Hampson & Bailey
[2013] FCCA 1004
•2 August 2013
FEDERAL CIRCUIT COURT OF AUSTRALIA
| HAMPSON & BAILEY | [2013] FCCA 1004 |
| Catchwords: CHILD SUPPORT – Application to set aside binding Child Support Agreement – departure order – father has high income – mother has substantial assets and resources – adult child maintenance. |
| Legislation: Family Law Act 1975 Child Support (Assessment) Act 1989 |
| Cases cited: Balzano & Balzano [2010] FamCAFC 11 Gavin v Garden [2011] FamCA 190 Simpson & Hamlin (1984) FLC 91-576 Sandrik v Sandrik (1991) FLC 92-260 Whitford & Whitford (1979) FLC 90-612 Leonard v Leonard [2010] FMCAfam 390 Cosgrove v Cosgrove (1996) FLC 92-700 |
| Applicant: | MS HAMPSON |
| Respondent: | MR BAILEY |
| File Number: | MLC 12045 of 2007 |
| Judgment of: | Judge McGuire |
| Hearing dates: | 26 & 27 November 2012, 15 & 16 January 2013, 12 March 2013 and 24 April 2013 |
| Date of Last Submission: | 24 April 2013 |
| Delivered at: | Melbourne |
| Delivered on: | 2 August 2013 |
REPRESENTATION
| Counsel for the Applicant: | Mr Walmsley Senior Counsel with Ms Devine of Counsel |
| Solicitors for the Applicant: | Nicholes Family Lawyers |
| Counsel for the Respondent: | Mr Glick of Senior Counsel |
| Solicitors for the Respondent: | Lander & Rogers |
ORDERS
The binding child support agreement between the parties dated 1 September 2009 be set aside as of the date of these Orders.
The father pay adult child maintenance for X born (omitted) 1992 in a quantum of $375 per week such to be payable to the mother and payable from 1 January 2012 and that any arrears now accrued under this Order be paid to the mother within 28 days of the date of these Orders and that such payments continue until 31 December 2013 or the completion of X's Degree whichever is the later.
There be a Departure Order for any eligibility for child support assessment for the child Y born (omitted) 1996 whereby the father pay to the mother:
(a)Private tuition costs and boarding fees for Y at (omitted) Grammar School as struck and when due and owing as provided to him by the mother such to be payable from 1 January 2013 and the father to reimburse the mother for any payments she has made in respect of tuition and board for Y within 28 days of the mother providing documentary evidence of such payments;
(b)The costs of uniforms, camps, excursions and/or tutoring to a maximum of $1000 per year by way of reimbursement to the mother within 14 days of her providing evidence of payment by her;
(c)All costs of private health insurance for Y at the Family’s current level of cover;
(d)There be nil periodic child support for Y;
(e)Any payments of periodic child support made by the father relevant to the period from 1 January 2013 and pursuant to the Binding Child Support Agreement of September 2009 be set-off against the father’s obligation to pay tuition costs and boarding fees pursuant to paragraph 3(a) herein;
(f)The father’s obligations in respect of Y continue until the later of the following events:
(i)Y attains the age of 18 years;
(ii)Y completes her secondary education.
There be a Departure Order from any eligibility for child support assessment for the child Z born (omitted) 1999 whereby the father pay:
(a)Private tuition fees at (omitted) School as struck and when due and owing and as provided to him by the mother;
(b)The costs of uniforms, camps, excursions and/or tutoring to a maximum of $1000 per year by way of reimbursement to the mother within 14 days of her providing evidence of payment by her;
(c)Periodic child support in a sum of $375 per week varied by the changes in the consumer price index for Melbourne as at the 1 July of each year such to be payable from the date of these Orders;
(d)All costs of private health insurance for Z at the Family’s current level of cover.
(e)The father’s obligations in respect of Z continue until the later of the following events:
(i)Z attains the age of 18 years;
(ii)Z completes her secondary education.
The mother’s application for adult child maintenance for W born (omitted) 1993 be dismissed.
IT IS NOTED that publication of this judgment under the pseudonym Hampson & Bailey is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT MELBOURNE |
MLC 12045 of 2007
| MS HAMPSON |
Applicant
And
| MR BAILEY |
Respondent
REASONS FOR JUDGMENT
Background
These parties are the parents of four children being:
a)X born (omitted) 1992 (aged 21 years);
b)W born (omitted) 1993 (aged 19 years);
c)Y born (omitted) 1996 (aged 17 years); and
d)Z born (omitted) 1999 (aged 14 years).
The following issues are left for my determination in this matter:
a)the Mother’s application that a Binding Child Support Agreement dated 1 September 2009 be set aside;
b)if the said Agreement is set aside then should there be a departure order in respect of the child support payable for the two dependent children of the parties in respect of school fees for the children and boarding school fees for one child and in addition to periodic child support;
c)the Mother’s application for adult child maintenance to be paid by the Father for their child X born (omitted) 1992 (aged 21 years); and
d)the Mother’s application that the Father pay adult child maintenance for their child W born (omitted) 1993 (aged 19 years).
The parties married on (omitted) 1988. They separated on 20 April 2000 and divorced in 2002.
The applicant Mother is 47 years old. She had remarried following separation from the Father but is again single. She has qualifications as a (omitted).
The respondent Father is 51 years old. He is an (occupation omitted). Mr Bailey has remarried and there are two children of that relationship, being A (aged 7 years) and B (aged 4 years).
The parties lived in (omitted) for the latter part of the marriage and following separation.
Final parenting orders were first made between the parties and by consent on 23 May 2001. Further proceedings eventuated in 2007 resulting in consent orders on 20 February 2008 providing inter alia:
a)the parents have equal shared responsibility for the four children;
b)that the children, Y and Z live on a week about basis during school terms and for one half of school holidays with each parent;
c)“unless otherwise agreed in writing between the parties, Y and Z shall continue their education at (omitted) Grammar School”.
Those consent orders included a notation that the parties would forthwith execute a new Child Support Agreement and the terms of a draft are annexed to the consent orders.
The parties executed a Binding Child Support Agreement on 1 September 2009 providing inter alia:
2. The father shall pay or cause to be paid to the mother for the support of the children:
2.1 the sum of $282.70 per week per child ($1,225.70 per calendar month per child), for each of Y and Z;
2.2 there shall be nil periodic payments for each of X and W.
3. The father shall pay or cause to be paid for the support of the children, whether incurred prior to the operative date or subsequently:
3.1 private tuition costs at (omitted) Grammar School for W and X (or such other school as agreed between the parties); including
3.1.1 tuition fees; and
3.1.2 camps, excursions and tutoring (but not boarding fees) to a maximum of $1,000 per child per year, by way of reimbursement to the mother within fourteen days of her providing evidence of payment by her;
3.2 Y’s and Z’s tuition fees at (omitted) Grammar School including consolidated charges, application and enrolment fees, non interest bearing loans, levies, camps and excursions;
3.3 all costs of private health insurance for the children at the family’s current level of cover;
3.4 all reasonable and proper health costs for the children including but not limited to:
3.4.1 medical;
3.4.2 dental;
3.4.3 orthodontic;
3.4.4 optical;
3.4.5 physiotherapy;
3.4.6 counselling;
3.5 that prior to the incurrence of any costs in relation to interstate or overseas excursion, orthodontic treatment or other significant extraordinary expenditure, the mother shall consult with and obtain the consent of the father regarding same and the consent of the father for the incurrence of such expenditure shall not be unreasonably withheld.
…
6the father’s obligations in respect of each child in accordance with the provisions of this Agreement will continue until the occurrence of the latest of the following events:
6.1 the child attains the age of 18 years;
6.2 the child completes his or her secondary education;
…
10. each party acknowledges and warrants that before this Agreement was signed by him or her, he or she was provided with independent legal advice from a legal practitioner as to the following matters:
10.1 the effect of this Agreement and the rights of that party;
10.2 the advantages and disadvantages at the time that the advice was provided to the party, of making this Agreement.
From 2009 the children X and W attended the (omitted) Grammar School. The younger two children continued at (omitted School). The parties continued to live in (omitted).
X now attends (omitted) University undertaking a (omitted) degree. The (omitted) degree occupies two years. She commenced in January 2012. The Mother’s evidence is that X intends to undertake a (omitted) degree in her field to complete at the end of 2015.
W completed V.C.E. in 2011. He deferred his tertiary studies during 2012 taking them up in 2013 at (omitted) undertaking a (course omitted).
Paragraph 7 of the agreement allows for automatic increase in the periodic support payable by the father pursuant to paragraph 2 in accordance with the variations of the consumer price index as at 1 July in each year.
The evidence now is that the father’s obligations sit at approximately $300 per week per child.
The Mother commenced these proceedings in an application filed 22 December 2011. Her amended application was filed 12 November 2012. The issues at that stage were:
a)the parenting and living arrangements for the children Y and Z;
b)the Mother’s wish to relocate Y and Z from (omitted) to Melbourne;
c)which school or schools should be attended by Y and Z;
d)the Mother’s application to set aside the Child Support Agreement of 1 September 2009;
e)if the said Child Support Agreement is set aside then an application for departure as set out above; and
f)the adult child maintenance for X and W.
The issues of the children’s living arrangements and schooling were resolved by consent shortly prior to the commencement of the trial. Those orders provide:
1. That the Mother will be permitted to:
(a) Enrol the child Y born (omitted) 1996 (“Y”) at (omitted) Grammar School to commence Term 1 2013;
(b) Enrol the child Z born (omitted) 1999 (“Z”) at (omitted) School to commence Term 1 2013; and
(c) Relocate the primary place of residence of Y and Z to the Melbourne Metropolitan area.
2.That the parties have equal shared parental responsibility for Y and Z.
3.That Y and Z live with the mother.
4.That Y and Z spend time with the Father as follows:
(a) In respect of Y:
(i)For one half of all school term holidays;
(ii)For one half of the long school summer holidays each year, alternating each year;
(iii)At all other times as may be agreed between Y and the Father;
(b) In respect of Z:
(i) On one weekend each month;
(ii) For one half of all school term holidays;
(ii) For one half of the long school summer holidays each year, alternating each year; and
(iv) At all other times by agreement.
such time to occur in relation to each such visit unless the children (or either of them) have a legitimate and substantial reason, in which case the parties will engage with either Mr P or Ms S together with the child/ren to resolve the issue.
5.The parties do all things to engage Ms S on a therapeutic basis, and attend all appointments as directed by Ms S, with the children, at the equal shared cost of the parties.
6.For the purposes of the Father’s time with the children in accordance with paragraph 4 of these Orders, the Mother shall deliver Z to (omitted) at the commencement of the visit and the Father shall return her to the Mother’s residence at the conclusion of the visit;
7.That the Mother shall do all acts and things and sign all documents as may be required to authorise (omitted) Grammar School and (omitted) School, or any other school Y and Z may attend, as may be agreed upon in writing between the parties, to provide to the Father copies of all school reports, parent/teacher interview notifications and school newsletters.
The evidence
The applicant Mother gave evidence and relied upon her affidavit and Financial Statement both filed 12 November 2012.
X gave evidence. She had provided a Financial Statement sworn 24 April 2012. She was cross-examined.
Affidavits of the Mother’s father, Mr Hampson and a Mr G were read into evidence without them being required for cross-examination.
The respondent Father relied on his trial affidavit and Financial Statement both filed 14 November 2012. His current wife, Ms N provided an affidavit and a Financial Statement. She was cross-examined.
Binding Child Support Agreement – whether it should be set aside
Relevant Law
There is no argument between the parties as to the validity of the document titled “Binding Child Support Agreement” executed by them on 1 September 2009.
Similarly, there is consensus that the agreement is compliant with s.80C(2)(c) of the Child Support (Assessment) Act 1989 (“the Act”) as to mandatory independent legal advise in the following terms:
(c) the agreement contains, in relation to each party to be the agreement, a statement to the effect that the party to whom the statement relates has been provided, before the agreement was signed by him or her, as certified in an annexure to the agreement, with independent legal advise from a legal practitioner as to the following matters:
i) the effect of the agreement on the rights of that party;
ii) the advantages and disadvantages at the time that the advise was provided, to the party of making the agreement.
Section 80CA of the Act stipulates that a binding child support agreement must not be varied although it can be terminated and replaced with a new binding child support agreement.
The power to set aside a child support agreement is provided in s.136 of the Act as follows:
Power of court to set aside child support agreements or termination agreements
(1) A party to either of the following agreements may apply to a court having jurisdiction under this Act for the court to set aside the agreement:
(a) a child support agreement that has been accepted by the Registrar under section 92 or 98U;
(b) a termination agreement, or a written agreement referred to in paragraph 80G(1)(b), that has been accepted by the Registrar under section 92.
(2) If a party has applied under subsection (1), the court may set aside the agreement in accordance with the application if the court is satisfied:
(a) that the party's agreement was obtained by fraud or a failure to disclose material information; or
(b) that another party to the agreement, or someone acting for another party:
(i) exerted undue influence or duress in obtaining that agreement; or
(ii) engaged in unconscionable or other conduct;
to such an extent that it would be unjust not to set aside the agreement; or
(c) in the case of a limited child support agreement:
(i) that because of a significant change in the circumstances of one of the parties to the agreement, or a child in respect of whom the agreement is made, it would be unjust not to set aside the agreement; or
(ii) that the agreement provides for an annual rate of child support that is not proper or adequate, taking into account all the circumstances of the case (including the financial circumstances of the parties to the agreement); or
(d) in the case of a binding child support agreement--that because of exceptional circumstances, relating to a party to the agreement or a child in respect of whom the agreement is made, that have arisen since the agreement was made, the applicant or the child will suffer hardship if the agreement is not set aside.
(3) Subject to section 145 (Registrar may intervene in proceedings), the parties to a proceeding under subsection (1) are the parties to the agreement.
(4) If:
(a) the court sets aside a child support agreement under this section; and
(b) the court is satisfied as mentioned in paragraph 117(1)(b) (departure orders);
the court may make an order under Division 4 of Part 7 without an application having been made under section 116.
(5) If:
(a) the court sets aside a child support agreement under this section; and
(b) the court is not satisfied as mentioned in paragraph 117(1)(b) (departure orders); and
(c) the payee has received or will receive benefits pursuant to the agreement;
the court may still make an order that departs from the administrative assessment where it is just and equitable to do so, having regard to the benefits that the payee has already received pursuant to the agreement.
There is therefore an onus on the party seeking to set aside the agreement to show both exceptional circumstances arising since the making of the agreement and future hardship to the applicant or a child if the agreement is not set aside.
Exceptional Circumstances
It is clear that the inclusion of the adjective “exceptional” in the section negates the possibility of a mere or any change in circumstances being sufficient to set aside an agreement and imposes a qualitative onus. As Warnick J observed in Balzano & Balzano[1]:
it is not intended that binding agreements should be set aside lightly. This amendment restricts the scope for the setting aside of binding child support agreements by specifying that exceptional circumstances relating to one of the children or parties to the agreement must have arisen since the making of the agreement, and that the child or party would suffer hardship if the agreement were not altered or set aside.
[1] [2010] FamCAFC 11
Mushin J in Gavin v Garden[2] in dealing with an application under s.79A of the Family Law Act1975 had cause to consider the nature of an onus in respect of “exceptional circumstances”. After considering the authorities, his Honour concluded that an exceptional circumstance must go beyond “the normal vicissitudes of life”, something more than the change and that the applicant not being a contributor to the circumstances of the change.
[2] [2011] FamCA 190
The Full Court in Simpson & Hamlin[3] also dealing with an application under s.79A of the Family Law Act1975 commented on “exceptional circumstances” thus:
the question therefore was whether the change which occurred in this case was such as to “take it out of and beyond the ordinary circumstances in which such change might be reasonably expected to occur …” His Honour in our view stated correctly the law on this point “which it amounts to ‘exceptional circumstance” is very much a question of fact and degree”
[3] (1984) FLC 91-576
Gee J in Sandrik v Sandrik[4] considered the decision in Simpson & Hamlin (supra) and commented:
what amounts to exceptional circumstances is very much a question of fact and degree and the question in this case, as in that case, is whether what occurred subsequent to my Orders of 22 May 1989 was such as to take it out of and beyond the ordinary circumstances in which such a change might be reasonably expected to occur.
a feature of Simpson & Hamlin (supra) which Lambert J saw as significant and indeed as did the Full Court in agreeing with his Honour in this respect, was whether or not the change occurred unexpectedly and quickly after the making of the property Order so that it could not have been regarded within the reasonable contemplation or expectation of the parties.
[4] (1991) FLC 92-260 at page 78,750
It is clear form the authorities that such a notion of “reasonable contemplation” or “expectation” incorporates both subjective and objective considerations.
I am satisfied therefore that the onus and test of exceptional circumstance is an qualitative one of being outside of the normal vicissitudes of life and one that was not and should not have been reasonably contemplated or expected within the particular factual platform of the case at point and that the circumstances arose after the making of the agreement and including a consideration of whether or not the applicant was the author, instigator or contributor to the change which may raise some public policy considerations.
Hardship
The second limb and onus is to show that hardship will occasion a child or the applicant party if the agreement is not set aside. This is, by the very wording of the section, a prospective consideration.
The notion of “hardship” is regularly considered in applications under s.44 of the Family Law Act1975 seeking extensions of time and it is generally presumed that the decision in Whitford & Whitford[5] remains strong authority and where the Full Court said:
In our view the meaning of “hardship” in subsec.44(4) is akin to such concepts as hardness, severity, privation, that which is hard to bear or substantial detriment - Cf. the meanings assigned to “hardship” in the short Oxford Dictionary and in Webster’s New International Dictionary, see also in the marriage of MacKenzie (1978) FL 90-496…
… in cases where “any hardship” of one party and “any hardship” of the other party is to be taken into consideration, or where the question is whether greater hardship would be caused by the making of an Order or the refusal to make an Order, it is appropriate to equate hardship “any appreciable detriment financial, personal or otherwise”. Under S.44(4) the Court is not required to consider or weigh any respective hardships, but it must be satisfied that hardship would be caused to a party of a marriage or to a child of a marriage if leave were not granted.
In ordinary parlance, hardship means something more burdensome than “any appreciable detriment”. We consider that in subsec.44(4) the words should have its usual, though not necessarily its most stringent, connotations. It is impossible to lay in advance what particular facts may or may not amount to hardship on the relevant sense as a general proposition it might be said that, the inability of an applicant to pursue a claim which in the circumstances of the applicant or a child of the marriage is trifling , generally will not cause hardship. Similarly, where the costs which the applicant will have to bear himself or herself are about as much or more than what the applicant is likely to be awarded on a property claim, ordinarily hardship would not result if leave to institute proceedings were not granted. But otherwise we find no warrant in either subsec.44(3) or 44(4) for saying that the right or entitlement lost must be a substantial one.
In an appropriate case, and depending on the circumstances of the applicant or the children, hardship may be caused by the loss or deprivation of something which is of comparatively small money value. In some cases, it may be a hardship to an applicant if he or she is unable to gain something worth $1000 or even less whilst in other cases something of that value may be considered trifling. Similarly, where there is a prospective entitlement to periodic maintenance, the inability to obtain an order for even a few dollars a week, may cause hardship. Where maintenance is sought, then in order to satisfy the Court that hardship would be caused if leave were not granted, the applicant will have to show that he or she is unable to support herself or himself adequately by reason of the matters set out in sec.72 or for any other reason having regard to the matters referred to subsec. 75(2)…
Hardship may be caused to an applicant if leave were not granted to institute proceedings, although the applicant is not in necessitous circumstances. Whatever the financial situation of the applicant may be, his or her loss of a prospective entitlement to property including money or his or her inability to have the financial and property relations of the parties adjusted or resolved, may constitute hardship.
[5] (1979) FLC 90-612 at page 78,144
In Simpson & Hamlin (supra) the Full Court also considered “hardship” and noted:
the importance of bringing an end to litigation remains an important consideration and the remarks of Mason J remain applicable to para (d) nutatis mutandis. To paraphrase his Honour’s remarks:
it is not sufficient that it appears that circumstances have arisen of an exceptional nature resulting in hardship to the applicant, the court must consider in the exercise of its discretion whether that hardship is of such a serious nature and results in such inequity that it can only be rectified by the extreme step of setting aside or varying an existing order of the Court
I note and respectfully adopt the comments of Mushin J in Gavin v Garden (supra) (at paragraph 61):
In my view, the concept of hardship should be considered on a similar basis to that of an exceptional circumstance. While not to be read stringently, it incorporates the concept of being more than “the normal vicissitudes of life”.
The father’s argument
The father argues that the binding child support agreement should not be set aside in that the applicant has shown neither “exceptional circumstances” nor “hardship”. He says that the onus to set aside the agreement rests with her and that she has not discharged that onus.
The father says that no exceptional circumstance has arisen since the making of the agreement in that the mother’s move to Melbourne was contemplated, or even planned, by her prior to the execution of the agreement on 1 September 2009. He relies on the applicant’s own Trial Affidavit at paragraph 12 and following where she deposes:
on 23 May 2001, Final Parenting Orders were made by consent in the Family Court of Australia at Melbourne. Around this time, I made my intentions to move back to Melbourne clear to my legal representatives at the time that I would only agree to sign the Consent Orders if they reflected that, after our property settlement, I wanted to reconsider where I lived with the children. Therefore, the 2001 Orders featured a notation to this effect
… there were further Court proceedings in relation to the children’s living arrangements in 2007, which resulted in Y and Z commencing a week-about arrangement from February 2008. Although I did wish to relocate to Melbourne at this time, I did not pursue Orders in that regard, as the father and I agreed to arrangements for the children, following counselling with Mr P.
The mother was cross-examined at length as to her contemplations and expectations in respect of relocating from (omitted) to Melbourne. She had also been cross-examined on 12 August 2009 in (omitted) which was contemporaneous with the negotiations that led to the Child Support Agreement of 1 September 2009. She was challenged specifically about the prospects of her moving to Melbourne. The transcript of her cross-examination in the current proceedings from 26 November 2012 at page 30 shows as follows:
Thank you. Do you also recall during your cross-examination giving evidence to this court in relation to your long held desire to relocate yourself, together with your children, as far as practicable, to Melbourne?‑‑‑Yes.
And, indeed, his Honour should understand that you’ve held this desire to relocate yourself and your children to Melbourne since probably 2001?‑‑‑Yes.
Indeed, when giving evidence to this court in (omitted) in August 2009, you had in mind then that Z may attend at (omitted) School in Melbourne?‑‑‑Yes.
You planned – and you gave evidence about your plan then, in August 2009 – to shift to Melbourne?‑‑‑I did.
And to take Z and to enrol her in (omitted) School, if I may call it (omitted) School?‑‑‑Yes.
Yes. And you gave evidence, did you not, about your ability, from your own financial assets and resources, to fund, first, (omitted) Grammar. That’s so, isn’t it?‑‑‑I can’t recall giving evidence to – in that form.
And the same cross-examination at pages 38 and 39:
I jump a question.
And it is around that time when you were about to marry Mr R that you also started to look into those arrangements that Y and Z should attend (omitted) School in Melbourne, did you not?‑‑‑Yes, we did.
And there was put to you:
There was a proposal that W and X were to be boarders at (omitted) Grammar and Y and Z were going to live with you in Melbourne and they would attend (omitted) School. Is that right?
And you said:
That’s what we were hoping they would do…
And when you went into the negotiations for the binding child support agreement, they were certainly matters that you had in your mind to be considered?‑‑‑Yes. They were.
They were. At that stage there had been, may I use the term – and I hope it doesn’t provoke my friend to be outraged – a topsy-turvy arrangement between both you and the father and the children about who lived with who and during what times. There was continuous change?‑‑‑There was occasional change. I wouldn’t say continuous…
Just the fact for his Honour to know that when you were sitting down to negotiate the binding child support agreement, the position of your four children, as to who they lived with, where they live, why – it was changing? It had changed?‑‑‑It – it had changed the two years prior to that. When – when we entered into the child support agreement in 2009, X and W were already at (omitted) Grammar. They were – they were – they were there and they were living with me, and the two younger children were living with me and the father – the father and I. So they – they haven’t chopped and changed. It was the two – two elder children, X and W, at this time had already spent eight months at (omitted) Grammar.
The father thus argues that the move of the mother, Y and Z to Melbourne was contemplated or even planned by the mother pre-2009 and contemporaneously with the making of the agreement. It follows, he argues, that the agreement should not be set aside as no exceptional circumstance has been shown. As such, the father relies on the Full Court statement in Simpson & Hamlin (supra) in concurring with the Judge at first instance at page 79,657 in the following term:
So far as the first point is concerned, his Honour quite rightly, in our view, concluded that:
“the occurrence of a change in the responsibility for the daily care and control of the children of a marriage, after the making of a property Order under sec.79 of the Family Law Act could not be held of its self to be an unusual circumstance. The ordinary vicissitudes of life coupled with the difficulties that parties to a marriage often experience in the task of restructuring their lives following the dissolution of their marriage and the division of their assets, and their obligations to the support of each other and the support, care and control of their children, frequently creates situations in which it is desirable having regard to the children’s welfare that such a change occurs.”
The question therefore was whether the change that occurred in this case was such as to “take it out of and beyond the ordinary circumstances on which such change might be reasonably expected to occur”. He saw that feature in the present in “the fact that the change occurred unexpectedly and so quickly after the making of the property order”… What amounts to “exceptional circumstances” is very much a question of fact and degree … whilst we might have had some hesitation ourselves as to whether or not in the light of the history of these parties and their admitted future intention, the change of custodial arrangements were so exceptional as to take it out of the normal vicissitudes of life…
In summary the father argues that the evidence shows:
a)The mother had contemplated a move to Melbourne and a change in the children’s living and schooling arrangements prior to and contemporaneously with the making of the Child Support Agreement;
b)In any event, and given the mother’s conceded history of such contemplations the eventual change in the children’s living arrangements, schooling and move to Melbourne is not “so exceptional as to take it out of the normal vicissitudes of life”;
Further, the father argues that the eventual relocation, albeit by consent, of the children to Melbourne with the mother and the consequent change of school was at the instigation of or with substantial contribution by the mother in bringing and prosecuting her application. Within this context the father says that the change of the children’s residence and schooling is not unusual, not unexpected and not outside the normal vicissitudes of life.
Secondly, the father argues that the mother does not, in any event discharge her onus of showing “hardship” to herself or the children if the agreement is not set aside.
He contends that hardship is not a relative concept and, like exceptional circumstances, should be such that it is also “outside of the normal vicissitudes of life”.
The father says that the mother’s own admissions, again in cross-examination, demonstrate no hardship to her if the Child Support Agreement stands. Conversely, he says that she gives and adduces no evidence of hardship in any particularised form.
The father refers to and the mother was cross-examined in detail as to her particular financial circumstances. It is fair to say that she is a person of some substantial wealth with assets and resources of approximately six million dollars available to her. She concedes that she rents a (omitted) property at $84,000 per annum. She does not work for remuneration. She has benefited by a substantial loan from her father which, on the evidence before me, has not been actively pursued for repayment. Her wealth is at least stable or possibly increasing and certainly has increased substantially since the making of the agreement in 2009.
The following took place in cross examination of the mother[6]:
I want to suggest to you that your present application is pursued by you, not because of any financial hardship that you may suffer if the existing orders are in place, but because you perceive the father has much more money than you thought he had and he can afford it?‑‑‑I was advised that this would be – this – this is what is acceptable.
Okay. But you are not putting, are you, financial hardship as a basis for the present application?‑‑‑No.
[6] Transcript 26 November 2012 at page 57
Counsel for the father argues that, firstly, that the mother suffers no hardship in a realistic sense in that she is a person of means and concedes that she could afford the additional costs, if any, of the change in the children’s schooling circumstances. Secondly, he argues that the mother herself perceives her application in relative terms as to hardship in that she prosecutes it on the basis that the father has a greater income than she first anticipated. In essence, he says that the mother adduces no evidence of hardship in any sense and hints perhaps that he could have mounted a no case to answer argument (although none was brought) with emphasis, of course, on the mother having the onus and burden of proof. A further exchange in cross-examination took place at page 53 of the transcript of 26 November 2012 as follows:
When did that position change for you?‑‑‑That changed after we received some discoverable documents.
Yes. And what changed – what was the change in your mind?‑‑‑That – what changed in my mind was the father’s ability to pay substantial – the father’s ability to pay for schooling fees.
Okay. So let’s come to the point then. Thank you for the answer. Let’s come to the point. Prior to receiving the father’s discovery or further documents ‑ ‑ ‑?‑‑‑Mm.
We will come to what they were in a moment – you had the financial ability to pay for the boarding, did you not?‑‑‑I did.
You did. When you found out, according to your understanding – I’m not accepting, I’m putting your understanding. When you found out, according to your understanding, Ms Hampson, that perhaps the father has more, what, assets or income than you thought ‑ ‑ ‑?‑‑‑Yes.
‑ ‑ ‑ you thought he should pay more. Am I being – I don’t mean to be flippant, but that’s really it?‑‑‑Yes.
Yes. So it’s not about your ability which caused you to change the application or change your mind, it’s about his ability to pay?‑‑‑Yes.
Because you do have – it’s a wonderful thing, but you do have the financial ability to pay for Y’s boarding, don’t you? My friend said very loudly a comment that the witness looked at and he said it for the third or fourth time.
Counsel for the mother referred me to a decision of Federal Magistrate (as he then was) Lapthorn in Leonard v Leonard[7]. That too was an issue as to setting aside of a Child Support Agreement with consideration of exceptional circumstances and hardship. The applicant father in that case argued, like the applicant mother in the matter now before me, that he would suffer financial hardship if the agreement not be set aside. The applicant’s financial position had also improved since the making of the agreement. At paragraph 60 FM Lapthorn concludes:
Mr D conceded the father’s circumstances are not desperate but argued that they are not unlimited. Maintaining the agreement may see the father paying around $100,000 more than he might be required to pay if an administrative assessment issued. Such a sum is significant for most people including the father. However, above that his financial position is better now than when he entered into the agreement. When he entered into the agreement he had already consented to property orders that altered his assets and liabilities and would have had regard to his income at the time. Being satisfied that his financial position is better now than it was then and that the change in caring for the children amounts to only one day a week I am not persuaded he will suffer hardship if the agreement is not set aside. Nor will the children.
[7] [2010] FMCAFam390
The mother’s argument
The mother carries the onus of proof as the applicant. She argues that there are exceptional circumstances such that the agreement should be set aside. She says that she and/or the children would suffer hardship if it is not set aside.
The mother candidly concedes, as she did in cross-examination, that she had contemplated, or even planned, a relocation from (omitted) to Melbourne as early as 2001. She argues, however, that the relevant time for her contemplation or expectation is at the execution of the agreement itself rather than any historical contemplation. She says that this is inherent in the wording of the section itself which states that “because of exceptional circumstances …. that have arisen since the agreement was made…” that is, the operative time is, according to the mother, the point of making the agreement. Her counsel submits that cross-examination of the mother elicited only her contemplations, expectations or plans prior to the making of the agreement and even perhaps immediately prior to making the agreement. He argues, however, that the wording of the agreement and the relative obligations in respect of Y/Z versus X/W within that agreement make it inherently contradictory for the mother to:
a)enter into an agreement which obligates fees payable only in respect of (omitted) Grammar School and it logically following that the children attend that school;
b)that there be orders on foot at the time of executing the agreement whereby the children live in a week-about arrangement and it therefore logically follows that they must live in (omitted) for their week with the mother;
c)that the mother being properly advised, and the agreement acknowledges that she received proper legal advice, as to the obligations of, and advantages and disadvantages, of executing the agreement;
d)that she should then enter into such an agreement whilst having a contemporaneous contemplation or plan to relocate herself from (omitted) to Melbourne and to change the children’s schools.
The mother references the agreement itself to show the distinction within that agreement in respect of the children W and X with the children Y and Z. That is, paragraph 3 of the agreement states:
the father shall pay or cause to be paid for the support of the children, whether incurred prior to the operative date or subsequently:
3.1 private tuition costs at (omitted) Grammar School for W and X (or such other school as agreed between the parties) (my emphasis)
3.2 Y and Z’s tuition fees at (omitted) Grammar School (my emphasis) …
The mother says, being properly advised, that she was committing to the children attending (omitted) Grammar school whereas schooling for the older two children was open to agreement otherwise. She says that in all of these circumstances she did not, and could not have contemplated moving to Melbourne with Y and Z or moving their schooling at the point of time that she executed the agreement.
The mother argues that the change in circumstance occurred post-the agreement and could not have been reasonably contemplated by her as at the time of the agreement. Those changes were:
a)The living arrangements of shared care breaking down in that Y and Z began to live primarily with the mother;
b)The children expressing strong views as to their living arrangements and preference for their schooling other than at (omitted) Grammar School;
c)In November 2012, more than 3 years after the agreement, the father consenting to the children moving with the mother from (omitted) to Melbourne and also to a change in their schools.
The mother contends that these are exceptional circumstances outside the normal vicissitudes of life and not contemplated by her at the time of the making of the agreement and further it would be an inherent contradiction for her to have entered into that agreement, properly advised as she was, if she had a contemplation, expectation or plan for the children Y and Z to be schooled other than at (omitted) Grammar School and for her and Y and Z to be living other than in (omitted). In this sense she says that her previous contemplations are irrelevant.
The mother further argues that the legislation does not allow for variation of binding child support agreements and hence in failure to set it aside in the current circumstances for the children would cause her hardship.
The mother says that she has a reasonable expectation, evidenced by the agreement itself, that the father would pay or contribute to the children’s school fees. If the agreement is not set aside then the father could strictly rely on it in respect of tuition fees for Y and Z at (omitted) Grammar School. Inevitably those fees would not be struck as the children would be attending other schools and the father would thus be relieved of his responsibility. She says that the fact that she is not in necessitous circumstances is irrelevant and not, in any event, a necessary condition of hardship. She says that hardship is not limited to “financial hardship” and that the deprivation of the anticipated rights and obligations under the agreement constitute hardship for her and/or the children. The mother’s Counsel submits that any concessions made by the mother in cross-examination were candid and accurate within their context but only limited to “financial hardship” and that the statutory meaning of the term is broader.
Conclusions re: binding child support agreement
I am persuaded that the agreement should be set aside in that there are exceptional circumstances occurring since the making of the agreement and that hardship would be afforded the mother and/ or children if it is not set aside.
I accept that the mother has had a long standing desire to move to Melbourne and that she had contemplated and perhaps planned the move. She was candid in giving this evidence. However, her past contemplations are not necessarily indicative of her contemplation or expectation as at the point of entering into the agreement. I note the terms of agreement are specific in respect of Y and Z and the (omitted) Grammar School. The contrast with the clause in respect of W and X where schools other than (omitted) Grammar were perhaps contemplated or open, is significant. That specific reference to (omitted) Grammar School together with the equal shared cared arrangement for the children in (omitted) at that stage make it inherently unlikely, and in fact, contradictory for the mother to have realistically contemplated or expected a relocation to Melbourne at the point of entering into the agreement. I am satisfied that the mother did not contemplate such moves of residence and school for the girls at the time of executing the agreement. The fact that the mother had full and proper legal advice and such being acknowledged within the agreement reinforces my finding.
I am satisfied that the change of living arrangements from equal care to primarily being with the mother occurred some time after the making of the agreement. I note that the shared care arrangement was in operation well prior to the execution of the agreement. There is no evidence to suggest that the mother deliberately instigated or was the author of the changes in circumstances. Y and Z commenced living primarily with the mother some time after the agreement had been in operation. There is no evidence that the girls’ views and preferences as to their schooling were other than voluntary and considered. Y and Z were given the assistance of Mr P, psychologist, in dealing with these issues and I am satisfied that the father’s eventual acquiescence gives credence to the independence and maturity of these decisions by Y and Z. In any event, the relocation of the girls from (omitted) to Melbourne with consequent changes of schools was acquiesced by the father prior to the hearing of this application. It follows that the children attending (omitted) Grammar School is impracticable and not now anticipated by either parent. I note but reject the argument of Senior Counsel for the father that the agreement is not necessarily frustrated. I am of the view that the agreement itself contemplated payment of school fees for Y and Z at (omitted) Grammar School. It anticipated their attendance at that school. The agreement does not allow the possibility of a different school (as it does for W and X). I am satisfied that these events were not reasonably foreseen, contemplated or expected by the parties at the point of entering into the agreement. To my mind, they are exceptional circumstances and changes in the children’s living and parenting arrangements and not simply “mere” change. The Child Support Agreement cannot at law be varied. That document contains the intentions of the parties as of its date of execution and I am satisfied that the supervening events constitute exceptional circumstance.
I am also satisfied that the mother will suffer hardship if the agreement is not set aside. She is a person of considerable means and would be able to meet the school fees from her own resources. The hardship which accrues to her is not “financial hardship” in its usual context. The authorities make it clear that hardship can accrue even if the applicant is not in necessitous circumstances. Rather, the enquiry for the Court is whether in the particular circumstances of the matter in question the applicant would suffer a hardship by a refusal to set aside the Orders. The circumstances here are where the agreement anticipated a payment or contribution by the father to the children’s school fees. It is a right and obligation conferred by the agreement. Failure to set aside the agreement in these particular circumstances would deprive the mother (and the children) of that payment or contribution. This is the evidence of the hardship claimed by the mother. I am of the view that this constitutes a substantial hardship. In financial terms, a refusal to set aside the agreement would cause the father’s obligation to rest at approximately $300 per week per child. The private school fees would be the responsibility of the mother. This would, of course be a financial detriment accruing to her. However, it is the loss of the rights and obligations themselves conferred by the agreement itself that constitute the hardship in this particular factual platform.
I propose to Order that the Binding Child Support Agreement made 1 September 2009 be set aside.
Departure Order for Y and Z
Section 136(4) of the Act provides:
(4) If:
(a) the court sets aside a child support agreement under this section; and
(b) the court is satisfied as mentioned in paragraph 117(1)(b) (departure orders);
the court may make an order under Division 4 of Part 7 without an application having been made under section 116.
5) If:
(a) the court sets aside a child support agreement under this section; and
(b) the court is not satisfied as mentioned in paragraph 117(1)(b) (departure orders); and
(c) the payee has received or will receive benefits pursuant to the agreement;
the court may still make an order that departs from the administrative assessment where it is just and equitable to do so, having regard to the benefits that the payee has already received pursuant to the agreement.
From the submissions of Counsel I am satisfied that each of the parties seeks a departure Order should the Child Support Agreement be set aside.
Section 117(1) states:
(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.
(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 spend time with, or communicate with, any other child or another person that the parent has a duty to maintain;
(aa) 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 the responsibility of the parent to maintain a resident child of the parent (see subsection (10));
(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 spend time with, or communicate with, 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.
The consent Orders of 27 November 2012 show the parties’ mutual intention for Y to attend (omitted) Grammar School as a boarder and for Z to attend (omitted) School. It follows that the provisions of section 117(1) and 117(2)(b)(ii) are satisfied.
The mother in her amended initiating application filed 12 November 2012 sought a departure Order in respect of Y whereby:
a)the father would pay a further $302 per week, in addition to his obligation under the Child Support Agreement, ongoing support for the period 1 July 2011 until 30 June 2012 increasing to a further $306 per week for the period 1 July 2012 until 30 November 2012;
b)All of Y’s educational expenses incurred by the mother from 1 July 2011 until 30 November 2012;
c)Private Health and Gap health costs for Y;
d)From 2012 until the conclusion of Y’s education:
i)Tuition and boarding fees at (omitted) Grammar and all other educational expenses including uniforms, shoes, laptops and extra curricular activities;
ii)Private health insurance and Gap costs.
She sought a departure Order in respect of Z in similar terms although Z would not be attending a boarding school and she proposed that the father continue the payments of $612 per week to be increased in accordance with the consumer price index. I infer, and there was some evidence, the mother would also seek weekly child support for Y in holiday times when Y is not either at school or with the father.
In a more simplistic form in written submissions after the conclusion of the evidence I understand the mother to be seeking orders as follows:
a)The father pay Y’s school fees and board at (omitted) Grammar School from her commencement of her attendance at that school in 2013;
b)The father pay school fees for Z at (omitted) School;
c)Together with $612 per week ongoing payments for each child but not payable during Y’s boarding periods at (omitted) Grammar and together with the ancillaries of health care, health costs and other educational and extra curricular costs.
The inference I am to take from the documents before me is that the mother seeks payment of the school fees in respect of each child from the commencement the 2013 school year given that the father’s obligation to meet the (omitted) School fees continued until the end of 2012. I also infer that she seeks payment of the additional weekly support from the time that the children came into her care on a full time basis in mid 2011.
The father, of course, argues that the Child Support Agreement remains binding and should not be set aside. He agrees, however, that a departure Order is appropriate if the agreement be set aside but does not agree that the simple mathematical exercise put by the mother of doubling the ongoing support provision in the agreement is appropriate. As an alternative, he argues that he pay a sum equivalent to the (omitted) Grammar tuition fees in respect of Y and Z and to be put towards their tuition costs at (omitted) Grammar School and (omitted) School respectively. A further alternative to the departure Order was that he pay Y’s tuition fees but that the mother pay the boarding costs. Generally, however, he says that any departure Order should consider the income, property and financial resources of each of the parents as well as the children’s needs.
The tuition fee for senior school at (omitted) Grammar is $8100 per term for each four terms or $32,400 per annum. The boarding component is a further $5635 per term or $22540 per annum. The total per year would be approximately $54,940.
By comparison the fees in year 11 at (omitted) Grammar School are $4115 per term or $16460 per year but less for younger children.
Tuition fees at (omitted) School for Z are struck at $26,160 per annum for 2013.
I am satisfied on the material before me that the father has a gross income of at least $1,500,000 per annum from his practice as a (omitted). Whilst he conducts his occupation through a series of family trusts and an umbrella of trustee companies, I am satisfied that his income is substantial. There was much cross-examination as to the income in its real terms, its disbursement, removal of monies from bank accounts by his wife and his current wife’s income and assets. Nevertheless, in the circumstances before me, I am satisfied that an income of such substance is sufficient to meet his obligations under a departure order even given his commitments which include two younger children of his current marriage. After cross-examination of the husband’s current wife, Ms N, I accept the submissions of Counsel for the mother that the father has an income nett of tax of between $16,000 and $18,000 per week before any distributions through his trusts or company structures. The father discloses minimal assets in his financial statement. His current wife however, who works as his (omitted), discloses three properties with significant equity and cash resources of about $1,000,000. I am satisfied that the father has at least a substantial interest or entitlement in these assets.
I accept that the father has suffered some recent serious health difficulties which may have impacted his work capacity in 2012. The evidence, however, is that his income and its potential remain in the vicinity of $1,500,000.
The mother, Ms Hampson, does not work. She has qualifications and experience as a (omitted). She has made some enquiries as to re-entering the work force but has not yet done so. She is a person of some independent wealth with assets and resources in her possession or control to a value of near $6,000,000. She derives an income of approximately $156,000 per annum inclusive of the current payment of $604 per week or $31,400 per annum child support from the father. She enjoys a very comfortable lifestyle with the father emphasising her ability to pay $84,000 per annum rental for a substantial property in (omitted). The evidence suggests that her asset position has improved by more than $2,000,000 since the execution of the child support agreement and during a time when she has not been employed and, on her evidence, meeting significant expenses for the children.
The mother’s initial position seems to have been that she would meet the boarding costs of Y at (omitted) Grammar and the father meet the tuition costs and extras plus periodic maintenance. She retreated from this position when the discovery process showed the father to be in a superior financial position that she had previously understood.
I am generally satisfied that the mother has substantial assets and has shown no need to undertake immediate employment regardless of her declared intentions to do so. She owns real property in (omitted) despite now living in Melbourne. There is no evidence of her receiving rent from that property although there are outgoings. There was much discussion in the evidence about an advancement from her father and whether it constitutes a loan? I am satisfied on the evidence that there is no current claim or attempt by the mother’s father for repayment. In summary, the mother seems to be in a far superior asset position than the father although his income is perhaps ten times that of her. It would be misleading however to describe this in simplistic terms as “one party being asset rich and income poor” and the other being “asset poor and income rich”. Significantly, contributions by parents to the support of children is not based solely on the income of the parent but also on property and financial resources as income capacity.
Section 117(4) of the Act provides:
(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; and
(iii) to any resident child of the parent (see subsection (10)) by the making of, or the refusal to make, the order.
Section 3 of the Act sets out the duty of parents to maintain their children in the following terms:
(1) The parents of a child have the primary duty to maintain the child.
(2) Without limiting subsection (1), the duty of a parent to maintain a child:
(a) is not of lower priority than the duty of the parent to maintain any other child or another person; and
(b) has priority over all commitments of the parent other than commitments necessary to enable the parent to support:
(i) himself or herself; and
(ii) any other child or another person that the parent has a duty to maintain; and
(c) is not affected by:
(i) the duty of any other person to maintain the child; or
(ii) any entitlement of the child or another person to an income tested pension, allowance or benefit.
Section 4 sets out the objects of the Act as follows:
(1) The principal object of this Act is to ensure that children receive a proper level of financial support from their parents.
(2) Particular objects of this Act include ensuring:
(a) that the level of financial support to be provided by parents for their children is determined according to their capacity to provide financial support and, in particular, that parents with a like capacity to provide financial support for their children should provide like amounts of financial support; and
(b) that the level of financial support to be provided by parents for their children should be determined in accordance with the costs of the children; and
(c) that persons who provide ongoing daily care for children should be able to have the level of financial support to be provided for the children readily determined without the need to resort to court proceedings; and
(d) that children share in changes in the standard of living of both their parents, whether or not they are living with both or either of them; and
(e) that Australia is in a position to give effect to its obligations under international agreements or arrangements relating to maintenance obligations arising from family relationship, parentage or marriage.
(3) It is the intention of the Parliament that this Act should be construed, to the greatest extent consistent with the attainment of its objects:
(a) to permit parents to make private arrangements for the financial support of their children; and
(b) to limit interferences with the privacy of persons.
I am satisfied that the payment of school fees for Y and Z and boarding fees for Y are necessary expenditures given the concession of the parties and their agreement that the children attend these schools.
At part 10 of her Financial Statement sworn 17 May 2012 the mother deposes that the ongoing weekly costs for Y and Z at an additional $998 per week or $499 for each child over and above that static costs. There was little forensic examination of those expenses. In any event, I consider them reasonable given the incomes and lifestyles enjoyed by the parents and children historically.
The mother must also accommodate the children although I note a property rented at $84,000 per annum may be considered extravagant even if she is obliged to at times accommodate a family unit of five.
I must take care not to “double up” in respect of Y. As a boarder I presume she is provided with full, or essentially full, board for 40 weeks per year. The consent Order of November 2012 provide that Y spend one half of all school holidays with the father and that Z spend the same but with an additional one weekend each month. I presume school holidays to be about 12 weeks per year and therefore six weeks with, and supported by, each parent.
I note that the set-aside child support agreement provided now for a payment by the father to the mother of $306 per week for each of the children when they were living in a week about arrangement. It is this logic that grounds the mother’s application now for $612 per week per child for each of Y and Z. However, that amount was agreed between the parties and I am not privy to the basis or rationale of them arriving at that figure. I am bound to take into account the provisions of the legislation, the financial positions of the parties and the needs of the children at arriving at a proper amount to be paid or contributed by each parent to their care.
In arriving at a departure Order which is just and equitable therefore, I take into account the following:
a)The weekly needs of each of the children as primarily set out in the mother’s financial statement;
b)The educational circumstances of each of the children and, in particular, that Y would spend 40 week per year at boarding school;
c)The configuration of time for the children between the parents which for Y is effectively equally shared out-of-school time;
d)The income, property and financial resources of each of the parents.
Y
I am satisfied that Mr Bailey should meet Y’s tuition fees, extra education expenses and boarding costs at (omitted) Grammar school. This will obligate him in excess of $55,000 to Y’s education and board per annum. There will accordingly be no direct contribution by the mother. In addition, Y will be with Mr Bailey for one half of her holiday time. She will spend 6 weeks of holidays with each parent and I assume some weekends with the mother. Y will, of course, have needs outside of those provided by the “boarding fee” which, again using the mother’s financial statement, I calculate to be the following:
a)Telephone – $9.50 per week;
b)Clothing and shoes - $131 per week;
c)Entertainment and hobbies - $25 per week;
d)Chemist and pharmaceutical - $13 per week;
e)Dry Cleaning $1.50 per week;
f)Books and magazines - $5 per week;
g)Gifts - $16 per week;
h)Hairdressing and toiletries - $6 per week;
i)Mobile telephone - $7.50 per week
Total: $212 per week.
I calculate these extras to be approximately $11,024 per annum. Should the mother, therefore, be required to make this contribution towards Y’s support then I am satisfied that this would be a just and proper distribution of her needs between the parents given consideration of the father’s superior income but the strong assets position of each party. Accordingly I do not consider it appropriate or necessary for the father to contribute periodic support for Y.
I am satisfied that the father should also meet or contribute to extras for Y being camps, excursions and tutoring in the same terms as the binding child support agreement obligated him for X and W being capped at $1000 per year with the mother to meet any additional costs. He should also continue to pay private health insurance.
Z
I am satisfied that Mr Bailey should also meet the school fees for Z at (omitted) School in Melbourne. I do not accept that any payment relative to the school fees at (omitted) Grammar is appropriate. The fact is that the Child Support Agreement in respect of school fees at (omitted) Grammar School has been set aside. I must consider the children’s needs and the financial circumstances of the parties afresh. Taking into account all of the relevant considerations set out above, I am satisfied that such orders are appropriate.
Z lives primarily with the mother. Ms Hampson deposes that Z has ongoing needs totalling $499 per week. Given the financial positions of the parties, I think it proper that each should contribute to those needs. I note that the mother provides housing for Z. I note that Z spends one half of school holidays and one weekend per month with the father. In all of those circumstances, I am of the view that an ongoing weekly payment by Mr Bailey for Z in the sum of $375 per week is just and equitable given the school fees are approximately $26,000 per annum.
The mother would therefore be contributing $124 per week to Z’s extra needs. The father should contribute to “extras” on the same terms as for Y.
I must also determine the starting point of such orders. I take into account that the children have lived primarily with the mother during the latter two years of the Child Support Agreement but that the father has continued to contribute in accordance with the equal shared care arrangement. I note also the greater financial impost being taken on by the father and also that the mother’s financial position appears on the evidence to have improved significantly since the making of the child support agreement. In all of those circumstances I think it proper that the father be responsible for the payment of the school fees and boarding costs for Y and the school fees at (omitted) School for Z from the start of the 2013 school year. The orders in respect of ongoing support for Z should operate from the date of these Orders. However, I assume that the father has been paying periodic Child Support for Y pursuant to the Child Support Agreement until now and at approximately $306 per week. Y however, has been a boarder at (omitted) Grammar School since the start of the 2013 school year and I am now about to Order that the father pay that board retrospectively. It seems therefore that there is an element of doubling up and it would be proper, therefore, that any periodic maintenance paid by the father in respect of Y since the start of this school year be set off against the reimbursement he will need to make to the mother for school tuition fees and board she has paid for Y.
Adult child maintenance – X
X is now 21 yeas of age. She is enrolled in an (omitted) degree at (omitted) University, studying a (omitted). The University degree is fast-tracked and to be completed at the end of 2013. Such fast-tracking obligates X to more than usual course time and less holiday or free time which in turn impacts on her ability to earn an income from part-time or casual employment.
X was previously enrolled in a similar (omitted) at (omitted). She elected not to proceed and took a gap-year in 2011 before commencing the (omitted) University degree in 2012.
Both the mother and X depose that she would like or anticipate to follow her (omitted) degree with a (omitted) degree which would occupy her in full time tertiary studies until the end of 2015.
The relationship between X and her father broke down in about 2008 and the evidence is that they unfortunately remain estranged.
The Binding Child Support Agreement from September 2009 obligates the father to meet private tuition costs and extra education expenses for X until completion of year 12. There was no obligation for periodic child support. As such, the mother deposes, and I accept, that she has otherwise been responsible for X’s financial support post secondary school subject to X’s own contributions. I note that the mother’s application was filed in December 2011 and just before X commenced this course.
The mother seeks an order whereby the father pay $500 per week adult child maintenance for X until the conclusion of her tertiary education, such to be varied in accordance with the consumer price index, and as from 30 November 2012. In addition, she seeks a lump sum of $25,000 being adult child maintenance at $500 per week from 22 December 2011. Ms Hampson does accept that there should be a reduction in the father’s obligations for X at dollar-for-dollar for X’s own earnings over $100 per week.
The father does not concede that the requirements of the legislation in respect of adult child maintenance have been made out. He will, however, submit to an order that he pay $250 per week “Whilst completing her degree at (omitted) University”. He does not propose that it be retrospective. He does not accept that any order should continue into post-graduate studies.
By consent Order of 30 January 2012 X and W were obliged to file “a Financial Statement and such further or other material as they chose”. X did not provide an Affidavit. She did, however, swear a Financial Statement on 24 April 2012. She gave evidence at the hearing and was cross-examined.
X has obtained an internship during the course of her degree. A document was tendered by consent on the day of final submissions being an undated statement clearly prepared by X which begins:
My internship is temporary and has come to an end as I am about to commence University holidays. It is indefinite and may not even continue for next semester at university depending on my workload/timetable.
The internship is with (omitted). It occupies her for one or two days a week depending on university course work and examinations. When working she is deployed for 7 or 8 hours per day at $20 per hour. The exhibit suggests that the internship does not continue during university holidays which, of course, at (omitted) University are substantially less than those at other institutions.
The relevant Law
Section 66L of the Family Law Act1975 (“the Act”) provides that a Court must not make a child maintenance order in relation to a child that is 18 or over unless the Court is satisfied that the provision of the maintenance is necessary to enable the child to complete her education. If the Court is so satisfied then a discretion is enlivened. That is, an Order is not made simply because the threshold of “necessity” is satisfied. Rather, whether or not an Order is made is to be determined according to the frame work provided in Division 7 of Part XII of the Act[8]. The guiding principle in respect of exercising the discretion is what in all the circumstances is reasonable and in not requiring an adult child to divest him/her self of all assets and capital to qualify for an order for maintenance[9].
[8] Cosgrove v Cosgrove (1996) FLC 92-700 at page 83,387
[9] Cosgrove v Cosgrove (no2) (1996) FLC 92-701 at page 83,395
Section 66H of the Act sets out the approach to be taken in proceedings for child maintenance including for an adult child as follows:
In proceedings for the making of a child maintenance order in relation to a child, the court must:
(a) consider the financial support necessary for the maintenance of the child (this is expanded on in section 66J); and
(b) determine the financial contribution, or respective financial contributions, towards the financial support necessary for the maintenance of the child, that should be made by a party, or by parties, to the proceedings (this is expanded on in section 66K).
Section 66J of the Act sets out the matters to be taken into account when considering financial support necessary for the maintenance of the child including an adult child as follows:
(1) In considering the financial support necessary for the maintenance of a child, the court must take into account these (and no other) matters:
(a) the matters mentioned in section 66B; and
(b) the proper needs of the child (this is expanded on in subsection (2)); and
(c) the income, earning capacity, property and financial resources of the child (this is expanded on in subsection (3))
(2) In taking into account the proper needs of the child the court:
(a) must have regard to:
(i) the age of the child; and
(ii) the manner in which the child is being, and in which the parents expected the child to be, educated or trained; and
(iii) any special needs of the child; and
(b) may have regard, to the extent to which the court considers appropriate in the circumstances of the case, to any relevant findings of published research in relation to the maintenance of children.
(3) In taking into account 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 other person unless, in the special circumstances of the case, the court considers it appropriate to have regard to them; and
(ii) any entitlement of the child or any other person to an income tested pension, allowance or benefit.
Section 66B sets out the objects of Division 7 of the Act being to ensure that children receive a proper level of financial support with their needs being met from the income, earning capacity, property and financial resources of both parents equitably.
Section 66K sets out the matters to be taken into account in determining the contributions to be made by the parties being:
a)The income, earning capacity, property financial resources of the party or of the parties;
b)The commitments of the parties that are necessary to support themselves or any other child or other person they have a duty to maintain;
c)The direct and indirect cost incurred by the parent or other person with whom the child lives in providing care for the child;
d)Any special circumstances which, if not taken into account in a particular case would result in an injustice or undue hardship to another person.
Given the break down of the relationship between X and the father in 2008, I assume there has been little input or consultation with Mr Bailey as to X’s tertiary education including the deferring of her original course. On the evidence before me, however, the course now being undertaken by X appears to be reasonable in the sense of ultimate career opportunities and X is progressing satisfactorily. I am satisfied that it is proper for X to be enrolled in and to continue her undergraduate degree and, in fact, no argument to the contrary was forcibly put on behalf of the father.
The mother at paragraph 22 of her Trial Affidavit deposes that X’s expenses for 2013 are as follows:
a)Accommodation - $195 per week;
b)Dining plan - $110 per week;
c)Books and university memberships etc - $20 per week;
d)Motor vehicle expenses – approximately $83 per week;
e)Weekly amount for living expenses - $180 per week;
f)Phone bill - $25 per week;
g)Airfares from Melbourne to (omitted) - $68 per week;
h)Personal and other expenses - $172 per week.
Total: $853 per week.
The total in 2012 was $793 per week but with the $60 per week variation applicable only to accommodation and dining plan.
X's Financial Statement deposes to ongoing expenses of $350 per week but clearly that does not include her accommodation/dining plan which the mother estimates at a total of $305 per week and X’s estimates therefore, corroborate the mother’s evidence in respect of items (e) and (h) above.
X was cross-examined in some detail as to her expenditure with focus on her clothing at $100 per week and her regular travel between Queensland and Victoria. I find her travel at $68 per week or $3536 per annum to be excessive. I think a figure of $1000 per annum or say $20 per week is more appropriate given X’s choice to leave (omitted) and pursue her studies on the (omitted), her limited term holidays and also her own evidence that much of her travel is for pleasure rather than necessity. I also consider $5200 per annum clothing for a student to be excessive and am prepared to allow $3000 per annum or say $60 per week. Education expenses at $20 per week are not particularised and I will not allow them. Consequently I will reduce X’s personal expenses by $108 per week from the estimate of $350 per week to $242 per week with her total needs now at $745 per week.
X herself can contribute up to $320 per week during the school terms from her internship despite its future uncertainty. She has the capacity for other alternative part time or holiday employment if the internship does not continue. Her work however, is not continuous and not always for two days per week and as such I do not favour the mother’s idea that there be a dollar-for-dollar system of reduction in the father’s obligation. Unfortunately, X and her father do not have a good relationship. Whilst I might like to encourage their communications, I do not think regular reports as to her earnings would be a fruitful start to a reconciliation. I estimate she could and should contribute at least an average of $200 per week over a year to her own needs. This leaves a shortfall of $545 per week. I repeat my findings above as to the income of the father, the asset position of the father, and the assets, resources and income of the mother. I am satisfied that each of the parents should contribute to X’s needs and that the appropriate distribution is $375 per week from the father and $170 per week from the mother.
It remains for me to determine the commencement date for such payments by the father. The circumstances in respect of X differ from those of her younger sisters. X has not been receiving ongoing payments from the father under the Child Support Agreement whereas the younger girls have been the recipients of approximately $300 per week to the mother. X has been at (omitted) University since the commencement of the 2012 University year. Subject to any of her own contributions, the mother has been financing her education and support from January 2012. The mother commenced these proceedings in December 2011. I note again the breakdown of the relationship between X and the father. I note also that I have a broad discretion in determining the starting date of such payment. I take into account that the mother has not been completely successful in her application in respect of quantum. I am of the view however that it would have been reasonable for the father to be contributing to X’s support from the commencement of her course in January 2012 and particularly given that the application was on foot by that time. I will Order that the father’s contribution be backdated to commence 1 January 2012 and in this sense the mother will be reimbursed for part of her expenditure thus far. That contribution is to be $375 per week since 1 January 2013. X’s needs during 2012, on the mother’s evidence were $60 per week less. She had not then, however, commenced her internship and hence her own contributions were limited to income from casual employment. I am satisfied that it is proper in all of these circumstances for the father’s contribution of $375 per week to be backdated to 1 January 2012. I am satisfied that such payment is necessary to assist X complete her tertiary undergraduate degree.
I am not persuaded on the evidence before me that the order should continue for any post-graduate or Masters degree to be undertaken by X. The evidence as to any potential benefits in respect of her employment is scant. As yet it is unknown if X will qualify for post graduate studies and/or whether there is employment available to her on the basis of her under graduate degree. If indeed she does pursue post-graduate studies then it will be open to X or the mother to bring a further application. I propose to order that the maintenance for X continue until 31 December 2013.
Adult Child maintenance – W
W is 19 years of age.
At paragraph 7(b) of her Trial Affidavit sworn 12 November 2012 the mother says:
W currently resides in (omitted) and is employed part-time as a (omitted) at a (omitted) shop. W intends to commence tertiary education in 2014 at (omitted). In addition to his income from his employment, I have provided financial support to W since the completion of his secondary education. I am aware that as of recently he has also received some support form the Father.
Like X, the mother deposes that W’s relationship with the father has been troubled and, in fact, broken down since August 2008.
W completed VCE in 2011. He deferred his acceptance to (omitted) and enjoyed a GAP year in 2012. He lived independently from the mother in (omitted) in 2012. By the end of the evidence in this matter the mother had moved from (omitted) to Melbourne.
It seems that despite his previous intentions, W enrolled at (omitted) in Semester one 2013. Until December 2012, at least, W continued to live independently of the mother in (omitted). The mother’s evidence is suggestive of W intending on moving into a share-house in Melbourne.
The mother seeks an Order that the father contribute adult child maintenance for W in the same quantum to that she seeks in respect to X.
The father opposes there being any Order in respect of W. He again suggests a voluntary payment and in a quantum of $100 per week but by way of private arrangement between him and W.
Unlike X, W did not give evidence at Court. Nor did W comply with the order to file a Financial Statement. As such, I do not have the same detail in respect of his financial needs and, importantly, his own ability and/or intentions to contribute to his own needs.
Further, it is the father’s contention that W does not want formal financial support form the father by way of Court Ordered Adult Child Maintenance. In cross-examination the mother did not dispute this contention although she implied that W’s attitude was perhaps related to the poor relationship between his parents and might not have been an informed or considered decision.
I have some difficulties in relation to the mother’s application in respect of W. I am satisfied that he does not himself seek to be the recipient of a maintenance order. He clearly has not wanted to be involved in these proceedings. He has not filed a Financial Statement. He did not give evidence. I have a limited knowledge of his current financial circumstances. He has lived independently of the mother during 2012. He has previously deferred his studies. He has earned his own income. The mother suggests that his intention is to again live independently. Whilst this may not necessarily make him “financially independent”, I can not be satisfied on the material before me that it is appropriate for there to be an Order in respect of W or indeed that such an Order necessary for him to complete his tertiary education. If his circumstances become more settled and it is clear that “necessity” arises then the Court is able to entertain an application by W.
Conclusion
As a result of the above, the father will be meeting the following child support and adult child maintenance obligations:
a)Tuition fees and boarding costs for Y - $54,960 per annum;
b)Educational extras for Y - $1000 per annum;
c)Tuition fees for Z – $26,160 per annum;
d)Education extras fro Z - $1000 per annum;
e)Periodic Child Support for Z - $19,500 per annum;
f)Adult child maintenance for X (at $375 per week) - $19,500 per annum
Totalling - $122, 120 per annum
In addition, the father will have the care and support of Y and Z for one half of their school holidays each year which I estimate to be approximately six weeks and for Z for one weekend per month.
The mother will have the following obligations:
a)Support of X at $170 per week - $8,800 per annum;
b)Estimated extra contributions to Y’s needs - $11,024 per annum;
c)Estimated extra contribution to Z’s needs (at $124 per week) - $6448
Totalling - $26,272 per annum.
The mother will also have the static costs of housing for Z on an almost full time basis and also for Y. In addition, any educational extras and extra curricular costs for Y and Z will be likely to fall on the mother.
In all of the circumstances, I am satisfied that a distribution of contributions of the children’s needs between the parents in these terms is just and equitable given the father’s far superior income but also taking into account the relative assets/resource positions of the parties.
I certify that the preceding one hundred and thirty-two (132) paragraphs are a true copy of the reasons for judgment of Judge McGuire.
Date: 2 August 2013
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