Jacome & Yanda
[2022] FedCFamC2F 1791
Federal Circuit and Family Court of Australia
(DIVISION 2)
Jacome & Yanda [2022] FedCFamC2F 1791
File number(s): BRC 7039 of 2022 Judgment of: JUDGE TAGLIERI Date of judgment: 23 December 2022 Catchwords: FAMILY LAW – PRACTICE AND PROCEDURE – Review of Judicial Registrar’s decision – spousal maintenance and child support – where husband seeks discharge of an interim order that he pay the children’s private school fees and restraint regarding changing the children’s school enrolment – where the husband seeks discharge of an interim order that he pay weekly spousal maintenance to the wife – application dismissed Legislation: Child Support (Assessment) Act 1989 (Cth) div 4 part 6A, div 4 part 7, div 5 part 7, ss 117(2)(b)(ii), 117(4), 117(6), 117(7), 117(7A), 117(8), 124, 125
Federal Circuit and Family Court (Family Law) Rules 2021 (Cth), sch 4, r 4.08
Cases cited: Fleming & Burnett [1994] Fam CA 175
Gyselman and Gyselman [1991] FamCA 93
Ivanovic & Ivanovic [1996] FamCA 41
Keymer & Keymer [2020] FamCAFC 70
Lightfoot and Hampson [1996] FamCA 8
Savery and Savery [1990] FamCA 30
MS and PS (2006) FLC 93-268
Simiko & Kellidis (No 2) [2022] FedCFamC2F 982
Division: Division 2 Family Law Number of paragraphs: 75 Date of hearing: 8 December 2022 Place: Hobart Counsel for the Applicant: Mr Linklater-Steele Solicitor for the Applicant: Rostron Carlyle Rojas Lawyers Solicitor for the Applicant: Mr Cooper, Cooper Family Law ORDERS
BRC 7039 of 2022 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MS JACOME
Applicant
AND: MR YANDA
Respondent
order made by:
JUDGE TAGLIERI
DATE OF ORDER:
23 December 2022
THE COURT ORDERS THAT:
1.The Application for Review filed 25 October 2022 is dismissed.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under a pseudonym Jacome & Yanda has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
Judge Taglieri
The applicant in this Application for Review filed 25 October 2022 (“the review application”) is Mr Yanda (“the Husband”), who is the respondent in the substantive proceedings. The respondent to the review application is Ms Jacome (“the Wife”), who is the applicant in the substantive proceedings.
The review application seeks review of Orders 6, 34, 37, 38, 39 and 40 made by a Senior Judicial Registrar on 4 October 2022 (“the interim orders”).
At the review hearing on 8 December 2022 (“the review hearing”), I was advised that the Husband no longer sought to vary Order 6, meaning that he accepted that no lump sum partial property settlement orders should be made.
Further, I was advised that the Husband sought:
(a)Discharge of the restraint order concerning changing the children’s school enrolment;[1]
(b)Discharge of the interim periodic spouse maintenance order made in favour of the Wife in the sum of $326 per week;[2] and
(c)Discharge of the child support orders for payment of school fees.[3]
[1] Order 34 of the interim orders.
[2] Order 36 of the interim orders.
[3] Orders 37 to 40 inclusive of the interim orders.
The Wife sought that the interim orders remain undisturbed.
Background and uncontentious facts
There are two children of the marriage, X aged 14 years and Y aged 12 years old. The parties were married for 15 years and finally separated in November 2021. The Wife and children have occupied the former matrimonial home since then.
During most of the marriage, the Husband earned a good income as a medical professional, while the Wife worked full-time in administration until the children were born. Thereafter, she continued to work in her own private consultancy and also undertook most of the home duties including caring for the children, although a nanny was also hired.
The Husband is a medical professional who was in private practice until after separation, when he took the role of Medical Director with Employer B, where he is now engaged. The Wife continues to work in her private consultancy, C Pty Ltd.
It was also agreed between the parties that:
(a)There is an Administrative Assessment in place pursuant to the Child Support (Assessment) Act 1989 (Cth) (“the Assessment Act); and
(b)The children have been attending private schools and that the total cost of the school fees is $1,044 per week.
At the commencement of the review hearing, I raised whether the Court should exercise power to make interim child support orders.
I observed that there did not appear to be:
(a)An Application for departure from the administrative assessment of child support or an objection to the same pursuant to Division 4 of Part 6A of the Assessment Act; or
(b)An Application to the Court for departure from the administrative assessment of child support pursuant to Division 4 of Part 7 of the Assessment Act.
Not surprisingly, because the Husband sought discharge of interim Orders 37 to 40 and the Wife wanted to preserve them, the parties made opposite submissions about the Court exercising power pursuant to s 124 of the Assessment Act.
Due to this contest, I gave both parties liberty to file a list of authorities with pinpoint references which each sought to rely on. Both parties forwarded their authorities to my Associate pursuant to liberty granted on 6 December 2022. The relevant law and authorities are addressed below.
Materials relied upon by parties
The Husband relied on his affidavit filed 1 December 2022 and Financial Statement filed 20 September 2022. Both have been read in evidence unopposed. I have also had regard to the Husband’s Case Outline filed 6 December 2022.
The Wife relied on parts of the following documents, which were considered without objection after the Husband’s solicitor abandoned his objection to the Family Reporter’s affidavit:
(a)Outline of Case filed 23 September 2022;
(b)Amended Initiating Application filed 30 August 2022, setting out the relevant interim orders sought at [25] to [29] on pages 26 and 27;
(c)Affidavit of the Wife filed 14 June 2022 at [1] to [12] and [30] to [50];
(d)Affidavit of the Wife filed 21 September 2022 at [8] and [9];
(e)Affidavit of the Wife filed 29 September 2022 at [9] to [13];
(f)Affidavit of the Wife to be filed 6 December 2022;
(g)Financial Statement of the Wife filed 14 June 2022;
(h)Financial Questionnaire of the Wife filed 14 June 2022.
(i)Balance Sheet filed 23 September 2022; and
(j)Affidavit of the Family Reporter Ms D (“the Family Reporter”) the filed 7 September 2022, which attaches the Family Report dated 22 August 2020 at annexure -1 (“the Family Report”). The Wife relied on [19] to [22], [27] to [31], [32] to [44], [62], [85], [102], [106] to [110], [114], [165], [182], [183], [189], [200] and [214] of the Family Report.
She also tendered into evidence the following documents:
·Exhibit M-1: Enrolment Agreement for E School dated 22 December 2021; and
·Exhibit M-2: Enrolment Agreement for F School dated 25 January 2022.
The Husband’s case
The Husband contends that neither party has capacity to pay the children’s school fees from incomes they draw. Accordingly, the restraint order referred to at [4] above should be discharged.
As a contract employee, the Husband claims that his income has reduced in 2022. He says the explanation for the reduction is:
(a)Less demand for him to work; and
(b)That he has a different pattern and hours of work because of the parenting arrangements, which require him to care for the children on a seven day on/off arrangement.
He contends, based on his evidence and the invoices annexed to his affidavit, that a true reflection of his earning capacity is $360,000 per annum or $6,900 gross per week.
After payment of tax, rent, assessed child-support, the expenses outlined in Part N of his Financial Statement filed 20 September 2022, and weekly repayment in reduction of his tax debt, his net position is minus $4,971. It is submitted that even if the Husband were not to reduce his tax debt, his surplus would only be $690 per week, which is inadequate to pay the school fees.
The Husband takes issue with the Wife’s disclosure of income and suggests that she has capacity to derive a greater income than that which she has disclosed.
The Husband claims that the Wife’s weekly income is $2,106, which is derived from a certain reconstruction of moneys paid or deposited to her bank accounts. He further says that she has a surplus of $182 per week after deducting payment of tax, private health insurance and registration, and weekly expenditure of $1,195, but not subtracting weekly credit card repayments.
The assessment described at [22] was premised on the assumption that private school fees would not be paid by either party; and that she would not need to make repayments for her credit card, because the balance of debt disclosed in her Financial Statement filed 14 June 2022 would have been repaid by now at the rate of repayments she disclosed, being $810 per week.
In relation to the Wife’s credit card, I observed during submissions that the contention that the credit card would by now be repaid could only hold as true if there were no further charges to the credit card. This was conceded, but a submission was made that there was no evidence put before the Court about an updated balance of the credit card debt and repayments to it.
In summary, the Husband contends that the Wife has failed to demonstrate a need for support and fails to meet a necessary prerequisite of making an order for spousal maintenance.
The wife’s case
The Wife deposed to an income of $1,210 gross per week, made up of $870 from self-employment and $340 from child support received from the Husband.
In her affidavit filed 6 December 2022 at [4.3], she identifies weekly fixed expenses of $2,568 and variable expenses of $1,195 per week, being a total of $3,763. This results in a shortfall of $-2,513 per week, noting her income at [26] of these reasons.
At [5] she deposes that the Husband’s employment contract identifies his income as $2,500 per day and further that he receives income for 16 hours or two days per month for non-clinical duties pursuant to his contract.
The effect of the above evidence is that the Wife refutes the claim that the Husband’s income has reduced and that he is still able to earn similar to that reflected in his Notice of Assessment for the financial year ending 30 June 2022 and care for the children in a week-on-week-off pattern of work.
The Wife disputes that she has not made proper disclosure of her income and provides an explanation for payments made to her business and personal bank accounts, which is that it reflects transferring of the same money to cover various expenses at times.
LEGAL PRINCIPLES
Spouse maintenance
The approach to be taken in deciding spousal maintenance applications is usefully addressed by the Full Court of the Family Court in Keymer & Keymer [2020] FamCAFC 70 at [33]. I will adopt that approach, which is identified as:
In MS & PS (2006) FLC 93-268, at 80,551, Coleman J explained that whether an order for spousal maintenance should be made requires a four step process as follows:
•can the applicant support himself or herself adequately?
•if not, what are the applicant’s reasonable needs?
•what capacity does the respondent have to meet those needs?
•what order is reasonable having regard to s 75(2)?
Further, as this is an interim hearing by way of application for review, I must decide the issues afresh standing in the position of the original decision maker and on materials the parties have identified they rely upon.[4]
[4] Rule 14.08 of the Federal Circuit and Family Court (Family Law) Rules 2021 (Cth).
Child support
Concerning the issue of the Court’s power to make an order for the Husband to pay the school fees and that the value of that liability not be credited against the administrative assessment of child support, the Husband relied on Ryan & Ryan [1994] Fam CA 175[5] and cited the following passage of the Court’s reasons:
In my opinion, as a necessary consequence of the amendments and the decisions to which I have referred, while the lodgement of an application to the court for an order under Division 4 is not a condition precedent to the hearing and determination of an application under ss. 123 and 124 of the Child Support Act, unless there is such an application for a departure order before the Court when it hears an application under sections 123 and 124 of the Child Support (Assessment) Act 1989, the Court, in providing child support for the child otherwise than in the form of periodic payments, if what is proposed is a lump sum, is limited at the very most to the aggregate amount of any current assessment but most probably in the light of the authorities to the capitalisation of the current assessment for the relevant period.
In my opinion it is not competent, having regard to the amendments which I have stated and their intention as revealed in the explanatory memorandum I have set out, for the court on an application under sections 123 and 124 to do other than what I have stated.
[5] Followed by the majority of the court in Lightfoot & Hampson [1996] FamCA 8 and in Ivanovic & Ivanovic [1996] FamCA 41.
The Wife on the other hand referred to the reasoning in Lightfoot and Hampson [1996] FamCA 8 followed in Ivanovic & Ivanovic [1996] FamCA 41. The conclusion of the latter usefully summarises the state of the law and how the statutory scheme is to be interpreted:
78.Before us and also before the Full Court in Lightfoot and Hampson was an application to read the Division as conferring through section 125(2) a power to increase the amount of child support liability. The long standing view of Division 5 has been that it serves as a means of providing a lump sum consolidation of existing obligations, not an avenue for increasing quantum.
79.The issue is a difficult issue of statutory interpretation concerning which opinions can legitimately differ. While we have some reservations about the correctness of the majority decision in Lightfoot's case and in particular the very limited operation that it gives to s125(2), we are not sufficiently persuaded that it is wrong to express a contrary conclusion and we think that the desirability of adopting a consistent approach to legislation such as this which affects so many people is such that we should not do so.
80.In our view, even if one applies the majority decision in Lightfoot's case, leave to appeal should be refused and the appeal dismissed. We do not read the majority judgment as an exhaustive statement of what may constitute "special circumstances for the purposes of section 125, thereby enabling the making of an order for a payment which is not to be credited against an existing assessment.
81.We consider that this case is one such illustration.
82.The wife here seeks payment of school fees as the alteration to the child support assessment. Such circumstances were envisaged by the majority in Lightfoot's case (at 84 per Fogarty J), as a species relevant to the exercise of discretion to supplement rather than substitute the assessment. The fees have been paid up to the point of this judgment by the wife. Given that we do not disturb the trial Judge's finding of a joint intention by the parties for the children to have a private school education, such payments have inevitably been to the financial detriment of the wife vis a vis the husband. Such circumstances were also mentioned by Fogarty J at 84 of his judgment in Lightfoot's case.
83.We appreciate that the majority judgment suggests that the meaning of "special circumstances" cannot be identical in both s117 and s125. However this may be, the expression must be given some meaning, as Fogarty J's judgment recognises. The test which governs the meaning of special circumstances for a departure application (Savery and Savery [1990] FamCA 30; (1990) FLC 92-131 cited with approval by the Full Court in Gyselman and Gyselman [1991] FamCA 93; (1992) FLC 92-279 at 79, 065), namely 'facts peculiar to the particular case which set it apart from other cases' we respectfully endorse. We also respectfully agree with the dictum of Fogarty J that s125 was inserted in the legislation "because it was apprehended that there might be unusual circumstances where there should not be a credit" (Lightfoot's case at 84). We must therefore consider whether the facts of the present case come within the ambit of this description.
I was told during the review hearing that there was no argument before the Senior Judicial Registrar about the above lines of authority and how the provisions of Division 4 and Division 5 of Part 7 of the Assessment Act should be applied and how they interact. Instead, the parties appear to have proceeded on the basis that the Senior Judicial Registrar was entitled to exercise power pursuant to section 124 and 125 of the Assessment Act and make the orders that were made.
As non-periodic child support orders were made by a Senior Judicial Registrar, I agree that there was power to make the orders.[6] The question still has to be decided as to whether the powers should be exercised by the court in the circumstances of the cases each party put before me.
[6] Item 37.1 of Schedule 4 of the Federal Circuit and Family Court (Family Law) Rules 2021 (Cth).
The parties’ expenses and findings
On the basis of the Wife’s affidavit evidence, her contentions about her expenses seem sound. Of course that evidence has not yet been tested, but it is not obviously internally inconsistent. Further, it is apparent that one or both parties must pay the private school fees if the children are to continue their private education.
Ignoring the cost of private school fees, the Wife’s evidence contained in her Financial Statement and not altered by her affidavit filed 6 December 2022 is that her total expenses are $2,796 being:
Expense Financial Statement Tax $100.00 Insurances $86.00 Car registration $15.00 Credit card repayments $330.00 Part N expenses $2,265.00 Total $2,796.00
Having carefully considered her claimed Part N expenses and noting that they are averages, there appears to be a small component of discretionary spending in the amounts for clothing and entertainment, but otherwise the sums claimed do not seem excessive given the parties’ apparent pre-separation standard of living. My preliminary finding is that the Part N expenses require reduction to about $2,000 after deduction of some discretionary spending.
The Husband’s expenses are identified in his evidence somewhat differently between the time he filed the Financial Statement on 22 September 2022 and in his affidavit of 1 December 2022 as is illustrated below:
Expense Financial Statement Affidavit Tax E$970.82 $2,689.00 Rent $820.00 $820.00 Child Support $340.00 $481.00 Part N expenses $3,015.00 $3,015.00 Total $5,145.82 $7,005.00
His Part N expenses are said to be $3,015 and includes expenses relating to the children when they are in his care. The value of the expenses the Husband attributes to the children is about 50 per cent greater than the value of the expenses claimed by the Wife when the children are in her care.
The Husband’s evidence about the amounts he expends on the children appears consistent with what can be inferred from what the Wife deposes in her affidavit filed 14 June 2022 at [10.5] and [10.8], namely that the Husband uses money as means of persuading the children to spend time with him and gain their favour.
There are two obvious differences in claimed expenditure:
(a)The claim that the Husband is now paying $481 per week in child support. While this corresponds with the Notice of Assessment from the Child Support Agency,[7] the record of payments received by the mother discloses that the father was still paying $340 per week until 30 November 2022; and
(b)The claim that the Husband is now paying weekly tax approaching three times what he had been paying according to his Financial Statement. This is explained by the Husband’s yet untested evidence in his affidavit filed 1 December 2022 at [31] to [34].
[7] Affidavit of the Husband filed 1 December 2022 at Annexure -5.
There is a flaw in the tax calculation in the Husband’s affidavit. It simply adopts gross income payments made to him and treats it as taxable income. However, it is likely that the Husband will have various deductions and permissible business expenses which will reduce the taxable income. Further, I do not know if the calculation allows for the tax-free threshold applicable to an Australian resident. I do not have sufficient evidence before me to make an accurate estimate of the tax payable by the Husband on gross income receipts of $360,000.
The evidence about expenditure by the Husband for himself on clothes, entertainment and “other” is also discretionary in character to some extent and the “other” is unidentified expenditure, making it impossible to assess if it is reasonable or necessary.
Noting the reasoning at [41] to [42] above, I do not accept the Husband’s evidence that the expenses recorded at Part N of his Financial Statement are reasonable or necessary in the amount claimed. More likely, the Wife’s evidence about Part N expenses are a reliable measure of what is reasonable and necessary. I consider that the sum of around $2,000 per week, including expenses related to the children, is a more reliable representation of the Husband’s reasonable and necessary Part N expenses.
The Husband’s reasonable and necessary weekly expenses at this interim stage are therefore assessed at $5,422, being:
Part N expenses $2,000.00 Tax estimate[8] $2,000.00 Rent $820.00 Insurances $121.00 Child support $481.00 Total $5,422.00 [8] Based on an absence of reliable evidence about the tax payable and noting [44] of these reasons.
I reject the submission by the Wife’s counsel that the Husband’s evidence,[9] about repayment of the tax liability being unnecessary. The tax liability plainly relates to past earnings and is to be paid by April 2023.[10] Whether part repayments are made or not, provision needs to be made for payment of the tax, unless the Wife concedes that the liability when due is paid from joint savings or the offset account. I do not understand that concession to have been made.
[9] Affidavit of the Husband filed 1 December 2022 at [31] to [34].
[10] Notice of Assessment for 30 June 2022 as attached to the affidavit of the Husband as part of Annexure 3.
I note that when I suggested the school fees be paid from the mortgage offset account, this was not agreed, so I can fairly infer that there would not be agreement about payment of the tax liability from those funds.
At this interim stage, I assess the Wife’s reasonable and necessary weekly expenses at $2,241 being:
Part N expenses $2,000.00 Insurances $86.00 Car registration $15.00 Credit card [11] $40.00 Tax estimate $100.00 Total $2,241.00 [11] Adjusted for the intent that the school fees will be met by other means than the credit card.
I have not allowed the credit card repayments as claimed as I understood from submissions from counsel that the credit card was in part used to meet the school fees, which are the subject of the Child Support application under s 124 of the Assessment Act.
The parties’ income and findings
The income documents generated by the Husband’s employer, as attached to the affidavit of the Husband filed 1 December 2022 at Annexure 2 (“Annexure 2”), demonstrate that in the five months of June to October 2022 inclusive, the average income excluding superannuation and what is described as a “one-off payment” is $141,550.47.
The above figure is different from the average figure set out at in the affidavit of the Husband filed 1 December 2022 at [13], which only covers a four-month period rather than the five-month period contained in Annexure 2.
Nevertheless, the documents at Annexure 2 show a distinct fall in days/hours of work in June and July compared to the hours of work in August to October. The reduction in hours worked shown is not fully explained by the parenting arrangements or the evidence because:
(a)The Husband says that if there is patient demand he works more than 75 hours a month and he worked 118 hours in June 2022 and 135 hours in July 2022, but no more than 75.5 in subsequent months;[12]
(b)He is likely to do and be paid for non-clinical work on days he does spent time with the children. I make this inference from a comparison of the Wife’s evidence in her affidavit filed 14 June 2022 at [9] and the spread of hours shown in the “Claims Detail Report” which forms part of Annexure 2;
(c)The records in Annexure 2 show he is paid for 16 hours of clinical work per month; and
(d)While the Husband is available to do clinical work for 14 out of 28 days in any month, according to the Claims Detail Report he has only worked nine of those days for August to October 2022. This is a material difference to the months of June and July 2022.
[12] Annexure 2.
I appreciate that the Husband may not be able to sustain the volume of work he did in the past for the reasons he gives in his affidavit filed 1 December 2022 at [18] and [19], but it appears he had already modified his work practices by July 2022 due to the parties’ agreed parenting plan.
Accordingly, I consider the income shown in the tax invoices for June and July 2022 are a more reliable reflection of the Husband’s earnings and earning capacity. I consider the sum of $35,000 per month is a closer representation of the Husband’s earning capacity. This should be adjusted to allow for some annual and sick leave over a 12 month period, as it does not appear that he is paid if he does not work pursuant to the contract.
I adopt the sum of $360,000 gross per year for the Husband’s earning capacity as submitted by the Husband. Averaged over the entire year is about $7,000 per week gross.
I have scrutinised the Wife’s evidence about her earnings and consider it fairly reliable despite the submissions by the Husband. I consider that the Husband’s submissions adopt an artificial and flawed means of calculating the income generated from her business and it is impossible to verify their accuracy from the evidence before the Court.
The Wife is more likely to have had income of about $1,250 gross per week in the period post-separation. But with the establishment of the week on/off parenting arrangement, she has capacity to increase her hours of work and further develop her business. She is clearly capable and very experienced in administration/management, given her own evidence.[13] Accordingly, I assess her earning capacity to be somewhat greater moving forward.
[13] Affidavit of the Wife filed 14 June 2022 at [37].
Determination
The total of the Wife’s earnings and child support according to the most recent assessment (which include those relating to the children), less her expenses assessed at $2,241,[14] produces a shortfall in the region of $500 per week. Therefore based on the above reasoning, she has demonstrated a need for periodic spouse maintenance.
[14] At [50] of these reasons.
After the Husband pays expenses of $5,422 identified at [47] of these reasons from assessed earning capacity of $7,000,[15] there is a surplus of about $1,600 per week.
[15] At [52] to [57] of these reasons.
I do not intend to interfere with the Order that the Husband pay to the Wife interim periodic spouse maintenance in the sum of $326 per week, as it is within the bounds of reasonableness relative to the Wife’s need for support and in anticipation of her being able to exercise further additional capacity to earn and because of the reasons below about payment of the school fees.[16]
[16] Fleming & Burnett [1994] Fam CA 175.
The authorities referred to at [33] and [34] above establish the following principles that this Court must follow:
a)a departure application to the Court under Division 4 of Part 7 of the Assessment Act (“Departure Application”) is not a condition precedent to the hearing and determination of an application under s 124 of the Assessment Act in Division 5 of Part 7 of the Assessment Act; but
b)The long standing view of Division 5 of Part 7 is that it serves as a means of providing a lump sum consolidation of existing obligations, not an avenue for increasing the quantum of child support payable;
c)If there is a Departure Application before the Court, when it decides the application under section 124 of the Assessment Act when it makes a lump sum or non-periodic order for child support, it is limited to an order up to the aggregate amount of periodic child support under the administrative assessment;
d)Where the Court hears and decides on application pursuant to also s 124 of the Assessment Act for lump sum or non-periodic child support, the value of the lump sum or non-periodic child support should be expressed under s 125 of the Assessment Act to be credited to reduce the assessed liability under the administrative assessment, except in special circumstances; and
e)For the purpose s 125, special circumstances is not confined to the meaning of that term within Division 4 of Part 7 of the Assessment Act and includes, “facts peculiar to the particular case which set it apart from other cases”.[17]
[17] Lightfoot & Hampson [1996] FamCA 8.
In this case before me, there is no Departure Application from the administrative assessment. I am to decide the Wife’s application as a standalone application as there is no prerequisite that she must file a Departure Application.
However, in my view the practice of making standalone applications for non-periodic or lump sum child support pursuant to s 124 of the Assessment Act, particularly at an interim stage of proceedings, should be discouraged. Such applications are prone to risk of inequity between parties because at an interim stage in the absence of a Departure Application to a Registrar or the Court,[18] there is limited opportunity to properly scrutinise the parties’ comparative earnings, expenses and capacity to pay what is effectively becomes additional child support over and above the assessed periodic child support.
[18] Division 4 of Part 6A and Division 4 of Part 7 the Assessment Act respectively.
Nevertheless, the authorities referred to above and the principles they stand for require me to decide the Wife’s application for payment of school fees as an application for child support pursuant to s 124 of the Assessment Act, with the difficulty and constraints described at [65].
While I accept that there is no mandate to proceed on an assumption that the children should continue attending their existing private school, in the circumstances of this case where:
(a)The children have been and are attending such schools and are apparently stable and settled;[19]
(b)The Husband had been supportive of this arrangement during the parties’ relationship;
(c)Both parents wished for the children to attend private schools until the Husband changed his position based on a claim that the school fees could not be afforded, which is not presently demonstrated to the Court’s satisfaction; and
(d)The Husband’s earning capacity remains at a disproportionately high level compared to the earning capacity of the Wife;
a restraining order preventing change of the children’s school enrolment is justified.
[19] Affidavit of the Wife filed 29 September 2022 at [9]; Family Report at [190] and [196].
The preliminary findings and my reasoning at [37] to [59] are relevant to the necessary considerations in the statutory requirements in s 124(2) of the Assessment Act, including whether it is just and equitable with respect of the children, the caring parent and the liable parent, having regard to the provisions of ss 117(4), 117(6), 117(7), 117(7A) and 117(8) of the Assessment Act.
In my view it is just and equitable as between the parties, and otherwise proper, for the Husband to pay non-periodic child support by way of payment of the school fees because of the reasoning at [67] and [68] which satisfy me that a ground for making the order for payment of non-periodic child support is satisfied. Namely, with respect of s 117(2)(b)(ii) of the Assessment Act, it enables the children to be educated in the manner the parents and children all expected.
Having concluded that an order should be made for the Husband to pay non-periodic child support, being the children’s private school fees, I am also obliged to make a statement for the purpose of s 125 of the Assessment Act.
I consider it appropriate to make a statement in the same terms as the Senior Judicial Registrar that the value of the school fees to be paid by the Husband are not credited against the administrative assessment because the circumstances of this case are properly regarded as special. The circumstances are within the type of category contemplated as “peculiar and set apart” from other cases as described by Fogarty J in Lightfoot & Hampson and followed by other judges in similar cases where the order sought is for the payment of private school fees.[20]
[20] Ivanovic & Ivanovic [1996] FamCA 41; Gyselman and Gyselman [1991] FamCA 92; Simiko & Kellidis (No 2) [2022] FedCFamC2F 982 at [124] to [132].
I acknowledge that this results in the Husband paying significantly more by way of child support than his liability pursuant to the administrative assessment. However, that is a permissible outcome in limited cases where the circumstances justify it.[21] I consider the circumstances of this case are special because:
(a)The Husband is likely to have surplus income after paying reasonable and necessary expenses;
(b)The children enjoy their current private schools and do not want to go elsewhere;[22]
(c)The Family Reporter has recommended the children remain enrolled at their current schools until Year 12;[23]
(d)The Husband supported and initially agreed that the children be enrolled at the current private schools. This is evident from the affidavit of the Wife filed 29 September 2022 at [19] and in the related Annexures;
(e)The Wife does not have capacity to pay the school fees and is unlikely to have that capacity in the foreseeable future;
(f)On any view, based on the content of the text messages sent by the Husband which are annexed to the Wife’s affidavit filed 14 June 2022,[24] he has inappropriately involved the children in financial issues on occasions; and
(g)It can readily be inferred from the above that the children would suffer hardship if the school fees are not paid and they cannot continue in their current schools.
[21] Lightfoot & Hampson [1996] FamCA 8 at [69] to [80] followed in Ivanovic & Ivanovic [1996] FamCA 41.
[22] Family Report at [169] and [182].
[23] Family Report at [214].
[24] At Annexure -2, pages 26 and 27.
There appears to be no barrier to the Objections and Reviews to Administrative Assessment, or Departure Application to the Court, concerning the periodic child support to be paid by the Husband. Should this occur, as time progresses the risk of escalating proceedings, related costs and potential inequity between the parties is a real concern. This in my view would be most unsatisfactory.
The Wife Case Outline sets out in Part E, a minute of orders sought. Because of the narrow confine of the Husband’s application for review and the submission by Counsel for the mother that she did not seek to disturb the Senior Judicial Registrar’s orders, it is unnecessary for me to address or determine whether the suite of Orders referred to in Part E should be made.
There will be an order dismissing the Application for Review.
I certify that the preceding seventy-five (75) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Taglieri. Associate:
Dated: 23 December 2022
0
2
0