Further update: Court fee increase disallowed

The Federal Courts Legislation Amendment (Fees) Regulation 2015 which was to increase fees in the family law courts was disallowed by the Senate on 25 June 2015.

The fee increase set out in my previous post will therefore not be implemented.

Update: New Court fees

I posted a week or so ago about the announcement in the budget that Court fees will be increasing as at 1 July 2015.

The Federal Courts Legislation Amendment (Fees) Regulation 2015, assented on 28 May 2015, sets out the new fees. The most common are:

• The filing fee for an Application for Divorce is increasing from $845 to $1195;  
• The Initiating Application fee increases from $320 to $350;
• The fee to issue a Subpoena increases from $55 to $120;
• An Application for Consent Orders fee increases from $155 to $235; and
• The setting down for hearing fee increases from $805 in the Family Court and $590 in the Federal Circuit Court to $885 and $650 respectively. 

There is also a new fee that has been announced - for filing an amended Initiating Application or Response. The fee is $120. Previously there was no fee to file an amending document. 

Amalgamation of Tribunals

The Tribunals Amalgamation Act 2015, passed by Parliament on 13 May 2015, will come into effect on 1 July 2015. From that date the Social Security Appeals Tribunal, along with the Migration Review-Refugee Review Tribunal will join the Administrative Appeals Tribunal.

The amalgamation is expected to generate efficiencies and savings through sharing financial governance, IT and human resources.

For the large part the current processes for each Tribunal will be maintained and the legislation provides for the work of the existing Tribunals to be conducted by a special division within the Administrative Appeals Tribunal. Existing applicants will not need to submit a new application as all undecided reviews will automatically be transferred to the new Tribunal.

However, of note in family law matters is some changes in relation to child support matters - currently conducted by the Social Security Appeals Tribunal. Judicial reviews will now be to the Federal Circuit Court and the Federal Court rather than to the Family Court. 

Budget announces increase to Court fees

Last week's federal budget announced expected changes to the fees in the Family Court and Federal Circuit Court. The changes, likely to take effect from 1 July 2015, are expected to raise around $87 million in the federal courts.

While no specific fee changes have yet been announced media reported last week that the fee for divorce applications, currently $845, would rise to $1,200, and the fee for an Application for Consent Orders would rise from $150 to $240. According to the Sydney Morning Herald the Attorney General George Brandis confirmed that fees will increase but said that details would not be known until July.

The Australian quotes the head of the Law Council of Australia's family law section, Rick O'Brien, who said "We have not yet been told what the proposed fee increases will be, but we would be extremely concerned that any fee increases would severely restrict access to the courts by people most in need." The paper went on to quote the immediate past head of the section, Mr Sinclair, who expressed concern that the increase to the consent order fee would discourage parties from trying to resolve their dispute by proper process which could lead to problems later on.

When will a tax liability not be a joint liability?

The recent case of Adair & Milford [2015] addressed a number of issues, as is usually the way, but of particular interest was a question that arose in relation to the husbands tax liability.

In the first trial the Judge had found that the husband had an outstanding tax liability at the time of separation in 2012 of $220,000 and at the time of the trial in 2014 of $419,000. The husband had ceased to pay PAYG instalments in 2011. Despite this the husband had given evidence that he was paying PAYG instalments of $4,230 per week as well as $287 per week in withholding tax at the time of the trial. The effect of the husband's evidence was to mislead the wife and the Court and to wrongly inflate his expenses so that they exceeded his income - which was not the case. The trial Judge then went on to examine the husband's income and expenses and found that the husband did have the capacity to have been paying the tax liability. The Judge held: "I accept that he was making a significant contribution to the wife, the children and the mortgages but at the same time, he made no arrangement with the Australian Tax Office notwithstanding the Court was under the impression that amounts were being set aside on a weekly basis. In my view, it would not be fair now to attribute the debt to the wife."

On appeal the husband argued that the trial Judge was in error in concluding the amounts of tax owing. The Appeal Court noted that "it is beyond dispute that the husband's evidence on this topic [at the trial] was imprecise and that no criticism can be levelled at his Honour's decision to accept the husband's evidence that as at separation he was indebted to the ATO in that amount."

The Appeal Court noted that there is no principal of general application that merely because a taxation debt accrued prior to separation it must be brought to account as a joint matrimonial liability: Trustee of the Property of G Lemnos, a Bankrupt & Lemnos and Anor (2009). The Appeal Court went on to say that to their view the facts of the case amounted to "compelling circumstances" - as announced by the Full Court in Johnson and Johnson [1999] - which would enable the Court to leave one party solely responsible for his own taxation debt.

The Appeal Court stated that it would have been necessary, in order for the appeal to succeed, for the husband to have successfully challenged the weight which the trial Judge placed on the husband's misleading evidence concerning the payment of his outstanding tax and to the cavalier manner in which he conducted his finances post separation.

The Appeal Court said: "The wife having been unaware prior to separation of the husband's failure to pay his taxation liabilities as they fell due and then after separation misled into believing payments were being made, it was entirely reasonable for his Honour to focus on how after separation the husband approached this debt and to ultimately conclude that the husband could and should have paid his accrued debt and tax as it fell due."

The husband was wholly unsuccessful on his appeal. The husband was ordered to pay the wife's costs of the appeal.

myGov and family law

A media release from the Minister of Human Services this week announced the launch of a new smart phone app called "Express Plus Child Support".

The new app is designed to allow parents to view letters and other communications, keep track of child support payments, update their contact and account details and advise of any important changes in their circumstances. Parents can even make payments using the app.

According to the media release if registered for myGov parents can download the Express Plus Child Support app.

This new app is the latest step in the expansion of myGov services. But other existing myGov services are also of relevance in family law matters. For example, through a myGov account it is possible to claim a range of Centrelink payments and the Centrelink Express Plus app can be used to interact with the Department in relation to those benefits. Also, once registered for myGov you can link with the ATO and then search for superannuation interests and their current balances.

What constitutes the end of a marriage?

In a couple of previous posts I have mentioned cases where the Court was required to examine the minutia of the parties lives to determine whether they were in a de facto relationship. You would ordinarily think that with marriage it would be easier to tell. However, the Court is actually frequently required to delve into the details of a marriage to determine when it ended - either for the purpose of an Application for Divorce or in order to determine the contributions that were made during the marriage in relation to a property division application.

Yesterday just such a case caught my eye when it was headlined on http://www.smh.com.au/act-news/i-wouldnt-have-married-her-if-id-known-she-had-deformed-nipples-exhusband-20150412-1milj4.html as "'I wouldn't have married her if I'd known she had deformed nipples': ex-husband".  Attention grabbing isn't it?

The case, published as Drysdale & Drysdale [2014], is a decision by Judge Neville in the ACT relating to a dispute between husband and wife as to the length of the marriage and the contributions of each of them during that time and post-separation.

His Honour stated that the husband was intent on having the Court determine the actual date of separation - "in his view it was essential that this occur because, he said ... (a) separation was in 1999, and (b) once this was established, in some way (he contended) this had the effect of quarantining his assets from the Wife's pursuit of them after that date. Respectfully the Husband was and is inaccurate in this regard in at least two respects. First, for the purposes of property proceedings, the date of separation does not, of itself, determine whether the assets of one party are or are not included in the asset pool ..."

The husband claimed that the relationship ended in 1999 but the wife stated that it ended in 2011.The husband, in his affidavit and in his oral evidence, set out his view that he intended to leave the marriage in 1974 when he had become aware of what he called a disfigurement of the wife (the Judge commented in the judgement that the description by the husband was "tersely lurid and doubtless hurtful"). The husband claimed that he nonetheless stayed with the wife for the children.

His Honour noted "whatever the Husband subjectively thought or intended regarding the date of the end of the relationship, it is for the Court to make determinations objectively in the light of the evidence presented to the Court.

Judge Neville determined the date of separation as 2011.

In doing so the Judge observed the following:

• The couple were married in 1972. The first child of the marriage was born in 1974 and two further children followed.  
• Attached to the wife's affidavit were date-identified photographs of the parties, post 1999, which suggested that the parties presented publicly - and did so over a period of time - as a couple. There was also affidavit material from friends stating that the parties appeared publicly as a couple. 
• The parties attended various family events, went to dinner with friends and alone together, and continued to go on holidays between 1999 and 2011. The husband claimed that he attended these events as a friend, or father to his children. 
• The husband completed the wife's tax return until 2002.
• In 2004 AAT proceedings the husband identified the parties as husband and wife.
• The parties utilised a shared credit card until 2007.
• The parties attended marriage counselling together during this period. 
• The husband confirmed that they slept in the same bed together - at least until 2006.
• No family members were told of the separation until 2011. Indeed the husband gave evidence that he was annoyed with the wife for having told his mother of the separation in 2011.