Sandmeier and Sandmeier

[2015] FamCA 1208

FAMILY COURT OF AUSTRALIA

SANDMEIER & SANDMEIER [2015] FamCA 1208

FAMILY LAW – CHILD SUPPORT – Where the father ultimately seeks to set aside provisions of a binding child support agreement – Where the father says he is not able to meet his obligations under the agreement and has fallen into arrears – Where the Registrar of Child Support is pursuing him by way of enforcement proceedings – Where the father seeks in the interim, that the Court stay the operative part of the child support agreement – Where the Court is persuaded that the father does not have the capacity to pay the rate of child support under the agreement – Order made staying the father’s liability under the agreement until his application to set aside the agreement is heard.

Child Support (Assessment) Act 1989 (Cth) – s 136(1), s 136(2)
Family Law Act 1975 (Cth)

APPLICANT: Mr Sandmeier

RESPONDENT: Ms Sandmeier

INDEPENDENT CHILDREN’S LAWYER: Legal Aid NSW Sydney Central Family Law

FILE NUMBER: SYC 5587 of 2011

DATE DELIVERED: 7 May 2015

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Johnston J

HEARING DATE: 7 May 2015

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Levet

SOLICITOR FOR THE APPLICANT: Spectrum Legal Group

FOR THE RESPONDENT: Ms Sandmeier in person

SOLICITOR FOR THE INDEPENDENT CHILDREN’S LAWYER: Ms Carroll, solicitor of Legal Aid NSW Sydney Central Family Law

Orders

1. That by consent orders are made in accordance with the document headed Orders Sought by the Husband filed in Court today at paragraphs 1, 2, 3 and 4 as set out hereunder:-

   1.Orders in accordance with proposed Minute of Order prepared by Independent Children’s Lawyer [as set out hereunder:-

   Pending Further Orders it is Ordered:-

   1.That the mother and father do all acts and things necessary and make all appointments necessary for them and the children to attend upon Family Therapy with a family therapist recommended by [Ms B] at [C] Psychologists.

   2.That within 7 days of the date of this letter the mother and father are to send to the Independent Children’s Lawyer the details of the family therapist at [C] Psychology and the date and time of their first appointment with that therapist.

   3.That the mother and father follow all directions and attend all appointments with the family therapist.

   4.That the mother and father are to ensure that the children are to attend all appointments made with the family therapist.

   5.That the father shall pay the costs of family therapy in the first instance and in the event that the parties are ultimately unable to agree about payment this will be determined by the Court.

   6.That the Independent Children’s Lawyer be permitted to discuss with the therapist:-

   a.The parents and children’s attend at family therapy

   b.Whether the parents and children are engaging with family therapy and

   c.How family therapy is progressing

   7.That the Independent Children’s Lawyer have leave to provide to the family therapist a copy of the Child Dispute Memorandum dated 17 February 2015.

   8.That the mother and father are to do all acts and things necessary and make all appointments necessary for the children to attend counselling with [Ms B] at [C] Psychology.

   9.That the mother and father are to ensure the children attend all appointments with [Ms B] as directed by her.

   10.That the father shall pay the costs of the appointments for the children to attend counselling with [Ms B] in the first instance and otherwise in accordance with order 5 above..

   11.That the children’s counselling with [Ms B] be deemed non-reportable, except for Order 11 below, and as such the parties will not subpoena the notes of [Ms B].

   12.That the Independent Children’s Lawyer be permitted to discuss with [Ms B]:-

   a.The children’s attendance at counselling

   b.How counselling is progressing

   13.That the Independent Children’s Lawyer have leave to provide a copy of these orders to [Ms B].

   Notation:

   1.The Court notes that it is the intention of the Independent Children’s Lawyer to request that any expert or family consultant appointed to prepare a report in this matter discuss with the family therapist and [Ms B[ the therapy and counselling that is being provided.

   2.Notation that the parties agree that the proper jurisdiction for the determination of all parenting issues involving the children of the marriage namely [D] born … 2001, [E] born … 2002, [F] born … 2006 and [G] born … 2009 and [that] for the purposes of the Hague Convention on the Abduction of Children is Australia and the parties submit themselves to the jurisdiction of the Family Court of Australia to the exclusion of the courts of any other country.

   3.That the wife be permitted to take the children out of the Commonwealth of Australia to [Country H] on or after 24 June 2015 returning to the Commonwealth of Australia on or before 12 July 2015.

   4.That in the event that any of the children do not wish to attend the wife’s wedding in [Country H], the husband care for such child or children in the wife’s absence.

2. That until completion of the father’s application for setting aside the Binding Child Support Agreement dated 26 October 2011:

   (i)The operation of clause 20 of such Agreement is stayed on the following conditions:

   (a)That the father pay to the mother the sum of $1,000.00 per week by way of child support;

   (b)That the father continue to meet the school fees for the children together with the cost of any extra-curricular activities currently attended by the children

   (ii)All enforcement action by the Registrar Child Support be stayed as from its commencement to today but this in no way operates to stay any future child support enforcement action by the said Registrar

3. That the Court requests the Registrar assessing the requirements of the substantive proceedings allocate a first day in the parties’ Less Adversarial Trial with expedition. 

4. That the Court requests the Registrar of Child Support to return the father’s passport to him and to seek the discharge of the departure prohibition order.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Sandmeier & Sandmeier 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 SYDNEY

FILE NUMBER: SYC 5587 of 2011

Mr Sandmeier

Applicant

And

Ms Sandmeier

Respondent

REASONS FOR JUDGMENT

Introduction

1. This is an application by Mr Sandmeier to whom for convenience I shall refer as “the father”.  The respondent to the application is Ms Sandmeier to whom for convenience I shall refer as “the mother”.  The parties had a number of issues before the Court today and they fell into two areas.  The first issues related to their children and in relation to a particular aspect concerning their children and I will come to that shortly.  The other aspect of the matter is a financial aspect and again after I have referred to some brief background matters to set this matter in some sort of context I will come to those matters.

Background

1. The parties married in Country H in 1997 and they separated in Sydney on 20 July 2011.  There are four children of the marriage D who was born in 2001, E who was born in 2002, F who was born in 2006 and G who was born in 2009.  The boys are on my calculation 14 years, about 12½ years, nine years and five years of age.

2. In September 2011 Registrar Chayna made consent orders.  The broad effect of those orders was that the parents would have equal shared parental responsibility for the children, that the children would live primarily with their mother and spend time with their father.  Mr Sandmeier would collect the children each morning before school and deliver them to school.  He was able to be present with them at the time that they went to the religious centre each week.

3. From the little I know about this matter there have been frustrations and concerns about the parenting arrangements.  The parties over the years have been able to agree on some changes.  In more recent times the father has spent something like alternate weekends, after school Fridays to Sundays and an afternoon each week, I think Wednesday afternoon, and perhaps some other times.  But what is also significant is that in about October or November last year, the parties’ son E commenced living with his father.  I understand that there are now quite serious difficulties in terms of his relationship with his mother.

4. To complicate matters, the children’s mother had a substantive application before the Court in which she was seeking permission to relocate the residence of the children to Country H in circumstances where she is planning to marry a person in Country H.

5. I have been informed across the bar table today that Ms Sandmeier no longer wishes to relocate the children’s residence to Country H .  But I understand she is going ahead with the marriage and that the parties have agreed to the Court making orders to enable those of the children who are happy to do so, to accompany their mother to Country H and attend her marriage there.  It is a matter for E about whether he will accompany his mother.  Of course it is to be hoped that he would be able to support her in such a happy event.  That is ultimately a matter for him.

6. The parties also ask the Court to make orders to facilitate family therapy because, to their credit, they accept that their relationship is poor and that there is a poor level of communication between them which must have an effect on the welfare of the children.  To their credit they have agreed on the whole family undertaking some therapy with a view to being able to get things more settled and hopefully with a view to being able to improve their relationship or at least their communication so far as the children are concerned.

Binding Financial Agreement and Binding Child Support Agreement

1. The remaining matter for adjudication is a difficult one.  It occurs in the context of the parties having made a binding financial agreement in respect of property and spouse maintenance matters on the one hand and at the same time they made a binding child support agreement.  Without going into the details of the first agreement, other than very broadly, my understanding is that a home was to be provided by Mr Sandmeier for the children’s mother.  That was actually done.  As it has turned out apparently he has been unable to maintain his obligations under a mortgage and that liability has been assigned to the wife’s parents.  They are meeting the mortgage payments so that the wife and the children have a roof over their heads.

2. Under that agreement Mr Sandmeier was also to pay spousal maintenance of $1000 a week.  That was indexed to the consumer price index or some other measurement.  Mr Sandmeier was also to maintain private health cover for the children and their mother. 

3. The matter which is really in focus today is an application which Mr Sandmeier proposes to file in this Court, and I have noted an undertaking that he will do so by next week, to the effect that the binding child support agreement between himself and the mother be set aside.

4. I have had the benefit of reading the binding child support agreement.  It is dated 26 October 2011.  It acknowledges the parenting arrangements which the parties had put in place, which are that the children would be living with their mother and she would be the principal provider of ongoing daily care for them.  It acknowledges that the father would be the person by whom child support would be paid under the provisions of the agreement and that the mother would be entitled to child support under the agreement.

5. Annexures to the agreement set out that each of the parties received independent legal advice in relation to the effects of the agreement and the rights, advantages and disadvantages under the agreement to the party being independently advised.

6. In broad terms the agreement provides that the father would pay child support for each of the children in the sum of $800 per week per child and then that liability would continue until either the happening of a child support terminating event as defined under the Act or on the parties’ youngest son G attaining the age of 18 or year 12 education or, in the event that he turned 18 during year 12 then at 31 December that year.  There is provision for the amount of child support, that is the $800, to be varied in accordance with movements in the consumer price index.

7. The agreement also recorded that the father would pay or cause to be paid to I School, which each of the boys attends, 100 percent of their education expenses including tuition fees, excursion fees, incidental sporting costs and associated equipment, cost of all school books, school uniforms and sporting uniforms,  cost of extracurricular activities,  musical instruments, information technology equipment, cost of artistic activities and associated equipment, and any other costs included in the school invoice.  There was also a provision in relation to health insurance costs, to which I have referred above.

8. The father now comes to the Court and says that he has not been able to pay in accordance with those very considerable obligations under the agreement.  He has fallen into serious arrears to the point where the Registrar of Child Support is pursuing him by way of enforcement proceedings in the Federal Circuit Court to enforce an amount in the vicinity of $206 000, which the Registrar says is owing in respect of arrears under the binding child support agreement.

9. The specific order which the father is seeking is that pending further order the operation of clause 20 of the binding child support agreement (being the operative part that requires him to pay the rate of $800 a week per child) be stayed on the following conditions.  Firstly, that he pay to the wife the sum of $700 per week by way of child maintenance and secondly, that he continue to meet the school fees for the children together with the cost of any extracurricular activities currently engaged in by the children.

10. It is submitted by Mr Levet of counsel for the father that the father is seriously in arrears and that the Court would be satisfied on the basis of his financial statement filed on 9 December 2014, that he simply does not have the available income, property or financial resources to be able to meet his obligations under the child support agreement.

11. It is submitted that in circumstances where the Court would regard him as having an arguable case for the relief which is sought, that is to achieve an order to set aside the binding financial agreement, the Court would stay the operation of that part of the agreement on the conditions which he offers being the $700 a week plus meeting the commitments to pay school fees and extracurricular activities.

12. The argument which is briefly outlined by Mr Levet is on the following basis. Section 136(1) of the Child Support (Assessment) Act1989 (“Assessment Act”) makes provision for a party to apply to a court for an order to set aside an agreement, being a relevant agreement. I do not need to trouble myself about that because this would be such an agreement. Sub-section 136(2) provides that:

    (2)If a party has applied under subsection (1), the court may set aside the agreement in accordance with the application if the court is satisfied:

    (a)that the party's agreement was obtained by fraud or a failure to disclose material information; or

    (b)that another party to the agreement, or someone acting for another party:

    (i)exerted undue influence or duress in obtaining that agreement; or

    (ii)engaged in unconscionable or other conduct;

    to such an extent that it would be unjust not to set aside the agreement; or

    (c)…

    (d)in the case of a binding child support agreement--that because of exceptional circumstances, relating to a party to the agreement or a child in respect of whom the agreement is made, that have arisen since the agreement was made, the applicant or the child will suffer hardship if the agreement is not set aside.

13. This first basis of the father’s argument would be that the mother exerted undue influence or duress in obtaining the agreement or engaged in unconscionable or other conduct to such an extent that it would be unjust not to set aside the agreement.

14. I am not aware of all the details of this argument.  But it is said by the father in the affidavit which is relied on in support of this stay application that he entered into the agreement in circumstances where he says he felt significant remorse and guilt about the marriage having broken down and he desperately wanted to reconcile with the children’s mother.  He said that he would sign anything to show her how sorry he was, even the package of documents which was presented to him.  He concedes that he was given independent legal advice by a solicitor, Mr J, and he also sought advice from his religious teacher Mr K.  He says that both those persons strongly advised him against signing the documents.

15. He said that part of the matrix of matters which were exercising his mind at the time was his very keen desire to endeavour to do whatever he could do to try and get back his marriage with the children’s mother.  He said that he wanted the mother to attend six months of marriage counselling with him.  He said that he believed at the time that during the course of such counselling they would be able to reconcile their differences and be able to resume the marriage.  But of course that did not occur.

16. The father says that the children’s mother only attended counselling on two occasions and then it had become very clear to her that there was no purpose in continuing with that counselling because it was very clear to her that the marriage had broken down irretrievably.  In any event he says that those were matters which were foremost on his mind, notwithstanding the strong advice and urging of those persons whom I have mentioned not to enter into the agreement.

17. He says he did so on the basis that this was a demonstration of how sorry he was for his part in the marriage breaking down.  He said that he also said that the mother needed to know that it was not worth the paper it was written on because he did not have the money to be able to fulfil his obligations under those documents.  That, of course, is the case that he is arguing.

18. The second part of the submission to set aside the agreement is what Mr Levet referred to as being exceptional circumstances as referred to in s 136(2)(d) of the Act.

19. Mr Levet submits that the father will suffer hardship in circumstances where neither of the parents contemplated that their son E would not continue to live primarily with his mother and that was one of the bases on which they arrived at the agreement.  As I have said, E has moved to live with his father.  At the present time that residence has been exclusive although I just pause to remind myself that the parties are going to undertake therapy and hopefully there will be some melting of those difficulties between E and his mother.

20. In any event Mr Levet says this is an exceptional circumstance.  It was not contemplated by the parties.  It certainly has not been provided for in the agreement and if the agreement is not set aside that will have the consequence of the father continuing to be liable to pay $800 a week for each of four children when he has the complete financial responsibility for one of those children. 

21. What I make out of all that is that, in my view, the father has at least an arguable case.  But nobody should read anything into that because at this point I do not know everything that one would need to know about the case.

Father’s Financial Circumstances

1. I turn briefly to consider the father’s financial circumstances.  He is a specialist medical practitioner, a cardiologist.  He says his total average weekly income is $12 692 per week.  He says his total expenditure is $20 336 per week, which is obviously a significant deficiency.  He estimates the value of his total property as being in the princely sum of $32 375 and total gross value of his superannuation $75 000.  He says he has total liabilities of $600 000 which includes $400 000 which is outstanding to the Australia Taxation Office and $200 000 to the Child Support Agency.  He sets out in detail at Part N of his Financial Statement, what his weekly living expenses would be and there is nothing for the purpose of these proceedings which is remarkable about those matters.  On a reading of that Financial Statement he does not have the capacity to be paying in accordance with the agreement.

2. On the other hand, the children’s mother is strongly opposed to any stay of the liability.  She asserts that in fact the children’s father has a long history of not complying with his obligations under the agreement.  She must be correct in that because the father has come into the Court saying that he cannot comply strictly with those requirements.  He says he has been able to pay the school fees.  There have been some modest issues about that between the parties.  But my perception is that at the present time he is up to date with those school fees, which of course are in a substantial amount.  The amount being around about $80 000 per year plus add-ons for extracurricular matters and other costs which are associated with that private school education.

3. The father says that he has been paying child support but not at the rate which is required under the binding child support agreement.  An examination of the relevant child support record indicates that the children’s father has paid between $49 000 and $50 000 in respect of child support over the last year, which works out at something close to $1000 per week. 

4. On the other hand the children’s mother says she is in very difficult circumstances.  In her Financial Statement sworn on 9 March 2015, she includes her total average weekly income of $460.25 per week, that being made up of social security benefits, being a pension and family allowance.

5. The mother is living in quite a valuable home in the Eastern Suburbs, which she says she is able to do through the generosity of her parents in the circumstances to which I have referred above.  She says she pays rates in respect of that property and she has some insurance to pay.  She runs a motor vehicle and of course she has substantial living costs with now three boys to support.  She says her total weekly expenditure is $3501.

6. The mother says in circumstances where she has the primary support of these children she cannot afford for the situation, and it would not be reasonable for the situation, to be brought about by the Court where the current liability under the binding child support agreement would not be realised.

7. The overall matter which is relevant to the stay, in my view, is to endeavour to achieve justice to the parties.  On the one hand the children’s mother is entitled to assume that the agreement is proper and appropriate and would not be set aside.  And she ought to be entitled to the fruits of that binding financial agreement.  At the moment the agreement has not been set aside and she and the children have a need.

8. Another relevant matter, in my view, is the bona fides of the children’s father in applying for the stay.  I have not been persuaded that this application is brought other than on the basis of bona fides.  As I said, Mr Levet submitted that the father’s position has always been that he never actually had the money to do this and he entered into it in the circumstances to which I have indicated.  I do not have any view other than he comes to the Court with appropriate bona fides.

9. One of the relevant matters must be, in my view, whether this is simply a hopeless case or whether the matter might have some prospect of success.  From the little that I know about the matter I would not regard the application as being a hopeless or vexatious application.  The father has some sort of arguable case.

10. Another matter will be the amount of time that it will take for the Court to be able to determine the substantive application when this is filed.  I asked whether the Child Support Agency would be prepared to stay their enforcement action.  Apparently they would not be prepared to stay enforcement action unless there was an order from a court requiring a stay.  So far as the likely progress of the matter in this Court is concerned I understand the parties have an appointment with a Registrar in the not too distant future.

11. It seems to me in all the circumstances that this question of whether the binding financial agreement ought to be set aside or not really needs to be dealt with fairly soon.  I propose to make an order that the Registrar allocate what we call a first day in the parties’ Less Adversarial Trial in respect of that matter, with expedition. 

12. In all the circumstances, in my view, the appropriate order to make is to stay the liability on the basis that, at least on my view of matters at this point, I am persuaded the children’s father does not have the capacity to pay the very substantial rate under the agreement.  That is not to say that the children’s mother does not require the funds because obviously if you have three growing boys the costs of supporting them are substantial indeed.

13. The father asked the Court to stay on the basis that he pay the children’s mother the sum of $700 per week by way of child support.  I propose to raise that amount to $1000 a week.  The father asks the Court to make an order on the basis that he would continue to meet the school fees for the children, the cost of extracurricular activities in respect of them.  Such would also be included in the order.  So I will make this order.

14. My clear intention is that we will take a pause in respect of the current disputed enforcement action.  But if Mr Sandmeier does not pay in accordance with what he has offered then the Child Support Registrar will be free to pursue any such arrears in whatever manner that person considers appropriate. 

I certify that the preceding forty-two (42) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Johnston delivered on 7 May 2015.

Associate:     

Date:              15 February 2016