Telama and Telama (No.2)
[2018] FCCA 625
•1 May 2018
FEDERAL CIRCUIT COURT OF AUSTRALIA
| TELAMA & TELAMA (No.2) | [2018] FCCA 625 |
| Catchwords: FAMILY LAW – Mother’s Application to enforce payment of Binding Child Support Agreement arrears – Father’s Application to set aside Binding Child Support Agreement and to discharge arrears. |
| Legislation: Family Law Act 1975 (Cth), s.79A Federal Circuit Court Rules (Cth), r.25B.13(a) Child-Support (Assessment) Act 1989 (Cth), ss.80C(2), 80CA, 136(2) |
| Cases cited: Re F: Litigant in Person Guidelines (2001) 161 FLR 189 Keane v Keane & Ors [2013] FamCA 332,50 Fam LR 120 Gavin v Garden [2011] FamCA190 |
| Applicant: | MS TELAMA |
| Respondent: | MR TELAMA |
| File Number: | SYC 1450 of 2008 |
| Judgment of: | Judge McGuire |
| Hearing date: | 5 February 2018 |
| Date of Last Submission: | 5 February 2018 |
| Delivered at: | Sydney |
| Delivered on: | 1 May 2018 |
REPRESENTATION
| Counsel for the Applicant: | Ms Spain |
| Solicitors for the Applicant: | Lander & Rogers |
| The Respondent: | Appeared in person |
ORDERS
That the Court declares that the Respondent owes to the Applicant the sum of $375,127.29 pursuant to arrears accrued under a Binding Child Support Agreement entered into between the parties dated 2 April 2013.
That the Respondent pay to the Applicant the sum of $375,127.29 within 120 days of the date of these Orders provided that should the Respondent fail to make such payment then the Applicant have liberty to apply for the issue of a Third Party Debt Notice pursuant to Rule 25B.40 of the Federal Circuit Court Rules 2001.
That the Binding Child Support Agreement made between the parties and dated 2 April 2013 be set aside as from the date of these Orders.
IT IS NOTED that publication of this judgment under the pseudonym Telama & Telama (No.2) is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT SYDNEY |
SYC1450 of 2008
| MS TELAMA |
Applicant
And
| MR TELAMA |
Respondent
REASONS FOR JUDGMENT
The applicant mother brings an application to enforce a binding child-support agreement entered into on 2 April 2013. The parties agree, for the purposes of this application, that the respondent owes an amount of $375,127.29 in arrears pursuant to that agreement.
The respondent father applies to the Court for an order setting aside the relevant child support agreement.
The applications are heard together.
The mother is represented in these matters by solicitors and counsel. The father represents himself. The Court offered[1] Mr Telama assistance with procedure and an invitation to request such assistance at any time. Mr Telama did, however, present as an intelligent and articulate litigant, well versed in the procedure in this Court and understandably so given what he says is some 10 years of consistent litigation in this and the Family Court.
[1] Re F: Litigant in Person Guidelines (2001) 161 FLR 189
The mother relied on her affidavit affirmed 31 January 2018 and a sworn financial statement of the same date. She was subject to some short cross-examination by the father.
The father relied on his affidavit affirmed 4 January 2018 and a financial statement affirmed the same date. His affidavit carries annexures which although not paginated, do extend to 5 separate and lengthy volumes. Mr Telama tells me that such detail is in response to apparent previous criticism of him in respect to discovery.
Orders sought
The applicant mother argues for the following orders:
Declaration
1)That pursuant to section 25B.13(a) of the Federal Circuit Court Rules, a declaration that the Respondent owes the Applicant the sum of $375,127.29 pursuant to a binding child support agreement dated 2 April 2013.
Orders
1)That the Respondent pay to the Applicant the sum of $384,390 (sic) within 60 days.
2)If the Respondent defaults in making the payment referred to in Order 1, then pursuant to section 25B.11 of the Federal Circuit Court Rules, an order for the attachment of earnings and debts, including a Third Party Debt Notice.
3)That the Applicant be granted liberty to apply to the Court in respect of enforcement.
4)That the respondent pay the applicant's costs of and incidental to this application.
The respondent asks for the following orders:
1)The Binding Child Support Agreement entered into between the parties on 2 April 2013 be and is hereby set aside.
2)The arrears under the Binding Child-Support Agreement be extinguished in full.
3)Either:
There be no departure from the administrative assessment for the support of the children of the marriage [X], [Y] and [Z].
Or in the alternative:
There be a departure from the administrative assessment for the support of the children of the marriage [X], [Y] and [Z] such that the Child Support Agency shall assume and apply a level of income for Ms Telama that is equal to the income used for Mr Telama, so as to properly allow for the financial resources available to Ms Telama and the children of the marriage.
4)The remaining amount of the costs order made by Justice Fowler on 21 February 2011 be extinguished in full as compensation to Mr Telama for the breach by Ms Telama of the confidentiality provisions in paragraph 17 of the Binding Child-Support Agreement.
5)There be no order for costs.
It eventuated that no application for departure from administrative assessment was properly prosecuted before me. Further, the proposed order 4 is not a matter that was pursued and perhaps could not be before this Court.
Consequently, the competing applications are simply the mother's enforcement application and the father’s application to set aside the child-support agreement and to discharge any arrears thereunder.
Background
Not surprisingly, these parties have an extensive litigious history. I borrow the chronology so far as it is agreed from the mother's case outline as follows:
·1996 parties marry.
·1999 Ms S born (now aged 18 years).
·2000 [X] born (now aged 17 years).
·2002 [Y] born (now aged 15 years).
·2004 [Z] born (now aged 13 years).
·2007 parties separate.
·2007 father entered into a relationship with Ms K.
·18 December 2008 orders made for the children to live with the mother.
·20 February 2009 father incorporates (company omitted) Pty Ltd to undertake property development in Queensland. The company subsequently purchases vacant land for $1.6M. and borrows $12 million to complete the development.
·2010 [A] born to the father and Ms K.
·30 September 2010 parties enter into First Binding Child Support Agreement.
·April 2011 husband purchases a block of land at Property A, Queensland for $1,075,000.
·2012 husband commences employment with (employer omitted) with target remuneration of $702,000 per annum.
·August 2012 husband purchases three vacant blocks of land in Property C.
·8 January 2013 (company omitted) Pty Ltd is placed into voluntary administration.
·22 March 2013 husband sells property at Property D.
·2 April 2013 parties entered into a new Binding Child Support Agreement terminating the previous agreement.
·15 January 2014 father makes a non-periodic payment pursuant to the Agreement.
·3 April 2014 father sells property at Property E for $187,500.
·8 April 2014 father sells property at Property B for $190,000.
·10 April 2014 ATO commences legal proceedings against the father in the District Court of New South Wales seeking recovery of $302,863.42. Father later enters into a payment arrangement with ATO in respect of this debt.
·2014 father is dismissed from his role at (employer omitted). He enters into a settlement with (employer omitted).
·September 2014 father sells the property at Property A, placing the proceeds of sale into a bank account held by Ms K.
·17 September 2014 father joins the board of (company omitted) (“(company omitted)”) as a non-executive director.
·2015 [B] born to the father and Ms K.
·2015 father enters into a contract of employment with (employer omitted)) as (occupation omitted) with remuneration of $480,000 per annum.
·10 April 2015 father receives a letter of demand from the liquidator of (company omitted) Pty Ltd.
·2015 father is informed by (employer omitted) that his contract of employment will not be extended.
·15 September 2015 father makes a periodic payment pursuant to the Agreement.
·9 October 2015 mother files an initiating application seeking to enforce Agreement.
·28 October 2015 father enters into a Limited Child Support Agreement with Ms K agreeing to pay $6,199.91 per annum.
·2015 father ceases employment with (employer omitted).
·2015 father commences employment with (employer omitted) on a package of $240,000 per annum.
·13 January 2016 father commences legal action against (employer omitted).
·18 May 2016 father settles his action against (employer omitted) and receives payment of $40,909 plus GST.
·26 August 2016 ATO commences proceedings against the father in the District Court of Queensland seeking recovery of amounts owed to it.
·February 2017 mother commences receiving child-support payments as assessed by the CSA and collected by them on her behalf.
The chronology above is generally accepted by both parties although there may be some small difference in detail including as to amounts referenced.
Mother's case
Essentially, the mother says that any circumstances that have occurred since 2 April 2013 in respect of the father are not ‘exceptional’ but rather represent simply the normal vicissitudes of life. In this sense she argues that the father's change of employment, decreasing income, accruing of other debts, and remarriage bearing children are not exceptional circumstances either solely or cumulatively. Collaterally or alternatively, the mother argues that the changes of circumstances argued by the father were either in existence or reasonably foreshadowed at the time of the Agreement or, further still, and in respect of his ATO debt and his dismissal from (employer omitted), caused by the father’s own behaviour and, as such, he should not be able to rely on his own misconduct or inaction as grounding a change of or exceptional circumstance.
Similarly, the mother argues that any hardship asserted by the father is either manipulated by him as, for instance, in him accruing a subsequent child support liability for the children of he and Ms K or, again relevant to his own inaction or misconduct as in the ATO debt and his decrease in income.
Further, the mother argues that, despite copious documents before the Court, the father has again failed to make full and frank disclosure of his financial history. Specifically, she argues that a sum of $610,000 remains unaccounted for in respect of the asserted purchase by Mr Telama of three Property C properties which he says he purchased from his company (company omitted) Pty Ltd in order to shore up the financial position of that company. Specifically, counsel for the mother argues that the father has been selective in his disclosure of documents.
In summary, therefore, the mother argues that the father has not crossed the evidentiary threshold of showing, firstly, exceptional circumstances as required for the setting aside of the Binding Child Support Agreement and, secondly, hardship to him if the agreement is not set aside. The argument follows on the same basis that the substantial arrears for child support should not be discharged.
The father's case
The father asserts that he has been the victim of exceptional circumstances all of which have occurred since the making of the Child Support Agreement and which were not foreshadowed or anticipated at that time. He says that any of those circumstances could sit alone as a grounding for the setting aside of the agreement or cumulatively amount to exceptional circumstances. He cites his remarriage and the introduction of further children as such a circumstance. He says that his substantial decrease in income from the loss of his (employer omitted) employment was not foreshadowed or anticipated. He says that he has attempted to mitigate this situation albeit unsuccessfully in applying for at least 100 jobs. He says that his liabilities to the ATO have occurred since and were not anticipated at time of the Binding Financial Agreement.
Secondly, the father argues that he will suffer hardship within the meaning of the Act if the Agreement is not set aside and the arrears extinguished. He argues that he has a current income of $219,000 gross per annum which is not sufficient to meet his obligations under the Binding Child Support Agreement.
The relevant Binding Child Support Agreement
The relevant agreement from 2013 puts the following obligations on the father:
i)A periodic payment of $6,815.33 per month to the applicant for the four children;
ii)$3,154.29 for school fees for each child annually until the completion of year four;
iii)$14,194 for school fees for each child annually from year 5;
iv)$315.43 per month for private health insurance; and
v)An additional sum to a maximum of $5,000 per annum towards [Z]’s special medical expenses.
The oldest child has now reached 18 years of age. The periodic payments for the remaining three dependent children total $5,450.23 per month or $65,402.72 per annum. Non-periodic payments for school fees total $47,328.56 per annum. The obligation cited at $5,000 per annum remains for [Z].
Relevant law
Division 1A of Pt 6 of the Child Support (Assessment) Act 1989 provides for parties to enter into binding child support agreements. The requirements of such agreements are set out at s.80C(2). There is no issue before me that the relevant agreement satisfies those requirements.
Section 80CA of the Act stipulates that a Binding Financial Agreement must not be varied but can be terminated or replaced with a new Binding Child Support Agreement.
Section 136(2) of the Act provides that a Court may set aside the agreement if satisfied:
…
d)in the case of a binding child support agreement – that because of exceptional circumstances, relating to a party to the agreement or a child in respect of whom the agreement is made, that have arisen since the agreement was made, the applicant or the child will suffer hardship if the agreement is not set aside.
It seems, therefore, that there are three crucial limbs to be satisfied and where the applicant to set aside the agreement carries an onus accordingly:
i)That there are exceptional circumstances relating to a party to the agreement or a child in respect of whom the agreement is made;
ii)That the exceptional circumstances have arisen since the agreement was made; and
iii)That the applicant or the child will suffer hardship if the agreement is not set aside.
The wording of the sub-section makes it clear by the inclusion of the adjective 'exceptional' that the possibility of a mere change or any change in circumstances would be insufficient to set aside an agreement and that the onus is therefore a high qualitative one. As Warnick J observed in Balzano & Balzano[2]:
… It is not intended that binding agreements should be set aside lightly. This amendment restricts the scope for the setting aside of binding child support agreements by specifying that exceptional circumstances relating to one of the children or parties to the agreement must have arisen since the making of the agreement, and that the child or party would suffer hardship if the agreement were not altered or set aside.
[2] [2010] FamCAFC 11
Mr Telama referred me to a decision of Watts J anonymised as Keane v Keane& Ors[3] where his Honour says at [40] in considering exceptional circumstances:
[3] [2013] FamCA 332,50 Fam LR 120
40.When considering whether or not ‘exceptional circumstances’, exists:
40.1the whole circumstances have to be taken into account;
40.2it may be that one circumstance alone cannot be described as exceptional but the whole of the circumstances, when looked at cumulatively, might be described as exceptional…;
40.3within a particular context whether something is exceptional is a matter of 'fact and degree'…
In dealing with an application under section 79A of the Family Law Act 1975, Mushin J in Gavin v Garden[4] considered the notion of 'exceptional circumstances' and concluded that to be exceptional then circumstances must go beyond 'the normal vicissitudes of life and something more than simple change and that the applicant not be a contributor to the circumstances of the change’. I respectfully adopt his Honour’s interpretation.
[4] [2011] FamCA190
Similarly dealing with a matter under section 79A, the Full Court in Simpson & Hamlin[5] commented on 'exceptional circumstances' as follows:
…The question therefore is whether the changes which occurred in this case were such as ‘to take it out of and beyond the ordinary circumstances in which such change might be reasonably expected to occur…'. His Honour in our view stated correctly the law on this point 'which amounts to 'exceptional circumstances' is very much a question of fact and degree’.
[5] (1984)FLC 91-576
To my mind, a circumstance could not be deemed 'exceptional' if it was contemplated, expected or foreseen at the time of the Agreement. This consideration would have both subjective and objective considerations on a case-by-case basis.
Thirdly, there is an onus on the applicant to prove on the balance of probabilities that he (or a child) will suffer 'hardship' if the agreement is not set aside. The Full Court in Simpson & Hamlin (supra) also considered 'hardship' and observed:
… It is not sufficient that it appears that circumstances have arisen of an exceptional nature resulting in hardship to the applicant, the Court must consider in the exercise of its discretion whether the hardship is of such a serious nature and results in such inequity that it can only be rectified by the extreme step of setting aside of varying an existing order of the Court.
Consequently, I consider the notion of 'hardship' must be viewed similarly to that of 'exceptional circumstance' where the bar is high and an applicant must show more than 'the normal vicissitudes of life'.
Binding child support agreements offer benefits to the parties but in turn cannot be varied and only be terminated in very limited and stringent ways. It follows, and as a matter of common sense, that a party should not to be able to act deliberately, negligently or wantonly thereby being the author of 'exceptional circumstances' and/or ‘hardship’ and then claim to discharge their heavy onus of proof accordingly.
Consideration – Setting aside Agreement
The father’s current income is $219,178.00 per annum. He has an annual net income of $142,932.00. Evidence forthcoming from cross examination shows the father’s taxable income for the years preceding the Agreement to have been:
·2008 - $1,626,461.00
·2009 - $1,450,343.00
·2010 - $21,979.00
·2011 - $211,500.00
·2012 - $698,001.00
The father’s evidence, which I accept as unchallenged, is that as of 2 April 2013 he enjoyed a remuneration package of $702,000 per annum with (employer omitted).
The father has been in his current employment since 2015 with a static income as above plus superannuation.
The agreed fact is that the father was summarily dismissed from his employment with (employer omitted) for alleged misconduct. I have no particulars of the alleged conduct. I do know that he pursued an unfair dismissal claim which settled by an ex-gratia payment to him equivalent to 10 weeks’ salary.
The father’s unchallenged evidence is that he has applied unsuccessfully for more than sixty higher paid employment positions since 2015. He has since undertaken further study.
The father’s sworn financial statement discloses no income from any source other than his employment.
I am satisfied that the father’s income was his primary, if not sole, source of satisfying his commitments under the Binding Child Support Agreement as of 2 April 2013. That income has now reduced by a gross of approximately $482,000 per annum.
The father commenced a relationship with Ms K in 2007. That relationship produced two children, [A] born in 2014 and [B] born in 2015. The father and Ms K separated in 2015.
On 28 October 2015 the father entered into a limited Child Support Agreement with Ms K obligating him in the monthly sum of $6,199.91 for [A] and [B]. At this time the father was employed on a contract of employment with (employer omitted) as (occupation omitted) with a remuneration of $454,419 per annum. Also at this time the father retained his obligation under the Binding Child Support Agreement of $6,815.33 per month plus school fees and [Z]’s payments. I can only comment that the entry into such a commitment for the Ms K children in such circumstances was extraordinarily disproportionate to his income.
The Applicant father has a current liability to the ATO of $718,900.35. He had no liability as of 2 April 2013. It seems, however, that this liability was struck after a series of audits by the ATO in respect of the father’s historical income and incorrect taxation assessments.
As at 2 April 2013 the father had credit card liabilities of $180,000E. They now sit at $285,244. The change in circumstances is, of course, his reduced income with which to meet these repayments.
As at 2 April 2013 the father owned a property at Property A, Queensland valued at $2,450,000 but with equity of only $425,000. That property was sold in 2014 and with net proceeds of $340,395.
In February 2009 the father incorporated a company, “(company omitted) Pty Ltd”. The company undertook property development in Queensland. In 2011 the property owned by the company suffered environmental damage and was placed into voluntary administration on 18 January 2013 or some 3 months prior to the relevant binding Child Support Agreement. In April 2015 the father received a letter of demand from the liquidators of (company omitted) Pty Ltd for $607,402. That amount remains unpaid.
Findings
I do not consider the advent of children from the father’s relationship with Ms K to be an exceptional circumstance. Rather, this might be a reasonably foreseen event and one which certainly sits within the normal vicissitudes of life. Certainly, the circumstances of the father’s extraordinary financial commitment to the two Ms K children does not satisfy the test or discharge his onus of showing an exceptional circumstance. Frankly, for a man with his (occupation omitted) training, aptitude and experience to enter into such a financial impost beggars belief and he is arguably recklessly the author of his own difficulties in this respect.
Nevertheless, I am persuaded on the balance of probabilities that the father’s loss of income does constitute an ‘exceptional circumstance’. The reduction of income is substantial and in a quantum of approximately $482,000 per annum. Although alleged misconduct directly caused his loss of income, I cannot be satisfied as to the fact of the misconduct. I have no particulars. The issue of fault in the dismissal was not pursued before me. The matter was settled without findings of fault or, at least, any such findings being placed before me. This is not, therefore, a situation analogous for instance to that in Balzano (supra) where the criminal conduct of the payee could not be relied upon as an ‘exceptional circumstance’. Further, this is not a situation where I can find that the father has voluntarily or manipulatively reduced his income or employment opportunities as in Keane (supra). To the contrary, I accept that he has attempted to mitigate his situation by actively seeking more remunerative employment and obtaining higher qualifications.
This is not a situation where the father has accrued assets or has other resources at his disposal to meet his commitments under the Binding Child Support Agreement.
I find, therefore, that there has been a significant change in the father’s circumstances. I find that such a change would not have reasonably been foreseen or expected as at 2 April 2013. I find this to be a change of circumstance which directly impacts on the father’s ability to meet his commitments under the Agreement. I am not satisfied on the evidence that he has contributed to this change in a deliberate or reckless way. I see this change to be outside the usual vicissitudes of life. As such, I am persuaded that this is an exceptional circumstance for the purposes of s.136(2) of the Act.
Having so found, I am also persuaded that the father will suffer hardship if the Agreement is not set aside. His sworn financial statement is virtually unchallenged. His commitments under the Binding Child Support Agreement approximate currently some $117,731 per annum. His net income after tax is disclosed at $142,480 leaving him with $24,749 or $476.00 per week to support himself and contribute to the support of [A] and [B]. I am satisfied, therefore, that the father would suffer a hardship should the Agreement not be set aside.
Discharge of Arrears
Whereas I have made a determination to set aside the Binding Child Support Agreement primarily on the basis of the father’s current circumstances, I am of the view that my consideration of the second argument by the mother that payment of arrears be enforced or, alternatively, by the father that they be discharged, enlivens a far broader consideration as to capacity and justice and equity.
Firstly, I am satisfied that the mother has actively sought her entitlement under the Agreement and has at no time acquiesced to the accruing of the substantial arrears. Her application was prudently filed as long ago as 9 October 2015 and the delays in the process can in no way be attributed to her.
The father is in stable employment with a substantial income of $219,178 per annum. Whilst he has accrued significant liabilities to the ATO and the liquidators of (company omitted) Pty Ltd, the liability for payment for his children in no way suffers in priority to those debts. Indeed, as Mr Telama was keen to remind me on more than one occasion during his final submissions, that whilst he might be considering a debtor’s petition for bankruptcy in respect of his heavy debt load, the child support arrears will not be captured by that status and I expect that his anticipated bankruptcy will have minimal, if any, impact on his basic income as it stands and indeed it may be that, as he apparently anticipates, his financial position will be improved should he, in fact, take that course.
Significantly, the father himself produced at annexure NN of Volume 4 of his trial affidavit a letter from “Dissolve” being the liquidators of his company (company omitted) Pty Ltd. That letter dated 10 August 2015 states inter alia:
Based on my findings above, I conclude that the total amount payable to the company by you is $737,077 and my calculation is set out as follows:
(Land omitted) in the outlook A transferred to you by the company.
$200,000
(Land omitted) in the outlook transferred to you by the company
$210,000
(Land omitted) in the outlook transferred to you by the company
$200,000
(Land omitted) in the outlook transferred to (business omitted) by the company
$177,000
Total payable amount by
$787,000
Less
Balance of the loan account owing by you excluding the loan transfers
($49,923)
Net payable settlement amount
$737,077
Notwithstanding the above, I have reviewed the Proofs of Debt submitted by the Creditors, being the Australian Taxation Office and (omitted) Pty Ltd, together with my estimated costs to complete this liquidation. This calculation shows a net deficiency of $607,402 in the liquidation. This is the amount I would require in order to settle the amount payable by you to the company.
At [133] of his trial affidavit, the applicant deposes:
On 10 April 2015 I received a letter of demand from the liquidator of (company omitted) in the amount of $607,402. This related to, amongst other things, funds withdrawn from the company by me prior to the voluntary administration to fund personal living expenses, child support and other obligations to Ms Telama.
When challenged by both Counsel for the mother and myself for clarification of the contents of the “Dissolve” letter, the father unequivocally repeated that he had paid the sum of $610,000 (in respect of the first three lots). He specifically says that he borrowed the money in his own name and on the security, in part, of his income. He says that the cash was transferred to the company. I am not satisfied from the letter from Dissolve of 15 April 2015 or from the father’s affidavit at [133] that this actual transfer occurred. I agree with the submissions of Counsel for the mother that the $610,000 is not accounted for. Certainly the father does not produce bank statements to evidence his asserted transfers. There are no settlement statements. I prefer to read the Dissolve letter of 15 April 2015 simply and literally that the monies referred to remain unpaid.
The Applicant has enjoyed holidays within Australia and overseas during the time that arrears have accrued under the Child Support Agreement. I do not accept that his estranged partner, Ms K, is his benefactor for all of the expenses of those trips and certainly not where corroborative evidence is not adduced from Ms K.[6] The father’s evidence and explanations, for instance where bookings appear in his name, was generally unimpressive. Specifically, corroborative evidence from Ms K in a sworn form would have added credulity to his claim that his estranged partner would finance his holidays in circumstances where he is presumably indebted to her for substantial amounts in respect of the financial support of their two children. I prefer that he has at least contributed financially to his own enjoyment of these holidays.
[6] Jones v Dunkell (1959) 101 CLR 298
In September 2014 the father sold a property at Property A. He says that he netted $340,399. His affidavit deposes at [15] thus:
…net proceeds of $340,399 all since spent on child support payments, tax debt payments of $180,000 and living expenses.
I accept the mother’s evidence that $128,000 of these monies were used to pay down the father’s then credit card liabilities. However, despite his substantial employment/income, he claims to have since accrued credit card liabilities of $258,245. He does not particularise or offer any explanation for such high levels of accrued debt.
Similarly, I do not accept with any probity the husband’s explanation of putting the balance proceeds of sale of the Queensland property into an account in the name of Ms K. His explanation for this and a subsequent use of an account in the name of [B] being for ‘tax benefit purposes’ is not, in my view a satisfactory explanation for the disbursement of funds.
The father discloses in his affidavit at [99] the sales of packages of shares received during his employment with (employer omitted).
The father himself indicated a propensity to utilise bank accounts in order to hide monies from his creditors or potential creditors including an account in the name of ‘Telama, Mr Telama, Ms K, [B]’ and to do so in order to avoid any proper garnishee order from the ATO. He also candidly admits moving amounts of money between his superannuation account and his personal account in breach of the Superannuation Rules.
Despite previous criticism of him in these proceedings and despite what now seems to be literally hundreds of pages of bank statements and sundry documents, I accept the submissions of the mother’s Counsel that the father has failed to disclose some relevant and specific bank statements. These failures are obfuscated by but not satisfied in his provision of copious other and seemingly irrelevant bank statements.
The father entered into a limited Child Support Agreement with Ms K on 28 October 2015 thereby obligating himself in a sum of $6,199.91 per month. I can only assume that he then considered that he had the ability to make such payments.
During the period in which he has accrued substantial child support arrears, the father has entered into two leases for motor vehicles including a (motor vehicle omitted) vehicle which is apparently driven by Ms K. He claims that at least one of the leases to be in default for about one year being a situation which I find difficult to accept save with some collateral agreement with the lender.
In his current child support assessment the father has a provisional income of $450,570 and the mother has an adjusted taxable income of $31,399.
The father deposes to currently paying child support of $2,135 per week for all of his dependent children.
In his sworn financial statement the father deposes to having an excess income over expenses of $318.00 per week. I assume as a priority these monies could be put towards his arrears of child support.
In his final submissions the father volunteered the following:
Now, the orders sought by the mother in terms of this remaining – this child support debt seeks orders for the attachment of earnings and debts including a third-party notice that is simply going to compromise my ability to earn any income into the future. Unlike the child support agency, which is at least required to leave the protected earnings amount of $716 per fortnight in an employee’s pay, the mother will not be subject to any such restriction. It would appear that her enforcement of the arrears, which she is very clearly, by her actions, intent on doing would, practically speaking, leave me able to derive income only from Centrelink payments for the remainder of my working life for the support of myself and my two younger children.
I note that the father now has secure employment and has a net income over and above his claimed expenses. I will give the father the benefit of the doubt in not interpreting the above submission as an indication or statement of intent that he would voluntarily relinquish that remunerative employment if I do not accede to his application to discharge the arrears of child support owing.
The father argues that the mother’s financial position has improved to such an extent that it would be just and equitable to discharge the arrears. I do not accept the submission. The four children reside with the mother and see the father infrequently. The mother derives her income primarily from Centrelink benefits supplemented by child support and dividends of $30 per week. Her major asset is the family home. She has some stock valued at $300,000. She has received family bequests of $370,000 used to reduce her mortgage but still retains a residual mortgage on the home. The children have received a bequest of a holiday home at Property F to be held in trust for them until 2030.
Taking all of these matters into account, I am not persuaded that any recent good fortune enjoyed by the mother of the children is such that the father should be relieved of his historical obligations for payment of child support or for the arrears that have accrued by reason of his non-payment. Further, it is well established that child support assessments and payments relate to specific periodic needs and there are long recognised public policy considerations in requiring and enforcing these parental obligations.
In conclusion, therefore, and taking into account all of the above, I am not satisfied in all of the circumstances that the arrears of child support due and owing should be discharged and I find in favour of the mother’s application that payment be enforced.
I note the exposed financial circumstances of the parties but am of the view that there must be a set period for the respondent to make arrangements for the payment of what is a considerable quantum of arrears. I consider a period of 120 days to be a reasonable period and, if not paid, then the applicant shall have leave to pursue the option of payment via a Third Party Notice.
I certify that the preceding seventy four (74) paragraphs are a true copy of the reasons for judgment of Judge McGuire
Date: 1 May 2018
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