STEYR & STEYR

[2018] FamCA 813

FAMILY COURT OF AUSTRALIA

STEYR & STEYR [2018] FamCA 813

FAMILY LAW – PROPERTY – Interim – application for sale of property – failure to comply with orders to pay mortgage – application to stay obligation to pay child support – application for departure from child support assessment – where child support Registrar not on notice of application or proceedings.

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

APPLICANT: Mr Steyr

RESPONDENT: Ms Steyr

FILE NUMBER: CAC 583 of 2016

DATE DELIVERED: 28 September 2018

PLACE DELIVERED: Canberra

PLACE HEARD: Canberra

JUDGMENT OF: Gill J

HEARING DATE: 10 September 2018

REPRESENTATION

SOLICITOR FOR THE APPLICANT: Farrar Gesini Dunn

COUNSEL FOR THE RESPONDENT: Mr Masters

SOLICITOR FOR THE RESPONDENT: Marjason & Marjason Solicitors

Orders

1. Orders 1 to 7 of the Husband’s Amended Application in a Case filed 17 July 2018 are dismissed.

2. The Husband’s applications in respect of Child Support, being Orders 8 to 12 of the Husband’s Amended Application in a Case filed 17 July 2018 are adjourned to 10am on 12 November 2018.

3. The Husband is directed to forthwith place the Child Support Registrar on notice of his application and of the adjourned date of the proceedings and to file an affidavit directed to the proof of such.

4. Noting that order 2 in the Wife’s Amended Response to an Application in a Case filed 6 August 2018 sought the dismissal of the Husband’s application in respect of the sale of the Suburb B property, her response is otherwise dismissed.

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

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

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

FAMILY COURT OF AUSTRALIA AT CANBERRA

FILE NUMBER: CAC 583 of 2016

Mr Steyr

Applicant

And

Ms Steyr

Respondent

REASONS FOR JUDGMENT

1. The Husband seeks a number of orders from his amended application of 16 July 2018, which deal firstly with the sale of the former matrimonial home in Suburb B, which is a property currently occupied by the Wife and the children.  He also seeks orders that relate to outstanding child support, including the stay of a current Child Support Assessment. 

2. The Wife presented a minute of orders sought.[1]  She sought procedural orders to “move the matter forward.”  Those procedural directions related to disclosure and valuations.  The content of those directions was not addressed during the proceedings and so it was unclear what was pressed. In any event, the orders sought did not form a part of the Wife’s Amended Response. Aside from these matters she seeks to proceed on the C Town aspect of her Response (that the proceeds of the sale of the C Town property be used to service outstanding loans).  She opposes the stay sought by the Husband in relation to child support and opposes the sale sought by the Husband for the Suburb B property.  The balance of the Wife’s Response was not pursued at the interim hearing.

   [1] Exhibit W1.

3. The Husband relied upon his affidavit of 17 July 2018.  The Wife relied on her affidavit of 6 August 2018.  Neither party complied with the Rules in respect of documents to be relied upon at the interim hearing, instead annexing documents to their affidavits.

4. By the time of the interim hearing the C Town property had been sold and the proceeds applied to the payment of the shortfall following sale of a property in Suburb E that had left an outstanding loan, arguably in compliance with Order (1) of the orders of 17 April 2018 as set out later in this judgment.

The application in relation to the Suburb B property

1. The Husband seeks a suite of orders for the sale of the parties’ property at D Street, Suburb B in the ACT.

2. The Wife seeks the Suburb B home as part of the final adjustment of property in the proceedings.  She currently lives in the property with the parties’ two children, X (four years old) and Y (two years old).  On her behalf it is asserted that she will be unable to house herself if removed from the Suburb B property.  She opposes the orders sought by the Husband.

3. Orders were made on 17 April 2018 providing in relation to the payment of the relevant mortgage as follows:

   2.The Wife is to make the mortgage repayments with respect to the [Suburb B] property.

4. Despite occupying the property at Suburb B, and being responsible for the payment of the mortgage in accordance with the above orders, the Wife has not made any repayments since February 2018.

5. The mortgage repayment is $2,048, due on the 14^th of each month.  The Wife says that the interest (non-capital) component of the loan is $572 per month.[2]  On 8 May 2018 the Husband advised the Wife that if she was not compliant with the order for the payment of the mortgage that he would apply for the sale of the property.

   [2] At [32] of the Wife’s affidavit of 6 August 2018.

6. The Wife replied that no payments were being made as “the redraw has not been taken,” apparently a reference on the part of the Wife to her position that the redraw facility operated by the parties should have been available for the payment of the mortgage.

7. However, the use of that redraw facility was specified in the orders of 17 April 2018 as follows:

   1. Any shortfall resulting from the sale of the [Suburb E] property be met by the parties in accordance with Order 12(e) of the Consent Orders of 13 December 2016, that is, by use of the re-draw facility in relation to the [Suburb B] property, with the balance to be borne equally by the parties.

8. The Orders did not provide for the Wife to be able to use the redraw facility for the payment of the Suburb B mortgage.  Rather, they were to be used for the shortfall in the sale price for a property owned by the parties in Suburb E, ACT.  The sale of that property fell approximately $100,000 short of the amount owing on the property.  Given the terms of the 17 April 2018 Orders, the Wife’s position with respect to the redraw is untenable.

9. The Wife, by her affidavit, says that she will make monthly payments in relation to the interest payments for Suburb B and the Suburb E property, previously sold by the parties at a loss, in the event that the Husband pays child support and spousal maintenance.  However, the spousal maintenance component of the Wife’s claim was not pressed.

10. As noted later in the judgment, the Husband is significantly in arrears in relation to the payment of child support to the Wife.  As at 14 June 2018 the arrears were over $21,000.

11. Under the circumstances that the Husband seeks the sale of the property in which the Wife is living, and which she seeks to retain, on the basis that she has not paid the mortgage in accordance with her obligations, but where he has failed to pay child support to the Wife in accordance with his obligations, the remedy sought by the Husband should not be granted.  This is particularly the case where, despite the failure on the part of the Wife, there is no indication that the Suburb B property is in any immediate peril by virtue of the non-payment.

The application in relation to child support

1. Pending the determination of a departure order, the Husband seeks that the operation of the Child Support (Registration and Collection) Act 1988 (“the Registration Act”) be stayed pursuant to s111C of that Act. He seeks that the Family Court determine a departure from administrative assessment pursuant to s116 of the Child Support (Assessment) Act 1989 (“the Assessment Act”).

2. Before hearing the departure aspect of the application, s116(1)(b)(ii) provides that the court must be satisfied that it is in the interest of both the liable parent and the carer that the Court deal with the application. The Husband claims that if the business is valued in relation to future maintainable earnings, an issue arises as to the proper remuneration allocation to the owner. To take the profitability of the company and also the income drawn by the owner, he says, would result in double dipping. The interrelationship of the valuation of the business and the assessment of the income of the Husband for the purpose of child support is a strong reason for concluding that it is in the interests of both of the parties for the Family Court to consider a departure order under Division 4 of the Assessment Act as part of the proceedings relating to property.  The issues appear to be intertwined.  The Wife accepted that it was probably in her interests for the Family Court to deal with the child support issues within the proceedings.

3. Section 111C of the Registration Act, which deals with stays, provides as follows:

   (1)This section applies if a proceeding has been instituted:

   (a)in a court having jurisdiction under this Act; or

   (b)before the Registrar under Part VII; or

   (c)before the AAT for an AAT first review; or

   (d)under Part 6A or 7 of the Assessment Act.

   (2)A party to the proceeding may, subject to the Family Law Act 1975:

   (a)in the case of a proceeding instituted in a court--apply to that court for an order under this section; or

   (b)otherwise--apply to a court having jurisdiction under this Act for an order under this section.

   (3)Pending the hearing and final determination of the proceeding, the court may make such orders as the court considers appropriate staying or otherwise affecting the operation or implementation of the Assessment Act and this Act if the court considers that it is desirable to do so, taking into account the interests of the persons who may be affected by the outcome of the proceeding.

   (4)The court may, by order, vary or revoke an order made under subsection (3).

(5)An order under subsection (3):

(a)is subject to such terms and conditions as are specified in the order; and

(b)operates for:

(i)     such period as is specified in the order; or

(ii)    if no period is specified--until a decision of the court, the Registrar or the AAT determining the proceeding becomes final.

1. Section 104 provides that the Family Court of Australia is a Court having jurisdiction under the Registration Act.

2. The touchstone for the use of the power is that a stay order be considered as appropriate by the Court.

3. The Husband asserts that such an order is appropriate for two reasons.

4. The first relates to the Husband’s identification of the interrelationship between the valuation of the Husband’s business and the assessment of his income.

5. The second reason is that he says that the Child Support Agency (CSA) has both made, and acknowledge making, errors that will require a further application to be made to the CSA and the Administrative Appeals Tribunal (AAT).  Those errors are said to relate to an assessment of the Husband’s income and in relation to the care arrangements for the children.

6. For the care arrangements, the CSA deemed the care to be 85 per cent with the mother and 15 per cent with the father.  He says that the actual ratio is 60 per cent with the mother and 40 per cent with him.  The assessment by the CSA was in the face of a representation by the Wife that the ratio was 65 per cent with her and 35 per cent with the Husband.

7. The Husband is currently in arrears in his child support.  As at 14 June 2018 this was calculated as $21,564.95.[3]  Without having yet made the relevant applications to deal with the two errors he has identified, the Husband seeks a staying of the assessment, including as to the accumulated arrears, pending a correction of the care arrangements and an assessment of the Husband’s income.

   [3] Annexure A of the Wife’s affidavit of 6 August 2018.

8. The Wife points to a current assessment against the Husband, based on an income of $336,000[4].  The Husband is currently assessed at an annual child support rate of $25,162.[5]  She notes that the Husband is at present unable to nominate his actual income, instead asserting a range of $100,000 to $140,000[6].  The Husband says that he will have a clearer view of what his income is once his accountant completes the accounts for the business.

   [4] Annexure A of the Wife’s affidavit of 6 August 2018.

   [5] Annexure A of the Wife’s affidavit of 6 August 2018.

   [6] At [17] of the Husband’s affidavit of 17 July 2018.

9. The Wife raises as a preliminary point that there is no indication in the material that the Child Support Registrar (the Registrar) has been placed on notice of the application and that this is a necessary prerequisite to dealing with the application made by the Husband.

10. I was not directed to any authority on this point, nor directed to what considerations might inform a decision in relation to this aspect.

11. It may be observed that the applications the Husband makes do not impact any substantive right held by the Registrar.  However, the making of orders will affect the obligations of the Registrar insofar as the Registrar acts in compliance with any orders that are made.

12. Section 116(3) of the Assessment Act, as it relates to a departure application before the court, is in the following terms:

    Subject to section 145 (Registrar may intervene in proceedings), the parties to the application are the liable parent and the carer entitled to child support.

13. Section 145(1) of the Assessment Act and s111E(1) of the Registration Act are in the following identical terms:

    (1)The Registrar may intervene in, and contest and argue any question arising in, a proceeding sunder this Act.

14. The Registrar is not automatically a party, but is entitled to intervene on any question, including the questions raised before the Court here, being whether there should be a stay (in part said to be justified by virtue of the conduct of the Agency) and whether the Court, as opposed to the agency, ought to determine the issue of departure.

15. That is, the Registrar has a right to be heard on these issues.  That right cannot be exercised, and the decision whether or not to exercise the right cannot be made, absent notice to the Registrar of the application and of the listing.

16. Accordingly, prior to determining the application insofar as it relates to child support, it will be necessary to place the Registrar on notice of the proceedings and the nature of the application.

Costs

1. To the extent that the Husband sought costs in relation to his application for the sale of the Suburb B property, his lack of success means that no such orders ought to be made.

2. While the Wife also sought costs, and has been partially successful, that partial success, in the context of her failure to pursue a significant part of the relief sought in her response, means that no order as to costs should be made.

I certify that the preceding thirty-six (36) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Gill delivered on 28 September 2018.

Associate: 

Date:  28 September 2018.