Gingham and Gingham
[2007] FMCAfam 254
•23 April 2007
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| GINGHAM & GINGHAM | [2007] FMCAfam 254 |
| CHILD SUPPORT – Application for departure order – application that father pay private education costs – application for lump sum assessment. |
| Child Support (Assessment) Act 1989, ss.3, 35, 115, 116, 117, 122, 123, 124, 128 |
| Prpic v Prpic (1995) FLC 92-574 Bendeich & Bendeich (1993) FLC 92-355 Lightfoot v Hampson (1996) FLC 92-663 Ivanovic v Ivanovic (1996) FLC 92-689 Gabbard & Gabbard [2006] FMCAfam 477 Gyselman & Gyselman (1992) FLC 92-279 F & S [2003] FMCAfam Mee & Ferguson (1986) FLC 91-716 Luton v Lessels (2001) FLC 98-015 |
| Applicant: | MS GINGHAM |
| Respondent: | MR GINGHAM |
| File number: | BRM2665 of 2003 |
| Judgment of: | Wilson FM |
| Hearing date: | 5 December 2006 |
| Date of last submission: | 5 December 2006 |
| Delivered at: | Brisbane |
| Delivered on: | 23 April 2007 |
REPRESENTATION
| The Applicant in person: | Ms Gingham |
| Solicitors for the Applicant: | N/A |
| Counsel for the Respondent: | Mr Hamwood |
| Solicitors for the Respondent: | Crowley Greenhalgh |
ORDERS
That the application filed 24 May 2006 be dismissed.
IT IS NOTED that publication of this judgment under the pseudonym Gingham & Gingham is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT BRISBANE |
BRM 2665 of 2003
| MS GINGHAM |
Applicant
And
| MR GINGHAM |
Respondent
REASONS FOR JUDGMENT
[X] was born [in] 1997. His mother, the applicant, seeks orders from the court compelling his father, the respondent, to pay additional monies by way of child support. Essentially, the relief that the applicant seeks is to compel the respondent father to pay private school fees for the child for the school year commencing in 2007. Although the application specified one school in particular, the application can be dealt with at a more general level – should the father be required to pay, either in addition to, or as part of, his child support obligations, the costs of a private school education for his son, who is now in year 4 at primary school.
By application filed 24 May 2006, the applicant sought the following orders:
a)Father to pay all private tuition education and associated costs for [X] directly to the provider of these services
b)Father to pay $11130 to [B] School by Dec 2006 and $6850 within 7 days of order.
c)Father to pay $2306 to [B] School uniform shop by Oct 2006 and $294.06 to [B] School stationary (sic) by Oct 2006.
The orders sought were contained in an application entitled “Child Support – Application for Departure Order”. Ordinarily, one would understand that to be an application for a departure order under s.117 of the CSA Act. However, by order of Jarrett FM on 17 July 2006 it was “noted” that the mother’s application filed on 24 May 2006 be treated as an application under s.124 of the Child Support (Assessment) Act 1989 (“CSA Act”) for an order that there be provision of child support other than by way of periodic payment paid to the parent entitled to such payments.
The response of the respondent father seeks simply that the mother’s application be dismissed.
A proper treatment of the application requires the court to consider not only s.124 of the CSA Act but other provisions of Part 7 Division 4 and Part 7 Division 5 of the CSA Act.
I should make it clear from the outset that the decision of this court can only be made on the evidence presented to it. At times, particularly during her closing submissions, the applicant made an impassioned plea to the court for orders that her former husband pay for the private education of their only child. I accept that the applicant honestly believes that a private education will benefit her son, and is necessary to meet his needs. That belief cannot, however, be a substitute for evidence to establish each of these propositions. Unfortunate as it may be, the court cannot act according to notions of what is fair or morally appropriate, but rather must apply the terms of the applicable statute having regard to the admissible evidence and binding case authorities.
In that regard, the applicant, who appeared for herself, suffered from the disadvantage that, not being cognisant of the rules of evidence, sought to put before the court much inadmissible material. Some of it was objected to by counsel for the respondent, other parts were objected to in an affidavit by the respondent’s solicitor, and then the respondent’s counsel made the submission, recorded at pages 19 and 20 of the transcript that invited the court to take the approach which is said to be common in this jurisdiction and in the Family Court of Australia “of stating that where evidence in an opponent’s affidavit consists of lay opinion, argument or irrelevant material, you will ignore it…”
If that is the practice that is common in this jurisdiction (as to which I make no judgment) it is to be deprecated. A court should not be provided with material said to be both admissible and inadmissible and be asked to decide for itself which of the material is admissible and which is not. If a party intends to object to the court receiving and relying upon evidence from the other party, objection should be taken to that evidence in the conventional way. That objection can then be ruled upon. That is the practice that I followed in the present case regarding the evidence of Dr L and Professor S. Objection was taken, argument ensured, and a ruling was made. It is quite inappropriate to then expect the court to sift through the remaining affidavit material and determine what is or is not admissible.
The affidavit material of both parties, but particularly that of the applicant, suffers from an absence of relevance to the issues to be decided on this application. The applicant, through no fault of her own, is unable to afford legal representation and has no grasp of principles such as the rule against hearsay, inadmissible opinion evidence, or the like. That is unfortunate. This is not an isolated case. Many litigants who, for one reason or another, represent themselves, suffer from the same disadvantage.
However, at the end of the day, it seems to me that the issues in this case are capable of being distilled from the mass of paper that has been put before the court in a way that refers to and relies upon evidence that is admissible in the ordinary meaning of that term. Before turning to that evidence, it is necessary to outline the relevant law that governs the present application.
The first question that must be addressed is whether Part 7 Division 5 of the CSA Act confers an independent source of power to order child support otherwise than in the form of periodic payments, or whether that Division limits the power to the substitution of non-periodic support for assessed periodic support. This is important because, if Part 7 Division 5 of the CSA Act confers an independent source of power it does not require the court to embark upon the exercise of examining whether a departure order should first be made under section 117 of the CSA Act. It would also permit the making of an order for lump sum child support over and above that assessed administratively.
Section 122 of the CSA Act provides:
This Division applies where a carer entitled to child support wants a liable parent to provide, or a liable parent wants to provide, child support for a child otherwise than in the form of periodic amounts paid to the carer entitled to child support.
This section by its terms suggests that orders made pursuant to Part 7 Division 5 of the CSA Act are in addition to, and not in substitution for, assessments of periodic child maintenance. There may, of course, be cases where periodic assessments are capitalised into a lump sum. As the Full Family Court observed in Prpic v Prpic (1995) FLC 92-574 at 81,688, capitalisation orders may well be appropriate where there are difficulties in enforcement or where it is proper to sever the financial link between the parties. Their Honours said that, as a general rule, given that payments of child support depend upon circumstances prevailing from time to time, which circumstances cannot be predicted with any significant degree of certainty, the provision of child support by way of lump sum should not be considered to be a readily available alternative but one that is only exercised where there are circumstances that make it appropriate to do so. Their Honours endorsed the observations of Mushin J in Bendeich & Bendeich (1993) FLC 92-355 at 79,954 as to the general inappropriateness of making lump sum orders.
Section 123 of the CSA Act provides:
(1) Application may be made to a court having jurisdiction under this Act for an order that a liable parent provide child support for a child otherwise than in the form of periodic amounts paid to the carer entitled to child support.
(2) An application:
(a) may only be made if an administrative assessment is in force in relation to the child, the carer entitled to child support and the liable parent; and
(b) may be made by the carer entitled to child support or the liable parent.
(3) Before hearing the application, the court must hear and determine any pending application made to the court for an order under Division 3 (administrative assessments more than 18 months old) or Division 4 (departure orders) in relation to the child, the carer entitled to child support and the liable parent.
(4) Subject to section 145 (Registrar may intervene in proceedings), the parties to the application are the carer entitled to child support and the liable parent.
For reasons that I will shortly state, I am satisfied that this court has jurisdiction under the CSA Act. There is an administrative assessment in force in relation to the child. The application is made by the parent (carer) entitled to child support. The parties to the present application are those required by s.123(4) of the CSA Act. The initial question that I posed above is reflected in s.123(3) of the Act which requires the court, before hearing an application for lump sum child support, to hear and determine any application for a departure order. That is, is it necessary for there to be an application for a departure order which may then be coupled with an application to make an order for lump sum child support, or is sufficient merely to make an application under ss.123 and/or 124 of the CSA Act?
Section 124 of the CSA Act provides:
(1) Where:
(a) a custodian entitled to child support or a liable parent makes an application to a court under section 123; and
(b) the court is satisfied that it would be:
(i) just and equitable as regards the child, the carer entitled to child support and the liable parent; and
(ii) otherwise proper;
to make an order that the liable parent provide child support for the child otherwise than in the form of periodic amounts paid to the carer entitled to child support;
the court may make the order.
(2) In determining the application, the court must have regard to:
(a) the administrative assessment in force in relation to the child, the carer entitled to child support and the liable parent; and
(aa) any determination in force under Part 6A (departure determinations) in relation to the child, the carer entitled to child support and the liable parent; and
(b) any order in force under Division 4 (departure orders) in relation to the child, the carer entitled to child support and the liable parent; and
(c) whether the carer entitled to child support is in receipt of an income tested pension, allowance or benefit or, if the carer entitled to child support is not in receipt of such a pension, allowance or benefit, whether the circumstances of the carer are such that, taking into account the effect of the order proposed to be made by the court, the carer would be unable to support himself or herself without an income tested pension, allowance or benefit; and
(d) the effect that the making by the carer entitled to child support of an application under section 128 (Pensioners entitled to apply to have assessed child support not reduced by more than 25%) would have on the order proposed to be made by the court (and any statement included in the order under section 125).
(3) 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 an order under subsection (1), the court must have regard to the matters mentioned in subsections 117(4), (6), (7), (7A) and (8).
(3A) In having regard to the earning capacity of a parent of the child under paragraph 117(4)(da), the court may determine that the parent’s earning capacity is greater than is reflected in his or her income for the purposes of this Act only if the court is satisfied as mentioned in subsection 117(7B).
(4) In determining whether it would be otherwise proper to make an order under subsection (1), the court must have regard to the matters mentioned in subsection 117(5).
(5) Subsections (2), (3), (3A) and (4) do not limit the matters to which the court may have regard.
As I observed to counsel for the respondent during the hearing of this matter, the terms of s.124(2) and (3) of the CSA Act suggest a separate consideration of an application for lump sum child support which would be largely redundant if the court was also required to consider the matters under s.117 of the CSA Act, in relation to an application for a departure order. That is, if an order for lump sum child support can not be made in the absence of an existing application for a departure order, why is it necessary in s.124 of the CSA Act to again consider the same matters as are required to be considered under s.117? This dilemma is compounded when s.125 of the CSA Act is considered. That section permits the court to order that the lump sum child support ought not be credited against any administrative assessment made by the Child Support Agency. That is, it can be in addition to, and not in substitution for, periodic child support.
When reading the statute according to its terms I formed the initial impression that Part 7 Division 5 of the CSA Act provided an additional remedy to carer parents to seek lump sum child support either in substitution for, or in addition to periodic child support assessed by the Child Support Agency.
However, the Full Court of the Family Court has considered these problems in two decisions: Lightfoot v Hampson (1996) FLC 92-663 and Ivanovic v Ivanovic (1996) FLC 92-689.
In Lightfoot v Hampson two nil assessments issued from the Child Support Agency. The mother applied for those assessments to be varied, and in lieu of periodic child support for a payment of a lump sum. The application was dismissed at first instance. Leave to appeal was granted by the Family Court of Western Australia. The mother also filed an application in that court for a departure order. The application for the departure order was dismissed but an order for lump sum child support was made. In essence, the intermediate justice considered that an order could be made under section 123 in the alternative to an order under s.117 of the CSA Act.
An appeal was brought against that decision to the Full Court. The court divided on the proper construction of the CSA Act. Fogarty J. set out the history of the CSA Act and the various amendments made to it. His Honour observed, at p.82,848:
“For the purposes relevant to this appeal there are, in my view, three essential features to this legislation. The first is that it provides for the administrative assessment of child support which is conclusive of the liability of the liable parent and of the entitlement of the custodian. That is, there is no additional liability or entitlement outside that provided for under the Act in cases that fall within it. The second is that it provides limited and exclusive methods by which the quantum of the administratively assessed liability and entitlement may be increased or decreased and, subject to the qualifications referred to hereafter in relation to Division 5 of Part 7, these are to be found in Part 6A and Division 4 of Part 7. Thirdly, the form of an assessment or departure order can be altered under Division 5 of Part 7 and/or section 141 which is in Division 8 of Part 7.”
In the course of his reasons Fogarty J referred to a number of provisions of the CSA Act including the definition of “child support” in section 5 of the Act which includes financial support by way of lump sum payment. His Honour also referred to Part 5 of the CSA Act which contains the central provisions of the legislation and which are used to calculate the administrative assessment of child support in accordance with the statutory formula. His Honour referred to s.35 of the CSA Act which provides:
This Division applies in relation to the assessment of child support payable for a child by a liable parent:
(a) except to the extent otherwise provided in Division 2 (Modifications of the basic formula for certain cases); and
(b) subject to any order made by a court under Division 4 of Part 7 (Orders for departure from administrative assessment in special circumstances); and
(c) subject to any provisions of a child support agreement that have effect, for the purposes of this Part, as if they were such an order made by consent.
Fogarty J then concluded that s.35 of the CSA Act provides three exceptions to the pervasiveness of the administrative formula in determining the quantum of liability for an entitlement to child support in cases which fall within its provisions. His Honour observed that Division 5 of Part 7 was not a specific exception. His Honour then concluded at p.82,849:
“In my view, Division 5 of Part 7, the other relevant portion of the Act in this appeal, is, subject only to the qualifications referred to later, concerned with changes in the form of the assessment or departure order and not with the quantum of the liability. I will refer to the provisions of Division 5 later but this conclusion, which is the critical issue in this appeal, follows, in my view, from the essential structure of the Act and its history.”
In discussing the structure of the Act and the ways in which administrative assessments of periodic child support can be altered, his Honour used the example of school fees at p.82,852 as follows:
“However, complications and uncertainties can arise because the form of this change is or can be different at the different levels. This is discussed in detail later but in summary, and using school fees as a convenient example of a more general issue, the position is as follows. Under Part 6A a review officer is confined to altering the quantum of the periodic assessment. Thus if he or she wished to take into account the payment of or liability to pay school fees the method by which that could be done would be confined to increasing or decreasing the periodic amount. However, the effect of Division 4, coupled with section 141, means that the court has much wider powers. It can alter the periodic amount or it can direct the liable parent to pay either a specific or ascertainable amount from time to time to meet the school fees or may direct the liable parent to pay those fees directly to the appropriate institution. In addition, the court, when it has made a departure order under Division 4, can, at the request of either party, employ the powers under Division 5 to order the liable parent to pay child support “otherwise than in the form of periodic amounts”; effectively “it can substitute” part or all of the periodic departure order by payments of particular or ascertainable amounts to the custodian from time to time to meet the school fees or direct payments to an appropriate institution. Finally, application can be made by either party direct to Division 5 from the original assessment so as to make a similar substitution order. Whichever way Division 5 is approached, the substitution order which it makes is subject to the 25% limitation contained in section 128 whenever that applies, effectively where the custodian is in receipt of an income tested pension, allowance or benefit.
Although the above summary appears complicated, it has, I think, been relatively well understood in the six years since the Assessment Act has come into operation and the appropriate components of it are applied in daily practice. The essential issue of difference in this appeal is whether Division 5 is confined to making the substitution order or whether, in addition, it is an independent source for making a child support order. In my view, subject to qualifications referred to later, the former is correct.
In highlighting these issues, I have used the school fees issues as a convenient example, but obviously these issue of difference have a wider application. If the alternate view is correct, in my opinion it represents a radical departure from the structure and policy of the Assessment Act and the manner in which it has been acted upon until quite recently.”
At p.82,854 Fogarty J said:
“Section 121 of this Division sets out its additional particular objects and are in the same terms as those in Division 4. In an attempt to ascertain which of the interpretations of Division 5 referred to previously are correct, little assistance is, I think, to be gained from reference to that section. It is ambiguous in the sense that it may be interpreted as indicating that Divisions 4 and 5 are to be combined to produce those outcomes or is indicating that they are independent methods of achieving those objects.”
His Honour observed that two aspects of s.123 of the CSA Act should be noted. First, there must be an assessment “in force”. Secondly, s.123(3) specifically requires that a departure application must be heard and determined before any application under s.123 is heard. Referring to ss.124, 125 and 128 of the CSA Act his Honour observed that in all three of these essential power sections the critical words are directed to the capacity to make an order for child support “otherwise than in the form of periodic amounts”, which indicates that Division 5 is a “substitution” provision. It enables the court where there is an assessment or departure order to alter the form of that assessment or order from its original periodic form. His Honour supported this conclusion by reference to a number of reasons at p.82,855.
His Honour observed that the “special circumstances” feature was absent in s.124 of the Act, a matter his Honour described as “conspicuous”. His Honour considered that the policy behind the CSA Act was essentially that the liability created by the assessment was, subject only to the review procedure, the total liability and entitlements. If Division 5 was to be seen as an independent and largely unfettered power to make an additional order it would throw that carefully structured process into confusion. His Honour said the reason why “special circumstances” was not included was because those special circumstances were either not relevant or had already been determined. His Honour considered that the argument that Division 5 was an independent source of power appeared to depend exclusively on the terms of s.125 of the CSA Act.
This discussion led his Honour at p.82,857 to say:
“In summary, my views about the scope of Division 5 are: -
a) essentially it is a substitution provision
b) it is not an independent source of power to make a child support order
c) it can lead to an increase in the total liability of the liable parent but only through the indirect path provided in section 125. That is, satisfaction of “special circumstances” justifying a non-credit against all or part of the existing assessment
d) this can not be done where the existing liability is nil as there is nothing to substitute and no source of credits
e) no matter who applies under Division 5 it can not lead to a decrease in the overall existing entitlement of the custodian.”
Purvis J agreed with Fogarty J. Kay J in dissent considered that Part 7 Division 5 of the CSA Act does create a head of power independent from Division 4 to increase the quantum of child support. In my view, his Honour’s dissenting judgment is a compelling one.
A differently constituted Full Court (Nicholson CJ, Baker and Rowlands JJ) in Ivanovic v Ivanovic expressed reservations about the correctness of the majority decision in Lightfoot v Hampson. However the court said that it was not sufficiently persuaded the decision was wrong and considered it should not express a contrary conclusion. On 2 December 1996 the High Court refused special leave to appeal in Ivanovic v Ivanovic. It has been thought by some commentators that this was an endorsement by the High Court of the approach of Fogarty J in Lightfoot v Hampson.
In my view, the decision in Lightfoot v Hampson is open to serious criticism. It seems the only reason why it continues to be applied is because practitioners, and the Child Support Agency, have continued to apply its reasoning. That is hardly a justification for the continued correctness of a decision if it does not accord with a proper construction of the language of the statute that governs applications of this sort.
Although I doubt its correctness, I am bound to apply the majority decision in Lightfoot v Hampson. That necessitates, in the present case, first determining the applicant’s application for a departure order under section 117 of the CSA Act.
Before embarking upon that issue I should state that I have considered whether the applicant has standing to apply for a departure order. Section 116 of the CSA Act provide:
(1) A liable parent or a carer entitled to child support may, in respect of an administrative assessment of child support for a child, apply to a court having jurisdiction under this Act for an order under this Division in relation to the child in the special circumstances of the case if:
(a) all of the following apply:
(i) the Registrar has, under section 98E or 98R, refused to make a determination under Part 6A in respect of the administrative assessment;
(ii) an objection to the refusal has been lodged under section 80 of the Registration and Collection Act;
(iii) the Registrar has disallowed the objection; or
(b) both of the following apply:
(i) the liable parent or carer entitled to child support is a party to an application pending in a court having jurisdiction under this Act;
(ii) the court is satisfied that it would be in the interest of the liable parent and the carer entitled to child support for the court to consider whether an order should be made under this Division in relation to the child in the special circumstances of the case; or
(c) in the case of a liable parent–the administrative assessment of child support payable by the liable parent for the child is made under subsection 66(1).
Note 1: For the orders that a court may make under this Division see section 118.
Note 2: With a court’s leave, a court may make an order under this Division in respect of a day that is more than 18 months earlier than the day on which the relevant application was made (see subsection 118(2B)). A person is taken to have applied under this section if leave is granted.
(2) An application may be made by the carer entitled to child support, or the liable parent, in relation to the child.
(3) Subject to section 145 (Registrar may intervene in proceedings), the parties to the application are the liable parent and the carer entitled to child support.
Section 115(b) is the only provision of s.115 of the CSA Act which could apply in the circumstances of this case. It is therefore necessary to consider whether the Registrar has either made or refused to make a determination for a departure order under Part 6A in relation to the child. In the present case, counsel for the respondent formally reserved his client’s right to rely on this argument to defeat the application, but advanced no meaningful argument in support of his opposition.
Exhibit G to the affidavit of the respondent filed 30 August 2006 is the most recent decision of the Child Support Agency before the court. It records that the objection decision was made under Part 6B of the CSA Act. It is not clear to what part of the Act reference was being made. The objection decision makes it clear that an assessment was made by the Child Support Agency for the respondent to pay child support. An application was made by the applicant mother to increase the amount of child support, which was successful, in part. The applicant objected to that decision. In part she sought an assessment for a higher amount, including an amount for the child’s private school education. This is referred to on the third page of the objection decision as follows:
“In total, Ms Gingham asks that $7274.00 for the year be added to her Child Support entitlement in addition to the SCO’s determination of $22,528 per annum.
Ms Gingham raised [X]’s attendance at a private boy’s school, [B] School, as that school has a program compatible with [X]’s circumstances regarding his special needs. She stated that the fees are $8352 per annum and will need to be paid in twelve monthly instalments from December 2005. Although she submitted medical opinion recommending his attendance and a provisional enrolment was mentioned, it appears that [X] may not be attending a private school this year or in 2006. Mr Gingham confirms this. There is no evidence that [X] has past the relevant entrance examinations. This matter may be addressed at a future time. For now, I am not satisfied special circumstances exist regarding the necessity of [X]’s private schooling in relation to his special needs.”
In my view, this should be construed as sufficient compliance with ss.115(b) and 116 of the CSA Act. The Registrar effectively disallowed the applicant’s objection, and the inclusion of private education expenses as a component of the child support to be paid by the respondent.
Therefore, having concluded that this court has jurisdiction to entertain the application under s.117 of the CSA Act, which it must do before turning to any order for lump sum under Part 7 Division 5 of the CSA Act, it is necessary to consider s.117 of the Act. That section provides:
Court may make departure order
(1) Where:
(a) application is made to a court having jurisdiction under this Act for an order under this Division in relation to a child in the special circumstances of the case; and
(b) the court is satisfied:
(i) that one or more of the grounds for departure mentioned in subsection (2) exists or exist; and
(ii) that it would be:
(A) just and equitable as regards the child, the carer entitled to child support and the liable parent; and
(B) otherwise proper;
to make a particular order under this Division;
the court may make the order.
Grounds for departure order
(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.
Note: Section 117A sets out provisions relating to income earned for the benefit of resident children.
High costs involved in enabling parent to have contact with child
(3) A parent’s costs involved in enabling the parent to care for a child can only be high for the purposes of subparagraph (2)(a)(iv) or (2)(b)(i) if, during a child support period, they total more than 5% of the amount worked out by:
(a) dividing the parent’s child support income amount for the period by 365; and
(b) multiplying the quotient by the number of days in the period.
High child care costs
(3A) The ground for departure mentioned in subparagraph (2)(b)(ib) is taken not to exist unless:
(a) the costs are incurred by the carer entitled to child support; and
(b) the child is younger than 12 at the start of the child support period; and
(c) the liable parent is not an eligible carer of any eligible child of whom both the liable parent and the entitled carer are the parents.
(3B) Child care costs can only be high for the purposes of subparagraph (2)(b)(ib) if, during a child support period, they total more than 5% of the amount worked out by:
(a) dividing the carer’s child support income amount for the period by 365; and
(b) multiplying the quotient by the number of days in the period.
Matters to consider for purposes of subparagraph (1)(b)(ii)
(4) 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, property and financial resources of each parent who is a party to the proceeding; and
(da) the earning capacity of each parent who is a party to the proceeding; 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) to:
(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.
(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.
Matters to consider for purposes of paragraph (4)(b)
(6) In having regard to the proper needs of the child, the court must have regard to:
(a) the manner in which the child is being, and in which the parents expected the child to be, cared for, educated or trained; and
(b) any special needs of the child.
Matters to consider for purposes of paragraph (4)(c)
(7) In having regard to the income, earning capacity, property and financial resources of the child, the court must:
(a) have regard to the capacity of the child to earn or derive income, including any assets of, under the control of, or held for the benefit of, the child that do not produce, but are capable of producing, income; and
(b) disregard:
(i) the income, earning capacity, property and financial resources of any person who does not have a duty to maintain the child, or who has such a duty but is not a party to the proceeding, unless, in the special circumstances of the case, the court considers that it is appropriate to have regard to them; and
(ii) any entitlement of the child or the carer entitled to child support to an income tested pension, allowance or benefit.
Matters to consider for purposes of paragraph (4)(d)
(7A) In having regard to the income, property and financial resources of a parent of the child, the court must:
(a) have regard to the capacity of the parent to derive income, including any assets of, under the control of, or held for the benefit of, the parent that do not produce, but are capable of producing, income; and
(b) disregard:
(i) the income, earning capacity, property and financial resources of any person who does not have a duty to maintain the child, or who has such a duty but is not a party to the proceeding, unless, in the special circumstances of the case, the court considers that it is appropriate to have regard to them; and
(ii) any entitlement of the child or the carer entitled to child support to an income tested pension, allowance or benefit.
Determinations in respect of paragraph (4)(da)
(7B) In having regard to the earning capacity of a parent of the child, the court may determine that the parent’s earning capacity is greater than is reflected in his or her income for the purposes of this Act only if the court is satisfied that:
(a) one or more of the following applies:
(i) the parent does not work despite ample opportunity to do so;
(ii) the parent has reduced the number of hours per week of his or her employment or other work below the normal number of hours per week that constitutes full‑time work for the occupation or industry in which the parent is employed or otherwise engaged;
(iii) the parent has changed his or her occupation, industry or working pattern; and
(b) the parent’s decision not to work, to reduce the number of hours, or to change his or her occupation, industry or working pattern, is not justified on the basis of:
(i) the parent’s caring responsibilities; or
(ii) the parent’s state of health; and
(c) the parent has not demonstrated that it was not a major purpose of that decision to affect the administrative assessment of child support in relation to the child.
Matters to consider for purposes of paragraph (4)(f)
(8) In having regard to the direct and indirect costs incurred by the carer entitled to child support in providing care for the child, the court must have regard to the income and earning capacity foregone by the carer entitled to child support in providing that care.
Subsections not to limit consideration of other matters
(9) Subsections (4) to (8) (inclusive) do not limit other matters to which the court may have regard.
In Gabbard & Gabbard [2006] FMCAfam 477 I set out my understanding of the principles applicable on a section 117 application. I repeat what I said in that decision, particularly at paragraphs 35 – 43. In summary, I concluded that existing case authority was largely unhelpful in determining what were “special circumstances”, the phrase which is the touch stone to the making of a departure order. It is plain that this court must apply Gyselman & Gyselman (1992) FLC 92-279. That requires the court to embark upon a three step process and determine:
a)whether one or more grounds of departure in s.117(2) is established; and if so,
b)whether it is just and equitable within the meaning of s.117(4) to make a particular order and
c)whether it is otherwise proper within the meaning of s.117(5) to make a particular order
In each of s.117(1) and 117(2) the phrase “special circumstances” is used. That phrase has never been satisfactorily defined. Again, I reiterate what I said in Gabbard & Gabbard in that regard.
The first step that I am required to undertake is to determine whether one or more of the grounds of departure set out in s.117(2) of the CSA Act exist in the present case. From my understanding of the evidence, only two grounds are relied upon by the applicant: ss.117(2)(b)(i)(B) and 117(2)(b)(ii). Dealing with each of those grounds in turn, the applicant asserts that the child [X] suffers from primary attention disorder with associated hyperactivity and dyslexia. In other parts of her evidence the applicant asserts that the child [X] suffers from attention deficit hyperactivity disorder. The child has been treated both by Dr L, paediatrician, and Professor S, an expert in child behaviour. In the decision of the Registrar (by A Corrigan) on 20 May 2005, it was accepted that the child [X] has special needs. It was accepted that [X] needed speech therapy and medication. The amount of child support payable by the respondent father was increased to include an allowance for speech therapy and medication. The child has ceased undertaking speech therapy allegedly because the applicant can not afford it, and the respondent has ceased paying for it.
The child currently attends [P] School. Because of behavioural problems he was referred for assessment and a special needs teacher was engaged to assist him. Apparently there is a good deal of medical and other evidence pertaining to [X]’s condition. I ruled that reports of Dr L and Professor S were admissible only as to the diagnosis made of [X], namely that he has attention deficit hyperactivity disorder. Reports of a speech therapist, psychologist and the like are attached to the applicant’s affidavit filed 30 May 2006 but unfortunately such evidence is not admissible on the final hearing of the application. No effort was made to produce affidavits of the health professionals other than Dr L and Professor S. Their reports, or letters, suffer from the deficiencies that I identified when ruling that their evidence was largely inadmissible.
However, so far as s.117(2)(b)(i)(B) of the CSA Act is concerned the respondent father in his evidence accepted that the child has special needs. In his affidavit filed 30 August 2006 the respondent denies that the child does not fit into the general public schooling system due to his special needs. The respondent does not deny that the child has “special needs” but rather contends that the public schooling system adequately caters for them. The respondent refers to [X]’s special needs in a number of paragraphs in his affidavit.
In his affidavit filed by leave at the commencement of the hearing, the respondent father attached the child’s school report for the second semester in 2006. This report shows that in English with four exceptions (out of 16 categories) [X]’s results were either D (needs attention) or E (unacceptable). His results were better in Maths with the majority being C (satisfactory). There were in fact 2 Bs (very good). His effort in Maths was D (needs attention). In Integrated Studies he achieved a C. His assessment revealed a preponderance of Ds in this area. He achieved Cs in Physical Education and B in Music. The general comments of the school were:
“[X] has continued to receive support (from class teacher, teacher aide and learning support teacher) with his learning this semester. He has made some progress in reading and spelling but the standard of his work is still well below that which is expected at this level. His attitude towards tasks is more positive than previously and he is sometimes now more willing to attempt work which he finds challenging. However he is often reluctant to join in whole class activities. If he continues to try and to practice spelling, handwriting and reading he should continue to improve. He will continue to receive learning support next year. It has been pleasing to see him happy and mixing more with other members of the class. [X] has a love of science and technology. He has been on level 1 behaviour all semester.”
This supports to a large extent the respondent father’s contention that [X] is improving at school, albeit slowly. In his evidence before the court the respondent father agreed that the child did need ongoing support especially with his literacy and other skills (T97.15). The father contended that the school report highlighted that [X] need to be in a nurturing and familiar environment. The father agreed (T97.20) that [X] had some learning difficulties but contended that they were overstated or sensationalized by the applicant mother. The father contended that [X] had made considerable progress in his schooling.
The applicant mother asserted that the child did not fit into the general public schooling system due to his special needs. She said that he struggled every day and the government schooling system was simply unable to cater for him. The mother asserted that a private school such as [B] School catered for a large number of boys like her son and also had a centre for managing academic potentially gifted education, which suited [X]’s special needs. The applicant said that [B] School was the only all boys school within a suitable demographic location that provides all the support facilities that [X] needs.
The applicant further asserts that by late 2002 it was clearly evident that the government schooling system was unable to cope with [X]’s special needs. It is for that reason that the applicant seeks to compel the respondent father to pay for private education at a school such as [B] School. On the other hand, the respondent father says that no medical practitioner has specifically said why [X] needs to attend a private boys school and he does not admit that [B] School provides a curriculum which is able to accommodate [X]’s special needs nor that it is the only school that can do so.
I am prepared, on the basis of the admissible evidence before the court to conclude that [X] does have special needs. However, that is not all that has to be proved to justify the making of the departure order. The applicant must demonstrate “special circumstances”. I am prepared to accept that special circumstances are demonstrated in the present case notwithstanding the vague meaning that has been accorded that term. Here the court is confronted with a case where a child has a diagnosed medical condition that requires additional help, a father who is in receipt of a large income and a mother who is bankrupt. In my view, each of those factors taken either individually or together constitute special circumstances sufficient to satisfy the primary or threshold consideration in each of the categories mentioned in s.117(2) of the CSA Act. It must also be proved that those special needs significantly affect the cost of maintaining the child. That can only be proved in the present case if it is accepted that [X]’s needs can only be met in a private school as opposed to in the state school system.
It is in that respect that the evidence is unfortunately very lacking. The applicant has convinced herself that only a private school such as [B] School can offer [X] the education he needs and which accommodates his special needs. There is, however, no evidence to support that belief however well intentioned and honestly held it may be. In particular there is no evidence from [B] School itself which supports a finding that that school as opposed to any other, provides facilities which properly cater for [X]’s special needs, being his learning difficulties and behavioural difficulties. The applicant has obtained information which suggests that the [B] School has a program for gifted students as well as for students with attention deficit disorder. There is no evidence that [X] fulfils the criteria of being a gifted student. Nor is there any evidence that the program offered at [B] School (whatever that program may be, because it was not put into evidence) deals with [X]’s special needs. There is also no evidence from the teaching staff from [P] School that [X] cannot be properly educated at that school, nor that the school cannot cope with his special needs. It has invested additional resources into the education of [X] and has provided him with additional assistance. His most recent report reflects an improvement in his performance in his schooling. The absence of evidence, as opposed to assertion from the applicant, that the present school cannot cope with [X]’s needs, and that a private school can, compels the conclusion that a ground for departure is not established.
Further there was no evidence that a private school education, as opposed to a state school education, was required to meet the child’s special needs. Indeed, at [P] School, where the child is currently attending, he has been afforded additional help in the form of a teacher’s aide and learning support teacher. There is no evidence that any additional facilities would be made available at a private school. I therefore conclude that the ground referred to in s.117(2)(b)(i)(B) is not made out on the evidence produced to the court.
So far as s.117(2)(b)(ii) is concerned, evidence was given by each of the applicant and the respondent about their intentions regarding the education of [X]. Further, evidence was given by Ms D, in support of the applicant.
In F & S [2003] FMCAfam Bryant CFM (as her Honour then was) considered whether a father should be ordered to pay private school costs. Her Honour observed that the question of the payment of school fees was dealt with by the Full Court of the Family Court in Mee & Ferguson (1986) FLC 91-716. Her Honour said, at para [15] that the principles that emerge from that case 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 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 dictated tendance 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.
Her Honour observed that although Mee & Ferguson was decided prior to the introduction of the CSA Act the reasoning has been applied to Child Support cases. Her Honour’s summary of the principles is no more than a reiteration of the judgment of the court at p.75,201.
In the present case, it is asserted on behalf of the applicant that an agreement was made to the child [X] attending a private school. In that regard the applicant relies on a conversation held on Christmas Day 1998 at which the respondent allegedly stated to persons present including Ms D that [X] would be attending [B] School. Ms D gave evidence before me, which I accept. She swore an affidavit in which she stated that the respondent instructed his wife to enrol their son at the school to ensure that he would achieve a place. Although the conversation took place in a social context I am satisfied that it occurred as the applicant and Ms D contend. The respondent accepted in his evidence that he would have attended the social gathering at which the alleged conversation took place. He also recalls there being a conversation on schooling (T106). Prior to the social gathering the applicant and respondent attended a presentation by a number of private schools at the Brisbane Entertainment Centre. This supports a conclusion that the applicant and the respondent have turned their minds to the education of their son and at least on a preliminary basis had formed the intention that he be educated at a private school. At T106 the respondent father says that he does not recall an agreement about [B] School but does remember discussing that he would like for [X] to go to a private school “ultimately” or “potentially”. He says there was certainly no time line as part of the discussions.
The respondent accepted at T106 that [X] would eventually go to a private school. This is consistent with the parent’s expectations, and indeed with the respondent father’s own background. Though he (and the applicant mother) were educated at secondary level at a government school, the respondent father has completed significant tertiary education at a private institution. Given his high levels of income, which I will shortly discuss, I have little difficulty in concluding that the respondent father expected that his son would eventually attend a private school.
Unfortunately there is little particularity in the applicant’s evidence about when the child was to commence schooling at [B] School. The evidence in this regard was very non specific. There was no evidence of an agreement, for example, that the child would have all of his education at a private school, or that he would start private school at a certain age. The evidence concerning the discussion in 1998 was equally susceptible to the interpretation that the child would attend a private school for all of his education, both primary and secondary, as it was that he would attend a private school for his high school education.
However, s.117(2)(b)(ii) of the CSA Act does not require that there be an agreement between the parents but rather evidence of the parent’s expectations that the child be privately educated. I am satisfied that in this case both parents had the expectation that their son [X] would be attending a private school. However, I can not accept that such expectation extended to [X] attending a private school for his primary education.
Therefore I am not satisfied that the ground referred to in s.117(2)(b)(ii) of the CSA Act is made out in this case.
I therefore conclude that no ground for departure mentioned in s.117(2) exists in the present case, at this point in time. The mother’s application must, therefore, be dismissed.
I should, however, deal with other matters argued by the parties in case a different review is taken of my conclusions elsewhere. If there was evidence that the child could only be satisfactorily accommodated in private school education then I would make a departure order in the present case. I am required, before doing so, to consider whether such an order would be just and equitable. Section 117(4) of the CSA Act requires me to have regard to a number of factors in making that determination. The first of those factors is the nature of the duty of a parent to maintain a child, as stated in s.3 of the CSA Act. Aspects of the statutory scheme where considered by the High Court in Luton v Lessels (2001) FLC 98-015. In that case, Gaudron and Hayne JJ said (at page 95,659):
“The Assessments Act records that “parents of a child have the primary duty to maintain the child”. This duty is said, by the Assessment Act, a) to be not of lower priority than the duty of the parent to maintain any other child or another person; b) to have priority over all commitments of the parent other than commitments necessary to enable the parent to support himself or herself and any other child or another person the parent has a duty to maintain; c) to be not affected by the duty of any other person to maintain the child or any entitlement the child or another person may have to an income tested pension, allowance or benefit… The principle object of the Assessment Act is said to be “to ensure that children receive a proper level of financial support from their parents”.”
In the same case Gleeson J said at page 95,653:
“It may be observed that, although the legislation is enacted in furtherance of a clearly defined public policy, it creates a distinctly person liability. The natural and moral obligation of the parent to support a child becomes, by force of the legislation, a legal obligation reflected in a debt, calculated in accordance with the Assessment Act, owing by a parent to a carer of the child.”
Thus, if [X]’s needs justified the provision of a private school education, the nature of his father’s duty to maintain him mandates the provision of such education provided the father could afford to do so. Similarly, if the needs of the child require the provision of such education, again it should be provided.
Much effort was spent in the present case by both parties in exploring the earning capacity and financial resources of the other. The applicant is a bankrupt, and is not presently working. As a result of property settlement proceedings brought in the Family Court of Australia, the applicant received a modest sum of money. Cross examination of the applicant was intending to show that she has greater financial resources than she has disclosed, by reference to her riding a valuable horse, taking that horse in a float, competing in various equestrian events, and presumably feeding and housing the horse. In my view, none of these attacks upon the applicant succeeded. The applicant offered a plausible explanation as to the ownership of the horse (her sister), the provision of the horse float (by Mr and Mrs A), and the circumstances by which she was able to travel to and from equestrian events such as that in Victoria. It was put to the applicant that the arrangements with her sister, who was said to be the owner of the horse, were a sham. However, the respondent led no evidence to establish that proposition. Having not gained any concessions from the applicant in cross examination, and leading no positive evidence to contradict it, leaves me with a clear impression that the applicant’s financial resources are not greater than those than she has disclosed.
The applicant herself embarked upon a crusade to uncover evidence of further income and assets which her former husband was thought to have owned. Multiple subpoenae were issued to this end. No doubt some of the applicant’s concerns regarding the financial position of her former husband stemmed from the animosity between the applicant and the respondent’s current partner, Ms K. The applicant is convinced that the respondent and Ms K intermingle their finances and that assets owned by Ms K are paid for using money from the respondent. Again these attacks failed to prove what they set out to. However, I was satisfied, having regard to the applicant’s skilful cross examination of the respondent that the respondent would, if orders were so made, have the financial capacity to meet the cost of private school education for his son, despite his protestations that he is unable to afford to do so. The applicant demonstrated that the respondent’s taxable income in the 2005/2006 financial year was in the order of $277,000.00. She also demonstrated that his financial statement was inaccurate in so far as it claimed that superannuation was deducted on a weekly basis in the amount of $403.00. This amount was in fact paid by the respondent’s employer over and above his income. The amount of superannuation was in fact $348.00 per week, and the respondent accepted the error in this regard (at T57-8). This demonstrates that the respondent would have an additional $15,000.00 – $20,000.00 per annum available to him beyond that asserted in his financial statement. Further, in his financial statement the respondent claims to pay $1,000.00 per week to his solicitors in payment of outstanding legal expenses. However, the outstanding legal expenses would be fully discharged, at this repayment rate, by the present time. It is fair to say that the respondent would have incurred additional legal expenses pertaining to these proceedings but one would still expect that the respondent would have up to $4,000.00 per month available to him following the discharge of his obligation to his solicitors.
It is unnecessary to delve any further into the financial affairs of the respondent. By combination of the two amounts just identified I am satisfied that the respondent would have the financial capacity to pay private school education for his son. Two observations should be made. The first is that merely because the respondent is able to afford the fees is not of itself a reason for imposing that liability (see F & S, supra). However, having concluded that the respondent has probably agreed, and certainly expects, his son to undertake private schooling at least at the secondary level, in my view this does not present an obstacle to an order being made in the future that such education be funded by the respondent father. The second observation that should be made is this. It is unfortunate that the respondent has chosen to expend large sums in legal fees, including in this litigation, when those monies could more usefully have been spent on caring for and educating his son.
The respondent gave evidence that the property settlement proceedings with the applicant (that lasted five days in the Family Court) have set him back considerably, from a financial perspective, and he wishes to accumulate assets in the future. However the respondent’s obligations as a parent to maintain his child (which in my view includes properly educating that child) must take priority over that ambition. As the High Court made clear in Luton v Lessels, supra, the priority of the child’s proper maintenance is of a higher order than commitments of the respondent other than those necessary to enable him to support himself. If one accepts the respondent’s evidence that he and Ms K do not support each other, but rather keep their finances separate, then the evidence plainly demonstrates that with his spare financial capacity, the respondent could meet the necessary private education expenses for his son.
Finally, I would conclude that it would be otherwise proper to make an order that the respondent pay for the private education costs of his son, if evidence sufficient to satisfy s.117(1)(b) was adduced. This is because the respondent would have financial capacity to pay for that education and he and the applicant expect that such education be provided to their son.
Although it is a matter for another day (which hopefully will not result in further litigation) I observe that, having concluded that both parents expect that [X] will receive a private education at some stage of his life, and given the father’s financial capacity to provide that education, one would expect that from grade 8 [X] would receive that private education and that the father will pay for it, in addition to his other child support obligations. That is, provided the father’s financial position does not markedly deteriorate, I would expect that the father would pay for all of the child’s private education expenses, over and above his child support assessment, once the child reaches high school.
I am of the view that the applicant mother brought these proceedings in good faith and with a view to providing the best possible outcome for her son. Unfortunately, the evidence does not support making the orders that she seeks. In the circumstances the orders I make are as follows:
a)That the application filed 24 May 2006 be dismissed.
I shall hear the parties as to costs.
I certify that the preceding sixty-eight (68) paragraphs are a true copy of the reasons for judgment of Wilson FM
Associate: Lynnette Chin
Date: 23 April 2007
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