Sharman & Hardwick - [2021] FedCFamC1F 34

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Sharman & Hardwick [2021] FedCFamC1F 34

File number(s): ADC 4532 of 2015

Judgment of: MEAD J

Date of judgment: 10 September 2021

Catchwords: FAMILY LAW – SPOUSAL MAINTENANCE AND CHILD SUPPORT – Overseas maintenance order – Where the husband seeks discharge of an order made in the United Kingdom – Where s 83(1)(c) and s 66S(2)(a) of the Family Law Act 1975 apply – Where Regulations 24A and 36 of the Family Law Regulations apply – Where s 18A of the Child Support (Registration and Collection) Act 1988 applies – Where s 83(4) of the Family Law Act 1975 applies – Where the Court is to consider s 72, s 74 and s 75(2) of the Family Law Act 1975 – Where it is considered whether there is a “just cause” for discharging the orders.

Legislation:
Child Support (Registration and Collection) Act 1988 ss 4, 18A, 24(a), 24(b)

Family Law Act 1975 (Cth) ss 66S, 66S(2)(a), 66S(3), 66S(6), 72, 72(1), 74, 74(1), 75, 75(2), 83, 83(1)(c), 83(6)

Family Law Regulations 1984 regs 24, 36, 36(1), 36(3), 36(4), 38(1)

Division: Division 1 First Instance

Number of paragraphs: 191

Date of hearing: 9 and 17 March 2021

Place: Adelaide

Counsel for the Applicant: Mr Tredrea

Solicitor for the Applicant: Angela Ferdinandy

Counsel for the Respondent: Mr Lindsay

Solicitor for the Respondent: Carmen Wood & Associates
ORDERS

ADC 4532 of 2015

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)

BETWEEN:
MR SHARMAN

Applicant

AND:
MS HARDWICK

Respondent

ORDER MADE BY:

MEAD J

DATE OF ORDER:

10 SEPTEMBER 2021

THE COURT ORDERS THAT:
1.Pursuant to Regulation 36 of the Family Law Regulations 1984 (Cth):
(a)paragraph 24(b) of the order of the Family Court at Central Family Court (No …) made 14 September 2016 in London be discharged as and from 17 March 2021;
(b)that paragraphs 25(a) and 25(b) of the said order be discharged as and from the date of the Term 4 at B School in 2021;
(c)that paragraph 24(a) of the said order remain in full force and effect;
(d)that paragraph 26 of the said order remain in full force and effect insofar as it refers to paragraph 24(a) only of the said order;
(e)that paragraph 27 of the said order remain in full force and effect insofar as it refers to the payments in 24(a) of the said order.

2.That paragraph 2 of the Amended Initiating Application filed herein by the husband on 7 September 2020 be discharged and that there be no order remitting or reducing to NIL any liability for arrears of spousal maintenance pursuant to the terms of paragraph 24(a) of the said order or child maintenance pursuant to the terms of paragraphs 24(b) of the said order, 25(a) of the said order or 25(b) of the said order SAVE AND EXCEPT for any arrears that have accrued pursuant to s 24(b) of the said order from 17 March 2021 but not prior to that date.
3.That paragraphs 1(a) to (e) be declared to be provisional pursuant to Regulation 38(1) of the Family Law Regulations 1984 (Cth).
4.That the parties or either of them be at liberty to register an application for a child support assessment at the Child Support Agency effective from the 17 March 2021.
5.That the husband do pay to the wife child support as may be determined by the Child Support Agency under an administrative assessment from time to time under the Child Support (Assessment) Act 1989 as and from 17 March 2021.
6.IT IS DIRECTED THAT the Registrar of this Court shall send to the Secretary within the meaning of r 38A of the Family Law Regulations 1984 (Cth) a sealed and certified copy of:
(a)this order;
(b)the reasons for judgment herein;
(c)the affidavit of the husband filed 12 November 2020;
(d)the financial statement of the husband filed 12 November 2020;
(e)the affidavits of the wife filed 8 January 2021 and 2 March 2021;
(f)the financial statement of the wife filed 31 August 2020.

7.That all extant applications be otherwise dismissed.

Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Sharman & Hardwick has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
INTRODUCTION

Mr Sharman (“the husband”) and Ms Hardwick (“the wife”) married in 2008 in Australia. After their marriage they returned to reside in the United Kingdom.
Their first child X was born in 2009 and their second child Y was born in 2013.
The parties separated in August 2015. Shortly thereafter the wife and children returned to reside in Australia.
On 14 September 2016 in proceedings between the parties in the Central Family Court sitting at the Royal Courts of Justice in London, a consent Financial Remedy Order was made between the parties (hereinafter referred to as “the English order”).
The order made provision for property settlement as between the parties as well as periodical spousal maintenance payments, periodical child maintenance payments and periodical school fee payments.
The order was in the following terms:
The parties
1.        The applicant is MS HARDWICK.
The respondent is MR SHARMAN.
Definitions
2.        Children of the Family
The “children of the family” are:
a.        X born on … 2009; and
b.        Y born on … 2013.
3.        Properties
“Property C” shall mean C Street, Suburb D, South Australia.
“Property E” shall mean E Street, Suburb E, South Australia ….
4.        Employee Management Incentive Scheme
The Employment Management Incentive Scheme shall mean the G Company Limited EMI Option Scheme under which the respondent has on 26 August 2016 been granted 147,759 shares at the exercise price of £0.72, or any alteration or amendment of that scheme, to include any alternative scheme which replaces this scheme and the respondent’s benefits under it. Further, the net payments received under that scheme shall be defined as the money or its equivalent received by the respondent after deduction of any taxes and charges due.
Recitals
5.This settlement and order proceeds on the basis of an English divorce and English financial remedy order and, on the basis, of an agreement that the English Divorce Petition will be amended and, by agreement, proceed to an uncontested suit and pronouncement of Decree Nisi (followed by Absolute) by this Court.
6.The parties acknowledge and agree that if both of them are habitually resident in Australia there is no jurisdiction to vary the maintenance provisions of this settlement in England, and any variation application(s) shall be brought in Australia. As a consequence the parties agree to procure an appropriate financial agreement in Australia reflecting the maintenance provisions of this English Order. For the avoidance of doubt this acknowledgment and agreement does not apply if the respondent is habitually resident in this jurisdiction.
7.        Introductory recital
The parties agree that the terms set out in this order are accepted in full and final satisfaction of:
a.        All claims for income (save for variation including capitalisation);
b.All claims for capital, that is payments of lump sums, transfers of property and variations of settlements;
c.        All claims in respect of each others pensions;
d.All claims in respect of the contents of Property C and Property E and personal belongings including but not limited to furniture, art work, jewellery and motor vehicles;
e.All claims in respect of legal costs in this jurisdiction and Australia, including those of the divorce;
f.        All claims against each other’s estate on death;
g.All other claims of any nature which one may have against the other as a result of their marriage howsoever arising either in England and Wales or in any other jurisdiction.
Agreements/Declarations
8.The respondent withdraws his application dated 17 December 2015, amended on 5 January 2016, to stay the divorce and financial remedy proceedings in this jurisdiction.
9.The parties agree that neither of them has any legal or equitable interest in the property or assets currently in the sole name or possession of the other and neither of them has any liability for the debts of the other, except as provided for in this order. For the avoidance of doubt that shall include any pension funds and superannuation provision.
10.The parties agree that neither of them shall institute proceedings against the other under the Married Women’s Property Act 1882 / the Law of Property Act 1925 / the Trusts of Land and Appointment of Trustees Act 1996.
11.A. The parties agree that the mechanism to agree the value of Property C for the purposes of paragraph 21 (b) below shall be that by 4pm on 11 October 2016 the parties agree the identity of the three estate agents in Adelaide, South Australia to provide a market valuation of the property on the basis of vacant possession and an arm’s length transaction and the average of the three valuations shall be adopted as the gross market value.
B. In the event that any estate agent charges any fee for the valuation the costs of that fee shall be borne equally by the parties.
C. The net proceeds of sale shall be defined as the gross value as calculated at sub-paragraph A less the mortgage secured against the property.
12.The parties agree that the applicant shall have no legal or beneficial interest in Property E.
13.The parties agree that the applicant requires ongoing financial disclosure from the respondent to ensure that paragraphs 21 (d) and (e) and 24 (c) of this Order have been fully complied with and on that basis the respondent has agreed to the undertakings at paragraphs 18 and 19.
14.The parties agree that any sums received pursuant to paragraph 21 (d) shall only be applied towards the payment of school fees and agreed reasonable educational extras in accordance with paragraph 25 and the following provisions shall apply:
i)The parties will at the appropriate time agree on an appropriate investment vehicle which balances potential rate of return with risk;
ii)If the funds held in the investment vehicle (be it a trust or other vehicle) are depleted whilst any child of the family is still in secondary education, the parties shall bear the shortfall equally unless it is agreed that alternative schooling is appropriate;
iii)The funds will only be accessible on the parties’ joint signature and all terms of the investment vehicle shall be agreed in writing between the parties.
15.The parties agree that the lump sum at paragraph 21 (c) only becomes payable if the respondent does not comply with paragraph 21 (b) and the order for sale at paragraph 23 is implemented.
16.The parties agree that the spousal periodical payments ordered at paragraph 24 (a) will be reviewed upon receipt by the parties of any payment received by the respondent from G Company under the Employee Management Incentive Scheme provided that he has complied with his obligations at paragraph 21 (e).
Undertakings to the court
17.Undertaking to secure release from mortgage
The respondent shall use his best endeavours to procure the release of the applicant from any liability under the ANZ mortgage secured against Property C on or before completion of the transfer provided for by paragraph 22 and shall in any event indemnify the applicant against all such liability.
18.      Undertaking in respect of the G Limited EMI
a.The respondent shall give the applicant 28 days written notice of any date on which his rights under the Scheme, or any varied or alternative scheme, or any alteration or amendment of that scheme, become exercisable.
b.The respondent will not exercise such rights without giving the applicant at least 14 days written notice of his intention to do so.
c.Subject to sub-paragraphs (a) and (b) above the respondent shall exercise such rights as soon as he is able to do so unless the parties agree in writing a delay in the exercise of those rights and an alternative date for the exercise.
d.The respondent shall take no steps adversely to affect the respondent’s prospective entitlement under the scheme.
19.      Undertaking in respect of Disclosure
a.For so long as paragraph 24 (c) is in force the respondent shall annually provide the applicant with:
i)A copy of any contract of employment, or for services, which includes an entitlement whether absolute, or, discretionary to a bonus and, if not included, in such document the scheme rules for any bonus entitlement.
ii.A copy of his P60 (or equivalent document) within 14 days of receipt by him of the same each year.
iii.A Letter or other document from his employer confirming his gross bonus each year together with a worked calculation of all taxes deducted or deductible that result in the net figure that the respondent is entitled to receive under the terms of this Order.
b.The respondent shall provide the applicant with any written alteration or amendment to the Scheme within 14 days of receipt of any such document by him.
c.The respondent shall provide the applicant with any further Share Option certificates issued under a replacement option as defined in the Scheme within 14 days of receipt of the same by him.
d.The respondent will promptly provide the applicant with any relevant document that provides further details of the Scheme.
e.The respondent will promptly notify the applicant of any termination of his employment and provide full details of any alternative employment.
20.      Undertaking to apply for Decree Absolute
The applicant shall take steps necessary to obtain Decree Absolute in this jurisdiction and make such application on a date no later than 8 weeks after pronouncement of Decree Nisi
IT IS ORDERED (BY CONSENT) (with effect from Decree Absolute):
21.      Series of lump sum orders
The respondent shall pay to the applicant the following lump sums:
a.£909 by 4pm on 11 October 2016 (to represent one half share of the respondent’s entitlement under the R Super Fund (G Company);
Lump sum in consideration of transfer of Property C
b.A sum of Australian $125,000 or such other amount as calculated in accordance with paragraph 11 above, whichever sum is the greater by 4pm 10 January 2017.
Lump sum in the event that the respondent fails to comply with sub-paragraph (b) above
c.If Paragraph 23 is operated and if the net proceeds of sale are less than Australian $125,000 a lump sum which represents the shortfall between the net proceeds of sale and the sum of Australian $125,000 within 14 days of the completion of the sale of the property.
Employee Management Incentive Scheme (as defined above)
d.Provided that the options become exercisable on or before 31 December 2026 a lump sum equivalent to 20% of the net payment, capped at a maximum of £200,000, paid into an education fund for the children of the family and the fund will be in (sic) operated in accordance with paragraph 14 above: AND
e.Provided that the options become exercisable on or before 31 December 2026 a sum equivalent to 27% of the balance of the net payment (the respondent to retain the remaining 73%).
22.      Transfer of property
The applicant shall transfer to the respondent all her legal estate and beneficial interest in Property C subject to the mortgage secured against the property upon payment of the lump sum ordered in paragraph 21 (b) above. For the avoidance of doubt the respondent shall pay all costs of implementing this paragraph.
23.      Order for sale
In default of the respondent complying in full with his obligations pursuant to paragraph 21 (b) above Property C shall be sold forthwith (on or after 11 January 2017) on the open market for sale and the following conditions will apply:
a.the property shall be placed on the open market for sale on 11 January 2017 at such price as may be agreed between the parties or in default of agreement determined by the court;
b.the property shall be sold for such price as may be agreed between the parties or in default of agreement determined by the court;
c.        both parties shall have conduct of the sale;
d.such solicitors as may be agreed between the parties or in default of agreement determined by the court shall have the conduct of the conveyancing work relating to the sale;
e.such estate agents as may be agreed between the parties or in default of agreement determined by the court shall offer the property for sale; and
f.        the proceeds of the sale shall be applied as follows:
i.        to discharge the mortgage secured against the property;
ii.in payment of the solicitors’ conveyancing costs and disbursements in connection with the sale;
iii.       in payment of the estate agents’ charges;
iv.       any taxes, if applicable;
v.        in payment of the balance to the applicant.
24.      Global order
a.The respondent shall pay to the applicant maintenance pending suit until the date of decree absolute and afterwards periodical payments. Payments shall be at the rate of Australian $6,000 per annum payable monthly in advance. Payments shall start on 16 October 2016 and shall end on the first to occur of: (i) the death of either the applicant or respondent; (ii) the applicant’s remarriage; (iii) 1 September 2026; or (iv) a further order.
b.The respondent shall pay to the applicant maintenance pending suit until the date of decree absolute and afterwards periodical payments for the benefit [of] the children of the family. Payments shall be at the rate of Australian $24,000 per annum per child, payable monthly in advance. Payments shall start on 16 October 2016, and shall end on: (i) each child respectively attaining the age of 18 years or ceasing their full-time secondary education whichever shall be the later; or (ii) a further order.
c.The respondent shall pay to the applicant a sum equivalent to 17.5% of his net annual bonus (gross bonus less all applicable taxes) received from G Company or any alternative employer no later than 28 days after receipt by the respondent of such bonus. The first payment shall be from any bonus received for the next financial year (currently June 2017) and then annually thereafter until 1 September 2026, or earlier termination of the payments under paragraphs (a) and (b) of this paragraph, or the payment of all sums due under paragraph 21 (e) above.
d.The court may (prior to the expiry of the term or subsequently) order a longer period of payment.
25.      School fees order – primary/secondary education
a.The respondent shall pay to the applicant further periodical payments for [the] benefit of X such sum as shall be equivalent to her school fees at B School (or subsequent school that may be agreed in writing between the parties), and reasonable educational extras agreed in writing in advance between the parties. Payments shall be made in four instalments paid before the beginning of the term in accordance with the requirements of the school, directly to the school bursar or other person indicated on the bill as recipient for the school, whose receipt shall be a sufficient discharge as agent for the applicant.
b.The respondent shall pay to the applicant further periodical payments for [the] benefit of Y in such sum as shall be equivalent to his Early Learning Centre fees, and thereafter school fees at B School (or subsequent school that may be agreed in writing between the parties), and reasonable educational extras agreed in writing in advance between the parties. Payments shall be made in four instalments paid before the beginning of the term in accordance with the requirements of the school, directly to the school bursar or other person indicated on the bill as recipient for the school, whose receipt shall be a sufficient discharge as agent for the applicant.
c.The respondent’s obligations shall stand discharged in relation to this paragraph on his compliance with paragraph 21 (d) above.
26.      Annual variation in periodical payments
The periodical payments set out in paragraph 24 (a) and (b) shall be varied automatically on the ‘variation date’, which shall be on the date of the payment due in October 2017 and at yearly intervals afterwards. The change in the payments shall be the percentage increase, if any, between the consumer prices index for Adelaide, South Australia during the most recent 12 month period preceding the variation date for which index data has been published.
27.      Payment of periodical payments by standing order
The respondent shall make payment of the sums due under paragraph 24 and above by standing order into the applicant’s following account:
Name of Bank/Building Society:         Commonwealth Bank of Australia
Sort code:  …
Account Number:  …
Name of account holder:  Ms Hardwick
or such other account as the applicant may from time to time nominate in writing.
28.      Clean break: capital and income
Except as provided for in this order, the respondent’s claims for periodical payments orders, secured periodical payments orders, lump sum orders, property adjustment orders, pension sharing orders and pension attachment orders shall be dismissed, and he shall not be entitled to make any further application in relation to the marriage for an order under the Matrimonial Causes Act 1973 section 23(1)(a) or (b) and he shall not be entitled on the applicant’s death to apply for an order under the Inheritance (Provision for Family and Dependants) Act 1975, section 2.
29.      Clean break: capital
The applicant’s claims for lump sum orders, property adjustment, pension sharing orders and pension attachment orders shall be dismissed on the respondent’s compliance with paragraph 21 (d) and (e).
30.      Costs
There shall be no order as to costs in this jurisdiction and in respect of the proceedings in Australia.
31.      Liberty to apply
The parties shall have liberty to apply to the court concerning the implementation and timing of the terms of this order only.
Applications before the Court

By way of Initiating Application filed on 7 June 2019 (as amended on 7 September 2020) the husband seeks the following orders:
1.That paragraphs 16, 24(a), 24(b), 24(c), 24(d), 25, 26 and 27 of the order made by His Honour Judge … on 14 September 2016 in the Royal Courts of Justice London United Kingdom be discharged.
2.That all arrears under paragraphs 16, 24(a), 24(b), 24(c), 24(d), 25, 26 and 27 of the said order be remitted or reduced to nil for the following periods:
a)        1 July 2017 to 30 June 2018
b)        1 July 2018 to 30 June 2019
c)        1 July 2019 to 30 June 2020
d)        1 July 2020 to the date of final orders in these proceedings.
3.That the parties or either of them be at liberty to register an application for a child support assessment at the Child Support Agency effective from the making of the order in the last preceding paragraph.
4.That the Husband do pay to the Wife child support as may be determined by the Child Support Agency under an administrative assessment from time to time under the Child Support Assessment Act.
5.That the parties do all such acts and things as shall be necessary to move the children from B School and enrol them in the H School or such other school as may be agreed between the parties and, in default of agreement, as ordered by the Court.
6.That all arrears of school fees payable at the date of this application be paid by the parties in equal shares.
In the wife’s Amended Response filed 31 August 2020 she seeks that the Amended Initiating Application filed 7 August 2020 be dismissed in its entirety. That Amended Response related to an Amended Initiating Application filed by the husband on 7 August 2020, which was further amended on 7 September 2020. The wife did not seek to further amend her Response.
Relevant provisions of the English order
The relevant provisions of the English order for the purposes of these proceedings are contained in orders 24(a), (b), (c) and (d), 25, 26 and 27 as well as recital 16.
Order 24(a) provides that the husband shall pay maintenance to the wife at the rate of AUD 6,000 per annum payable monthly in advance commencing 16 October 2016 and concluding on the death of either party, the wife’s re-marriage, 1 September 2026, or a further order.
Order 24(b) provides that the husband shall pay child maintenance at the rate of AUD 24,000 per annum per child payable monthly in advance as and from 16 October 2016 until each child attains the age of 18 years or ceases fulltime secondary education which ever shall be the later, or a further order.
Order 24(c) provides that the husband pay to the wife a sum equivalent to 17.5 per cent of his nett annual gross bonus less all applicable taxes received either from G Company or any alternative employer not later than 28 days after receipt by the husband of that bonus.
The first payment is to be from any bonus received for the next financial year (which was due in June 2017) and then annually thereafter until 1 September 2026, or the earlier termination of payments due under orders 24(a) and 24(b), or the payment of all sums due under paragraph 21(e). I will return to the provisions of order 21(e) in due course.
Order 25(a) provided that the husband pay to the wife:
…further periodical payments for benefit of X such sum as shall be equivalent to her school fees at B School (or subsequent school that may be agreed in writing between the parties), and reasonable educational extras agreed in writing in advance between the parties…
The order went on to provide that payments be made in four instalments before the beginning of the term in accordance with the requirements of the school and directly to the school bursar or other person receiving those funds for the school, whose receipt should be a sufficient discharge as agent for the wife.
The provisions of order 25(b) were identical with respect to the child Y.
The obligations of the husband with respect to the provisions of orders 25(a) and (b) were, according to the provisions of order 25(c), to be discharged on compliance with the provisions of order 21(d) to which I will return later.
Order 26 provided for annual consumer price index increases and order 27 specified the banking institution into which the child and spousal maintenance orders should be made.
The law
The husband seeks orders of this Court to discharge certain provisions of an order made for spousal maintenance, child maintenance and school fees in the Central Family Court sitting at the Royal Courts of Justice in London on 14 September 2016.
It was common ground between the parties that the liabilities of the husband arising from paragraphs 24(a) and (b) of the terms of that order constitute an “overseas maintenance liability” for the purposes of the Child Support (Registration and Collection) Act 1988 (Cth).
Regulation 36 of the Family Law Regulations 1984 (“the Family Law Regulations”) governs the Court’s jurisdiction to discharge, suspend, revive or vary an order, agreement or liability to which that regulation applies. Regulation 36(1) applies to:
(a)an overseas maintenance order or agreement registered in a court before 1 July 2000; and
(b) an overseas maintenance entry liability or a registered maintenance liability.
A registered maintenance liability is defined in Regulation 24A of the Family Law Regulations as “a registrable maintenance liability under section 18A of the Child Support (Registration and Collection) Act 1988” (“the Registration Act”).
Section 18A of the Registration Act provides that:
(1)      A liability is a registrable overseas maintenance liability if it is:
(a)a liability of a parent…of a child to pay a periodic amount for the maintenance of the child; and
(b)       an overseas maintenance liability.
(2)      A liability is a registrable overseas maintenance liability if it is:
(a)a liability of a party to a marriage to pay a periodic amount for the maintenance of the other party to the marriage; and
(b)       an overseas maintenance liability.
…
(4)A liability is a registrable overseas maintenance liability if it is an amount that is in arrears under a liability mentioned in subsection (1) or (2)…
The Registration Act in s 4 defines an overseas maintenance liability as:
…a liability that arises under:
(a)a maintenance order made by a judicial authority of a reciprocating jurisdiction; or
(b)a maintenance agreement registered by a judicial or administrative authority of a reciprocating jurisdiction…
The United Kingdom is a reciprocating jurisdiction for the purposes of the Registration Act.
The order was made in the United Kingdom. Under the terms of the order the husband was liable to pay a periodic amount for the maintenance of the parties’ children, and for the maintenance of the wife.
I am satisfied, and the parties were not in dispute, that the liability of the husband is a “registerable overseas maintenance liability” and accordingly a “registered maintenance liability”, and that Regulation 36 of the Family Law Regulations applies in these circumstances.
The husband is the person against whom the order was made in the United Kingdom, is the person liable to make the payments, and accordingly, pursuant to the terms of Regulation 36(3) of the Family Law Regulations, is entitled to make the application.
In determining the application Regulation 36(4) provides that the “law in force in Australia under the [Family Law] Act” is the law to be applied. Regulation 38 (1) provides that “An order made under regulation 36 is provisional” in circumstances where the United Kingdom is a reciprocating jurisdiction for the purposes of that provision.
The Courts power to discharge, suspend or vary a spousal maintenance liability arises from s 83 of the Family Law Act 1975 (Cth) (“the Act”).
The husband seeks in paragraph 1 of the final orders sought in his Amended Initiating Application filed 7 September 2020 that certain provisions of the English order be discharged.
Section 83(1)(c) of the Act provides that the Court may discharge the order “if there is any just cause for so doing”.
He further seeks that all arrears under the same paragraphs be “remitted or reduced to nil” for the periods:
·1 July 2017 to 30 June 2018;
·1 July 2018 to 30 June 2019;
·1 July 2019 to 30 June 2020; and
·1 July 2020 to the date of final orders.
Section 83(6) of the Act provides that:
An order decreasing the amount of a periodic sum payable under an order or discharging an order may be expressed to be retrospective to such date as the court considers appropriate.
Section 66S of the Act is the basis for the Court’s jurisdiction to modify a child maintenance order. The Court’s power to discharge such an order is found in s 66S(2)(a) of the Act. Again, the Court must be satisfied, pursuant to the terms of that provision, that there is “just cause” for discharging such an order.
It was submitted by counsel for the wife that the order for payment of school fees contained in paragraphs 25(a) and (b) of the English order does not come under the definition of a “registerable maintenance liability”. It was asserted that the order is a “school fees order” not a child maintenance order and therefore is distinguishable from a “registerable maintenance liability”.
Paragraph 24 of the order was headed “Global order” and paragraph 25 was headed “School fees order – primary/secondary education”. The wording in paragraph 24(b) relating to child maintenance and paragraphs 25(a) and (b) relating to school fees were identical, namely that the payments were “periodical payments for the benefit [of] the children of the family” in the case of order 24(b), “further periodical payments for [the] benefit of X” in order 25(a), and “further periodical payments for [the] benefit of Y” in paragraph 25(b).
I am satisfied that both orders are child maintenance orders and constitute registerable maintenance liabilities. I find that the Court has jurisdiction to make the orders sought by the husband provided it is satisfied that there is just cause for so doing.
It is the husband’s position that following upon the discharge of the child maintenance provisions of the English order his liability for provision of financial support to his children should be assessed by the Child Support Agency.
Background
In the husband’s trial affidavit filed 12 November 2020 he deposed to:
·being employed as a professional by G Ltd, the position being as a permanent fulltime employee;[1]
[1] Paragraph 19.
·to receiving a salary of GBP 120,000 and an annual discretionary bonus of up to GBP 100,000 generally paid in June of the following year;[2]
·becoming a member of G Company’s Enterprise Management Incentive Scheme in August 2016 (hereinafter referred to as “the Scheme”);[3]
·to membership providing him with “a contractual right to acquire a set number of shares at a set price on a future event, namely the sale of the company;”[4]
·to being granted 147,796 share options in the Scheme at 0.72 pence;[5]
·to estimating the eventual cash value of those share options as between GBP 1 million and GBP 2 million;[6]
·to the Scheme being valued by Her Majesty’s Revenue and Customs in the United Kingdom at the time he entered at GBP 18.3 million and to it being an incentive scheme;[7]
·it being a requirement of the Scheme that a sale price of GBP 50,000,000 be achieved before members of the Scheme could sell their shares;[8]
·a taxable income of GBP 163,188 for the UK financial year ending 5 April 2015;[9]
·a taxable income of GBP 243,976 for the UK financial year ending 5 April 2016;[10] and
·a taxable income of GBP 217,382 for the UK financial year ending 5 April 2017.[11]
[2] Paragraph 19.
[3] Paragraph 15.
[4] Paragraph 15.
[5] Paragraph 28.
[6] Paragraph 15.
[7] Paragraph 28.
[8] Paragraph 29.
[9] Paragraph 17.
[10] Paragraph 86.
[11] Paragraph 86.
In paragraph 48 of his trial affidavit he deposed to his salary reducing in June 2017 from GBP 120,000 to GBP 90,000, to being no longer supplied with a company vehicle and to an annual bonus being reduced to GBP 80,000.[12]
[12] Paragraph 48.
The parties received less than expected upon the sale of a property they owned in C Street, Suburb D. This property was the subject of paragraphs 21(b), 21(c) and 23 of the English order.
The English order provided for the husband to pay to the wife the sum of AUD 125,000 or such other amount as calculated in accordance with paragraph 11 of the English order, whichever sum is the greater, by 4.00 pm on 10 January 2017. Paragraph 11 of the “Agreements/Declarations” contained in the English order provided a mechanism for valuation of the Property C property.
Paragraph 21(c) of the English order provided a mechanism for payment to the wife of a “top up” amount in the event that the husband defaulted on payment of the lump sum amount to her as provided for in paragraph 23 of the English order.
In that event the husband was to pay the nett proceeds of the sale of the C Street property to the wife together with such further sum as was necessary to ensure she received the amount of AUD 125,000. That payment was to be made to her within fourteen days of the completion of the sale of the property.
In the UK financial year ending 5 April 2016, some five months prior to the making of the English order, the husband’s taxable income was GBP 243,976. In the UK financial year ending 5 April 2017 it was GBP 217,382.
The property in C Street was valued, according to the husband’s evidence in cross‑examination, at between AUD 340,000 and AUD 360,000. It was put to the husband that following upon the English order he had ceased to pay the mortgage on the property. He agreed with that proposition, saying he had done so because the tenants had left. He denied that following upon him ceasing the mortgage payments the ANZ bank gave Notice of Intention to Sell, but said rather he had the permission of the bank to “freeze” the mortgage.
The English order had provided for the wife to transfer her interest in the property to the husband but it was clear that course had not been adopted by the parties, which triggered the operation of order 23 of the English order.
It was the husband’s evidence that the tenants had ceased paying the mortgage in approximately September 2016, the same month in which the English order was made by consent. He told the Court that he thought the monthly mortgage was approximately AUD 2,400 per month.
He agreed to the proposition put to him by the wife’s counsel that he was earning approximately GBP 200,000 per annum at that time, but said his income was beginning to decline, and that, together with no income from the tenants, caused him to choose not to pursue the option of purchasing the property from the wife.
He denied that he had no reason to stop paying the mortgage. He further denied that the bank took steps to sell the property. When asked how the property came to be sold, he replied that it was “my efforts in marketing”. He said he had put the property in an agent’s hands, that that is where “the issues” had started, and that with a valuation of AUD 340,000 to AUD 360,000 “we went conservative” and the property was marketed for AUD 355,000.
He said when nothing was happening to progress the sale, the agent suggested to him that they might approach the other people in the building as to whether anyone was interested in purchasing the property. He said that he did so with “flyers”, and that the property was then sold.
He agreed that the sale attracted Capital Gains Tax (“CGT”) and that the wife paid the CGT of approximately AUD 43,000. He agreed that the wife was ultimately approximately AUD 50,000 short of the AUD 125,000 payment referred to in paragraph 21(b) of the English order.
It was the wife’s evidence contained in paragraph 22 of her affidavit filed 2 March 2021 that the husband defaulted in his obligation to service the mortgage without notice to her, and that the ANZ Bank were pursuing the option of a mortgagee sale. She said this resulted in the husband selling the property to another unit owner within the building after distributing “flyers” via email offering the property up for sale, rather than engaging a sales agent and without her knowledge or consent.
In circumstances where it is clear that the property was owned by the parties jointly, the wife no doubt was required to sign all documentation relating to the sale. I find however in light of evidence to which I shall later refer, that the wife was unlikely to have been kept properly informed by the husband of the actions he was taking to sell the property rather than to acquire her interest in the property.
There was no evidence before the Court as to any amount by which the mortgage may have increased between the time the husband ceased making those payments and the sale of the property.
It was the husband’s evidence contained in paragraph 45 of his affidavit filed 12 November 2020 that the best offer for purchase of the property was AUD 240,000.
It appeared to be common ground that the shortfall due to the wife upon settlement was AUD 47,976.
In the period of thirteen months between the date of the making of the English order and October 2017, it was common ground that the husband had not fallen into arrears with respect to the payment of spousal maintenance, child maintenance and school fees. He began to do so thereafter, resulting in the wife taking action to enforce the arrears.
In the twelve month period from October 2017 to October 2018 the husband fell into arrears with respect to spousal maintenance in the sum of AUD 1,767, arrears in respect of child support in the sum of AUD 18,485, and arrears in respect of school fees in the sum of AUD 26,658. This period encompassed six months of the UK financial year ending 5 April 2018 and six months of the year ending 5 April 2019. The husband was also still in arrears with respect to the outstanding lump sum from the C Street property.
English enforcement proceedings
On 15 May 2018 the husband was served with proceedings instituted by the wife in the United Kingdom for enforcement of the English orders both in respect of the outstanding lump sum payment and in respect of spousal and child maintenance arrears and school fees arrears. The hearing was listed for 11 June 2018 before a District Judge in London. The husband appeared in person but had legal assistance prior to the hearing from his previous solicitors. The wife was legally represented.
The husband’s income for the UK financial year ending 5 April 2018 was GBP 180,351.
It was recorded in paragraph 12 of the order of the District Judge of 11 June 2018 that as at 11 June 2018 the husband had accrued arrears in respect of periodical payments for the wife and the children in the sum of AUD 11,918.50 and AUD 20,700.50 in respect of periodical payments of the school fees.
Paragraph 24(c) of the English order provided that the husband pay the wife a sum equivalent to 17.5 per cent of his nett annual gross bonus less all applicable taxes received from G Company or any alternative employer no later than 28 days after receipt by him of the bonus. The husband paid the wife her share of the bonus received by him in about June 2017.
It was common ground in the English proceedings that the bonus due to be received by the husband was anticipated to be due on 15 June 2018 in the sum of GBP 38,482, of which the wife’s share pursuant to the English order was 17.5 per cent, or GBP 6,734.[13]
[13] Respondent’s Book of Documents – page 45.
In opening, submissions were put to the District Judge on 11 June 2018 by the wife’s legal representative Ms S setting out these matters. She proposed that maintenance arrears of GBP 6,763 be deducted from the bonus payment, school fees arrears in the sum of GBP 11,747 likewise be deducted from that payment, and that a proportion of the remaining balance of GBP 13,328 should be applied to the reduction of the outstanding lump sum payment due to the wife from the sale of the C Street property.

On page 48 of the wife’s Book of Documents the transcript illustrates the District Judge and the wife’s legal representative being advised by the husband during his evidence that he had already received his nett bonus of GBP 38,482. He told the Court that he had been paid “late last week” and that he had transferred GBP 6,734 to the wife to her K Bank account to reflect her 17.5 per cent share of the bonus. 11 June 2018 was a Monday, and it transpired during the hearing that the husband had received the total bonus funds the previous Friday.
In paragraph 7 of the recitals to Her Honour’s order she referred to that oral testimony.
In answer to questions from the bench the husband told the District Judge he had paid his K Bank loan off the day after receiving the bonus payment. He also confirmed to her that the wife would not have known that he had actually received his bonus until the court hearing that day, 11 June 2018.
In cross-examination in those proceedings the husband confirmed that he had taken out a car lease following upon the making of the English order under which he was required to pay lease payments of GBP 500 per month.[14] Further, after payment of the 17.5 per cent of his bonus payment to the wife and in full knowledge that the enforcement proceedings were listed for hearing approximately one week later, he had paid out a K Bank personal loan of GBP 11,800 on the day after receiving the bonus, had paid his previous lawyers GBP 4,500 and then transferred GBP 16,000 to his National Australia Bank account in Australia.[15]
[14] Respondent’s Book of Documents – page 53.
[15] Respondent’s Book of Documents – page 65.
The following exchange occurred between the District Judge and the husband at the hearing on 11 June 2018:
DISTRICT JUDGE: When you made those payments of four and a half thousand to your solicitors and 11,800 to clear a debt, you must have known that one of the options available to this Court was to make orders that would have provided for the payment of arrears out of that bonus.
A.To a degree, absolutely, and that’s why I’ve transferred that to my Australian account for possibly arrears or future maintenance, because if I pay my arrears I’m back to square one again because how will I pay- I’m caught out with arrears and in going forward.
DISTRICT JUDGE: Well, if you had carried on in your existing employment for another six months while you got yourself completely set up in Australia, by setting up new contracts as a professional with clients in Australia, you would have had an ongoing income knowing that at the end of six months you would be able to go back out and join your family, which, of course, I completely understand, but you have made that choice, Mr Sharman.
A.I have made that choice, and yes, whilst I agree with Ms S for the increase in my monthly wage to roughly 4,464, yes, there is some extra to help pay but it still won’t cover the Australian dollars 4,583.
DISTRICT JUDGE: No, but that is because your bonus was supposed to be taken into account as part of your overall obligation.
A. Correct.
I find that having become aware of the English enforcement proceedings by being served with same on 15 May 2018, the husband had made it clear to his employer G Company that he would appreciate the payment to him of his bonus prior to the anticipated due date of 15 June 2018.[16] I find that G Company had accommodated his request such that he received the funds prior to the hearing on 11 June 2018.
[16] Respondent’s Book of Documents – pages 71 and 72.
I find that the request had been made by the husband with the express intention of dissipating his bonus save for the payment of 17.5 per cent thereof to the wife, to avoid being restrained from doing so other than for the purpose of meeting his spousal and child maintenance and school fees obligations in the first instance.
At the conclusion of the English enforcement hearing and on 11 June 2018 the District Judge made a consent order. Pursuant to that order the husband was not to dispose of, deal with or diminish the funds standing to his credit in the National Australia Bank account in Australia, being the balance of his bonus in the sum of AUD 21,975.48 save for being permitted to pay to the wife that sum, whereupon what was referred to as a “freezing order” in those proceedings would cease to have effect.
Paragraph 9 of the recitals to the District Judge’s order noted that the husband agreed to transfer to the wife the sum of AUD 21,975.48 by 4.00 pm on 14 June 2018 which in paragraph 11 of the recitals was recorded as being in partial discharge of the lump sum owing to the wife pursuant to paragraph 21(c) of the English order.
In June 2017 the husband’s salary had been reduced to GBP 90,000 from GBP 120,000 and his annual bonus from GBP 100,000 to GBP 80,000. During cross-examination in the English enforcement proceedings the husband agreed with the proposition that:
…your maintenance provision for Ms Hardwick and the children of the family was agreed with reference to, essentially, your guaranteed income of 170,000 gross, which was your basic and your discretionary bonus. I see that you nodded.[17]
[17] Respondent’s Book of Documents – page 52.
In the 2017 UK financial year ending 5 April 2017 the husband earned some GBP 47,000 more than that base amount, and in the 2018 UK financial year ending 5 April 2018 some GBP 10,000 more. That amounted to GBP 57,000 over the period during which he incurred the majority of the arrears the subject of the enforcement proceedings, which as at 11 June 2018 totalled GBP 32,618.
On 21 May 2018, some two months into the 2019 UK financial year, the husband gave notice to G Company of his intention to resign. In cross-examination he rejected the proposition that his resignation had anything to do with the wife having taken the enforcement proceedings in London. He said it was because of changed financial circumstances, even though he conceded that at that time his income was greater than that upon which the English orders had been predicated. It was his evidence that his income was continuously declining and that he perceived there would be ongoing changes arising from “Brexit” and the business performance of G Company.
He gave the wife no notice of his intention to resign. He confirmed in cross-examination in the London enforcement proceedings that he had not told the wife of his resignation until early June 2018, after having been served with the enforcement proceedings. In that same evidence he confirmed that pursuant to his employment contract with G Company he had, upon resignation, a six month notice period during which he was entitled to continue to work and he confirmed, in answer to a question from the bench, that he would also have been entitled to a pro rata bonus for half of the year.[18]
[18] Respondent’s Book of Documents – pages 58 and 59.
G Ltd EMI
At the time of his resignation the husband was a fulltime employee of G Company. He also had an entitlement to G Company’s EMI as previously referred to herein.
In paragraph 18 of the English order under the heading “Undertaking in respect of the G Limited EMI”, the following appeared:
Undertaking in respect of the G Limited EMI
a.The respondent shall give the applicant 28 days written notice of any date on which his rights under the Scheme, or any varied or alternative scheme, or any alteration or amendment of that scheme, become exercisable.
b.The respondent will not exercise such rights without giving the applicant at least 14 days written notice of his intention to do so.
c.Subject to sub-paragraphs (a) and (b) above the respondent shall exercise such rights as soon as he is able to do so unless the parties agree in writing a delay in the exercise of those rights and an alternative date for the exercise.
d.The respondent shall take no steps adversely to affect the respondent’s prospective entitlement under the scheme.
Order 21(d) and (e) of the English order were headed “Employee Management Incentive Scheme (as defined above)”. The definition was contained in paragraph 4 of the English order in the following terms:
4. Employee Management Incentive Scheme
The Employment Management Incentive Scheme shall mean the G Limited EMI Option Scheme under which the respondent has on 26 August 2016 been granted 147,759 shares at the exercise price of £0.72, or any alteration or amendment of that scheme, to include any alternative scheme which replaces this scheme and the respondent’s benefits under it. Further, the net payments received under that scheme shall be defined as the money or its equivalent received by the respondent after deduction of any taxes and charges due.
Order 21(d) provided that if the husband’s options under the Scheme:
…become exercisable on or before 31 December 2026 a lump sum equivalent to 20% of the net payment, capped at a maximum of £200,000, paid into an education fund for the children of the family and the fund will be in (sic) operated in accordance with paragraph 14 above…
Paragraph 14 of the English order set out the agreement between the parties in the event that any sum was received pursuant to the terms of order 21(d).
Order 21(e) provided that if the options of the husband became exercisable on or before 31 December 2026, the husband pay to the wife a sum equivalent to 27 per cent of the balance of the nett payment, with him to retain the remaining 73 per cent.
In paragraph 19 of the same order under the heading “Undertaking in respect of Disclosure”, as well as the undertaking relating to the husband keeping the wife properly informed about the terms and conditions of his employment and his income, the following appeared at subparagraph (e):
The respondent will promptly notify the applicant of any termination of his employment and provide full details of any alternative employment.
The husband’s resignation from G Ltd
The husband’s evidence was that his resignation as a fulltime employee of G Company resulted in the cessation of his membership to the EMI and that he did not receive any lump sum benefits or leave entitlements upon leaving the company to return to Australia which he did some four days or so before his resignation became effective.
The effect of the husband’s resignation from G Company, without notice to the wife until “after the event”, was that he breached the undertaking contained in paragraph 19(e) of the English order as well as paragraph 18(d) as his actions adversely affected the wife’s prospective entitlement under the Scheme.
In cross-examination the husband told the Court that he had made a determination to leave his employment with G Company in late 2017 or the first quarter of 2018, that things were going “downhill”, and that he had not put anything to that effect in writing to G Company.
When asked why he had taken such drastic steps to breach an undertaking to the Court and to forfeit any ability to participate in the EMI, he replied “that is in the documents I am sure”. When asked whether he denied he had taken those steps because of the enforcement proceedings taken by the wife in London he said that he had it was more than a perception of his employment rewards and that the three owners were very business-savvy, they had said the EMI was strong in 2015 but it had declined.
When asked why he thought his financial rewards were no longer on offer in circumstances where his employer was still treating him very well, he conceded that they were but it was not as good as previously and they had eluded to further reductions.
He agreed they were still very generous with his financial remuneration between the making of English orders and the date of his resignation. In addition, he conceded that as well as his salary and bonus, G Company had paid for him to go on holiday to Europe including airfares and accommodation.
When it was put to him that he was surely not suggesting that was evidence of “belt-tightening” at his employment, he said they were annual trips which the company provided at that time but were not done now. When asked if he had known in advance that those trips were going to cease, he replied he did not.
The husband further agreed in cross-examination that only he and one other senior employee had resigned in or about June 2018 out of a total of five to eight senior employees including the owners. He agreed he was the first to resign, denied that his decision was made quickly, and agreed that there was a short time to act on his decision which was agreed to with G Company.
He agreed that he could have continued working for G Company until November 2018 and still receive his base salary which was much greater than he anticipated earning upon his return to Australia. In addition, as I referred to earlier herein, he agreed with District Judge that he would have been eligible for a pro rata bonus payment.
When it was put to him that he could have negotiated the contractual arrangements that he entered into with G Company even if he had continued working until November 2018 such that he did not forfeit income and potential bonus, he replied that his salary had reduced to GBP 90,000, his bonus to GBP 80,000, and that in the new arrangements his income was to be paid in AUD not in GBP.
By the time the husband resigned from G Company without notice to the wife in June 2018 the English order had been in place for approximately 21 months. On the husband’s evidence the English orders had been predicated on him earning at least GBP 170,000 per annum through salary and bonuses.
The wife’s case was that the husband’s evidence as to the reasons for his resignation from his employment, without notice to her, resulted not only in a downturn in his income but the loss of any future entitlement to the G Company EMI and should be treated with much caution.
I am satisfied that the husband’s evidence with respect to the haste with which he left his employment in the United Kingdom resulting in a significant loss of income over a short period of time, and the associated potential loss of significant financial gain from his interest in the EMI in which the wife, pursuant to the terms of the English order would share, was less than credible. It may well be that the husband was missing the children but he did not take the opportunity of putting any evidence of significance before the Court with respect to that issue. That is a matter to which I shall refer later.
At the time of his resignation he was still in receipt of annual income GBP 90,000 and an expected bonus of GBP 80,000. The time between giving advance notice to G Company of his intention to resign and him leaving the United Kingdom was approximately one month.
There was no evidence before the Court of anything that may account for his precipitous decision other than that it was made immediately upon having been served with the English enforcement proceedings at a time when he was already in arrears with the English order. The nature of his departure from his employment and the United Kingdom saw him forgo six months’ salary and any associated pro rata bonus.
It may well be that at the time of the making of the English order the husband was unreasonably optimistic as to the potential of his interest in the EMI, taking into account the valuation of GBP 18.3 million at the commencement of the Scheme by Her Majesty’s Revenue and Customs combined with the need to achieve a sale price of GBP 50,000,000 for him to be able to exercise his options and benefit from that sale. The wife may also have been carried away by that optimism.
Nevertheless, there was no evidence adduced by the husband to support his assertions with respect to the downturn in G Company business generally or the prospects of a successful outcome or otherwise for the interests of the members of the Scheme. This evidence could have been adduced by the husband in light of his evidence of his close relationship with the G Company Directors.
I find that the husband’s actions were taken against the backdrop of a view held by him that if he continued residing in the United Kingdom, earning the income he was still earning as at the time of his departure he would have no prospect of varying or discharging the English order.
I am satisfied that he took the actions he did to ameliorate his financial obligations to the wife and to the children.
Husband’s return to Australia
The husband worked in the United Kingdom for G Company from the commencement of the 2018 UK financial year on 6 April 2018 to on or about 26 June 2018, a period of some 2.5 months. He then returned to reside in Australia.
Prior to leaving the United Kingdom he had negotiated a contract with G Company under the auspices of his business L Company through which he commenced business on 1 July 2018.
In or about October 2018 the husband signed a lucrative agreement with G Company for twelve months, which was renewed in October 2019 for a further twelve months. The husband’s evidence was that the agreement required that he travel to the United Kingdom three times per year for five to six weeks, and that he would be paid GBP 1000 per day he worked.
In paragraph 86 of the husband’s affidavit filed 12 November 2020 he deposed to taxable income earned in the United Kingdom between 6 April 2018 and 5 April 2019 to be GBP 99,242. He deposed to his Australian income between 1 July 2018 to 30 June 2019 to be AUD 132,336. The husband therefore earned conservatively AUD 231,578 over that fifteen month period using an approximate exchange rate of AUD 2 to GBP 1.
By October 2018 the husband’s arrears of spousal maintenance and child maintenance including school fees totalled AUD 46,910 of which AUD 26,658 was attributable to school fees and the balance of AUD 20,252 attributable to spousal and child maintenance. These arrears had accrued between October 2017 and October 2018. The husband had continue to work in the United Kingdom between October 2017 and June 2018. On his evidence, as at June 2018 when he left the United Kingdom he was still in receipt of a salary of GBP 90,000 and entitled to a bonus of approximately GBP 80,000.
I have already found that the husband’s departure from his English employment occurred with unseemly haste following upon the wife taking enforcement proceedings in the United Kingdom and with the intention of altering his circumstances in an effort to justify non‑compliance with the English order.
In paragraph 89 of the husband’s trial affidavit he deposed to arrears arising from the English maintenance order totalling AUD 36,793 of which the sum of AUD 16,838 related to school fees and the balance of AUD 19,955 related to spousal and child maintenance.
I have already referred to the income declared by the husband for the fifteen month period between 6 April 2018 and 30 June 2019 to be at least AUD 231,578. That took into account that the husband had determined that he would not “work out” his permissible six month resignation notice period or take advantage of the bonus that would have accrued during that period, primarily for the purpose of taking steps to reduce his income and accordingly his liability for the maintenance of the wife and the children.
The husband’s income decreased in the financial year 1 July 2019 to 30 June 2020, with the husband deposing in paragraph 86(g) of his trial affidavit to income of AUD 105,279 for that period. COVID-19 effectively caused the cessation of overseas travel in March 2020.
As of August 2020 the husband deposed in paragraph 90 of his trial affidavit to arrears of spousal and child maintenance totalling AUD 67,323 of which school fees comprised AUD 29,770 and spousal and child maintenance totalled AUD 37,553.
The contract between L Company and G Company was not renewed after it expired in October 2020. I accept the husband’s evidence that due to COVID-19 it is impracticable for it to be renewed in the foreseeable future.
The husband deposed to receiving “job keeper” between 30 June 2020 and the date of his trial affidavit being 12 November 2020, as well as to receiving one payment of AUD 10,560 gross from work between February and November 2020.

At trial the husband gave additional oral evidence that he had earned approximately AUD 25,000 from work with M Company, a company based in South Australia. He said he had an ongoing relationship with that company. He further gave evidence that he had commenced work with N Company on a contract basis for a fee of AUD 15,600.
At the hearing in March 2021 it was the husband’s case that he had no capacity to continue to pay child support, spousal maintenance or school fees at the rate prescribed in the English order or any arrears.
It was the wife’s position that matters of property settlement, spousal maintenance and child support were finalised by the English orders. It was her position that the husband had failed to comply with the terms of the order effectively since the time they were made, and that it was only as a result of taking enforcement proceedings in the English courts resulting in the freezing of the husband’s bank accounts that enabled her to receive some of the funds owing to her pursuant to the orders.
It was the wife’s position that the husband had been less than frank with respect to all of his financial dealings following upon the parties’ separation and that the Court should not find that there is any “just cause” that could sustain the husband’s application.
CONCLUSION
The husband seeks the discharge of the orders to which I referred earlier herein pursuant to the provisions of s 83(1)(c) of the Act with respect to the spousal maintenance orders, and s 66S(2)(a) of the Act with respect to the orders for child maintenance.
The Court’s power to discharge the orders as sought by the husband only arises, in accordance with that legislation, in circumstances where there is “just cause” for so doing.
Turning firstly to the question of spousal maintenance, the Court must consider the provisions relating to spousal maintenance in the Family Law Act 1975 (Cth).[19]
[19] Family Law Regulations 1984, reg 36(4).
Spousal maintenance is determined by reference to ss 72, 74 and 75 of the Act. Section 72(1), being the first relevant section in this case, is in the following terms:
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, if, and 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) for any other adequate reason;
having regard to any relevant matter referred to in subsection 75(2).
The next relevant section, being s 74(1) provides that:
In proceedings with respect to the maintenance of a party to a marriage, the court may make such order as it considers proper for the provision of maintenance in accordance with this Part.
The Court is then required to take into consideration the matters referred to in s 75(2) of the Act to the extent that they are relevant to the particular facts.
The husband is aged 59 years. The wife is aged 51 years. They appear to be in good health.
The husband’s income position at the time of filing his financial statement on 12 November 2020 was very unclear. He deposed to total average weekly income of AUD 613 in circumstances where he deposed to be self-employed/unemployed job seeker.
In cross-examination the husband agreed he had signed a further contract on the cusp of the trial from which he expected to earn AUD 15,000 for six weeks work. He further agreed he still had work with “M Company”.
When asked whether there was ongoing opportunity for employment with G Company, he replied that no opportunity existed this year, that he would not be returning there this year as the United Kingdom “was a mess”, that he had spoken with G Company and told them that and that G Company only required low numbers this year.
I have already referred to the income earned by the husband over various periods during which he has claimed impecuniosity, as well as to him failing to take the opportunity available to him to earn approximately GBP 45,000 and bonus of approximately GBP 40,000 in the six month period that he was entitled to continue working for G Company following upon proffering his resignation rather than leaving the company immediately upon resignation as he elected to do in 2018.
The husband’s income did not begin to reduce below the amount on which he predicated his ability to comply with the English orders prior to them being made by consent on 14 September 2016 until sometime during the 2019 Australian financial year, and only then because of actions he took unilaterally without any advice to the wife. These resulted in an unnecessary reduction of income he was entitled to and had the capacity to earn from his employment.
His income further reduced during the 2020 Australian financial year, which in part occurred as a result of the impact on international travel of COVID-19 as and from approximately March 2020.
The husband was entitled to decide to return to Australia to live and work in circumstances where his children reside here.
Nevertheless, the husband had legal obligations to provide financial support for the wife in terms of the English orders and upon which the wife was entitled to rely unless there was just cause for those orders to be discharged.
Neither the husband nor the wife had any property of any significance at the time of the making of the English orders. The husband remains indebted to the wife in the sum of approximately AUD 50,000 plus interest arising from the sale of the C Street property. The property owned by the husband at Suburb F, South Australia has, according to the financial statement filed by him on 12 November 2020, a value of AUD 270,000 with a mortgage of AUD 273,322 at that date.
The husband has the capacity for appropriate gainful employment. Other than the evidence to which I have already referred relating to short term contracts with the two companies during the 2.5 years the husband had been resident in Australia following upon his resignation from G Company, the only evidence adduced by the husband with respect to any other attempts to find and secure appropriate employment were contained in paragraph 112 of his trial affidavit where he deposed to having “diligently” sought work in Adelaide since COVID-19 struck.
He deposed to his future income being uncertain but to being able to charge AUD 345 per hour for working and AUD 3,200 per day. He deposed to his income in Australia nevertheless not being close to what he earned in the United Kingdom. His evidence did not extend to an explanation for that proposition.
I am unable to find on the evidence that the husband has made diligent efforts to secure employment other than with the two companies to which I have referred in the absence of any further details as to those efforts.
I am satisfied that the husband is capable of appropriate gainful employment but I am not satisfied as to him having diligently pursued that position in Australia.
By the time of hearing in March 2021 COVID-19 travel restrictions had been in place for a period of some twelve months and it was the husband’s evidence that he did not see himself returning to the United Kingdom in the foreseeable future.
The wife’s income as deposed to in her financial statement filed 31 August 2020 was modest in the sum of AUD 788 per week, comprising family tax benefit in the sum of AUD 117 per week, child maintenance and spousal maintenance in the sum of AUD 13 per week and “job seeker” in the sum of AUD 583 per week. She deposed to her occupation as an educator.
The wife has essentially been engaged in fulltime care of the children since their respective births, was effectively the children’s sole parent between her return to Australia in August 2015 and the husband’s return to Australia in June 2018 save for the time they spent with their father when he returned to Australia for visits, and has been the children’s primary caregiver since June 2018.
The wife adduced evidence regarding the children spending alternate weekends with their father whilst he is in Adelaide and to her offering for the children to spend additional time with him but to him refusing those offers. The wife was not challenged with respect to that evidence.
She deposed to being overwhelmingly responsible for transporting the children to and from school, to and from all of their extra-curricular and social activities and to providing, in addition to normal day-to-day care of the children, extensive home support for Y to assist him to improve his reading and written English and also assisting him with tutors three times per week.
She deposed to completing a Masters at P University and to being dependant on student Centrelink payments and family tax benefit in addition to a modest income from casual work. She deposed to having not been able to work in that capacity after November 2020 because of the impact of COVID-19.
The wife does not own any property and deposed to having borrowed extensive funds from her parents to assist her to meet her commitments following upon the parties’ separation.
I am satisfied that the wife has limited income, no property and no financial resources save and except for superannuation which as at August 2020 had a value of approximately AUD 77,500. The husband deposed to superannuation entitlements as at November 2020 in an amount of AUD 63,596.
I have already referred to the wife’s caregiving role with respect to the parties’ two children who at the time of the hearing were aged 11 and 8 years respectively.
The commitments of the husband to maintain himself and the children were deposed by him to be AUD 561 per week as at November 2020. The wife deposed to those commitments in the sum of AUD 1,644 per week as at August 2020. Neither party were cross-examined with respect to those matters.
Neither party has a responsibility to support any other person. I have already referred to the wife’s eligibility for her job seeker payment and the husband’s job keeper payment at the time of hearing.
Upon the parties’ separation in 2015 the husband remained living in rented accommodation in City O in the United Kingdom which had apparently been the matrimonial home for the previous ten years. The wife returned to live in Australia with the children.
The wife and the children live in accommodation rented from her parents for which she pays AUD 13 per week. The husband lives in the property owned in his name in Suburb F, South Australia in respect of which he deposed to mortgage payments of AUD 420 per week and rates and levies of AUD 118 per week. There was no evidence before the Court to suggest that the husband is enjoying a standard of living that is other than reasonable.
The wife’s evidence as to expending the sum of AUD 1,644 per week to support the children and herself was not challenged. I am satisfied that none of the amounts to which she deposed are unreasonable, being mindful that education expenses including fees and levies account for AUD 390 of those expenses. I am also mindful however that her housing expenses are extremely low only because of assistance provided to her by her parents. The wife only deposed to housing expenses of AUD 13 per week.
I am satisfied that the wife has no capacity to provide a standard of living that in all of the circumstances is reasonable for herself and the children without reasonable assistance from the husband.
The wife’s evidence which was not challenged was that she is undertaking a course of education to assist her in obtaining an adequate income, in addition to her fulltime home duties and care for the parties’ children.
I am satisfied that in assuming the major caregiving role for the children during the entirety of their lives the wife has contributed significantly to the income and earning capacity of the husband.
The evidence before the Court is of limited time spending between the children and the husband following upon the parties’ separation in August 2015. Even taking into account that between then and June 2018 the husband was primarily resident in the United Kingdom, the wife was not challenged on her evidence that since his return to Australia he has mainly spent alternate weekends with the children when he is in Adelaide and has declined offers of additional time with the children.
The wife has always been the primary caregiver for the children. I am satisfied on the evidence before the Court that she wishes to continue her role as a parent. I find that she needs to be financially protected to enable her to continue to do so. Having said that, I am satisfied that the wife has undertaken appropriate education to assist her when she is able to earn an adequate income.
Neither party is cohabiting with another person. Property settlement proceedings as between the parties concluded by way of the English orders, in respect of which the husband is still indebted to the wife in the sum of approximately AUD 50,000 plus interest.
The husband’s liability for child support has been to date determined by the English orders. I find on the evidence that the husband has at all times since the making of those orders been reluctant to honour his obligations pursuant thereto with respect to the maintenance of the wife and the parties’ children since at least October 2017, the last date upon which the husband deposes to having been free of arrears.
For the reasons to which I have already referred, I am satisfied that a significant contributor to the husband’s decision to return to reside in Australia was a fervent desire to reduce his obligations towards child support for the parties’ two children.
The husband is in significant arrears with respect to the children’s school fees which, for the reasons to which I referred earlier herein, I am satisfied forms part of the “registerable overseas maintenance liability” to which I have referred earlier herein.
The wife deposed to the parties enrolling both children in B School at Suburb Q, South Australia in 2012, having formed the joint intention that the children should attend at that school. The children were duly enrolled in the school and pursuant to the English orders the child maintenance provisions included the husband being responsible for the children’s school fees, with payment to be made directly to the school.
At the time the English orders were made, on the husband’s own evidence they were based on him earning GBP 170,000 per year. I have already referred to the significant income he earned over and above that in the two years following the making of the orders. Notwithstanding that additional income he had, by July 2017, contacted B School and sought to terminate the children’s enrolment.
The Court is only able to discharge the child maintenance orders under the English order if there is just cause for so doing.[20] That is the only order sought by the husband in relation to the existing child maintenance orders.
[20] Family Law Act 1975 (Cth) s 66S(2)(a)
The Court has not been asked to vary the order by way of increase or decrease.
Had such an application been made by the husband, the Court must not have followed that course unless since the English order was made:
(a)the circumstances of the child have changed so as to justify the variation; or
(b)the circumstances of the person liable to make payments under the order have changed so as to justify the variation; or
(c)the circumstances of the person entitled to receive payments under the order have changed so as to justify the variation.
The Court would also be required to take into account whether the cost of living had changed to such an extent as to justify the Court increasing or decreasing any amount to be paid under the order or, if the order was made by consent, find that the amount ordered to be paid is not proper or adequate. That includes the Court having regard to any payments and any transfer or settlement of property previously made to the child or to any other person for the benefit of the child by the person against whom the order was made.
All of these requirements are addressed in s 66S(3) and (6) of the Act.
In the event that those issues were to be addressed by the Court I could not find on the evidence that the circumstances of the children have changed so as to justify any variation or that the circumstances of the person entitled to receive payments under the order have changed such as to justify the variation.
I am not satisfied that any change in cost of living is relevant to these proceedings and I would find that the English order provided for a proper and adequate payment of child maintenance.
There is no doubt that the circumstances of the person liable to make payments under the order have changed. That change must be, if the Court is being asked to increase or decrease the amount of a child maintenance payment, a variation of the order that is justifiable.
Taking all of the evidence to which I have referred into account I find that the husband has consistently followed a pattern of behaviour since the making of the English order that would suggest he has and will continue to take whatever steps he is able to minimise his child support liability under a child support assessment.
I further find that the husband is equally anxious to minimise his liability for spousal maintenance.
That was previously under the English orders a liability that was extant until 1 September 2026 unless it ceased at an earlier date for the reasons to which I have already referred.
The spousal maintenance obligation was modest, in the sum of AUD 6,000 per year.
I have already referred to the husband’s income in the period between April 2018 and December 2019.
Notwithstanding the findings I have made as to the reasons behind the husband’s dramatic change in his employment conditions and potential benefits since his resignation from G Company in June 2018, I am satisfied that at least from March 2020 his ability to continue to earn income by way of his contract with G Company has been severely curtailed by COVID-19.
Nevertheless, I have already found that I am not satisfied he has made diligent efforts to maximise his income earning potential in Australia, which on his own evidence is significant.
The amount he is required to pay pursuant to the English orders by way of child support is significant. He has now been resident in Australia for some 2.5 years, and I am satisfied that there is just cause to discharge that part of the child maintenance order that relates to the monthly payment to the wife (paragraph 24(b)) as and from the date of hearing of this application, namely 17 March 2021.
I am unable to find on the evidence for all of the reasons to which I have referred that there is any just cause for discharging paragraphs 24(b), 25(a) and 25(b) of the English orders prior to that date.
Likewise I would discharge paragraph 26 as and from the date of hearing of this matter. There seems no necessity to discharge paragraph 16.
I find on the evidence that there is no just cause for discharging paragraph 24(a) of the English orders.
For all of the reasons to which I referred in my consideration of s 75(2) I am satisfied that the wife is in need of spousal maintenance. I am satisfied that the amount of spousal maintenance ordered under the English orders is modest, being AUD 6,000 per annum, that the wife is unable to support herself adequately by reason of having the care and control of both of the parties’ children who have not attained the age of 18 years and for the relevant matters to which I referred in my consideration of s 75(2) factors, and that the husband is reasonably able to provide that support.
I am not satisfied that the arrears incurred by the husband pursuant to the terms of paragraphs 24(a) and 24(b) and 25(a) and 25(b) of the English order should be remitted or reduced to nil for any period save and except with respect to the arrears arising from order 24(b) of the English orders which should be reduced to nil for the period 17 March 2021 to the date of this order. The parties or either of them will then be at liberty to register an application for a child support assessment through the Child Support Agency effective from the date of the making of this order.

I decline to remit or reduce to nil the arrears in circumstances where I am satisfied that the husband has engineered his financial position and his work arrangements both in United Kingdom and in Australia so as to avoid his liability for spousal and child maintenance payments as ordered in the English orders.
It is clear on the evidence that the husband may not at this time be in a position to make good on those arrears and on the arrears with respect to the property settlement aspect of the English orders but that is a matter that can be pursued by the wife at such time as she sees fit.
As a result of the Child Support Agency taking over the role of determining child support liabilities as and from 17 March 2021 the wife will be aware of the husband’s financial position from time to time.
I am satisfied that there is just cause to discharge the order with respect to the school fees aspect of the child maintenance (25(a) and 25(b) of the English orders) such that they be discharged as and from the conclusion of Term 4 in 2021. Any arrears with respect to that order can be pursued by B School as and when they see fit.
For those reasons I make the orders as set out at the commencement of these reasons for judgment.

I certify that the preceding one hundred and ninety-one (191) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Mead.
Associate:
Dated: 10 September 2021

File number(s):	ADC 4532 of 2015
Judgment of:	MEAD J
Date of judgment:	10 September 2021
Catchwords:	FAMILY LAW – SPOUSAL MAINTENANCE AND CHILD SUPPORT – Overseas maintenance order – Where the husband seeks discharge of an order made in the United Kingdom – Where s 83(1)(c) and s 66S(2)(a) of the Family Law Act 1975 apply – Where Regulations 24A and 36 of the Family Law Regulations apply – Where s 18A of the Child Support (Registration and Collection) Act 1988 applies – Where s 83(4) of the Family Law Act 1975 applies – Where the Court is to consider s 72, s 74 and s 75(2) of the Family Law Act 1975 – Where it is considered whether there is a “just cause” for discharging the orders.
Legislation:	Child Support (Registration and Collection) Act 1988 ss 4, 18A, 24(a), 24(b) Family Law Act 1975 (Cth) ss 66S, 66S(2)(a), 66S(3), 66S(6), 72, 72(1), 74, 74(1), 75, 75(2), 83, 83(1)(c), 83(6) Family Law Regulations 1984 regs 24, 36, 36(1), 36(3), 36(4), 38(1)
Division:	Division 1 First Instance
Number of paragraphs:	191
Date of hearing:	9 and 17 March 2021
Place:	Adelaide
Counsel for the Applicant:	Mr Tredrea
Solicitor for the Applicant:	Angela Ferdinandy
Counsel for the Respondent:	Mr Lindsay
Solicitor for the Respondent:	Carmen Wood & Associates

ADC 4532 of 2015
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN:	MR SHARMAN Applicant
AND:	MS HARDWICK Respondent

ORDER MADE BY:	MEAD J
DATE OF ORDER:	10 SEPTEMBER 2021