Holiday and Holiday

[2016] FCCA 2248

FEDERAL CIRCUIT COURT OF AUSTRALIA

HOLIDAY & HOLIDAY [2016] FCCA 2248

Catchwords:
FAMILY LAW – Adult child maintenance – Applicant’s financial needs – Respondent’s capacity to pay.

Legislation:

Family Law Act 1975, ss.66G, 66H, 66J, 66L

Cases cited:

Cosgrove & Cosgrove (1996) FLC 92-700

Mercer & Mercer (1976) FLC90-033
Oliver & Oliver (1977) FLC 90-227
Masterson & Masterson [2012] FMCAfam 913

Applicant: MS HOLIDAY

Respondent: MR HOLIDAY

File Number: ADC 4051 of 2015

Judgment of: Judge Kelly

Hearing date: 7 March 2016

Date of Last Submission: 16 March 2016

Delivered at: Adelaide

Delivered on: 2 September 2016

REPRESENTATION

Counsel for the Applicant: Ms C Smith

Solicitors for the Applicant: Legal Services Commission of SA

The Respondent: In Person

ORDERS

1. Pursuant to s.66G and s.66L of the Family Law Act 1975, the Respondent father do pay adult child maintenance for the Applicant MS HOLIDAY born (omitted) 1996 at the rate of ONE HUNDRED AND FIFTY DOLLARS ($150.00) per week, backdated to commence on 16 March 2016 and continuing until the said adult child completes her present undergraduate studies.

2. The said maintenance payments shall increase on 1 July each year, commencing 2017, in accordance with variations in the Consumer Price Index (March quarter) for Adelaide.

3. Ongoing payments be made fortnightly to the Applicant’s nominated bank account commencing as and from 7 September 2016.

4. The Respondent pay the arrears due and payable for the period 16 March 2016 to 7 September 2016, such payment to be made in full to the Applicant’s nominated bank account no later than 9 December 2016.

5. In the event the Respondent fails to make payments by the due date in accordance with these Orders on two occasions, including payment in full of the arrears by the nominated date, then all maintenance payments thereafter shall be paid to the Applicant’s mother Ms H for transmission to the adult child, with such payments to be collected by the Department of Human Services, Child Support.

6. The Applicant provide written confirmation of her subject results to the Respondent within 14 days of the completion of each University semester or term.

7. The Applicant notify the Respondent in writing within seven (7) days in the event she:

   (a)withdraws from her course of studies;

   (b)marries or enters into a de facto relationship;

   AND in such circumstances the Order for adult child maintenance is thereafter discharged.

8. The proceedings are otherwise dismissed as finalised.

IT IS NOTED that publication of this judgment under the pseudonym Holiday & Holiday is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT ADELAIDE

ADC 4051 of 2015

MS HOLIDAY

Applicant

And

MR HOLIDAY

Respondent

REASONS FOR JUDGMENT

Introduction

1. The Applicant commenced these proceedings with her Initiating Application filed 29 October 2015, in which she seeks an order that the Respondent father pay her adult child maintenance in the sum of $200.00 per week, to increase in accordance with the CPI index on 1 July each year.   The Applicant also seeks an order that payments be directed to her mother, via the Department of Human Services, Child Support.

2. The Respondent seeks that the Application be dismissed, arguing that the Applicant has not demonstrated a need for adult child maintenance.

Background

1. The Applicant was born 6 November 1996.  She lives with her mother and has done so since her parents separated.  The Respondent paid child support for the Applicant pursuant to a Child Support Assessment until the end of her secondary education in 2014. 

2. The Applicant commenced tertiary studies in 2015 and is enrolled in a (course omitted) at (university omitted).  This is a five year full time course and the Applicant anticipates completing her Degree at the end of 2019.   In addition to studying full time, the Applicant also works part time at (omitted) and acknowledges that she has the capacity to make some contribution towards her own self support.

3. The parties entered into negotiations during 2015 in an effort to resolve the question of ongoing financial support, without success.  As the parties were unable to reach an agreement, the Applicant commenced these proceedings. 

Relevant legal principles

1. As the Applicant is over 18 years of age, the Family Law Act 1975 determines what level of financial support should be paid by her parents, if any. Division 7 of Part VII of the Family Law Act deals with child maintenance orders. Section 66L(1) states:

   “A court must not make a child maintenance order in relation to a child who is 18 or over unless the court is satisfied that the provision of the maintenance is necessary:

   (a)     to enable the child to complete his or her education;  or

   (b)     because of a mental or physical disability of the child.”

2. If the Court determines that the requirements of s.66L have been met, then the Application is determined in accordance with the relevant principles dealing with any child maintenance application. Section 66G empowers the Court to make such child maintenance order as it thinks proper. Section 66H directs the Court to:

   a)consider the financial support necessary for the maintenance of the child (as expanded in s.66J); and

   b)determine the financial contribution able to be made by a party for the maintenance of the child (as expanded in s.66K).

3. The authorities are clear that the Court has a discretion whether or not to exercise its adult child maintenance jurisdiction.  This was discussed in Cosgrove & Cosgrove[1] where His Honour Justice Warnick enumerated the following factors which may affect the Court’s discretion in relation to an adult child maintenance claim.  The factors listed by His Honour are as follows:

   [1] Cosgrove & Cosgrove (1996) FLC 92-700

   “(i)whether the ‘nexus’ of dependence between the child and parents had ceased and the application amounts to a ‘resurrection’ of that dependence;

   (ii)the period between initial cessation of dependence (if any) and the application;

   (iii)whether the child had completed the course of education intended by the parents to outfit him/her for employment sufficient to support himself/herself;

   (iv)other assistance, benefits or education which the child has received;

   (v)the ability of the child to complete the course in question;

   (vi)the likelihood of the child completing the course in question;

   (vii)the financial capacity of the child to maintain himself/herself to the completion of the ‘education’;

   (viii)the financial circumstances of those persons responsible for support of the child (generally the parents);

   (ix)the filial relationship between the child and the person from whom maintenance is sought.”

4. There is authority to suggest that the absence of a filial relationship between the Applicant adult child and the parent may be a determining factor in an Adult child maintenance application.[2]  Other authorities take a different approach, concluding that it should not be “a necessary element of awarding maintenance that there should be a warm relationship between the parent and the child”.[3] While the absence of an affectionate child/parent relationship may be a factor in the Court’s discretion, the circumstances in which it should expunge a parent’s potential responsibility pursuant to s.66L should be very limited, in my view.

   [2] Mercer & Mercer (1976) FLC 90-033

   [3] Oliver & Oliver (1977) FLC 90-227

5. As noted by Brown J in Masterson & Masterson, “the more consistent line of recent authority, relating to this issue, seems to have ameliorated the earlier attitude that it was inappropriate for the court to condone an adult child wanting to take from a parent financially with one hand and spurn that parent emotionally with the other.”[4]  At the same time, His Honour commented that the filial relationship may be a factor in assessing the amount of adult child maintenance, if such maintenance was found to be necessary by the Court.  This will depend on the circumstances in each case.

   [4] Masterson & Masterson [2012] FMCAfam 913 at para.156

The hearing

1. The Applicant relied upon her Affidavits filed 29 October 2015 and 19 February 2016.  The Respondent relied upon his Affidavit filed 26 February 2016 which repeated and expanded upon his original Affidavit filed 18 November 2015.

2. Both parties gave evidence and were cross examined.  It is clear from the nature of the Respondent’s Affidavit and his cross examination of the Applicant, that he harbours a great deal of resentment towards his former spouse, the Applicant’s mother.  At times, the Respondent’s cross examination seemed driven as much by a wish to find out about his daughter’s life and activities, as by the financial issues before the Court.

3. I am satisfied that the Applicant gave her evidence honestly and openly.  The Respondent sought to challenge much of the Applicant’s evidence in cross examination, as he is entitled to do. In my view the Applicant made concessions where appropriate.   I generally accept her evidence before the Court even when supporting records or documents were not provided. 

The Applicant’s case

1. The Applicant claims total weekly expenditure of approximately $467.00.[5]  This figure was calculated by adding up the total household expenditure incurred for various expenses within her mother’s household and then allocating 50% of each item to her, together with her own personal expenses.

   [5] Affidavit of Ms Holiday filed 29 October 2015, para.9

2. When asked why she was seeking an order for adult child maintenance from her father in the sum of $200 per week, the Applicant explained that she earns on average $180 per week, and accordingly her expenses exceed her income by $287 per week.  Given that the Respondent father earns approximately twice as much as her mother, she concluded that it would be appropriate for the Respondent to contribute two-thirds of this shortfall by way of adult child maintenance, which equates to approximately $200 per week.

3. The Applicant provided copies of her mother’s recent payslips to confirm her mother’s income.[6]  She also provided documentary proof of various household and other expenses that she was claiming, as annexed to her Affidavit.  The Applicant conceded that she is not presently paying those full expenses and that she generally contributes $100 per week to the household expenses, because that is all she can afford.  The Applicant gave evidence that she tries to pay her mother $200 per week, but is rarely able to do so.

   [6] Affidavit of Ms Holiday filed 29 October 2015, Annexure C

4. The Applicant is clearly unable to meet all her claimed expenses at present, but that does not mean that the expenditure is not legitimate and relevant to her Application for adult child maintenance.  Her evidence indicates that, at present, the Applicant’s mother is bearing the entire shortfall for her financial support.  It is that situation which the Applicant seeks to remedy by pursuing an order for adult child maintenance from the Respondent.

5. I am satisfied that the Applicant has successfully completed her studies to date and is likely to meet her assessment requirements in the future.

The Applicant’s income and reasonable expenses

Income

1. I turn now to the Applicant’s income and financial resources.  She has few assets of any value.  She estimates her average weekly wages in the sum of $180 per week.  The Court is directed to disregard her eligibility for any income tested pension benefit or allowance, such as her Youth Allowance.[7] 

   [7] Family Law Act 1975, s.66J(3)(b)(ii)

2. The Applicant conceded that during university holiday breaks she is able to work longer hours and earns a higher income when compared to her employment during university semesters.   The Respondent argues that the Applicant can work substantially more hours during her university holidays and calculates her potential income earning capacity to exceed $340 per week, when averaged over the year.  However this assumes that the potential extra hours are available and offered to the Applicant and I am not satisfied that it is reasonable to make this assumption.

3. The Applicant provided a range of payslips covering periods both during university semester and holidays.  The payslips indicate that she earned net income in the sum of $6,265 between 1 July 2015 and 14 February 2016, a period of 33 weeks. This equates to a weekly income of approximately $190 per week.  Taking into account the payslips provided by the Applicant, I am satisfied that she has indeed worked extra hours during those non academic weeks, but as mentioned above, the Court cannot assume that full time employment is immediately available to the Applicant whenever she seeks it.

4. I find the Applicant’s income should be fixed at the sum of $190 per week.  I am satisfied that the Applicant does not have any further financial resources she may call upon.  The Respondent referred to a potential inheritance that the Applicant’s mother may receive at some point in time, but the evidence was not sufficient for this possibility to affect the Court’s decision. 

5. I reject the Respondent’s contention that the Applicant is somehow in a “fifty percent de facto relationship” with her boyfriend.  There was no evidence to support this claim or to suggest that she may have some claim for financial support from her boyfriend.

Expenses

1. The Applicant has set out her weekly expenses in her Affidavit.  She endeavoured to support all of her expenses with appropriate documentation, but acknowledged that she was not able to provide receipts for each and every item.  

2. The Respondent challenged her claimed expenditure.  He argued that the Applicant cannot claim one half of her mother’s housing costs and household expenses when she uses only one bedroom in her mother’s four bedroom home.  In my view, this ignores the reality that the Applicant also uses other rooms and facilities within the premises.  The Court may have been more sympathetic to the Respondent’s argument if the claimed housing expenditure was unreasonably high, but I conclude that it is not.  I note the Applicant based her calculations on the interest component of her mother’s home loans, not on her mother’s actual mortgage repayments. 

3. The Applicant would be paying accommodation expenses if she lived independently of her mother and I consider that the amount claimed of $132 per week is not excessive.  The Respondent suggested that the Applicant could reside with him, but this is a fanciful suggestion, given their poor relationship.

4. Turning to her other expenses, I conclude it is unlikely that the Applicant would be contributing towards house and contents insurance for a property she does not own, nor towards car insurance for a vehicle she does not own and I exclude those expenses. 

5. The Applicant was cross examined at length in relation to log book entries relating to her use of her mother’s motor vehicle.  The Applicant conceded that her mother had filled in some of the entries in the log book and was unable to confirm that all of the entries were accurate. 

6. Clearly the Applicant does use her mother’s motor vehicle.  Whether she is travelling to work, to visit her boyfriend to her leisure activities, or other destinations, she incurs some petrol costs associated with the use of her mother’s motor vehicle.  The log book is not entirely reliable but certainly provides some guidance as to the Applicant’s likely petrol expenses.  Taking into account the uncertain evidence on this topic I will allow $20 per week in relation to the Applicant’s petrol expenditure.

7. The Respondent challenged the Applicant’s expenditure on books and stationery for her university studies, particularly as to why the Applicant had not purchased all her text books second-hand.  This is a legitimate issue, but it may be that not all of the books were available second-hand.  The computer printout of second-hand textbooks tendered by the Respondent[8] did not assist the Court, as it referred to other text books, not the legal text books purchased by the Applicant.  I accept that the Applicant has claimed twice for one text book, which is clearly an error.  I will reduce her claimed expenditure accordingly.

   [8] Exhibit R3, Computer printout from Unibooks (undated)

8. The Respondent also queried her claimed expenditure given that she was not able to provide receipts for some of the items referred to. Whether or not receipts were otherwise provided, I am satisfied the Applicant is a witness of truth and I accept her claimed expenditure in this regard.

9. I decline to include the item claimed for health insurance.  If a parent chooses to maintain an adult child on their health insurance, that is a matter for that parent; it is not an expense that is necessary for the Applicant to complete her tertiary education. 

10. I accept the other expenses claimed are otherwise reasonably necessary to enable the Applicant to complete her tertiary education.   It is important for any tertiary student to maintain a balanced lifestyle and physical fitness or sporting activities are an important aspect in that regard.

11. I therefore find the Applicant’s expenses are as follows:

Housing costs (estimate)	$132
Food and household supplies (estimate)	$100
Electricity	$14
Water	$8
Computer (internet/landline)	$7
Mobile telephone	$17
Petrol (estimate)	$20
Fares	$18
Books (estimate)	$12
Stationary	$11
Clothing and shoes (estimate)	$20
Medical expenses (estimate)	$15
Pharmaceutical (estimate)	$10
Sporting commitments	$39
Union fees	$4
TOTAL	$427

1. I find that the Applicant’s reasonable weekly expenses are $427 and exceed her income by the sum of $237.

The Respondent’s case

1. The Respondent relied upon his Affidavit filed 23 February 2016 which sets out his income and financial expenses, together with the evidence challenging the Applicant’s position.  I have already addressed the Respondent’s evidence as it relates to the Applicant’s income and expenses and I now turn to the Respondent’s financial circumstances.

Income

1. The Respondent is employed as a (occupation omitted) for (business omitted).  His net weekly salary is $1,451 plus a fuel allowance of $27 per week, totalling $1,478.  He is also eligible to earn commissions based on his sales results.  I appreciate there may be some uncertainty about the Respondent’s commission payments, but his sworn Affidavit includes a weekly amount of $209 as his average weekly commission (after tax)[9] and this seems to be reflected in his taxable income for the financial year ending 30 June 2015[10]. 

   [9] Respondent’s trial affidavit filed 25 February 2016 at para.57

   [10] Ibid at para.51 and Annexure 12

2. A bundle of the Respondent’s payslips were tendered[11] and indicate that the Respondent received a commission payment of $9,872 gross (net $6,024) on 3 February 2016, in addition to an earlier commission payment of $2,611 (net) received by him in October 2015.[12]  He may have received other commission payments across the financial year as well.  I am satisfied that the Respondent’s available income consists of his salary plus commission payments, which are likely to be in the region of $10,850 each year, or $209 per week, as deposed to in his Affidavit.

   [11] Exhibit A2, Respondent’s payslips for the period 23 December 2015 to 17 February 2016

   [12] Respondent’s trial Affidavit filed 25 February 2016, Annexure 12, payslip for pay date 28 October 2015

3. For the purposes of this hearing, I find that the Respondent’s net weekly income is $1,687.

Expenses

1. The Respondent gave evidence that he pays $440 per week towards his accommodation expenses.  He negotiated this payment with his partner and it reflects one-half of her mortgage repayments.  He pays the sum of $240 per week direct to her mortgage and $200 per week direct to her.  This suggests that his partner’s mortgage repayments are in the region of $880 per week which seems high for a property the Respondent describes as ‘a modest three bedroom property’.[13]  Nonetheless, I will allow this expenditure as claimed by the Respondent.

   [13] Respondent’s Closing Submissions

1. Certain of the Respondent’s other claimed expenses are open to challenge, however.  I consider his claim of $100 per week on alcohol is excessive and conclude that a more reasonable amount would be $50 per week. The Respondent himself conceded that the items detailed as work office expenses and work travel expenses were tax deductible and I exclude those expenses.  He claims the sum of $50 per week for “miscellaneous expenses”, $43 per week for entertainment and two allocations of $50 per week for holidays.   The item “miscellaneous” has no definition and I exclude that item.  I further conclude that the Respondent’s reasonable expenditure in relation to holidays should be more realistically allocated in the sum of $50 rather than $100. 

2. In the circumstances I find the Respondent’s expenses are as follows:

Rent/mortgage	$440
Electricity	$22
Gas	$9
Water	$17
Council Rates	$12
Home & contents insurance	$8
House & garden maintenance	$25
Telephone / internet	$10
Car repayments	$144
Car maintenance	$62
Car insurance	$15
Car registration	$16
Petrol	$83
Foxtel	$15
Bank fees	$12
Food & household supplies	$125
Alcohol	$50
Holidays	$50
Mobile telephone	$11
Entertainment	$43
Health insurance	$36
Dental gap fee	$29
Eye care / gap	$17
Medicines / pharmacy	$9
Clothing / shoes	$10
Hairdresser	$6
Gifts	$20
Timeshare annual fee	$14
Hobbies	$10
TOTAL	$1,320

1. I find that the Respondent’s income exceeds his expenses by the sum of $367 each week.  I accept that the Respondent does not own any assets or have access to any other financial resources that he can readily call upon to meet any order for adult child maintenance.

Should an adult child maintenance order be made?

1. The Respondent argues that the Applicant is presently studying and is clearly able to complete her studies without his current financial support and therefore an adult child maintenance order is not necessary to enable her to complete her education. However, that mistakes the intention of s.66L.

2. I am satisfied that the Applicant has established that she requires ongoing financial support to complete her education, in the sum of $237 per week. That being the case, the Applicant is entitled to pursue adult child maintenance against either or both of her biological parents. The nexus of financial dependence has not been broken in relation to the Respondent, given that negotiations with respect to this issue began soon after the Applicant commenced her tertiary studies. The Applicant and Respondent do not enjoy a good relationship, but I do not consider that this factor overrides the Respondent’s obligations pursuant to s.66L.

3. The Applicant does not need to file an Application against her mother as her mother is presently assisting with her financial support, whereas the Respondent father has declined to do so.  The fact that one parent is contributing towards their adult child’s financial support cannot be seen as a reason to excuse the other parent from doing so, provided the adult child has established they are unable to support themselves adequately and the relevant parent has the financial capacity. 

4. Clearly both parents may have an obligation to provide financial support and I am satisfied that the Applicant’s mother will continue to meet her obligations in that regard.  The Applicant’s mother earns a lower income than the Respondent father.[14]  Based on the Applicant’s claimed expenditure (calculated at 50% of her mother’s household outgoings) the Court can safely infer that her mother’s capacity to contribute to her support is more limited than the Respondent’s capacity.   The Applicant’s mother has been picking up the shortfall for the Applicant’s support, but no doubt this has caused her mother considerable financial stress.

   [14] Applicant’s Affidavit filed 29 October 2015, Annexure C

Conclusion

1. Taking into account both parents’ responsibility to contribute towards the Applicant’s support and their respective financial circumstances, I conclude that the Respondent has a greater capacity to contribute towards his daughter’s support than does her mother.  I find that he should pay the sum of $150 per week by way of adult child maintenance, an amount equal to approximately 60-65% of the Applicant’s established financial need. I am satisfied this is an appropriate allocation of financial support to the Respondent, taking into account all of the evidence. The payment should increase in accordance with the CPI each year, which is usual practice.

2. The order will be backdated to the date of hearing.  This will create immediate arrears, but that is a situation that could have been avoided had the Respondent adopted a more reasonable attitude to this Application.  I consider that the date of hearing is a more appropriate timeframe than the date of filing, given that the Respondent has successfully challenged some aspects of the Applicant’s claim. 

3. The Respondent is entitled to be kept advised of the Applicant’s progress through her studies.  It is also appropriate that the Applicant notify the Respondent immediately in the event she withdraws from her course, begins living in a de facto relationship, or marries.   

4. The Respondent sought to limit his obligation only to the University terms or semesters, but this again misunderstands the purpose of s.66L. The Applicant has ongoing expenses which she needs to meet, whether during University semester, or holiday break. Her income and expenses have been calculated as an average over the whole year and the Respondent’s obligation similarly should be calculated and continue over the whole year.

5. The Applicant proposes that the payment of adult child maintenance continue until she concludes her tertiary education, whereas the Respondent proposes that any order cease at the end of the Applicant’s course in 2019.  While it is true that many students need to undertake further study beyond an undergraduate degree, in order to maximise their employment and career opportunities, there was no evidence before the Court in that regard.  In the circumstances I find that the Respondent’s obligation should cease upon the Applicant completing her present undergraduate degree.  Any further financial support would need to be assessed on her financial circumstances at the time.  I do not consider the remaining orders sought by the Respondent are necessary.[15] 

   [15] Respondent’s Affidavit filed 26 Feb 2016 at para. 48

6. The Applicant sought an order that payments be directed to her mother, so that the maintenance may be collected by the Child Support Agency, to avoid any non compliance issues.  This presupposes that the Respondent will not comply with the Orders and I am not prepared to make that assumption.  I will order that payments be made to the Applicant’s nominated bank account.  In the event the Respondent fails to make payment by the due date on two occasions, including payment of the arrears, then the Orders will provide for payment to be made via the Applicant’s mother and the Child Support Agency thereafter.

7. I now make orders as set out at the commencement of these Reasons.

I certify that the preceding fifty four (54) paragraphs are a true copy of the reasons for judgment of Judge Kelly

Date: 2 September 2016