Bandi & Dora
[2024] FedCFamC1F 730
•17 October 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Bandi & Dora [2024] FedCFamC1F 730
File number(s): SYC 3377 of 2022 Judgment of: CURRAN J Date of judgment: 17 October 2024 Catchwords: FAMILY LAW – CHILD SUPPORT – interim application for departure – where the mother seeks a departure order for non-periodic child support – where the mother seeks for the father to pay for the child’s school expenses – where the father seeks departure order for non-periodic child support – where the father seeks for both parties to equally share in the child’s school expenses – where the court finds the father has significant financial resources available to him – where the court finds the mother and father expected the child to be privately educated – where the court finds the child anticipates attending a private school – where the mother has primary care of the child and the father lives overseas – finding of grounds for an interim departure order – orders made for non-periodic child support departure Legislation: Child Support (Assessment) Act 1989 (Cth), Pt 7, Div 5, ss 117, 123, 124, 125 Cases cited: Henschel v Sartre (No 5) [2024] FedCFamC1F 339
In Marriage of Philippe (1978) 34 FLR 436
In Marriage of Savery (1990) 99 FLR 346
Lightfoot v Hampson (1996) 129 FLR 444
Muir & Rodelo (No 2) [2023] FedCFamC1F 845
Strahan v Strahan [2011] FamCAFC 126
Yanda & Jacome [2023] FedCFamC1A 116
Division: Division 1 First Instance Number of paragraphs: 124 Date of hearing: 25 September 2024 Place: Sydney Counsel for the Applicant: Ms Clifford Solicitor for the Applicant: Fox & Staniland Lawyers Solicitor Advocate for the Respondent: Mr Gitto-Caesar Solicitor for the Respondent: Lander & Rogers ORDERS
SYC 3377 of 2022 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS BANDI
Applicant
AND: MR DORA
Respondent
ORDER MADE BY:
CURRAN J
DATE OF ORDER:
17 OCTOBER 2024
THE COURT ORDERS UNTIL FURTHER ORDER THAT:
1.That the parties do all necessary acts and things to accept the enrolment for the child X (“the child”) born in 2015, to commence attending C School in 2025.
2.To ensure that the child’s place at C School is preserved and confirmed the father shall do all necessary acts and things to promptly:
(a)Sign any necessary forms from C School to confirm his consent to the child’s attendance starting in 2025;
(b)Provide C School with the information they need to send any invoices directly to his email address and confirm with C School that the mother will be copied on any invoices sent to the father;
(c)Reimburse the mother $1,050, being half of the enrolment fees already paid to C School by her within seven days of these orders being issued, to her account nominated in Order 5, and pay any other fees that may be necessary, as and when they fall due, before the child commences school in 2025.
3.That the father be solely responsible for paying, as and when each payment falls due, 100 per cent of all school fees and any associated education costs whether direct or indirect as a result the child attending C School such that the father shall cause to be paid all tuition fees and all incidental education expenses included in the invoice from C School which may include but is not limited to items such as core curriculum charges, sporting and extra-curricular activity charges, school transport, excursions, school camps, textbooks, school uniforms, sport uniforms, sports equipment, academic items and other clothing or items which require the school logo and all fees and charges as determined by the school for school activities and outings which the child may participate.
4.Where possible, the payment made by the father pursuant to Order 3 is to be made directly to C School or any third party associated with the school (eg uniform shop) in such amount that satisfies 100 per cent of their invoice, as and when each payment falls due. If it is not possible for C School or the third party to be invoiced direct to the father or be paid directly by the father, the mother will determine alternate payment details for the father to facilitate payment or reimbursement to her.
5.If the mother pays an expense which the father is liable to pay as set out in these orders, the mother shall provide to the father a copy of the receipt and a photo of the items she purchased for the child and the father shall reimburse her to her nominated account, within seven days of the mother sending the receipt.
6.In respect of the incidental educational expenses the amount of such expenses to be paid by the father shall be not more than $20,000 for each calendar year.
7.The father shall not seek to reduce his periodic child support under the current child support administrative assessment or obtain a credit as a result of any payments he makes to try and reduce his current child support assessment as set out in these Orders.
8.The father is not responsible for payment of any costs associated with any overseas excursions or non-compulsory excursions or optional extra-curricular activities outside of the core extra-curricular activities and sports activities usually offered to the students.
THE COURT NOTES THAT:
A.The mother has the option to change the bank account where she receives reimbursement and will notify the father if this occurs. The father is to proceed with reimbursement to the current nominated B Bank account until and unless the mother provides alternate account information.
B.In addition to the tuition fees to be paid by the father, the father shall meet associated education costs and incidental education expenses to a maximum of $20,000 in each calendar year.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Part XIVB of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish an account of proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under a pseudonym Bandi & Dora has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).
EX TEMPORE
REASONS FOR JUDGMENTCURRAN J:
These reasons for judgment were delivered orally and have been corrected from the transcript.
INTRODUCTION
These reasons concern an interim application made in the parenting and child support departure proceedings between the mother, Ms Bandi, and the father, Mr Dora. There is one child of the marriage, X (“the child”) born in 2015.
The mother filed an Application in a Proceeding on 4 September 2024 seeking interim child support departure orders for the provision of child support otherwise than in the form of periodic amounts under s 124 of the Child Support (Assessment) Act 1989 (Cth) (“the Assessment Act”), and an order that upon that departure order being made, that the parties do all things to accept the enrolment of the child at C School commencing in 2025.
The father sought an interim child support departure order for non-periodic payments, whereby the parties shared the non-periodic amounts. If that order was made, he consented to the order for the enrolment of the child at C School commencing in Year 5 in 2025.
BACKGROUND
The mother was born in 1976 and is employed as a professional. The mother is presently living in Sydney. The father was born in 1977 and is working as a finance professional. The father is presently living in City D.
The parties commenced cohabitation in 2006. They were married in the United States of America (“USA”) in 2007. Final separation occurred on 1 May 2019 and a Divorce Order was made in Australia in 2022.
The mother commenced parenting proceedings in Australia on 19 May 2022. The parties have ongoing property proceedings in the United States, which were commenced by the father in 2022.
The child currently resides with the mother in Sydney, and it is agreed that the child is to remain living in Sydney with the mother. The child currently spends time with the father in accordance with the interim orders made by Judge Morley on 23 June 2023.
ORDERS SOUGHT
Both parties to the proceedings are seeking a child support departure order under s 124 of the Assessment Act, being orders for provision of child support otherwise than in form of periodic amounts. These orders, however, are sought on competing terms.
The areas of contention are whether the father should be ordered to pay more than 50 per cent of the child’s education costs, what those costs entail, and if so, whether enrolment of the child at C School should follow.
Applicant mother
The applicant mother sought orders for the father to be solely responsible for payment of the child’s school tuition fees and any direct or indirect associated education costs capped at $20,000 per annum. The orders she sought define the included education costs.
The mother sought an order that, pursuant to s 125 of the Assessment Act, there is no reduction to the periodic administrative assessment paid by a father, as a consequence of the s 124 order being made.
Subject to these orders being made, the mother sought an order for the parties to do all things necessary to accept the enrolment of the child to attend C School in 2025.
Respondent father
The respondent father sought orders for the parties to each be responsible for 50 per cent of all education expenses for the child’s attendance at C School or other agreed school and that there is no reduction to the periodic administrative assessment paid by a father, as a consequence of the s 124 order being made.
The father sought orders for the parties to each be responsible for 50 per cent of the costs of extra-curricular activities conducted outside of school, provided there is agreement between the parties for the child to attend such activity.
The father sought that, subject to his orders being made, the child attend C School in 2025 (unless otherwise agreed by the parties or ordered by the court). In the event the child does not attend C School, the father sought orders that the parties shall agree between themselves what will be communicated to the child about this decision and then communicate such agreed message.
The father initially sought for the mother to be ordered to withdraw her application to Services Australia to increase the child support assessment. However, this application was subsequently withdrawn.
MATERIAL RELIED UPON
The applicant mother relied upon the following material:
(a)Financial Statement of Ms Bandi filed 28 May 2024;
(b)Application in a Proceeding filed 4 September 2024;
(c)Affidavit of Ms Bandi filed 4 September 2024; and
(d)Case Outline filed 23 September 2024.
The respondent father relied upon the following material:
(a)Financial Statement of Mr Dora filed 3 July 2024;
(b)Response in an Application in a Proceeding filed 18 September 2024;
(c)Affidavit of Mr Dora filed 18 September 2024; and
(d)Case Outline filed 23 September 2024.
The father’s case outline also relied upon the mother’s documents.
Both parties withdrew their reliance on the Single Expert Report of Dr E. I have given it no consideration in this matter.
THE LAW
Child Support Departure
Part 7 of the Assessment Act confers jurisdiction on certain federal and state courts. The Federal Circuit and Family Court of Australia (Division 1) is a court having jurisdiction under pt 7 of the Assessment Act (see Muir & Rodelo (No 2) [2023] FedCFamC1F 845 at [290]-[298]).
Division 5 of pt 7 of the Assessment Act contains the criteria which must be satisfied for the court to make orders for provision of child support otherwise than in form of periodic amounts.
Under s 123(1)(a) of the Assessment Act, an application can be made to a court having jurisdiction under the Act for an order that a liable parent provide child support otherwise than in the form of periodic amounts paid to the carer entitled to child support. This application may be made only if an administrative assessment is in force in respect of the child.
Where the carer entitled to child support, or the liable parent has made an application under s 123(1)(a) of the Assessment Act, s 124 articulates the two requirements that the court must be satisfied of before making an order for non-periodic child support. The court must be satisfied that it would be just and equitable as regards the child, the carer entitled to child support, and the liable parent; and otherwise proper, to make an order.
Section 124 sets out the matters that the court must have regard to in determining the application:
(2) In determining the application, the court must have regard to:
(a)the administrative assessment in force in relation to the child, the carer entitled to child support and the liable parent; and
(aa)any determination in force under Part 6A (departure determinations) in relation to the child, the carer entitled to child support and the liable parent; and
(b)any order in force under Division 4 (departure orders) in relation to the child, the carer entitled to child support and the liable parent; and
(c)whether the carer entitled to child support is in receipt of an income tested pension, allowance or benefit or, if the carer entitled to child support is not in receipt of such a pension, allowance or benefit, whether the circumstances of the carer are such that, taking into account the effect of the order proposed to be made by the court, the carer would be unable to support himself or herself without an income tested pension, allowance or benefit.
(3)In determining whether it would be just and equitable as regards the child, the carer entitled to child support and the liable parent to make an order under subsection (1), the court must have regard to the matters mentioned in subsections 117(4), (6), (7), (7A) and (8).
(3A)In having regard to the earning capacity of a parent of the child under paragraph 117(4)(da), the court may determine that the parent’s earning capacity is greater than is reflected in his or her income for the purposes of this Act only if the court is satisfied as mentioned in subsection 117(7B).
(4)In determining whether it would be otherwise proper to make an order under subsection (1), the court must have regard to the matters mentioned in subsection 117(5).
(5)Subsections (2), (3), (3A) and (4) do not limit the matters to which the court may have regard.
The parties currently have an administrative assessment in force for the purposes of making an application in accordance with s 123(1)(a), there is no current departure determination or departure order in force, and neither parent is in receipt of an income tested pension, allowance or benefit.
In determining whether it would be just and equitable as regards the child, the mother and father the court must have regard to the matters mentioned in s 117(4), 117(6), 117(7), 117(7A) and 117(8). The court must also consider the matters mentioned in s 117(5), in determining whether it would be otherwise proper to much such an order.
Is it just and equitable to make an order?
There are various matters that the court must have regard to in determining whether it would be just and equitable as regards the child, the carer entitled to child support (the mother) and the liable parent (the father), to make an order under s 124 of the Assessment Act.
Section 117(4) of the Assessment Act, sets out the matters for the court’s consideration:
(4)In determining whether it would be just and equitable as regards the child, the carer entitled to child support and the liable parent to make a particular order under this Division, the court must have regard to:
(a)the nature of the duty of a parent to maintain a child (as stated in section 3); and
(b) the proper needs of the child; and
(c)the income, earning capacity, property and financial resources of the child; and
(d)the income, property and financial resources of each parent who is a party to the proceeding; and
(da)the earning capacity of each parent who is a party to the proceeding; and
(e)the commitments of each parent who is a party to the proceeding that are necessary to enable the parent to support:
(i) himself or herself; or
(ii)any other child or another person that the person has a duty to maintain; and
(f)the direct and indirect costs incurred by the carer entitled to child support in providing care for the child; and
(g)any hardship that would be caused:
(i) to:
(A) the child; or
(B) the carer entitled to child support;
by the making of, or the refusal to make, the order; and
(ii) to:
(A) the liable parent; or
(B)any other child or another person that the liable parent has a duty to support;
by the making of, or the refusal to make, the order; and
(iii)to any resident child of the parent (see subsection (10)) by the making of, or the refusal to make, the order.
The court also must consider the matters in ss 117(6), 117(7), 117(7A) and 117(8), which are considered in further detail below.
I have considered each of the relevant sections in making this determination.
Proper needs of the child
Section 117(4)(b) of the Assessment Act requires the court to have regard to the proper needs of the child. Section 117(6) specifies what the court should have regard to:
Proper needs of the child
(6)In having regard to the proper needs of the child, the court must have regard to:
(a)the manner in which the child is being, and in which the parents expected the child to be, cared for, educated or trained; and
(b)any special needs of the child.
At the centre of these proceedings is a dispute as to whether there was an expectation held by both parents about the manner in which the child is to be educated. The mother said that both parents expect the child to be educated at C School from 2025. The father denies this. It is however agreed that the child wishes to attend C School.
It is agreed between the parties that C School is an appropriate school to meet the proper needs of the child. Both parties acknowledge that C School was contemplated as a schooling option for the child since he was an infant; this is evidenced by the child’s registration at C School in 2015 (at least as a holding position for the child).
The father asserts that the child was registered for several schools, and that it was not agreed that the child would attend C School. This evidence can be properly tested at a final hearing, it remains in dispute.
The mother contended that the family has for the child’s life contemplated him being privately educated in Sydney even while they were living internationally. The submission is compelling, and it is supported on the evidence particularly given the applications for enrolment at two Sydney private schools.
The mother said that the child has an understanding that he will be going to C School in Year 5, which is something that he often discusses with his friends. She said he “often talks to me and his father about how much he is looking forward to going to [C School].” The father said that the mother has made the child aware that he will be attending C School in 2025 and said that the child “appears genuinely excited about this.”
Although both parties agree that the child should attend C School in Year 5, the mother’s position is predicated on the father bearing sole responsibility for the child’s education costs. The mother contends that if the costs are shared equally between the parties, as sought by the father, the mother is not presently in a position to meet these costs, and the child would not be able to attend C School in 2025.
The father disagrees with the mother’s assertion, contending that the mother has the financial means both by way of her income and assets to contribute towards the child’s education costs. The father also asserts that, because the parties had made a joint decision about the manner in which the child should be educated that the costs should be jointly shared.
On the evidence available on this interim determination, I am satisfied that the parties’ completion of the enrolment indicates they considered, at that time, that C School was an appropriate school. I accept this as evidence of the intention of the parties in respect of the manner in which the parties expected the child to be educated, that is in a private school in Sydney.
Income, earning capacity, property and financial resources.
The income, earning capacity, property and financial resources of the child and the parents are matters required to be considered under s 117(4)(c) and s 117(4)(d), in determining whether it is just and equitable to make an order. The circumstances to be considered under these sections are outlined further in s 117(7) and s 117(7A):
Income, earning capacity, property and financial resources
(7)In having regard to the income, earning capacity, property and financial resources of the child, the court must:
(a)have regard to the capacity of the child to earn or derive income, including any assets of, under the control of, or held for the benefit of, the child that do not produce, but are capable of producing, income; and
…
(7A)In having regard to the income, property and financial resources of a parent of the child, the court must:
(a)have regard to the capacity of the parent to derive income, including any assets of, under the control of, or held for the benefit of, the parent that do not produce, but are capable of producing, income; and
Both parents have a significant income, earning capacity, have property and financial resources, some of which are held exclusively for the benefit of the child. It is necessary to explore the financial position of each parent, and the resources available, to determine whether it would be just and equitable to make an order under s 124, and if so, on what terms.
The child’s college fund
The father has a college fund for the child, which was disclosed in his financial statement. The fund has a balance of $190,338. The father contends that the college fund may be used at eligible institutions (most based in the USA) and that the purpose of the fund was for the child’s university/college education, not for schooling. However, the father sent an email to the mother that said “when we opened the account, school costs were not eligible – now a limited amount can be used for school expenses.” There was no evidence as to what the extent of that limited amount that could be used for school expenses was.
The father made submissions about the college fund asserting that it is not an asset that the child can currently derive income or earnings from. Notwithstanding this, it is an asset which is held for the benefit of the child.
The mother contended that the weekly amount of $155 listed in the father’s financial statement, as a contribution towards the child’s education, is an amount that is likely going towards the college fund (an asset the father asserts that the child cannot currently access).
The college fund is not a significant consideration, in the ambit of the assets of the parties, as the father has a surplus of income in any event (as is explored below). Nevertheless, I find it is a source of possible funds to meet some of the expenses of the school fees, at least on an interim basis.
The father’s financial position
The father’s financial circumstances are vastly superior to that of the mother. The father earns an annual income of $1,022,060, with his total yearly expenses being $724,932. His undisputed annual surplus of income is not less than $297,128. The father’s annual income is more than three times greater than that of the mother.
The father’s deposed annual expenses are close to double of the expenses of the mother. The annual expenses of the mother are $403,507 and those of the father are $724,000.
The father’s financial statement records him as paying $203 for the child’s expenses each week (which is inclusive of $155 each week he deposes is paid to the child’s education costs), in addition he pays child support. The parties agree that since June 2024 the father has been paying the child’s medical costs of $130 per week.
The father has gross assets of $5,271,922 and his total liabilities are $679,914 (being the mortgage on the property in which he presently lives). This leaves the father’s net asset position at $4,592,008. The father also has $1,828,152 in superannuation.
The mother contended that the father has the demonstrated capacity to meet all of the school costs many times over just from his net income as declared. This is true.
I find the father’s financial circumstances are indeed vastly superior to those of the mother.
The mother’s financial position
The mother’s salary was recorded as $298,000 in her financial statement and she disclosed a pay increase, such that she now receives an extra $240 each week. Despite significant health issues in the past the mother has returned to full time employment. She has the capacity to work from home and does so. The mother has gross assets of $1,935,000 with liabilities of $1,035,000, leaving her with a net asset position of $900,000. She has a gross superannuation with a value of $381,301.
According to the mother’s financial statement, her weekly personal expenditure is currently $7,761. Of this weekly figure, the mother deposes that $3,418 are expenses for the child. The mother presently receives $372 per week in child support from the father. She also receives interim spousal maintenance of $820 per week from the father.
Notwithstanding the mother’s current financial position, the mother deposes that she has a shortfall in her expenses over her income. The mother maintained her weekly costs are reasonable in her circumstances, but the mother still has a weekly shortfall. The father maintained that the mother’s weekly expenses are “either not as she represents” or are “inflated.”
Are the mother’s expenses inflated as contended by the father or are not as she represents?
$2,000 per week rental expenses
The mother’s evidence was that she has a liability of $2,080 per week for her rent, private health and motor vehicle registration. The mother is currently living with the child in a property owned by the maternal grandparents. The mother said “the only reason [X] and I are not homeless is because my parents have tried to help us in a very hard time to let us stay in a place they would normally rely on for market rate rental income.” She did not give any evidence as to the extent of the help or what market rate rental income would be.
In respect of the mother’s claimed rent obligations the father made two submissions. The first was that the mother was not required to meet the rent obligations. Hence the sum should not be considered as a required expense as he contends it is not being paid weekly as she deposes. The second was that the mother and child could live in less expensive rental option and in that regard, he provided evidence by way of a list of alternate and cheaper accommodation options.
In respect of the first of the contention, I do not accept the rent obligations of the mother to her parents should be disregarded. The mother has given evidence as to her rental obligations to her in her financial statement which was corroborated by her application to change child support assessment (exhibit 5). That document records the mother declaring that her rental costs were $2,000 per week, she made that declaration on 1 June 2024. I cannot determine on the evidence whether this obligation is being paid or is accruing and whether she is paying on a weekly basis or some other basis. The mother’s application to Services Australia listed that she was paying $2,000 for renting the property although, the father contends that “[Ms Bandi] does not actually pay rent as she lives in an apartment owned by her parents, rent free.” He contended that this sum is “significant” and suggested that it is “perhaps above what the market rent would otherwise be in relation to the property.” There was no evidentiary basis for the father’s submission.
Her evidence is that rent is an expense she incurs and that her parents support her by allowing her to reside there at the rate she pays rather than them receiving “market rate rental income.” Her financial statement deposed that she pays rent, private health insurance and motor vehicle registration of $2,080 per week and that the rental components is paid to Mr F & Ms G. I infer from this evidence that the rate at which she is obliged to pay rent to her parents is less than the market rate they could otherwise achieve. I cannot make any finding in relation to what those amounts might be.
The mother has an undisputed and significant history of health issues. She says that her parents live nearby and provide help to her and the child. It is not implausible that they may assist her with flexibility in the payment of rent. On the evidence I can make no finding as to the arrangements. The arrangements will no doubt be fully explored at the final hearing. There is no basis, however, for me to conclude, on the evidence, that the maternal grandparents permit the mother to live rent free. Even if it is not an expense that the mother pays each week (as with a commercial rental arrangement) I accept her sworn evidence that it is part of her weekly expenses. I reject the suggestion that her rental expenses are not a liability that are necessary to be met by her.
In respect of the second contention that the mother and child should consider more affordable accommodation options, I reject that contention for the reasons that follow.
Firstly, the mother and child reside in the property and are settled there. To suggest that a parent should relocate to more modest and affordable accommodation in order to create a capacity to meet the school expenses is not supported by any authority, of which I am aware.
Secondly, the father will undoubtedly maintain his (superior) standard of living (with accommodation costs of his mortgage and expenses of some $2,500 per week) but contended that the mother and child could move from a three-bedroom home to a two-bedroom, one bathroom flat at a reduced cost of $650 per week. To suggest a move of accommodation from a living standard that the child is familiar with is not reasonable. The current cost of the father’s accommodation for him alone are $2,054 per week for mortgage repayments and $503 for rates and unit levies.
Thirdly, the mother works from home freeing her to attend to the child as the primary carer. An extra room to facilitate her work from home arrangements is entirely reasonable.
I reject any suggestion that the mother should be required to consider renting a smaller and less expensive home in order to contribute to the child’s education costs on an interim basis as contended. I am not satisfied on the evidence that the mother’s claimed rental costs are inflated.
Holiday expenses
The father submitted that mother’s weekly expense of $795 towards holidays for herself and the child is “excessive in the circumstances,” and that this figure “should be half” of what is represented. The father’s own holiday expenses plus expenses for him spending time with the child are $594 per week.
The mother said, in explanation of her holiday expenses, that the parties previously enjoyed international and domestic holidays, which the father continues to enjoy. The mother also noted that her figure included the costs associated with her frequent trips to Region H to see the child’s paternal grandparents. There was no break down or particularisation of the costs. It is not possible, on this interim basis, for me to make findings in respect of the accuracy of this claimed expense. However, I find that the holiday expenses of both parties are significant with the mother’s annual figure being over $40,000 and the father’s annual figure being over $30,000.
This is an interim application where the areas of dispute cannot be fully tested. There is minimal evidence on which it is possible to make a finding as to each parent’s actual travel costs. Even if I accept the father’s proposed figure of $397.50 per week (being half of that that was claimed by the mother) as a reasonable figure, given the father has more required international travel in order to visit the child, the mother would still be in a deficit of her expenses over her income.
There is little basis to accept any figure given the lack of evidence. However, adopting the father’s figure for travel, the mother would then have weekly expenses of $7,233.50 (also excluding the $130 medical expenses that the father now covers). In these circumstances, with the mother’s increased weekly income of $6,172, the mother is still in shortfall of approximately $1,000 per week of her expenses over her income.
On an interim basis I am satisfied that the mother currently has a deficit in her income over her expenses and does not have the capacity from her income to meet the school fees and costs.
The father has a significant capacity to meet the expenses after consideration of his income and expenses, on an interim basis.
Use of other financial resources to meet the interim school costs
The father contends that the mother’s financial resources, including the approximate $630,000 of savings available to the mother, together with her recent expenditure of $109,000 on a motor vehicle, supports his assertions that the mother has capacity to meet half of the school fees and expenses on an interim basis.
There is nothing out of the ordinary in respect of the mother purchasing a motor vehicle given the parties’ respective asset and income situation. I do not accept her purchase of a motor vehicle has any relevance for this interim determination.
I accept the father’s contention and find that the mother has some assets and savings from which she could contribute to the school fees.
However, it is also the case that the father has substantially more assets than the mother. Additionally, he likely has access to the education fund, from which he could meet the expenses, or at least part of them, on an interim basis.
Direct and indirect costs in providing care
The court is required to consider under s 117(4)(f), if it would be just and equitable to make an order for non-periodic child support, with regard to the direct and indirect costs incurred by the carer entitled to child support. Section 117(8) provides the court with further direction:
Direct and indirect costs in providing care
(8)In having regard to the direct and indirect costs incurred by the carer entitled to child support in providing care for the child, the court must have regard to the income and earning capacity foregone by the carer entitled to child support in providing that care.
There is no dispute that the mother is the primary carer of the child. The mother is primarily responsible for the day-to-day care of the child. The father sees the child approximately once every three months. It is also agreed between the parties that the father lives in City D, and that the mother will continue to live in Sydney with the child.
The evidence supports the finding that a substantial proportion of the mother’s weekly expenses are costs directly incurred by the mother as the child’s primary carer. The father contributions, in his payment of child support and the medical expenses for the child, make up a small portion of the child’s weekly expenses, as deposed by the mother.
The mother says that she has maintained primary care of the child throughout his upbringing, noting, however, there were periods where the father had primary care whilst the mother was undergoing medical treatment. The mother contends that in assuming the role as primary carer she has foregone her earning capacity and income. The mother accepted, however, that she has been able to earn an income of approximately $4,000 per week and that she has assets with a value of $1,935,000.
Notwithstanding these factors, the mother invited the court to consider the income that she will forgo by reason of her care commitments as the child’s primary carer into the foreseeable future, particularly as the father lives in City D and will not meet any of the ancillary costs that are sometimes absorbed by the non-primary parent in day-to-day life when both parents are living in a similar location.
The evidence supports the finding I make that the mother has met the majority of the direct and indirect costs of providing care to the child. I am unable to make any finding on an interim basis on the evidence as to the extent to which the mother may have foregone earning capacity and income. This is also a matter which will be fully tested at the final hearing, and I make no finding on an interim basis.
Hardship that would be caused by making the order
Although both parties seek orders from the court under s 124 of the Assessment Act for the provision of child support otherwise than in the form of periodic amounts, the father contended that he and the child may be prejudiced by the interim orders sought on the terms proposed by the mother.
Section 117(4)(g) directs the court to consider any hardship that would be caused to the child, the carer entitled to child support (the mother) or the liable parent (the father), by the making of orders, or refusal to make orders.
These are interim proceedings for a child support departure order, where the mother also seeks final orders for child support departure. The mother’s interim position for the child to attend C School is conditional on the father bearing sole responsibility for the entirety of the child’s education costs on an interim basis. The interim position is in conflict with the father’s position for the child to attend C School but only if the parties share equally the costs of the educational expenses.
The father contends that it is not in the best interests of the child to change schools’ multiple times which may be the outcome if the final departure application as sought by the mother is not made. The gist of his submission was that due to the interim nature of these proceedings and the conditional nature of the mother’s application, that this may eventuate, and this could cause hardship.
The father contended that to view the interim orders sought by the mother as “just for the year, is not necessarily telling the whole story”, and over the course of the remaining eight years of the child’s education, under the mother’s proposed orders the father estimated this would cost him somewhere between $450,000 and $480,000. I do not accept this is a relevant consideration for my determination of this interim issue. This is an application for interim orders. The substantive applications will be dealt with at final hearing at which time all of the relevant evidence will have an opportunity to been tested.
The mother’s position is that the child would commence at C School in Year 5 and after the property proceedings in City D are finalised and the parties’ respective financial positions are crystallised, the competing departure order applications will be heard. Once both parties’ financial circumstances are known, she contended that she may not be as cautious as she is in her current position and her final child support departure application may in fact change.
The mother further submitted that if the court were to make the proposed interim orders and these were ultimately considered improper, the father could arguably have access to a remedy to restore any resulting unjust outcome (in essence as applied in the interim property determination in Strahan v Strahan [2011] FamCAFC 126 but applying to a child support departure).
I am not persuaded that speculation as to a possible amended application on final hearing of orders sought or an argument as to a possible remedy are relevant factors in consideration of the current application.
I am however satisfied that any interim departure order made may indeed be discharged after the final hearing once the evidence has been fully tested if there is no basis to make such an order on a final basis. It is only once an understanding of the parties’ respective financial circumstances are known that the final departure application can be properly determined.
In these circumstances the mother asserts that there is no prejudice to the father if interim orders are made consistent with her application pending final determination.
I agree the prejudice to the father is minimal in the circumstances of this case where the property matter will be finally determined in City D, as some stage in the future and the parenting matter listed and determined in this court thereafter. The final departure order application will be determined at the final hearing of this matter at that time after the evidence has been fully tested, findings will be made and consideration of the relevant factors at that time will occur. These orders are interim in nature and secure the arrangements pending final determination. I do not accept the potential change of schools for the child or the potential future costs of school fees if final departure order is made in the terms currently sought by the mother, form the basis to find hardship as contended by the father.
Other Considerations
Section 124(5) of the Assessment Act provides that the court may have regard to matters outside of those specified in s 124.
The father contends that the orders sought under the mother’s proposal would not be just and equitable as the orders also lack certainty and create too broad of an obligation upon the father. In submissions the father asserted that the reference to “incidental education costs” and “associated education costs” is vague and would leave the father exposed to bearing a broad range of costs that he has no control in determining. The form of orders sought by the mother identifies with a level of specificity by non-exhaustive examples of expenses that are to be met and proposes a cap of $20,000. In my view, these measures do provide a level of certainty and specificity.
The father contends that if the mother is granted sole decision-making responsibility on a final basis (as sought by her), she could make costly decisions (i.e. school related overseas trips, exchange programs, extra-curricular activities) without the father's involvement, yet he would be solely financially responsible for the costs of such activities. This consideration is not relevant as this is an application for an interim departure order and a determination as to parental responsibility orders is a matter for final parenting orders. Additionally, to limit the extent of the required support I will make an order for a cap as proposed and I will make an order that excludes the cost of overseas travel or optional excursions and optional non-usual extra-curricular activities, at least on an interim basis. This order will include the usual term activities and usual term extra-curricular activities that are ordinarily offered to students including the sport, music and other endeavours that students are encouraged to partake in but will exclude overseas travel and optional extra-curricular activities that are not the usual extra‑curricular activities.
The father took issue with the proposed capped amount sought under the mother’s orders. The father opposes this model maintaining his preference for the “shared contributions” model, which the father deposed would “incentivise the mother to consider the financial impact of her decision, as she would also bear the cost.” In response to the capped model, the father deposed the mother may be “inclined to maximise expenses up to the cap.”
The father opposed a cap approach, however when pressed about the appropriateness of the $20,000 amount he suggested that a lower amount of $5,000 to $10,000 would be more suitable. I was not taken to any forensic or accounting basis for any figure that was suggested, be it $20,000, $10,000, $5,000 or any other figure.
The mother did not accept the father’s assertion that the capped model may incline the mother to maximise expenses up to the cap.
There is no evidence before me as to the likely costs to be incurred. I must do the best that I can based on the information, however it is the mother’s application, and it is her onus to establish that the order sought is just and equitable and otherwise proper.
I am persuaded by the father’s contention that the mother could approve expensive overseas travel or other expenditure without recourse to him and accordingly, I make an order to exclude those types of expenses.
The orders that I make will be interim only and apply until further order and will exclude overseas or optional additional expenses that are not usually offered.
I exclude overseas travel or extra-curricular expenses other than the compulsory sporting and compulsory extra-curricular activities usually offered by the school.
In these interim proceedings there was no evidence before me as to the actual or likely cost of the compulsory and elective extra-curricular and sporting activities. As this is an interim determination and I can only what I can on the evidence that I have been provided. The cap provides an upper limit on costs and I consider that upper limit to be appropriate. Both parties will have an opportunity to provide evidence as to the actual costs of the sports, excursions and extra-curricular activities sought to be included in any final orders that they seek.
Is it otherwise proper to make an order?
In addition to the just and equitable requirement under s 124, the court must also be satisfied that it is otherwise proper to make a departure order.
Pursuant to s 124(4) of the Assessment Act, in determining whether it is otherwise proper, the court must have regard to the matters mentioned in s 117(5), as follows:
(5)In determining whether it would be otherwise proper to make a particular order under this Division, the court must have regard to:
(a)the nature of the duty of a parent to maintain a child (as stated in section 3) and, in particular, the fact that it is the parents of a child themselves who have the primary duty to maintain the child; and
(b) the effect that the making of the order would have on:
(i)any entitlement of the child, or the carer entitled to child support, to an income tested pension, allowance or benefit; or
(ii)the rate of any income tested pension, allowance or benefit payable to the child or the carer entitled to child support.
Neither parent or the child are currently receiving an income tested pension, allowance or benefit. The considerations under s 117(5)(b) are not relevant to these proceedings. I have had regard to the nature of the duty of both parents to maintain a child.
The parties have substantial assets and incomes, as outlined above, and I consider that it would be otherwise proper for an order under s 124 to be made based on this factor alone (see Henschel v Sartre (No 5) [2024] FedCFamC1F 339 at [267]).
Should an order under s 124 be made?
In the circumstances where both parties are seeking an order under s 124, subject to different caveats, I have found that it is just and equitable and otherwise proper to make an order, it is then relevant for me to consider on what terms the order should be made.
The mother contends that it is important for the court to hold in mind that she bears all the day‑to-day expenses of the child, given the father lives overseas. The mother distinguished these circumstances from a usual case where incidental expenses of caring for a child would be met by both parties from time to time. In this case they are met almost entirely by the mother other than when the child spends time with his father. The mother submitted that in such unusual circumstances it would be unjust to make an order as sought by the father.
The father acknowledged that his financial position is vastly superior to that of the mother but correctly identified that the mother is not impecunious, and she has access to some assets. He contended that by virtue of the decision being jointly made for the child to attend C School, the funding of this decision should be also jointly shared. The father’s submissions did not directly address the different positions of the mother and the father in their duties to maintain the child. The real crux of his position was that the mother’s purported weekly expenses were an inaccurate or an exaggerated reflection of what expenses she incurs on a weekly basis for her and the child and fails to account for the assets she has available. He says in these circumstances, it would not be just and equitable for the court to make the orders as sought by the mother. As referred to earlier in these reasons, I do not accept there is evidence that the mother’s expenses are inflated.
I consider that the vastly superior financial and asset position of the father, the current expenses of the mother and her income, the significant day to day care of the child by the mother and the history of the parent’s registration of the child at various private schools in Sydney are all factors that on balance that support the mother’s application being granted, subject to the limitations identified in these reasons, and to be granted on an interim basis.
The final determination will occur once the parties’ property proceedings have concluded and their respective financial circumstances are certain. This will include the parties knowing what their assets are and whether the mother will continue to receive spouse maintenance and what level of child support she will be receiving.
Reduction in Periodic Child Support Assessment
As I have assessed that it is appropriate to make an order for provision of child support otherwise than in the form of a periodic amount under s 124 of the Assessment Act, it is necessary to state whether the annual rate is to be reduced considering s 125 of the Act.
In the mother’s application she seeks that pursuant to s 125 of the Assessment Act there is no reduction to the periodic administrative assessment paid by the father, as a consequence of the non-periodic departure order being made.
Section 125 of the Assessment Act requires that:
(1)If the court makes an order under section 124, the court must state in the order whether the annual rate of child support payable by the liable parent under any relevant administrative assessment is to be reduced, in the manner specified under subsection (3), by the child support ordered to be provided by the liable parent.
Note:If the court makes a statement under this section that the annual rate of child support is to be reduced, the Registrar must make a provisional notional assessment under section 146B.
(2)The court may state that the annual rate of child support payable by the liable parent is not to be so reduced only if it is satisfied that, in the special circumstances of the case, it would be:
(a)just and equitable as regards the child, the carer entitled to child support and the liable parent; and
(b)otherwise proper;
that the annual rate of child support not be reduced by the child support ordered to be provided.
(3)If the court states in the order that the annual rate of child support is to be reduced by the child support ordered to be provided, the court must also state in the order either:
(a)that the annual rate of child support payable is to be reduced by a specified amount that represents an annual value of the child support to be provided; or
(b)that the annual rate of child support payable is to be reduced by 100% or another specified percentage that is less than 100%.
(4)The court may, under subsections (1) and (3), make different provision in relation to different child support periods and in relation to different parts of a child support period.
(5)In determining whether it would be just and equitable as regards the child, the carer entitled to child support and the liable parent to make a statement of the kind referred to in subsection (2), the court must have regard to the matters mentioned in subsections 117(4), (6), (7), (7A) and (8).
(5A)In having regard to the earning capacity of a parent of the child under paragraph 117(4)(da), the court may determine that the parent’s earning capacity is greater than is reflected in his or her income for the purposes of this Act only if the court is satisfied as mentioned in subsection 117(7B).
(6)In determining whether it would be otherwise proper to make a statement of the kind referred to in subsection (2), the court must have regard to the matters mentioned in subsection 117(5).
(7)Subsections (5), (5A) and (6) do not limit the matters to which the court may have regard.
The majority of the Full Court in Lightfoot v Hampson (1996) 129 FLR 444 held that under the Assessment Act the court can make orders for non-periodic child support even if there is no corresponding credit provided to the liable parent for the periodic child support rate. In his discussion around the scope of Division 5 of the Assessment Act, Fogarty J stated at 461:
In summary, my views about the scope of Div 5 are:
(a) Essentially it is a substitution pro vision.
(b) It is not an independent source of power to make a child support order.
(c)It can lead to an increase in the total liability of the liable parent, but only through the indirect path provided in s 125. That is, satisfaction of “special circumstances” justifying a non-credit against all or part of the existing assessment.
(d)This cannot be done where the existing liability is nil as there is nothing to substitute and no source of credits.
(e)No matter who applies under Div 5 it cannot lead to a decrease in the overall existing entitlement of the custodian.
The scope of discretion bestowed onto the court under s 125 was considered on appeal by Riethmuller J in Yanda & Jacome [2023] FedCFamC1A 116. Justice Riethmuller clarified Fogarty J’s statement in that div 5 of the Assessment Act is not an independent source of power to make a child support order, noting at [10] “that the power to make non-periodic child support orders is not a power that can be exercised ‘independently’, that is, independently of any consideration of the period child support rate.”
In this decision Riethmuller J found that s 125 of the Assessment Act provides the court with a power to make non-periodic child support orders that goes beyond the periodic amount. Section 125 provides the court with an express discretion to determine whether the non‑periodic child support is to be credited against the periodic support obligation.
As outlined in s 125(2) of the Assessment Act, the court can only make an order not to reduce the annual rate of child support payable by the liable parent, if it is satisfied that in the special circumstances of the case it would be just and equitable, as regards the child, the carer entitled to child support, and the liable parent, and it is otherwise proper.
Justice Kay, as he then was, In Marriage of Savery (1990) 99 FLR 346 (citing Connor J In Marriage of Philippe (1978) 34 FLR 436 at 437), explained that special circumstances mean “facts peculiar to the particular case which set it apart from other cases.”
There are special circumstances in this case. The facts peculiar to this case, are found in the reasons I have already outlined but can be distilled and summarised to the significant superior financial positions of the father both in terms of his income and assets, the parent expectations of the child’s education, the child’s anticipation of attending C School, and the mother’s primary care of the child in circumstances where the father lives in a different country.
After consideration of the parties respective circumstances as outlined in these reasons, together with the fact that the orders I make are interim orders which may, by reason of the parties changed circumstances following the determination of the property proceedings, be discharged, I am satisfied in the special circumstances of this case that it is just and equitable and otherwise proper to make an order as envisaged under s 125(2) of the Assessment Act that the annual rate of child support is not to be reduced. It is noted that the annual rate is currently $19,344 but there exists currently an application to vary that amount so it may change.
CONCLUSION
Having regard to the circumstances identified in these reasons, I am satisfied that it is just and equitable and otherwise proper to order that weekly child support be paid as assessed and that the father pay 100 per cent of the costs of the private school tuition, books, IT levy, uniforms, compulsory excursions, compulsory sports and compulsory extra-curricular costs and all extra‑curricular activities including the cost of registration, equipment and uniforms.
For the avoidance of any doubt the payment of compulsory excursions does not extend to offers for overseas travel with the school or other optional opportunities the school may provide by way of non-compulsory extra-curricular activities offered to students, unless agreed between the parents.
I certify that the preceding one hundred and twenty-four (124) numbered paragraphs are a true copy of the Ex Tempore Reasons for Judgment of the Honourable Justice Curran. Associate:
Dated: 15 November 2024
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