Chambers and Chambers

FEDERAL CIRCUIT COURT OF AUSTRALIA

CHAMBERS & CHAMBERS

[2013] FCCA 2204

Catchwords:
CHILD SUPPORT ̶ Whether order for non-periodic child-support should be varied or discharged ̶ whether wife’s circumstances have changed ̶ whether change in cost of living relevant.

Legislation:

Child Support (Assessment) Act 1989 (Cth), ss.117, 124, 129

Applicant:

MS CHAMBERS

Respondent:

MR CHAMBERS

File Number:

DGC 593 of 2008

Judgment of:

Judge Phipps

Hearing date:

1 November 2013

Date of Last Submission:

1 November 2013

Delivered at:

Dandenong

Delivered on:

19 December 2013

REPRESENTATION

The Applicant appearing on their own behalf:

Counsel for the Respondent:

Mr Puckey

Solicitors for the Respondent:

Kennedy Partners

ORDERS

That the parties obligations under the order made in chambers by Federal Magistrate Turner on 30 October 2009 concerning the child X born (omitted) 1998 (“the order”) continue until 31 December 2013.
Otherwise the order is discharged.

IT IS NOTED that publication of this judgment under the pseudonym Chambers & Chambers is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).

FEDERAL CIRCUIT COURT OF AUSTRALIA

AT DANDENONG

DGC 593 of 2008

MS CHAMBERS

Applicant

And

MR CHAMBERS

Respondent

REASONS FOR JUDGMENT

The wife applies for variation of orders made by consent on 30 October 2009.
Those orders provide that the parties enrol their child X born (omitted) 1998 at (omitted) College to commence in year five in 2010. The payment of school fees necessitated the order contain a clause that the parties:
Advise (omitted) College that for the purpose of payment of all school tuition fees and other compulsory school expenses in relation to X’s attendance at (omitted) College, accounts are to be split and an account for half to be sent to each of the husband and wife.
Paragraph 2 of the order provides for non-periodic child support:
That pursuant to section 124 of the Child Support (Assessment) Act, the husband provide child support to the wife and for the child X by way of
1.Payment of half of the tuition fees and other compulsory expenses, as invoiced by (omitted) College, for X’s attendance at the school, commencing in 2010;
2.Payment of half of the costs of uniforms and other compulsory school requisite; and
3.Payment of half of the cost of school books.
Paragraph 3 of the order required the husband to pay fees invoiced by the school direct to the school and the other by reimbursement to the wife.
Paragraph 4 of the order provides that the non-periodic payment of child support pursuant to paragraph 2 is not to reduce the amount payable under the administrative assessment of child support.
The variation the wife applies for is that either the order for non-periodic child support be varied so that the husband is required to pay all school fees for X and arrears, or that the order be varied to provide for X to attend a government secondary college.
The husband opposes any change in the order. He proposes an order that the wife’s application be dismissed.
Section 129 of the Child Support (Assessment) Act 1989 (Cth) provides for modification of orders made under s.124. To discharge or vary the order s.129(2) requires the court to be satisfied that it would be just and equitable as regards the child, the carer entitled to child support and the liable parent concerned, and otherwise proper to make the discharge order.
In addition s.129(3) requires that the court must not vary the order unless, relevantly to this case, it is also satisfied that making the variation is justified because of a change in the circumstances of the child, the carer entitled to child support or a liable parent since the order was made or last varied; or that making the variation is justified because of a change in the cost of living since the order was made or last varied.
Section 129(9) provides that in satisfying itself in regard to change in cost of living the court must have regard to any changes that have occurred in relevant Consumer Price Index published by the Australian Statistician.
In determining whether it is just and equitable and otherwise proper the court must have regard to certain of the matters mentioned in s.117 as required by s.129(5) and (6). Section 129(8) requires the court to have regard to any payments and property settlement previously paid by the liable parent to the child carer entitled to child support.
The wife is 52 having been born on (omitted) 1961. The husband is 55 having been born on (omitted) 1958.
The parties married on (omitted) 1985 and separated in September 2006. They divorced on 7 July 2009. They have two children from the marriage, Y born (omitted) 1994 and X born (omitted) 1998.
The husband works full time as a (occupation omitted). He is the (position omitted) of (business omitted) a small (omitted) specialising in (omitted). Since the orders were made on 30 October 2009 he has remarried to Ms S and they have one child born on (omitted) 2013. His taxable income for the financial year ended 30 June 2012 was $168,964. His wife is a (occupation omitted) by occupation now on maternity leave. She operates her own (business omitted) currently through a (omitted). The husband’s evidence, which I accept, is that she currently has little net income.
The husband is assessed to pay $1,168.42 per month child support for X. The child-support assessment states his adjusted taxable income is $253,250. This is because he incorporated his (business omitted) and sold the unincorporated (business omitted) to the incorporated (business omitted) and the child-support assessment deems as income payments made resulting from financial arrangements put in place at the time of incorporation. The husband’s financial statement states his average weekly income at $3,840 before tax which is about $200,000 a year. He says that his income at the time the orders were made in 2009 was about $130,000 a year. His case was conducted on the basis that any relevant change in circumstances was his marriage and birth of a dependent child.
The wife works as an (occupation omitted). She works on contract through a company. She states that her income from employment is $692 a week about $32,000 per year. Her adjusted taxable income for child-support purposes is $36,435. She works three days a week. She says that that was the case when the order was made in 2009 and that her income then was about the same. She says this is because contract rates for the (duties omitted) work she does have not changed since 2009 and so not increased in line with inflation.
The wife works on a contract her contracting company was with (employer omitted). She says that the system she works on is a (omitted) system and that the work with (employer omitted) will cease at the end of this year. The company which employs her will then have no work for her and she does not know whether she will find other employment and doubts that she can.
Until the end of 2012 the wife was receiving child-support for the older child Y. She has turned 18 and ceased secondary schooling and now is in first year at (omitted) University. She lives with the wife and has some income including part-time work in her father’s office.
X is in year eight at (omitted) College. The annual tuition fee this year is $22,596. There are further fees for additional activities. In 2014 the year 9 annual tuition fee is $24,890. The school has a program where the pupils travel to China and in that year the total anticipated fees for X will exceed $30,000.
The wife gives her total gross income after payment of business expenses as $1,049 per week. The components are:
Net income before tax from employment $692
Family Tax Benefit $47
Child support for X $270
The wife’s assets are her residence at Property B, the former matrimonial home which she values at $800,000, and superannuation of $9,000.
Her liabilities are an unpaid income tax assessment of $3,700 for previous years, a MasterCard debt of $4,800, (omitted) College tuition fees, which at the date of her financial statement dated 9 August 2013 was $5000 and may now be greater and an amount of $6,500 which she describes as accountants fees and credit card debts.
Consent orders made 18 June 2009 provide for X’s living arrangements. Each alternate week he spends from after school Wednesday until 8.00pm Sunday with his father and in the intermediate week from after school Wednesday until the commencement of school on Thursday. He spends time with his father during school holidays and on the various celebratory occasions. Otherwise he lives with his mother. He spends five nights a fortnight with his father and nine nights a fortnight with his mother
The Australian Bureau of Statistics yearly increases from September quarter to September quarter for the Consumer Price Index weighted average of eight capital cities All Groups are:
September 2009 to September 2010 2.80%
September 2010 to September 2011 3.50%
September 2011 to September 2012 2.00%
September 2012 to September 2013 2.20%
The compound increase from the quarter prior to the order being made in September 2009 until the quarter prior to the hearing about 10.9%.
When uniforms, schoolbooks and other expenses in addition to school tuition fees are taken into account the wife is facing a yearly payment for X’s schooling of $15,000 or even more. Half the yearly tuition fee for 2014 is $12,445 and total extra expenses of $1,000, half for the wife, seems a reasonable estimate.
The wife has her own living expenses, those for X and at least some for the daughter Y. She is over 18 but as a first year university student living at home, a reasonable arrangement and reasonable for the wife to be supporting her at least in part.
The wife’s unpaid tax, credit card bills and the unpaid school fees shows that financially she is overcommitted. She has until this year succeeded in paying the school fees but her lack of savings shows she has little if any funds available for discretionary spending. When the order was made in September 2009 she had the ability to pay the school fees but only just. The evidence does not show what the school fees were then but a reasonable inference is that they were lower.
Two things have changed since 2009. The wife no longer receives child-support payments for Y and her employment future is uncertain. The cessation of child support payments for Y is not a change of circumstances but the uncertainty in her employment is. It is true that her current contract is not yet at an end but she expects that to happen in December 2013. If that occurs she will not be able to pay half school fees for 2014 or any future years.
The other factor is the change in the cost of living in circumstances where the wife’s income has not increased. In circumstances where the wife’s finances were fully committed when the order was made in September 2009 and an increase in the cost of living of about 10.9% without any increase in income is significant.
The change in the wife’s financial circumstances are considerations described in the relevant parts of s.117. The change in the wife’s circumstances makes it just and equitable as regards the child, the wife and the husband and otherwise proper to vary the order. The order for the husband to pay half school fees cannot exist if the wife does not pay the other half. To free her from her obligation to pay half the school fees means that the order under s.124 for non-periodic child-support must be changed.
An alternative is to vary the order so that the husband pays increased percentage of the fees and so the wife pays a corresponding decreased percentage. I do not think that this meets the requirements of s.129. The wife’s income is such that to pay any substantial part of the fees means she must have a very modest standard of living with no ability to save.
The wife’s application has the alternatives of either the husband paying all the school fees at (omitted) College or the child attending a government school. While the husband has a substantial income which has increased, perhaps beyond the cost of living, his circumstances have changed because he has a dependent child and currently a dependent wife. He lives in rented premises. The wife received the substantial amount of the matrimonial assets after their marriage came to an end.
In the circumstances I am not satisfied that it is just and equitable as regards the child, the wife and the husband or otherwise proper to order that he pay all of the school fees and expenses.
The husband, while his position about an order for non-periodic child-support was that the statutory requirements were not satisfied to require him to pay all the (omitted) College school fees, his evidence was that if that was what was required for X to continue at the school. He said that was the way he had been brought up.
The conclusion I have reached requires that the order requiring the wife to pay half school fees and the order for non-periodic child support for the other half to be paid by the husband be discharged. That means that the order that X attend (omitted) College must also be discharged. Given that that the husband has said that he will pay all the (omitted) College school fees, I should not make an order that the child attend a government school.
Discharging the order for payment of fees and discharging the order for enrolment at (omitted) College means there is nothing left of the order. Thus the appropriate order is to discharge the whole order. It is nearly the end of the year, therefore, the appropriate order is that the parties’ obligations continue until 31 December 2013 and thereafter the order is discharged. I do not consider that I should effectively vary the order by requiring the husband to pay any arrears of the wife’s half.

I certify that the preceding thirty-seven (37) paragraphs are a true copy of the reasons for judgment of Judge Phipps

Date: 19 December 2013

[2013] FCCA 2204

19 December 2013

Key Legal Topics

Areas of Law

Family Law

Civil Procedure

Legal Concepts

Appeal

Jurisdiction

Remedies