SURREY & SURREY

[2019] FamCA 486

FAMILY COURT OF AUSTRALIA

SURREY & SURREY [2019] FamCA 486

FAMILY LAW – ORDERS – CONTRAVENTION OF PROPERTY ORDER – dismissal of all but one count – husband found to have contravened provisions of child support agreement – husband required to enter into a bond and consequential orders made –
where wife seeks other orders by enforcement or in compensation – incompetent application – s 79 jurisdiction already exercised – application dismissed.

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

APPLICANT: Ms Surrey

RESPONDENT: Mr Surrey

FILE NUMBER: MLC 10280 of 2016

DATE DELIVERED: 4 June 2019

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: Bennett J

HEARING DATE: 4 June 2019

REPRESENTATION

COUNSEL FOR THE APPLICANT: In person

SOLICITOR FOR THE APPLICANT: Not applicable

COUNSEL FOR THE RESPONDENT: In person

SOLICITOR FOR THE RESPONDENT: Not applicable

Orders

1. I find Count 7 of the wife’s Contravention Application filed 5 March 2019 proved in that the husband has contravened paragraph 7.3 of the limited Child Support Agreement dated 25 May 2017 in that he failed to pay all private health insurance levies for support of the children X born … 1999 and Y born … 2001 (“the children”) and some out of pocket and medical gap expenses from 1 January 2017 until 3 April 2019 in the sum of $4,321.27 and that his contravention was without reasonable excuse.

2. I dismiss Counts 1 to 6 of the wife’s Contravention Application filed 5 March 2019

3. The husband pay the sum of $4,321.27 to the wife by lodgement of clear funds into her bank account BSB... Account No. …54 by not later than 10.00 am on Wednesday 12 June 2018.

4. Pursuant to s 112AF of the Family Law Act 1975 the husband enter into a bond for a period of 18 months which requires him to be of good behaviour  that is without surety or security.

5. The wife’s Contravention Application filed 5 March 2019 be and is hereby otherwise dismissed.

6. The Amended Application in a Case of the wife filed 5 March 2019 (with orders sought being enumerated at paragraphs 13 to 19) be dismissed NOTING THAT:

   (a)       The order sought in paragraph 13 has been dealt with in the context of the contravention application and that the monies to be paid to the wife pursuant to this Order are on account of private health insurance levies and gap expenses for the children or either of them;

   (b) Paragraph 14 is dismissed without any determination on the merits, it being a matter which appears to fall within the jurisdiction of the Child Support (Assessment) Act 1989;

   (c)       Paragraph 18, in which the wife seeks an order for costs, is dismissed without determination on the merits.

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 Surrey & Surrey 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 MELBOURNE

FILE NUMBER: MLC 10280 of 2016

Ms Surrey

Applicant

And

Mr Surrey

Respondent

REASONS FOR JUDGMENT

REVISED EX-TEMPORE

1. This matter comes before me as a special fixture of a contravention application filed by the wife on 5 March 2019, in which she alleged a number of contraventions.  There is also the wife’s amended application in a case filed 5 March 2019, in which she seeks a raft of orders also directed to compliance.

2. The contravention application was first returnable before me on 1 April 2019, when we identified seven counts of contravention.  They were condensed into summary form and marked Exhibit “C2”.  It is the identification of the counts in “C2” which are reflected in these reasons for decision.

3. On 1 April 2019, Count 1, Count 2, Count 3 and Count 4 were dismissed, because they were not competent applications, having regard to the obligations (or lack thereof) cast upon the husband pursuant to the primary Order relied upon by the wife.  Counts 5, 6 and 7 survived and they fell for determination subsequently.

4. The matter was next before me on 23 May 2019.  On that day, the wife had subpoenaed an accountant, Mr L, whose firm has acted for the parties and an associated entity.  Mr L was required to attend Court and to produce documents.  It appears that through no fault of the wife, she had been unable to inspect the documents prior to that hearing day.  I had limited time with which to deal with any matter on that day and was not in a position to have the matter stood down.  I adjourned the matter for special fixture to me today.

5. My pessimism in relation to the amount of time needed for Counts 5, 6 and 7 has turned out to be accurate. 

Contravention Application

Count 5

1. Paragraph 4 of Orders made 28 November 2017 provides:

   “That M Accounting Services be appointed as the accountant to complete the financial documents for Surrey & Surrey Super Pty Ltd and each party shall be able to receive all information from and communicate with M Accounting Services.”

2. By Count 5 it is alleged “2016 SMSF Tax Returned was lodged by Mr C – B Accountants, and tax due paid by The Husband from the SMSF”.  That is, the husband instructed Mr C instead of M Accounting Services.

3. I have dismissed Count 5.  Whilst I can see that the wife is aggrieved by certain actions taken by the accounting firm B Accountants or a Mr C, I must conclude that there is insufficient evidence to satisfy me that the husband is indirectly or directly responsible for the lodgement of 2007 financial returns for the parties’ private superannuation fund.  At the time, B Accountants said that it no longer acted for the superannuation fund or for the wife.  Moreover, the documents as lodged were not completed in that they were not signed by either of the husband or the wife.  They should not have been able to be lodged at all.  The wife was at that time a director and secretary of that entity.  There is no reasonable explanation as to why this was done without the authority of either party.  However, I am not satisfied that the husband authorised these documents to be filed on behalf of the company.  It follows that the wife has failed to prove that the husband authorised an accountant other than the accountant specified in the primary Order so this Count must fail.

Count 6

1. By Count 6 it is alleged that “the Husband has not provided the total of his superannuation due for the 2016-2017”.

2. Paragraph 11 of Orders made on 25 May 2017 provides:

   “The Husband in his capacity as Director of Surrey & Surrey Pty shall pay or cause to be paid all outstanding superannuation payments so that the Fund is up to date with employee and rental payments and the Fund is in compliant with its legal obligations.”

3. Paragraph 3 of the Orders made 28 November 2016 provides:

   “That upon completion of the settlement of the sale of the factory, the proceeds shall be applied in accordance with paragraph 8 of the Orders of 25 May 2017 (“the Orders”) and when the parties equalise the superannuation entitlements pursuant to paragraph 10(a) of the Orders, there shall be an adjustment to be made to the wife from the husband’s share to account for any outstanding rental arrears and any outstanding superannuation contributions from the husband.”

4. In relation to Count 6, I received evidence which indicated that the husband had failed to comply with previous orders by paying all his superannuation contributions up-to-date.  It was significant because the second order mentioned in the contravention of this particular Count provided for an equalisation of superannuation entitlements.  After some evidence from the accountant Mr L and documentary evidence from the wife, it appeared that the sum of $881 or thereabouts was still outstanding, a small amount but an amount that the husband could not prove that he had paid.  During one of the adjournments, he produced documentary evidence (Exhibit “…”) that those moneys were paid on or about 22 November 2017.  There are no contributions which have not been paid.  Count 6 accordingly stands dismissed.

Count 7

1. By Count 7 the wife makes allegations in relation to “PRIVATE HEALTH LEVIES & OUT OF POCKET EXPENSES”.  It is alleged that:

   “From 1 January 2018, The Husband has refused to continue to reimbursement to the wife, Private Health Insurance Levies, for support of the children.

   In addition, a significant amount of out of pocket expenses born by the Wife for the children's medical gap fees and school requirements, have not been reimbursed by the Husband.”

2. Count 7 relates to the husband’s responsibility to pay pursuant to a limited child support agreement made between the parties on 25 May 2017. A child support agreement once registered, as this agreement is, is enforceable and liable to be the subject of a contravention application in accordance with section 95 of the Child Support (Assessment) Act 1989. 

3. The evidence on Count 7 has been fairly disjointed.  It has involved telephone calls to two health insurance funds.  Finally, figures were arrived at on which I am satisfied that the amount owing by the husband to the wife for past premiums for both of the children is the sum of $4022.14 for the period January 2018 to April 2019.  To that there is to be added the single gap expense of $299.13.  There were other gap fees claimed by the wife in the sum of approximately $275, but she is prepared to forgo those.  So the total amount which it is now agreed is owing by the husband to the wife on that basis is $4321.27.

4. Very briefly, the factual matrix of the noncompliance was that at the time the child support agreement was entered into, the wife had medical insurance for the family which then covered herself and the two children of the relationship, X born in 1999 and Y born in 2001.  Between the time of the child support agreement and 1 January 2018, the husband reimbursed the wife for the extras and hospital cover for the children.

5. As at 1 January 2018, without warning or explanation, the husband ceased to reimburse the wife and took out his own insurance cover with the same insurer, which is Company J, and had the children covered through that policy. 

6. He now realises that was in contravention of his obligations under the child support agreement. 

7. I am satisfied that since 1 January 2018, the health insurer has been receiving premiums to cover the named children from both parents, so there has been double insurance and an extra premium paid. 

8. It is agreed that it is appropriate for the wife to continue her insurance, and for the husband to apply for, and hopefully obtain, a refund of that proportion of premiums paid by him since 1 January 2018 which purported to cover the children (who were already covered under the wife’s policy).  The parties will be required to inform Company J of their respective policy numbers so Company J can obviously confirm the overpayment.  There is a high level of mistrust here so that will have to be achieved delicately.  Neither parent will reveal his/her policy or membership number to the other. 

9. I am satisfied that in respect of Count 7, the husband without reasonable excuse failed to pay for the support of Y and X’s private health insurance levies from 1 January 2018 to 3 April 2019.  I am also satisfied (as a matter of concession by the husband) that there were out of pocket expenses paid by the wife for which the husband should have reimbursed her in the sum of $299.13 but did not do so. 

10. Part XIIIA of the Family Law Act 1975 (Cth) (“the Act”) provides for the sanctions for failure to comply with orders and other obligations that do not affect children. Whereas these orders are referable to children, they are financial orders rather than parenting orders. Division 2 and, in particular, s 112AD provides for sanctions for failure to comply with orders. If a Court is satisfied that a person has without reasonable excuse contravened an order under the Act, the Court may make an order for the imposing of one or more of the sanctions available to be imposed under section 112AD(2), being a sanction or sanctions that the Court considers to be most appropriate in the circumstances.

11. It is expressly stated by subsection 112AD(1A) that the power to impose sanctions remains intact notwithstanding that the order in respect of which there was noncompliance has been complied with.  That is not the case here, although the husband says that he will pay the amount calculated by me. 

12. The sanctions available to the Court are set out in subsection (2) and begin with a bond pursuant to 112AF, a community-based order, a fine or a sentence of imprisonment.

13. I have informed the husband that there would not be a period of imprisonment, and that is the case. 

14. In my view, the most appropriate penalty would be to require the husband to enter into a bond pursuant to s 112AF to be of good behaviour, in particular to comply with orders of the Court.

15. The bond has been explained to him and he has agreed to enter into the bond. 

RECORDED:  NOT TRANSCRIBED

1. For the avoidance of doubt, the husband acknowledges that the child support agreement, which has been the subject of Count 7, requires ongoing payments by him of the extras cover provided by Company J at currently $54.40 per month.  Further, the premium owing to Company H for hospital cover, appears to be somewhere in the vicinity of $190 per month in respect of which the wife will cause an invoice to be sent regularly to the husband.

2. That concludes the contravention application.

Amended Application in a Case

1. The next matter with which I deal is the wife’s amended application in a case filed on 5 March 2019.  The wife has confirmed to me that orders enumerated at paragraphs 1 to 12 of the amended application are no longer sought by her.  The orders sought by her are those that are underlined and set out as paragraphs 13 to 19.  The wife’s application is in the nature of enforcement or compensation for what she alleges is non-compliance by the husband with previous orders.  The parties have had the final alteration of property interests.

2. For reasons which I have explained to the parties, the wife’s application is defective and unsupported by evidence.  It could be adjourned, further amended, or the evidence augmented.  However, I am not satisfied that there is enough which is competent about this application to permit the wife to proceed with it further.  

3. I want to make clear those matters upon which I make a final finding and dismiss and those matters which I dismiss without a hearing on the merits.  The wife would be able to pursue the latter subsequently in another form.

Paragraph 13

1. At paragraph 13 the wife seeks an order in relation to payment of arrears owing under a limited child support agreement.  I have already dealt with those as account of the contravention application in respect of which I have given reasons.  Therefore, paragraph 13 is to be dismissed because it has already been dealt with on its merits.

Paragraph 14

1. At paragraph 14 of the orders sought, the wife seeks that within 24 hours in compliance with paragraph 7 of the limited child support agreement the husband pay to the wife $8000 to facilitate therapeutic treatment for Y.

2. It is conceded by the wife that her evidence in this respect is not in affidavit form and I would have to adjourn the matter for a month in which to put the evidence on affidavit and then the husband would have to have another month to respond.

3. In short, the wife alleges that Y has an illness.  She seeks $8000 to obtain treatment from a practitioner in Suburb K in Queensland, Australia, for treatment.  The husband concedes that the child is not well and struggles with some medical complaints.  He has done some reading on an illness, and he is not, at this point, and absent expert evidence, satisfied that it is an appropriate diagnosis. 

4. The treatment proposed is by a practitioner who the husband says is not entitled to practice in his own right, that is he is required to be supervised, which gives me some cause for concern about possible malpractice or complaints against the practitioner.  With the diagnosis and treatment in doubt, the husband is also sceptical and not prepared at this point to accept the cost estimated by the wife at $8000.  The husband acknowledges that both children have medical complaints, but he does not know precisely what they are, and says that they are apparently doing very well in spite of their difficulties.

5. I dismiss paragraph 14 of the wife’s application because it is, in effect, an application for non-periodic child support which, to my mind, is not covered by paragraph 31 of the limited child support agreement, or certainly could not be covered by that without extensive expert evidence.

6. This is the matter upon which it would be open to the wife to pursue an application under the Child Support (Assessment) Act1989 (Cth).

Paragraph 15

1. At paragraph 15, the wife seeks that within 24 hours, in compliance with paragraph 13 of the order made on 25 May 2017, the husband pay to the wife $6000 for financial loss incurred. 

2. The order made on 25 May 2017 was the final property order entered into between the parties by consent (“the Order”).  It was a consent order.  It was apparently prepared by the solicitors for the applicant, who were G Lawyers, and at that time Mr Surrey was acting on his own behalf.  I have already commented that there is some difficulty with the drafting of the orders in as much as not all of the paragraphs imposes an obligation on the parties or either of them, to do or refrain from doing certain things.

3. Paragraph 13 of the order provides:

   Subject to compliance in full by the Wife with paragraph 12(c) of these Orders, from the date of these Orders the Husband pay and indemnify the Wife and keep her indemnified in respect of any and all liability of or in relation to the entities, including any debt personally guaranteed by the Wife and any unpaid tax (including capital gains tax), penalties, fines and interest assessed or hereinafter assessed against the Wife with respect to income derived, distributed or otherwise received by her from any of the entities or any amount owed by the Wife to the entities and from all actions, proceedings, costs, claims and demands in respect thereof.

4. Paragraph 12(c) of the Order provides:

   Within 90 days hereof, and upon the Husband’s full compliance with paragraph 5 of these Orders (in fully discharging the share loan):

   (c) The Wife do all such things and sign all necessary documents at the Husband’s expense, to:

   (i)resign from any office held by her and transfer to the Husband and/or his nominee any legal or beneficial interest held by her in Surrey & Surrey Pty Ltd, Surrey & Surrey Property Pty Ltd, Surrey & Surrey Property Trust and The Surrey's Trust (“the entities”);

   (ii)assign to the Husband or in accordance with his direction all of her rights, interest, powers and/or beneficial entitlement in the entities;

   (iii)assign any debit or relinquish any credit loan account in any of the entities to the Husband or in accordance with his direction.

5. Paragraph 5 of the order provides:

   As and from the date of these Orders, the Husband will pay and indemnify the Wife in respect of the National Bank of Australia share loan secured over the former matrimonial home, being Account Number …59 (“the share loan”) as and when the repayments fall due and will fully discharge the share loan within 3 years from the date of these Orders and cause the loan to be refinanced so as to remove the Suburb F property as security contemporaneously with the Wife’s refinance of such property.

1. By way of context, there was a former matrimonial home, being a property in which the wife still resides.  It was subject to a mortgage related to its acquisition.  It is common ground that the wife indemnifies the husband in relation to that original mortgage, which I think is dealt with in paragraph 4(b) of the Order. 

2. There was a second mortgage taken to acquire shares which were acquired in the name of the husband.  The amount of the share loan was approximately $95,000 at the time of the Order.  The obligation of the husband was to repay that loan within three years of the date of the Order, which means by 24 May 2020.  He is paying instalments owing under the loan in the meantime.  He is not in default of the instalments or of the terms of repayment of the second mortgage, which is referred to in the Order as the share loan. 

3. In seeking $6,000, the wife relies on an indemnity provided in paragraph 13 which does not arise until the wife has complied with her obligation to transfer any office she holds and any beneficial interest she holds in various entities to the husband pursuant to paragraph 12(c) of the Order.  The wife has not yet done those things.  Indeed, paragraph 12 makes it clear that she is not required to do those things until the husband has complied with paragraph 5.  As previously stated, paragraph 5 requires the repayment of a share loan which is not due to be repaid until 24 May 2020. 

4. The actual grievance of the wife, as best I can understand it, is that there was some negotiation between the husband and the Australian Taxation Office whereby the scheme of an arrangement or repayment plan was entered into on the wife’s behalf for income tax or taxation of some sort and the wife alleges that this rendered her ineligible for a family tax benefit that she otherwise would have got. 

5. As a result of the family tax benefit not being available to her, she forewent the sum of approximately $6000, which having regard to then perilous financial situation, including the necessitous and upsetting circumstances of the children’s ill health, she could well have used.  It represented a hardship for her; however, I cannot see under paragraph 13 where the wife is entitled to recover the alleged sum of $6000 from the husband. 

6. It may sound in an application for a setting aside of the Order, but that would be a very drastic step in the circumstances of this case and is not what the wife seeks.  I dismiss paragraph 15 as I do not regard it as competent.

Paragraph 16

1. In paragraph 16 the wife seeks that the husband comply with paragraph 12 of the Order by repaying the shareholder’s loan.  The wife is referring to the balance of a loan account owning by Surrey & Surrey Pty Ltd to her and reflected in the books of Surrey & Surrey Pty Ltd.  Such an entitlement, if it exists in the wife, would be an entitlement which she is required to transfer to the husband under paragraph 12(c)(iii) and upon the compliance by the husband with paragraph 5 (fully discharging the second mortgage share loan which is not due to be repaid until 24 May 2020).

2. The wife’s position is that pending the husband’s repayment of the share loan (24 May 2020) secured by the second mortgage over the former matrimonial home, she is entitled to the beneficial interest in the loan account standing to be credit in her name in Surrey & Surrey Pty Ltd.  That is not my reading of the Order.  This could, if pressed, also constitute the basis for a setting aside of the property orders, possibly this time at the husband’s behest.  I find that paragraph 16 is not a competent order to be sought and I dismiss it.

3. That is not to say that I dismiss any other underlying cause of action, but I do not find that the application currently before the Court is competent. 

Paragraph 17

1. In paragraph 17 the wife seeks an order that, “In compliance with paragraph 5 of the final property order, at the expense of the husband, the wife owns the appropriate insurance policies on the husband, such as wage protection, trauma, disability and death until such time as all financial obligations under these orders are finalised”, or words to that effect.

2. The wife has clarified for me that what she is seeking is some security for compliance by the husband with his obligations under the final property order, including his obligation to repay the second mortgage facility (the share loan) taken to acquire shares, which is reflected in paragraph 5 of the order.

3. I do not know whether the wife proposes that the husband acquire insurance policies and income protection and life insurance and the like, or whether she says that those policies are contractually already in force and she should be substituted as the owner of those policies or the person entitled to payment out. 

4. Regardless, I do not see that there is any basis upon which the wife can seek the order she does at paragraph 17.  There appears to be no security offered for compliance by the husband with paragraph 5 of the final property order.  I have been informed from the bar table that it is common ground that the shares that were acquired with the share loan which were secured by the second mortgage over the former matrimonial home were in the sole name of the husband.  Paragraph 18 of the final property order is the general catch-all provision which provides in paragraph 18(a) for the husband to be solely entitled to the exclusion of the wife to the shares in his possession as at the date the order was made (my paraphrasing). 

5. There is no jurisdiction for me to make an order in the terms of paragraph 17 of the wife’s application. The Court’s jurisdiction under s 79 of the Act is exhausted.

Paragraph 18

1. The next order sought by the wife at paragraph 18 is that the husband, “Pay the remainder of the wife’s costs incurred from 25 May 2017 to date”.  The Order made on 25 May 2017 was an order sought by consent.  I do not know what the costs are that the wife seeks.  She has appeared before me on three occasions always on her own behalf.  I do not suggest that there may not have been other occasions when she appeared before other judges, and I have not sought that she particularise the costs.  I have not made any costs order in her favour.

2. I dismiss paragraph 18.  In doing so, I do not consider that I have dealt with the matter on its merits, and if the wife wants to make another specific application in which she identifies the costs claimed and the applications or matters for which they were incurred she may do so, but it does not seem to me that I should keep this amended application in a case alive waiting for her to do so. 

Paragraph 19

1. The only other order sought at paragraph 19 was such further or other order as the Court deems appropriate and I was not informed of the particulars of any such order. 

Conclusion on Wife’s Application in a Case

1. For the above reasons, I dismiss the wife’s amended application in a case filed on 5 March 2019.

2. For case management purpose, these proceedings are at an end and can be removed from my docket.

I certify that the preceding sixty-three (63) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Bennett delivered on 4 June 2019.

Associate:

Date:  23 July 2019