Hanna and Hanna
[2004] FMCAfam 450
•3 September 2004
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| HANNA & HANNA | [2004] FMCAfam 450 |
| CHILD SUPPORT – Application for a departure from CSA assessment – whether special circumstances exist that warrant a departure – whether it is just and equitable to make a departure – where parents agreed son would attend private school – where father currently living with his parents – where father asserts he is no longer financially capable of paying private school fees – whether CSA decision requiring payment by father of half of the tuition fees should be departed from – where father claims that his obligations under the current assessment restricts him from setting himself up in own home – whether in deciding whether special circumstances exist regard should be had to the fathers desire to set up his own home and the likely costs associated with doing so. |
Child Support (Assessment) Act 1989 (Cth), ss.117, 118
Family Law Act 1975(Cth), s.79A
Savery and Savery (1990) FLC 92-131
In the Marriage of Gyselman (1992) 15 FLR 219
Mee v Ferguson (1986) FLC 92-663
Lightfoot & Hampson (1996) FLC 92-663
Wild & Ballard (1997) FLC 92-771
| Applicant: | ROBERT EDWARD HANNA |
| Respondent: | ELIZABETH ANNE HANNA |
| File No: | PAM 1229 of 2004 |
| Delivered on: | 3 September 2004 |
| Delivered at: | Parramatta |
| Hearing date: | 18 August 2004 |
| Judgment of: | Raphael FM |
REPRESENTATION
| For the Applicant: | Applicant in person |
| Solicitors for the Respondent: | Byrnes Lawyers |
ORDERS
Application dismissed.
Applicant to pay respondent’s costs to be assessed in accordance with Part 21 Rule 21.02(2)(b) and Schedule 1 of the Federal Magistrates Court Rules.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT PARRAMATTA |
PAM 1229 of 2004
| ROBERT EDWARD HANNA |
Applicant
And
| ELIZABETH ANNE HANNA |
Respondent
REASONS FOR JUDGMENT
These proceedings involve an application for a departure from the child support assessment made originally on 16 September 2003 by a senior case officer and confirmed on 19 December 2003 by an objections officer for the regional child support registrar. The application was in the following form:
“1. Departure from an administrative assessment
That there be a departure from administrative assessment for child support for BH born 23 November 1988 and TH born 30 October 1991 payable by the husband to the wife as follows:
(i) Variation of assessment on school fees
From 1 January 2004 to the conclusion of the secondary school education, (expected to be 31 December 2006) that the CSA ruling that the husband pay half of the private school tuition fees be revoked.”
There were two other applications, one for a variation of annual assessment up until 2009 and the other that the mother not make any further claims against the father for private education, which were not proceeded with. The mother resisted the application seeking that it be dismissed.
The child support assessment
The decision from which departure is sought is the third change of assessment application dealt with by the CSA. Prior to the determination the father was paying child support at the rate of $6,240.00 per annum for the two children of the marriage. The father asked for an increase in the child support income amount to $68,250.00 for the period from 14 April 2003. The father who had previously been unemployed for some time had obtained employment at that rate and felt that his child support obligations should be adjusted accordingly. The case officer made the adjustment, resisted a request from the mother for an increase in that figure but determined that the father have his child support rate increased for the 2004 year by $8,044.00 to take account of the high costs of educating the children. The sum of $8,044.00 represented one half of the tuition fees for the son B at a well-known Sydney private school.
Background
The parties were married on 21 February 1987. They separated on 2 June 2001 and were divorced on 27 August 2002. There are two children of the marriage; B born 23 November 1988 and T born 30 October 1991. During the course of the marriage the father worked at Alcatel. The wife also worked during the course of the marriage although she claims this was on an intermittent basis. The father earned in excess of $70,000.00 per annum but shortly before the separation he was retrenched. He received the sum of approximately $95,000.00 by way of retrenchment payment.
In 2001 the parties agreed that the son B should be enrolled at the private school. He commenced in year 7 in 2001 as a day boy. The mother concedes in her affidavit at [29] that sending the boy to the private school involved a financial hardship on the applicant and herself.
The father remained unemployed for approximately two years during which time the parties separated. The retrenchment payment received by the father was placed into a joint account. On 24 September 2001 the mother, without reference to the father, paid the son’s school fees for the next two years being term 4 2001 - $3,616.00, 2002 - $13,888.00 and 2003 - $14,052.00.
The parties entered into a property settlement. Under those arrangements a mother was to pay to the father $90,000.00 plus 14.23% of the proceeds of sale of the matrimonial home. The husband kept his motor vehicle and his superannuation which was worth approximately $180,000.00. The property settlement was based upon a value for the matrimonial home of about $870,000.00. The matrimonial home was in fact sold for $1,350,000.00. After the house was sold the mother moved to the Port Macquarie area. The children who had been living with her in the matrimonial home moved with her. The mother has made arrangements to purchase a property of approximately 80 acres upon which she proposes to erect a four bedroom house at a cost that the father estimates of $330,000.00. According to the mother, after the home is built she will be left with approximately $187,000.00 in the bank. The mother has indicated that she does not wish to work at the present time because she feels obliged to provide care and attention to the children. When the mother moved she placed the son into a boarding house at the private school the fees for which are approximately $13,600.00 per annum.
The law
The provisions of s.117 of the Child Support (Assessment) Act empower a Court to make an order for departure from administrative assessment in special circumstances.
Section 117(i) provides as follows:
“i)That in the special circumstances of the case one or more of the grounds for departure outlined in section 117(2) exist before a Court can make an order for departure;
ii)that under section 117(1)(b)(ii) it would be just and equitable, as regards the child, the carer entitled to the support and the liable parent; and
iii)that it would be otherwise proper to make a particular departure order.”
If these three conditions are satisfied then the Court should make the departure order sought.
In Savery and Savery (1990) FLC 92-131 Kay J said that “special circumstances” were “facts peculiar to the particular case which set it apart from other cases.”
In the Marriage of Gyselman (1992) 15 FLR 219 at 225, the Full Court of the Family Court said as follows of the phrase “special circumstances”:
“Whilst it is not possible to find with precision the meaning of that term, as a generality it is intended to emphasise that the facts of the case must establish something that is special or out of the ordinary. That is, the intention of the legislature is that the Court will not interfere with the administrative formula result in the ordinary run of cases.”
The grounds for departure
Section 117(2) of the Act sets out the various grounds for departure. After considering these various bases for departure and whether or not in the special circumstances of the case it is appropriate for a departure order to be made, the Court must then consider section 117(4) of the Act which deals with the circumstances in which it is just and equitable to make the departure order sought.
Section 117(4) of the Act reads as follows:
“117(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:
–the nature of the duty of a parent to maintain a child (as stated in section 3); and
–the proper needs of the child; and
–the income, earning capacity, property and financial resources of the child; and
–the income, earning capacity, property and financial resources of each parent who is a party to the proceedings; and
–the commitments of each parent who is a party to the proceeding that are necessary to enable the parent to support:
himself or herself; or
any other child or another person that the person has a duty to maintain; and
–direct and indirect costs incurred by the carer entitled to child support in providing care for the child; and
–any hardship that would be caused:
to:
the child; or
the carer entitled to child support;
by the making of, or the refusal to make, the order; and
to:
the liable parent; or
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.”
Finally, it is necessary for the Court to consider section 117(5) and determine whether or not it is proper to make the departure order.
Section 117(5) reads as follows:
“117(5) In determining whether it would be otherwise proper to make a particular order under this Division, the court must have regard to:
–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
–the effect that the making of the order would have on:
any entitlement of the child, or the carer entitled to child support, to an income tested pension, allowance or benefit; or
the rate of any income tested pension, allowance or benefit payable to the child or the carer entitled to child support.”
In Gyselman (supra) the Full Court of the Family Court said at page 240 as follows:
“As we have already indicated, the exercise under section 117 involves three steps. The first, which we have already examined, is whether one or more of the grounds in subsection 2 has been made out. The legislation then requires the court to consider whether any proposed order is “just and equitable” and “otherwise proper”.
It is clear therefore that each of these three steps must be addressed by the court as a separate issue, namely:
a)whether one or more of the grounds of departure in section 117 is established; if so:
b)whether it is just and equitable within the meaning of section 117(4) to make a particular order;
c)Whether it is otherwise proper within the meaning of section 117(5) to make a particular order.
The grounds for departure upon which the applicant bases his claim are found at s.117(2)(c)(i) “because of the income, earning capacity, property and financial resources of either parent or the child”. The applicant also argues that the finding of the CSA that there were grounds under s.117(2)(b)(ii) was incorrect in all the circumstances of the case.
The applicant’s evidence
The applicant swore two affidavits, the first being one of 5 March 2004, the second being one of 18 August 2004. The father was self-represented and much of the affidavits consist of submissions. The mother’s solicitor agreed that these could remain in the affidavit but they have been treated by me as submissions and not as the truth of what is there stated. The father was cross-examined. I am satisfied that the parents agreed that their son be educated at the private school. The father did not seek to deny this. However, he argued that the agreement was made at a time when he was in employment, when the mother was working, when they were living in a property in which they had substantial equity and when the son was a day boy. The father’s evidence was that at around the time of the breakdown of the relationship he had been made redundant and that he had remained unemployed for approximately two years. He has recently found a position but this does not pay as much as he was being paid at Alcatel. The father suggested in his affidavit that the mother had taken control of his termination payment and used it pay, inter alia, the school fees for the following two years. This is not what occurred. The money was paid into a joint account and was expended. There is little evidence before me as to who expended that money save that it is conceded by the mother that she paid the school fees and that she did so without consulting the father, although she told him immediately thereafter by way of an e-mail.
The father says that he is currently living with his parents. This is not a situation which he wishes to continue. He is 46 years of age. It is not appropriate, he says, for him to be living with his parents. Furthermore, his parent’s house is not big enough to accommodate himself, his parents and both of his children when he has access to his children. His affidavit indicates that one of the children has to sleep on a mattress on the floor during these access periods. The father agrees that he can pay the child support assessed against him at the moment and still have approximately $300.00 per week left over but only because he is living with his parents. He wishes to vacate his parent’s house and move into a unit of his own which will have sufficient room for his children. Bearing in mind that his children are not of the same sex and are teenagers he would appear to need at least a three bedroom unit if they are to be properly accommodated.
The father argues that as the circumstances in which he agreed with his wife that the son should be privately educated no longer exists and the decision of the CSA requiring him to make an extra payment of one half of the son’s school fees should be departed from. It should also be departed from because by paying the amount assessed he is placing himself in a position where he is unable to leave his parent’s house. It is unsuitable for him and his children for the reasons previously described.
The respondent’s evidence
The mother also gave evidence. She provided an affidavit sworn 17 May 2004. She was cross examined by the father. Much of the debate between the father and the mother centred around the use of the $90,000.00 redundancy money. I shall deal with this in my findings. The mother’s evidence indicated that she had approximately $900,000.00 from the sale of the property and confirmed that she had land on the mid north case and proposed to build a substantial house there. The mother indicated in her evidence that she did not propose to return to work at the present time. She did not indicate that she was unable to work. It would appear from the mother’s evidence that the decision to place the son into boarding school arose directly out of her own decision to move to the mid north coast although she believes that being in a boarding house has assisted her son’s academic progress.
Findings of fact
The father sought to persuade the court that the mother had effectively snaffled the entire redundancy payment made to him and used it for her own purposes including those of paying for the son’s school fees. I am not satisfied on the evidence that this occurred although I do not say it did not. What I do know is that the sum of $90,000.00 was paid to the father in the property settlement. The mother claims that this is repayment of the $90,000.00. The father denies this. I do not think this is the appropriate forum in which this matter should be litigated. The father has not sought an order under s.79A of the Family Law Act1975.
The father was criticised for not doing anything to set aside the payment of the school fees by the mother. It was argued that because he did not contact the school and seek repayment or take any other steps he impliedly consented to what she had done. I would not go so far as that. I do not think the father’s attitude to the payment could be said to be anything more than reluctant acquiescence. I am not satisfied that the father could be said to have intended that his son be educated as a boarder at the private school. I think that the true arrangement between the parties was that the son could be educated at that school whilst both his parents were in employment and whilst he attended the school as a day boy.
Application of law to these facts
The extra payment which the father is objecting to and seeking departure from relates not to the boarding house fees but to the educational component of the school fees. So far as the year in question is concerned, and it is important to note that the finding of the CSA only related to the period between 1 January 2004 and 31 December 2004, the mother has borne the cost of the boarding house. The departure request relates solely to the academic fees which the CSA added to the normal percentage of child support required to be paid by the father. It would therefore seem to me that I must disregard the boarding house fees when considering whether a departure should be made in respect of the tuition fees. The law in relation to payment of tuition fees is that where parents agree to a child attending a private school then they are liable to contribute to the extent that they have a reasonable financial capacity to do so: Mee v Ferguson (1986) FLC 92-663; Lightfoot & Hampson (1996) FLC 92-663; Wild & Ballard (1997) FLC 92-771.
The question is therefore whether the father has a reasonable financial capacity to make the payments. The evidence discloses that he currently does so but he only does so because he is living with his parents and not paying the normal expenses which a person in his position would be expected to be paying. It is not a situation that he is happy with. He seeks a departure based upon the prospective cost of maintaining himself appropriately. Regrettably, although he would be entitled to such consideration if he had taken the necessary steps to remove himself from his parent’s house, whilst he is currently there there is nothing I can do because the CSA is obliged to consider the father’s present financial circumstances and commitments and not those which may occur in the future. When considering whether special circumstances exist which require a change of assessment on the basis that a parent’s necessary expenses significantly affect their capacity to support their child, the Child Support Policy Guidelines require evidence of the expense and proof that it is being paid. When assessing whether special circumstances exist requiring a change of assessment, regard may be had to the costs of setting up a household with basic necessities following separation. In saying this I take into account that the father provided no evidence of a firm intention (as opposed to a wish) to leave his parents home. If he had come to the court with a costed plan containing details of rental, moving costs, furnishing costs, bond money and a time line it would have assisted me to make a finding in favour of departure. But he did not. I also note that the father has about $90,000 on deposit, so he cannot argue that he needs a favourable decision before making any commitment.
The orders which may be made under s.117 are governed by s.118 of the CSA Act. These orders relate to the liable parent. It was clear from the father’s affidavits and submissions that he wished the court to take into account the financial position and earning capacity of the mother. But he had not made an application for that to be done and the mother resisted me incorporating such consideration into my decision. I can only deal with the application which is before me unless the parties agree otherwise. It is quite clear to me that an appropriate assessment of child support liabilities between the two parents would require the agency to consider the mother’s financial situation and her earning capacity. The agency would also have to consider the liability for the boarding house fees in circumstances where there was no agreement that the son should board and the necessity arose out of a personal decision of the caring parent. But these are matters for the agency to take into account when it makes its next assessment at the end of this year. I do not say that the matters were not considered at all by the agency because the liable parent’s contribution towards the tuition is only 50% and no extra burden has been placed upon him in respect of the boarding house costs.
My first task in deciding whether or not a departure should be made is to consider whether there are special circumstances in this case. At the present time I do not think there are. It is unfortunate that a liable parent has effectively to put himself into debt or into arrears in order to set up his household after separation and thus qualify for consideration under reason 7 of the CSA’s change of assessment process, which states:
You have necessary expenses in supporting yourself that affect your ability to support the children.
The CSA departure application form lists ‘reasons’ for departure which reflect the grounds contained in s.117(2) Child Support (Assessment) Act. Reason 7 correlates to s.117(2)(a)(iii)(A) which provides
s.117(2) For the purposes of subparagraph (1)(b)(I), the grounds for departure are as follows:
(a)that, in the special circumstances of thecase, the capacity of either parent to provide financial support for the child is significantly reduced because of:
(i) …
(ii) …
(iii) commitments of the parent necessary to enable the parent to support:
(A) himself or herself; or
(B) ….
If I am unable to take the mere wish of the father (as understandable as it is) to resettle himself into consideration, then I am unable to find that there are special circumstances in this case. The father’s inability to make the payment of one half of the tuition fees, which I have found that he agreed would be incurred, is not a present inability but an inability based upon the happening of a future event. To that extent the application is premature and I am unable to deal with it.
I dismiss the application. In giving consideration to the question of costs I note that the father has wholly failed in this application which appears to me to have been misconceived. It is unfortunate that the father did not seek legal advice. On the other hand the mother did seek legal advice. She was appropriately represented. Costs were reduced by having the matter heard by telephone and by her solicitor not unduly extending cross-examination or raising objection to the affidavit material or the manner in which the submissions for the father were made. It is therefore appropriate that the father pay the mother’s costs to be assessed in accordance with Part 21 Rule 21.02(2)(b) and Schedule 1 of the Federal Magistrates Court Rules.
I certify that the preceding twenty-eight (28) paragraphs are a true copy of the reasons for judgment of Raphael FM
Associate:
Date: 3 September 2004
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