Amato and Amato
[2013] FCCA 942
•26 July 2013
FEDERAL CIRCUIT COURT OF AUSTRALIA
| AMATO & AMATO | [2013] FCCA 942 |
| Catchwords: FAMILY LAW – Child maintenance – wife’s application for lump sum child maintenance where husband has ceased to be a resident of Australia or a reciprocating country for the purposes of child support – husband has failed to pay maintenance for the child since April 2012 – husband has failed to take part in these proceedings – orders made for husband to pay lump sum child maintenance. |
| Legislation: Child Support (Assessment) Act 1980 |
| Collins & Collins (1993) FLC 92-343 RNL & RHB [2005] FMCAfam 520 Bereat & Bereat [2010] FamCA 693 |
| Applicant: | MS AMATO |
| Respondent: | MR AMATO |
| File Number: | MLC 812 of 2010 |
| Judgment of: | Judge Bender |
| Hearing date: | 18 July 2013 |
| Date of Last Submission: | 18 July 2013 |
| Delivered at: | Melbourne |
| Delivered on: | 26 July 2013 |
REPRESENTATION
| Counsel for the Applicant: | Mr Cash |
| Solicitors for the Applicant: | Manby & Scott Lawyers |
| Counsel for the Respondent: | NA |
| Solicitors for the Respondent: | NA |
ORDERS
On or before 26 August 2013 the husband pay to the wife child maintenance for the child, X born (omitted) 1999 (“X”), in the sum of $76,200.00 by way of a lump sum payment.
Order 6 of the orders made 22 May 2013 be dismissed.
IT IS NOTED that publication of this judgment under the pseudonym Amato & Amato is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT MELBOURNE |
MLC 812 of 2010
| MS AMATO |
Applicant
And
| MR AMATO |
Respondent
REASONS FOR JUDGMENT
Introduction
This is the wife’s application seeking the husband pay child maintenance for the parties’ son, X born (omitted) 1999 (“X”).
These proceedings were commenced by the wife’s Initiating Application filed 13 December 2012. On 24 June 2013 the wife filed an Amended Initiating Application seeking orders in the following terms:
a)The husband pay to the wife child maintenance for X at the rate of $20,000.00 per annum from 1 July 2012 until 8 November 2017.
b)The child maintenance be capitalised and paid to the wife by way of one lump sum payment of $90,000.00 within 28 days of such an order being made.
c)The husband pay the wife’s costs on an indemnity basis.
At the hearing of this matter the wife was given leave to amend her application such that she now seeks an order that the husband pay child maintenance as from 13 December 2012, being the date she filed the Initiating Application.
The husband has failed to participate in these proceedings.
The wife’s application was first listed on 21 December 2012. On that occasion the husband failed to appear. An order was made adjourning the matter to 20 May 2013 and it was noted in the orders made that day that the husband had been taken to have been served with the wife’s application for child maintenance on 20 December 2012. The wife’s then solicitors were ordered to serve the husband with a copy of the orders of 21 December 2012 by emailing them to the husband’s known email address.
On 20 May 2013 the husband again failed to appear. The matter was adjourned to 22 May 2013. On 22 May 2013 orders were made for the matter to be adjourned to 18 July 2013 and for the wife to file an Amended Initiating Application, supporting affidavit and an up to date financial statement on or before 1 July 2013. Orders were also made that in the event the husband failed to appear on 18 July 2013, the matter would proceed on an undefended basis.
The wife’s then solicitors were again ordered to serve the husband with a copy of the order of 22 May 2013 and the documents filed by the wife in accordance with those orders by emailing them to the husband’s known email address.
On 18 July 2013 the wife’s solicitors filed an affidavit of service confirming service upon the husband in accordance with the orders of 22 May 2013 and annexing an email response received from the husband as follows:
Sorry to disappoint,but I will be at work on the 18th July,I work a 6 week on,3 week off roster
On 18 July 2013 the husband again failed to attend Court. Given the orders made on 22 May 2013 and the husband’s repeated failure to attend Court or file any responding material in relation to the wife’s application for child maintenance, the matter proceeded on an undefended basis in the husband’s absence.
Background
The wife is aged 48 years and the husband is aged 43 years. The parties commenced cohabitation in 1991, married on (omitted) 1993 and separated on 29 August 2009. The parties have two children, X aged 13 years and 8 months who resides with the wife and an adult child Y aged 20 years who lives independently in (omitted).
X has had no contact with the husband since 2010.
At separation the husband had been employed in the (omitted) industry in (omitted) as an (omitted) for approximately three years. After separation the husband took a position as an (omitted) with (omitted) at the (omitted) in (omitted). The husband continues to work in the (omitted) industry outside of Australia. The country in which country the husband is currently working is unknown. It is the wife’s evidence that in a recent Facebook entry made by the husband he makes reference to receiving a commendation from his employer for (omitted) in (omitted).
In the husband’s affidavit sworn 3 March 2011 in relation to property proceedings, the husband deposed that when not working, he is based in (omitted). It is the wife’s evidence that the husband continues to be based in (omitted) when not working.
Following separation the parties had an informal agreement that the husband would pay the wife $2,200.00 per month child support for Y and X who were then both in the wife’s care. In March 2010 Y moved to (omitted) to live with the paternal grandparents and thereafter the husband paid the wife $1,100.00 per month child support in relation to X only.
In May 2011 final property orders were made by consent and the parties reached an informal arrangement that the husband would pay the wife $1,200.00 per month child support for X.
Prior to the parties’ final separation in August 2009, the parties had briefly separated. During this time the wife applied for Centrelink benefits and was therefore required to also apply for child support. In or around July 2011 the Child Support Agency issued an assessment that the husband pay child support for X in the sum of $9,069.00 per annum from 21 July 2007. Both parties objected to this decision and on 28 November 2011 the Child Support Agency assessed the husband to pay child support for X at the rate of $14,400.00 per annum from 23 September 2011 to 31 December 2013.
Both parties sought a review of this decision and on 13 April 2012 the Child Support Agency disallowed both parties’ objections.
On 23 April 2012 the wife received correspondence from the
Child Support Agency which stated inter alia:
The Child Support Agency (CSA) has reviewed your child support case and decided that Mr Amato ceased to be a resident of Australia and/or a reciprocating country for child support purposes on 31/12/2013.
What this means for you
· This means that your child support case has ended as of 31/12/2013.
On 17 April 2012 the Child Support Agency collected arrears of child support from the husband in the sum of $4,792.85. The husband has paid no child support for X since April 2012.
On 15 January 2013 the wife received further correspondence from the Child Support Agency which stated inter alia:
The Child Support Agency (CSA) has reviewed your child support case and decided that Mr Amato ceased to be a resident of Australia and/or reciprocating country for child support purposes on 1/05/2009.
What this means for you
This means that your child support case has ended as of 1/05/2009.
X has always struggled socially and academically. In June this year X was assessed by a multi disciplinary team at (omitted) Community Health Services and was diagnosed with Autism Spectrum Disorder (Autism).
Because of the difficulties X’s autism causes him he was subjected to considerable bullying in his state school during his primary school years. The wife therefore made the decision to enrol X at (omitted) College, a private school, when he commenced secondary school this year as it is a smaller school and better able to manage his special needs.
Now that X has been formally assessed as autistic by (omitted) Community Health Services, the wife and (omitted) College are in the process of developing an individual learning plan for X as well as investigating whether he qualifies to receive funding at school to support his learning and better his social inclusion.
The evidence
The wife
The wife relies on her affidavits sworn 12 December 2012,
22 May 2013 and 20 June 2013 and her financial statement sworn
20 June 2013. The wife also relies upon the diagnostic report prepared by (omitted) Community Health Services in relation to X dated June 2013. The wife also gave viva voce evidence at the final hearing of this matter.
The wife is employed on a permanent part-time basis as a (omitted) at (omitted). The wife earns $620.00 per week and receives $160.00 per week in Centrelink benefits.
The wife has recently sold the former matrimonial home retained by her pursuant to property orders made in May 2011 as she was unable to afford the mortgage on that property. The wife has purchased a property in (omitted) for $270,000.00 and is servicing the mortgage for that property in the sum of $222,000.00 by way of weekly repayments of $300.00.
In the wife’s financial statement sworn 20 June 2013 she deposes that her weekly living expenses exclusive of the mortgage are $340.00 per week. The Court is satisfied this figure is reasonable and properly represent the wife’s personal living expenses.
In relation to X’s living expenses, it is the wife’s evidence that his day to day living expenses are $325.00 per week, exclusive of the provision of providing a home for X, the costs of education and medical and orthodontic expenses, exclusive of education and medical and orthodontic costs.
This figure included expenditure of $100.00 per week for ‘children’s activities’. When cross-examined as to this figure, it is the wife’s evidence that X plays basketball, has recently joined the (omitted) and is a dedicated electronic game player. A breakdown of the cost of these activities is such that I find that an appropriate figure for monies expended for X’s activities is $50.00 per week.
The Court is therefore satisfied that the sum of $275.00 per week is a reasonable representation of X’s weekly living expenses.
As noted earlier in this judgment, because of X’s autism the wife has enrolled him at (omitted) College. X is in year seven. The fees for (omitted) College are $3,700.00 per annum. It is the wife’s evidence that X’s uniforms and books cost a further $1,150.00 per annum.
It is the wife’s evidence that as X progresses through secondary school there will be a number of school camps and excursions that X will participate in each year. The wife estimates the costs of these camps and excursions over X’s school life to be approximately $3,000.00.
It is the wife’s evidence that in the preliminary discussions she has had with (omitted) College in relation to X’s individual learning plan, private tutoring has been one of the strategies suggested to assist X’s learning. The wife has made enquiries of a private tutoring organisation in (omitted), who have advised the wife that tuition fees per term range between $520.00, for one lesson per week, and $1,040.00 per term, for two lessons per week.
It is the wife’s evidence that X also needs orthodontic treatment. It is the wife’s evidence that she has been advised by X’s orthodontist that prior to him being fitted with braces he firstly needs to have stopped growing (X is currently 6’ 2”and is still growing – the husband is 6’ 7”) and will secondly need a jaw operation. The estimated cost of the surgery and orthodontic work is $25,000.00.
It is the wife’s evidence that the husband has been posting photographs on Facebook of a substantial property being built in (omitted). From the comments the husband has posted in relation to these photographs this property can be assumed as being owned by the husband.
It is the wife’s evidence that prior to separation the husband earned $11,475.00 net per month and he also received an annual bonus of one month’s pay each year, an annual net income of $149,175.00.
The husband
As set our earlier in this judgment, the husband has filed no material in relation to the wife’s application for child maintenance nor has he appeared before the Court, since the wife filed her Initiating Application in December 2012.
The husband filed a financial statement on 3 March 2011 in relation to the parties’ property matter then before the Court. In this financial statement the husband deposed to a weekly income of $3,154.00 and expenses of $3,004.90. Included in the husband’s weekly expenses were mortgage repayments for the former matrimonial home, maintenance payments for X and repayments of a small loan to the husband’s parents totalling $823.08 per week. These are payments the husband is no longer required to meet.
The law
Division 7 of Part VII of the Family Law Act 1975 (“the Act”) sets out the powers of the Court when making child maintenance orders.
Sections 66B and 66C of the Act set out of the objects and underlying principles of Part VII of Division 7 as follows:
Section 66B Objects
(1) The principal object of this Division is to ensure that children receive a proper level of financial support from their parents.
(2) Particular objects of this Division include ensuring:
(a) that children have their proper needs met from reasonable and adequate shares in the income, earning capacity, property and financial resources of both of their parents; and
(b) that parents share equitably in the support of their children.
Section 66C Principles--parents have primary duty to maintain
(1) The parents of a child have, subject to this Division, the primary duty to maintain the child.
(2) Without limiting the generality of subsection (1), the duty of a parent to maintain a child:
(a)is not of lower priority than the duty of the parent to maintain any other child or another person; and
(b) has priority over all commitments of the parent other than commitments necessary to enable the parent to support:
(i) himself or herself; or
(ii) any other child or another person that the parent has a duty to maintain; and
(c) is not affected by:
(i) the duty of any other person to maintain the child; or
(ii) any entitlement of the child or another person to an income tested pension, allowance or benefit.
Section 66E of the Act prohibits the Court from making an order for child maintenance if at the time the child maintenance order is sought, an application can properly be made under the Child Support (Assessment) Act 1989.
As the husband in this matter has not been a resident in Australia or in a reciprocating country for child support purposes since May 2009 no application can be made for child support under the Child Support (Assessment) Act 1989. As such this Court has the power to make an order for child maintenance.
This application is brought by the wife. Both she and X are resident in Australia. Accordingly the requirements of section 66E and section 69E of the Act are met and this Court has jurisdiction to hear the application before it.
Section 66H of the Act sets out the approach the Court is to take in proceedings for a child maintenance order. Firstly, the Court must consider the financial support necessary for the maintenance of the child. Secondly, the Court must determine the respective financial contribution each of the parties should make towards the financial support necessary for the child’s maintenance.
When determining the financial support necessary to maintain a child, section 66J(1) of the Act requires the Court to consider the primary duty of parents to support their child, the proper needs of the child and the incomes, earning capacity, property and financial resources of the child.
Section 66J(2) of the Act requires the Court when taking into account the proper needs of the child to consider the age of the child, how the child is being educated and if the manner of that education is in accordance with both parties’ expectations and any special needs of the child.
When determining the contribution each party should make to the child’s necessary support, section 66K(1) of the Act requires the Court to take into account the primary duty of the parties to support the child, the income, earning capacity, property and financial resources each party has to support him or herself, any other child or other person the party is responsible for, the direct and indirect costs incurred by the party with whom the child lives in the care of that child and any other special circumstances which, if not taken into account, would cause injustice or undue hardship to any party.
Section 66K(4)(a) of the Act sets out that when determining the parties’ respective financial contributions to the care of the child, the Court must disregard any income tested pension received by the child or the person the child lives with.
X’s necessary financial support
As set out earlier in this judgment, I am satisfied the reasonable weekly living expenses for X’s care is $275.00 per week, exclusive of his education costs, medical and orthodontic expenses and the cost of providing X with a home.
The wife has enrolled X in (omitted) College for his secondary education. The decision to do this was made by the wife alone and thus it is arguable that X is not being educated in the manner both parties expected.
It is the wife’s evidence that the husband has had no contact, either face to face or verbal, with X since 2010. It is the wife’s further evidence that save for a single telephone call made to the wife by the husband in March 2013, the husband has not sought to discuss X or his needs with the wife since separation. X’s care and the decisions as to his best interests have vested solely with the wife.
X has recently been diagnosed with autism. It is the wife’s evidence that X has struggled socially and academically for most of his school years. X was the subject of ridicule and bullying during his primary school years. Because of these factors, the wife made the decision that X would be better suited to (omitted) College for his secondary education as it is smaller and better able to accommodate X’s special needs.
It is the wife’s evidence that since starting at (omitted) College this year X has settled well, has made friends and is considerably happier than he was in primary school. X’s school report for his first semester at (omitted) College shows that whilst X is not at the requisite academic level for his year level, he is working hard and has improved measurably from his school reports at the end of primary school.
The Court also notes that during the marriage the parties’ eldest child Y attended (omitted) College and (omitted) Grammar, both private schools. It is therefore apparent that both parties embraced the concept of private education for their children.
Whilst the husband was not a party to the decision that X attend (omitted) College for his secondary education rather than a state school, I am satisfied that given X’s autism, his attendance at (omitted) College is appropriate. I am also satisfied that given Y was educated privately, the parties embraced private education for their children. Accordingly the costs of X’s attendance at (omitted) College are a necessary cost for X’s maintenance.
It is the wife’s evidence that the annual costs for X’s attendance at (omitted) College are $4,850.00, this figure includes tuition fees and the costs of X’s books and uniforms.
There are also additional expenses for X’s excursions, school camps and the like which the wife estimates to be approximately $3,000.00 over X’s school life.
It is the wife’s evidence that following X’s recent diagnosis of autism, a specific learning plan is being developed to assist X better achieve academically and socially. The possibility of a personal tutor is being explored as one of the strategies that may assist X. The cost of this tutoring is between $520.00 and $1,040.00 per term.
As X’s individual learning plan is as yet to be settled, enquires have not been made as to whether tutors with expertise in treating children with autism are available in (omitted). It remains unclear whether tutoring will assist X or, if tutoring is put in place, how long any such tutoring would be required. As such it is difficult to qualify what, if any, expenses may be incurred in relation to possible tutoring for X.
X will require extensive orthodontic intervention, including a jaw operation once he has “stopped growing”. The cost of that intervention will be approximately $25,000.00.
It is the wife’s evidence she “hopes” X will have this work done before he is 18 years of age but concedes it will be some years before X will be fully grown.
In all these circumstances I am satisfied that the annual financial support necessary to maintain X is $19,650.00. This figure excludes the costs of the wife providing X’s home.
Contributions to X’s maintenance
The wife is in permanent part-time employment and earns $620.00 per week. The wife also receives Centrelink benefits which, for the purposes of determining child maintenance, are to be disregarded. As noted earlier in this judgment the Court is satisfied the wife’s reasonable living expenses are $340.00 per week plus the wife’s ongoing mortgage repayments of $300.00 per week.
The husband’s current financial and personal circumstances are not known to the Court.
It is apparent from the email response sent by the husband to the wife’s solicitors on 19 June 2013 that the husband continues to be employed internationally in the (omitted) industry, possibly in (omitted) given the recent Facebook entry from the husband disclosing a commendation received by him for (omitted) in that country.
When not working, the husband is based in (omitted) where, again because of the husband’s Facebook entries, the husband has possible interests in real estate.
It is the wife’s evidence that the husband has a (omitted) girlfriend but the nature of that relationship and what, if any, responsibility the husband has for her is unknown.
The husband has failed to provide the Court, the wife or her solicitor with any details of his current financial position including a copy of his current employment contract. However in the financial statement sworn and filed by the husband on 3 March 2011 the husband deposes to an annual income of $160,000.00 per annum from his then employment in the (omitted) industry in (omitted).
I am of the view that it is a reasonable assumption for this Court to make that the husband continues to earn an income of not less than $160,000.00 per annum.
I am therefore satisfied that the husband has a primary duty to maintain X, and that other than his own support the husband has no obligations to support any other person. I am also satisfied that the husband has the income and financial resources to contribute to X’s necessary financial support.
The wife has an annual income exclusive of Centrelink benefits of $32,240.00 per annum. The husband has an estimated annual income of not less than $160,000.00 per annum. The husband earns five times as much than the wife.
I have made a finding that the annual financial support necessary to maintain X is $19,650.00. This is, as noted, exclusive of the cost to the wife of ensuring X has a home to live in.
In these circumstances and given it is the wife that bears the costs of providing X’s home, I am satisfied the husband should pay child maintenance at the rate of $15,500.00 per annum, being slightly less than 80% of the reasonable costs necessary for X’s maintenance.
Lump sum maintenance or periodic payments
Given the husband’s sporadic payment of maintenance of X until April 2012 and his complete failure to pay any maintenance for X since that date, the wife is seeking the Court order the husband pay maintenance for X by way of a lump sum payment calculated up to X turning 18 years of age.
Section 66P(1) of the Act empowers the Court when making an order for child maintenance to order the payment of a lump sum or to order payment of a weekly, monthly, yearly or other periodic amount.
Section 66K(5) of the Act provides that when determining the financial contributions to be made by a party, the Court must consider the capacity of a party to make periodic payments before considering the capacity of that party to provide maintenance by way of a lump sum payment.
The Full Court in the matter of Collins & Collins (1993) FLC 92-343 considered an appeal by the husband against an order he pay lump sum child maintenance. At page 79,637 Fogarty & Renaud JJ held:
It is clear from his Honour's judgment that he specifically considered the provisions of section 66E(5) and found that it was ''quite clear that the husband had sufficient financial resources to make periodic payments and there is no question as to his financial capacity to do so''. However, his Honour went on to consider the history of the husband's irregular payments, and, having considered his capacity to make periodical payments, found, in effect, that there were more compelling reasons for ordering him to pay a lump sum. His Honour made no error of law in ordering lump sum maintenance rather than periodical payments.
In this matter, it is quite apparent the husband has the capacity to provide maintenance for X by way of periodic payments. The husband failed to do so with any regularity after separation and has failed to do so at all for the last 15 months, to his shame.
The husband is fully cognisant that his residence outside of Australia protects him from the provisions of the Child Support (Assessment) Act 1989 and has since April 2012 shown complete indifference to his son and his primary duty to contribute to the proper maintenance of X.
X is a young man who has difficulties and special needs and the burden of this, practically, emotionally and financially is resting solely on the wife’s shoulders.
In all those circumstances I am satisfied that it is an appropriate exercise of this Court’s discretion that, despite the husband’s capacity to pay periodic maintenance, an order be made that the husband pay child maintenance for X by way of a lump sum payment. This is the only way this Court can be satisfied the husband will fulfil his primary duty to maintain his son.
The wife sought orders that the husband pay child maintenance for X in the amount of $90,000.00 by way of a lump sum payment. This figure was calculated on the basis the husband pay the sum of $20,000.00 child maintenance per annum for X for a period of five years and applied a 5% ‘discount’ on the basis that the child maintenance would be payable by way of a lump sum payment.
That the Court has the discretion to apply a discount to orders for a lump sum payment to allow for the vicissitudes that might impact on the parties over the period that the lump sum payment is calculated cover, is not in doubt.[1] This does not mean however where an order is made for a lump sum payment that amount ordered is discounted as a matter of course. Each case must be determined on it own facts.
[1] Bereat & Bereat [2010] FamCA 693, RNL & RHB [2005] FMCAfam 520
In this matter the husband has failed to pay child maintenance for X since April 2012. The child maintenance payable by the husband for X will be calculated as from the date of the wife’s application being 13 December 2012 to the date of X’s eighteenth birthday, a period of four years and eleven months. However, there is eight months prior to the wife’s application when the husband should have been contributing to X’s maintenance and failed to do so. On the basis of my findings in this matter, in that period the husband should have contributed $10,300.00 towards X’s proper maintenance. The husband failed to do so.
In these circumstances, I am satisfied there should be no discount applicable to the lump sum child maintenance payable by the husband.
Whilst it is unknown whether X will continue in mainstream education until he is eighteen years of age, I am satisfied that given X’s learning and social difficulties because of his autism it is highly probable that he will need some form of training and education until he is 18 years of age.
Orders will therefore be made that the husband pay child maintenance for X in the sum of $76,200.00 by way of a lump sum payment. This amount is calculated on the basis the husband pays support for X from 13 December 2012 to X’s eighteenth birthday.
Finally, on 22 May 2013 I made an order that the husband pay arrears of child support fixed in the sum of $15,600.00. This order was based on the then belief that the husband had been assessed to pay child support by the Child Support Agency at the rate of $14,400.00 per annum from 23 September 2011 to 13 December 2013.
However the correspondence from the Child Support Agency dated
15 January 2013, which was only brought to the Court’s attention at the final hearing, states that the husband ceased to be a resident of Australia or a reciprocating country for child support purposes as from 1 May 2009 and as such no assessment for the husband to pay child support under the Child Support (Assessment) Act 1989 should have been made from that date. Accordingly, there can be no arrears for child support payable by the husband for any period prior to the wife’s Initiating Application filed 13 December 2012.
In these circumstances, order six of the orders made 22 May 2013 must be, and is, dismissed.
I certify that the preceding ninety (90) paragraphs are a true copy of the reasons for judgment of Judge Bender
Date: 26 July 2013
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