Carr & Vincent (No.2)
[2009] FMCAfam 648
•26 June 2009
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| CARR & VINCENT (No.2) | [2009] FMCAfam 648 |
| FAMILY LAW – Child maintenance – children aged 7 and 6 – father lives in Japan – mother and children live in Australia – no nexus between father and provisions of child support regime – financial needs of children – capacity of parents to pay – relevance of child support scheme – manner in which children are being educated – what is proper. |
| Family Law Act 1975, ss.66B, 66C, 66E, 66H, 66J, 66K |
| Carr & Vincent [2008] FMCAfam 888 Carr & Vincent [2009] FMCAfam 608 Ganter & Grimshaw (1998) FLC 92-810 Beck v Sliwka (1992) 15 FLR 520 |
| Applicant: | MR CARR |
| Respondent: | MS VINCENT |
| File Number: | ADC 2680 of 2008 |
| Judgment of: | Brown FM |
| Hearing date: | 17 June 2009 |
| Date of Last Submission: | 17 June 2009 |
| Delivered at: | Adelaide |
| Delivered on: | 26 June 2009 |
REPRESENTATION
| Counsel for the Applicant: | Mr Noble |
| Solicitors for the Applicant: | Andersons |
| Counsel for the Respondent: | Ms Tucker |
| Solicitors for the Respondent: | CM Tucker & Associates |
ORDERS
Until further or other order by way of interim child maintenance for the children of the relationship [X] born in 2002 and [Y] born in 2003 (hereinafter referred to as “the children”).
The father pay all of the children’s tuition fees to attend [S] College or such other school as the parties may agree upon.
The father pay all costs necessary to ensure that the children have top cover health insurance.
The father pay the monthly interest only payments on the first mortgage secured against the property located at Property F so long as the property is occupied by the mother and children as their principle place of residence.
The father pay to the mother a sum of $1,700.00 per calendar month for the maintenance of the children to a bank account to be nominated to the father by the mother so that the sum reaches the account no later than 4:00pm Adelaide time on the fifteenth day of each month commencing 1 July 2009.
The applications be listed for directions on 3 March 2010 at 9:30am.
IT IS NOTED that publication of this judgment under the pseudonym Carr & Vincent is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT ADELAIDE |
ADC 2680 of 2008
| MR CARR |
Applicant
And
| MS VINCENT |
Respondent
REASONS FOR JUDGMENT
Introduction
These proceedings relate to the appropriate level of financial support for two children – [X] born in 2002 and [Y] born in 2003.
The proceedings are interim in nature. What that means is that the orders made at this stage will stay in place until such time as the parties’ respective substantive applications have been finally determined.
As a result of the interim nature of the proceedings, I have not had the opportunity to undertake as extensive an examination of the evidence as is likely to occur at the final hearing stage. In particular, there has been no cross-examination of either party concerned.
Accordingly, at this stage, I am unable to determine conclusively evidentiary disputes which arise between the parties. The evidence before me, at this stage, consists of the respective affidavits of each of the parties, which are untested through any process of cross-examination.
The parties to the proceedings are [X] and [Y]’s parents – their mother Ms Vincent and their father Mr Carr. I have had previous involvement with the parties arising from disputes between them in respect of care arrangements for [X] and [Y].[1] These earlier reasons for judgment provide some background to this matter and detail the current strained relationship between the parties.
[1] See Carr & Vincent [2008] FMCAfam 888 and Carr & Vincent [2009] FMCAfam 608
Ms Vincent commenced these proceedings on 23 March 2009. On a final basis, it seems to be the position that she wishes to sever all financial connection between herself and Mr Carr. To this end she seeks the payment of a lump sum of child maintenance in the sum of $598,000.00. Obviously, it is a considerable sum of money.
In addition, she wishes the court to make final orders that the father pay all of the children’s school fees at [S] College, as well as their incidental expenses. These expenses include the children’s after hours school care; their vacation care; the cost of provision of school uniforms and shoes for them; the provision to them of books, computers and other educational prerequisites; and the payment of any travel expenses relating to school trips.
On an interim basis, pending the finalisation of her lump sum application, Ms Vincent seeks the payment to her of periodic child maintenance in the sum of $4,000.00 per month for [X] and [Y], together with payment of the children’s [S] College Fees, particularly their incidental expenses relating to their academic needs, which Ms Vincent asserts include out of hours school care and vacation care.
Mr Carr responded to this application on 13 May 2009. He objects to the payment of any lump sum of child maintenance. Accordingly, in a formal sense, he seeks the dismissal of Ms Vincent’s final application.
This is also his formal position in respect of her interim application. It is however not his actual position that he is opposed to providing any level of financial support whatsoever for [X] and [Y] at this stage of proceedings.
At this stage, he is committed to paying the children’s basic tuition fees at [S] College, which amounts to approximately $20,000.00 per annum. In addition, he is prepared to continue to keep paying the interest only arising on the mortgage secured against the parties’ former family home, in which Ms Vincent, [X] and [Y] continue to live. The interest amounts to around $115.00 per week.
Finally, Mr Carr is prepared to advance a monthly amount of cash to Ms Vincent for [X] and [Y]’s financial support. He would want this amount to be capped. He would propose an amount of around $1,700.00 to $1,900.00 per month.
Essentially what Mr Carr proposes is that he would pay a monthly package of benefits for the children, which would have a total value of $4,130.00 per month. This would include school fees ($1,667.00); mortgage payments ($498.00); health insurance ($169.00); with the balance in cash ($1,796.00).
In the circumstances of this case, Mr Carr resists any order which would make him personally liable for the children’s after school care; their vacation care; and other incidental expenses, particularly their extramural activities and the provision of their school uniforms. It would be his position that these expenses should be paid for directly by the mother from either her own income or from any cash sums provided by him pursuant to the court’s order.
It is Mr Carr’s position that the package, which he proposes, is a generous one. He is concerned that, if an “open ended” order is made, so that he is made liable for the payment of specific expenses, such as after school care and leisure activities, the mother will capriciously exploit such an order.
Ms Vincent’s position is that her financial situation is currently parlous and will remain so, as she is a modest income earner. Mr Carr is well paid and it is the mother’s case that, during the course of the parties’ relationship, the children were committed to a comfortable lifestyle, which included an expensive education and access to a wide variety of extracurricular and recreational activities.
Both she and Mr Carr are committed to [X] and [Y] continuing to attend [S] College. A standard of education which is well beyond her financial resources. It is her case that the bare payment of the children’s tuition fees will not cover what is financially entailed in the children attending that school.
In addition, it is the mother’s case that the parties’ separation has compelled her to return to the workforce. As such, she is dependent upon the utilisation of after school care, vacation care and a nanny to provide care for [X] and [Y] so that she can earn her income. In these circumstances, it is her position that it is incumbent upon the father to provide a level of financial support for [X] and [Y], which recognises these considerable expenses.
For all sorts of reasons, the parties currently have an extremely jaundiced view of one another. The mother regards the father as being selfish and mean. The father regards the mother as being an emotionally labile spendthrift. These issues have been explored in the previously published reasons for the judgment.
The parties never married. As a result, the mother has commenced proceedings for the settlement of de facto property issues with the father in the District Court at Adelaide pursuant to the applicable South Australian Legislation.
These proceedings will not be finalised until, at best, the early part of 2010. All agree that this aspect of the litigation between the parties needs to be completed prior to the finalisation of the lump sum child maintenance proceedings.
Accordingly, I am determining the appropriate level of periodic financial support for [X] and [Y] until such time as the property proceedings between Ms Vincent and Mr Carr have been determined.
Mr Carr’s employment circumstances are not of the norm. He is an [occupation omitted], [employed in] Japan. Although an Australian citizen, he lives and works overseas in Japan. As a result, there is an insufficient nexus between him and the statutorily based child support scheme, which operates in Australia.
In addition, there are no formal agreements between the Governments of Australia and Japan for the collection of child support. Accordingly, the parties agree that maintenance for [X] and [Y] can only be assessed pursuant to the provisions of the Family Law Act 1975 (Cth).
Although Mr Carr lives and works in Japan, he is committed to coming to Australia to spend regular periods of time with [X] and [Y]. In future, he will be coming to Adelaide on six occasions per year, for periods of up to ten days at a time.[2]
[2] See Carr & Vincent [2009] FMCAfam 608
It is Mr Carr’s position that his plans to visit Adelaide regularly will constitute a considerable financial commitment for him, as he will have to rent accommodation for himself and the children and during these periods he will be solely financially responsible for providing for the children. Mr Carr would want the Court to take into account these expenses, when it assesses his liability to provide recurrent financial support for the children.
In addition, it is Mr Carr’s position that he has significant other financial responsibilities in Japan. Since the parties separated, he has remarried and has another child [Z], who is around one year of age. Mr Carr has both a legal and moral duty to support his wife and [Z].
In all these circumstances, Mr Carr regards Ms Vincent’s application for maintenance as being an ambit claim, which is motivated more by her antipathy towards him than considerations of the proper financial needs of the children. In addition, he is critical of the mother for not providing a full disclosure of her current financial circumstances.
In contrast to Ms Vincent, it is Mr Carr’s case that he has provided a comprehensive range of documents relating to his financial position, which includes all relevant bank and earning statements.[3] It is his case that his finances are an open book and, although currently well paid, his resources are not limitless.
[3] See affidavit of Ms J filed 11 June 2009.
Ms Vincent does not accept that the sum of cash, which Mr Carr proposes to pay to her for [X] and [Y]’s maintenance is a reasonable one in all the circumstances of this case. Mr Carr earns around Australian $275,000.00 per annum. He is not personally liable to pay tax on this sum. The maintenance package proposed by Mr Carr would amount to around eighteen per cent of his gross income.
It is Ms Vincent’s case that the needs of the children are great, particularly given the manner in which the parties have agreed [X] and [Y] are to be educated. They engage in many activities – horse riding; ice skating; tennis; swimming; and all manner of other sports.
In addition, Ms Vincent has employed a nanny, at a cost of $230.00 per week to assist her with caring for [X] and [Y]. All in all, Ms Vincent estimates the children cost her a sum of around $1,343.00 per week to maintain or just under $70,000.00 per annum, putting aside monies relating to the payment of her mortgage.
Although Mr Carr understands that it is not possible to apply the child support formula to his and Ms Vincent’s respective incomes and the current care arrangements for [X] and [Y], it is his case that the formula provides a useful yardstick or guide for the court to assess the appropriate level of maintenance for [X] and [Y].
The application of the formula to the parties’ circumstances would provide a figure of around $1,650.00 per month or $19,800.00 per year in child support which Mr Carr would be required to pay to
Ms Vincent, if he was resident in Australia and was receiving the same high salary as he currently does.
It is Mr Carr’s case that what he is proposing is in effect what the formula would provide and when this sum is combined with the children’s school fees and the interest payments on the mortgage which he remains committed to provide, the sum, which he proposes to pay by way of maintenance, is more than reasonable.
These proceedings cannot definitively resolve the various issues in dispute between the parties. Rather they are designed to calculate a proper level of financial support for [X] and [Y] pending the final hearing of the parties’ final applications, given their respective incomes, property and financial resources.
Legal principles applicable
The parties’ respective applications must be determined according to the provisions of Division 7 of Part VII of the Family Law Act. This division deals with the making of child maintenance orders and the objects and principles, which are relevant.
Section 66B sets out the objects of the division. These include ensuring that children receive a proper level of financial support from both their parents; that children have their proper needs met from reasonable and adequate shares in the income, earning capacity, property and financial resources of both parents; and that parents share equitably in the support of their children.
Section 66C places the primary duty of maintaining children upon the parents of those children. This duty has priority over all other commitments a parent has other than those commitments necessary for a parent to support him or herself or any other child he or she has a duty to maintain.
In the present case, the duty to support [X] and [Y] financially resides solely with Ms Vincent and Mr Carr. The court must ensure that this duty is met, as far as possible, equitably by both of them from appropriate shares in each of their respective incomes, assets and financial resources, depending on their earning capacities. In essence, the law requires parents to share the burden of maintaining their children, according to the level of their respective means, so far as this is equitable.
The approach the court must take in assessing a child maintenance order is set out in s.66H. It is essentially a two step process. Firstly, the court must consider the level of financial support necessary for the maintenance of the child concerned. The relevant matters to be considered are set out in specific detail in s.66J.
Secondly, the court must determine what contribution each parent should make to providing that financial support. The matters to be considered specifically in regards to this second step are set out in s.66K.
Section 66J directs the court to assess the “proper” need of the child concerned in fixing an appropriate level of maintenance. In so doing, the court must have regard to the age of the child concerned and the manner in which the child is being, and in which the parents expected the child to be, educated. In appropriate circumstances, in assessing the needs of any child, the court may have regard to any published research relating to the costs of maintaining a child.
Section 66K delineates the matters the court is required to take into account in determining the contributions which parents should make towards the financial maintenance of their children. These matters include the following:
·The income, earning capacity, property and financial resources of the parents concerned;
·The commitments of each of the parents that are necessary to enable that parent to support him or herself or any other child or another person that parent has a duty to maintain;
·The direct and indirect costs incurred by the parent with whom the child concerned lives in providing care for that child;
·Any special circumstances which, if not taken into account, would result in either injustice or undue hardship to any person.
In this case, Mr Carr has both a legal and moral duty to support his wife and [Z]. This legal obligation to support [Z] is of equal priority to Mr Carr’s duty to support [X] and [Y]. It is accepted however, that whilst his duty to support [X] and [Y] on the one hand and [Z] on the other is of equal priority, this duty does not necessarily translate into the equal provision of financial resources between the two families concerned.[4]
[4] See Ganter & Grimshaw (1998) FLC 92-810.
Pursuant to the provisions of s.66E, the court is specifically prohibited from making a child maintenance order if an application for administrative assessment of child support could be made pursuant to the Child Support (Assessment) Act 1989. However, the child support assessment regime may be relevant to the making of a child maintenance order in certain circumstances.
As I understand a number of decision of the Family Court, in particular Beck v Sliwka,[5] although I am not bound to follow the Child Support Assessment Scheme in making judgments under the Child Maintenance Provisions of the Family Law Act, in some situations the scheme may provide a useful guide for determining such cases.
[5] Beck v Sliwka (1992) 15 FLR 520
In Beck v Sliwka, (supra) Nicholson CJ and Fogarty J held that:
Whilst it must be emphasised that under the Family Law Act the court is required to consider the facts of the individual case in accordance with the structure in Division 6, nevertheless in the sort of case with which we are concerned now and which is not untypical of many cases litigated both in this court and in the Magistrates Court, and where the issue is the capacity of the non-custodian to make an equitable contribution to the costs of the children, it seems not unreasonable to at least pay regard to the formula in determining the amount of a Stage 1 order.
The financial needs of the children
Ms Vincent asserts that [X] and [Y]’s financial needs are met by a sum of $1,343.20 per week or $69.846.40 per annum. This sum does not include any component for providing accommodation for the children or the cost of their basic tuition fees at [S] College.
[X] and [Y] have lived in a comfortable and well resourced middle class family. The impression I have is that they are indulged children, in the sense that their every need or interest is fully catered for by their parents.
My responsibility, in this case, is not to ensure that [X] and [Y] are provided with an identical or superior standard of living to that which they enjoyed prior to their parent’s separation. Rather it is to assess what are their “proper needs” depending on their respective ages and the standard of education, which their parents have agreed they should enjoy.
I have no doubt that Mr Carr and Ms Vincent agreed and continue to agree that both [X] and [Y] should have a private school education from the start of their primary school years. It was a given that this education should be provided by a school with a high reputation for both academic and pastoral excellence. Undoubtedly [S] College ”fits the bill” in this regard.
Accordingly, it is proper and fitting that a component of the children’s maintenance should include their basic tuition fees at [S] College. This amounts to a sum of around $20,000.00 per annum for both children. A more vexed question relates to the children’s incidental or additional expenses, which relate to their various extramural and recreational activities.
Ms Vincent estimates the basic cost of providing for the children’s needs as being $781.00 per week.[6] This sum includes food ($150.00); savings ($50.00); entertainment ($80.00); holidays ($70.00); cleaning ($74.00); fares and car parking ($26.00); and gifts ($40.00).
[6] See annexure A to the mother’s affidavit filed 20 May 2009
I agree with the assertion of Mr Noble, counsel for the father, that the amount, as quantified, has something of an ambit claim about it. It seems to me likely that many of the alleged items of expenditure could be either easily trimmed or excluded.
In particular it would seem unnecessary for the children to save $1,300.00 per annum each or to have allocated the sum of $3,848.00 for holidays per annum, particularly as Mr Carr will provide a significant component of these holidays. In addition, the sum allocated for their generic hobbies and entertainment seems to me to be high.
Accordingly, I have reached the view that the sum claimed by Ms Vincent does not appear to be proper in the sense that it is either accurate or appropriate. In this regard, I consider sources of information, extraneous to the mother are likely to provide a more accurate and object standard by which to gauge the economic costs of supporting children of the ages of [X] and [Y].[7]
[7] In this regard see Family Law Act section 66J(2)(b)
One of the major rationales of the recently amended child support regime brought about by the Child Support Legislation Amendment (Reform of the Child Support Scheme – New Formula and Other Measures) Act 2006 was that the various applicable child support formulae would be more reflective of the actual financial needs of children affected by the child support system, as they would be based on actual empirical research regarding the actual costs of children.
In his second reading speech regarding the new legislative regime, Mr Brough, the relevant minister at the time, said as follows:
“The new formula, on the other hand, will explicitly be based on the costs of children, as drawn from Australian research showing the real cost of children for the level of their parents’ income and the children’s ages. An ‘income shares’ approach will be used so both parents will have the same amount deducted as self-support, both parents income will be taken into account in establishing the costs of the children, and the resulting costs will be apportioned between the parents according to their share of the combined income.”[8]
[8] See Hansard (House of Representatives) for Thursday, 14 September 2006 at page 1
The Child Support Agency has calculated the costs of supporting two children, under the age of twelve years, in circumstances where their parents’ combined income is greater than $141,063.00 as being $26,802.00 per annum or $515.42 per week.
Ms Vincent’s case is that the payment of the children’s basic tuition fees does not cover the actual cost of enabling the children to attend [S] College, particularly in the sense of ensuring that they participate fully in a wide variety of sporting activities offered by the school.
In addition, it is Ms Vincent’s case that the parties had earlier agreed that it was appropriate for [X] and [Y] to engage in other recreational activities, independent of the school, to assist them to become accomplished children. As such, by necessary implication, she asserts that these activities are germane to the children’s education.
In [Y]’s case, she goes riding and ice-skating. [X] plays tennis. Both children have swimming lessons. Ms Vincent asserts that the additional cost of the children engaging in sport at school is $20.00 per week and their other activities cost in the vicinity of $106.40 per week.
This does not appear to me to be an excessive sum, when the nature of the activities concerned is considered. However, I do not think that all the activities entailed are proper ones, when the overall educational needs of the children are considered. Both Ms Vincent and the children may need to prioritise which activities are most important to them.
In addition, it seems likely to me that there is some overlap between these various extramural activities and the other calculations Ms Vincent has completed in respect of the cost of the children’s other hobbies and recreational needs.
In addition, it seems likely to me that the mother would be capable of making some economies so far as these various activities are concerned. Finally, in the past, Mr Carr has paid for some of these activities, when the children have been in his care.
As I said at the outset, my responsibility is not to ensure that [X] and [Y] have an identical standard of living to that which they enjoyed prior to their parent’s separation. Rather, it is to ensure that they are educated to the standard upon which their parents previously agreed.
It is a pleasant thing to be able to ride a horse, ice-skate or play tennis proficiently. Each is a useful attribute. However, these abilities are not the essential prerequisites of a well educated person. Certainly, other than in exceptional circumstances, they will not provide the means by which a child will obtain a tertiary education or secure and well remunerated employment.
As such, when the economic circumstances of parents change, as a result of relationship breakdown and the acquisition of other financial obligations, they are the types of expenditure, which can be jettisoned or at the very least be reconsidered.
Ms Vincent has returned to full-time employment. Her hours of work coincide and overlap with periods of when the children are at school. As such, she is reliant on before and after school care and vacation care for the holidays.
She has also employed a nanny to assist her. The nanny costs
Ms Vincent $25.00 per hour. In addition, the nanny is allowed a motor vehicle allowance of $30.00 per week. Ms Vincent estimates that she utilises the nanny, a tertiary student, approximately eight hours per week. Accordingly, Ms Vincent estimates the nanny is costing her $230.00 per week.
In addition, Ms Vincent estimates that childcare costs her in the vicinity of $205.80 per week or $10,700.00 per annum. It does not seem to be the case that she has factored into her calculations any periods of time when Mr Carr will be caring for the children.
At this stage, Ms Vincent’s childcare expenses have not been subjected to any thorough scrutiny. I accept that sole working parents, who are engaged in full-time employment, are necessarily reliant on others to provide care for young children, both before and after work and during school holidays. I am however concerned that, in this particular case, Ms Vincent has attempted to maximise her estimated level of expenditure.
One of the principles underpinning the child maintenance provisions of the Family Law Act is that parents should share equitably in the financial support of their children, commensurate with their respective incomes. In this sense, Ms Vincent, as the major residence providing parent, should not consider that she is entitled to bill Mr Carr for every conceivable item of expenditure relating to the children and expect automatic reimbursement.
In my view, to some extent, the mother’s childcare expenses are incurred incidental to the earning of her income rather than being expenses strictly referable to the proper needs of the children. As such, I would expect that Ms Vincent is entitled to make a retrospective claim for a childcare tax rebate.
After having considered these various matters, putting aside the children’s basic tuition expenses, I have come to the view that the sum of $540.00 per week or $2,340.00 per month represents a proper figure for providing for the children’s financial needs. In reaching this figure, I have factored in the fact that [X] and [Y] are accustomed to a high standard of living, as a result of their father’s high level of income.
I have also taken into account, to some extent, the fact that Ms Vincent has significant childcare expenses because she is a sole parent. As a result of these various factors, the sum so calculated is slightly higher than the figure mandated by the statistical research undertaken by the Child Support Agency in respect of children of [X] and [Y]’s ages, who enjoy roughly socio-economic circumstances.
The next step of the process is to ascertain how Mr Carr and
Ms Vincent must contribute towards this sum, given their respective financial circumstances. At this stage, I have not factored in Mr Carr’s contribution towards the payment of the mortgage interest on the parties’ family home.
The mother’s financial circumstances
I accept that Ms Vincent is a modest income earner. She is currently employed [as an occupation omitted]. She earns $898.00 per week or $46,696.00 per annum. Her major expenses are tax ($263.00); life insurance ($18.00); and motor vehicle registration ($13.00).
There is some controversy between the parties regarding health insurance. Both parties have taken out health insurance for [X] and [Y]. Ms Vincent calculates the costs of her family health insurance as being $46.00 per week. Mr Carr has indicated that he is willing to continue to pay this expense on behalf of both the mother and children.
At this stage, Ms Vincent does not have to pay any rent or mortgage expenses for herself and the children. She is however paying rates on the Property F property, which she occupies with the children, at the rate of $56.00 per week.
Apart from her home, Ms Vincent does not have any assets of a significant value. She has a car and superannuation of modest value. She does not have any outstanding personal loans.
Ms Vincent estimates that it costs her personally $236.00 to provide for her own day to day needs. This does not appear to me to be an excessive sum.
The father’s financial circumstances
Mr Carr is employed by [H], a company incorporated in the American State of Hawaii. [Company specifics omitted]. Mr Carr is paid in US dollars.
At the present time, he is paid a base salary of US$12,871.00 per month plus overtime at the rate of US$191.00 per hour. In addition, he receives commuting expenses of between US$500.00 and US$1,200.00 per month.
Given the nature of Mr Carr’s employment, he is also paid a per diem amount of US$976.00 per month. He also receives an experienced pay incentive of US$6,667.00 paid in August each year.
Mr Carr’s employer provides him with life insurance; health insurance, which covers family members; and ninety percent of all airfares for himself and his family.
All in all, Mr Carr estimates his weekly income as being A$5,318.00 per week or A$276,536.00 per annum. It is significant that he is not liable to pay tax, in either Japan, the United States or Australia in respect of this income.
Mr Carr estimates that it costs him ¥359,000.00 per month to support his wife and [Z] in Japan. This equates to A$4,819.36. Mr Carr’s major expenses are rent (¥190,000.00) and living expenses (¥120,000.00). This equates to just over A$4,000.00 per month.
I have been provided with little evidence, if any, regarding how much it costs to live reasonably in Japan. In the past, the mother has been critical of Mr Carr for moving from an apartment near Narita Airport to a residential area of Tokyo.
At this point, I am not in a position to assess whether Mr Carr’s expenses are reasonable or can be regarded as exorbitant. However, it seems clear to me that his financial resources are finite, particularly given that he has two families to support – one in Australia and one in Japan.
Mr Carr has modest savings, currently worth less than A$30,000.00. He has just over A$170,000 in accumulated superannuation. Otherwise, he has no significant assets to speak of.
The impression, which I have, is that although he has been and remains a high income earner, Mr Carr has no great facility to save or accumulate funds. At this juncture, given the evidence available to me, it is difficult to see how he could possibly satisfy the mother’s claim for lump sum child maintenance.
Conclusions
Given the foregoing analysis of the parties’ situation, it is clear that [X] and [Y] are children whose needs cost a significant sum of money to satisfy each week. In addition, it is clear to me that both parties are currently in somewhat straitened financial circumstances.
Necessarily this must entail some financial sacrifice on both their parts and the adoption of some level of financial austerity. Certainly, although Mr Carr is well paid, he has many demands on his salary, which is not limitless.
Mr Carr has a legal duty to support his wife and son in Japan. These commitments consume a significant proportion of his recurrent income. His obligations to his family in Japan rank neither higher nor lower than Mr Carr’s legal liability to support [X] and [Y]. However there is no presumption that his contributions to these different aspects of his family should in some way be equalised.
The parties’ difficult financial circumstances have dictated that
Ms Vincent must return to the paid workforce. Mr Carr continues to earn the high salary, which he earned prior to the parties’ separation. Accordingly, it cannot be said that either party is shirking their financial responsibilities for [X] and [Y].
However, the financial landscape of their lives has changed to a significant degree, largely because of Mr Carr’s responsibilities towards his wife and child in Japan. Mr Carr has a responsibility to support not only [X] and [Y] but also himself, [Z] and his wife.
Up to this stage, it seems to be the case that neither party has contemplated any serious reduction in the standard of living for [X] and [Y]. However, it would seem to me that financial necessity dictates that some savings be found.
There is no principle of law that the court should ensure that children have an identical standard of living to that which they enjoyed prior to their parents’ separation. In addition, it is not Mr Carr’s responsibility alone to support [X] and [Y]. This responsibility also resides with
Ms Vincent.
The court’s responsibility is to ensure that the children enjoy an equitable share in both their parents’ income and financial resources, including their parents’ ability to earn an income. Accordingly, it is not open to Ms Vincent to expect Mr Carr to supply all of the children’s financial needs.
The most significant expense for the children is their school fees at
[S] College. The father agrees to continue to pay these fees, which amount to around $20,000.00 per annum. This is a significant sum of money. Its provision will ensure that the children’s proper educational needs will be met, to the standard upon which the parties’ have previously agreed.
Mr Carr also agrees to continue to paying the interest only on the mortgage secured against the parties’ former family home. This, of itself, represents a benefit for the children. It is also means that
Ms Vincent is not put to the direct expense of funding accommodation for herself and the children.
I would hope that the parties’ themselves could resolve the issue of the children’s health insurance, particularly as this seems to be a benefit which is provided by Mr Carr’s employer. Certainly, it would seem to be foolish for the children to be covered by two separate health insurance policies taken out by each of their parents.
Given the issue of the children’s school fees; the mortgage interest payments; and potential health insurance payments; the father is paying benefits for the children which amount to somewhere in the vicinity of $2,334.00 per month.
Again, this is a significant sum. However, I concede that it does not result in any “bread butter or jam” being put on the table so far as [X] or [Y] are concerned. More importantly it does not provide any of the items or appurtenances of life to which they have become accustomed.
I have calculated the costs of supporting [X] and [Y], putting aside their school fees, as being a sum of $28,000.00 per year. I have factored into this figure the socio-economic lifestyle to which they have become accustomed. I appreciate that this sum will not cover every aspect of the lifestyle to which they have become accustomed. However, for the reasons already provided, there must be some economies made in this regard.
I have reached the conclusion that this sum should be divided effectively 70/30 percent between the parties, with Mr Carr paying the larger proportion. This will result in him paying Ms Vincent a monthly amount of child maintenance in the sum of $1,633.80. For the sake of convenience I propose rounding this sum up to $1,700.00.
In reaching this apportionment, I have taken into account that earlier orders have been made which provide for Mr Carr to come to Australia on at least six occasions each year, for periods of up to ten days at a time. During these periods, he will be responsible for providing for the children’s day to day needs, including renting an apartment in which to accommodate them and himself.
These will be significant expenses on his part and during these periods he will continue to remain responsible for paying recurrent maintenance payments to Ms Vincent. On my calculations [X] and [Y] will be in the father’s care for about 16% of each year.
This outcome will mean that Mr Carr is providing financial benefits for the children amounting to around $4,000.00 per month. In all the circumstances, I consider this to be a proper sum at the interim stage. I will adjourn the proceedings until March of 2010 to ascertain what is the position regarding the parties’ District Court proceedings.
The father has been paying Ms Vincent around $4,000.00 per month, including the school fees. Accordingly, the 1st of July 2009 is an appropriate starting date for the formal order.
For all these reasons, the orders of the court will be as set out at the commencement of these reasons for judgment.
I certify that the preceding one hundred and thirteen (113) paragraphs are a true copy of the reasons for judgment of Brown FM
Associate: P Smith
Date: 26 June 2009
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