received his pay the following day and found that the amount pursuant to the Third Party Debt Notice, $4,544.55, had been deducted despite the order;

    e)The husband says the money was paid in breach of the order;

    f)He now seeks an order that the wife repay the money;

    g)The wife’s case is that the order was directed to B Ltd and not to her, and

    h)Further, the wife and the court did not know that the husband’s pay received 27 March 2020 was, or appearing to be, his standard or normal rate of pay.

24. Although not stated as such, the intention behind the issuing of a Third Party Debt Notice with a pay protection clause is so that the person owed money will be paid, but that the order authorising the issuing of a Third Party Debt Notice does not financially cripple the person who has to pay.

25. The protection clause in the Third Party Debt Notice reflects a public policy aspect of the ability of the court to make such an order, on the basis that the preceding emanates under the Family Law Act1975 (“the Act”) and not under an act or common law dealing with debts.

26. At all times I was aware of the financial issues facing the husband and in implementing the public policy aspect of the making of a Third Party Debt Notice, I was aware that I should not take a step to financially harm him.

27. In considering his possible pay reduction, I indicated that should the evidence support his position I would very probably make the suspension order, before I made the order.

28. I have now had time to peruse the transcript of 25 March 2020.

29. In assessing the situation at the time the solicitor for the wife opposed the staying of the orders and stated that she did not know whether the husband was stating that he was still employed with B Ltd.

30. As can be seen at pages 2 and 3 of the transcript I indicated that it was not the intention to threaten a person’s financial viability but I did not know whether the husband had ceased his employment with B Ltd.

31. The husband responded that he was not sure of the position himself and was referring to public statements by B Ltd that it would be standing down 20,000 employees without pay.

32. I reiterated that the court needed to see the sworn evidence of what the position was but I was concerned that the husband’s financial viability may be threatened because of the COVID-19 stand downs at B Ltd.

33. I also indicated that as there was not enough evidence before the court I could not resolve the issue that day, but that I was thinking of a stay in the circumstances which I understood the husband to be in.

34. At page 5 from line 32 of the Transcript of 25 March 2020 I said this:

    “It’s not – and it’s a stay only until he is receiving his normal income from B Ltd. I will put it like that, normal income, not special arrangement income at half pay or at no pay. … Because, obviously, if the situation is forced where third party debt notice still operates against reduced income and puts him in a position of being taken through the provisions of the bankruptcy act, even a self-declared bankruptcy or because of debtors.”

35. The husband went on to explain that if he was working to a fortnightly roster he would get paid one fortnight but not the next and although the wife would get some monies because of the Third Party Debt Notice it would mean he would be deprived of pay the following fortnight and he would be in a precarious financial position.

36. That is how I understood the tenor of his application.

37. At all times during that hearing on 25 March 2020 I refer to the fact that the husband needed to obtain and put before the court actual evidence of what was occurring.

38. I indicated I would make an immediate stay which I did on the basis that I was concerned about his financial viability.

39. The issue was raised not knowing when the husband’s receipt of pay would change, but aware that the situation at that time was changing daily in response to COVID-19 restrictions on the airlines.

40. I also stated at page 10 line 11 of the 25 March 2020 transcript that:

    “So what I would propose to do – again, I’m subject to what Ms Kingswell [wife’s solicitor] stated – was – to object to what Ms Kingswell will tell me – is to stay the order at this stage. Have the husband file very precise material about his employment and wages, and that would include any decision to take, I think he said, two weeks leave at half pay.”

41. I also indicated that I would simply stay the operation of the Third Party Debt Notice until further order, which was because no one then knew, as we still do not know, how long the COVID-19 travel restrictions will affect B Ltd.

42. At page 12 line 3 of the 25 March 2020 transcript I stated that:

    “When it comes back … when you’ve filed your material, you know, I consider what I do with it at that stage again.”

43. The husband also asked that he receive the order by email from my Associate to confirm that I was making the order so he could present that to the pay office of B Ltd.

44. As submitted by the wife correctly, both she and the court were unaware of the amount of pay the husband was to receive for the pay period ending 29 March 2020 and the amount stated in the payslip – his usual or normal wages – has come as a surprise.

45. In fact the court was not told he was to be paid two days later, but having asked for a copy of the order so he could inform the pay office of it raises a query as to whether the husband knew when he would be paid and I suspect he did.

46. What I do not know is whether he knew he would be paid what appears to be his normal amount of money as outlined above.

47. The Third Party Debt Notice was originally made in order that the husband pay the debts upon which the notice was based, on the proviso that such payment did not go below the protection level of $2,982.37, and based on his then annual or normal wage.

48. At no time on 25 March 2020 was the court told that the husband would indeed be receiving a gross pay of $34,542.72 and a net pay of $19,468.72, his normal wage.

49. Had the court known that, it would have still made the stay and the suspension order, but dated it after the pay period ending 29 March 2020.

50. In my view two issues very clearly stand out in this matter.

51. As intimated in the wife’s material, it is B Ltd which made the mistake and not the wife. In fact she had no control at all over the workings of the B Ltd pay office as she is merely the recipient of the order. The issue of whether the court has jurisdiction to order the wife to repay money based on the wording of the husband’s application was not canvassed, although reference was made to that aspect of the case.

52. However, from what I have now said it is apparent that an order was made which did not reflect the intention of the court, because at all times the intention of the court was to ensure the operation of the Third Party Debt Notice as long as the husband received his normal wages. For the pay period ending 29 March 2020, the husband received his normal wage.

53. The court is given a power to ensure orders reflect the intention of the court, and thus orders may be changed on that basis, without an injustice to a party.

54. Stated in the Federal Circuit Court Rules2001, r.16.05(2)(e) is the power which allows a judgment or an order to be set aside if such did not reflect the intention of the court.

55. The intention of the court was to stay and suspend the operation of the Third Party Debt Notice, in circumstances where the husband’s income had been reduced because he had been stood down.

56. It was not the intention of the court to relieve the husband of the debt while he was still earning his normal wage, and the pay packet the amount was deducted from has not been shown by him to be anything other than his normal wage.

57. I realise his argument was that he was about to be stood down but the court still requires all of the facts, not assumptions, and this led the court into error.

58. On the basis that the order did not reflect the intention of the court I intend to dismiss the husband’s application but amend the suspension order so that it takes effect from the first pay after the pay period ending 29 March 2020.

I certify that the preceding fifty-eight (58) paragraphs are a true copy of the reasons for judgment of Judge Coates

Associate:

Date: 28 October 2020