Naczek and Dowler - [2017] FamCA 105

FAMILY COURT OF AUSTRALIA

NACZEK & DOWLER

[2017] FamCA 105

FAMILY LAW – Spouse and child maintenance orders made overseas – husband seeks discharge in Australia because of change of circumstances – respondent fails to appear – circumstances established – provisional orders made.

Child Support Assessment Act 1989 (Cth)
Child Support (Registration and Collection) Act 1988 (Cth)
Family Law Act 1975 (Cth)

Daniels & Bell (2007) FLC 93-315
Lutzke (1979) FLC 90-714
Vakil & Vakil (1997) FLC 92-743

APPLICANT:

Mr Naczek

RESPONDENT:

Ms Dowler

FILE NUMBER:

MLC

4659

2011

DATE DELIVERED:

16 February 2017

PLACE DELIVERED:

Melbourne

PLACE HEARD:

Melbourne

JUDGMENT OF:

Cronin J

HEARING DATE:

16 February 2017

REPRESENTATION

COUNSEL FOR THE APPLICANT:

Ms Vohra

SOLICITOR FOR THE APPLICANT:

Kennedy Partners

THE RESPONDENT:

No appearance

Orders

IT IS ORDERED PROVISIONALLY:

That Order 2 of the orders made on 14 December 2006 in Case No FD05D02174 as varied by the orders of the Honourable Mrs Justice Baron DBE on 3 November 2009 is discharged.
That orders 3 and 4 of the said orders are discharged.
That the Registrar of the Family Court of Australia forward this order together with the reasons for judgment to the Secretary of the Australian Attorney-General’s Department with a request that they be forwarded to the Principal Registry of the Family Division of the High Court of Justice in London, United Kingdom for the purposes of confirmation (either with or without modification) by a court having jurisdiction in respect of the said original overseas maintenance orders.
That the attention of the Secretary of the Attorney-General’s Department is drawn to the provisions of Regulation 38A of the Family Law Regulations 1984.
That the respondent pay the applicant’s costs fixed in the sum of $4091.
That the application filed 6 October 2015 is otherwise dismissed.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Naczek & Dowler has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER: MLC 4659 of 2011

Ms Naczek

Applicant

And

Ms Dowler

Respondent

REASONS FOR JUDGMENT

This is an application brought by Mr Naczek seeking the discharge of orders made in the United Kingdom for spousal maintenance and child financial support. Ms Dowler is the respondent. On 23 November 2015, she filed a response seeking that his applications be dismissed, that the current orders be maintained and an order that Mr Naczek pay her costs. The matter was listed for directions on 31 October, at which time both parties appeared, including Mr Naczek being represented and Ms Dowler not.
The matter was then set down for trial. Ms Dowler filed a response on 22 December in the form of an application in a case. I will treat that as, indeed, what she is formally seeking. It indicates that she was aware that the hearing was on 16 February.
Equally consistent with the question of her knowledge of these proceedings is the fact that she filed an affidavit in support of her proposed orders on 16 January 2017. A brief reading of that affidavit, albeit there is significant objection to some of the statements, would indicate that she intended to proceed with her application. I find that Ms Dowler was aware that the hearing was on today. She was called at 10 am when the matter was first called over, pending the determination by me of a part heard matter, and called again at 11.30 am, and there was no response. I am advised by counsel for Mr Naczek that a call to Ms Dowler’s telephone has rung out, and an email has not been responded to.
There has been no text message to Mr Naczek, and, on that basis, one can either conclude that she has had some problem today, or, alternatively, she has decided not to attend. In addition to those matters, Mr Naczek has filed an outline of case document prepared by his lawyers, and I am informed that that document has been served on Ms Dowler.
On the basis that she has failed to appear to prosecute her case, I strike out her responses of 25 November 2015 and 22 December 2016, but, as a matter of precaution, I will give her 14 days to seek to set aside the orders that now may be made, supported by affidavit as to why she has not appeared today. I will order these reasons be transcribed and placed on the Court file.
RECORDED : NOT TRANSCRIBED
The parties to this application are Mr Naczek, (“the applicant”), and Ms Dowler (“the respondent”). By his application filed on 6 October 2015, the applicant seeks provisional orders of this Court under regulation 36 of the Family Law Regulations 1984 for the discharge of an order made by the High Court of Justice of the United Kingdom, which was initially made on 14 December 2006 and ultimately varied on 3 November 2009, and a second order relating to child support also made in the same way.
To the extent that it is possible to discern the respondent's position, she opposes the discharge of these orders. For whatever reason the respondent did not attend the Court today, and I have struck out the two responses upon which she appears to be relying. As such, the applicant seeks to proceed on an undefended basis, but that simply means, like all cases, he has to prove his case on the balance of probabilities. For the reasons that follow I am satisfied that he has established that case on the balance of probabilities and the orders that he seeks should be made.
The unchallenged evidence of the applicant is that he is 59 years of age and currently working for a major bank in Australia. The respondent is 56 years of age and is employed on part-time basis in a retail position, where she earns, by the applicant’s standards, a substantially lower sum. From his more substantial income he has been paying $72,800 per year spousal maintenance and $16,380 per annum by way of child support.
There are two children of this relationship: Mr N, who is now 18 years of age, and L, who has just turned 16 years. Both of those children were the subject of substantial proceedings in this Court a number of years ago, but since that time, their residential position has changed. Mr N now lives with the applicant and spends time in accordance with his wishes, and, in any event, as I earlier indicated, he is now 18 years of age. L is in a different position. She is at a private school, and all of the costs of that are met by the applicant. Those costs include all of the usual attendant costs of a child in addition to the relevant fees.
Importantly, throughout the year 2016 the child, who is now 16, was not living with her mother on a full-time basis, but, in any event, she is now described as a day boarder. She goes to school from 8 am to 8.30 pm from Monday to Thursday, and at 3.30 pm she comes home to the respondent or the applicant if his contact applies It is the applicant's unchallenged evidence that five out of every 14 nights are spent with him along with half of the relevant school holidays. In addition to his care of L, there are problems associated with Mr N who has a mild intellectual disability and has attended schools offering special education programs. It is the applicant's view that Mr N will remain dependent on him for financial support and housing in the foreseeable future.
In 2005, the parties separated in the United Kingdom, and litigation followed. At the conclusion of those proceedings, the respondent relocated to Australia, where she had been born. The children came with her. In 2006 in the United Kingdom various financial orders were made, which included the payment of child support, the costs of private school education and also periodic maintenance for the respondent. The respondent's maintenance was fixed at £60,000 per annum. What then followed was a change of the financial circumstances of the applicant which led to the orders being altered so that the relevant child support was fixed at $16,380 per child per year along with all of the relevant school fees and periodic payments of spousal maintenance of $72,800 per annum.
The application before the Court is to discharge all of those orders. In respect of the spousal maintenance order, the applicant points to a change of circumstances, that time has passed by and that the respondent's circumstances should have, and could have, altered such that she could support herself. In addition, he points to s 81 of the Family Law Act 1975 (Cth) (“the Act”), which is the provision known as the “clean break” concept. It seems from reading the orders of the United Kingdom that the “clean break” concept was considered but found not to be possible because of the financial position of the applicant.
The applicant was then engaged in buying a property “off the plan”, but I have heard his evidence today, and am satisfied that it ultimately ended in a significant loss.
In addition to those matters, the child support situation has also changed. That is somewhat self-evident, but, in any event, Mr N is no longer living with the respondent, and L is largely being cared for financially by him. To the extent that she spends some time with her mother, she (the mother) has an income stream together with relevant payments from the government.
To the extent that these child support orders are discharged, the respondent has a remedy in respect of L in that she could apply for child support under the assessment situation in any event. Unfortunately, she is not here to explain the situation.
The other dilemma for the Court today and, indeed, for the applicant, is that there is no current financial evidence from the respondent. She did not file an outline of case document, so I have perused as many of the documents as I could, to ascertain just exactly what evidence she might be able to rely upon. The reality is it is too difficult to discern because this particular court file is in about four boxes.
The last financial statement upon which the respondent relied was filed in November 2015, and that was relied upon by counsel for the applicant. In respect of those particular matters, having regard to when that financial statement was signed, I have doubts as to whether I could rely upon it in the current climate. Accordingly, the only evidence that I have of the respondent's financial position, ironically, comes from the applicant himself.
He points to the fact that in 2009 the respondent had purchased a home in I Town and the source of the funding for that came from the property settlement that was ordered in the United Kingdom. Because of the subsequent proceedings in this Court, the equity in that property seems to have been dissipated by her legal costs, and she had to sell it. Since then she has purchased another home. From the documents that the applicant's solicitor obtained under subpoena, he has been able to ascertain her source of income, which include not only various private positions of employment but also payments from the government.
For example, he has been able to ascertain that she worked for a courier company, a retail position and also received moneys to the extent of $20,000 from an unidentified PayPal account. He calculated that over a space of a period of some 16 months, she had a total income of $655,000, out of which, there were expenses associated with credit card payments, rental and the mortgage payment. His calculation is that she had at least $274,000 left over. What must be factored into that is that he was contributing towards the support of the school expenses and had a significant period of time caring for the children as well.
I do not understand exactly what has happened to all of the money that the respondent has had at her disposal. The applicant pointed to the fact that between January 2014 and December 2014 the respondent accumulated over $100,000 in her bank account. That seems to be consistent with the earlier analysis of her income exceeding expenses. That was not be the picture portrayed in the financial statement provided by the respondent in November 2015.
The applicant asserted that the respondent holds formal qualifications as a health professional, but he has no idea of her current registration, if, in fact, it has been maintained. She is in her 50s, so her working life has some limitations, but there is no reason that I can see why she might not be able to pursue her profession again. She has fewer obligations in relation to the children. She has received a variety of forms of income and not necessarily just that which she portrayed in the financial statement of November 2015.
What the respondent portrays in the financial statement from 2015 is that she is working in a store, on a part-time basis. Her evidence according to the financial statement would have been that at that time she was earning $200 per week, but an analysis of the documents produced under subpoena would suggest that it is now higher. According to the submission of the applicant, there is no logical reason why the respondent could not be working, not only from the point of view of her employability and her skills but also there is no known health problem to prevent her going back to her profession or indeed working for more hours.
The demands on the respondent relating to the children are relatively modest. For example, in respect of Mr N, the applicant pointed to the years 2013 through to 2016. He counted that approximately 10 nights only were spent by Mr N in the respondent's care. I have already alluded to the periods of time where L has not been in the respondent's care but she too has been away from the respondent on a school live-in arrangement and therefore would not have been a burden for the respondent such as to prevent her from obtaining further employment.
Regulation 36 of the Family Law Regulations provides that a registered maintenance liability may be the subject of an application of this Court's jurisdiction, and once empowered, the Court may make an order discharging the particular overseas order. Regulation 36(4) provides that the law to be applied to the determination of an application in that sense is the law in force in Australia under the Act.
The definition of an overseas maintenance entry liability or, as is the case here, a registered maintenance liability, are defined in regulation 24A of the regulations. Both of those provisions refer to the registerability of the maintenance liability rather than its registration. The particular legislation that governs the registerability of these liabilities is the Child Support (Registration and Collection) Act 1988.
An application can be made for registration of such a liability in a manner to be specified by the Registrar. When one tracks through that particular registration process, there is a form that the Registrar uses, but it is not immediately apparent from the legislation itself. The regulation goes on to say that the Registrar must register the liability if the payee has given notice or is required to give notice.
The registration process applies to the payee rather than the payer, so to some extent the question of how such an order could be registered is a matter for the respondent rather than the applicant. In any event, the question seems to focus on the words “registrability”. The order could be registered by the respondent. In my view, “registrable” should be read in its plain meaning in regulation 24A. That is, it does not have to be registered but rather, registrable. That is, on that basis, this order from the United Kingdom fits within the definition in regulation 36 of the Family Law Regulations 1984.
To the extent that there is any doubt about that, regulation 17 of the Family Law Regulations provides that a degree may be registered in any Court having jurisdiction under the Act by filing a sealed copy of the decree in that Court, thus if it is necessary for the overseas orders to have some form of registration in this Court in addition to be a registrable liability, it occurs by the orders of the United Kingdom, being attached to the affidavits upon which the parties rely.
Having therefore determined that the Court has jurisdiction to hear the case, the question is the power to make the orders that the applicant seeks. The relevant provision is s 83 of the Act. Section 83 (1)(c) provides that the Court may discharge the order if there is any just cause for so doing. In Vakil & Vakil (1997) FLC 92-743, the Full Court held at paragraph 5.23, referring to the obiter dicta of Lindenmeyer J in Lutzke (1979) FLC 90-714 that the question whether there is just cause for discharging an order, including one made in a reciprocating overseas jurisdiction and registered in Australia, 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.
In Vakil, the Full Court went on to say at para 6.23:
…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).
Section 81 of the Act will be seen as an encouragement to the Court from the legislature, certainly in respect of financial matters, to make such orders as will finally determine the financial relationships between the parties to the marriage and avoid further proceedings between them.
Section 81 has some real significance. If it is the edict upon which s 83 is to be considered, then it is important that the applicant’s obligations to support the respondent are brought to an end once and for all.
The decision in Vakil was followed by the Full Court in Daniels & Bell (2007) FLC 93-315. The Full Court there examined the meaning of “just cause”, but in a different context, and approved the passages not only from Vakil, but its earlier life in Lutzke.
In relation to spousal maintenance, the starting point is s 72. That provision says that a party to a marriage is liable to maintain the other party to the extent that the first-mentioned party is reasonably able to do so, and I interpolate here that there could be little suggestion that the applicant could provide some form of support, but only if that other party is unable to support herself or himself adequately, whether, (a) by reason of having the care and control of a child of the marriage who has not attained the age of 18 years, (b) by reason of age or physical or mental incapacity for appropriate gainful employment, or (c) any other adequate reason.
Those provisions are to be guided by s 75(2). The respondent no longer has the control or the care of Mr N because of his age and living circumstances, and only a limited role in the care of L. While she still has that role, the importance of s 72 lies in the fact that, the respondent must show she is unable to adequately support herself. It has always been the applicant’s case that the respondent could do something about her personal situation, having regard to the time that has elapsed since the orders were made, and the maturity of the children.
The second point made in s 72 is that one of the grounds for making an order for maintenance is if a person is unable to support herself adequately because of a physical or mental incapacity for appropriate gainful employment. The evidence suggests that the respondent has not only the appropriate opportunities for gainful employment, but has, indeed, carried them out. There is no suggestion of any mental incapacity or any other health consideration that would preclude her from supporting herself through employment.

The third category in s 72 is any other adequate reason. Because of the absence of the respondent today, I cannot think of any other particular reason why she could argue that. Section 75 of the Act requires the Court when exercising jurisdiction under s 74, which is the power to make an order for spousal maintenance, to take into account a number of matters. The Court is always hamstrung when it only has one side of the story, but in this case I have the benefit of the applicant’s perception of the respondent’s life. Accordingly, I am able to find that there is no reason why, because of age or state of health, the respondent is unable to make a contribution towards her own support.
I am now aware of her income and financial circumstances, at least through the eyes of the applicant, and, find there is no logical reason why she has not the capacity to improve her financial position through gainful employment. I do not know what her commitments are in respect of supporting herself other than the details provided to the Court by the applicant. It does not seem there are any responsibilities that she has for supporting any other person.
Section 75(2)(f) requires the Court to consider the respondent’s eligibility for a pension allowance or other benefit under the laws of the Commonwealth. That provision precludes the Court from taking those matters into consideration when assessing her ability to support herself. I do so here. The respondent however appears to have saved a substantial sum which still entitled her to Commonwealth benefits. She was able to work in various positions as well.
Another consideration is the standard of living of the parties which, in all the circumstances, is reasonable. The respondent has purchased another house in the area where she seems to want to live and as her only child under 18 years of age is in a significant private school in Melbourne, I can presume that her standard of living is reasonable.
The Court is obliged to consider the duration of the marriage and the extent to which it has affected the earning capacity of the parties whose maintenance is under consideration. This is an unusual case in that it seems that the duration of the marriage is probably less than the period since the separation, but there is no evidence before me to indicate that the duration of the marriage, or indeed the period subsequent to that time, has affected the earning capacity of the respondent.
The Court is always obliged to consider the need of a party who wants to continue that role that they currently have as a parent. I have already indicated the matters about Mr N and L.
The other matters in relation to child support are matters that are entirely in the hands of the respondent. As I earlier observed, if she wished to have child support in the future, she could certainly apply for an assessment in any event.
The final matter that I think needs consideration is s 75(2)(o), which permits the Court to take into account any fact or circumstance which the justice of the case requires to be taken into account. In my view, this is where the clean break concept which is outlined in s 81 of the Act is important. Clearly s 81 is the focus of the legislature in Part VIII, to ensure that if possible, the Court ends any ties between parties so that they can get on with their respective lives.
The applicant has continued for a long time to make the necessary provision in respect of the respondent, leaving aside the children. It seems to me that there is no incentive for the respondent to do anything about her financial position whilst his contributions continue. That flies in the face of s 81, but also the general philosophy of allowing people in broken relationships an opportunity to start life again. That should be taken into account under s 75(2)(o). In those circumstances, there is no justification for the continuation of the spousal maintenance order.
It is not necessary for me to deal with the relevant provisions in the Child Support Assessment Act 1989 (Cth) relating to the obligations on each of the parties to support their children. Interestingly, the particular support provided by the applicant in this case is very much focused on education. I do not know exactly what would happen to L if he ceased his support. No doubt that is a matter that can be taken up by the respondent in the area of child support.
The orders were focused on a different time and a different set of circumstances. The situation has now changed and because of the period of time that the applicant has with L, the situation justifies a review. Because the order has not been registered with the child support legislation registrar, nor has there been any application for an alteration of it, it is time for that review. The respondent has not shown any apparent interest by her absence here today but I shall leave it to her to decide whether she seeks to maintain the status quo. The child support order from the United Kingdom should therefore be discharged.
Any orders made today are provisional, depending upon their endorsement and registration by the relevant court in the United Kingdom. Accordingly, I shall make orders in terms of paragraphs 1 and 2 of the application filed by the applicant on 6 October 2015.
By s 117, the applicant seeks costs. Section 117 provides that in proceedings under the Act, each party shall bear their own costs unless the circumstances justify a departure from that principle and if the Court is satisfied that there is a justifiable reason, it must take into account the matters set out in s 117(2A) of the Act. The costs sought in this particular case total $4091.
The very absence of the respondent today – and I observe, as did counsel for the applicant, that it is now almost 3 pm – without any indication as to the cause or reason for that, seems to me to justify a departure from the principle that each party pays their own costs. The costs sought as I have indicated have been determined according to the scale. In that sense, the amount sought must be seen to be reasonable. Section 117(2A) of the Act requires the Court to take into consideration financial circumstances of the parties. The applicant has significant financial resources, but that alone is not a basis not to make an order for costs in his favour.
The respondent has a house which is the subject of a mortgage and indeed has a variety of sources of income which she chooses, apparently, to limit. One is entitled, under s 117(2A), also to take into account the conduct of the litigants in relation to the particular proceedings. In this case, the respondent provided an affidavit as late as only a few weeks ago and gave all indications of participating. She was opposing the orders sought by the applicant.
In those circumstances, her conduct today in not being here and not filing anything of assistance to the Court has meant that the applicant has had to effectively do the groundwork to prove his case. There are no indications in this particular case of any Legal Aid costs, and the Court is otherwise at large to take into account other matters that seem appropriate.
This is a case where there ought to be an order for costs for the reasons I have just said, and I will make an order that the respondent pay the applicant’s costs fixed in the sum of $4091.

I certify that the preceding fifty three (53) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Cronin delivered on 16 February 2017.

Associate:

Date: 28 February 2017