Duncan and Duncan
[2007] FMCAfam 393
•4 May 2007
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| DUNCAN & DUNCAN | [2007] FMCAfam 393 |
| CHILD SUPPORT – Variation of child support agreement – adult child maintenance – application dismissed. |
| Child Support (Assessment) Act 1989, s.117 |
| Bryant v Bryant (1996) 20 Fam LR 575 In the Marriage of Gilmour (1994) 18 Fam LR 646; [1995] FLC 92-591 Liesert v Nutsch [1996] FLC 92-665 Wild and Ballard (1997) FLC 92-771 |
| Applicant: | MS DUNCAN |
| Respondent: | MR DUNCAN |
| File Number: | MLM8179 of 2003 |
| Judgment of: | Connolly FM |
| Hearing date: | 30 April 2007 |
| Date of Last Submission: | 1 May 2007 |
| Delivered at: | Melbourne |
| Delivered on: | 4 May 2007 |
REPRESENTATION
| Counsel for the Applicant: | Self Represented |
| Counsel for the Respondent: | Mr Robinson |
| Solicitors for the Respondent: | Alan Wainwright J Okno & Co |
ORDERS
That the husband pay to the child, C, the sum of $250 per week until the completion of his arts course at M University together with all prescribed texts and course materials, gym membership, personal computer, public transport pass, union fees and the contribution towards the purchase of a motor vehicle on a dollar-for-dollar basis and finally private medical and dental insurance cover.
That the wife's application be otherwise dismissed.
That the wife pay the husband's costs fixed in the sum of $9700.
That the payment of the said costs be stayed for a period of six months.
IT IS NOTED that publication of this judgment under the pseudonym Duncan & Duncan is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT MELBOURNE |
MLM8179 of 2003
| MS DUNCAN |
Applicant
And
| MR DUNCAN |
Respondent
REASONS FOR JUDGMENT
The proceedings
This is an extempore judgment arising from the wife's application for a variation of a registered child support agreement. The proceedings were originally commenced by the husband, seeking orders that he spend more time with the children and the wife responded by seeking a variation of the child support agreement dated 19 June 2003.
Ultimately in her amended response filed 22 January 2007, she also sought an order that the husband pay adult child maintenance for the child, C, in the sum of $450 per week. The husband's proceedings with respect to the children were concluded with orders being made on
30 March 2006.
The wife's application is contained in her amended response, filed on 22 January 2007 and is supported by her affidavit and statement of financial circumstances filed on the same day. The husband's response is set out in his amended application filed 14 June 2006 and is supported by his affidavit filed 1 February 2007 and his statement of financial circumstances filed on 8 September 2006.
The background
The husband is 48 years of age. He is employed as an executive with
[I] Australia where he has worked for some 20 years. He resides with his wife, F, who he married in 2006. She has two children aged 17 and 13 and they live with the parties at Property P. The husband's income is apparently $547,000 per annum and his full financial circumstances are otherwise set out in paragraphs 14, 15 and 16 of his affidavit and in his Form 13.
The wife is 47 years of age, she is involved in home duties and lives at Property M with the three children of the marriage. The property in which she resides was recently valued at $2.2 million and is unencumbered. The wife's income is some $770 per week, which is made up $244 a week from the sole parent's pension and $526 per week, the child support for H and L.
The parties married in 1982 and separated on 4 August 2002. There are three children of the marriage, C, 19, H, who is currently 16, and L, is 13 years of age, nearly 14. C completed his secondary studies at
G School at the end of 2006. He is currently enrolled in an Arts course at M University. H is doing her year 12 at S School and L is in year 8 at the same school.
On 20 June 2003, final orders were entered into with respect to the children and financial matters. The children were to live with the wife and there were provisions for them to spend time with their father. The parties also signed a child support agreement on 19 June 2003 which was registered with the Family Court. The agreement provided that the husband pay periodic support for the children, as well as private school fees. Pursuant to the original agreement, the husband's liability was to cease if any of the children ceased to reside with the wife for less than 60 per cent of the time. During the year of 2004 and 2005, the husband sought additional time by agreement with the wife. The parties were unable to reach agreement as to additional time and ultimately the husband filed an application on 7 September 2005 for increased contact. Consent orders were entered into on 30 March 2006. As well as extending the time that the children would spend with their father, there was also an amendment to the child support agreement which deleted the provision for termination of the agreement in the event that the children ceased to reside with the wife for less than 60 per cent of the time.
Pursuant to her application, the wife sought an increase in the periodic amount to $450 per week per child and an extension of the time for
H to her 18th birthday in the event that she finishes her secondary education at the end of this year. By the time these proceedings commenced, the parties had agreed that the amount of $250 currently being paid by the husband for adult child maintenance for C was an appropriate amount but the wife was seeking an order that the husband pay at least $175 of that amount direct to her.
The husband's position was that he would continue to pay it directly to C. The amount of periodic child support that the husband was required to pay under the original agreement was $246 per week per child. That amount has been increased each year by reference to the increase in the CPI. The husband's unchallenged evidence is that since the agreement has come into effect he has paid the following amounts for the benefit of the children according to paragraph 10 of his affidavit: in 2003/2004 he paid the sum of $86 410; in 2004/2005 he paid $94 470; in 2005/2006 $105 918 and from July 2006 to January 2007 he estimates an amount of $64 000.
His further evidence, again unchallenged, is that he spent an amount of between $15, 000 and $20, 000 for food, utilities and holiday expenses while the children were in his care. He further says that he has had the children in his care for approximately 44 per cent of the time since 2004. Although following a disagreement with C in the middle of the year 2006, C has spent little or no time in his father's household.
The law
Counsel for the husband helpfully referred me to a number of authorities which set out the law with respect to the variation of a child support agreement. I do not propose to traverse all of those authorities because in my view the correct approach is set out in the most recent of those decisions, that of the Full Court in Wild and Ballard (1997) FLC 92-771 and the judgment of Ellis, Kay and Gun JJ. The judgment also encapsulates the other decisions referred to by counsel.
I adopt and incorporate into my reasons for judgment the following‑paragraphs from that decision. Commencing at page 844‑91:
In Bryant v Bryant (1996) 20 Fam LR 575 the Full Court (Fogarty, Finn and Kay JJ) said (at 578-9):
“While it might be said that the Full Court did not in Gilmour [(1995)FLC 92-591] expressly decide the issue of the correct approach to the variation of child support agreements, that issue has now been put beyond doubt by the decision of the Full Court (delivered on 29 February 1996) in Liesert v Nutsch [1996] FLC 92-665
That case raised squarely the issue of the approach to be adopted by the court to an application to vary a child support agreement, and in relation to that issue Kay J (with whom Nicholson CJ and Mushin J agreed) said ( at FLC 82,877–8):
“In any event, in my view, his Honour has approached his task here with a misapprehension of his obligation. The obligation is set out in s 117 of the Child Support (Assessment) Act. To the extent that the statute is a difficult statute enshrouded in fog and that it may not have been seen to be as clear as possible, the Full Court in the Marriage of Gilmour (1994) 18 Fam LR 646 [1995] FLC 92-591 endeavoured to bring in a very large fan and blew away the mist that hides some of the meaning of the section. Some may say in doing so they replaced fog with dust, others say the horizon is now clear.
It was held in Gilmour’s case that where it is sought to vary an order for departure or to vary a child support agreement for payment of periodic payments, that the mandatory way to approach the matter is via s 117 of the Child Support (Assessment) Act.”
Section 98(1) of the Child Support (Assessment) Act provides that:
"(1) Where:
(a) under section 95, provisions of a child support agreement have effect, for the purposes of Part 5, as if they were a court order of a particular kind; and
(b) the agreement, or those provisions of the agreement, are registered in a court having jurisdiction under this Act;
the provisions may be discharged, suspended, revived, or varied by the court in the same manner and in like circumstance as the court could discharge, suspend, revive or vary an order of that kind made by it.
Now if the literal words of the section are not perfectly clear to the reader, the Full Court in Gilmour’s case interpreted the section as saying effectively: where you have a child support agreement calling for the payment of periodic payments and you wish to make other arrangements other than those that you are obliged to make under the agreement, then you need to establish that there are special circumstances that would enable a court to depart from the provisions of the agreement, and you need to establish that one of the grounds for departure set out in s 117(2) of the Child Support (Assessment) Act is made out; and then you need to establish the other legs of s 117, namely that the departure sought is just and equitable as regards the child, the custodian entitled to the child support and the liable parent, and it is otherwise proper to make a particular order under the Division.
Thus if any doubt could be said to have existed regarding the correct approach to an application for the variation of a child support agreement as at the time that the present case was heard and determined, the decision in Liesert v Nutsch has now put beyond doubt that it is necessary for the court in determining an application to vary the periodic payment provisions of a child support agreement, to proceed according to the provisions of s 117(2) of the Assessment Act, and that no regard is to be had to other statutory provisions (such as s 66N(2) and s 83(2) of the Family Law Act, or s 129(2) of the Assessment Act), which require a change of circumstances to be established before an order for child or spousal maintenance, or for child support in a form other than periodic cash, can be varied.
I also adopt and incorporate the provisions of s.117(2)(a), (b) and (c) of the Child Support (Assessment) Act 1989 (Cth) into my reasons for judgment:
(2) For the purposes of subparagraph (1)(b)(i), the grounds for departure are as follows:
(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 any other child or 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
(iv) high costs involved in enabling a parent to care for any other child or another person that the parent has a duty to maintain;
(b) that, in the special circumstances of the case, the costs of maintaining the child are significantly affected:
(i) because of high costs involved in enabling a parent to care for the child; or
(ia) because of special needs of the child; or
(ib) because of high child care costs in relation to the child; or
(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 the child; or
(ia) because of the income, property and financial resources of either parent; or
(ib) because of the earning capacity of either parent; 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; or
(iii) because an amount (the additional amount ) of a liable parent's child support income amount was earned, derived or received by the liable parent for the benefit of a resident child or resident children of the liable parent; or
(iv) because an amount (the additional amount ) of an entitled carer's child support income amount was earned, derived or received by the entitled carer for the benefit of a resident child or resident children of the entitled carer.
Conclusions and findings
The wife's claim for a variation of the child support agreement are based on a number of grounds. Firstly, she claimed that H is now finishing school 12 months earlier than was anticipated at the time the agreement was first entered into. She was very firm in her evidence about this, despite rigorous cross‑examination on the topic. Yet, on the second day of the hearing, when confronted with a letter from the school, indicating H was to be promoted from year 7 to year 8, that letter being dated 29 May, it became clear that there was no basis to this claim. Indeed it was difficult to draw any other conclusion than that she deliberately lied about the issue. Furthermore, whilst this was the main basis for her application to vary the agreement during the hearing, it was not part of any affidavit material relied upon by her.
The second ground for seeking a variation of the agreement was that the cost of maintaining the children had risen significantly. Her evidence on this issue did not support that contention. Indeed, the costs that the wife claimed with respect to maintaining the children in 2003, that is $1349 per week, was slightly higher than those costs claimed in her current financial statement of $1256. Further, the wife's evidence as to her income and expenditure did not stand up to cross‑examination. Aside from money spent on her various credit cards totalling about $58,000 per annum, she was unable to say with any precision on what the moneys were spent, or where they came from. Although it is clear her mother has been generous to her during the last three years.
She says that the total cost that she has paid to the legal practitioners amounts to $125,000 approximately. These relate to three lots of legal proceedings, those in 2003 being the initial children's orders, as well as the property and financial orders of 2006 when the children's orders were varied to extend the contract time and the child support agreement was also varied, and the current proceedings. There is no detail or breakdown of those costs, nor does she provide any proof of payment. In any event, the 2003 costs and 2006 costs should have been known to the wife at the time that the agreement was varied of March of 2006. Any costs relating to the current proceedings can be dealt with at the conclusion of these proceedings. In my view they provide no ground for varying the agreement.
Finally it would appear that the wife has done little to avail herself of any opportunity to earn some income. She has a number of qualifications which she obtained before the marriage and more recently has obtained further qualification and indicated to the court that she intends to commence her own business when these proceedings are completed. She did not however provide any explanation as to why she had not done so earlier or why she has not looked for employment during the last three years. Furthermore, during this three or four year period, she has enjoyed a very comfortable lifestyle. She has had a number of overseas and interstate holidays. She has a $2.2 million residence which is unencumbered and she clearly has a capacity one way or the other to generate income to support the lifestyle that she has enjoyed. In my view it is not the obligation of her husband to do so albeit he has a very substantial income totalling some $547,000 per annum, which has increased by about 8 per cent on his previous disclosed figure of $507,000. I am satisfied that he has met all of his obligations pursuant to the agreement and has made additional contributions as indicated in his affidavit material.
Certainly, I do not accept the wife's view that the non-payment of bus fees is a ground for setting aside the agreement. It is clear from the evidence that she could have spent a very much smaller amount on the children's travel if she had chosen to do so. If indeed the bus costs are an amount the husband is required to pay pursuant to paragraph 3.2 of the agreement then her recourse should have been to enforce an application.
I am satisfied in all of the circumstances that the wife has made out no grounds for a variation of the child support agreement under the headings contained in s.117(2). The issue of what should happen with H next year is a matter than in my view is not appropriate to determine until she has completed year 12. In the very likely event that she gains a tertiary placement next year, the husband has indicated that he will make similar provisions for her to those he has now made for C.
As I have already indicated, the amount of C's adult child maintenance has been agreed at $250 per week. In my view that is an entitlement that C has and it is appropriate for the wife to negotiate some arrangement with him for reimbursement for some of the benefits that she provides. Although it is important to recognise that she has an obligation to continue to provide some support herself as well.
I certify that the preceding twenty (20) paragraphs are a true copy of the reasons for judgment of Connolly FM
Associate: Averil Manners
Date: 15 June 2007
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