BUICK & BOESTEN

[2012] FamCA 1019

FAMILY COURT OF AUSTRALIA

BUICK & BOESTEN [2012] FamCA 1019

FAMILY LAW – CHILDREN – application by the mother seeking to move the children from a private school to a State school – where the mother says that the financial circumstances of the parties indicated that they were unable to afford the children’s school fees now and in the future – where the father’s proposed method of payment of the school fees will further increase the debts of the parties – best interests – orders that the children be enrolled at the State school.

Family Law Act 1975 (Cth) ss 60CA & 60CC

Foley & Foley [2010] FamCA 1175
Foster & Foster [2006] FamCA 125
Tily & Tily [2002] FamCA 384

APPLICANT: Mr Buick

RESPONDENT: Ms Boesten (formerly Buick)

INDEPENDENT CHILDREN’S LAWYER: Legal Services Commission of South Australia

FILE NUMBER: ADC 3045 of 2010

DATE DELIVERED: 7 December 2012

PLACE DELIVERED: Adelaide

PLACE HEARD: Adelaide

JUDGMENT OF: Justice Dawe

HEARING DATE: 4 December 2012

REPRESENTATION

COUNSEL FOR THE APPLICANT: Ms Pyke, QC

SOLICITOR FOR THE APPLICANT: Martin Robinson Solicitors

COUNSEL FOR THE RESPONDENT: Mr Heinrich

SOLICITOR FOR THE RESPONDENT: Robert Chrzaszcz & Associates

COUNSEL FOR THE INDEPENDENT CHILDREN’S LAWYER: Mr Boehm

SOLICITOR FOR THE INDEPENDENT CHILDREN’S LAWYER: Legal Services Commission of South Australia

Orders

1. That the father and mother do all such things and execute all documents as may be required to:

   (a)cancel the enrolment of the two youngest children of the marriage (being D born on … September 2003 and E born … May 2005) at F School with the effect from the end of the 2012 school year;

   (b)enrol the said children at the G Suburb School at H Street, G Suburb in the State of South Australia from the commencement of the 2013 school year;  and

   (c)provide an authority to the other to enable the other party to be able to request and access educational information from any school attended by either of the two children mentioned above.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Buick & Boesten has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

FAMILY COURT OF AUSTRALIA AT ADELAIDE

FILE NUMBER: ADC 3045  of 2010

Mr Buick

Applicant

And

Ms Boesten (formerly Buick)

Respondent

REASONS FOR JUDGMENT

Introduction

1. By an Amended Application in a Case filed by the father Mr Buick on 14 November 2012 the father sought in paragraph 7 the following orders:

   That the father (sic) the mother be directed and an injunction be granted directing them to pay from the joint … Account of the father and the mother at Bendigo and Adelaide Bank:

   (a)      All fees currently due and payable to [F School] in respect of the children of the father and the mother;
   (b)      All fee accounts rendered hereafter by [F School] in respect of the said children.

2. By response to an Application in a Case filed by the mother Ms Boesten on 16 November 2012, she sought the following orders:

   3.That the husband and wife do all such things and execute all documents as may be required to:

   (a)cancel the enrolment of the two youngest children of the marriage, being [D] and [E], at F School with the effect from the end of the 2012 school year;

   (b)enrol the said children at the [G Suburb School] at [H Street, G Suburb] in the State of South Australia from the commencement of the 2013 school year; and

   (c)provide an authority to the other to enable the other party to be able to request and access educational information from any school attended by either of the two children mentioned above.

   4.That the application in paragraph 3 above be heard and determined prior to the commencement of the 2013 school year.

3. These matters were considered at the interim hearing before me on 4 December 2012.  The father was represented by Ms Pyke, QC.  The mother was represented by Mr Heinrich.  The Independent Children’s Lawyer was represented by Mr Boehm.

4. The proceedings were commenced in the Federal Magistrates Court of Australia and in December 2011 were transferred from the Federal Magistrates Court to the Family Court of Australia, being listed before a Registrar for directions on 21 February 2012.  Since then there have been various interim applications in relation to the children and financial matters.

5. The mother relies upon her affidavit filed on 28 November 2012 which sets out the orders which she seeks in relation to the change of school.

6. The father sets out the facts upon which he relies in opposing the orders the mother sought in his affidavit filed on 3 December 2012.

7. The current interim application being considered by the Court relates to the two youngest children of the parties, D who was born in September 2003 and E who was born in May 2005.

8. The other children of the parties are J who was born in April 1994 (now aged 18) and K who was born in October 1995 (now aged 17).  It is agreed that K will continue to attend and complete Year 12 at F School.

9. The children have all been enrolled in F School throughout their schooling.

10. D completed Year 3 in 2012.  E completed Year 1 in 2012.

11. The mother has significant ties to F School, being an old scholar and member of the old scholars association.

12. The parties were married in 1991 and separated in 2009.  The older children J and K live with the father.  The two younger children live in a shared care arrangement, spending one week with the father and one week with the mother.

13. The Child Responsive Programme Memorandum (“CRPM”) refers to the appearance of an “entrenched conflict between these parties in the context of a bitter and protracted property settlement”.  (Paragraph 17 of the CRPM).

14. The CRPM also refers to the younger children being exposed to “intense parental disharmony”. 

15. The ongoing litigation in relation to children and financial matters supports the Family Consultant’s opinion that there would appear to be an intractable conflict which is likely to be having an impact upon the children, and in particular, the younger children.

Relevant Law

1. Part VII of the Family Law Act 1975 (Cth) (“the Act”) contains approximately 230 sections which deal with the issues in relation to children.

2. The most relevant for the purposes of these interim proceedings are sections 60B, 60CA, 60CC, 61C, 61D, 61DA, 64B, 65D, 67ZC and 68B and the specific provisions of Division 12A (principles for conducting child related proceedings).

3. The provisions of section 60CA are significant: 

   In deciding whether to make a particular parenting order in relation to a child, a court must regard the best interests of the child as the paramount consideration.

4. In the decision of Tily & Tily [2002] FamCA 384 (unreported) the Full Court allowed an appeal and ordered a retrial with the majority indicating that the appeal was upheld because the Judge at first instance failed to take into account the parties’ capital, the mother’s offer to bear the full extra cost in relation to the children’s boarding school fees and that it was not clear from the Judge’s reasons, the extent to which the financial matters were considered.

5. In the ex tempore reasons given by His Honour Justice Rose (as he then was) in January 2006 in the matter of Foster & Foster [2006] FamCA 125 (unreported) his Honour said in paragraph 89:

   However, there is even a greater factor which influences the best interests … and that is the pragmatic factor of who will be paying the school fees.

6. His Honour continued to say that it could not:

   … possibly be in the best interests of a child to continue at a school where there is a strong possibility that the child may have to be withdrawn from that school and go to another school because the parent who took on the responsibility is perhaps, through no fault of his, unable to meet those fees.  The fact that he has struggled to do so in the past is very much to his credit.  However, I have to deal with the situation as it exists today and not turn a blind eye to it on the basis of what has previously happened.

7. His Honour then went on to deal with the question of the financial circumstances of the parties and dealt with the father’s “actual and reliable ability to meet the school fees”.

8. Counsel for the mother also referred to my decision in the matter of Foley & Foley [2010] FamCA 1175 delivered in December 2010 when in ex tempore reasons I considered the factors relevant to the best interests of the children.

9. Each of the matters before the Court must be determined on the relevant factors which promote the paramount consideration, being the children’s best interests.

Discussion and findings

1. The father submitted that the children are happy and well supported at F School.  On his behalf it was submitted by counsel on the day of the hearing that the school had agreed to delay any enforcement of the school fees for D and E for the year 2013 until such time as the Family Court proceedings have been determined.  The father maintained that the allocation of the responsibility for the payment of the F School fees should be delayed until the Family Court property settlement proceedings have been concluded.

2. The mother maintained that the financial circumstances of the parties indicated that they were unable to afford the ongoing school fees for D and E at F School and they should therefore attend the G Suburb School for the commencement of the 2013 school year and thereafter.

3. Throughout the marriage the parties paid the school fees using their Lines of Credit.  One of the accounts, had a significant credit facility in it.  There are significant issues to be determined in the financial proceedings as to the operation of the accounts and the determination of the assets and liabilities of the parties to be taken into account.

4. The tuition fees for D and E for the year 2013 will be in the region of $17,000.

5. The mother maintained in her affidavit sworn on 28 November 2012 that at the time that affidavit was sworn, the borrowings on the various lines of credit resulted in the parties owing in excess of $720,000 to the bank.

6. The mother maintained that the father’s information provided to the Child Support Agency included that his expenses exceeded his income by $2,000 before he met child support obligations.

7. The mother maintained that a significant income previously received into the Line of Credit accounts (being the dividend paid by one of the investment companies C Pty Ltd) was not to be paid this year. 

8. The father in his affidavit filed on 3 December 2012 refers to his affidavit filed in December 2010 in which he agreed to expenses being met from the Line of Credit accounts, including school fees and related expenses for the children.  (Paragraph 9 of the affidavit filed on 3 December 2012).

9. The father also refers to the orders made in May 2012 which provided for outstanding F School fees to be paid from the proceeds of sale of one of the real estate properties.

10. In paragraph 35 of the father’s affidavit he says:

    In the meantime, there is sufficient income, particularly dividend income form [C Pty Ltd] to more than meet the cost of the borrowings in the … to … Lines of Credit.  In November 2011, a dividend payment from [C Pty Ltd] amount to $131,247.38 was paid into the … account at Bendigo & Adelaide Bank.

11. The annexure to the affidavit of the mother filed on 28 November 2012 includes C Pty Ltd meeting of directors minutes of a meeting on 8 November 2012 at which the father was present when it was resolved that “no final dividend be distributed for the 2011/2012 financial year”. 

12. The mother refers to earning approximately $39,000 as a registered nurse and provides her PAYG summary for the year ended 30 June 2012. 

13. The father proposes to pay the school fees from the joint debt being the Lines of Credit in various accounts which have debit balances, but still have some capacity for parties to borrow further monies.

14. The mother is opposed to any further payment of the F School fees from bank loans.

15. Both the father and mother referred to the assets and liabilities of the parties in the Balance Sheet filed on 2 November 2012 (which appears to be dated 15 August 2012).  The Balance Sheet discloses that the parties’ real estate, investments, furniture and other assets total in excess of $4 Million.  For the purposes of consideration of the school fees issue, the add-backs are not taken into account. 

16. The liabilities of the parties in the Balance Sheet include the debt to Bendigo and Adelaide Bank, being two Lines of Credit, showing a debt of $720,000.  The stated liabilities refer to unknown amounts owing by the trust or the parties to the Australian Taxation Office (“ATO”) for at least two financial years.  Not taking into account the possible debt to the ATO the parties include liabilities in excess of $1.5 Million.

17. It is significant however that the mother owns the property at L Street, M Town, which is value at $1.24 Million.  Other assets include the shares in C Pty Ltd, valued at $1.42 Million.

18. If both of these significant assets are taken out of consideration for the purposes of considering the available funds to pay the children’s school fees, there is a significant reduction in the net figure.

19. The father does not offer to pay the F School fees from his own funds or earnings, but maintains that the same should only be paid from the Line of Credit, thus increasing the joint debt due to the bank by the parties.

20. The financial circumstances of the parties, the nature of their income, the uncertainties relating to the value of the assets and most significantly the proposed increase in the debt to the bank support the mother’s case that it is not financially wise or viable for her to continue to incur further debts.

21. When considering the appropriate order in these circumstances, it is necessary even on an interim basis, to consider the best interests of the children. Section 60CC of the Act provides that when making a parenting order the Court must regard the best interests of the children as the paramount consideration.

22. The matters to be considered are set out in section 60CC. A significant provision is sub-section (d) “the likely effect of any changes in the child’s circumstances”.  The Court accepts that the change in school is a circumstance which is likely to have an effect upon the children.  The mother referred in her affidavit to the children having been accepted for enrolment to the G Suburb School for the 2013 calendar year.  She refers to it being close to her home and closer than the F School to the father’s home.

23. In her affidavit the mother refers to a friend of E already attending G Suburb School.

24. There is also a risk that in due course the financial circumstances of the parties may prevent the children from continuing at F School.  The effect of any change is likely to be reduced if the children are moved sooner, rather than later, and settle into their new school at a younger age.

25. Subsection 3(f) refers to the capacity of each of the children’s parents to provide for their needs, including emotional and intellectual needs.  In this case the mother makes it plain that she does not have the income capacity to provide for the children’s education at F School.  As indicated above there are also significant doubts about the capacity of the parties to provide for the ongoing F School fees from the capital available.

26. The father’s proposal is that the school fees remain the joint liability of the parties until allocation of the accumulated debt is decided as part of the final property settlement decision.

27. One of the less significant factors in this matter is subsection (l) which is “whether it would be preferable to make the order that would be least likely to lead to the institution of further proceedings in relation to the child”.  This is a matter which is taken into account but is not determinative.

Conclusion

1. Considering all of the factors, but giving most weight to the best interests of the children, the Court is satisfied that the move to the G Suburb School is a proposal which is more likely to be in the best interests of the children, both in the short term and the long term, than leaving them at the F School where their school fees will be accumulated as a debt for the parties jointly in circumstances where the financial circumstances of the parties do not support such a debt being incurred on an ongoing basis.

2. I therefore make the orders sought by the wife in paragraph 3 of the Response to an Application in a Case filed on 16 November 2012.

I certify that the preceding fifty-three (53) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Dawe delivered on 7 December 2012.

Associate: 

Date:  7 December 2012