N & Child Support Registrar & N

[2006] FamCA 385

FAMILY LAW ACT 1975

IN THE FULL COURT OF THE
FAMILY COURT OF AUSTRALIA
AT BRISBANE No. NA79 of 2005

(No. BRM 7806 of 2002)

BETWEEN:
N
Appellant Husband

AND:
CHILD SUPPORT REGISTRAR
First Respondent

AND:
N
Second Respondent

BEFORE THE HONOURABLE JUSTICE WARNICK

REASONS FOR JUDGMENT

Date of Hearing: 8 March 2006

Date of Judgment: 19 May 2006

Appearances: Mr Waterman of Counsel, instructed by Hogan & Company Lawyers, appeared on behalf of the Applicant Husband
Mr Foster of Counsel, instructed by, The Australian Government Solicitor, appeared on behalf of the First Respondent

Mr Baston of Counsel, instructed by Ryan Kruger Lawyers, appeared on behalf of the Second Respondent

N and Child Support Registrar and N NA79 of 2005 (BRM7806 of 2002)

Heard: 8 March 2006
Delivered: 19 May 2006

APPEAL FROM FEDERAL MAGISTRATES COURT – MAINTENANCE OF SPOUSE – DISCHARGE OF ORDER – Orders for spousal maintenance were made in favour of the wife in the Supreme Court of Arizona, USA in 1997 – The husband was in default of interim orders and was denied the opportunity of giving evidence in chief at the final hearing – The husband moved to Australia – The wife sought to have the US maintenance order registered in Australia – The order was registered and the Child Support Registrar brought a subsequent application against the husband to enforce the spousal maintenance order and recover substantial arrears that were owing – The husband, in response, sought an order that the maintenance order and any arrears be discharged – The Federal Magistrate dismissed the husband’s application on the basis that it would be contrary to public policy not to respect the laws of other national jurisdictions – The husband appealed – The issue to be determined by the Federal Magistrate was whether there was “just cause” in discharging the maintenance order, such determination being a discretionary one – In making such a determination, the Federal Magistrate allowed the “public policy” consideration to either overwhelm the discretionary exercise to the point that no discretion was exercised or, if discretionary factors were weighed, not all relevant factors were identified – In any event, the principle of “public policy” stated by the Federal Magistrate was misconceived or inadequately identified.

Lutzke and Lutzke (1979) FLC 90-714

Vakil and Vakil (1997) FLC 92-743

That the appeal be allowed. That the orders of Federal Magistrate Rimmer be set aside. That the applications of the husband and the summons filed by the Child Support Registrar be remitted to the Federal Magistrates Court for rehearing.

When Swedish pair Mr and Mrs N separated in 1995 they were living in the United States of America, so it was there that the wife commenced proceedings in the Superior Court of Arizona, for divorce, property settlement and spousal maintenance. An interim order for spousal maintenance was made and ultimately, in proceedings in which the husband did not fully participate, orders were made for property settlement and spousal maintenance, payment of which was to commence 1 June 1997, at US$3,000 per month. The husband has not paid the amount owing for property settlement or maintenance.
The wife eventually obtained registration of the American order in Australia and the Child Support Registrar brought an application to enforce the spousal maintenance order and recover the very substantial arrears. That application prompted the husband to bring his application under the Family Law Regulations for discharge of the maintenance order and all arrears accrued. Both applications were heard before Federal Magistrate Rimmer on 6 June 2005.
On 22 September 2005, her Honour made orders suspending the American order for spousal maintenance from 16 July 2004 (the date of the husband’s application for discharge) until further order. She dismissed all other applications between the husband and wife, including the application for discharge of all arrears arising in the period from the date of the American orders to 16 July 2004. Her Honour made orders on the application of the Child Support Registrar, essentially requiring the husband to notify the Registrar of any change in his financial circumstances. However, she also made an order that the husband pay $10,000 costs of the Registrar.
The husband has appealed those orders and these reasons relate to the disposition of that appeal.
Among the lengthy grounds of appeal are several that assert errors of principle. I have come to the conclusion that, as a consequence of such error, critical to the Federal Magistrate’s reasoning, the appeal must be allowed. That conclusion is best understood after some discussion of the reasons of the Federal Magistrate and those reasons in turn are best understood after some background of this matter, in particular of the proceedings in America leading up to the final orders there.
As well, although it may not ultimately be necessary to discuss all the grounds of appeal, I think knowledge of them and discussion of some matters they raise, assists in appreciating the critical point.
After discussion of the critical point, I will refer to the principles applicable to the appeal, the application of those principles to this appeal and resulting consequences.

Background and summary of the reasons of the Federal Magistrate

The parties married in Sweden in 1970. After the separation of the parties the wife returned to live in Sweden and the husband for a time remained in America.
Upon the wife’s application brought in America, interim orders, for spousal maintenance and for payment of $2,500 to allow the wife to return to America to prosecute the proceedings, were made. The husband made one payment in respect of the interim order for maintenance, but then left the United States permanently in mid-1996. Following his departure:
“…as a result of enforcement proceedings brought by the wife, he was further ordered to pay the sum of US$2,750 in arrears of spousal maintenance. The husband has not paid this sum of money.
“In March 1997 the husband applied to have the wife’s application in Arizona dismissed but this was unsuccessful and the matter was listed for final hearing on 21 May 1997. At that time it is clear that the husband had failed to comply with orders of the court and failed to take the required procedural steps under the rules of court. Further the husband did not appear personally at the hearing but was represented. As the husband had not purged his contempt he was not entitled to put evidence before the court and the role of his lawyer was limited to cross-examination of the wife and submissions.” (reasons of the Federal Magistrate)
The learned Magistrate further said:
“10. At separation it is clear that the parties owned substantial assets in Australia, Sweden, New Zealand and the United States.…
11.    On 3 April, 1997 the husband filed an application in the Family Court at Brisbane seeking orders for property settlement. The wife cross applied seeking an order that the husband’s property application be permanently stayed, some orders to assist in the enforcement of the property orders made in Arizona. These applications were set down and heard before Justice Lindenmayer of that court on 25 May 1999. His Honour ordered that the husband’s application for property settlement be permanently stayed. He further made a declaration that the wife was entitled to receive the sum of US$300,000 having the Australian equivalent of $457,945 from the husband pursuant to the judgment and Orders of the Superior Court of Arizona made 5 August, 1997. A further order was made that the wife was entitled to collect the items referred to in Exhibit 1 of the orders of the Arizona court from the husband at his residence at [M] or such other place as agreed.
12.    The wife maintains that she has not received the sum of $457,945 or the chattels and items she was entitled to from the husband.
13.    On 12 November 1998 the wife made application to the Family Court of Australia to have the Arizona judgment registered and enforced. This matter was heard before Justice Jordan of that court on 19 January 1998. The application for enforcement of the maintenance application was struck out on the basis that the court had no jurisdiction to determine enforcement of the overseas maintenance order and only maintenance agreements could be registered and enforced, not court orders. The husband says on the basis that he had received advice to that effect from his legal advisors, he had no reason to appeal the Arizona orders.
14.    In August 2000, the husband received notification from the Child Support Agency that the law had changed and that overseas spousal maintenance orders could now be registered with the Child Support Agency as the collection agency without any reference to any court in Australia. He says that this is the reason that the Child Support Agency is now pursuing him for payment of the order and arrears under the order.”
Then, under the heading “The Law”, her Honour traced the steps pursuant to various statutes and regulations leading to her power to consider the applications before her. There is no issue on the appeal about her Honour’s consideration of those matters and it would seem that there was no issue before the learned Magistrate about those matters either. Thus, her Honour recognised that in considering the application of the husband she would apply the provisions of section 83 of the Family Law Act 1975, the terms of which section she set out.
The learned Magistrate then referred herself to passages from the decision of the Full Court of the Family Court in Vakil and Vakil (1997) FLC 92-743 as follows:
“5.15 …As the note in the Butterworths service referred to above indicates, there is no limit imposed by the statute as to the circumstances in which an existing maintenance order may be discharged save that there must be “just cause for so doing”. Whilst it may, we think, safely be said that s.83(1)(c) was not intended, and should not be interpreted in such a way as to enable it to be used as a back-door method of appealing from or obtaining a second hearing (on the same factual circumstances) in respect of the original order, the court should not seek to impose additional barriers to the exercise of the jurisdiction to discharge an order beyond those flowing from the proper interpretation and application of the statutory requirement for “just cause” to be shown.
…
5.23 …we conclude that, having regard to the current wording of s.83(7) (supra), the question whether there is “just cause” for discharging an order, including one made in a reciprocating overseas jurisdiction and registered in Australia under the Regulations, is to be determined as an exercise of judicial discretion by reference to notions of what would be regarded as “right” and “proper” in Australia, having regard (inter alia) to the provisions of ss.72 and 75 of the Act. However, we are of the view that the effects of s.83(7) is not such as to preclude regard also being paid to provisions of the Act other than ss.72 and 75, to the extent that they may be considered relevant in the circumstances of a particular case, and that may include, for example, s.81 and s.43(a).”
Her Honour then turned to “The Applicant’s Submissions”. She recorded that one of the husband’s submissions was that the findings of the Arizona Court about his earning capacity were based on evidence of the wife which was demonstrably unreliable. He submitted that material facts had been withheld from the court and that the evidence of the wife was inherently vague and false. He argued that the true position of the parties at the time was that they were “parlous”.
Further, it was submitted that the husband at the time of trial before Rimmer FM had not the capacity to meet any order for spousal maintenance.
The husband was 61 years old at the time of the hearing in the Federal Magistrates Court, the wife 69 years old.
Her Honour then turned to “The Respondent’s Submissions”. She recorded that, for the wife, it was submitted that the husband’s conduct in the Arizona proceedings and since should be taken into account;
“30. …given that the husband has never sought to appeal the spousal maintenance order made by the Arizona Court and since that order was made in August 1997, the husband has not complied with it in any respect”
Her Honour also set out further submissions for the wife:
“31. …It is submitted that the situation the husband is now faced with arises directly from his own actions and the way he decided to conduct himself in the court proceedings in Arizona..
32. …He says that he did not concern himself with taking steps to appeal the decision because he was secure in the knowledge that the spousal maintenance order could not be registered by the wife for enforcement here in Australian and he only brings this application now that the law in this regard has changed to permit the wife to register and enforce the order. To find that there is a “just cause” in those circumstances, it is submitted, would be contrary to public policy to permit this situation to occur.”
Rimmer FM then recorded the submission of the wife that, even if the court considered that the husband had shown just cause, the court would find that he had failed to make disclosure of a significant chose in action constituted by a claim for property settlement against his former de facto partner.
Finally, it was submitted that the husband remained in a far superior financial position to that of the wife.
Her Honour then moved to “Application of the law and reasoning”. Her Honour said:
“34. This is not a usual matter and ultimately it is a matter for me to determine within my discretion as to whether the husband has established just cause for the discharge or variation of the overseas maintenance order.
35.    Given the particular facts relating to the husband’s conduct in the proceedings which gave rise to the making of the order in the Arizona Court in 1997, I do not consider it would be proper for this Court to exercise it’s discretion and permit of a find (sic) that there was just cause for the Court to vary or discharge the order prior to the husband filing this application. To do that would be a serious matter as important public policy considerations are applicable. The husband was a resident in the United States when the wife instituted her proceedings there in 1996.
36.    The parties had lived in that country since 1979. In so doing, the husband made himself subject to the legal rule and laws of that country. It was he who then put himself in contempt of the interim orders made in the Superior Court of Arizona. The husband at no time sought to remedy this situation by any appropriate or available legal means open to him, such as seeking to appeal or review the decision he simply ignored the orders made. He further simply ignored important procedural rules and requirements associated with those proceedings, such as providing the wife with discovery. He avoided the direct consequences of his contemptuous acts by departing the United States to live permanently in Australia whilst those proceedings were ongoing.
37.    The consequence of his doing that was that the Rules of the Arizona Superior Court meant he could only take a limited role in those proceedings when the matter was finally heard, as he was found to be in contempt of that Court’s orders. Quite contrary to submissions made on his behalf that he was sidelined in those proceedings, his own decisions and actions at that time lead to the consequence of his being so limited.
38.    Importantly, the consequences have also been borne by the wife. The husband submits she gave false, misleading and unsafe evidence to the Superior Court of Arizona, which relied upon such evidence to conclude and determine the husband had the necessary capacity to pay the quantum of spousal maintenance ordered. I do not accept that this is correct. Again what ultimately occurred in those proceedings was a direct consequence of the husband’s failure to purge his contempt of court, undertake proper discovery and attended at the hearing so he could be fairly heard and fully present evidence which he and he alone could properly give about his financial capacity. In circumstances where the wife properly disclosed to the court that she was not the party but the husband who managed the financial affairs of the parties, from that point onwards, the court and the wife were aware that such limitations prevailed in making precise findings as to material facts about the husband’s financial position. That the wife then upon being questioned at the hearing sought to assist the Court by giving the evidence she did is neither the giving of false or misleading evidence nor is it at all surprising.
39.    It is also important for the Court to consider what occurred after those orders were actually made. The husband took no proper steps to appeal the decision made. Instead he sought to enter into some form of correspondence directly with the Judge. He did not comply with the orders. He totally ignored them. He sought to invoke jurisdiction of the Australian Family Court to deal again with property settlement and it was made very clear to him by the judgment of Justice Lindenmayer, that it was against public policy for an Australian Court to do so.
40.    Directly and most tellingly the husband sets out in his affidavit filed in support of his application that he did not take steps to appeal the Arizona Court’s decision in so far as it related to spousal maintenance because he had legal advice and was well aware that until the law changed in 2000, he could not have that order enforced against him here in Australia. In effect therefore he made a deliberate and informed choice to remain at all times subject to the legal obligations imposed upon him under that Order to pay spousal maintenance and take no proper steps in the appropriate forum of the United States to appeal that decision based upon the fact that he was safe from enforcement consequences here in Australia.
41.    For this Court to permit the husband to completely disregard the legal obligations imposed upon him by the Arizona Orders and to behave in a manner which totally disregarded that order and the rights which flowed properly to the wife under the orders as he has done, on the basis that he made a conscious decision to take no proper and available legal action in the United States, would not be proper. It is clear he did this simply because he knew he could remain in Australia safely relying on the lack of available means to the wife to enforce her rights under that order. I am satisfied that to do this would breach important public policy considerations for Courts (wherever they may be situated) to ensure that they respect each others laws and orders.
42.    Whist it may be that the husband now brings evidence before this Court, that he failed to bring before the Arizona Court, that he always lacked capacity to pay (and I do not find he necessarily has that may establish a cause for discharge or variation) but it does not establish a “just” cause. The word “just” imports with it the concept of justice. It would not be providing justice as between the parties to permit the husband to in effect go and lie (sic) in a country such as the United States with his wife, enjoy the benefits that country offered to then for a number of years but then when proper legal processes were invoked against him, permit him to leave the country, behave in a contemptuous manner when orders were made, and then permit him to ignore both the orders and consequences of his actions upon the wife by completing negating the effect of the Court orders by discharging the arrears of spousal maintenance from the date of the order until the point in time when he realised those consequences had caught up with him by a change in Australian law in 2000.
43.    Therefore I am satisfied that the husband does not establish the necessary just cause as required under the Regulations and I do not propose to exercise the discretion in his favour to vary or discharge the spousal maintenance between the date when the order was made in August 1997 and the date when the husband filed his application in this court on 16 July 2004.
44.    In my view the situation since 16 July 2004 requires different considerations. At that point the husband properly sought to invoke the jurisdiction that was available to him to have the court vary or discharge the order. As stated in the decision in Vakil (supra)…
45.    At this time some 8 years after the original spousal maintenance orders were made in 1997, the situation is very different to that which existed in 1997. The parties’ circumstances have both changed. Neither of them have had any real nexus with the United States since the proceedings finished in 1997. The husband has lived in Australia on a permanent basis since 1996. The husband is now 60 years of age and there is evidence he has not been employed in the field he had been employed in for the many years prior to 1997 despite making hundreds of job applications. In these circumstances I am satisfied that there is just cause demonstrated for the court to consider the variation or discharge of the order.”

Her Honour then turned to the application of sections 75 (particularly subsection 75(2)) and 83. She readily accepted that the wife had a need of maintenance but said the real issue was the husband’s capacity to meet “…an order for spousal maintenance and one at the rate of US$3,000 a month”. Upon turning to the husband’s financial circumstances, her Honour accepted his evidence of them. During the course of her consideration of the issue she said:
“53. The wife sought to have the court make a credibility finding against the husband because he had not made disclosure of his chose in action which arises from a defacto property claim that he may have against a former defacto partner […]. I have heard all of the evidence of the husband about this matter. He may at some time in the future receive an entitlement to property from such action. The matter is hotly contested by [the husband’s former defacto partner]. There is no way for the Court or the husband to know what the outcome of such action may be. I do not find that he deliberately endeavoured to hide this from the wife or the court so as to deceive the court as to his true financial position.
54. Therefore I am satisfied in this matter that these two people are living in strained financial circumstances. The husband only earns income of just over $15,000 a year gross. After he pays for his own modest and reasonable support it is unfortunately the case that he simply does not have the present capacity to pay spousal maintenance. The outcome of his asset position will not be clear for some time. He will have significant arrears to pay off via arrangements he will have to make with the Child Support Agency for the arrears between the date the Arizona orders were made and 16 July 2004 as I will not be discharging those arrears. The wife will receive the benefit of those arrears.
55. Given all of those matters, at this time. I do not find that the husband has the capacity to pay any ongoing spousal maintenance under the Arizona orders. I do not propose to discharge those orders. It may be when he receives property resolution in the defacto claim he presently has that his capacity will change. I propose to suspend the operation of those orders until further order. This will leave the wife’s right’s intact to seek to revive the operation of the order in whole or in part if in the future the husband’s financial capacity changes.”
For these reasons her Honour then, as earlier stated, suspended the orders of the American court:
“…in so far as it relates to the payment of spousal maintenance…from 16 July 2004 until further order of the court.”

Grounds of appeal

“1.    The learned Federal Magistrate failed to give adequate reasons for her Decision and her failure to do so amounted to an error of law. The exercise of discretion by the learned Federal Magistrate miscarried as a consequence.
2. The learned Federal Magistrate erred in law in finding that there was no just cause for discharging the Order made in the Superior Court of the State of Arizona on 5 August, 1997 and erred in law in the manner in which she applied and interpreted “just cause” within the meaning of section 83(1)(c) of the Family Law Act 1975.
3.     The learned Federal Magistrate erred in finding that the Wife did not “give false, misleading and unsafe evidence” to the Superior Court of Arizona in circumstances where there was ample evidence before the learned Federal Magistrate that demonstrated that the Wife did not provide reliable evidence.
4.     The learned Federal Magistrate erred in law in finding that “the word ‘just’ imports with it a concept of justice.”
5.     The learned Federal Magistrate having made findings that:-
a.“at this time, some 8 years after the original Spousal Maintenance Orders were made in 1997, the situation is very different to that which existed in 1997. The parties’ circumstances have both changed.”
b.“…in these circumstances I am satisfied there is just cause demonstrated for the Court to consider the variation or discharge of the Order.”
c.“The parties are at an age where over 8 years have brought substantial changes to their capacity for ongoing gainful employment. I am satisfied that the provisions of s 83 of the Act have been satisfied by the Husband.”
d.The Husband had not worked in a technical way using his engineering degree for many years prior to the parties separating and that he had made hundreds of job applications in his field of expertise but that his lack of recent work experience and his age have meant that he has been not able to obtain work in this field.
e.Husband has the “income and expenses set out in his Financial Statement”. His expenses are very modest. They are not in any way excessive and he was not seriously challenged in relation to them.”

Erred in failing to make findings in favour of the Husband as to his lack of capacity to pay from the time of the making of the Orders on 5 August, 1997 in circumstances where the Husband’s income was unchallenged and he clearly demonstrated that he did not otherwise have the capacity to pay.
6.     The learned Federal Magistrate erred in failing to consider and give appropriate weight to the unchallenged evidence as to the Husband’s income and his lack of capacity to meet the Order prior to the filing of his Application for Discharge.
7.     The learned Federal Magistrate erred in making Orders placing an obligation on the Husband to notify the Child Support Agency of any changes in employment and his financial position (Orders 2-7 and 9) with such Orders to remain in force until further Direction (Order 8) in circumstances where there were no findings made to support such Orders particularly in circumstances where Her Honour made findings in respect of substantial changes to the parties capacity for ongoing gainful employment and the finding that the Husband did not have “the capacity to pay the ongoing spousal maintenance under the Arizona Orders.
9.     The learned Federal Magistrate erred in making an Order that the Respondent (sic) pay the Applicant’s (sic) costs in the sum of $10,000:-
(a).Without giving the Husband any opportunity to be heard in respect of the issue of such a proposed Order and in circumstances where the learned Federal Magistrate’s finding of fact; the husband did not have any capacity to meet such an Order; and
(b).Without applying the provision of section 117 of the Family Law Act 1975.

10. The learned Federal Magistrate, having expressed an intention to suspend the operation of the said Orders of 5 August, 1997, erred in failing to make such an Order.”

The Federal Magistrate’s consideration of “Just cause”

Although I do not think that the Federal Magistrate’s treatment of the compass of “just cause” is the critical point in this appeal, it is related to it and, as seen, several grounds of appeal refer to her Honour’s use of the term, and her findings in respect of “just cause”. Therefore, I think some discussion of the term and the Federal Magistrate’s views of what might constitute it, is useful.
In her reasons, Rimmer FM set out the terms of section 83, the parts relevant to this discussion being:
“83(1)If there is in force an order …with respect to the maintenance of a party…
(a)   …
(b)   made by another court and registered…
the court may:
(c)   discharge the order if there is any just cause for so doing…”
The structure of section 83(1)(c) arguably provides for two levels of discretion; firstly that to be exercised in finding whether or not there is a “just cause” as referred to in paragraph (c) and secondly whether, though “just cause” has been established, the order ought be discharged.
If this is so, there is room for confusion about when concepts of “justice” or “just cause” ought be addressed. Although, one would think that in the end, the same result would be achieved whether principles were considered at the first or second level, or on the basis that there was only one exercise of discretion, any such confusion might interfere with deliberations.
There may be some signs that the Federal Magistrate used the term “just cause” interchangeably to refer to the overarching exercise of discretion in some instances and, in others, to the exercise under paragraph (c) (compare paragraph 35 with paragraphs 42 and 45 of the judgment).
However, the point is mentioned here merely to indicate a possible impediment to clarity, rather than an independent argument on appeal.
A more significant point, one to which ground 4 directly relates, arises in the following manner. When setting out the law, as earlier noted, her Honour addressed statements in Vakil and Vakil going to “the question whether there is “just cause” for discharging an order…” and saying that the answer “…is to be determined as an exercise of judicial discretion by reference to notions of what would be regarded as “right” and “proper” in Australia, having regard (inter alia) to the provisions of sections 72 and 75 of the Act.”
The question of what might constitute “just cause” had been earlier discussed by Lindemayer J (a member of the bench in Vakil) in Lutzke and Lutzke (1979) FLC 90-714, There, his Honour Lindenmayer J said:
“…the Act is silent as to what may constitute “just case” for the discharge of an order. In my opinion, however, the words “just cause” are not used in any broad general sense, nor are they intended to import any abstract notions of justice, “palm tree” or otherwise, into the determination of applications for discharge. In my opinion those words must be interpreted in the context of the Act as a whole, and in particular with regard to the other specific provisions of the Act which relate to maintenance. Thus a “cause” for the discharge of an existing maintenance order will be a “just cause” only if, having regard to the other provisions of the Act, particularly those relating to maintenance, it can be said that it is “right” or “proper” that the order should be discharged. If there is any room for doubt that this is the correct approach, in my opinion that doubt is removed by section 83(7) which provides:
(7)for the purposes of this section, the Court shall have regard to the provisions of section 72, 73, 75, and 76.” (at p 78,832)
After a lengthy review of authority, the bench in Vakil approved what Lindenmayer J said in Lutzke (see p 84,021).
In paragraphs 41 to 43 of her reasons (quoted earlier), the federal Magistrate said:
“41. For this Court to permit the husband to completely disregard the legal obligations imposed upon him by the Arizona Orders and to behave in a manner which totally disregarded that order and the rights which flowed properly to the wife under the orders as he has done, on the basis that he made a conscious decision to take no proper and available legal action in the United States, would not be proper. It is clear he did this simply because he knew he could remain in Australia safely relying on the lack of available means to the wife to enforce her rights under that order. I am satisfied that to do this would breach important public policy considerations for Courts (wherever they may be situated) to ensure that they respect each others laws and orders.
42. Whist it may be that the husband now brings evidence before this Court, that he failed to bring before the Arizona Court, that he always lacked capacity to pay (and I do not find he necessarily has that may establish a cause for discharge or variation) but it does not establish a “just” cause. The word “just” imports with it the concept of justice. It would not be providing justice as between the parties to permit the husband to in effect go and lie (sic) in a country such as the United States with his wife, enjoy the benefits that country offered to then for a number of years but then when proper legal processes were invoked against him, permit him to leave the country, behave in a contemptuous manner when orders were made, and then permit him to ignore both the orders and consequences of his actions upon the wife by completing negating the effect of the Court orders by discharging the arrears of spousal maintenance from the date of the order until the point in time when he realised those consequences had caught up with him by a change in Australian law in 2000. (emphasis added)
43. Therefore I am satisfied that the husband does not establish the necessary just cause as required under the Regulations and I do not propose to exercise the discretion in his favour to vary or discharge the spousal maintenance between the date when the order was made in August 1997 and the date when the husband filed his application in this court on 16 July 2004.”
What the learned Magistrate seems to have done in paragraphs 41 to 43 was to import into the consideration of whether “just cause” had been established, concepts of “public policy” referred to in, among other places, paragraph 41, which she saw as so significant that they rendered it unnecessary to make findings about matters directly relevant to the application to discharge or vary the orders, namely whether from the date the orders were made or at any subsequent time up to 16 July 2004, the husband had capacity to pay.
While, as said in Vakil, it was open to the Federal Magistrate not to permit section 83(1)(c):
“…to be used as a back-door method of appealing from or obtaining a second hearing (on the same factual circumstances) in respect of the original order…”
the court in Vakil immediately continued:
“…the court should not seek to impose additional barriers to the exercise of the jurisdiction to discharge an order beyond those flowing from the proper interpretation and application of the statutory requirement for “just cause” to be shown.”
It may be that her Honour has imported into the notion of “just cause” an extraneous principle of “justice”.

The critical point

This point is raised via grounds 2 and 4, which draw attention to the Federal Magistrate’s finding, expressed in passages earlier quoted but repeated here, namely:
“35. Given the particular facts relating to the husband’s conduct in the proceedings which gave rise to the making of the order in the Arizona Court in 1997, I do not consider it would be proper for this Court to exercise it’s discretion and permit of a find (sic) that there was just cause for the Court to vary or discharge the order prior to the husband filing this application. To do that would be a serious matter as important public policy considerations are applicable.…
…
41. For this Court to permit the husband to completely disregard the legal obligations imposed upon him by the Arizona Orders and to behave in a manner which totally disregarded that order and the rights which flowed properly to the wife under the orders as he has done, on the basis that he made a conscious decision to take no proper and available legal action in the United States, would not be proper .… I am satisfied that to do this would breach important public policy considerations for Courts (wherever they may be situated) to ensure that they respect each others laws and orders.” (emphasis added)
It is clear from the Federal Magistrate’s reasons (earlier quoted) in paragraphs 34 through to 43 of her judgment, that the Federal Magistrate has found that the husband’s behaviour in respect of the American Court and its orders fell on the wrong side of some important public policies. An initial difficulty is this: the only identification of these “considerations” would appear to be in the last sentence of paragraph 41 quoted above, namely that there are important public policy considerations for courts wherever situated “to ensure that they respect each other’s laws and orders”.
I think it arguable, from the number of references to public policy that the learned Magistrate made, in slightly different forms of expression, that there may have been other policies which her Honour had in mind.
But if so, there is a further difficulty. If there are other public policy considerations beyond that identified in paragraph 41, they are not identified, yet they have overwhelmed all other relevant considerations in addressing the husband’s case, at least as it related to the arrears that accrued prior to the filing of his application in Australia. In such circumstances, the appeal would have to succeed.
However, assuming that there was only one public policy consideration relied upon by the Federal Magistrate, namely that courts ensure “that they respect each others laws and orders”, two questions arise. Is that a legal principle that could have been applied to this case, and, if so, was it correctly applied?
Firstly, neither representative for either respondent referred to any support for the existence of a principle so stated. Indeed, Counsel for the wife conceded that it was difficult to know to what principle the Federal Magistrate was referring in paragraphs 41 and 42.
Further, while even before enforcement of foreign decrees was permitted by statute, the law permitted certain actions and defences to be based upon such decrees (see, for example “Conflict of Laws in Australia”, Nygh and Davies, 7^th edition, Chapter 9). I have not located any statement of a principle of law equal to that formulated by the learned Magistrate.
However, Counsel for the wife argued that if you “excised” the references in paragraphs 41 and 42, the ultimate decision was nonetheless supportable on a “conventional approach” and that such an approach was discernible from the balance of the learned Magistrate’s reasons.
Even if established, such a proposition may not be enough to avoid a successful appeal if there was error of principle, but for the moment I will regard it as a submission that the application of a wrong principle does not necessarily mean that an appeal succeeds, if the application of the correct principles must have produced the same result.
The very legislative scheme that allowed the Federal Magistrate to consider the applications before her, particularly that of the Child Support Registrar for enforcement, displayed “respect” for the American order, in the sense that the scheme recognised the order and allowed for its enforcement. Further, the scheme did not permit a “back door appeal” against the American order and, further still, the onus was on the husband in this case to establish circumstances that could excuse him from obeying the American order.
The facts that the husband had not sought to appeal that order at any time nor, until 16 July 2004, that it be discharged or varied, were certainly relevant to the question of whether arrears accrued ought be discharged.
So, the argument may have implied that perhaps to apply a public policy to the effect that the Federal Magistrates Court in this instance “respected” the American order, was really to say no more than the existence of the order and the absence of attempts to appeal it or have it discharged or varied, were relevant factors in the exercise of the Federal Magistrate’s discretion, pursuant to section 83 of the Family Law Act.
There are two difficulties with this argument. The first is that I am doubtful whether, in addressing the question of discharge of arrears up to 16 July 2004, the learned Magistrate exercised any discretion. Arguably, I think her Honour thought that the application of the “public policy” removed any need for her to address other factors relevant to the exercise of discretion.
At paragraph 35, as already seen, she said:
“35. Given the particular facts relating to the husband’s conduct in the proceedings which gave rise to the making of the order in the Arizona Court in 1997, I do not consider it would be proper for this Court to exercise it’s discretion and permit of a find (sic) that there was just cause for the Court to vary or discharge the order prior to the husband filing this application. To do that would be a serious matter as important public policy considerations are applicable …”

Secondly, unless the learned Magistrate considered it unnecessary to address any factors other than “public policy”, (a view that she has not expressed) she has failed to address all relevant factors, at least in considering the application in so far as it related to arrears up to 16 July 2004.
The husband’s case to establish “just cause” had some strengths. The learned Magistrate found that the situation at the time of hearing before her was:
“…very different to that which existed in 1997. The parties’ circumstances have both changed.…The husband is now 60 years of age and there is evidence he has not been employed in the field he had been employed in for the many years prior to 1997 despite making hundreds of job applications.…I am satisfied that the provisions of s 83 of the Act have been satisfied by the husband.…I find that he has the income and expenses as set out in his financial statement.
His expenses are very modest. They are not in any way excessive and he was not seriously challenged in relation to them…Therefore I am satisfied in this matter that these two people are living in strained financial circumstances.…”
As earlier seen, her Honour’s assessment of the husband’s position was such that she thought he ought be relieved of the obligation to pay spousal maintenance since he applied for discharge of the orders (at least pending the outcome of his property settlement claim with his former de facto wife).
That assessment of the husband’s current financial position must also have been relevant to the husband’s capacity to pay arrears arising before he filed his application for discharge. But that factor was not mentioned, even if only for the purposes of recording that it was overwhelmed by the “policy” considerations.
A further matter of concern is whether her Honour addressed the possibility of the husband establishing that, after the American order, his capacity to pay the order deteriorated. At paragraph 42, her Honour said:
“42. Whist it may be that the husband now brings evidence before this Court, that he failed to bring before the Arizona Court, that he always lacked capacity to pay (and I do not find he necessarily has that may establish a cause for discharge or variation) but it does not establish a “just” cause.”
but I do not find it clear from that sentence or the balance of the paragraph (earlier quoted) that the Federal Magistrate is addressing any period later than the time at which the American order was made.
However, with regard to this last-mentioned factor, Counsel for the wife submitted that the case of the husband below was only for discharge of the American order (as opposed to, in the alternative, variation) and was founded on the contentions that the wife had given false evidence in the American proceedings and, in any event, that the husband currently could not pay arrears or ongoing maintenance. There was no concession before me that the husband’s case was so limited and I was not taken by Counsel for the wife to material to support his contention.
While the husband’s application filed 16 July 2004 sought only that the American order “be discharged and any arrears remitted”, cases for discharge are often conducted on the basis that if the evidence falls short of supporting discharge of the order from its commencement, discharge from a later time, or variation, is sought.
On the one hand, the learned Magistrate’s discussion of “The Applicant’s Submissions” is consistent with what Counsel for the wife says. On the other hand, the Federal Magistrate referred on a number of occasions to the issues of whether to “vary or discharge” (see e.g. paragraphs 34, 35, 43, 44, 45 and 46). Also, of course, the learned Magistrate ultimately suspended the order, effective from 16 July 2004, rather than discharging or refusing to discharge, the American order. Without more I do not think I can regard the husband’s case below as limited as strictly as Counsel for the wife suggests.
In any event, the learned Magistrate’s failure, as part of the discretionary exercise, to consider the husband’s current capacity to pay arrears accrued before 16 July 2004, remains.
In summary, there no doubt will be cases where an application, similar to that of the husband, may be dismissed without a determination of all of the facts, on the basis that, even if the applicant established all that he or she set out to do, some other factor would render the dismissal of the application the proper order. But if that is to happen, that overwhelming factor must be correctly and clearly identified. That has not been the case here.
Here, a perception of “public policy” either overwhelmed the discretionary exercise to the point that no discretion really was exercised; that is; (effectively, once the husband’s behaviour in respect of the American order was established, the “public policy” prescribed the result) or, if discretionary factors were weighed, including the application of principles of “public policy”, not all relevant factors were identified.
And, in any event, the “public policy” was misconceived or inadequately identified.

Principles applicable to the appeal

In House v The King (1936) 55 CLR 499, at pp 504‑505, Dixon, Evatt and McTeirnan JJ. said:
“The manner in which an appeal against an exercise of discretion should be determined is governed by established principles. It is not enough that the judges composing the appellate court consider that, if they had been in the position of the primary judge, they would have taken a different course. It must appear that some error has been made in exercising the discretion. If the judge acts upon a wrong principle, if the allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some of the material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so. It may not appear how the primary judge has reached the result embodied in his orders, but if upon the facts it is unreasonable or plainly unjust, the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law reposes in the court of first instance. In such a case, although the nature of the error may not be discoverable, the exercise of discretion is reviewed on the ground that a substantial wrong has in fact occurred.”

Conclusion overall

It follows from what I have said above, that I am of the view that the Magistrate made an error of principle which formed an integral part of her reasoning and disposition of the case before her. Applying what was said by the High Court in House v The King, in my view the appeal must be allowed.

Consequences

In his Notice of Appeal, the husband sought, in the event the appeal was allowed, that the American order be discharged together with all accumulated arrears and that any penalties following the registration of the order in Australia also be discharged. In other words he sought that this court re-exercise the discretion vested originally in the Federal Magistrate.
There is in my view an overwhelming impediment to that course which is that, as discussed, the learned Magistrate made very few findings of fact relating to matters such as the husband’s capacity to pay prior to 16 July 2004, when he filed his application. In the circumstances, I consider that there is no alternative but to remit the husband’s application for retrial.
The orders made in favour of the Child Support Registrar are in my view entirely consequential on the result reached by the Federal Magistrate on the husband’s application. As that result is to be set aside, in my view, the orders in favour of the Registrar should also be set aside and the enforcement application be remitted.

ORDERS

That the appeal be allowed.
That the orders of Federal Magistrate Rimmer made 22 September 2005 be set aside.
That the applications of the husband filed 16 July 2004 and the summons filed by the Child Support Registrar filed 26 September 2002 be remitted to the Federal Magistrates Court for rehearing by a Federal Magistrate other than Federal Magistrate Rimmer.

[2006] FamCA 385

19 May 2006

Key Legal Topics

Areas of Law

Family Law

Legal Concepts

Jurisdiction

Appeal