CORNESS & CAMERON
[2005] FMCAfam 558
•18 October, 2005
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| CORNESS & CAMERON | [2005] FMCAfam 558 |
| CHILD SUPPORT – Departure. |
| Child Support (Assessment) Act1989, ss.110, 116, 124, 125 Child Support (Registration and Collection) Act1988, s.38A Family Law Act1975, s.66L |
| Cosgrove v Cosgrove (1996) FLC 92-770 In the Marriage of Gyselman (1992) 15 FLR 219 Savery and Savery (1990) FLC 92-131 Hides v Hatton (1997) FLC 92-759 DJM v JML (1998) FLC 92-816 F & S (2003) FMCAfam 531 |
| Applicant: | Patricia katherine corness |
| Respondent: | stewart james cameron |
| File Number: | BRM 5018 of 2004 |
| Judgment of: | Jarrett FM |
| Hearing dates: | 12 May and 23 June, 2005 |
| Date of Last Submission: | 23 June, 2005 |
| Delivered at: | Brisbane |
| Delivered on: | 18 October, 2005 |
REPRESENTATION
| The Applicant appeared in person |
| The Respondent appeared in person |
ORDERS
That the provisions of the Child Support (Assessment) Act1989 that administratively determine the liability of the respondent to pay child support in respect of the children Andrew Cameron born on 10 October, 1986 and Matthew Cameron born 24 September, 1990, be departed from as follows:
(a)To the annual rate of $2,193.96 for the child support period from 1 May, 2004 – 14 July, 2004;
(b)
To the annual rate of $5,727.96 for the child support period
15 July, 2004 – 9 October, 2004.
That the provisions of the Child Support (Assessment) Act1989 that administratively determine the liability of the respondent to pay child support in respect of the child Matthew Cameron born 24 September, 1990, be departed from as follows:
(a)
To the annual rate of $4,185.96 for the child support period
10 October, 2004 – 31 July, 2005.
That pursuant to s.124 of the Child Support (Assessment) Act1989 the respondent shall pay child support in respect of the children Andrew Cameron born on 10 October, 1986 and Matthew Cameron born
24 September, 1990 by payment of the sum of $3,435.12 and same shall be paid to the applicant forthwith.
That pursuant to s.125 of the Child Support (Assessment) Act1989 the amount ordered to be paid in the preceding paragraph not be credited against the respondent's liability for child support under any assessment made under the Act.
All other applications are dismissed.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT BRISABANE |
BRM 5018 of 2004
| PATRICIA KATHERINE CORNESS |
Applicant
And
| STEWART JAMES CAMERON |
Respondent
REASONS FOR JUDGMENT
By her amended application filed on 3 May, 2005 the applicant seeks the following orders:
1.THAT CHILD SUPPORT BE $90 PER WEEK PAID MONTHLY WITH COST OF LIVING ADJUSTMENTS ADDED TO BE PAID MONTHLY FOR MATTHEW CAMERON TILL 18 YEARS COLLECTED BY CHILD SUPPORT AGENCY.
2.50% OF ALL DENTAL, MEDICAL, ORTHODONTIC, PODIATRIC, OPTICAL, PHYSIO AND ALL MEDICAL EXPENSES AND COSTS UNTIL MATTHEW CAMERON IS 18 YEARS OLD.
3.50% OF SCHOOL FEES AND COSTS INCLUDES CAMPS, BOOKS, UNIFORMS, FORMALS, SPORTS ETC FROM JANUARY 2004 UNTIL MATTHEW CAMERON FINISHES HIS COLLEGE EDUCATION.
4.25% OF SCHOOL COSTS FOR ANDREW AND MATTHEW CAMERON FROM SEPTEMBER 1999 TO DECEMBER 2003. THE OUTSTANDING AMOUNT OF $3,435.12 TO BE PAID DIRECTLY TO IONA COLLEGE AND THIS DEBT BE TRANSFERRED TO MR CAMERON'S NAME AND BILLED TO HIS HOME ADDRESS IMMEDIATELY.
5.OUTSTANDING CHILD SUPPORT AGENCY DEBT OF $1,773.34 TO BE PAID IN FULL AND COLLECTED BY 15 JULY 2005.
6.AFTER REACHING THE AGE OF 18 YEARS AND STILL CONTINUING TERTIARY EDUCATION MR CAMERON WILL ASSIST ANDREW AND MATTHEW CAMERON DURING THIS TIME WITH AN ALLOWANCE OF $40.00 PER WEEK PER SON PAID DIRECTLY INTO THEIR BANK ACCOUNTS. THIS WILL CEASE ON COMPLETION OF STUDIES OR NON CONTINUANCE OF SAME OR REACH THE AGE OF 21 YEARS.
The respondent opposes the orders sought and seeks that the application be dismissed.
Background
The parties commenced to live together when they married on
5 September, 1981 in New Zealand. They finally separated on 16 May, 1991 and were divorced on 16 October, 1996.
The parties have two children: Andrew who was born on 10 October, 1986 and Matthew who was born on 24 September, 1990. Andrew is now 19 years of age and Matthew years is 15 years of age.
The children live with the applicant mother pursuant to orders made by consent on 31 August, 1995 in the Family Court of Australia at Brisbane. Those orders have been varied from time to time (21 March, 1996 and 15 June, 1999). The father exercises contact with the boys, but he alleges contact has been problematical.
There is a long history of dispute between these parties concerning child support. There have been a number of change of assessment applications by the applicant which have been, to varying degrees, successful. The most recent change of assessment application was unsuccessful, but that decision was reversed after the applicant successfully objected to the change of assessment decision.
The respondent argues that because there has been a successful objection decision, the current application cannot succeed and should be dismissed. I reject that submission. The respondent points me to s.110 of the Child Support (Assessment) Act1989 ("the Act") to support his argument. The application is permitted, however, by s.116(1) and 116(1A) of the Act. An unsuccessful objection is not a pre-requisite: all that is required is that an objection has been lodged and "the Registrar has either disallowed the objection or has allowed it in whole or in part". There is evidence that an objection was allowed on 14 September, 2004.
The assessments
The only assessments in evidence before me are as follows:
Child Support period Husband’s Taxable Income (for the relevant financial year) Husband’s Child Support Income amount Wife’s Child Support Income Amount Assessed Child Support (per month) 1/07/96 –
30/06/97Unknown $10,286 Nil $34.92 1/07/97 –
30/06/98Unknown $9,606 Nil Nil 1/07/98 –
30/06/99Unknown $7,928 Nil Nil 1/07/99 – 30/09/00 Unknown $4,952 Nil $260 1/05/04 –
14/07/04$18,499[1] $17,000[2] $30,180 $91.17 15/07/04 –
9/10/04Unknown $30,092[3] $30,180 $385.67 10/10/04 –
31/07/05Unknown $30,092[4] $30,180 $257.17[5] [1] As disclosed by his 2004 income tax return.
[2] Set by estimate of income by liable parent
[3] Set by departure decision made by A Corrigan, Objections Officer on 14 September, 2004
[4] Set by departure decision made by A Corrigan, Objections Officer on 14 September, 2004
[5] Reduced from the previous amount because the oldest child turned eighteen.
The applicant's case
The applicant alleges that current administrative assessment of child support should be changed because:
a)It does not take into account the costs of Matthew’s education – he is being educated as the parties envisaged that he would;
b)It does not take into account special needs of Matthew for dental and orthodontic work that he requires, nor the costs of podiatrists and physiotherapists;
c)It does not take into account the respondent's actual income, his earning capacity nor his financial resources.
The applicant also applies for child support to be paid otherwise than in the form of periodic amounts, namely by the payment of a lump sum to cover 25% of school fees for the children between September, 1999 to December, 2003.
Finally, she seeks an order for adult child maintenance in respect of both children by way of periodic payment of $40.00 per week for each child until the completion or cessation of tertiary study.
The adult child maintenance application
The Court must not make an order for maintenance of a child who has turned 18, unless satisfied that the provision of maintenance is necessary to enable the child to complete his or her education, or because of a mental or physical disability of the child. The court may make such a child maintenance order, in relation to a child who is 17, to take effect when or after the child turns 18: s.66L(1)(a) of the Family Law Act1975 ("the Act").
Once satisfied that the provision of maintenance is necessary to enable the child to complete his or her education, the discretion to make an order for maintenance is enlivened. An order need not be made simply because the threshold has been met: Cosgrove v Cosgrove (1996) FLC 92-770.
The Court must have regard to the other provisions of Division 7 of Part VII of the Act when deciding whether to make an order. The guiding principle is what, in all the circumstances, is reasonable.
Matthew is presently 15. No order in respect of his maintenance after he turns 18 can presently be made.
Andrew is presently 19 years of age. There is evidence that he is presently completing tertiary education. There is no evidence, however, that would allow me to properly assess Andrew's reasonable weekly needs, nor that he requires the maintenance order to enable him to complete his education.
The application for the orders sought in paragraph 6 of the amended application filed on 3 May, 2005 must be dismissed.
Enforcement of arrears
The applicant seeks enforcement of child support arrears by paragraph 5 of her amended application filed on 3 May, 2005. There is evidence from the respondent that he has an arrangement in place to acquit those arrears. It must be the case that the Child Support Registrar is presently collecting child support on behalf of the mother.
The arrears can be enforced by the Child Support Agency, or if the applicant makes an election under s.38A(1) of the Child Support (Registration and Collection) Act1988 (“the CS(R&C) Act”), she may enforce those arrears herself. Whatever the position might be, however, it is inappropriate to make a further order for the payment of that money by the respondent to the applicant. A liability already exists on his part to make that payment.
Moreover, until there is an election pursuant to s.38A(1) of the
CS (R&C) Act, the outstanding arrears are a debt due to the Common-wealth and are not enforceable at the suit of the applicant. There is no evidence of any election on her part.
The departure application
The law
The obligation to pay child support is created by the provisions of the Act. Section 3 recites parents’ obligations to maintain their children. The objects of the Act are supplemented in s.4. Each of the objects needs to be borne in mind when deciding an application under the Act. When interpreting the Act it should be construed to the greatest extent, consistent with the attainment of its objects. Sections 114 and 121 identify that the objects of Divisions 4 and 5, Part VII include:
a)that children have their proper needs met from reasonable and adequate shares in the income, earning capacity, property and financial resources of both of their parents; and
b)that parents share equitably in the support of their children.
The provisions of s.117(1) of the Act empower a Court to make an order for departure from administrative assessment in the special circumstances of the case. The Full Court of the Family Court in Gyselman (1992) FLC 92-279 set out a three-step process that Courts must follow in determining an application for a departure order under s.117. The first step is whether one or more of the grounds for departure in s.117(2) is established. If so, the next step is whether it is just and equitable within the meaning of s.117(4) to depart from the administrative assessment. The final consideration is whether it is otherwise proper within the meaning of s.117(5) to make a particular order.
In Savery and Savery (1990) FLC 92-131 Kay J said that “special circumstances” were “facts peculiar to the particular case which set it apart from other cases.”
In the Marriage of Gyselman (1992) 15 FLR 219 at 225, the Full Court of the Family Court said of the phrase “special circumstances”:
“Whilst it is not possible to find with precision the meaning of that term, as a generality it is intended to emphasise that the facts of the case must establish something that is special or out of the ordinary. That is, the intention of the legislature is that the Court will not interfere with the administrative formula result in the ordinary run of cases.”
Hides v Hatton (1997) FLC 92-759 makes it clear that the court must follow the three-step process in respect of each year for which a departure order is sought.
In DJM v JML (1998) FLC 92-816, the Full Court of the Family Court of Australia observed:
17.40 ... Child support and child maintenance orders are governed by legislation which emphasises and prioritises the obligation of parents to support their children and seeks to ensure that the level of financial support is to be measured according to the parent's “capacity to provide financial support'' .
17.41 Property adjustment orders have far less focus and are arrived at on the basis of what is “`appropriate'' after weighing up many competing factors. Spousal maintenance is governed by a test of what is proper having regard to the reasonable ability of the liable spouse to meet the needs of the other.
17.42 In our view there can be different answers to the same question about earning capacity depending on which head of power is sought to be exercised.
17.43 A judge might reasonably say that a parent should be working longer hours or in more lucrative employment to meet child support obligations. A spouse is only required to support the other spouse to the extent that he or she is reasonably able to do so. This requirement does not impute the same degree of compulsion about it that the child support and child maintenance tests express. Thus a parent may be required or expected to work long hours or at more than one job if the parent has the capacity and opportunity to do so, and if the children need greater support than they would receive if the parent was only to work shorter hours. At the same time it might not be reasonable to expect an estranged spouse to avail himself or herself of such opportunities so as to provide maintenance for the other spouse. In the latter case it is a question of what is reasonable in the circumstances.
In this application the applicant bears the onus of proof.
The grounds for departure
The applicant claims that the current administrative assessment does not provide an adequate level of child support because both children have special needs that have involved the wife in considerable expense. In particular, she says that she has had to make the following expenditure:
a)Matthew's expenses for going
back to school in 2004 $129.20
b)Andrew's optical service payment in 2003 $203.80
c)Dental Surgery for both children $535.00
d)Podiatrist and orthotics costs
(some of which was covered by
Health Insurance $793.00e)Andrew's final year costs $375.00
f)Back to school costs – 2003 $4,202.23
The school costs referred to above are not the type of costs that might ordinarily be considered to fall within the notion of special needs as used in s.117(2)(b)(i)(B) of the Act.
There is no evidence to support the claims for the medical and dental costs claimed by the wife and no evidence that there will be any ongoing costs in the future. During the course of submissions it was suggested that Matthew might need braces, but no evidence of that requirement, or the likely cost was put before me.
This ground for departure is not made out.
The second ground relied upon by the applicant is that specified in s.117(2)(b)(ii) of the Act, namely that the child Matthew is being educated in a manner that was expected by his parents.
Matthew attends Iona College and has done so since 2000. I accept the applicant's submissions that Matthew was sent to Iona with the respondent's consent and that he agreed to pay 25% of the school fees, increasing upon certain conditions being met to 50%. There is documentary evidence to that effect. The respondent's attempt to avoid the effect of his agreement does him no credit.
For 2004, fees for Matthew to attend Iona were $2,199.00 excluding any other costs. The wife is currently indebted to Iona for about $8,000.00 for fees that have accumulated since 1999 (when Andrew commenced there).
I am satisfied that this ground is made out for each of the child support periods referred to in the table above after 1 July, 1998. Unfortunately, however, there is no evidence that there were administrative assessments in place for the period 30 September, 2000 – 1 May, 2004 and so I cannot take those periods into account
Matthew is being educated in the manner expected by his parents. Both parents agreed for Matthews's education to occur in such a way and there is convincing proof of the respondent's agreement.
The applicant also relies upon the ground specified in s.117(2)(c)(i). She says that the respondent does not:
a)disclose all of his earnings;
b)earn to his full capacity;
c)disclose all of his financial resources and property.
The respondent has never filed a response or an affidavit of evidence in chief. He gave some oral evidence and filed a form 13 financial statement.
He describes himself as a singer/performer and a singing teacher. He claims he earns $444.00 per week and has expenses of $570.00 per week. He lives in a home with Ms Jennifer Parish, whom he describes as his friend.
Ms Parish and the respondent have a long association professionally. The evidence satisfies me that in the past they have conducted business together under the name Operatif!. The respondent is described in publicly available literature (exhibited to the applicant's affidavit filed on 27 April, 2005) as the manager and driving force behind the establishment of Operatif!. Operatif! changed its name to Singing Brisbane in 2002, but I find, the respondent remained financially interested in that business. I cannot make specific findings about the nature or extent of the respondent's financial involvement in the business, but I am satisfied that he is so interested. The business of Singing Brisbane is increasing (see exhibit K1 exhibited to the applicant's affidavit filed on 27 April, 2005).
I reject the notion that Ms Parish is simply the respondent's friend.
I find that they are in both a financial and personal relationship. The respondent is described in publicly available material as Ms Parish's husband (exhibited to the applicant's affidavit filed on 27 April, 2005).
It is no coincidence that at the time the respondent was bankrupt, Ms Parish received an inheritance from the respondent's father's estate of $180,000. The terms of the will are drafted so that Ms Parish receives a share of the testator's estate, but if the respondent predeceased Ms Parish (and notwithstanding that she remained living), his children (not her) would take her share. If the testator's true intention was to benefit Ms Parish by the bequest, one wonders what purpose was served by passing her interest to the respondent's children in the event of his death, not Ms Parish's.
On 12 May 2005, I ordered that the parties produce the following documents:
a)The Respondent’s personal income tax returns for the past five (5) financial years:
b)Ms Parish’s personal income tax returns for the past five (5) financial years;
c)The financial statements for Operatif!/Singing Brisbane for the past five (5) financial years;
d)Copies of any and all invoices received by Operatif!/Singing Brisbane for services rendered by the Respondent for the past five (5) financial years;
e)Copies of the Respondent’s Suncorp bank statements for the past three (3) years;
f)Copies of the Respondent’s Citibank Mastercard statements for the past three (3) years;
g)The Applicant’s personal income tax returns for the past five (5) financial years.
Those orders were only partially complied with. The respondent and Ms Parish did not produce many of the documents ordered. Tax returns were produced for one the 2003/2004 year. The applicant did not produce her income tax returns either. The financial statements for Operatif! were not produced as ordered.
I am satisfied that the respondent has not made full and frank financial disclosure. Moreover, I am satisfied that he has not done so deliberately.
I am satisfied that special circumstances exist in this case. Those circumstances are the difficulty there is in identifying the respondent's true financial position and the intermingling of the respondent's and Ms Parish's financial affairs. I am satisfied that Matthew is being educated in a manner that was expected by his parents and that the costs of maintaining him are significantly affected.
Further, I am satisfied that in the special circumstances I have identified above, the provisions of the 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 respondent for the child because of the income, earning capacity, property and financial resources of the respondent.
Just and equitable
Section 117(4) of the Act reads as follows:
In determining whether it would be just and equitable as regards the child, the carer entitled to child support and the liable parent to make a particular order under this Division the Court must have regard to:
(a)The nature of the duty of a parent to maintain a child (as stated in section 3); and
(b)the proper needs of the child; and
(c)the income, earning capacity, property and financial resources of the child; and
(d)the income, earning capacity, property and financial resources of each parent who is a party to the proceedings; and
(e)the commitments of each parent who is a party to the proceeding that are necessary to enable the parent to support:
(i)himself or herself; or
(ii)any other child or another person that the person has a duty to maintain; and
(f)the direct and indirect costs incurred by the carer entitled to child support in providing care for the child; and
(g)any hardship that would be caused:
(i)to:
(A) the child; or
(B) the carer entitled to child support;
by the making of, or the refusal to make, the order; and
(ii)
(A) the liable parent; or
(B) any other child or another person that the liable parent has a duty to support;
by the making of, or the refusal to make, the order.
The applicant deposes that her weekly expenses for the children are $322.50. Most of that must relate to Matthew given that Andrew is at University, and according to the respondent is virtually self-sufficient. In addition to that there are his school fees of about $2,200 per year.
I find that Matthew's proper needs are in the order of $365.00 per week.
I am unable to make a proper finding about the respondent's financial circumstances. According to his 2004 income tax return he earned a gross sum of $18,499 ($21,808 less $1,277 depreciation and $2,032 in other expenses). Ms Parish earned a gross sum of $33,550 for the same period. Her gross revenue was, however, about $109,000 and there were significant deductions for non-cash expenses such as depreciation on her BMW motor vehicle (of which the respondent has free and unlimited use), and her investment property at Norman Park.
I am satisfied that the respondent has an interest in the real property situated at 11 Norman Cresent, Morningside. I am satisfied that he has financial resources being the ability to earn income through the structure that he has established with Ms Parish. At the very least, and without making any allowance for any deductions that might properly be claimable by them, their combined gross income appears to be in the order of $51,000 per annum. Given the failure to properly disclose their financial circumstances, I am inclined to think that in fact the combined income is more than they have disclosed.
The respondent claims a weekly expenditure of $570.00 per week.
The applicant earns $734.35 per week gross (about $38,000 per annum). She works as a customer service officer and earns $549.50 per week. She also receives parenting payment and Family Tax Benefit totalling $115.00 per week. She receives about $70.00 per week by way of child support and arrears of child support. She has expenses (excluding the children) of $529.70.
Given the objects of the Act and my findings about the income of the parties, I consider that the respondent should meet one half of the increased in Matthew's reasonable weekly needs by reason of his schooling at a private school. Matthew has been attending private school since 2000, but the only assessments in evidence are those to which I have earlier referred. The agreement in respect of the payment of school fees has been in place much longer than that.
The assessments for the periods 1 May, 2004 – 14 July, 2004, 15 July, 2004 – 9 October, 2004 and 10 October, 2004 – 31 July, 2004 should all be increased. For the period 1 May, 2004 – 14 July, 2004 the child support amount should be $182.83 per month or $2,193.96 per annum. For the period 15 July, 2004 – 9 October, 2004 the child support amount should be $477.33 per month or $5,727.96 per annum. For the period 10 October, 2004 – 31 July, 2004 the child support amount should be $348.83 per month or $4,185.96 per annum.
Otherwise proper
Section 117(5) of the Act is in the following terms:
(5) In determining whether it would be otherwise proper to make a particular order under this Division, the court must have regard to:
(a) the nature of the duty of a parent to maintain a child (as stated in section 3) and, in particular, the fact that it is the parents of a child themselves who have the primary duty to maintain the child; and
(b) the effect that the making of the order would have on:
(i) any entitlement of the child, or the carer entitled to child support, to an income tested pension, allowance or benefit; or
(ii) the rate of any income tested pension, allowance or benefit payable to the child or the carer entitled to child support.
I am satisfied that orders to reflect the above assessments are otherwise proper. I am satisfied that these parties have the ability to each contribute to the needs of their children.
Lump sum school fees
In F & S (2003) FMCAfam 531, Bryant CFM (as Her Honour then was) said in relation to school fees:
The principles… in relation to school fees can be summarised as follows:
(a)Where the non-custodian has agreed to the child attending a private school, that person is liable to contribute to the fees so long as and to the extent that he or she has a reasonable financial capacity to continue to do so;
(b)Where the non-custodian has not agreed to the child attending such a school, he or she is not liable to contribute to those expenses unless there are reasons relating to the child’s welfare which dictate attendance at the school rather than a non-private school. Then the non-custodian is required to contribute to the extent that he or she has a reasonable financial capacity to do so; and
(c)The mere fact that a non-custodian can afford the fees or is a wealthy person is not, in itself, a reason for imposing that liability.
As I have set out above, I accept that there is an agreement between the parties about school fees. The applicant calculates, and I accept, that the respondent's liability according to that agreement for the period from September, 1999 to December, 2003 is $3,435.12. That does not overlap with the periods in respect of which I will make departure orders.
I am satisfied that the respondent has had the financial capacity to meet his agreed obligation in respect of school fees. The respondent has not paid them, I find because of what he sees as the applicant's unreasonable attitude toward contact between the children and him. The wife has borne the burden of the school fees in the sense that she remains solely liable for them. I bear in mind the findings that I have made above about the respondent's financial circumstances.
In the circumstances, an order for a lump sum of $3,435.12 is appropriate. That amount should not be otherwise credited against the respondent's child support liability because in the special circumstances of the case that I have identified above, it would be just and equitable as regards the applicant and the respondent and otherwise proper that it be paid in addition to any other amounts of child support for which the respondent was, or is liable.
I make the orders set out at the commencement of these reasons.
I certify that the preceding sixty-three (63) paragraphs are a true copy of the reasons for judgment of Jarrett FM
Associate: S. Haysom
Date: 18 October, 2005
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