Rennie and Rennie and Anor

[2014] FamCA 601

FAMILY COURT OF AUSTRALIA

RENNIE & RENNIE AND ANOR [2014] FamCA 601

FAMILY LAW – Adjournment application refused – Enforcement of child support orders – Costs.

Bankruptcy Act 1966 (Cth)
Child Support (Assessment) Act 1989 (Cth)
Family Law Act 1975 (Cth)

Prantage & Prantage [2013] FamCAFC 105

APPLICANT: Ms Rennie

1^st RESPONDENT: Mr Rennie

2^nd RESPONDENT: The Estate Of Ms Bishop

FILE NUMBER: MLC 1428 of 2014

DATE DELIVERED: 3 June 2014

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: Cronin J

HEARING DATE: 3 June 2014

REPRESENTATION

COUNSEL FOR THE APPLICANT: Ms Fiskin

SOLICITOR FOR THE APPLICANT: Kennedy Partners

COUNSEL FOR THE RESPONDENT:	Mr Burke
SOLICITOR FOR THE 2nd RESPONDENTS:	No appearance

Orders

1. That paragraph 2 of the orders made on 2 April 2014 is discharged.

2. That Mr Bishop as the executor of the estate of the late Ms Bishop pay to Kennedy Partners as the solicitors for Ms Rennie from the entitlement of Mr Rennie, the sum of $137,104.

3. That Kennedy Partners as the solicitors for the applicant be restrained from distributing the proceeds referred to above until 4.00pm on 24 June 2014.

4. That if the husband Mr Rennie files an application supported by affidavit prior to 4.00pm on 24 June 2014 seeking to:

   (a)   set aside these orders; and

   (b)  set out why the applicant is not entitled to those funds,

   the injunction to Kennedy Partners to hold the funds in trust is extended until further order.

5. If the husband fails to comply with the foregoing order to file an application to set aside these orders, as set out, the injunction is automatically discharged and Kennedy Partners may thereafter distribute the proceeds accordingly.

6. That the husband pay the wife’s costs of these proceedings.  In default of agreement as to the quantum of those costs by 1 July 2014, the costs shall be assessed by the Registrar and paid by the husband.

That the application in a case filed 21 February 2014 is otherwise dismissed.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Rennie & Rennie and Anor 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 1428 of 2014

Ms Rennie

Applicant

And

Mr Rennie

Respondent

The Estate of Ms Bishop
2nd Respondent

REASONS FOR JUDGMENT

1. The orders that I propose to make in this case need a little explanation because it is a somewhat convoluted and confusing position.  The best way for me to explain this is to go back to what occurred in 1994.  It would appear that in the Dandenong Family Court of Australia in 1994 the then Ms Rennie had an application before Judicial Registrar Nikakis for a departure from the administrative assessment of child support.  I have the benefit today of not only the order that the judicial registrar made but also the reason he gave for making it.  Mr Rennie did not attend and the reasons do not indicate how satisfied the learned judicial registrar was about service.

2. The judicial registrar understood that Mr Rennie was away working interstate. I am entitled to presume because of the presumption of regularity that the judicial registrar was satisfied that either Mr Rennie knew of the application or at least was not prejudiced by it proceeding in his absence. What the judicial registrar then did was to make an order for a lump sum of child support for the four children who were all under the age of 18 years. He then gave reasons and referred to s 123 of the Child Support (Assessment) Act 1989 (Cth). That is clearly a power to make an order other than for a periodic payment but, as its provision says, a Court must first deal with any departure application.

3. Where the problem seems to arise is that in indicating the quantum of the capital sum the judicial registrar makes reference to such things as $5000 for the repairs of the wife’s car and $7000 for the support of the wife and the children.  There does not appear to me to have been any other application before the Court that day so it is hard to see how questions such as the repairs of the motor car can fit within the child support definitions.  Mr Rennie was not there to argue to the contrary and the order has stood the test of time.  It is well said in authority that an order of a superior Court beyond jurisdiction remains valid until it is set aside.  I do not have an application before me to set that order aside. 

4. To the extent that Mr Rennie might say that he was not aware of the proceedings, correspondence clearly shows that, at least shortly thereafter, he was because he went bankrupt.  In his list of unsecured creditors he listed the child support agency for the very figure arising from the departure order, as he described it, for $40,375.  How long ago that bankruptcy was concluded, I am not sure. 

5. In 2004 there is correspondence between Mr Rennie and the Child Support Agency in Suburb B where the assessment process was continuing and he made complaints about the fact that he had retrieved documents from the archive file at the Family Court in Dandenong and that these documents referred to the “ex-wife’s current application”, as he described his former wife. 

6. That letter bears a handwritten date of 1 April 2004.  That is 10 years ago and Mr Rennie has taken no steps to do anything about the order that was made in 1994.  The order obviously then has to be considered in the light of the bankruptcy. 

7. Under s 82 of the Bankruptcy Act 1966 (Cth), a debt arising from what might be described as a “maintenance order” is a debt provable in bankruptcy. Section 5 of the Bankruptcy Act defines “maintenance order” as:

   …including an assessment made under the Child Support Assessment Act 1989.

8. An assessment includes an order of the Court.  At first blush, therefore, one might say, the order was caught by the bankruptcy and, therefore, is no longer enforceable.

9. However, s 153 of the Bankruptcy Act provides that the discharge of a bankrupt from bankruptcy does not release him from the liability under the maintenance agreement or order unless the Bankruptcy Court orders otherwise.   Again, I have no information from Mr Rennie to indicate that that is the case. 

10. All of that led to Ms Rennie – whom I shall refer to as the “wife” – bringing an application on 21 February 2014 for effectively enforcement of the order.  It does not take much imagination to contemplate that $40,000 that has not been paid for something like 20 years carries interest.  The $40,375 plus interest of $81,745 up to February. 

11. The reason why the application seemed to have been activated was that Mr Rennie became entitled to some money through a deceased estate.  As a result of the application, a third party was joined and that is a Mr Bishop who is the executor of the late Ms Bishop, in whose estate Mr Rennie has an interest.  Today I have a letter from Mr Bishop, indicating that he did not want to participate in the proceedings but that, through his solicitors, he conceded he would be willing to comply with any order of the Court.  Thus, he is conceding he is holding money for Mr Rennie. 

12. The first return date of the matter was 2 April 2014 before Macmillan J.  Mr Rennie had not filed any material on that date.  Nor did he appear.  The matter was then adjourned to the duty list today and an injunction was made in relation to the executor from distributing the estate, pending further order of the Court.  Her Honour then made an order that:

    On or before 30 April 2014 the husband file a notice of address for service, a response to the application in the case and any affidavits upon which he sought to rely.

    Service of that order was then directed.  30 April came and went and Mr Rennie did not file any material. 

    The Court correspondence file which is not usually part of the file itself shows that, some days ago, Mr Rennie contacted the Court and requested that he be permitted to appear at today’s hearing by electronic communication.  Having regard to the fact that he had not filed any material and there was no indication in any attached correspondence that he would, I declined to allow him to appear by telephone or any other electronic means.

13. This morning Mr Burke, a solicitor, indicated that he had instructions to act for Mr Rennie.  I note that on 2 June, which was yesterday, Mr Rennie filed a notice of address for service not indicating any firm of lawyers acting for him but, indeed, a post office box address in C Town. 

14. Mr Burke’s application for an adjournment today was on the basis that, last Friday and again yesterday, he received instructions from Mr Rennie who was going to send him some documents.  One of the bases for the adjournment and, more importantly, the delay, according to Mr Burke, was that Mr Rennie had been waiting on an outcome from Victoria Legal Aid.  When that is considered a little more carefully, it is not quite that simple. 

15. Mr Rennie applied to legal aid authorities in Western Australia and was clearly told that this was a cause of action in Victoria and, therefore, he had to apply to Victoria Legal Aid which he duly did.  He was refused legal aid and he reviewed the decision and was refused again.  There seems little doubt that he was refused on the basis that he had money coming to him from the estate and, with the paucity of funds in Victoria, it is not at all surprising that he would not be eligible.  Undeterred, bearing in mind that the second refusal seems to have been in March or very early-April, he then sought to review it again by some system that Victoria Legal Aid has where, if they consider that the review is appropriate, they send it out to some objective authority.

16. It seems, from what Mr Burke was instructed, that the further rejection by this third attempt did not occur until fairly recently and, as a consequence of that, Mr Rennie was left having filed no material.  I might have some sympathy for his position if, indeed, this was the first rejection by legal aid.  But, on any view, he had applied for legal aid and been refused twice by the time that he became aware of the orders of Macmillan J.  It might be said that this case had some complexity about it and, therefore, he needed a lawyer to assist him to mount some sort of argument or, alternatively, that he was in an isolated area or, alternatively again, that he was unable to deal with matters such as those set out in the various documents. 

17. One of the matters that I do have the advantage of is reading some of the correspondence of Mr Rennie.  He has a beautiful hand, in terms of writing, and his thoughts are clear.  He is an articulate and intelligent man.  Bearing in mind that he was aware by early-April that he had obligations to file material by the end of April and failed to do so, presumably on the basis that he thought he was going to get some sort of legal aid grant, I think that his legal aid requirement argument has no merit. 

18. In discussions today I have indicated that there are really three issues.  One was the delay that I have just dealt with, another was the question of whether the Court should exercise its discretion to enforce the orders anyway, and the third is the disquiet that I have about the orders.

19. That said, Mr Rennie has sat on his hands for the best part of 20 years.  Whether interest should be payable in these circumstances is another interesting question.  To date, the real problem for me is that I have no idea what if any application, Mr Rennie intends to make in relation to these proceedings.  On that basis it was my suggestion that the appropriate order is that the executors be removed from the proceedings by them complying with the order of the court to pay into the hands of the solicitors for the wife the entire sum that she is seeking, on the basis that on the material, there is no dispute about the debt.

20. There might be an argument about the interest, but the interest calculations seem to me to be correct using the Family Law Rules 2004, and that if, indeed, Mr Rennie does have some argument in this case then he can file an appropriate application to seek to set aside these orders. I take into account that he is somewhere in Western Australia, but, he has filed a Notice of Address for Service, not naming the solicitors who he seems to have engaged, but rather to nominate a post office box in C Town. People normally have post office boxes for a good reason, one of which is that they don’t have a post box outside their house. That can create problems in far-flung places like C Town if he is not close by to the post office.

21. I think the position of the wife in seeking that Mr Rennie have seven days to seek to set aside the orders is probably a little strict, particularly having regard to the fact that this has taken 20 years to get this far.  I think 21 days is probably more appropriate, bearing in mind that there is the tyranny of distance.  In my view, it is appropriate in this case to grant the application of the wife but to stay the operation of that order for 21 days.

22. If Mr Rennie has a cause of action or has a defence, he needs to file that application within 21 days.  That application will be listed back before me at the first available opportunity after that time.  The material in support of the application will need to justify why he has sat on his hands for at least 10 years, and certainly for the last couple of months, since he became aware that things were on the move in relation to the enforcement.

RECORDED : NOT TRANSCRIBED

1. This is an application for costs arising out of the orders that I have just made.  Those costs have been articulated to $16,622.  It is clear that those costs are calculated by a costs agreement.  The rules provide that unless the court is making an order for indemnity costs, in which case the costs agreement has to be tendered in evidence, the court should not depart from the usual practice, which is to apply the rules.  The recent Full Court decision in Prantage & Prantage [2013] FamCAFC 105 is the authority in relation to indemnity costs orders, even in cases like this, and there does not seem to me to be anything unusual about the case justifying an indemnity costs order.

2. As I do not have the precise details of what the costs might be under the rules, I am not able to actually fix the costs.  Section 117 of the Act provides that in cases in this Court, each party shall bear their own costs unless there are justifying circumstances to depart from that principle.  If the court is intending to depart from the principle it is obliged to take into account the matters set out in s 117(2A) of the Act.  I cannot think of a better example of a situation in which the court should depart from the principle that each party pays their own cost, where someone has not complied with an order for the best part of the 20 years, and then, when the proceedings start, he ignores them.

3. On that basis there are circumstances to justify a departure from the principle.  That said, I still have to take into account the matter set out in s 117(2A) of the Act.  Those matters include the financial circumstances of the parties, compliance with court orders, the eligibility for Legal Aid, whether someone has been wholly unsuccessful and any other relevant matters.  I do not know the financial circumstances of the husband, other than his solicitor says that he is an invalid pensioner, but I am conscious of the fact that the second respondent in this particular case is the executor of an estate in which the husband has an interest.

4. It would seem, on any view, he is not impecunious.  The wife’s position is not much better.  In this case, it is clear the very reason the parties are before the court is because of non-compliance with court orders, not only in respect of the initial proceedings in 1994 but also the orders of Macmillan J on 2 April 2014.  There are no Legal Aid considerations in this case and, in my view, the husband has been, at this stage, wholly unsuccessful.  His solicitor suggests that I reserve the costs, but, in my view, that just creates another problem on another day.

I certify that the preceding twenty-six (26) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Cronin delivered on 3 June 2014.

Associate: 

Date:  25 July 2014