AR and AL - [2004] FMCAfam 597

FEDERAL MAGISTRATES COURT OF AUSTRALIA

AR & AL

[2004] FMCAfam 597

CHILD SUPPORT – Variation of periodic payment provisions of Child Support Agreement – determination of child’s proper needs – special circumstances demonstrated – variation of periodic payment provisions ordered.

MAINTENANCE – Adult child maintenance – child over 18 years – Family Law Act 1975, s.66L – whether husband should pay for adult child’s overseas study program – whether husband should pay HECS liabilities – application for adult child maintenance dismissed.

Family Law Act 1975
Child Support (Assessment) Act 1989
Child Support (Registration and Collection) Act1988
Federal Magistrates Court Rules 2001

Luton v Lessels (2001) FLC 98-015
Gyselman (1992) FLC 92-279
Hides v. Hatton (1997) FLC 92-759
Ross & McDermott (1998) 23 FamLR 613
Hallinan v. Witynski (1999) FLC 98-009
Hampson v. Lightfoot (1997) FLC 92-775
Liesert v Nutsch (1996) FLC 92-665
Bryant (1996) FLC 92-690
Wild v Ballard (1997) FLC 92-771
Jones v Dunkel (1959) 101 CLR 928
Gilmour & Miller (2003) FMCAfam 328
Tynan & Tynan (1993) FLC 92-385
Carpenter & Carpenter (1994) FLC 92-583
Cosgrove & Cosgrove (1996) FLC 92-700
Smith; St James; Smith v Wickstein (1996) FLC 92-714

Applicant:

Respondent:

File No:

MLM 7011 of 2002

Delivered on:

29 October 2004

Delivered at:

Melbourne

Hearing dates:

29-30 January 2003, 7 February 2003,
24 March 2003, 15 April 2003

Judgment of:

Walters FM

REPRESENTATION

Counsel for the Applicant:

Self represented

Solicitors for the Applicant:

Nil

Counsel for the Respondent:

Ms S. Johns

Solicitors for the Respondent:

TJ Mulvany & Co

ORDERS

The Agreement be varied by deleting paragraph 1 and inserting in its place the following:
a)The husband hereby agrees to pay or cause to be paid to the wife by way of child support the sum of $277.00 per week for the child J, such payments to commence on Monday 11^th November 2002 (being the first Monday after the filing of the wife’s amended application) and be paid into a bank account established by the wife. This payment is to extend beyond J attaining 18 years of age in the event that he commences tertiary studies.
b)The child support payable to the wife pursuant to paragraph (a) above will increase from 11 November each year (commencing 11 November 2003), in accordance with variations in the Consumer Price Index for Melbourne.
The variation referred to in (1) above be deemed to take effect on
1 January 2004.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
MELBOURNE

MLM 7011 of 2002

Applicant

And

Respondent

REASONS FOR JUDGMENT

Introduction

The parties entered into a child support agreement on 4 September 1995 ("the Agreement"). The Agreement deals with the amount of child support that the husband is to pay for the parties' three children — who all live with the wife. Two of the children are now over 18 years of age. The third is still at school.
The wife seeks to increase the child support payable by the husband (pursuant to the Agreement) for the youngest child. She also seeks that the husband pay adult child maintenance for one of the other two children.
The husband also seeks that the Agreement be varied, but in such a way as to require him to pay far less child support for the youngest child than the wife seeks. He otherwise opposes the wife's application.

Background

The husband was born in August 1947, and the wife in November 1951. They married in November 1975 and separated in June 1993. They are now divorced.
The parties have three children — L (born 17 March 1978 — now aged 26), R (born 18 February 1980 — now aged 24) and J (born 23 October 1990 — now aged 14).
All three children have lived with the wife since the date of separation.
In September 1995, the parties entered into a s.87 Deed — which was later approved by the Court. They entered into the Agreement at approximately the same time.
On 21 September 1995, the husband married Ms B.
L completed an Arts/Law (Honours) degree at the end of 2001, and in March 2002 she commenced Articles. She has been self supporting since that time.
On 5 July 2002, the wife filed a form 12 application. She filed an amended application on 7 November 2002, together with a form 63 application.

Issues

The principal issues for determination are as follows:
a)How much child support should the husband pay for J?
b)What else (if anything) should the husband be obliged to pay for J?
c)Should the husband be obliged to pay adult child maintenance for R, and, if so, how much?

The Wife's Case (Outline)

The wife argues that the husband is a self employed dentist, "… with multiple practices, properties and a very large share portfolio". She asserts that he is in a very strong financial position, and well able to support R and J — if he were minded to do so.
The wife referred to (and annexed to her affidavit sworn 7 November 2002) a large number of financial documents which, she alleges, reveal aspects of the husband’s financial position. The wife argued that the financial documents were either incomplete, distorted or misleading (and perhaps deliberately so). She argued that the husband had failed to make full and frank disclosure of his true financial position.
It is clear that there is a long history of conflict between the husband and the wife. The wife remains upset at the circumstances of the breakdown of the marriage, and frustrated that, in her view, the husband has “… focused his attention on making a new life for himself, with the exclusion of our children as a priority…”.[1]
[1] See the wife’s affidavit sworn 7 November 2002 (shorter affidavit), page 5.
The wife also feels continuing resentment towards the husband as a result of her perception that he has received benefits from her family that he would not otherwise have received (but for his marriage to the wife), and that he has avoided his financial responsibilities to the wife and the parties’ children.[2]
[2] See the wife’s affidavit sworn 7 November 2002 (longer affidavit), paragraph 7.
Although much of the trial was occupied by a relatively detailed analysis of the husband’s financial position, the wife ultimately accepted that the husband’s income (for the year ended 30 June 2002) was as described in a document entitled “Aide Memoire No.1” prepared by the husband’s counsel and handed up to the court on

30 January 2003. The document reveals that the husband’s “total adjusted income” for the 2002 financial year was approximately $255,000.00.

The Husband’s Case

In his affidavit sworn 23 December 2002, the husband deposed, inter alia, to the following:
a)Although the husband previously operated a dental practice in partnership with Dr V, the partnership has been dissolved and the husband now practises in his own right.
b)The husband’s present wife (to whom I shall refer to as “A”) has worked on a full time basis since their marriage in September 1995. She is an Associate Professor of Genetics at Genetic Health Victoria.
c)A’s younger son, D, then lived with her (and the husband). D was a full time student, then aged approximately 22.
d)The husband has “an excellent relationship” with J, but “no relationship whatsoever” with either L or R.
e)In the conduct of his dental practice, the husband utilises a service trust (which is responsible for the administration associated with the practice). The husband does not dispute that he controls the service trust and that, in effect, all the income from his dental practice is “his” income.
f)In the 2002 financial year, the “ultimate proprietor entity” of the husband’s dental practice (being a discretionary family trust) distributed approximately $58,000.00 to A’s son, D. Other distributions were made to A’s daughter, N.
g)In relation to the distributions to A’s children, the husband said:
Distributions are no longer made to N as she is married and independent. D is a full time student and supported by his mother. I say that I totally acknowledge the distributions made and accept that as a matter of law D and N are able to call up these funds distributed to them at any time… (At) no time has any cash been distributed to D and N as the liability arises as a consequence of book entries. D and N have disclosed the income in their individual tax returns and I have met the tax… (Had) there been an harmonious relationship with either or both of my daughters, I would have distributed in like manner to them.
h)In the calendar year 2002, the husband expended the following amounts in relation to his children:
·J – a total of $20,489.00 (including school fees and associated expenses, and periodic child support).
·R – $7,005.50 (including books, university fees and periodic maintenance payments).
·Private health cover (for the husband, J, R and A’s son, D) – $1,980.00.
i)The total of the above amounts is $29,474.50.
j)The husband is prepared to accept an increase in child support for J from $50.00 per week (being the amount referred to in the Agreement) to $100.00 per week – commencing on 1 January 2003.
k)The husband opposes any increase in respect of maintenance for R.
l)The husband summarises the history of his dental practice, and describes his relationship with Dr V – which he characterises as “an association, not a partnership”. He says that they each receive the income from their own patients.
m)In September and October 2002, the husband and Dr V restructured their practices. As a result, the husband received a net amount of $231,000.00 (and was left with one dental practice, which he now operates exclusively).
n)The husband used the whole of the $231,000.00 received as a result of the restructuring of the dental practices as a payment towards the mortgage liability owed by the husband in respect of his interest in the home which he owns jointly with A. According to the husband, “… (this) effectively means that all my mortgage repayment for my interest in my principal private residence has been repaid”.
o)The home occupied by the husband and A is owned by them as tenants in common in the proportions of 80% to A and 20% to the husband.
p)The husband values his gross interest in his dental practice at $180,000.00 (comprising plant and equipment, goodwill and debtors).
q)The husband intends to retain his dental practice and keep working — to meet his commitments (particularly in relation to J). He intends to continue to conduct the practice until J ceases his tertiary studies.
r)The husband refers to the wife’s financial position, and asserts that the home in which she lives is worth considerably more than the $600,000.00 which she estimates to be its value. He also asserts that the wife owns another residential property, situated at the rear of the former matrimonial home.
s)The husband does not contribute to A’s financial position. Nor does he contribute to that of her children. All disposable income retained by the husband is spent either on himself or in meeting his commitments to J and R.
t)The husband will continue to pay all private school fees and ancillary education expenses for R and J until they complete their studies - including tertiary studies.
u)The husband does not accept “… that HECS is an educational expense as … the expense for tertiary education, unless voluntarily paid earlier, is a liability of the recipient of that education to be paid commensurately with the income earned by such recipient.” He opposes any application that he meet such an expense.
v)The husband believes that the level of support that he has provided to date (for J and R) is appropriate in all the circumstances, and he questions the wife’s motivation for seeking increased support.

The Law

The Commonwealth’s legislative scheme for assessment and enforcement of child support liabilities is contained in the Child Support (Assessment) Act 1989 (which I shall call the “Assessment Act”) and the Child Support (Registration and Collection) Act1988. Certain aspects of this scheme were considered by the High Court in Luton v Lessels (2001) FLC 98-015. In that case, Gaudron and Hayne JJ said (at page 95,659):
The Assessment Act records that the ‘parents of a child have the primary duty to maintain the child’. This duty is said, by the Assessment Act, (a) to be not of lower priority than the duty of the parent to maintain any other child or another person: (b) to have priority over all commitments of the parent other than commitments necessary to enable the parent to support himself or herself and any other child or another person the parent has a duty to maintain: (c) to be not affected by the duty of any other person to maintain the child or any entitlement the child or another person may have to an income tested pension, allowance or benefit. …The principal object of the Assessment Act is said to be ‘to ensure that children receive a proper level of financial support from their parents’.
Part 5 of the Assessment Act (ss 35-79) provides for the administrative assessment of child support. “Child support” is defined as “financial support under [the Assessment] Act, including financial support under [the] Act by way of lump sum payment or by way of transfer or settlement of property”. An administrative assessment of child support requires the application of one or more of several statutory formulae that is, or are, apposite in the particular circumstances. Section 79 of the Assessment Act provides that ‘an amount of child support due and payable by a liable parent to a carer entitled to child support is a debt due and payable by the liable parent to the carer’…
Where there has been an administrative assessment, both the liable parent and the carer may lodge with the Registrar an objection against the assessment. A person aggrieved by a decision on the objection may, pursuant to section 110 of the Assessment Act, appeal to a court having jurisdiction under that Act.
In the same case, Gleeson CJ said (at page 95,653):
The objects of the Assessment Act are set out in section 4. The principal object is to ensure that children receive a proper level of financial support from their parents. To that end, the Act provides for a level of support to be determined in accordance with legislatively fixed standards, and permits carers of children to have the level readily determined without the need to resort to court proceedings.
…It may be observed that, although the legislation is enacted in furtherance of a clearly defined public policy, it creates a distinctly personal liability. The natural and moral obligation of the parent to support a child becomes, by force of the legislation, a legal obligation reflected in a debt, calculated in accordance with the Assessment Act, owing by a parent to a carer of the child.
Gaudron and Hayne JJ continued (at page 95,663):
Part 7 of the Assessment Act (ss 99–146) deals with the jurisdiction of courts under the Act. In particular, provision is made for applications to a court for a declaration about the applicability of the administrative assessment provisions. Provision is made for what are called “appeals” against incorrect administrative assessments and for orders for departure from administrative assessment. (The reference to “appeal”, although similarly used in other contexts, may mislead. The proceeding which is so described is the first application of judicial power; it is an exercise of original, not appellate jurisdiction.) An order by a court for departure from an administrative assessment may be made on the grounds on which the registrar may make a departure determination…
The process involved in the consideration of an application for departure from an administrative assessment of child support was explained by the Full Court in Gyselman (1992) FLC 92-279 at 79,064-5, under the heading “Division 4 – Orders for Departure from Administrative Assessment in Special Circumstances”. The Full Court said (inter alia):
Section 117 is the critical provision.
The structure of that section is that s.117(1)(b) identifies concisely the matters about which the Court must be satisfied and those components are then expanded in subsections (2) to (9). Section 117(1)(b) identifies a clear three-step process:
1.      Whether one or more grounds of departure in s.117(2) is established.
2.      Whether it is ‘just and equitable’ within the meaning of s.117(4) to make a particular order.
3.      Whether it is ‘otherwise proper’ within the meaning of s.117(5) to make a particular order.
It is clear from the careful way in which s.117 has been structured that the Court must address each of those three separate issues...
…Each of those grounds (in s.117(2)) is prefaced by the words, "in the special circumstances of the case". Whilst it is not possible to define with precision the meaning of that term, as a generality it is intended to emphasise that the facts of the case must establish something which is special or out of the ordinary. That is, the intention of the Legislature is that the Court will not interfere with the administrative formula result in the ordinary run of cases. (It has been held) that "special circumstances" were "facts peculiar to the particular case which set it apart from other cases". The approach to the interpretation and application of the particular grounds in s 117(2) must be guided by that qualification.
In Hides v. Hatton (1997) FLC 92-759, the Full Court said (at 84,352):
It was also made clear in Gyselman that when the Court is considering whether it is just and equitable within the meaning of s.117(4) to make a particular order, the Court is required to undertake the task of considering the matters set out in paragraphs (a) to (g) of that sub-section, and in this regard the Full Court said as follows (at 79,078):
‘However, some of the matters listed in sub-section (4) may overlap with matters already considered under sub-section (2) and some of the paragraphs in sub-section (4) may be more significant in one case than they would be in another or of little relevance in a particular case. It is an essential part of the s.117 exercise to carry out the obligation under sub-section (4). However, that does not mean that it is necessary in each case to slavishly go through each of the paragraphs. The extent to which it is necessary to do so will depend upon the facts and conduct of the individual case and the analysis already performed under sub-section (2).’
The Full Court also made it clear in its decision in Gyselman that similar considerations apply to the Court’s determination as to whether it is ‘otherwise proper’ within the meaning of s.117(5) to make a particular order (see at 79,080), and furthermore and very relevantly for present purposes the Full Court emphasised the importance of trial Judges providing adequate reasons for judgment in order to ensure a proper exercise of the discretion under s.117 (see at 79,080).
In the same vein, a differently constituted Full Court in Ross & McDermott (1998) 23 FamLR 613 at 623-4 (paragraph 39) said:
... a practical and flexible approach should be adopted to the task of considering these s 117(4) and (5) matters, that is an approach similar to that which this court has long adopted to the ‘s 68F(2) matters’… in child-related proceedings under the Family Law Act 1975 (Cth), and to the ‘s 79(4) matters’ and ‘s 75(2) matters’ in property settlement proceedings under that Act. Accordingly, we consider it is unnecessary to make any reference to those s 117(4) and (5) matters which have no real relevance in the circumstances of the particular case. We also consider that it would be permissible to group together and consider as a whole, those relevant matters which by their nature lend themselves to such an approach in the circumstances of the particular case, and in the case of those matters which are required to be considered under more than one subsection of s 117, to examine such matters only once, although they may need to be taken into account under more than one subsection.

In Hallinan v. Witynski (1999) FLC 98-009, the Full Court said:
... (The) reasons for answering the two questions posed by s.117(1)(b)(ii) need not be elaborate, but the task of considering, at least broadly, the matters referred to in s.117(4) and 117(5), respectively, and then making a finding as to satisfaction or otherwise in relation to the relevant matter, must be undertaken as a necessary part of the exercise of discretion imposed on the Court by s.117(1).
It is important to note that neither party seeks to vary or discharge the husband’s obligation to pay school fees. The wife seeks only to vary the periodic payments referred to in clause 1(a) of the Agreement.
Section 95 (2) of the Assessment Act provides that periodic payments due under a child support agreement are to be treated as if they are due pursuant to an order made by consent under Division 4 of Part 7 of the Assessment Act.
Section 95(3) of the Assessment Act states that provisions in a child support agreement under which child support is to be provided in a manner otherwise than in the form of periodic amounts to be paid to the carer entitled to child support are to have effect as if they were an order made by consent under s.124 of the Act.
Because the wife only seeks to vary the periodic payments referred to in clause 1 of the Agreement, s.95(2) has relevance to the present application, whereas s.95(3) does not.
Section 98 of the Assessment Act states that the provisions of a child support agreement may be “discharged, suspended, revived or varied by the court in the same manner and in like circumstances as the Court could discharge, suspend, revive, or vary an order of that kind made by it”.
In order to vary a consent order made under the provisions of Division 4 of Part 7 of the Assessment Act, a Court must be satisfied that a ground for departure mentioned in s.117(2) of the Act exists, and that it would be “just and equitable” and “otherwise proper” within the meaning of s.117(4) and (5), to make an order changing an existing order.[3]
[3] See Gilmour (1995) FLC 92-591.
The law in relation to the variation of the periodic payment provisions of a child support agreement is set out in Liesert v Nutsch (1996) FLC 92-665, Bryant (1996) FLC 92-690 and Wild v Ballard (1997) FLC 92-771. After referring (somewhat cynically, it seems) to fans, fogs, dust and horizons[4], the Full Court in Bryant observed that it is now:
…beyond doubt that it is necessary for the Court in determining an application to vary the periodic payment provisions of a child support agreement, to proceed according to the provisions of s. 117(2) of the Assessment Act, and that no regard is to be had to other statutory provisions…which require a change of circumstances to be established before an order for child or spousal maintenance, or child support in a form other than periodic cash, can be varied.[5]
[4] See the passage from Liesert v Nutsch at p. 83,163 of Bryant.
[5] See Bryant (1996) FLC 92-690 at 83,164.
But the Full Court (in Bryant) continued as follows[6]:
It must however be recognised that once an order has been made departing from an administrative assessment, before there can be a variation of (or “departure” from) that existing order, it must be established to the Court’s satisfaction, that since the making of the existing order circumstances have arisen as a result of which the financial capacity of either party is now significantly reduced (s. 117(2)(a)), or the costs of maintaining the child have been affected (s 117(2)(b)) or the existing order now results in an unjust and inequitable determination of child support (s. 117(2)(c)). There is nothing in Gilmour to suggest to the contrary.
In the case of a child support agreement which has been accepted by the Registrar, and which provides for the payment of periodic child support, such an agreement takes effect as a departure order made by consent (s. 95(2)), and before the agreement can be varied by the Court, the Court must, again in our view, be satisfied that there has been some change which would give rise to one of the grounds for departure in paragraphs 117(2)(a),(b) and (c). Again, there is nothing in Liesert v Nutsch to the contrary.
If the situation was not as we have just proposed in the last two paragraphs, there would be nothing to stop a party who did not accept the terms of a departure order from immediately approaching the Court to have the matter re-heard, or to stop a party who thought better of the agreement which he or she had made, immediately seeking to vary the agreement. (Emphasis added)
[6] See page 83,169-70.
Thus, when dealing with the application for a variation of the husband’s obligation to pay periodic child support as required by the terms of the Agreement, the Court must determine at the outset whether, by reason of a change of circumstance, a ground for departure exists. The Court must then determine whether it would be just and equitable, and otherwise proper, to make an order varying the arrangement described in the Agreement.[7]
[7] See Wild v Ballard at pp 84,492-3
To the extent that s.117 speaks of concepts such as “grounds for departure” and “administrative assessment of child support”, the Full Court in Bryant[8] confirmed that s.117 must “…be interpreted and applied uniformly and consistently in all cases…”. It does not matter whether the application before the court is for an initial variation from administrative assessment, or for a variation from an existing departure order, or for a variation of the periodic payment provisions of a child support agreement. Relevantly, the reference to “administrative assessment” in s.117(2)(c) does not preclude that sub-section from operating where an application is made to vary periodic payment provisions of a Child Support Agreement.[9]
[8] At page 83,169
[9] See Bryant at page 83,168

The Agreement

Paragraphs 1 and 2 of the Agreement (which are the only relevant provisions of the Agreement for the purposes of these proceedings) are as follows:
1. The husband hereby agrees to pay or cause to be paid to the wife by way of child support the sum of $100.00 per week for the children L and R and the sum of $50.00 per week for the child J making a total of $250.00 per week. These payments are to extend beyond their attaining 18 years of age in the event they commence tertiary studies. The payments are to commence on 11 September 1995 and be paid into a bank account established by the wife, and when each child turns 18 years of age, an account controlled by the child.
2. The husband shall by way of further child support pay or cause to be paid for the said children:
(a)all private school fees;
(b)the reasonable cost of uniforms, books, excursions, tutorials and all other necessary educational expenses;
(c)the reasonable cost of hospital, medical, dental and prescribed pharmaceutical expenses.

Discharge of Child Support Agreement

Although the wife initially sought an order that the Agreement be discharged, no grounds were provided to warrant such a course of action. Indeed, in my opinion, the orders sought by both parties can comfortably be accommodated by a variation of the Agreement – provided, of course, that such a variation is warranted.
Neither party seeks to change the provisions of paragraph 2 of the Agreement, and hence I propose to deal with the competing applications as applications to vary paragraph 1 of the Agreement.

Change of Circumstances

Leaving aside the provision of adult child maintenance for R, it is clear that the wife’s application principally deals with a proposed variation of the periodic payment provisions of the Agreement – in that the wife is seeking a significant increase in the quantum of child support payable by the husband for J pursuant to the Agreement. She also seeks that the husband pay certain other expenses for J which, to the extent that they may be regarded as child support, are to be provided in a manner otherwise than in the form of periodic payments to be paid to the wife. These expenses are in addition to the school fees and other expenses for which the husband is responsible pursuant to paragraph 2 of the Agreement.
I shall deal with the various items sought by the wife and properly characterised (if they can fairly be characterised at all) as non-periodic child support payments later in these Reasons.
It is clear that there have been changes of circumstances since the date of the Agreement, and that such changes justify or empower the Court to proceed to deal with the matter further.
The most obvious change is the fact that L has now completed her tertiary studies and is self supporting. But there have been other changes as well:
a)L and R have now completed their secondary education, and the husband is no longer responsible for the significant private school fees (and other expenses) which he undertook to pay in the Agreement. Although the husband has indicated that he will continue to pay “ancillary education expenses” for R and J until they complete their studies (including tertiary studies), he does not accept that HECS is an education expense. He is not prepared to pay HECS fees for any of the children.[10]
[10] See the husband’s affidavit sworn 23 December 2002, para 21.16.
b)In his affidavit sworn 23 December 2002, the husband said that he was prepared to consent in an increase in the periodic child support payable for J from $50.00 per week to $100.00 per week – even though he does not admit that:
i)“… the wife is without means and ability to contribute to the support of J”; and
ii)“… an increase in child support for J is justified”.
c)Notwithstanding the above, the husband filed a response on 23 December 2002. In it, he sought (inter alia) that he pay child support for J at the rate of $100.00 per week — linked to the CPI — with effect from 1 January 2003.[11] The husband later conceded that it would be appropriate to increase the periodic amount of child support for J to $200.00 per week.
d)There can be no doubt that the costs of maintaining J have increased significantly since the date of the Agreement. Whilst it is true that, just as the costs of maintaining J that are incurred by the wife have obviously increased, so also have the school fees and other expenses for which the husband is liable pursuant to the Agreement, there can nevertheless be no doubt that the proportionate balance between the two forms of expenses has changed significantly since the Agreement. The matter can be looked at in this way:
i)If it is assumed for the sake of the exercise that the overall cost to the wife of maintaining J at the date of the Agreement was, say, $350.00 per week, then it is clear that the husband was contributing just over 14% of those costs (given that his obligation pursuant to the Agreement was to pay $50.00 per week for J).
ii)If the weekly cost to the wife of maintaining J has increased to, say, $500.00 at the present time, then the husband’s proportionate contribution towards that cost (if it is to remain $50.00 per week) has now fallen to 10%.
iii)Although the husband has continued to pay the school fees and other educational expenses for J, his obligation was always to pay 100% of that amount. To that extent, the husband does not have to bear a greater (proportionate) burden in respect of the school fees and other expenses than he had to bear at the time of the Agreement.
iv)The wife, on the other hand, has had to meet a greater proportionate share of the overall cost of maintaining J whilst he is in her care.
e)Whether or not the husband initially admitted that an increase in child support for J is justified, he is now prepared to submit to an order that quadruples the quantum payable to the wife pursuant to the Agreement.
f)Further, both parties agree that the child support payable for J should be linked to CPI adjustments. That, in itself, is a significant change from the arrangement embodied in the Agreement.
[11] He also sought an order pursuant to s.66L of the Family Law Act to the effect that he pay adult child maintenance for R at the rate of $100.00 per week commencing 1 January 2003 until the cessation of her tertiary studies (together with certain other expenses, principally associated with her education).

“Special Circumstances” – Section 117(2)

It follows from the discussion of change of circumstances in the previous section of these Reasons, and the statement of the law contained in paragraphs 18 to 34 above, that strict adherence to the provisions of the Agreement as it relates to J would indeed “… result in an unjust and inequitable determination of the level of financial support to be provided by (the husband)”.
In case I am wrong in this regard – and, in any event, in order to assist the Court to consider the next relevant consideration pursuant to s.117(1) of the Assessment Act as explained in Gyselman (1992) FLC 92-279 (in other words, to determine whether it is “just and equitable” within the meaning of s.117(4) to make a particular order) – I propose to now deal with the overall cost of maintaining J (including his proper needs), and the financial position of the parties.

Overall Cost of Maintaining J

The wife’s claim was for the husband to pay to her the sum of $928.00 per week in respect of child support for J. In addition, she sought that the husband continue to pay all school fees and associated expenses, and make various other payments for J’s benefit.
During her closing address, the wife explained that the sum of $928.00 per week is not a true reflection of the actual costs of maintaining J. She simply adopted 18% of what she believed the husband’s income to be. Although 18% is indeed the appropriate basic child support percentage for one child, the wife obviously overlooked other aspects of the child support scheme – including the existence of the payer’s income cap.
Ms Johns (for the husband) argued that the wife’s evidence regarding the costs of maintaining J was so unreliable that the Court should adopt the Lee “expenditure survey” scale in order to obtain “a useful guideline” as to the cost of maintaining J. At the time of the trial, the total expenditure for a child aged between 11 and 13 pursuant to the Lee scale was $287.56 per week. Ms Johns argued that the “other” expenses in the Lee scale (amounting to approximately $36.00 per week) should be removed because the husband meets J’s medical and dental costs and education expenses. In other words, Ms John’s argued that a reasonable amount pursuant to the Lee expenditure survey for the cost of maintaining J is $251.00 per week.
I reject Ms John’s submission in this regard. The fact of the matter is that the husband pays far in excess of $251.00 per week just for J’s school fees, bus fees, uniforms, books, stationery and ancillary expenses. It is also clear from the evidence of both parties that the overall costs of maintaining J (including school fees) are far in excess of the assessment of total expenditure set out in the Lee scale. In my opinion, it is necessary to properly and fairly assess those costs on the basis of the evidence before the Court.
I find that the following weekly figures reflect a fair allowance for the costs incurred by the wife in maintaining J, and represent his proper needs whilst he is with her:

Food

$125.00

Household supplies

$20.00

Household repairs

$10.00

Insurance

$2.00

Gas

$2.00

Electricity

$10.00

Water

$7.00

Heating fuel

$1.00

Telephone

$10.00

Petrol

$30.00

Motor Vehicle registration

$2.00

Motor vehicle maintenance

$20.00

Motor vehicle insurance

$10.00

Clothing/Shoes

$40.00

School lunches

$15.00

School expenses

$5.00

Pocket money

$20.00

Medical/Dental

$2.00

Entertainment

$25.00

Holidays

$20.00

Pool maintenance

$10.00

Miscellaneous expenses

$20.00

Total

$406.00

The above figures have as their genesis the average weekly expenses (as they relate to J) contained in the wife’s amended form 12 application filed 7 November 2002. The wife’s evidence was that the right hand column of Part G of the form 12 relates to her expenses for J. The total of those expenses is $622.00 per week.
During the course of the trial, the wife conceded that the amounts claimed for “repairs” and “bar-mitzahs” should be removed. The effect of such an adjustment was to cause the total average weekly expenses for J to be reduced from $622.00 per week to $507.00 per week.
The wife was cross-examined at some length regarding her estimate of the expenses associated with J’s care. As indicated above, the figures set out in the schedule appearing in paragraph 48 above are, I find, an appropriate allowance for the items to which they refer. Some of those items require comment:
a)Food
The wife’s original estimate was $150.00 per week for food for J. During cross-examination, she agreed that J has an evening meal with his father on four nights per fortnight, and that he lives with his father for half of all school holidays. I accept that $150.00 per week may be excessive for food for J, but not to a significant extent having regard to the parties’ religion[12], standard of living and J’s age. I have allowed $125.00 per week.
[12] I take judicial notice, for example of the fact that kosher meat is comparatively expensive.
b)Household Supplies
I am satisfied that the wife’s allowance of $30.00 per week is excessive, and that an allowance of $20.00 per week would more properly reflect the amount actually spent on such supplies for J.
c)Rates
Although the wife sought to allocate $15.00 per week to J’s expenses in relation to this item, I am of the view that it more properly reflects an expense for which the wife should be liable. After all, the home is her asset.
d)House repairs
Although the wife initially sought an allowance of $70.00 per week for this item, and later discounted it entirely, I am of the view that a modest allowance should be made for it. There can be no doubt that a reasonable proportion of the wear and tear on the house is due to J and his activities. If he were not to be in the house, then I have little doubt that fewer repairs and maintenance tasks would be required. In my opinion, an allowance of $10.00 per week for this item is reasonable.
e)House Insurance
For the reasons referred to in the preceding paragraph, I am of the view that a reasonable allowance for this item is $2.00 per week.
f)Electricity
The wife originally allowed $13.00 per week for this item, together with $14.00 per week to be allocated to her. In other words, her total costs in respect to electricity were alleged to be something in the order of $27.00 per week. During cross-examination it was revealed that the average cost of electricity for the household is $20.00 per week. Ms Johns argued, therefore, that the wife’s allowance for this figure should be reduced. I am also of the opinion that it should be reduced, but I consider that $10.00 per week is a reasonable allowance for J’s electricity usage.
g)Telephone
The wife’s claim for this item was $16.00. Once again, Ms Johns’ cross-examination revealed that the wife’s allowance was probably excessive. In my opinion, an allowance of $10.00 per week for this item is appropriate.
h)Motor Vehicle Expenses
I am satisfied that the amounts claimed by the wife in relation to these items are reasonable. I have no doubt that much of the wife’s motor vehicle usage relates to J and his activities.
i)Clothing/Shoes
The wife produced a list of what she considers to be a reasonable allowance for clothing and shoes for J during a 12 month period. The total cost for a 12 month period was in excess of $3,600.00. In my opinion, the wife’s estimates in this list are either exaggerated or unreasonable. For example –
·The list refers to three suits at $200.00 each (totalling $600.00 for the year).
·The list includes four tracksuits at $55.00 each (totalling $220.00).
·The list contains six pairs of pyjamas at $25.00 each (totalling $150.00).
·The list contains two pairs of runners at $150.00 each, and two pairs of school shoes at $100.00 each.
In my opinion, a reasonable allowance for clothing and shoes for J is $40.00 per week.
j)Holidays
Although the wife originally allowed $10.00 per week in respect of this item, she also sought a separate order to the effect that the husband pay $2,000.00 per year “towards J’s yearly holiday”. I have dealt with that separate claim later in these Reasons, but have concluded that an appropriate allowance for holidays for J (on a weekly basis) is $20.00. I have reached this conclusion having regard to the parties’ standard of living and J’s age. I have also taken into account the fact that the husband has taken J on regular holidays and that it is fair and reasonable that the wife should also be able to provide him with holidays of a similar standard (or approaching a similar standard).
k)Child Minding
Although the wife originally claimed $25.00 per week for this item, she later agreed that it should be removed.
l)Pool Maintenance
The wife originally claimed $24.00 per week for this item. When added to the $10.00 per week that she claims as being her share of the item, it is clear that the overall cost of pool maintenance is alleged to be $34.00 per week. I accept that J and his friends are likely to use the pool more frequently than other members of the wife’s family, and am of the view that a reasonable allowance for this item would be $10.00. The pool is, after all, an asset (or part of an asset) owned by the wife.
m)Bar-mitzahs and Birthday Party
The wife initially claimed $45.00 per week in respect of bar-mitzahs and $10.00 per week in respect of J’s birthday party. She later removed her claim in respect of the bar-mitzahs. In my opinion, it is reasonable to make an allowance for the large variety of expenses that the wife is likely to have to meet for J on a regular basis. Such expenses are not limited to birthday parties, but can include gifts, magazines, donations, replacement of personal items and the like. In my opinion, an allowance of $20.00 per week is not unreasonable when regard is had to J’s age, standard of living and (according to the wife) busy social life.

It follows from the above that a fair allowance for the costs incurred by the wife in maintaining J whilst he is with her is $406.00 per week. But that figure does not represent the total cost to both parties of maintaining J (having regard to his proper, overall needs).
In my opinion, two additional categories of expenses must be added to the figure of $406.00 per week in order to determine the total cost to the parties of maintaining J. The first category relates to the general costs incurred by the husband in maintaining J whilst he is with the husband. The second category relates to the other costs incurred by the husband in maintaining J (most notably, J’s school fees and associated expenses).
In relation to the first of the categories referred to above, the husband presented no direct evidence as to the costs associated with maintaining J whilst he is with him. It is the case, however, that J spends approximately four nights per fortnight, together with half of the school holidays with the husband — being a total of approximately 120 days per year. In other words, J spends approximately one third of his time with the husband.
In the absence of clear evidence of the amount spend by the husband in maintaining J whilst J is with him, I am not prepared to attempt any form of detailed analysis of what may or may not be a reasonable allowance for this item. It is fair to say, however, that if a fair allowance for the costs incurred by the wife in maintaining J whilst he is with her is $406.00 per week, then a similar allowance for the husband might arguably be something in the order of 50% of that amount (given that J is with the wife for double the time that he is with the husband). Nevertheless, given that the wife is J’s principal care giver, that the husband resides in a house owned principally (to the extent of 80%) by A, and that A obviously earns a reasonably significant income, I am not persuaded that one half of $406.00 is an appropriate allowance for the costs incurred by the husband in maintaining J whilst he is with him. Doing the best that I can with the information available to me, I find that a reasonable allowance for such costs is $125.00 per week (on average).
The second category referred to above relates to school fees and other expenses paid by the husband on J’s behalf. In relation to the calendar year 2002, the husband asserts that he paid a total of $20,489.00 in respect of school fees and associated expenses, youth camps, child support payments and certain activities (being trampolining and break dance lessons) for J. The figures comprising that total were not challenged (or not challenged effectively) by the wife.
I propose to ignore the amounts paid to the husband in respect of child support (given that this payment has no bearing on the overall costs – to both parties – of maintaining J) and the amounts paid in respect of trampolining and break dance lessons. I have ignored the activities because there is some doubt that they are ongoing activities[13]. The other expenses are as follows:
[13] There is also some doubt that the amounts stated by the husband were actually paid.

School fees

$14,313.00

School Bus Fees

$1,488.00

School Uniforms

$554.00

Books and Stationery

$445.00

Youth Camps

$320.00

Total:

$17,120.00

I have included the amount of $320.00 per annum for youth camps, because, in my opinion, it is appropriate for J (who attends a Jewish day school and whose parents are committed members of the Melbourne Jewish community) to involve himself in such activities.
The annual figure referred to in paragraph 57 above equates to an average of $329.00 per week.
Although the husband also stated that he pays $1,980.00 per annum in respect of health insurance, he explained that the insurance covers himself, J, R and A’s son, D. In those circumstances, I am not prepared to make any allowance for the costs of such cover as it relates to J alone.
It follows from the above that, in my opinion, a fair allowance for the total, overall costs incurred by both parties in maintaining J (and which represents his proper needs on an average weekly basis) is as follows:
a)Living expenses whilst with the wife: $406.00 per week;
b)Living expenses whilst with the husband: $125.00 per week;
c)School fees and associated expenses, and youth camps: $329.00 per week.
The total of the above figures is $860.00 per week.

J’s Financial Position

Although it was apparent that J has some limited financial resources available to him, I am satisfied that he does not have the capacity to contribute to his own maintenance. In other words, Johsua’s income, earning capacity, property and financial resources do not amount to a relevant consideration in the context of this case.

The Wife’s Financial Position

During the course of her evidence, the wife accepted that, at the time when the s.87 Deed was entered into between the parties, the division of the asset pool was approximately 90/10 in the wife’s favour (if the husband’s figures were taken into account), and approximately 70/30 in the wife’s favour (if her figures were taken into account).
The wife asserted that the property in which she presently resides (in Mitchell Road, Caulfield) is valued at something in the order of $750,000.00. At the time of the property settlement, the wife also received an investment property in Langdon Road, Caulfield. According to the wife, she transferred the property to her parents some two or three years after the property settlement.
According to the wife, there was only some $40,000.00 or $45,000.00 equity in the Langdon Road property, and the wife felt obliged to re-pay her parents certain legal fees that they had met.
The wife’s father has since died. The Langdon Road property continues to be owned by her mother. It is tenanted, and the rental income is received by the wife’s mother.
The wife is an only child.
In her form 12, the wife states that she owes $145,000.00 in respect of “other loans”. She said that this amount is owing to her mother in respect of moneys paid by the wife’s parents at the time of the property settlement.
It was suggested (on behalf of the husband) that the wife does not really owe her mother the amount of $145,000.00 and that, even if she does, she is never likely to have to pay it.
Although considerable time was spent at the hearing on cross-examination of the wife relating to her financial position, I am not persuaded that it is a highly relevant factor in all the circumstances of this case. I accept that the wife’s parents outlaid considerable sums on her behalf in order to meet her legal expenses, and to meet any payment due pursuant to the property settlement. I also accept that the Langdon Road property is now owned by the wife’s mother (and not by the wife), and that the wife is unlikely to have to re-pay to her mother – in the foreseeable future – any sums that she may owe her.
I find that the wife owns the home in which she presently resides, together with its contents and her motor vehicle. I find that she has net assets totalling not less than $650,000.00.
I also accept that the wife is likely to inherit certain assets from her mother. In the context of the current proceedings, however, I am of the view that that likelihood is not a relevant consideration. The responsibility for maintaining J rests with his parents, and not with the wife’s mother.
According to the wife’s form 12, her only source of income is from “pensions and family allowance” (and maintenance/child support paid by the husband). Her mother “supplies any shortfall” between the wife’s income and her total expenditure.
The wife was cross-examined as to her earning capacity. In Recital N on page 5 of the s.87 Deed, the wife confirmed that she was then “presently unemployed”, but she also agreed that, by reason of her qualifications and experience, she had the capacity for full time employment. The wife said in evidence that the Recital in the s.87 Deed was an accurate statement of her position as it was in 1995.
The wife said that she has “elected” not to work since 1995. She seems to have made only limited attempts to obtain employment.
The suggestion, as I understand the husband’s case, is that the wife is not properly exercising her earning capacity. It needs to be understood, however, that the wife is an only child of holocaust survivors. Her father died relatively recently, and her mother is unwell. She was obliged to care for her father prior to his death. She now feels obliged to care for her mother.
The wife’s mother clearly relies upon her for transport and emotional support.
Whilst I accept that the wife’s mother may provide her with some limited assistance in her household (including, perhaps, some financial assistance), I am not prepared to find that the wife has anything other than a very limited earning capacity. I accept that the wife has qualifications in music and that she has worked in the past (in a limited capacity) selling dental supplies. She clearly has limited administrative skills (and few computer skills). In my opinion, she can fairly be said to be unable to support herself adequately due to her understandable sense of obligation to her mother, her limited work experience and her lack of current skills. Even if the wife were able to obtain employment, I am of the view that she would be unable to earn in excess of $15,000.00.
In my opinion, it would clearly be unreasonable to expect the wife to sell the home in which she and the children live (and have lived for a very long time) in order to enable her to contribute towards the cost of maintaining J. Further, she does not appear to have the capacity to meet the costs associated with borrowing against her assets for such a purpose.
Although I have found that the wife has only a very limited earning capacity, it is not inappropriate that I now make mention of certain other aspects of the wife’s case:
a)In my opinion, it is clear that the wife was profoundly affected by the separation. She did not desire the separation, and has had difficulty coping with her altered position. She has struggled to deal with the loss of security and loss of confidence brought about by the marriage breakdown. The wife clearly perceived herself as part of a close family structure. Leaving aside feelings of abandonment and betrayal (and my comments in this regard are not intended to imply that the husband — who left the former matrimonial home and established a relationship with A — has behaved unreasonably or inappropriately),[14] the wife’s unanticipated and unwanted (from her point of view) “independence” created within her an emotional need which has, to some extent, been met by the presence of her children in the home.
b)Notwithstanding that the parties separated in 1993, the wife continues to bear ill feeling towards the husband as a consequence of the manner in which the parties’ relationship ended. She is clearly resentful that the husband has “moved on”, and established what appears to be a successful second marriage.
c)Although the wife (who represented herself) saw fit to mount an attack on a broad range of issues relating to the husband’s lifestyle and financial position, those attacks were wholly ineffectual, and only served to demonstrate that the husband was a truthful — if somewhat rigid and insensitive — witness.
d)Notwithstanding the wife’s criticisms of the husband, she eventually conceded that she was the party to the litigation who had failed to fully disclose all relevant documents. Although the wife may be emotionally or psychologically depleted the extent that she has no real or effective capacity to obtain or maintain paid employment, there can be no doubt that she is an intelligent and determined person. She appeared to adopt the view that her financial position was not likely to be relevant to the issues before the court, but even when it became apparent to her that her approach in this regard was misconceived she was slow to focus on the shortcomings in her own case.
e)Although the wife has a credit card, she failed to produce any statements relating to it. Nor did she produce any of her bank statements. Similarly, the wife was cross-examined in relation to the children’s savings and share portfolios, and she failed to adequately respond to those questions.
f)L (the parties’ eldest child) is employed on a full time basis as a solicitor, and earns, something in the order of $42,000.00 per annum. She lives with the wife, but appears to make no contribution (or no significant contribution) to the costs of the household.
g)Ms Johns submitted that the wife’s apportionment of household expenses amongst herself and the children reflected a degree of dishonesty on her part. Although I accept that the wife’s explanations for certain of the allocations were not entirely satisfactory, they did not — in my view — reflect any dishonesty or lack of candour on her part. Instead, they resulted from the wife’s perception that, directly or indirectly, the husband should be responsible for a greater proportion of shared expenses than might otherwise be the case.
h)Ms Johns submitted that the wife’s application could be viewed as an attempt to re-visit the property settlement that the parties effected in 1995, and that the wife was simply seeking “to feather her own nest” – and not to meet the real needs of the children the subject of the application. I reject that submission. In my opinion, the wife genuinely believes that the husband has made an inadequate contribution to the financial support of R and J — particularly after child support for L ceased to be an issue. The wife’s cross-examination of the husband, and the way in which the wife conducted her case, reflect a genuine desire to persuade the court that the husband cannot be believed as to his stated financial position and that he has endeavoured to obfuscate the true state of his affairs. Although the wife has not succeeded in demonstrating that the husband is an untruthful witness, and although I accept that he has made a full and frank disclosure of his financial position, it cannot follow from that that the wife’s motives should be impugned. I am satisfied that her case was, and was conducted as, a child support/adult child maintenance case.
[14] I am well aware that I have not had presented to me credible evidence which could lead to a meaningful analysis of the actual causes of the breakdown of the marriage.

The Husband’s Financial Position

Ms Johns submitted, and I accept, that — to some extent — the case became clouded by side issues relating to property transactions, the dissolution of the husband’s partnership with Dr V, and events that occurred (or may have occurred) at least four or five years ago.
I am satisfied that the husband is a witness of truth and that his financial position is as he described it to be. Further, I am satisfied that Dr V is also a witness of truth — and I accept his evidence.
During the course of the hearing I made comments regarding the husband’s failure to call his accountant to explain certain entries in the husband’s financial records. Both the husband and Dr V said that the accountant could have assisted the court to understand certain aspects of their partnership affairs. I have concluded that it is inappropriate to draw any adverse inference as a result of the husband’s failure to call his accountant. I am aware that, upon closing the husband’s case, Ms Johns sought leave to re-open for the purpose of adducing evidence from the accountant. I refused Ms Johns’ application in that regard. Whilst I accept that the husband’s financial affairs could have been more carefully explained in the documents filed on his behalf, the reality is that the wife eventually accepted that the husband’s income is in the vicinity of $255,000.00 per annum. I would add that I have had the opportunity of re-reading the evidence given by the husband and Dr V, and I am satisfied that they have done their best to answer the questions asked of them in a straightforward and appropriately responsive manner.
I accept the following summary contained in paragraph 17(a) of the husband’s affidavit sworn 23 December 2002:
Throughout the marriage to the applicant and at the time the property matters were finalised I effectively conducted five dental practices, all on sessional bases. One practice was located in Hawthorn, one in St Kilda, one in Richmond, one in Tullamarine and one in Collins Street. In about 1986, the Richmond practice was sold to my associate, Dr V and Tullamarine was closed. In 2001, the St Kilda practice was sold (to a third party). After payment of liabilities, no profit was realised from the sale of this practice. Since 2001, effectively in an association, not partnership, with Dr V, I have conducted practices at Hawthorn and in Collins Street. The association means that Dr V receives the income from his patients, I receive the income from my patients and effectively we pay the administration of the practices proportionately as we use the practices.
I also accept the following summary contained in paragraph 17(b) of the husband’s affidavit:
During the months of September and October 2002, I negotiated, on a very harmonious basis, a total restructuring of the conduct of the practices. In effect, Dr V now practices exclusively from Hawthorn and I practice exclusively from Collins Street. Dr V’ patients from Collins Street have effectively followed him, although those preferring to have a city dentist remain with me. Similarly most of the patients attending the Hawthorn practice now attend Dr V — although a small number insist on attending me. The restructure of the practice required that I received funds from Dr V…
The husband received a net amount of $231,000.00 as a result of the restructuring of the practices (and his surrender of any direct or indirect interest which he had in the freehold of the premises from which the Hawthorn practice was conducted).
The s.87 Deed records that the parties (either personally or though related companies, trusts or partnerships) had an interest in properties in Burwood Road, Hawthorn, Waverley Street, Richmond, Clifton Street, Richmond and Sydney Road, Coburg. The s.87 Deed also records that, on the same basis, the parties had an interest in dental practices in Collins Street, Melbourne, Burwood Road, Hawthorn, Acland Street, St Kilda and Clifton Street, Richmond.
The husband effectively retained the parties’ interest in all these properties following the property settlements. The properties were heavily encumbered.
The husband later caused corporate entities controlled by him to dispose of their interest in the two Richmond properties to a corporate entity controlled by Dr V. The relevant contracts of sale are annexed to Dr V’ affidavit sworn 21 February 2003.
All moneys due from the entity controlled by Dr V to the entities controlled by the husband were paid in or about 1995 (and it would appear that the husband used those moneys for the payment of legal fees).
For reasons which I accept had nothing to do with the husband, a delay occurred in the registration of the transfers associated with the sale of the two properties. I find that the husband now has no beneficial interest in either of the Richmond properties.
I also accept that neither the husband nor entities controlled by him have retained any beneficial interest in any of the other properties referred to in the s.87 Deed.
I accept that the husband’s asset position is as recorded in his statement of financial circumstances. His interest in the home that he owns jointly with A, his share portfolio and his interest in his dental practice have a total value of approximately $560,000.00. He has resources (principally comprising an interest in a superannuation fund) valued at approximately $340,000.00. It follows that the husband owns (or directly or indirectly controls) assets to the value of approximately $900,000.00 — if superannuation entitlements are to be treated as an asset.

It would appear that the principal liability of the husband is his practice overdraft. Between the date of his financial statement and the date upon which he gave evidence, the overdraft varied considerably. Although it is likely to be something between $10,000.00 and $40,000.00 (approximately) at the present time, I propose to ignore it in the context of these proceedings. In my opinion, precision is not required when identifying the comparative asset position of the parties. Suffice it to say that I find that the husband’s net asset position (in the broadest sense) is stronger than that of the wife to the extent of something in the order of $250,000.00.
Although a significant part of the trial was occupied by an analysis of the husband’s income, it was eventually conceded that the court could work on the basis that the husband’s income (or income earning capacity in the broadest sense) is approximately $255,000.00 per annum.

Commitments of the Parties to Enable Them to Support Themselves and Others

I do not propose to deal with this factor in any detail for the following reasons:
a)Given the ages of the parties, their respective backgrounds and lifestyles, it seems to me that both parties’ living expenses (that is, their living expenses for themselves) should be fairly similar. I accept, of course, that the husband, because of his income, may be able to afford items (such as holidays and clothing) that the wife cannot reasonable afford.
b)All thee of the parties’ children reside with the wife. L is self supporting and J and R are the subject of these proceedings. If the husband is not obliged to support L and R, then the wife is not obliged to support them either.

Quantum of Child Support for J

It was not in dispute that, in the special circumstances of the case now before me, adherence to the provisions of the child support agreement would result in an unjust and inequitable determination of the level of financial support to be provided by the husband for J because of the overall respective financial positions of the parties. The husband eventually conceded that it would be appropriate to make an adjustment with respect to the periodic amount by increasing it to $200.00 per week. Ms Johns argued that, if the Lee scale were to be adopted, and if the husband were to be paying periodic child support for J at the rate of $200.00 per week, then when the other items of expenditure are taken into account (such as school fees and associated expenses), the husband would be paying something in the order of 76% of J’s overall needs.
I have already concluded that a fair allowance for the costs incurred by both parties in maintaining J (which allowance represents J’s proper needs) is a total of $860.00 per week.[15] When I take into account the matters set out in s.117(4) of the Assessment Act — which factors have been discussed above — I conclude that it would be just and equitable for the husband to bear something between 80% and 90% of these costs. It would be intellectually dishonest for me to choose either of these percentages, and hence I conclude that it is appropriate for me to choose the mid point of the two — being 85%.
[15] See paragraphs 61 and 62 above.
I have chosen the above percentage because of the fact that the husband’s earning capacity is at least 10 times greater than that of the wife, and because he has assets and financial resources of greater value of that of the wife. I have also taken into account, however, that the wife could have and arguably should have sought some form of financial contribution towards household expenses from L (and perhaps R) and the fact that, although the husband’s assets and financial resources are of greater value than those of the wife, she still has significant assets in her own right. Finally, it seems to me that it would be neither just or equitable to order the husband to pay more than the percentage to which I have referred.
85% of $860.00 per week is $731.00. Given that the husband is presently responsible for the costs which he incurs whilst J is with him (totalling $125.00 per week) and J’s educational and associated expenses (totalling $329.00 per week), it is apparent that the quantum of child support that the husband should pay is $277.00 per week.

Whether Proposed Child Support Order Is “Otherwise Proper”

Having regard to the provisions of s.117(5) of the Assessment Act, I am of the view that the proposed child support order is indeed “otherwise proper”.

Child Support Order

Having regard to the Reasons set out above, I do not propose to discharge the Agreement. There is no need for me to do so. This is particularly so because the parties have agreed that paragraph 2 of the Agreement is to remain in force.
I propose, therefore, to make orders to the following effect:
a)The Agreement be varied by deleting paragraph 1 and inserting in its place the following:
i)The husband hereby agrees to pay or cause to be paid to the wife by way of child support the sum of $277.00 per week for the child J, such payments to commence on Monday 11^th November 2002 (being the first Monday after the filing of the wife’s amended application) and be paid into a bank account established by the wife. This payment is to extend beyond J attaining 18 years of age in the event that he commences tertiary studies.
ii)The child support payable to the wife pursuant to paragraph (i) above will increase from 11 November each year (commencing 11 November 2003), in accordance with variations in the Consumer Price Index for Melbourne.
b)The variation referred to in (a) above be deemed to take effect on 1 January 2004.

J – Other Issues

I have ordered that the child support payments for J are to extend beyond his eighteenth birthday in the event that he commences tertiary studies. Although this is not strictly a child support order, the arrangement is in accordance with that now embodied in the Agreement.
Covenants in the Agreement in relation to which there may be no jurisdiction under the Assessment Act may be able to be enforced under the Family Law Act. The Agreement (as varied by the orders that I propose to make) can be registered under the Family Law Act in a court of competent jurisdiction.
Both parties retain the right to apply to vary or set aside the Agreement as it stands after the making of the order which I propose. Clearly, if either party’s circumstances change significantly, or if J’s proper needs change from those which now adhere, then one or other of the parties is likely to make an appropriate application. Further, if the husband should see fit to pay less towards J’s tertiary education expenses (in the broadest sense) that he contributed towards his daughters’ tertiary expenses, then he will have acted contrary to the assurances that he and his counsel gave to this Court and that fact, alone, is likely to constitute an adequate ground for reopening the issue of adult child maintenance for J.
I am aware that s.66L(2) of the Family Law Act provides that a court must not make a child maintenance order that extends beyond the day on which the child will turn 18 unless it is satisfied “… that the provision of the maintenance beyond that day is necessary:
a)to enable the child to complete his or her education; or
b)because of a mental or physical disability of the child.”
The fact of the matter is, however, that the orders that I propose to make are not (strictly speaking) child maintenance orders. They are orders made under the Assessment Act, varying the provisions of the Agreement. The Agreement itself contained a provision that the relevant payments (for all three children) were to extend beyond the children’s 18^th birthday (in the event they commenced tertiary studies). Obviously, the parties had agreed that the payments were necessary toe enable the children to complete their education, or the clause would not have been drafted as it was. In all the circumstances of this case, I am satisfied that the provision of maintenance/child support for J beyond his eighteenth birthday is necessary to enable him to complete his education.
I recognise, of course, that J does not turn eighteen until October 2008, and that circumstances may well alter prior to or after that time, but it is important, in my view, to endeavour to retain the overall structure of the Agreement if it is possible to do so (as the Agreement has worked satisfactorily since it was entered into in September 1995) and attempt to avoid the possibility of further proceedings between the parties.
Neither party sought to vary the provisions of clause 2 of the Agreement, and hence it will remain in its present form.
Although the wife has sought that the husband pay “all tertiary fees and books” for J, I am not prepared to make such an order. In my opinion, such an order would move well beyond a variation of the Agreement, and would necessarily involve different considerations (relevantly, those contained within s.66L of the Family Law Act). I reiterate that I have endeavoured to make orders which will retain the overall integrity of the Agreement and the arrangement the parties considered appropriate at the time that it was entered into. It is also the case that L was in her final years of secondary school at the time that the Agreement was entered into, and I have no reason to believe that the parties did not turn their minds to the question of tertiary fees and books for her at that time.
The wife also sought an order that the husband pay (for J) the “cost of hospital, medical, dental, homoeopathic and prescribed pharmaceutical expenses”. Once again, and for the reasons which I have already given, I am not persuaded that the provisions of the Agreement should be altered. In any event, the husband said that J is covered under his private health insurance arrangements, and that he will ensure that J continues to be covered under those arrangements.
The wife also sought “$2,000.00 per year towards J’s yearly holiday”. I have already included an allowance of $20.00 per week for holidays in the schedule of expenses incurred by the wife in maintaining J (which schedule, I have found, represents his proper needs whilst he is with the wife). Ms Johns submitted, and I accept, that to make a further allowance for holidays for J would amount to “double dipping”. In any event, I am satisfied that the quantum of child support that I have ordered is fair and reasonable, and appropriate to enable (or assist) the wife to meet J’s proper needs. I would add that, in my opinion, an allowance of $2,000.00 per year for a holiday for J is excessive, and no evidence was presented to support the specific amount claimed.
Although the wife sought on order to the effect that the husband pay the cost of a laptop/desktop computer for J every three years, I am not persuaded that such an order is appropriate. The wife suggested that J’s school requires its students to own a laptop computer, but no independent evidence was presented to that effect. Once again, I am of the view that the orders that I propose adequately meet J’s proper needs.
The wife also sought orders to the effect that the husband purchase a car for J valued at $26,000.00 when he turns 18 years of age, and that he pay for a one year program in Israel for J after he completes year 12. Leaving aside the question of whether the Court has jurisdiction to make these orders at the present time, the fact of the matter is the evidence before the Court does not support a conclusion that either order would be appropriate. The orders seem to have far more to do with the wife’s desire to have J treated in the same way as she perceives that A’s children have been treated than with a genuine, considered application for variation of the Agreement.
I am not satisfied that any (or any significant) arrears now exist in relation to child support for J, and I am not prepared to make any orders in relation to “unpaid maintenance”. Nor am I prepared to make any orders in relation to J’s share certificates. Even if such an application were properly before the Court, I am not persuaded that it would be in J’s best interests for them to be retained by the wife rather than the husband. I have no reason to believe that the share certificates will not be retained, and kept secure, by the husband.
The husband has a good relationship with J and sees him regularly. No evidence was presented to me to suggest that the share certificates would be “at risk” whilst they are with the husband.
I am aware that the effect of the orders that I propose to make in relation to child support for J will be to create “instant arrears”, as it were. I am satisfied, however, that the husband earned (and still earns) more than enough to have paid (and to be able to continue to pay) the level of child support which I have found to be proper and appropriate. As a consequence of his conduct in failing to pay child support at such a level, the wife has clearly incurred a financial detriment. I am not of the view that the husband was strongly motivated not to pay child support at an appropriate level. I find, though, that he willingly took advantage of the terms of the Agreement, even after it became apparent to him that the quantum of child support referred to in it was inadequate.
I am satisfied that the husband has more than sufficient assets and income available to him to meet the obligations that will flow from the orders that I propose to make.

R – Adult Child Maintenance

The wife sought orders that the husband pay $464.00 per week maintenance for R during the final year of her medical degree (2003), plus half the cost of R’s university approved practical study program in Toronto, Canada (including airfare, accommodation, and food). The wife also sought that the husband pay $2,800.00 in respect of “unpaid maintenance” for R.

Adult Child Maintenance – The Law

Section 66L of the Family Law Act1975 deals with maintenance for a child who has attained the age of 18 years. Section 66L(1) reads (in part) as follows:
A Court must not make a child maintenance order in relation to a child who is 18 or over unless the Court is satisfied that the provision of the maintenance is necessary:
(a)to enable the child to complete his or her education; or
(b)because of a mental or physical disability of the child…
Section 66L is contained in Division 7 of Part VII of the Family Law Act. For some years, there was a degree of confusion as to whether the other provisions of Division 7 apply to proceedings for maintenance for a child who has attained the age of 18 years - see, for example, Tynan (1993) FLC 92-385, Carpenter (1994) FLC 92-583 and Cosgrove (1996) FLC 92-700. In Smith; St James; Smith v Wickstein (1996) FLC 92-714, however, the Full Court of the Family Court of Australia approved the following passage from the decision of Chisholm J. in Carpenter (which passage I have amended to reflect the current provisions of the Family Law Act):
In my view the words “child” and “children” in [Division 7] refer to relationships rather than ages. If this were not so then [Section 66L] would be unnecessary, since there would be no jurisdiction to make an order for the maintenance of a person over 18. The purpose of [Section 66L] is to circumscribe the scope of the jurisdiction in relation to adult children. It sets out the limited circumstances in which orders can be made for the maintenance of children over 18, or orders made during their minority to be continued beyond 18. It does not purport to spell out the matters to be taken into account in considering the maintenance of adult children. This is because ... the other provisions of [Division 7] apply to such proceedings. It does not seem likely that the parliament would have set out detailed guidelines for the maintenance of children under 18 but provided no guidance at all for children over that age. Further,… there is nothing peculiar or inappropriate about applying the provisions of the Division to adult children, despite the fact that some of them…are obviously inapplicable.
It follows from the Full Court’s decision in Smith v Wickstein that Sections 66H, 66J and 66K apply to an application under Section 66L.
Section 66H is as follows:
In proceedings for the making of a child maintenance order in relation to a child, the Court must:
(a)consider the financial support necessary for the maintenance of the child...; and
(b)determine the financial contribution or respective financial contributions, towards the financial support necessary for the maintenance of the child, that should be made by a party, or by parties to the proceedings…
The matters to be taken into account under Section 66H(a) are expanded upon in Section 66J. Those to be taken into account under Section 66H(b) are expanded upon in Section 66K.
I do not propose to reproduce the provisions of Sections 66J and 66K in these Reasons. The first subsection in each of the sections sets out, with some particularity, the matters which the Court must take into account when considering the financial support necessary for the maintenance of the child and in determining the financial contribution to be made by each of the parties towards that financial support. The other subsections of the sections further expand upon those matters.

Evidence – R

The Agreement was entered into when R was 15 years of age (and still at school). She was in her final year of Medicine in 2003. According to the wife, much of that year would see R rostered in the county and unable to continue with part-time work to subsidise her maintenance.
In paragraph 11 of her affidavit sworn 7 November 2002 (longer affidavit) the wife said:
In December 2002, R has been approved by the Monash Medical Dean to do a 5 week study program in a world class Toronto hospital – on advice from her tutors that overseas experience enhances her prospects in gaining entry into a specialist program. To his credit, the husband has already contributed the elective application fee in recognition of its importance. I request that he also pay half the flight, accommodation and food expenses with me.
The wife said that R works part-time at a pharmacy, and that her income is approximately $85.00 per week. She also receives Austudy benefits. R works approximately 4 hours per week and makes no financial contribution to the expenses of her mother’s household, although she pays for some of her own items – and she does assist the wife in a variety of ways.
In relation to the study program at the Toronto hospital, the wife conceded that, hypothetically, R could have done the program in Melbourne and not in Canada.
The husband’s evidence was that the husband has continued to meet the payments required under the Agreement (including R’s education expenses, books and union fees) throughout R’s university career. Unfortunately, he has “no relationship whatsoever” with her.
The husband said, and I accept, that R has occasionally telephoned him to ask him to pay certain education expenses or other payments, but he has never received from her details of her examination results. Nor has she informed him of her progress in her studies.
During the calendar year 2002, the husband paid in excess of $11,000.00 in respect of books for R, her elective year university fees, her university fees and adult child maintenance. R is also covered under the husband’s private health scheme.
Ms Johns submitted, and I accept that the wife failed to produce any adequate evidence to substantiate her claim for $464.00 per week for R. Ms Johns also submitted (and again, I accept) that the wife did not demonstrate that R’s placement in Toronto was a component necessary for her to complete her course. No documents were produced which substantiated the quantum of the expenditure in relation to travel.
Ms Johns confirmed that, not only had the husband met his obligations pursuant to the Agreement in the past, but that he also proposed to continue to meet those obligations for 2003.

Adult Child Maintenance – Conclusion

The wife’s evidence in relation to R’s part time job, and her ability to work, was less than satisfactory. I am not persuaded that R could not work to a greater extent than she has to date in order to supplement her own income.
As explained above, Section 66H(a) requires me to consider the financial support necessary for R’s maintenance. Section 66J(1) directs that, in doing so, I must take into account –
c)the matters mentioned in Section 66B:
d)R’s proper needs; and
e)R’s income, earning capacity, property and financial resources.
Section 66B(1) states that the principal object of Division 7 is to ensure that children receive a proper level of financial support from their parents. Section 66B(2) states that particular objects of Division 7 include ensuring:
a)that children have their proper needs met from reasonable and adequate shares of the income, earning capacity, property and financial resources of both their parents; and
b)that parents share equitably in the support of their children.
I bear the provision of Section 66B – and the principles enunciated in Section 66C – firmly in mind as I consider my judgment in this matter.
The references in Section 66J(1)(b) and Section 66J(2) to “proper needs” must be qualified, in the case of an adult child, by the provisions of Section 66L. To use the word employed by Chisholm J in Carpenter (see above), Section 66L circumscribes the scope of Section 66J(2). In the circumstances of the present case, R’s “proper needs” are those which are necessary to enable her to complete her education.
The word “necessary” does not mean “absolutely essential”, but involves a consideration of “reasonableness” (see Cosgrove (1996) FLC 92-700 at 83,389)
Section 66L speaks of “a child maintenance order”. The definition of “child maintenance order” is to be found in Section 4(1) and, through it, Section 65B(5). It is a species of parenting order – one which deals with the maintenance of a child. That the maintenance of a child (adult or not) is a much broader concept than the simple meeting of certain identified expenses referable to a particular object or activity is apparent from the scheme of Division 7 of Part VII of the Family Law Act1975. This was alluded to by the Full Court in Smith v Wickstein (see above) at page 83,592.
Reasonableness in the present circumstances requires me to have regard to such considerations as the fact that a full time university student in R’s situation cannot fairly be considered to be reasonably able to support himself or herself during his or her course of study. That is not to say that some full time university students do not support themselves adequately, but in the circumstances of the present case, I find that neither party would realistically expect R to work very long hours.
Nevertheless, a limitation, qualification or circumscription (see Smith v Wickstein at 83,592-3) of some sort clearly applies. If “reasonableness” is the correct test, then I must assess R’s proper needs (within the meaning and contemplation of that term in Section 66J) by reference to those of her expenses which are reasonably necessary to enable her to continue and complete her education. It is clear beyond argument that a student cannot be expected to continue or complete her education if she cannot afford accommodation or food, or if she does not have them provided for her. That which is reasonably necessary in this context is a matter of degree, and for the exercise of the discretion reposed in this Court having regard to the provisions of Division 7 of Part VII of the Family Law Act.
I have already indicated that, in my view, there is inadequate evidence before the Court to enable me to make a fair assessment of R’s proper needs. But even if a figure close to $464.00 per week is the correct figure, I am not satisfied that the provision of maintenance for R beyond the amount referred to in the Agreement (and the additional expenses paid by the husband) is necessary to enable her to complete her education. In my opinion, the husband has made an appropriate financial contribution towards the financial support necessary for R’s maintenance – particularly having regard to the additional expenses that he has met pursuant to clause 2 of the Agreement (and, in the case of the two girls, above and beyond his obligation pursuant to that clause).
Under the general “umbrella” of the failure of the wife to provide adequate evidence to the effect that R requires the quantum of maintenance sought by the wife in order to enable her to complete her education is the fact that the wife did not present any evidence from R herself. In my view, the absence of such evidence is significant. Having regard to the husband’s description of R’s approaches to him since separation, R does not appear to be a particularly sensitive person where the husband is concerned. She is now well over the age of 18, and about to start a demanding professional career. She could have (and, in my view, should have) given evidence if she was genuinely minded to overcome the prima facie hurdle that s.66L represents. No adequate explanation was provided as to why the wife failed to obtain evidence from R. In my opinion, the matters raised by the wife in her application (and, indeed, by the husband in his responding documents) fairly required some form of corroboration from R – and an affidavit from her may have greatly assisted the wife’s case.
I do not suggest that the observations that I have recorded in the previous paragraph necessarily lead to a strict application of the rules in Jones v Dunkel (1959) 101 CLR 928. Nevertheless, in my view, it would have been natural for the wife to produce R as a witness, and I would have expected her to be available to the wife in that role. I do not infer from the absence of this kind of evidence that it would have necessarily have been damaging to the wife’s case if it had, in fact, been called. I can and do infer, however, that it may not have helped her case.
To the extent that it may be relevant to my determination in this matter, I am not prepared to make a finding to the effect that the wife has interfered – in any way – with the husband’s relationship with his children. The wife was not cross-examined about this subject in any detail, and had no real opportunity to respond to the husband’s accusation.
It follows from the above that I am not satisfied that maintenance beyond the amounts presently being paid by the husband (on the one hand) and the costs of the Toronto program (on the other) can fairly be regarded as “necessary to enable R to complete her education”. That being the case, the wife’s application in relation to these items will be dismissed.

“Unpaid Maintenance” and “Unpaid HECS” for L and R

There was no evidence (or no sufficient evidence) before me to enable me to conclude that the quantum sought by the wife in respect of “unpaid maintenance” for R and L was accurate. I am unable to conclude that such unpaid maintenance exists, and the wife’s application in relation to it will be dismissed.
I have already dealt with s.66L of the Family Law Act. I am not satisfied that the payment of HECS fees by the husband for both girls is or was ever necessary to enable them to complete their education. Both girls now have the ability to establish themselves in prestigious and relatively well paid professions (L in the Law and R in Medicine). The law imposes no obligation on the husband – beyond the provisions of s.66L – to meet expenses such as HECS fees.
In any event, I am not satisfied that the early or pre-payment of HECS fees is a payment that is necessary to enable a child to complete his or her education. Certainly, HECS must eventually be paid, but I agree with the husband’s description of the charge as “… a liability of the recipient of that education to be repaid commensurately with the income earned by such recipient”.[16]
[16] See husband’s affidavit sworn 23 December 2002, paragraph 21.16.
I refer to, and respectfully agree with, the following passage from the decision of the then Chief Federal Magistrate in Gilmour & Miller (2003) FMCAfam 328 (at paragraph 7):
The father contends that HECS fees are not necessary for (the child’s) support in that she can complete her course without the HECS fees being paid in circumstances in which they can be deferred and paid later. HECS fees were introduced as fees for students in circumstances in which the government allows them to be deferred if a student is unable to pay them or chooses not to pay them and that when the course is ultimately completed and the student obtains a certain level of income those fees then have to be repaid over a number of years. Hence, in my view, it is clear from the legislation itself that they are not necessary to the education of the child. The very scheme which allows for a deferral, in my view, makes it clear that they are not a necessary part of her education.
I accept that it may have been financially advantageous to the girls for their HECS fees to have been paid, and I accept that it would be a relief for them not to have a large liability when they complete their course. But the question is whether it is necessary that their HECS fees be paid. Clearly, it is not.
It follows from the above that the wife’s application in relation to the HECS fees will also be dismissed.

Conclusion

I propose to make the orders set out in paragraph 104 above, but will hear from the parties as to the form of those orders.

I, Paul O’Halloran, certify that the preceding one hundred and fifty-seven (157) paragraphs are a true copy of the reasons for judgment of Walters FM

Associate:

Date: 29 October 2004

Food	$125.00
Household supplies	$20.00
Household repairs	$10.00
Insurance	$2.00
Gas	$2.00
Electricity	$10.00
Water	$7.00
Heating fuel	$1.00
Telephone	$10.00
Petrol	$30.00
Motor Vehicle registration	$2.00
Motor vehicle maintenance	$20.00
Motor vehicle insurance	$10.00
Clothing/Shoes	$40.00
School lunches	$15.00
School expenses	$5.00
Pocket money	$20.00
Medical/Dental	$2.00
Entertainment	$25.00
Holidays	$20.00
Pool maintenance	$10.00
Miscellaneous expenses	$20.00
Total	$406.00

School fees	$14,313.00
School Bus Fees	$1,488.00
School Uniforms	$554.00
Books and Stationery	$445.00
Youth Camps	$320.00
Total:	$17,120.00