C and C

[2006] FCWA 69

JURISDICTION:

FAMILY COURT OF WESTERN AUSTRALIA

ACT:  FAMILY LAW ACT 1975

CHILD SUPPORT (ASSESSMENT) ACT 1989

LOCATION:	PERTH
CITATION:	C and C [2006] FCWA 69
CORAM:	THACKRAY J
HEARD:	2, 3 & 10 FEBRUARY 2006 & WRITTEN

SUBMISSIONS

DELIVERED:	4 JULY 2006
FILE NO/S:	PT 1130 of 1994
BETWEEN:	[C]
Applicant/Mother

AND

[C]
Respondent/Father

(Page 2)

Catchwords:

Child support - variation of existing departure order - asset-rich, income-
poor payer - private school fees.

Vexatious litigant - self represented litigant - vexing but not vexatious.

Legislation:

Child Support (Assessment) Act 1989, s 117
Family Law Act 1975, s 118

Category: Not Reportable

Representation:

Counsel:

Applicant	:	Self Represented Litigant
Respondent	:	Ms B Lane

Solicitors:

Applicant	:	Self Represented Litigant
Respondent	:	Kitto & Kitto

Case(s) referred to in judgment(s):

[Case citation]
Gilmour & Gilmour (1995) FLC 92-591
Gyselman & Gyselman (1992) FLC 92-279
Hides & Hatton (1997) FLC 92-759
Ross & McDermott (1998) FLC 98-003
Vlug v Poulos (1997) FLC 92-778
Zabaneh & Zabaneh (1986) FLC 91-766
(Page 3)

1 The Court has once again been asked to determine issues relating to child support to be paid by David C to Fiona C for their three youngest children – the twins, who recently turned 18, and 14-year-old [daughter].

Brief background

2 Mrs C is 46 years of age. She is not employed and survives primarily on child support and social security. She lives on a small rural property [out of the city].

3 Mr C is 61 years of age. He was previously the chairman of a public company but has been farming for the last few years. At the time of trial he was about to leave his property at [one town] and commence farming [in another area]. He also maintains a home in Perth.

4 Mr and Mrs C were married in 1985 and separated in 1993. There were four children of the marriage, [the eldest son], born March 1986, [the twins], both born May 1988, and [the daughter], born April 1992.

5 The eldest son is in the second year of studies at [university]. The twins were due to start their university education in Perth shortly after the trial. The [daughter] was in Year 9 at [college]. The eldest son is based in Sydney, but the other children have been living with Mrs C at [the rural property]

6 The parties first became involved in Family Court proceedings in 1994 and the Court file is now in its fifteenth volume. The parties have expended a massive amount on lawyers. Mr C continues to be represented by solicitors and counsel. Mrs C is unrepresented.

Relevant orders

7 On 30 July 2001, the parties consented to the making of orders departing from the existing child support assessment and providing for Mr C to pay:

· tuition fees for all four children at a [private school] (or in the case of the [daughter], a school with equivalent fees) until they completed their secondary education;

· $7,080 arrears of fees for the eldest son at [private school];

· ongoing child support at the cap (i.e. maximum) rate for each child until age 18;

·

· (Page 4)

·

· a lump sum of $50,000, of which $20,000 was to be paid

within a month and $30,000 within a year.

8 The parties agreed that the payment of the school fees and the lump sum payment were not to be credited against Mr C’s liability under any administrative assessment.

9 In July 2002, only one year after the making of the consent orders, Mr C applied for a significant reduction in his payments. He claimed he was unable to pay child support and school fees because of the drought and because of a reduction in the value of his shares. His application was finally heard more than a year later. On 27 August 2003, Tolcon J made orders:-

•  discharging the 2001 consent orders with effect from 31 December 2002;

•  requiring Mr C to pay nearly $13,000 to the [private school] by way of part-payment of tuition fees for the boys;

•  requiring Mr C to pay ongoing child support as follows:

(a)	from 1 January 2003 to 31 August 2003 – $120 per week per child;
(b)	from 1 September 2003 until 30 June 2004 – $125 per week per child;
(c)	from 1 July 2004 – such sum as may from time to time be assessed by the Child Support Agency.

10 Tolcon J had, in fact, already partially suspended the operation of the consent orders on an interim basis in February 2003. In particular, the obligation to pay private school fees had been suspended and the child support had been reduced to $120 per week per child, effective from 1 January 2003. The effect of the August 2003 order was to confirm that Mr C was no longer required to pay any of the children’s school fees, save for the specified lump sum.

11 Mrs C sought leave to appeal Tolcon J’s decision out of time. Barlow J dismissed her application in June 2004, by which time the current proceedings were well underway. His Honour observed that some of the proposed grounds of appeal demonstrated “matters which in my view give rise to an arguable case”.

(Page 5)

Relevant assessments

12 The effect of the orders made in August 2003 was to require child support after 1 July 2004 to be fixed in accordance with assessments made by the Child Support Agency. The Agency, in due course, issued an assessment requiring Mr C to pay at the rate of $840.50 per month, with effect from 1 July 2004. This assessment was based on a deemed income of $44,469. However, when Mr C lodged his 2003/04 income taxation return, his liability was reassessed. On 27 October 2004, he was directed to pay $21.67 per month. This assessment was backdated to 1 July 2004.

13 As a result of the reassessment, Mr C was in credit, but he did not wish to take advantage of the amended assessment. He was advised by the Child Support Agency to enter into an agreement with Mrs C to reinstate payments to the previously assessed level. He sent such an agreement to Mrs C but it was not returned. He therefore ceased making payments, although at times since it has been claimed he continued to pay at the old rate.

14 Mrs C sought to have the October 2004 assessment reviewed. On 3 March 2005, a Senior Case Officer determined that the assessment should be restored to the previous figure of $840.50 per month. The assessment covered the period from 1 July 2004 to 7 May 2006 (i.e. the day before the twins turned 18). In making this decision, the Senior Case Officer effectively took up Mr C’s offer to pay at the previously assessed level. The Senior Case Officer found Mr C’s affairs were “too complex to determine” and said that the payment of $840.50 per month would provide Mrs C with some support pending resolution of the Family Court proceedings.

Orders sought

15 On 16 October 2003, Mrs C filed a Form 63 Application in which she sought an injunction restraining Mr C from disposing of any property received by him from the estate of his late father. Amongst other orders, she also sought an order in these terms:

“That orders made on 26/27 August 2003 be varied so that 36% of the total Inheritance received by the husband be paid to the wife by way of child support in addition to child support payable pursuant to those orders.”

16 Mrs C filed an amended Form 63 Application on 10 February 2004. This sought the same orders as contained in the original application and a variety of additional orders. I do not propose to repeat all of them, but the thrust was to seek the reinstatement of

(Page 6)

the 2001 consent orders requiring Mr C to pay child support at the
cap rate and private school fees.

17 On 21 October 2004, Mrs C filed what she called a “Substituted Application”. This, in effect, sought orders that Mr C pay:

• child support at the cap rate for [the twins] attendance, and the [daughter], with effect from 16 October 2003;

• all education expenses relating to [the twin’s] attendance at [the college] and the [daughter’s] attendance at [private school] [sic] until the children completed their high school education; and

• all medical, dental, orthodontic and associated costs for [the twins], and the [daughter].

18 In the alternative, Mrs C asked that Mr C pay child support by way of an unspecified lump sum in lieu of periodic payments for the period after 1 July 2004.

19 At the commencement of the trial, I dismissed an application by Mrs C to further amend the orders sought. Accordingly, the application I am required to determine is the Substituted Application filed on 21 October 2004, which limits the backdating of any order to 16 October 2003 and does not seek any variation of child support for the eldest son.

20 The orders sought by Mr C were contained in a Minute filed on 10 December 2004. He seeks an order that he pay child support at the rate of $64.60 per week per child (i.e. the current rate) or the rate assessed from time to time by the Child Support Agency, whichever is the greater. He also proposes that he pay half of [the [daughter’s] tuition fees at [the college] from the start of 2005 until completion of her secondary education. He originally proposed he pay the children’s private health insurance, but now does not seek that order.

Orders not sought

21 I am not asked to make any determination of the maintenance payable for [the twins] after they attained the age of 18. At the time of the trial, the twins were only a few months away from their 18th birthday. They were temporarily residing away from Mrs C’s home whilst undertaking a short-term holiday job. There was doubt whether they would be living with Mrs C when they commenced their university studies in 2006. There was also

(Page 7)

disagreement about their ability to support themselves whilst studying. In those circumstances it was inappropriate to attempt to determine the level of support each parent would need to provide to assist them through their tertiary education.

22 In making my determination, it will be necessary to make some assumptions about circumstances after the trial concluded. The assumptions I propose to make are these:

• The twins returned to live with Mrs C after they finished their holiday jobs and remained with her until their 18th birthday;

• Neither parent will be required to maintain the twins after they turned 18 (this is relevant only in assessing the ability of each party to support [the daughter]).

23 In the event my assumption concerning the place of residence of the boys is inaccurate, I will give leave to reopen, as it may be appropriate to terminate child support at a date earlier than their birthday.

Mrs C’s financial circumstances

24 Mrs C received a property settlement worth $700,000 in 1995: [case citation]. It is unclear what portion of the settlement remained after payment of the legal costs.

25 Mrs C’s financial circumstances have deteriorated substantially over the last 10 years. She used some of her settlement on the [small business] she conducted from the rural lot she retained at [her home]. The business was not successful. She has drawn on capital to meet the shortfall in her living costs and to pay legal costs, as well as some of the children’s school fees. By 2005 she was being hotly pursued by a variety of creditors, including the bank which held the mortgage over [the property]. She was determined not to sell the property, which has been her home and that of the children for many years. She was also concerned about the price she would be likely to receive on a forced sale.

26 Mrs C entered into an arrangement with a finance company in late 2005 to discharge the mortgage on [the property] and to meet some of her many pressing commitments. These included costs in the region of $6,000 she incurred in defending the proceedings commenced by the mortgagee. The conditions associated with the new loan are quite onerous. Interest is payable at the rate of 9.5% per annum (with the first year’s interest having been paid in

(Page 8)

advance from the loan funds). Mrs C also incurred loan
establishment and other fees of nearly $12,000.

27 The [rural] property is Mrs C’s only asset of substance. It is worth $745,000, with a mortgage of $450,000. Her equity is therefore only $295,000. She owns nothing else, other than her furniture and a clapped-out car. Mrs C does have $26,000 left from the proceeds of the loan but has debts exceeding that amount. She owes the local shire nearly $20,000 and she owes $22,000 to the accountants who assisted her in earlier Family Court proceedings. It is difficult to see how Mrs C will be able to manage the new mortgage once she is required to commence paying periodic interest towards the end of 2006. Nevertheless, she hopes her circumstances will improve as a result of these proceedings. She also hopes to obtain employment.

28 Mrs C was criticised for spending so much of her capital on lawyers and accountants during the course of her long-running dispute with Mr C. It is true she has expended a great deal on litigation over the years; however, I am not convinced she has wasted assets in the legal sense. For example, she spent tens of thousands of dollars in obtaining the 2001 consent orders, which provided her with a significant financial advantage. Regrettably, as events panned out, the fruits of that litigation were short-lived. It was perfectly understandable that she then resisted Mr C’s efforts to be discharged from his obligations so soon after he consented to them being imposed. Had Tolcon J not been led into at least one error, and arguably made others, as Barlow J found, she may also have achieved a favourable outcome in the 2003 proceedings.

29 Apart from the liabilities mentioned above, Mrs C also claims to have two other debts. One of these relates to a $10,000 loan from her parents. This money was borrowed in 2002 to cover a shortfall in her living costs. Although Mrs C is estranged from her parents, she acknowledges they will not force her to repay the debt. Nevertheless, she considers she has a moral obligation to repay the funds they have advanced.

30 Mrs C also says she owes about $8,500 to [the daughter’s] godmother. These funds were paid to allow [the daughter] to complete her primary school education at [private school], when Mr C ceased paying the fees. I was not persuaded this money is legally owed; however, I accept that Mrs C feels a strong moral obligation to [the daughter’s] godmother for her generosity.

(Page 9)
31	Mrs C has other pressing needs. In particular, she needs a reliable car for herself and [the daughter]. In the period leading up the trial she had been forced to hire a car. Her existing vehicle had travelled over 450,000 kilometres and could no longer be driven. She estimates a replacement vehicle would cost $20,000. She also says she needs $5,500 for [the daughter’s] orthodontic and optical needs.
32	In her affidavit sworn in March 2005, Mrs C claimed that [the eldest son] was still her “responsibility” whilst he was continuing with his studies. She said any assessment of child support should include [the eldest son] as a dependant so she could make provision for him. Nevertheless, Mrs C did not make any formal application in relation to [the eldest son]. Mr C claims he is self-sufficient. I do not intend to take [the eldest son] into account in coming to my decision; even though I am aware he spends time living with Mrs C when he comes home for holidays.
33	Mrs C is almost totally reliant upon social security and child support to maintain herself and the children. Her total income at the time of trial was $733 per week, of which she says $210 was child support. I was uncertain whether she did, in fact, receive the $210 per week she mentioned. Mr C says he pays only $194 per week, which is the correct figure for an assessment of $840.50 per month. I suspect Mrs C has simply taken the monthly figure and divided by four, which provides an inaccurate weekly figure. In any event, her position has presumably deteriorated further since trial, as Mr C’s child support obligation would have reduced to $64.65 per week when the twins turned 18 in May 2006. There will also have been adverse changes to her social security benefits.
34	Although, Mrs C was earning $500 per month from [agistment] for a neighbour in the period shortly prior to trial, I accept this was a temporary arrangement. I accept that she generally earns little or no income from the farm. I also accept that the [livestock] she retains are of little commercial value and cost only a small amount to maintain.
35	Mrs C hopes to obtain employment in the future. She says she has been trying to obtain work during the course of these proceedings. She has also been endeavouring to obtain qualifications. She began studying financial planning in 2002. She commenced a part-time MBA at the [university] in 2005, although she has made very limited progress. She has substantial experience in the [rural] industry, but for some reason has only sought
(Page 10)
employment in that industry in the Eastern States. She has sought employment in the financial planning industry, although she is not yet qualified for such employment. She has also made one application for employment in the real estate industry, but again has no relevant qualifications.
36	The manner in which Mrs C conducts her legal proceedings demonstrates she is a resourceful woman, of superior intelligence. Had she more experience and qualifications, it is likely she would have a worthwhile and well-paid career. However, she has been out of the workforce for many years. I accept it would have been difficult for her to obtain employment living where she does and having the responsibilities she has had in relation to her children. I also accept that her ongoing involvement in litigation, in this and other courts, would have made it extremely difficult for her to keep a job.
37	Hopefully, now these proceedings have been “concluded”; the boys are at university; and the [daughter] is in the second year of high school, Mrs C will be able to obtain some paid employment. Given her lack of qualifications and experience, I doubt her income would be sufficient to cover more than her own reasonable living costs. She would be unlikely to have sufficient income to make anything other than a nominal contribution to the costs of maintaining the [daughter].

Mr C’s financial circumstances

38 Mr C received assets thought to be worth about $700,000 at the time of the 1995 property settlement. As events turned out, his settlement was worth a good deal more, since the large parcel of shares he received has since been sold for much more than they were worth at the time. In 1995 his shares were valued at $969,000, but he later sold 2 million of them at $2.25 each, making him, as he said, “flush with money”. It was this transaction that enabled Mr C to put so much money into superannuation and to acquire other property he still owned at the date of trial. His current portfolio of assets significantly exceeds the value of assets he retained in the settlement. This is so notwithstanding he has been paying child support and some of the children’s school fees. (Mr C has paid much less child support than he first thought after misreading a rather confusing document provided by the Child Support Agency.)

(Page 11)
39	Mr C’s current finances are somewhat complicated and it was difficult to ascertain his precise financial position from the information provided. This was so primarily for three reasons.
40	First, he made little effort to value assets at their current market values, preferring instead to rely upon book values. He has incurred enormous legal costs over the years and said he did not want to incur the further expense of valuations. I can appreciate Mr C’s desire to contain his costs; however, the manner in which he detailed his financial position did not assist the Court in ascertaining his real wealth. The use of book values has consistently allowed Mr C to suggest that his financial position is much weaker than it really is, leaving it to Mrs C to muddle around trying to prove his worth. He has been able to make estimates of his real worth to lending institutions and there was nothing to prevent him from doing the same in these proceedings. It was fortuitous that a number of his most significant assets had either recently been sold or purchased at the time of trial, giving the Court a much better guide to his financial position.
41	The second difficulty in ascertaining Mr C’s financial position arose from the unavailability of the 2004/05 accounts for his various entities. He said he had been advised it was unnecessary to proceed promptly with the preparation of the accounts because the entities had all lost money and hence there would be no tax payable. For reasons which need not detain me, it now seems this may not be the case. Whatever the reason, the financial accounts for a number of the relevant entities for the last financial year were not available to the Court.
42	The third complication arose out of the fact that Mr C’s finances were in a state of flux at the time of trial. He and his business partner, Mr D had previously operated two farms at [country towns] in partnership. They also continue to share an interest in a business known as [XYZ]. Their relationship is very strained and they now communicate only through their accountant. They were anxious to terminate as much of their financial relationship as possible. In order to bring this about, they have sold both farms. Contracts had been signed at the time of trial, but settlement was not due to take place until March 2006. Although Mr C suggested that settlement of the sales was “speculative”, there was no evidence to suggest they would not proceed, even though Mr D at one stage appeared to be “bluffing” in relation to signing the transfer documents. One of the contacts had originally been subject to a condition that may have proven difficult to fulfil, but
(Page 12)
that condition had been waived by the purchaser. I intend to proceed on the assumption that the settlement of both contracts proceeded as planned. The sale price of the farms is therefore known, but there was no information to assist in making a firm finding about the value of the other assets of the farming partnership. These were to be sold at a clearing sale shortly after the trial.
43	At the time of trial, there also seemed to be a prospect that Mr C might be able to liquidate his interest in [XYZ]. Mr D had previously expressed an interest in acquiring Mr C’s share, but matters had not progressed further. During the course of giving evidence, Mr D expressed renewed interest in buying out Mr C, if the price was right. Regrettably, there was no formal valuation of [XYZ] and it was difficult even to hazard a guess as to its likely value.
44	Faced with these difficulties, I was nevertheless able to make the following findings concerning the assets owned by Mr C, either personally or through entities over which he exercises control. I have not identified whether each asset is owned personally or through an entity, since it would make no difference to the outcome.

The [suburban] home

45 Mr C previously owned a home at [the suburb], which he valued at $550,000 at the time of the 2003 trial. I have doubts whether Mr C really considered the property to be worth only that amount at the time. Quite apart from any other considerations, Mr C had told a financial institution in the previous year he thought the property was worth $700,000. The June 2003 accounts of the entity that owned the property showed a book value of $670,000, which I infer was cost price, plus cost of significant improvements. In his Statement of Financial Circumstances sworn in December 2004 he gave the value of the property at $750,000. It was, in fact, sold in June 2005 for $950,000.

46 In his affidavit sworn in December 2004, Mr C claimed that if [the suburban] home was sold, the money would have to be used to discharge mortgages securing liabilities relating to other assets. This was not, in fact, required at the time of sale about seven months later.

(Page 13)

The[new] home

47 Mr C was able to use the proceeds from [the suburban home] to acquire a new house in [a new suburb] at a cost of $660,000. It would be unhelpful to speculate to what extent the property may have appreciated in value in the recent boom in Perth property prices.

48 Mr C claimed in his evidence that the [new] house was “an investment property” in the same way [suburban] house had been. In fact, in earlier proceedings, Mr C had been at pains to say [suburban] was not an investment property at all, but rather his family home. Mr C’s new wife said it was necessary for them to

maintain a residence in Perth because the home on the farm at [ the country town] was effectively a workers’ cottage, which on occasions had to be shared with others. Furthermore, Mrs C has quite serious health problems and needs somewhere to stay when she comes to Perth for regular medical treatment.

49 It makes sense for Mr & Mrs C to maintain a residence in Perth, but Mr C had no effective response when it was suggested to him that it would have been quite feasible to have acquired a suitable property in the range of $300,000 to $400,000, rather than $660,000. He did protest he had already “downsized”, but this was hardly surprising given that [suburban] residence could only be described as a mansion, far in excess of the needs of a couple who require city accommodation on only an occasional basis.

Motor vehicles

50 Mr C still owns his [sports car], which in 2003 he said was worth $30,000 but which he now says is worth $50,000. He also owns two other motor vehicles. One of these is a 2000 Holden Statesman, which he values at $18,000 (and which in a previous statement of assets provided to financiers was valued at $65,000). The other is a 1990 Honda Accord worth $3,500.

[No 1] farm

51 This was one of two farming properties owned jointly by Mr C and Mr D. Mr C valued the property at its book value of $620,000 at the time of the 2003 trial. It has now sold for $780,000. In his December 2004 affidavit, Mr C claimed that the proceeds of sale would be required to discharge financial obligations associated with [XYZ]. However, he now acknowledges that the farm was released as security for the obligations of [XYZ] in 2005.

(Page 14)

[No2] farm

52 This is the other farm Mr C owned jointly with Mr D. He valued the property at its book value of $602,000 in 2003. It has now sold for $1,050,000.

Plant, equipment, stock and grain of farming partnership

53 Mr C rejected a suggestion that the partnership might receive $600,000 for the sale of plant and equipment from the [region] farms. This suggestion was based on a letter Mr D sent to Mr C in April 2005, in which he asserted that the equipment was worth $660,400. In a statement provided to financiers in 2002, Mr C claimed ownership of plant and equipment worth $800,000.

54 In any event, Mr C’s response to the suggestion that the plant and equipment would sell for $600,000 was to say, “if we could get $300,000 I would be a happy man”. In addition, he expected that the 2,200 sheep would be sold for about $58,000. Mr C impressed me as someone who has a tendency to be a little pessimistic when giving evidence in the Family Court. I intend to proceed on the assumption the partnership probably achieved at least $358,000 from the sale of the plant and equipment and stock.

55 I had no reason to doubt Mr C’s evidence that all of the proceeds from grain previously sold had been received and were in the bank – save for one payment of about $26,000 to $30,000 which he expected in March 2006. There was also the possibility that there would be some later payments from the grain pool, but Mr C anticipated these would amount to “very little”.

Consulting fees

56 Mr C now acknowledges he is owed consulting fees of at least $200,000 for his work for the farming partnership. This represents income of $40,000 per annum for his time on the farms. He did not disclose this asset in his Statements of Financial Circumstances, although provision has been made for the payment in the farm accounts each year. Mr C said that until Mr D gave his evidence, he did not know whether his partner conceded he was entit led to the money.

57 It was put to Mr C that he had also not disclosed the consulting fees in his Statement of Financial Circumstances in the proceedings before Tolcon J, when the fees stood at $160,000. Mr C conceded he had not mentioned it, but he was wrong to do so – since I note that on page 8 he did make mention of the fees, albeit he said that “due to the seasonal conditions this sum has never been

(Page 15)

paid to me. If the money were to become available secured and
other creditors would be paid before me…”

58 It seems there may be a dispute between Mr D and Mr C as to whether or not the consulting fee now stands at $200,000 or $240,000. Mr D says that Mr C should not be entitled to the $40,000 consulting fee claimed for his first year on the farm because he did not receive a similar payment for his efforts. In any event, Mr D acknowledged the undisputed fees amounting to $200,000 would be paid to Mr C at the time of settlement of the farms.

[No 3] farm

59 Although Mr C claims to have earned nothing from farming over the last few years, he has nevertheless acquired a new farm, to which he was planning to move after he leaves [the region]. The new property, [No 3 farm], is much smaller and cost $602,000. Mr C anticipates it will cost him about $170,000 to acquire the equipment needed to operate the property. He feels the farm is in a less risky area and is hopeful of making a better return.

[Rural Lot]

60 This is a rural lot in the same locality as Mrs C’s property. Mr C owns a half interest with Mrs C’s parents. It is one of the assets he received as part of the 1995 property settlement. It produces no income.

61 Mr C denied in cross-examination that he had ever previously suggested this property was being held to fund the children’s university education. However, at a hearing on 4 November 2002, he acknowledged that he and Mr C’s parents were holding the block for the children’s “possible future needs”, and he went on to mention their university education.

62 Mr C claimed that the property had been on the market at a price of $310,000 since January 2003. I was not persuaded that genuine efforts had been made to sell the property. Mr C now estimates his half share to be worth $180,000. There was no other evidence of the value.

63 In his December 2004 affidavit, Mr C said that if he ever sold the [rural lot] , he would have to use the proceeds to pay the $170,000 loan he had to the ANZ Bank. He has subsequently used $100,000 from his superannuation in order to reduce that liability to $70,000.

(Page 16)
[XYZ]
64	The [XYZ] business was originally operated as a partnership involving only Mr C and Mr D. They later introduced another partner, Mr T. In August 2004, the business was transferred to a company, [XYZ] Pty Ltd, in which Mr C holds one third of the shares. The partnership still exists, but appears now to have only one asset, a block of land at [a country town], shown in the accounts at $40,000 (presumably its historical cost).
65	Although Mr C has had money invested in the [XYZ] business for many years, he has only ever received one $20,000 drawing. The 2004/05 accounts of the [XYZ] partnership show a further drawing of $239,260 for each partner, but this drawing was then lent to [XYZ] Pty Ltd. Although he is a director and major shareholder in the company, Mr C claims he was unaware of the transaction until the trial, as the annual accounts seemed to have been lost in the post.
66	When Mr D was asked to explain why there had been no significant income received by the owners of [XYZ], he said “I am great believer in reducing debt and trying to grow a business and that is why there have been no dividends.” It is certainly the case the business has grown. The company now has an annual turnover in excess of $11 million. In 2004/05 it had an operating profit after tax of nearly $334,000. This was after allowance for depreciation of over $1 million and repairs and maintenance of $930,000. It has plant and equipment, with a book value of over $4 million, after allowing for accumulated depreciation. It is true the company also has significant liabilities, especially associated with the financing of its plant and equipment. Nevertheless, it can be seen that it is a major enterprise, and it is unfortunate the Court was not provided with any reliable evidence of the value of Mr C’s share.
67	The business accountants prepared a valuation of [XYZ] in March 2000, when it was proposed that Mr T would acquire an interest in the partnership. The basis upon which the valuation was prepared was not revealed, but it indicated that the net assets were worth $613,009. In arriving at this figure, liabilities of $60,000 to Mr C and $140,000 to the farming partnership were taken into account. Mr C then had a half share in the business. Accordingly, the “value” of Mr C’s interest in [XYZ] could be perceived at the time as being $436,504.
68	Mr D provided a signed Statement of Assets and Liabilities to financiers in 2002, indicating that his one-third interest in [XYZ]
(Page 17)
was worth $700,000. However, at what I infer was probably the same time, Mr C completed a statement for the same institution, in which he estimated his one-third interest as being worth only $400,000. Mr C said he valued his share at $400,000 because that was what Mr T had paid when he acquired his one-third interest. I might observe Mr C could have adopted the same approach when he completed his Statement of Financial Circumstances in this Court in July 2002, in which he valued his interest in [XYZ] at only $107,000 (i.e. book value) – and again in August 2003 when he valued it at $153,000.
69	Mr C’s counsel consented to the production into evidence of a memorandum prepared by the ANZ Bank relating to the affairs of Mr C and Mr D. This was dated May 2005 and noted that [XYZ] was:

“trading very well with future prospects looking very good. They sold off their stock cartage business in February, which cleared majority of Esanda debt and reduced their gearing. Stock cartage was their lowest Profitability area and needed considerable resources, they can now concentrate on Mining and Oil work …At this stage C does not plan to sell out of his 33.3% share in [XYZ].”

70 In April 2005, Mr D wrote to Mr C advising that he was willing to make an offer for his interest in [XYZ]. Nothing seems to have occurred as a result of that expression of interest. At trial, Mr D confirmed it was his desire for Mr C to leave the business. He said he would expect Mr C to receive back at least his $300,000 original investment, plus interest. Mr D hoped that if he had funds remaining after the sale of the farms he could use that money to acquire Mr C’s interest.

71 Mr D thought he might have some pre-emptive rights to acquire Mr C’s interest in [XYZ]. Whether this is the case or not, he certainly appears to be a reasonably anxious prospective purchaser. Mr D is now on record as considering a price in excess of $300,000 to be appropriate. I suspect that his comments from the witness box were no more than an “opening bid”, especially as Mr T paid $400,000 for his interest at a time when the business was losing money (see Exhibit 6). It is now making a healthy profit.

72 Mr C’s counsel said that he could not be criticised for having held onto his interest in [XYZ]; however, it is the case he has had a large sum of money tied up in the business from which he has received almost no return. He now has an opportunity to liquidate

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his interest. I suspect he also has an opportunity to make a very tidy profit, but it would be inappropriate to place too much store on that suspicion, given the lack of evidence.

73 In making these remarks, I have not overlooked Mr D’s evidence that there could be worrying times for [XYZ] over the next 12 months because it is about to lose one of its major contracts. His concerns did not dampen his desire to acquire Mr C’s share for at least $300,000 plus interest. I have also not overlooked the fact that portion of the business has been sold since Mr T acquired his share. The evidence suggests the sale was of the least profitable portion of the business.

Superannuation

74 Mrs C alleged at the 2003 trial that Mr C’s substantial superannuation fund could be drawn on to meet child support and school fees. She produced evidence from an expert to substantiate this allegation. Tolcon J indicated in his judgment that he was “unhappy” with the evidence provided by the expert. He found it to be “not objective” and “unhelpful”. His Honour concluded “it may well be that there may be avenues for Mr C to draw on those funds, but for the purposes of these proceedings, I am not prepared to take them into account.”

75 It is now common ground that Mrs C and her expert were correct in asserting that Mr C could have drawn on his superannuation funds in 2003. Although I understand why Mrs C claims Mr C deliberately misled the Court, I accept that Mr C had received conflicting and misleading advice in relation to the conditions attaching to his superannuation entitlement.

76 Mr C now has superannuation worth $576,281. Portion of the fund is “preserved”, but he has unrestricted access to $382,300.

Inheritance

77 Mr C’s father had died at the time of the 2003 trial, but he had not yet received his interest in the estate. Mr C told Tolcon J he was expecting to receive around $100,000. In fact, he received substantially more. In February 2004, he received $168,086 cash, together with a car worth $5,000 and furniture worth $17,000. All of the money was used to reduce debt and meet living costs.

78 Mr C asks me to accept that when the matter was before Tolcon J in August 2003, he was unaware that the executor had written to his sister in [the eastern states], five days earlier, advising that a cash offer had been made to acquire the home of his

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late father. (He did volunteer under cross-examination before me that he had an “indication” that his inheritance would “possibly” be more than $100,000, but he did not have any “higher level of reliability” to put forward an estimate greater than $100,000.) Had the information concerning the offer on the property been known to the Court, Mr C would presumably have been able to give a more accurate estimate of the amount he anticipated receiving. At the very least, Tolcon J would have been aware that Mr C could be coming into a substantial sum of money in the near future, rather than having to wait for the sale of a property. In any event, Tolcon J appears not to have considered the inheritance to be of any significance, since he did not mention it in his judgment and presumably therefore did not see it as a source of funds to keep the children in their schools.

[The] shares

79 The company in which Mr C owned a substantial parcel of shares at the time of the 1995 property settlement ultimately became known as [ the shares] NL.

80 Mr C was subjected to a vigorous cross-examination in relation to claims he made at earlier stages of the present proceedings concerning the extent and value of the [the shares] owned or controlled by him. In his Statement of Financial Circumstances sworn in August 2003, prior to the trial before Tolcon J, Mr C acknowledged that a company he controlled had 3.5 million [shares] worth only $74,417. He also acknowledged he had 100,000 [shares] in his own name, worth $2,100. I do not propose to make findings concerning all that has occurred in relation to those shares since that time, although I did consider there was possibly some substance in Mrs C’s line of questioning suggesting that paragraph 7 of Mr C’s affidavit sworn on 26 November 2003 contained only half of the truth. In any event, there is no doubt that the value of shares in this company increased significantly after the hearing in 2003 and Mr C has been able to liquidate his holding for in excess of $357,500.

Savings/liabilities

81 Exhibit 26 provides details of funds available to Mr C and his entities, together with his personal liabilities and those of his entities. The net effect is that he/they have a deficit of approximately $84,000 – i.e. after allowing for the fact he is responsible for only one half of the farm overdrafts. In making this

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finding, I have concluded that Mr C’s counsel has made an
arithmetical error in paragraph 14 of her closing submissions.

Taxation

82 The 2004/2005 accounts for [XYZ] Pty Ltd and the [XYZ] partnership were made available during the course of the trial. Somewhat confusing evidence was given in relation to possible income taxation implications relating to the income disclosed. At one stage, it seemed it was suggested that tax would be payable on the notional drawing shown in the accounts of the partnership. This could not be so, as tax is paid on income not drawings; however, there would be taxation implications arising from the distribution of the profit made on sale of an asset of [XYZ] during 2004/05. This resulted in an income distribution of $190,911 to an entity controlled by Mr C. The taxation consequences of this would depend upon other matters about which I was not informed. I can do no more than conclude there will be an income taxation consequence arising from this distribution.

83 There may also be income taxation consequences of the payment of the consulting fees mentioned above. There was no evidence or submissions to indicate what these would be once they made their way through the relevant entities (presuming they are disclosed as income).

Income and expenses

84 Mr C disclosed in his Statement of Financial Circumstances an income of only $196 per week, being fees and travel costs paid by the local shire for attending meetings. He claims to have expenditure of $1,025 per week, including child support of $194. His expenses include those of his current wife, with whom he had been living since 1996. (They were married shortly after the 2003 trial.) Mrs C is in poor health and earns no income.

85 Mr C has a degenerative back condition and suffers frequent pain; however, this has not yet forced him to give up his farming work. He claims to have made no money from farming over the last few years and indeed says the farms have made a loss in every year since the severe drought of 2002. The accounts suggest this is true, but the losses are calculated after a sizeable allowance for depreciation and for the payment of the consultancy fees mentioned above, which have not actually been paid. For example, in 2002/03, the two farms had a combined profit of $134,119 after adding back depreciation and the consultancy fee of $40,000. In 2003/04 the profit was $26,879 after making the same allowances.

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The 2004/05 accounts were not available. Mr C says 2005/06 will not be profitable because of fuel costs and a decline in prices for grain and wool. The poor economic conditions were not sufficient to stop him from acquiring another farm.

The twins’ financial circumstances

86 The current financial circumstances of the twins are not relevant for the reasons mentioned above; however, it is necessary to consider what they have been earning since 2003.

87 Both twins had a job at the time of the trial. They were working a long day and were well-paid; however, the jobs were going to last for only four weeks. (I am unable to take notice of what Mrs C said her closing written submissions about what actually happened to those jobs.) The boys were living away from home and paying $120 per week for board and lodging.

88 Both twins have had part-time jobs since the orders were made in 2003. I accepted Mrs C’s evidence that they had probably each earned around $60 per week during school term and somewhat more during holidays. Both have used their income to acquire old second-hand cars. I am satisfied that their incomes have not been sufficient to do more than to pay for their cars and contribute to the running costs.

The three-stage child support process

89 Mrs C placed considerable emphasis on changes in Mr C’s financial circumstances following the trial in 2003. It is, in fact, unnecessary for Mrs C to establish, as a threshold matter, any change in circumstances. Instead, the Court is required only to follow the three-stage process mandated by s 117 of the Child Support (Assessment) Act 1989: Gyselman & Gyselman (1992) FLC 92-279 and Gilmour & Gilmour (1995) FLC 92-591.

90 Accordingly, before making any order, I must be satisfied

that:

• one or more of the grounds for departure in s 117(2) has been established;

• that it is “just and equitable” within the meaning of s 117(4) to make the order; and

• it is “otherwise proper” within the meaning of s 117(5) to make the order.

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The relevant periods

91 There are four time periods that require consideration:

• 16 October 2003 to 8 December 2003, when Mr C was required to pay a total of $480 per week for all four children;

• 9 December 2003 to 30 June 2004, when Mr C was required to pay a total of $375 per week for the three youngest children;

• 1 July 2004 to 7 May 2006, when Mr C was required to pay a total of $193.96 per week ($840.50 per month) for the three youngest children;

• 8 May 2006 onwards (there was no evidence of any assessment covering this period, but I would presume Mr C intends to pay $64.65 per week for [the daughter], being one third of the amount required by the last assessment).

92 The first period ends on 8 December 2003 because this is the date on which [the eldest son] finished school and went to live with Mr C. Originally he was only going to the farm for the summer holidays, but ended up taking a “gap” year. He remained with his father until he went to [the eastern states] in 2005. Whilst living on the farm he was paid a wage, but did not make any contribution to his living expenses. [The eldest son] turned 18 in May 2004.

Grounds for departure

93 S 117(2) of the Child Support (Assessment) Act 1989, insofar as it is relevant, provides the following grounds for departure:

“(a)

that, in the special circumstances of the case, the capacity of either parent to provide financial support for the child is significantly reduced because of:

(i)	the duty of the parent to maintain any other child or another person; or
(ii)	special needs of …another person that the parent has a duty to maintain; or
(iii)	commitments of the parent necessary to enable the parent to support:

(A)	himself or herself; or
(B)	any other child or another
person that the parent	has a duty to
maintain; or

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(iv) …;

(b) that, in the special circumstances of the case, the costs of maintaining the child are significantly affected:

(i) …

(ii) because the child is being cared for, educated or trained in the manner that was expected by his or her parents;

(c)

that, in the special circumstances of the case, application in relation to the child of the provisions of this Act relating to administrative assessment of child support would result in an unjust and inequitable determination of the level of financial support to be provided by the liable parent for the child:

(i)	because of the income, earning capacity, property and financial resources of either parent or the child; or
(ii)	because of any payments, and any transfer or settlement of property, made or to be made (whether under this Act, the Family Law Act 1975 or otherwise) by the liable parent to the child, to the carer entitled to child support or to any other person for the benefit of the child; …”

94 In Gyselman & Gyselman (supra), the Full Court, in considering the meaning of the expression “in the special circumstances of the case”, said (at 79,065):-

“Whilst it is not possible to define with precision the meaning of that term, as a generality it is intended to emphasize that the facts of the case must establish something which is special or out of the ordinary … In Savery’s case (p. 77,897), Kay J, adopting the view in Phillippe and Phillippe (1978) FLC 90- 433 at p. 77,202 in a different context, said 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.”

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Special circumstances?

95 Are there facts peculiar to this case that set it apart from other cases, thereby justifying a variation of the child support ordered/assessed? In my view, the answer is overwhelmingly in the affirmative. This is especially so for the last two of the four relevant periods (i.e. those for which Mr C’s obligation were set by administrative assessment at $64.65 per week per child). The position is not so patently obvious for the first two periods, when child support was payable at a much higher level, but I am nevertheless satisfied there are special circumstances relating to those periods as well.

96 In considering this issue it is helpful to reflect on what Mr C would have been paying for his children had the consent orders made in 2001 not been obliterated by the orders made in 2003.

• In 2003, he would have been paying $36,433 per annum (plus tuition fees for four children at [private school]). Instead, for most of the relevant period, he paid at the rate of $24,960 per annum;

• In 2004, he would have been paying $36,387 per annum (plus tuition fees for three children). Instead he paid at the rate of $19,500 per annum for the first half of the year and at $10,086 per annum for the other half;

• In 2005, he would have been paying at the rate of $37,538 per annum (plus tuition fees for three children). Instead he continued to pay at the rate of $10,086 per annum;

• In 2006, until the twins turned 18, he would have paid at the rate of $39,979 per annum (plus tuition fees for [the daughter]). Instead he continued to pay at the rate of $10,086 per annum;

• In 2006, after the twins turned 18 and until the rates changed on 1 July 2006, he would have had to pay at the rate of $22,485 per annum for [the daughter] (plus tuition fees). Instead, Mr C wants to pay at the rate of $3,359 per annum and only half of [the daughter’s] tuition fees.

97 In his spirited defence of his position, Mr C points to the poor years he has had on the farm, particularly in the 2002 drought. He also points to the fact that he has had to dispose of some of his assets. He also relies on the fact that he continues (at least on paper) to earn no income. Whilst there is some factual foundation for each of these propositions, Mr C’s case completely ignores the

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very valuable assets he has at his disposal. It also ignores the desperate financial position in which Mrs C now finds herself after years of attempting to maintain herself and three children.

98 By the time the two farms settle, as best I can ascertain, Mr C is likely to have the following assets (ignoring [the new farm]):

Description	$
Half proceeds of sale of farms, plant, stock, etc	1,094,000
Overdue consulting fees (50% only, as the payment will	100,000
come from the proceeds of sale of the farm in which he has a half interest)
[new] home (at least)	660,000
[sports car]	50,000
Other motor vehicles	21,500
Half interest in [the rural lot]	180,000
[XYZ] (at least)	300,000
Superannuation (unrestricted portion)	382,300
Balance of superannuation	193,981
GRAND TOTAL (at least)	$2,981,781

99 After taking account of the cash/savings he has available, Mr C has liabilities of only about $84,000, although there will be some other liabilities such as commission on the sale of the farms, some tax and sundry other items. As I have indicated above, there is some difficulty in being too precise about the full extent of Mr C’s wealth; however, what is readily apparent is that he is a multi- millionaire, with assets worth something in the region of ten times those of Mrs C.

100 If further grounds than these were needed to establish a reason for departure from the existing order/assessments, they can be found in the circumstances in which Mr C was able to secure the discharge of the obligations he accepted in 2001. These include, but certainly are not limited to the following:

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•	Tolcon J’s decision was based on a misapprehension of the factual position at the time. The most notable example was his Honour being led wrongly to accept that Mr C could not draw on his substantial superannuation to tide him over the bleak period he was experiencing on the farm;
• Tolcon J not being provided with accurate information concerning the size of Mr C’s inheritance, which ended up being received within a matter of months of the trial; • the decline in the value of Mr C’s shareholding – upon which he had also relied in seeking relief from his obligations – was significantly reversed after the trial; • Mr C estimated his home in [the suburbs] of Perth to be worth $550,000, but it was sold two years later for $950,000.
101	I have noted above the vast disparity between the financial positions of the parties. Whilst it is true that Mrs C’s financial position has gone backwards, in part, because of expenditure on legal costs, the same could be said of Mr C. Instead of paying child support and school fees, he has “invested in lawyers” (to use Mrs C’s expression). Ironically, he has funded this investment by drawing $39,000 from the superannuation fund which was previously assumed to be unavailable for the payment of child support and school fees.
102	Unlike Mrs C, Mr C appears to have done very little to ameliorate his legal costs. I can appreciate that with his responsibilities on the farm and his distance from the city, it would have been difficult for him to dispense with his legal representation altogether. Nevertheless, he is a man of considerable intelligence and acumen and yet appears to have done little or nothing to represent himself in any part of the proceedings. Not only has he employed solicitors but they have engaged counsel for numerous Court appearances. This is his right as a citizen but his substantial expenditure on legal costs does not sit well with his alleged inability to afford more than a modest amount of child support.
103	Mr C also points to what he regards as wastage of Mrs C’s capital by the efforts she has made to retain the [rural] property. The property does not earn an income and is fairly valuable. I accept it may have been sensible for Mrs C to have disposed of the property and obtained cheaper accommodation for herself and the children. On the other hand, one can readily understand her desire, particularly given her background, to retain the home in which she and the children have lived for a long time. More importantly, had
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Mr C paid child support at a rate which I consider he could have afforded to pay all along, Mrs C would not have found herself in the extraordinarily difficult circumstances which have sent her into the clutches of her current financiers.
104	It is also true, as Mr C asserts, that Mrs C may have been able to obtain employment had she made more sensible applications for employment. On the other hand, I have already acknowledged that her responsibilities to the children and her involvement in these absolutely necessary proceedings would have made it difficult for her to obtain and retain regular work. Even had she obtained employment, it would probably only have been sufficient to meet her own reasonable needs and insufficient to contribute significantly to the maintenance of the children.
105	Mr C also somewhat plaintively suggests he should be entitled to make provision for his retirement. Ideally, that would be the case – and indeed I consider that even with payment of a more appropriate rate of child support, he will be able to make provision for his retirement. There is little prospect of Mrs C having opportunity to do likewise. Regrettably for her, she did not have the windfall that Mr C obtained with the share of assets he received in the property settlement.

School fees

106 If Mrs C succeeds in her application, Mr C will be made retrospectively responsible for the twins’ tuition fees from 16 October 2003 until when they concluded their secondary education in 2005. He would also be responsible for [the daughter]’s tuition fees for the same period and until she concludes her secondary education in 2009. This would reinstate the position pursuant to the 2001 consent orders.

107 S 117(2)(b)(ii) provides as a ground for departure the fact that a “child is being … educated ... in the manner that was expected by his or her parents”. There has been an issue between the parties as to whether or not it was anticipated their children would attend private schools, let alone a school as expensive as [the private school]. In my view, the issue was put to rest by the making of the consent order requiring Mr C to pay the fees for all of the children at either [the private school] or at a school with fees equivalent. His consent to that order determined “the manner” in which the children were thereafter to be educated. Mr C’s own application now proposes he be equally responsible for the costs of [the daughter’s] education at [college].

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108	Mr C was relieved of his obligation to pay the school fees when Tolcon J was persuaded in 2003 that he did not have the capacity to comply with the order. Mrs C thereupon removed both [twins] from [private school]. They were home-schooled until the commencement of 2004, when they began attending the less expensive [college]. They completed their secondary education at [the college] at the end of 2005. The boys’ fees for 2004 and 2005 were paid by Mrs C’s parents.
109	The [daughter] was not removed from [the private school] in 2003. As noted above, her godmother paid the fees for 2004 to allow [the daughter] to complete her primary education at [the private school]. The [daughter] commenced attending [college] in 2005. Mrs C’s parents paid [the daughter’s] fees in 2005 and are continuing to pay for her attendance there. Mrs C considers Mr C should put her in funds to allow her to repay [the daughter’s] godmother and her parents for the funds they have outlaid on the children’s education.
110	There was little evidence about the level of tuition fees payable at [the private school]. I note that the Minute of Consent Orders attached to the 2001 consent orders originally carried a notation that the [private school] tuition fees were “currently $9390 per child per year, less sibling discount”, although this note was deleted on the copy on the Court file. I also note that Mrs C’s Statement of Financial Circumstances disclosed a debt to [the daughter’s] godmother estimated at $8,500, which relates to the payment of the 2004 [private school] fees. In this Court of specialist jurisdiction I consider I can take judicial notice of the fact that [private school] is in a group of elite private schools where fees in the range suggested were commonly charged a few years ago.
111	There was also little evidence about the fees payable at [the college]. It seems that Mrs C told the Senior Case Officer in 2005 that the fees were in the region of $2,000 per annum. I also propose taking judicial notice of the fact that [the college] is one of many Catholic high schools charging fees slightly in excess of Mrs C’s 2005 estimate. In her Statement of Financial Circumstances sworn in 2006, Mrs C estimated [the daughter’s] total education expenses at $66 per week or about $3,400 per annum. This presumably included costs other than tuition fees (which is all that Mr C agreed to pay in 2001).
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112	I consider it is appropriate to require Mr C to pay the children’s tuition fees with effect from 16 October 2003 for these reasons:
• He previously accepted responsibility to pay them in 2001; • He obtained relief from paying them on the basis of information that has been shown to be inaccurate; • He can afford to pay them; • Mrs C cannot afford to pay them; • Mrs C has paid their other education expenses.
113	Mr C points to the fact that he is being asked to pay fees that have already been paid by others, to whom Mrs C has no legal obligation. He also claims he has reimbursed Mrs C’s parents “in- kind” for the fees they have paid. Although Mr C apparently remains on good terms with Mrs C’s parents, I found his evidence on this issue to be vague and unconvincing. I was not persuaded he has any formal arrangement with Mrs C’s parents, neither of whom gave evidence.
114	The fact that the children’s tuition fees have already been paid should not, in the circumstances of this case, prevent the Court requiring Mr C to reimburse those who made the payments. Whilst I accept that Mrs C does not have a legal obligation to [the daughter’s] godmother in relation to the payment of the 2004 school fees, she has a strong moral obligation. If the godmother is reimbursed with these monies, she may then be able to direct her generosity to other areas for [the daughter’s] benefit. This could include, for example, school trips and the other sorts of larger expenses that come with having teenage children. On the other hand, for all I know, [the daughter’s] godmother may herself be in desperate need of the money which she so generously advanced.
115	There are slightly different considerations in relation to the fees outlaid by Mrs C’s parents. Although I found Mr C’s evidence on this issue to be unconvincing and vague, it is possible he does have some kind of understanding with Mrs C’s parents as he has alleged. In those circumstances, the appropriate order is to ensure that any moneys Mr C pays to cover the expense they met should be received by Mrs C’s parents, not by Mrs C. If they accept they have already been paid “in kind”, as Mr C alleges, then no doubt they will make an appropriate arrangement with Mr C to return the money to him. As I have indicated above, they are more
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favourably inclined towards him than they are towards their daughter.
116	I do not propose to order Mr C to pay the additional educational expenses sought by Mrs C (i.e. costs other than the tuition fees). She agreed in 2001 to meet those payments herself. I consider it appropriate to proceed on the basis that she could make adequate provision for these additional expenses from the periodic child support I propose to require Mr C to pay.

Proper level of support

117 I turn now to consider what would be an appropriate level of support during each of the four child support periods identified above. Before doing so, it is appropriate I comment on two submissions made on behalf of Mr C:

• It may be that Mrs C failed to make a full disclosure of all of the documents that might have been in some way relevant, just as I consider Mr C did not always make available all of the many more documents in his possession which may have been relevant. I do not consider this is in any way fatal to Mrs C’s application. In particular, it did not seem to me to be surprising that she would not have much in the way of documentation to establish what income her nearly adult sons have been earning in the last couple of years.

• I also do not consider it is in any way fatal to Mrs C’s application, particularly as she was self-represented, that she has failed to provide detailed evidence of the proper needs of the children in each of the relevant periods. I consider their needs can be established from a variety of sources.

118 First, Mr C consented in 2001 to paying child support at the cap rate, which must indicate that he considered Mrs C would incur expenses equivalent to the highest rate allowed under the child support formula. Indeed he paid her $50,000 on top of that and agreed it should not be credited against his periodic payments. In 2003, the cap rate for four children exceeded $36,000 per annum. That rate grew slowly with inflation during the relevant periods.

119 Secondly, I can take account of published research to establish the costs of maintaining children. The Lee Expenditure Survey establishes that in a one-child, one-income family with an income of $912 gross per week, the cost of living for one child aged 11 to 13 years is presently $328 per week. This figure too has grown slowly with inflation over the relevant periods. It is impossible on

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the evidence to work out what Mrs C did, in fact, spend on her children in the four periods. What can be said, however, is that in the process of trying to maintain them, Mrs C’s financial circumstances have been thrown into turmoil, from which she may never recover. I consider that this is an appropriate matter to take into account in determining retrospectively what would be an appropriate level of support.

120 Thirdly, I can take into account Mrs C’s estimate of the children’s current needs in her Statement of Financial Circumstances. She said it cost $620 per week to maintain the three children in January 2006. I do not consider this could be seriously challenged, given the research relating to the cost of maintaining children. I should, of course, take into account the fact that this estimate includes $66 per week for education expenses, some of which I propose requiring Mr C to pay. On the other hand the estimate does not take account of a number of expenditure items such as entertainment/hobbies, holidays, books and magazines and gifts.

121 I also note that amongst Mrs C’s estimated expenses is $103 per week for medical and dental and associated expenses. I presume this includes an allowance for [the daughter’s] orthodontic needs mentioned above. Mrs C has been responsible for the children’s health needs during the relevant periods. It seems Mr C has not made any contribution. Although he has, in the past, made much of the fact that he has had the children privately insured, this has meant nothing for Mrs C as he has never reimbursed her for any of the expenses she incurred. She sent numerous medical accounts to his solicitors, in accordance with his request that she do so, but they were not processed. Whilst some of them may have been out of date by the time they were sent, it nevertheless appeared that many of them were capable of being reimbursed but were not. Nevertheless, I do not propose to order Mr C to pay the additional medical and dental expenses sought by Mrs C. Her estimate of expenditure includes her expenditure on these items and I consider it appropriate for her to make provision for them from the periodic child support I propose to order Mr C to pay.

122 I have noted above that the cap rate for the relevant periods was in the range of $36,000 to $40,000 per annum. In determining what would be an appropriate level of support for Mr C to pay, it is important to recognise that I am not dealing with the 2003 orders by way of an appeal, which might have resulted in the reinstatement of the previous consent orders. Instead, I am

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required to consider matters afresh and in doing so must have regard to what were the reasonable costs of maintaining the children in the relevant periods.

123 Mrs C’s own estimate of the cost of maintenance of the children, which she made in January 2006, would suggest that the required level of support was somewhat less than the amount payable at the cap rate. However, I consider it only equitable to take into account the fact that Mr C’s failure to provide adequate support for the children since 2003 has had a double impact on Mrs C. Not only has she not received adequate support for the children but she has also been forced to rearrange her finances in a way that has caused her very substantial expense. Furthermore, Mrs C has been forced to expend time and energy on litigation to secure a proper level of support for her children, rather than making more concerted efforts to obtain employment. I consider it at least arguable that this is a matter I can take into account pursuant to s 117(8) of the Child Support (Assessment) Act 1989. Finally, Mrs C has worn out her vehicle over the years she has been looking after the children. She desperately needs a reliable vehicle to transport [the daughter]. In all of the circumstances, I intend to accede to Mrs C’s application for the payments to be adjusted to the cap rate prevailing during each of the relevant periods.

124 Recent legislative changes have brought about a dramatic reduction in the level of child support payable for the benefit of children of high-income earners. The cap rate for a child such as [the daughter] was reduced to $15,483 per annum with effect from 1 July 2006. I am satisfied that [the daughter’s ]reasonable needs, excluding her school fees, are slightly in excess of the new cap rate. However, as Mrs C has restricted her application for payments to be made at the cap rate, I do not propose to order Mr C to pay anything more than the new cap rate with effect from 1 July 2006.

Just and equitable and otherwise proper?

125 I have found there are special circumstances that warrant variation of the 2003 order and departure from the relevant child support assessments. However, before making an order, I must also be satisfied it is just and equitable (as regards the children and both parents) and otherwise proper to do so. In considering whether I am so satisfied, I must consider not only the circumstances of the parties as they existed in the relevant periods,

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but also in relation to their present circumstances: Hides & Hatton
(1997) FLC 92-759.

126 I do not propose discussing all of the relevant matters requiring consideration under s 117(4) and s 117(5): Ross & McDermott (1998) FLC 98-003. However, I have taken them into account in determining it is just and equitable and otherwise proper to vary the order and depart from the assessments. In particular, I have taken into account:

• that it is the parents of children who have the primary duty to maintain them, not the taxpayer or relatives and friends;

• that Mr C has sufficient capital and resources to support not only himself and his present wife but also his children;

• that Mrs C does not have sufficient capital or resources to make anything more than a nominal contribution to the maintenance of the children (she, of course, making a substantial contribution to their welfare by caring for them full-time);

• the proper needs of the children as identified inter alia in published research; and

• the fact that although the orders will place Mr C substantially in arrears, he can discharge the arrears from a number of sources, but most obviously from the readily available funds in his superannuation account and from the $200,000 consultancy fees, which represents income he has been earning but not receiving during the four relevant periods.

Conclusion

127 Whilst I have been critical of Mr C in these reasons, he is to be strongly commended for having always honoured his legal obligations. I also acknowledge that in the past he has recognised his duty to support his children at an appropriate level. This was best demonstrated in 2001 when he consented to paying child support at what was effectively the maximum rate, as well as meeting very expensive school fees. I also acknowledge that he suffered a serious financial setback in the 2002 drought. Nevertheless, that calamity has been allowed to dominate child support issues to an extent out of all proportion. In doing so, the reasonable needs of the children have been overlooked. I consider the orders I propose making will, at least in part, remedy what has become a serious injustice.

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Vexatious litigant application

128 In his Minute of Orders filed on 10 December 2004, Mr C sought the dismissal of a variety of applications made by Mrs C on the basis they were vexatious or frivolous. The Minute went on to seek an injunction restraining Mrs C from bringing any further application (save and except enforcement applications) without leave.

129 Section 118 of the Family Law Act 1975 provides that:

“The court may, at any stage of proceedings under this Act, if it is satisfied that the proceedings are frivolous or vexatious –

(a)	dismiss the proceedings;
(b)	make such order as to costs as the court consider just; and
(c)	if the court considers appropriate, on the application of a party to the proceedings – order that the person who instituted the proceedings shall not, without leave of a court having jurisdiction under this Act, institute proceedings under this Act of the kind or kinds specified in the order,

and an order made by a court under paragraph (c) has effect
notwithstanding any other provision of this Act.”

130 Section 118 was considered by the Full Court in Zabaneh & Zabaneh (1986) FLC 91-766. Evatt CJ, with whom the other members of the Court agreed, said at 75,586:

“If one looks at the wording of the legislation and the rules, it is clear that the intention is that the Court may make an order restraining a vexatious litigant from instituting unnecessary and harassing proceedings against the other party, and that the intention is that a person be restrained in such a manner that if that person wishes to institute proceedings, he or she should come before the Court in the first instance on an ex parte basis.

...

The reason why a party is restrained from instituting proceedings in a case like this, is to prevent multifarious overlapping applications between the parties, which amount in essence to a harassment of the other party, and an abuse of

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the process of the Court, and which involve enormous
expense for both the parties ...”

131 The authorities make clear that the power to make orders pursuant to statutory provisions such as s 118 of the Family Law Act 1975 is to “be exercised with caution” and reserved for the clearest of cases: see Vlug v Poulos (1997) FLC 92-778 and the authorities referred to at page 84,607 of that judgment.

132 Mr C referred to a number of applications he submitted could ground the making of an order under s 118. He particularly sought the dismissal of various parts of what he called the Amended Form 63 Application filed on 16 October 2003. There is some confusion about this document. There are two different Form 63 Applications on the Court file, both apparently filed on 16 October 2003. One of them is described as an Amended Application. Enquiry made by my Associate of both parties establishes that this application is in fact the Amended Application referred to by Mrs C in her closing written submissions as having been filed on 10 February 2004. It appears the document was indeed filed on that date and incorrectly noted as filed on 16 October 2003.

133 Those parts of the Amended Application which Mr C seeks to have dismissed include paragraphs (a), (c), (d) and (e) on page 4. Those relate to injunctions and substantive relief sought by Mrs C concerning the inheritance mentioned above. She had sought the same orders in the original Form 63 application filed in October 2003. Given that Tolcon J had delivered his decision in September 2003, it could be suggested that it was vexatious for Mrs C to file a further application so quickly after the matter had been “resolved”; however, in my view this is not the case. Tolcon J had apparently placed no weight on the inheritance in arriving at his decision, and in any event the ultimate amount received by Mr C was much greater than he led his Honour to believe he was likely to receive. Mrs C had suffered a severe financial setback as a result of Tolcon J’s decision to set aside the consent orders. The orders had been set aside on the basis of Mr C’s changed financial circumstances, yet he was about to come into a considerable sum of money that had not been mentioned in the judgment. Mrs C may well have been better advised to appeal against the decision (which she tried unsuccessfully to do much later) but her actions in seeking to obtain some of the inheritance for the benefit of the children were scarcely frivolous or vexatious.

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134	Mr C also seeks the dismissal of paragraphs (f) and (g) on page 7 of the Amended Application. The form of the orders sought left much to be desired, but counsel for Mr C properly conceded that there was nothing in Mrs C’s substantive application for a departure order which could be described as vexatious or frivolous. The fact that in prosecuting her application she sought some poorly worded orders does not make her a vexatious litigant.
135	Mr C also sought dismissal of paragraphs 3, 4, 5, 6 and 7 on page 8 of the Amended Application. The issues raised in those paragraphs were relatively minor, but the one on which counsel for Mr C placed emphasis was that which would have required Mr C to answer Specific Questions delivered in earlier proceedings. The orders sought were a little nonsensical, but Mrs C was simply endeavouring to obtain further information concerning Mrs C’s somewhat complex financial circumstances. Once again, I was not satisfied the applications were frivolous or vexatious.
136	Mr C also sought the dismissal of Mrs C’s application filed on 18 December 2003. This was an interim application seeking orders similar to those discussed above in relation to the inheritance, together with other orders relating to the children’s medical expenses. She also sought an urgent interim lump sum payment of child support. The affidavit in support of the application indicated that Mrs C understood the inheritance was to be distributed before Christmas 2003. At that stage, Mrs C was awaiting the hearing of her substantive Form 63 Application. Her affidavit drew attention to the fact that Tolcon J had not been apprised of all of the circumstances relating to the inheritance. I am not satisfied this application was frivolous or vexatious.
137	Mr C also sought the dismissal of an Application filed on 14 January 2004. The application sought a large variety of orders designed to relieve Mrs C of the financial burden imposed as a result of the discharge of the consent orders. It was also designed to obtain information from Mr C relating to his financial position. Once again, the form of orders sought left much to be desired, but I was not persuaded this application was frivolous or vexatious.
138	The final application Mr C sought to have dismissed was that contained in the Minute of Orders sought by Mrs C in June 2004. This application again addressed issues relating to the inheritance, payment of medical expenses and obtaining information which might be of assistance in the substantive proceedings. The form of
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orders left even more to be desired than those sought in the applications discussed above.
139	I accept it has been exceedingly frustrating for Mr C’s solicitors to attempt to comprehend and respond to some of the material filed by Mrs C. Regrettably, the child support system is exceedingly complex. Many experienced family law practitioners have difficulty navigating it. It is almost impossible for a layperson to comprehend its intricacies. However, it cannot be expected that a person who has the primary responsibility of maintaining children should expend enormous sums on lawyers to obtain adequate levels of child support – even if the other parent chooses to be represented by solicitors and counsel at almost every step along the way. On the contrary, it is to be expected that litigants in the position of Mrs C will be self-represented and will make a “hash” of presenting their case. Mrs C had every reason to be concerned about the effect of Tolcon J’s decision on her children. Considered globally, I am simply not persuaded that the matters she has brought before the Court since he handed down his decision have been frivolous or vexatious. In a nutshell, the way in which Mrs C presents her applications is vexing but not vexatious.

Outstanding applications

140 I was informed during the course of the hearing that Barlow J had adjourned a number of pending applications to the trial Judge. I will hear from the parties about how these matters should be resolved to ensure there are no matters left outstanding.

Orders

141 For the reasons set out above, I propose making the following

orders:

1. The orders made on 27 August 2003 be discharged with effect from 16 October 2003, save insofar as they relate to the child [the eldest son], born March 1986.

2. The husband shall pay child support for the children, [the twins] both born May 1988, and [the daughter], born April 1992, at the cap rate pursuant to s 42 of the Child Support (Assessment) Act 1989, with effect from and including 16 October 2003 until the day on which each child attained or attains the age of 18 years.

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3.

The husband shall also pay:

(a)	the tuition fees for [the twins] at [the college] for 2004 and 2005;
(b)	the tuition fees for [the daughter] for 2004 at [private school];
(c)	the tuition fees for [the daughter] at [the college] for 2005, 2006 and the balance of her secondary education.

4.

The husband shall satisfy his obligation in relation to the preceding order in the case of fees already paid by reimbursing those persons who made the payments within 14 days of this order and providing to the wife documentary evidence of having done so.

5.

The husband’s application for an injunction restraining the wife from commencing further proceedings without leave of the Court is dismissed.

6.

The application and response be otherwise dismissed save insofar as they seek costs.

I certify that the preceding [141] paragraphs are a true copy of the reasons

for

judgment delivered by this Honourable Court

Associate