Percell and Mulroy

[2017] FamCA 413

FAMILY COURT OF AUSTRALIA

PERCELL & MULROY [2017] FamCA 413

FAMILY LAW – CHILD SUPPORT – Where the parties have one child – Where the father has been assessed to pay child support in respect of the parties’ child – Where in the course of property settlement proceedings a declaration was made pursuant to s 90RD(1) of the Family Law Act 1975 (Cth) that the parties were in a de facto relationship for a period of time – Where the father seeks a declaration that the mother was not a person who could properly apply for an assessment of child support pursuant to s 25 of the Child Support (Assessment) Act 1989 (Cth) – Where the father submits that child support assessments over the relevant period were not properly based and seeks recovery of those funds – Where the child support amounts paid by the father during the period that the parties were declared to have been in a de facto relationship may be recovered by him – Where it is not clear to the Court what amounts have been paid by the father pursuant to the child support assessments – Proceedings adjourned for the purpose of determining the amount improperly paid by the father.

Family Law Act 1975 (Cth) – ss 90RD, 90SM(4)(a), (b) and (c)
Child Support (Assessment) Act 1989 (Cth) – ss 25, 143

APPLICANT: Mr Percell

RESPONDENT: Ms Mulroy

FILE NUMBER: SYC 1379 of 2013

DATE DELIVERED: 13 June 2017

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Johnston J

HEARING DATE: 7 October 2016

REPRESENTATION

FOR THE APPLICANT: Mr Percell

COUNSEL FOR THE RESPONDENT: Mr Gardiner

SOLICITOR FOR THE RESPONDENT: Central Coast Family Law

Orders

1. It is noted that this Court is satisfied that during the period from 12 February 2001 to April 2011 (“the period”), Ms Mulroy was not a parent who could properly apply to the Child Support Registrar for administrative assessment of child support for the child, J born … 2001 because she was not able to satisfy the requirements of s 25 of the Child Support (Assessment) Act1989 (Cth).

2. That all child support liability of Mr Percell for the said child be stayed during the period.

3. That any enforcement action by the Child Support Registrar in relation to any child support liability of Mr Percell during the period be stayed.

4. It is noted that Mr Percell is seeking orders from this Court to enable him to recover from Ms Mulroy all child support paid by him for the said child during the period.

5. That these proceedings be adjourned for further directions to 10.00 am on 13 July 2017.

6. That the Application in a Case filed on 4 April 2017 and the Request for Issue of an Enforcement Warrant filed on 10 April 2017 be listed before Johnston J at 10.00 am on 13 July 2017.

7. That a sealed copy of these orders be served as soon as possible by Mr Percell on the Child Support Registrar.

Note: The form of the order is subject to the entry of the order in the Court’s records.

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

Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYC 1379 of 2013

Mr Percell

Applicant

And

Ms Mulroy

Respondent

REASONS FOR JUDGMENT

Introduction

1. Mr Percell (“the father”) and Ms Mulroy (“the mother”) have been engaged in litigation over many years. 

2. On 7 October 2016 there were applications by each of them for determination. 

3. The first was a property enforcement application. The mother was seeking an order to confirm that by operation of an order made on 18 July 2016 she was appointed Trustee for Sale of the father’s property at B Street, C Town, New South Wales. The second application was an application by the father which related to child support. He sought a declaration that the mother was not a person who could properly apply for an assessment of child support in relation to the parties’ child because she was not a person who at the time of making application for child support was “not living with the (father) as his … partner on a genuine domestic basis” as referred to by s 25 of the Child Support (Assessment) Act1989 (Cth) (“the Assessment Act”).

Property enforcement application

1. The mother’s property enforcement application was dealt with by orders made by me on 7 October 2016. 

2. On 18 July 2016 I had made orders including Orders 3.1 and 3.2 as follows:

   3.…

   1.THAT within 10 days of the date of these orders, the respondent shall pay to the applicant’s solicitors on behalf of the applicant the sum of $140,000 (“the capital sum”) together with interest calculated in accordance with the Family Law Rules from 6 February 2016 to the date of payment.

   2.THAT should the respondent fail to make payment to the applicant in accordance with 1 (above) it is declared that the applicant is appointed Trustee for Sale in relation to the property [B Street, C Town], New South Wales being Lot … in Deposited Plan … (“the property”) and is authorised to do all things, sign all documents, give all necessary authorisations on behalf of the respondent in respect to the sale and the sale proceeds are to be disbursed in accordance with order 2.8.1 – 2.8.5 and that [Mr Percell] forthwith do all things to rescind any contract for sale entered into by him in respect of the said property.

   …

3. The mother argued that the father had not paid the $140,000 within the required 10 days and that by operation of those orders she had become appointed Trustee for Sale in accordance with Order 3.2.  I rejected that argument and dismissed her application making an order that paragraph 3.2 of the orders of 18 July 2016 be discharged.  I gave reasons for judgment ex tempore on that occasion.

Child support application

Background

1. To provide some context for the father’s child support application I note the following background matters.

2. A substantive property application was filed by the mother in the then Federal Magistrates Court of Australia on 15 March 2013.  That Court became the Federal Circuit Court of Australia (“FCC”) in April 2013. 

3. The father filed a response to that application in the FCC on 1 August 2013. In his response the father sought declarations pursuant to s 90RD of the Family Law Act 1975 (Cth) (“the Act”) that the parties were not in a de facto relationship and associated orders, as well as an order that the mother’s property application be dismissed.

4. The father had also been engaged in endeavouring to achieve a property settlement with his former wife, Ms Percell.  An application for the making of consent orders was filed in this Court at Canberra but the Court declined to make the orders. 

5. The FCC transferred the substantive property proceedings to this Court on 19 August 2013.

6. On 28 October 2013 the proceedings at the Canberra Registry between the father and Ms Percell were transferred to this Registry and joined with these proceedings.

7. The proceedings first came before me on 20 December 2013 on which occasion I made orders that the father file and serve an amended initiating application setting out the orders sought by him arising from his marriage to Ms Percell and in respect of the alleged de facto relationship with the mother and various other directions.  Ms Percell became a party in the substantive property proceedings between the mother and the father.

8. I indicated to the parties that I proposed to hear the jurisdictional issue separately from any consideration of property, that is, whether a de facto relationship as required to found the property jurisdiction was able to be established.  That issue was listed for hearing for four days commencing on 20 January 2015.  Those hearing dates had to be changed and four days commencing 14 April 2015 were appointed for the hearing instead.

9. On the first day of the hearing, 14 April 2015, the parties resolved the threshold issue and the following orders were made by consent:

   5.…

   1.A Declaration between the Applicant and 1^st Respondent under section 90RD of the Family Law Act 1975 that the Respondent [Mr Percell] and Applicant [Ms Mulroy] were in a de facto relationship from March 2000 to April 2011.

   2.A Declaration between the Applicant and 1^st Respondent that the Applicant [Ms Mulroy] has made substantial contributions as set out under section 90SM(4)(a), (b) and (c) of the Family Law Act 1975 that would result in serious injustice to her if the Application under section 90SM(4)(a), (b) and (c) of the Family Law Act is not heard.

   …

10. That resolved the threshold issue concerning jurisdiction.

11. There had been proceedings in the Queensland Magistrates Court brought by K Pty Limited (“K”) seeking a judgment against the father and the mother who were found to be jointly and severally liable for a debt in the sum of $52,419.91.  Those proceedings were stayed by me until completion of the substantive property proceedings.

12. The parties were able to resolve the substantive property proceedings and I made orders by consent on 22 December 2015.  The orders included orders in relation to payment of the K debt, which had increased considerably, and orders which required the father to transfer his interest in a property to Ms Percell.  Relevantly for the purpose of the immediate proceedings, the father was required to pay to the mother’s solicitors on behalf of the mother the sum of $140,000, and the orders included default orders the details of which it is unnecessary to refer.

13. The parties continue to be in dispute in relation to the sale of the C Town property.  Certain injunctions were made on 15 June 2016 in circumstances where the father was endeavouring to sell the property.  Applications in relation to the sale of the property were before me on 18 July 2016.  As indicated above, the wife was endeavouring to have the Court confirm that by operation of the substantive orders she was Trustee for Sale of the property.  The father opposed that course.  By orders that day I extended the time for the father to pay the $140,000 plus interest by 10 days to provide him with further opportunity to raise the funds.  But Order 3.2 of the orders provided that in the event that the father failed to pay in accordance with the order the mother was appointed Trustee for Sale of the property.  As I have said, I discharged that order and gave ex tempore reasons for judgment that day.

14. The father indicated that day that he proposed to file an amended application in a case to seek a declaration to the effect that the mother had not been in a position to properly seek a child support assessment.  I made some directions to ready that matter for hearing and listed it for 7 October 2016.

Child Support Liability

1. The father contends that because the declaration was made pursuant to s 90RD(1) of the Act that the parties were in a de facto relationship from March 2000 to April 2011, as a matter of law, the mother is precluded from properly making application for child support assessment over those years.

2. In support of his case the father refers to s 25 of the Assessment Act which provides relevantly as follows:

   A parent (the applicant) of a child may apply to the Registrar under this section for administrative assessment of child support for the child if:

   (a)…; and

   (b)the applicant is not living with the other parent as his or her partner on a genuine domestic basis (whether or not legally married to the other parent).

3. He submits that the Court has now declared that the parties were living in a de facto relationship at the time when the mother applied to the Child Support Registrar for an administrative assessment of child support for their child. He submits that as a consequence, s 25(b) of the Assessment Act has not been complied with and therefore all child support assessments over that relevant period are not properly based in that they have not been made in accordance with the requirement of s 25 of the Assessment Act.

4. The father further submits that in circumstances where the mother was not able to apply properly for a child support assessment, all monies which he has paid pursuant to the relevant assessments over the period have been paid improperly and therefore he should be able to recover the amounts in accordance with the provisions of s 143 of the Assessment Act.

5. Section 143 of the Assessment Act relevantly provides as follows:

   (1)      If:

   (a) an amount of child support is paid by a person (the payer ) to another person (the payee ); and

   (b)the payer is not liable, or subsequently becomes not liable, to pay the amount to the payee;

   the amount may be recovered from the payee in a court having jurisdiction under this Act.

6. Accordingly, the father submits that the Court should declare that the mother was not able to apply properly for child support assessment during the period of the de facto relationship, and that the father is not liable for payment of any child support for the child during that period. In addition, the father indicated that if the Court accepts his contention he proposes to pursue the appropriate recovery action in a court having jurisdiction under the Assessment Act.

7. The mother submits that the father’s application amounts to an abuse of process. 

8. It is submitted on behalf of the mother that the father has not put before the Court evidence which would be sufficient to support his application.  It is further submitted that the father conceded in his oral evidence that notwithstanding his consent to the declaration about there being a relevant de facto relationship, in fact he maintained the position that the parties were not living in a de facto relationship at the time when the relevant child support assessments issued. 

9. It is also submitted that the father failed to put before the Court any evidence in admissible form to establish that he had made any child support payment. It is submitted that the mother denied in her affidavit that the father had paid her any money at all pursuant to any child support assessment and the father did not take the opportunity to cross-examine the mother about this denial. The inference is that the father not having made any child support payment under the assessments there would be no purpose in a declaration because there were no child support payments to be recovered pursuant to the relevant provisions of the Assessment Act.

Discussion and Conclusion

1. As the father submits, s 25 of the Assessment Act provides the circumstances under which a parent of a child may apply to the Child Support Registrar for administrative assessment of child support. Clearly such application is not available to a parent if that parent is living with the child’s other parent on a genuine domestic basis. I accept that there are provisions of the Assessment Act which, in appropriate circumstances, would enable recovery of money paid pursuant to child support assessments in circumstances where the payee was not entitled to such payments.

2. As has been the case with most matters in relation to the financial affairs of the parties the situation in relation to child support is the subject of considerable disputation between them.  The father alleges that he has paid $131,000 in child support payments.  The mother denies this.  She said she applied for a child support assessment from the father in respect of their child, J in January 2016.  She said she received the first child support payment in April 2016 and a part payment in May 2016.  She says the father currently owes her $9,014.95 in child support since May 2016.  She annexed to her affidavit what appears to be a copy of a page of the Child Support Agency website which refers to a payment history showing direct credits of $406.47 and $2,876.36.  Whether this accurately reflects the history of the father’s child support payments over the whole period of assessments is far from clear to me.

3. On the other hand, the father says he has been assessed to pay child support in respect of the parties’ daughter since as early as 1 January 2001.  He annexed to his affidavit child support assessments over the years for the period commencing 1 January 2001 and over the ensuing years up to the period ending 30 April 2012.  So the parties’ accounts in respect of child support liability and payment appear to vary markedly.

4. In my view, the parties having agreed to the making of the declaration pursuant to s 90RD of the Act and that declaration having been made, as a matter of law, it is not open to either of them to assert that they were not in a de facto relationship from March 2000 to April 2011. It follows, therefore, that any child support assessment for the parties’ child made during that period has not been properly made because the mother was not able to satisfy the requirement in s 25 of the Assessment Act that she was not living with the father as his partner on a genuine domestic basis.

5. Accordingly, in my view, any child support paid by the father during that period is child support for which the father is not liable as referred to in s 143 of the Assessment Act and may be recovered from the mother in this Court, being a court having jurisdiction under the Assessment Act.

6. Having found this, as I have said, it is far from clear to me what amounts have actually been paid by the father pursuant to the assessments.  It would be necessary for this Court to determine what has actually been paid so that it could then declare the amount in respect of which the applicant is not liable to pay and deal with the father’s recovery application.  Presumably the father will be able to obtain a printout of the relevant account of the Child Support Registrar or some similar business record.

7. Accordingly, I propose to adjourn these proceedings to a date for directions for filing further material so that the Court can be in a position to determine how much has been improperly paid by the father. 

8. In the meantime, I propose to make orders to stay any further child support liability by the applicant for the child J for the relevant period and to stay any recovery action for child support by the Child Support Registrar for such period until such time as the Court is able to make a final determination about this matter.

I certify that the preceding thirty seven (37) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Johnston delivered on 13 June 2017.

Associate:     

Date:              13 June 2017