KEK & BK
[2005] FMCAfam 250
•30 May 2005
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| KEK & BK | [2005] FMCAfam 250 |
| FAMILY LAW – Adult child maintenance – child with disabilities – liability for adult child maintenance should not be determined by assuming a general benefit flows from tertiary education – a course of study that contributes to scholarship but does not enhance employability does not fall within the objects – child support departure applications – cross applications dismissed. |
C v C (1962) 4 FLR 461
C & L [2002] FMCAfam 163 (unreported)
DJM v JLM (1998) FLC 92-816
Gyselman (1992) FLC 92-279
In the Marriage of Cosgrove (1996) FLC 92-700
In the Marriage of FM (1997) FLC 92-738
Mee & Ferguson (1986) FLC 91-716
In the Marriage of Gamble (1978) FLC 90-452
In the Marriage of H (1981) FLC 91-083
In the Marriage of Henderson (1989) FLC 92-011
In the Marriage of Tuck (1981) FLC 91-021
Osborne v Osborne (1972) 19 FLR 315
| Applicant: | KEK |
| Respondent: | BK |
| File No: | PAM 4158 of 2004 |
| Delivered on: | 30 May 2005 |
| Delivered at: | Parramatta |
| Hearing dates: | 8 February & 8 March 2005 |
| Judgment of: | Ryan FM |
REPRESENTATION
| Counsel for the Applicant: | Mr A. Givney |
| Solicitors for the Applicant: | Lamrocks |
| Counsel for the Respondent: | Mr G. Watkins |
| Solicitors for the Respondent: | In person |
ORDERS
Commencing 24 September 2004 pursuant to s.66L of the Family Law Act 1975 the father pay $162 per calendar month for the child Matthew (not his real name) born in 1986. Payment pursuant to this order is to be made to a bank account nominated by the mother, monthly in advance.
In addition to the maintenance ordered pursuant to order (1), the father shall provide private hospital and medical insurance, which includes provision for incidentals for the child.
If as a consequence of these orders the father must pay arrears of child maintenance, all arrears shall be paid to the mother within eight (8) weeks from today.
Commencing 7 September 2006, the father’s child maintenance for the child Matthew shall increase to $160 per week. Payment pursuant to this order is to be made to a bank account nominated by the mother, fortnightly in advance.
These orders continue until Matthew finishes a TAFE diploma commenced second semester 2005, or three years from the date of these orders provided Matthew is still enrolled in the TAFE diploma, or Matthew discontinues the TAFE diploma whichever is the sooner.
For the purpose of these orders Matthew will complete his TAFE Diploma on the day upon which a TAFE official advises he that he has completed all necessary requirements for conferral of TAFE Diploma.
If Matthew suspends his TAFE diploma studies for more than one year the father’s liability to continue to pay maintenance pursuant to these orders is discharged.
All child support applications are dismissed.
In the event that either party seeks to make an application for costs they shall file and serve written submissions within twenty-one (21) days. Any submissions in reply shall be filed and served within fourteen (14) days and any response within a further seven (7) days. All submissions will be filed with my associate on facsimile number 9893 5767.
All exhibits tendered in these proceedings be returned at the expiration of one calendar month unless an appeal is lodged.
The solicitor who issued any subpoena collects that subpoenaed material and returns it to the owner within seven (7) days.
All outstanding applications are dismissed.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT PARRAMATTA |
PAM 4158 of 2004
| KEK |
Applicant
And
| BK |
Respondent
REASONS FOR JUDGMENT
Introduction
1.This is an application by KEK (“the mother”) for periodical adult child maintenance. Although the mother also applied for lump sum adult child maintenance and retrospective increase of child support, her counsel conceded that the mother had not established the prerequisites for this relief. BK (“the father”) cross applied seeking a departure order of a child support assessment dated 17 July 2003. His cross application seeks retrospective reduction of paid child support. Thus, the effect of his cross application would be to establish a debt, which the father calculates at $13,760, from the mother in his favour. The father alleges that the child support review officer wrongly excluded Matthew’s income when determining the father’s quantum of child support. Regarding over 18 child maintenance, the father says he will pay private health insurance, gap payments for reasonable health procedures undertaken with his prior approval and, subject to conditions, reasonable education costs.
2.The parties have three adult children, of which the elder two live independently. Matthew (not his real name), who is 18, lives with the mother and is the young adult at the centre of these proceedings. Matthew wants to be a social worker. In order to do so he plans to study full time at TAFE commencing second semester 2005.
3.Matthew suffers from numerous disabilities stemming from a pituitary tumour which was discovered in his brain at age nine. The extent of Matthew’s disability and the prospect for him to obtain employment are at issue. Although the father agrees Matthew is disabled, he believes that he is capable of working and concerned that tertiary education is beyond his capacity. Notwithstanding his uncertainty, during the hearing the father conceded that Matthew should be given the opportunity to study at TAFE and there is a reasonable likelihood he will complete his chosen course. With this concession the mother established threshold eligibility for maintenance. The maintenance issues narrowed to whether the mother needs financial support from the father while Matthew studies and the extent of the father’s capacity to contribute.
Short history
4.The applicant mother was born in 1951.
5.The respondent father was born in 1951.
6.The parties married on 24 March 1973.
7.The parties’ first child, BK, was born in 1977.
8.Their second child CK was born in 1980.
9.Matthew was born in 1986.
10.The parties separated in October 1994 and divorced in January 1995.
11.Matthew’s brain tumour was first diagnosed in August 1995. Matthew began a series of operations as well as courses of chemotherapy and radiotherapy.
12.By May 1996 Matthew’s condition had improved to the extent that he ceased chemotherapy and radiotherapy.
13.Purdy J heard contested property applications at the Family Court of Australia at Parramatta on 9 May 1996 and 11 December 1996. From the property orders the mother received the former matrimonial home at Penrith. The home was worth $220,000 and subject to a mortgage of $116,000. The husband was ordered to pay out the mortgage and retained his sizeable superannuation.
14.In November 1996, Matthew was diagnosed as legally blind, as a result of the tumour compressing on his optic nerve. Matthew commenced a second round of chemotherapy and radiotherapy treatment.
15.In April 1997 Matthew’s chemotherapy and radiotherapy ceased.
16.In October 1997 the applicant wife resigned from her position with the Commonwealth Bank. The mother has not had full time paid work since.
17.In September 1998 the father and his partner purchased property at Sylvania Waters. The total cost of acquisition and construction of a new home is $776,300.
18.During 2001 Matthew’s EEG results showed signs of epilepsy.
19.On 19 November 2002, the respondent father was retrenched. He received a substantial retrenchment package. The father has not had continuing full time paid work since.
20.On 17 July 2003 the Child Support Agency issued a Notice of Decision to vary the child support assessment so that the respondent father would be liable to pay child support at a rate of $9,500 per annum.
21.On 22 December 2003 the Child Support Agency issued a Notice of Decision in response to the mother’s application to vary the child support assessment of 17 July 2003. The mother based this application on the proposition that it costs extra to cover Matthew’s special needs and also the alleged failure of the Child Support Agency to consider the father’s income, earning capacity and financial resources.
22.On 24 February 2004 the Child Support Agency issued a Notice of Decision in response to the mother’s application to vary the child support assessment of 17 July 2003. The mother based this objection on the alleged failure of the Child Support Agency to take into account the father’s 2002/03 income and his current earning capacity. It is this decision that is the subject of the competing departure applications.
23.In December 2004 Matthew completed the Higher School Certificate at Lifeskills Level. The Lifeskills program is a NSW Board of Studies initiative designed for students with special education needs. Subject to Board of Studies approval, the course enables schools to develop an individualised program of study that challenges students according to their individual levels of need.
24.In early 2005 the mother settled the sale of the former matrimonial home. Its sale price was $460,000 which resulted in $372,000 net proceeds. Upon settlement, the mother and Matthew moved to the Bateman’s Bay area where the mother has extended family. Initially the mother has moved into rented accommodation while she decides whether Bateman’s Bay meets their long term needs.
Agreed facts
25.The parties agree on the following facts.
26.During the hearing the parties agreed that Matthew should be given the opportunity to complete his chosen tertiary studies and that he has the capacity to do so.
27.The parties agree that Matthew is only entitled to a mobility and education allowance if he is attending a course of study.
28.The mobility and education allowances are not subject to an income test and have not been since 1 May 2003.
29.Matthew has been nominated for a traineeship with the Department of Education and Training New Apprenticeship Centre.
30.Matthew has been nominated for a transition to work program run by the Department of Aging, Disability and Homecare.
31.It is reasonable that Matthew undertake a course of full time study.
32.Matthew is eligible for admission into a TAFE Diploma in Welfare Studies.
33.Matthew is able to undertake his preferred TAFE course irrespective of whether he lives in Sydney or Batemans Bay. If living in Batemans Bay, Matthew will attend TAFE in Nowra.
The evidence
34.The applicant mother relied on the following:
·Her application filed 17 August 2004.
·Her affidavits filed 17 August 2004, 10 January 2005 and her oral testimony.
·Her financial statements filed 17 August 2004 and 10 January 2005.
·The affidavit of Professor Frank Martin filed 14 January 2005. This witness was not cross examined and I accept his evidence.
·The affidavit of Cem Oztan filed 14 January 2005. This witness was not cross examined and I accept his evidence.
·The affidavit of Dr Geoffrey Ambler filed 14 January 2005. This witness was not cross examined and I accept his evidence.
35.The respondent father relied on the following:
·His further amended response filed 27 January 2005.
·His affidavit filed 6 September 2004 and his oral testimony.
·His financial statement filed 6 September 2004.
·The affidavit of Gail Woodford filed in court and her oral testimony.
·The orders sought at trial are included in his counsels case outline document.
The relevant law – adult child maintenance
36.The law to be applied in relation to child maintenance is set out in Part 7 Division 7 of the Family Law Act 1975. Section 66H sets out the approach to be taken in proceedings for child maintenance. The objects[1] of the division are to ensure that children receive a proper level of financial support from their parents. Particular objects include ensuring that children have their proper needs met from reasonable and adequate shares in the income, earning capacity, property and financial resources of both parents and that the parents share equitably in the support of their children.
[1] Section 66B
37.Parents have a primary duty to maintain their children. The duty of a parent to maintain a child is not of lower priority than the duty of the parent to maintain any other child or another person, and has priority over all commitments of the parent, other than commitments necessary to enable the parent to support himself or herself, and any other child or another person that the parent has a duty to maintain. It is not affected by the duty of any other person to maintain a child, or any entitlement of another person to an income tested pension or allowance or benefit.[2]
[2] Section 66C
38.The court may make, “such maintenance order as it thinks proper”[3]. In child maintenance proceedings the court must consider the financial support necessary for the maintenance of the child, and then determine the financial contributions towards that financial support to be made by each party. In relation to the financial support necessary for the maintenance of the child, s.66J sets out detailed matters that the court must consider. These include the age of the child, the manner in which the parents expect the child to be educated and any special needs that the child may have. The court may have regard to any relevant findings of published research in relation to the costs of maintaining children.[4] In Australia, that published research is commonly referred to the Lovering “Costs of children in Australia” tables and also the Lee “Expenditure survey” tables. The Full Court held that the Lee tables represent a more accurate guide to the costs of children. See Streets and Streets (1994) FLC 92-509. In In the Marriage of Stojanovic (1990) 13 Fam LR 849 the father’s financial resources and capacity to seek work despite his failure to do so was held to justify an order for child maintenance.
[3] Section 66G
[4] Section 66J(2)(b)
39.Section 66L (1) of the Family Law Act 1975 provides that maintenance is payable for a child over the age of 18 years when necessary:
a)to enable the child to complete his or her education; or
b)because of a mental or physical disability of the child.
40.Necessity must be shown to establish an entitlement under this section. In In the Marriage of Gamble (1978) FLC 90-452, Fogarty J found that necessity constitutes more than being morally or socially desirable. Necessity is not restricted to absolute necessity according to In the Marriage of Tuck (1981) FLC 91-021. In Tuck the Full Court determined necessity by considering the needs of the child balanced with the reasonableness of the parties contributing, given their financial circumstances, along with any other relevant factors. This interpretation was reaffirmed in In the Marriage of Henderson (1989) FLC 92-011 in the context of the former section 66H (now 66L) of the Family Law Act.
41.Warnick J considers what is necessary in terms of completion of a child’s education in In the Marriage of Cosgrove (1996) FLC 92-700. His Honour concluded that maintenance is necessary for a child over the age of 18 “if the child reasonably needs support to enable the child to complete his or her education.” Warnick J held necessity does not mean maintenance must be “absolutely essential” but that it should involve the element of “reasonableness”. That is, there may be many ways in which a child could find the financial support to complete his or her education but when balancing the parent’s resources and the child’s potential resources, what is reasonable? A compelling approach to determining reasonableness can be found in Warnick J’s non-exhaustive list of factors to be considered by a court when exercising discretion in adult child maintenance cases. These factors are:
·Whether the “nexus” of dependence between the child and parents had ceased and the application amounts to a “resurrection” of that dependence.
·The period between the initial cessation of dependence (if any) and the application;
·Whether the child had completed a course of education intended by the parents to outfit him/her for employment sufficient to support him/herself;
·Other assistance, benefits or education which the child has received;
·The ability of the child to complete the course in question;
·The likelihood of the child completing the course in question;
·The financial capacity of the child to maintain himself/herself to the completion of the course of education;
·The financial circumstances of those persons responsible for support of the child (generally the parents).
42.A section 66(1)(a) maintenance order dealing with a child’s education usually ceases upon the child’s completion of that education. At that point the child is assumed to be in a position to support himself through some form of employment which could not have been pursued while studying.
43.Section 66L(1)(b) deals with adult maintenance payable when the child suffers a mental or physical disability. The onus lies with an applicant to satisfy the court of the child’s disabilities. In In the Marriage of FM (1997) FLC 92-738 this constituted the applicant making, “every endeavour to obtain appropriate gainful employment” for the child. The court required evidence that the child would be “totally unsuited for any kind of employment and [would be] unlikely to obtain any form of employment either in the short term or long term.”[5] Roberts FM took a slightly softer approach in C & L [2002] FMCAfam 163 (unreported). His Honour was satisfied that the child’s case fell under s.66L(1)(b) based on the evidence that that child was schizophrenic and had tried to take part in a scheme which would make him able to work, but failed. The child’s immediate inability to work meant that he should be maintained.[6]
[5] In the Marriage of FM 21 FamLR 237 p 248
[6]C & L [2002] FMCAfam 163 unreported at p12
44.In determining what financial contribution should be made by the parents, the court is to take into account first, the matters referred to in s.66B (objects) and s.66C (principles). Next, the court must take into account the income, earning capacity, property and financial resources of the parties. The court must take into account the capacity of the parties to earn and derive income, and any assets which are capable of producing income. The court is to take into account the commitments of each party necessary to enable that party to support himself or herself and any other child or person that the party has a duty to maintain. In determining what financial contribution each party, should make, the court must disregard any entitlement of the person with whom the child lives to an income tested pension, allowance or benefit. The court must also disregard the income, earning capacity, financial resources of any person who does not have a duty to maintain a child, unless in the special circumstances of the case the court considers it appropriate to have regard to them.[7]
[7] Section 66K
Threshold grounds for over eighteen maintenance
45.It is clear the TAFE course Matthew wishes to undertake falls under the definition of education in s.66L(1)(a).
46.Selby J in Osborne v Osborne (1972) 19 FLR 315 found that the liability for adult child maintenance should not be determined by assuming a general benefit flows from tertiary education. His Honour said that while a university degree would be essential for some professions, it would be wasted on a child not suited to study. For some children an apprenticeship may be more suitable.[8] In In the Marriage of H (1981) FLC 91-083 the applicant sought orders for adult child maintenance specifically in respect of two children. The first child, an 18 year old boy had recently left school and had been accepted into a combined Law and Science degree. The child appeared well adjusted and capable of successfully completing his chosen course of study. His 21 year old brother had suffered considerably from mental illness. He had twice enrolled in a teaching course but each time his study had been interrupted by significant bouts of mental illness. Smithers J found that the first child’s circumstances meant that it was appropriate for him to receive adult child maintenance. The child was embarking on a rigorous double degree and lived a significant distance from university which left limited time to participate in part time work. The court distinguished the first child’s circumstances with those of the second largely on the premise that the words “to enable” presupposes at the least a reasonable probability of success in the chosen course of education.[9]
[8] Osborne v Osborne (1972) 19 FLR 315
[9] In the Marriage of H (1981) FLC 91-083 at 76,576
47.The mother’s argument for adult child maintenance to support the child’s tertiary education and future employment prospects seems counterintuitive to her argument that the child is in need of maintenance because of his disabilities render him unable to undertake paid work. When this case commenced the father suggested Matthew may not, even if he completes a TAFE course, be able to obtain employment in the welfare field because of his physical limitations. Would the education have changed this situation? The question then arises: Does the provision for adult child maintenance to allow the child to complete his or her education require that that education contribute to his or her employability? In my view it must. Support for this proposition is found in C v C (1962) 4 FLR 461 where the Supreme Court of Victoria held that one of the factors to be considered in determining liability was, “whether the course to be pursued by the child was going to help the child to earn an income.”[10] The thrust of s.66L is that over eighteen maintenance is not ordered as of right. For the payment of over eighteen maintenance to be reasonable a child’s educational pursuits must be purposeful, more than education for its own sake. A course of study that contributed to a child’s scholarship yet did not enhance employability does not fall within the objects namely “proper needs” in s.66B(2)(a).
[10] C v C (1962) 4 FLR 461at 465
48.Dr Jeffrey Ambler is a paediatric endocrinologist in practice at Westmead Hospital. Dr Ambler provided a summary of Matthew’s past medical history, present health and prognosis. He summarised Matthew’s diagnosis and disabilities as follows:
“1. HCG secreting germinoma-exploration, biopsy 28 September 1995, followed by chemotherapy and radiotherapy. 2. Neuraxis dissemination and local recurrence September 1996, now in remission. 3. Panhypopituitarism. 4. Severely impaired vision. 5. Hiatus hernia and ulceration. 6. Residual ataxia”.49.Helpfully, Dr Ambler explained the ramifications of his diagnosis. He explained,
“Matthew was diagnosed with a malignant brain tumour called a germinoma in September 1995. This was treated with surgical exploration and biopsy and then required treatment with a quite aggressive regiment of chemotherapy and radiotherapy in an attempt to cure the tumour. In 1996 he had further recurrence and spread of his tumour, however, this was arrested with further therapy.
The original tumour and the side effects of treatment have left Matthew with many residual management problems. He has panihypopituraism which means that he does not make any of the vital pituarity hormones and all of these have to be replaced by him taking medication. This current hormonal replacement medications are Thyroxin, Hydrocortisone (maintenance dose plus additional doses if unwell or otherwise physiologically stressed), Minirin and Testosterone implants. He has been treated with growth hormone therapy in the past for growth hormone deficiency.
The other severe problems which Matthew has are resolved [as] a result of his tumour and its therapy is severely-impaired vision (legally categorised as blind) and a major degree of ataxia or unsteadiness on his feet. Matthew has also had problems with hiatus hernia and upper GI ulceration and because he is unable to exercise significantly, control of his weight has been an ongoing struggle for him.
Matthew will hopefully remain stable on his replacement therapy, however, faces many challenges. From an endocrine point of view the major risk is adrenal crisis if he becomes unwell and cannot tolerate extra doses of hydrocortisone. He urgently requires hydrocortisone in this situation, either given at home or in a health care facility. This is a potentially life threatening complication. He is also at risk of dehydration if his mineran dose is not well balanced with his fluid intake and this can be unsettled by inter-current illnesses such as gastroenteritis. This is also potentially a life threatening complication. Every five months Matthew has to have a minor procedure to insert testosterone implants for his ongoing androgen replacement.
In addition to the above specific features, Matthew suffers from very easy physical and mental fatigability, a common problem after this type of therapy.
While Matthew is a young man of significant determination and extraordinary good humour, he will continue to remain very dependent on the close care of his family members and significant input from [the] medical system. I do not envisage him being capable of independent self care or financial independence for the time being. However, I am hopeful that Matthew may be able to pursue some of his interest in TAFE or other courses which may at some time in the future allow him to do some part time work”.
50.Professor Frank Martin is a well known and highly regarded ophthalmologist. Matthew attends Professor Martin at the Children’s Hospital at Westmead. Professor Martin last examined Matthew on 14 October 2004. He reports, “Visual acuity in the right eye was light perception and in the left eye 2/36 part. Visual fields were constricted to within 5 degrees of fixation. There was bilateral optic atrophy with the right optic disc being more severely affected than the left”. Simply put, this means Matthew has severe visual impairment and is legally blind. Relevantly, Professor Martin says Matthew’s vision will not improve in the future. A recurrence of the germinoma could compromise Matthew’s little remaining vision.
51.In order to complete his higher school certificate, Matthew’s school structured his classes so that he needed to attend only four hours each day. In class, Matthew uses a computer set at size 72 fonts. Matthew is a skilled typist and types at about the same speed most adults write. While at school, Matthew was assisted in the classroom by a teacher’s aid, who also accompanied him on school excursions. The school provided an itinerant teacher who worked with Matthew a few hours a week helping him with his eyesight. The main effect of Matthew’s gait difficulty is that he needs orthopaedic inserts and walks slowly. The mother’s evidence is that Matthew has short term memory problems and became flustered if too much was asked of him at school. His short term memory deficits reveal themselves in the repetitive nature of Matthew’s conversation with the mother.
52.In order to determine whether Matthew has the capacity to complete his tertiary studies it is necessary to understand the effect of his disabilities. The Royal Blind Society completed a vision assessment report in November 2004. Mr Oztan, Orthoptist at Vision Assist, made recommendations for assisting Matthew with work tasks and further studies. These included materials using good contrast, audiotape format for large amounts of reading, photocopying to enlarge fine print, use of an adjustable lamp, strategies to reduce glare and training to help Matthew maintain independent travel skills. The Royal Blind Society considers that Matthew has the capacity for employment and suggested employment at a call centre.
53.Ms Gail Woodford is a support teacher transition employed by the Department of Education and Training to assist schools and parents to develop appropriate means of transitioning students with disabilities into an adult environment. Ms Woodford has worked with Matthew for approximately five years. The mother failed to disclose that Ms Woodford nominated Matthew for a traineeship with the Department of Education and Training, New Apprentice Centre in social welfare or similar. The traineeship is for one or two years. This would enable Matthew to attend TAFE with the appropriate support as well as obtaining job skills whilst studying. A traineeship for a person with a disability is partially funded by the government. The TAFE course is undertaken at no expense and wages are heavily subsidised. Presently, the government pays approximately $114.17 per week and the employer pays the balance, somewhere in the vicinity of around $200 per week. Transition support teachers nominate suitable students for traineeships who meet guidelines. The guidelines are that the child has a disability, is suitable for open employment and has completed a VET course. Matthew fits all guidelines. After his nomination, Matthew was interviewed by “Disability Works”. This is an organisation which attempts to find employers willing to take on an apprentice or trainee with a disability. Their role is to interview students and determine suitability. Matthew was interviewed in approximately November 2004 and assessed as suitable. By the time Matthew moved to Bateman’s Bay with his mother, Disability Works had not yet located a prospective employer. However, given the limited time and the time of year, this is not surprising and their inability to locate an employer does not persuade me that had Matthew remained in Sydney an employer would not have been located.
54.The Department of Aging, Disability and Home Care funds a “Transition to Work” program on the south coast. Matthew was granted a transition to work package. This means he may nominate various employment agencies which are disability specific and attend a program aimed at the acquisition of appropriate pre-vocational skills.
55.The mother challenged Ms Woodford’s evidence and says that she minimises the impact of Matthew’s disability. Ms Woodford was unaware that Matthew’s school hours were only four hours each day and that he did not complete a work experience program she arranged. However, Ms Woodford frequently saw Matthew on the school ground. Whilst she formally met Matthew and his mother only once each term, her informal observations of him and discussions with his teachers gave her reasonable understanding of how Matthew was faring. I accept her evidence that away from school distractions and in an environment where those attending are more focussed on study, Matthew may find studying easier. Her assessment of Matthew’s capacity for work is not ambitious. She is particularly well qualified in this field and her opinion deserves careful consideration.
56.On balance, notwithstanding Matthew’s disabilities, I agree with Matthew’s parents and Ms Woodford that Matthew has the capacity to study at TAFE in his chosen field. If Matthew successfully completes his TAFE course, I am also satisfied that he has the capacity for at least part time work at an appropriate level in his chosen field.
57.Thus, the applicant has established threshold entitlements for adult child maintenance on the basis of supporting the child’s tertiary education.
58.Concerning over 18 maintenance, there are four periods that must be examined. These are:
·Period one is from 24 September 2004 until January 2005 during which period Matthew was not receiving his education and mobility allowances and before the mother sold her home.
·Period two is from January 2005 until Matthew starts TAFE in mid 2005 during which period Matthew is not receiving his education and mobility allowances and the mother and child are living in rented accommodation.
·Period three is from when Matthew starts TAFE and his allowances resume while the mother and child are living in rented accommodation.
·Period four is from when the mother buys her new home and until Matthew completes his TAFE studies.
Matthew’s income
59.While studying Matthew receives the following weekly benefits. Disability support pension $156, mobility allowance $34 and education allowance $31. Matthew’s disability support pension is payable because he is blind. A disability support pension is income tested and must be disregarded. Matthew receives this pension irrespective of whether he is studying. Matthew’s mobility and education allowances stopped in September 2004 when Matthew finished his HSC. These benefits will resume when he starts TAFE.
60.Until he finishes studying Matthew has no capacity to contribute towards his own expenses through part time employment.
Matthew’s expenses
61.The mother operates Matthew’s bank account and is authorised to receive his Centrelink payments. Apart from special expenses attributed to Matthew the mother pools their income and divides their expenses equally. Concerning expenses this broad brush approach is reasonable. As at January 2005 his average weekly expenses were $208. In her financial statement filed 17 August 2004 the mother details Matthew’s expenses including his share of housing costs. These expenses are outlined later in these reasons. Matthew’s proper share of housing expenses is half of these and other fixed outgoings, which is $91.50. Thus from September 2004 until he moved to Batemans Bay in January 2005 Matthew’s average reasonable and necessary expenses are $299.50. This finding covers period one.
62.After moving to Batemans Bay Matthew started gym work that costs $70 each week. Matthew enjoys attending gym and it provides him with an important social outlet and sorely needed exercise which helps control his weight. Given Matthew’s health difficulties, gym expenses are properly taken into account. These average weekly expenses, $208, are actual expenses, with the mother limiting expenditure by reference to her income. I accept her evidence that if she had greater income or child maintenance she would spend more on Matthew. Fifteen dollars for entertainment, nothing for books or gifts and only ten dollars for clothes indicates that presently the mother is able to only provide Matthew’s bare necessities. The mother reasonably wishes to buy Matthew a laptop computer, electronic magnifiers, speech software and the like. Her present income does not enable this and she makes no provision for this in her financial statement. Matthew’s special shoes cost $210 a pair plus special inserts. Even with top level insurance the mother only receives 50%-70% refund.
63.A contentious issue concerns whether the court should make any provision for Matthew’s accommodation expenses. By virtue of the parties property settlement the mother received the former matrimonial home, where she and the children continued to reside after separation, unencumbered. Simply put, the father contends that because the mother had an unencumbered home, she should not be able to claim accommodation expenses she incurs following its sale. The mother sold the home as part of her plan to move to the south coast. She moved in order to live closer to her sister from who she receives practical and emotional support with Matthew. Although criticised for leaving Sydney where Matthew’s training and employment opportunities are said to be superior, the mother’s decision is reasonable. Although she makes no complaint, the strain on her caring for Matthew as a single parent is significant, indeed almost all encompassing. By moving she feels better equipped to continue his care, a factor when examined from both her and Matthew’s perspective, makes her move reasonable. Matthew is more reliant upon his mother than anybody else. For whatever reason, since separation responsibility for Matthew’s care has rested almost solely on the mother’s shoulders. Although the father now offers respite care, provided the mother does half the travelling, his lack of significant care for Matthew since separation makes this scenario too uncertain to be realistically relied on. When one considers how all consuming Matthew’s care is, the father’s insistence that the mother does half of the travel as a precondition for his assistance is manifestly unreasonable. It is not as if he has pressing demands on his time. It cannot be the case that a parent seeking child maintenance must forever be required to live in the same place in order to have accommodation needs considered. As this case demonstrates this would be a harsh outcome indeed. The mother having received the house was entitled to deal with the asset as she determined appropriate. It was hers without strings attached that limited the use to which it was put. Provided the decision to change the nature of the assets is reasonable, a party is entitled to have the consequences of change taken into account. Having decided for good reasons to move, the mother’s decision to sell the former matrimonial home was reasonable.
64.Presently the mother pays $260 per week rent. She has invested the bulk of the sale proceeds ($350,000) in a term deposit while the balance is deposited in her cheque account and used for regular expenses. Because I will take into account the income this investment presently produces, I will also take into account expenses she incurs because she has changed the nature of her assets. Until the mother purchases another property, Matthew’s expenses include an extra $130 per week for accommodation, with the mother properly incurring a further $130 per week for her own rental costs. Given Matthew’s age dividing the accommodation cost equally is reasonable. This finding relates to period two and three.
65.Within 6-12 months the mother anticipates buying a new home, which is likely to cost about $350,000. When stamp duty and other costs are included the home will cost about $372,000 leaving her with few savings. When she does so the mother will have household expenses, repairs and maintenance which as a tenant she does not have. As well she will incur insurance, rates and occasional capital costs not presently paid for. The Lee tables indicate average housing and utilities costs of $39.42 per week. From the time the mother purchases a new home, this is the appropriate amount to attribute as Matthew’s share of housing and utilities. This finding relates to period four.
66.To date the mother has limited Matthew’s expenses because of her limited income. Without intending any criticism of her, she had no choice but to proceed in the manner she did. This means Matthew has gone without. Once his study allowances stopped Matthew’s financial situation, as well as his mother’s, was parlous indeed. If the mother had incurred debt to meet Matthew’s expenses it would be appropriate to take this into account. Concerning later periods I will consider the boy’s expenses by reference to published tables. To apply these tables retrospectively when the court has evidence of the child’s actual expenses would be erroneous. If measured by reference to the tables Matthew’s expenses are increased, because the increase does not reflect reality it cannot form the basis of the mother’s application. Similar difficulties do not arise if the tables are considered prospectively. Thus during period one Matthew has no relevant income and necessary weekly expenses of $299.50.
67.During period two Matthew has no income. His weekly expenses change by reference to gym and rental costs. Thus his average weekly expenses total $408. There may be a few weeks after this judgment before Matthew starts TAFE. I have decided against calculating Matthew’s expenses by reference to the Lee tables during the few relevant weeks and leaving the parties to agree when the period started. It is almost certain that they would not agree on the effect of the orders and highly likely that they would spend more arguing the issue than the amount covered by the order. Such an outcome would be most unfortunate. Thus throughout the entire period Matthew’s expenses are calculated by reference to his actual expenses.
68.When Matthew starts TAFE (period three) he has $65 per week income. Until the mother buys a new home his actual weekly expenses are $408 leaving a shortfall of $343 per week. Because of the mother’s approach to Matthew’s expenses, the court may obtain a better guide to Matthew’s necessary expenses during this and period four by having regard to relevant findings of published research in relation to the costs of maintaining children.[11] The Lee “Expenditure survey” tables provide total weekly expenditure for an 11-13 year old averages $314.59 per week. This figure is current as at August 2004 and relates to a one parent one child family with a weekly income of $894.60. As a general proposition an 18 year old is likely to eat more than an eleven year old and general expenses are also likely to be greater. Matthew has extra expenses to which I have made reference that cannot be ignored. The effect of this is that during period three Matthew’s necessary expenses are $314, plus $70 plus $90.58 ($130 rent minus $39.42 Lee tables housing allowance) which total $474.58. The shortfall is thus $474.58 less $65, which is $409.58. The only change during period four is housing which is provided for in the $314. Thus during period four Matthew’s necessary expenses are $384. During this period he has $65 per week income which means there is a shortfall of $319 per week.
[11] Section 66J(2)(b)
69.The father proposes that he will pay all of Matthew’s medical insurance, medical expenses and gap payment which is about $15 per week. He also offers to pay his education expenses which he estimates at between $700 and $800 per annum, an amount the mother absorbs in Matthew’s average weekly expenses. While in many families leaving the non resident parent to meet these expenses would be reasonable, these parties have an appalling personal relationship and virtually no capacity to civilly discuss matters concerning their son. The mother was unable to resist any opportunity to criticise the manner in which she says the father failed her and Matthew. Her written response to the father’s affidavit[12] drips sarcasm, the details of which do not need restating here. I was left with an overwhelming sense that the mother will never forgive the father for leaving her and the children. One can understand her dismay that at the end of Matthew’s secondary education, for the first time since Matthew started high school the father shows any interest in Matthew’s education and now challenges her decisions about their son’s future. Having spent years focussed almost exclusively on helping Matthew achieve to the fullest extent of his ability, she is obviously distressed that the only interest the father takes in Matthew’s future and education is after he received her maintenance application. The father has spent more time in conversation with health workers and Matthew’s school teachers after he received this maintenance application than in the preceding six years. I understand the mother’s cynicism and her inability to accept the father genuinely intends to pay reasonable expenses or that his assessment of Matthew’s reasonable expenses will accord with Matthew’s genuine needs. With so little common ground between them, the father may inappropriately refuse the mother’s claimed expenses for Matthew leaving her out of pocket. The only variable where this will not occur is medical insurance. Provided this can be arranged so that the mother can claim Matthew’s expenses without needing the father’s approval the father will be able to provide for this expense directly. Because of my concerns that Matthew’s other needs will be unmet or the mother not reimbursed, these expenses will be considered as part of Matthew’s necessary expenses and not paid as the father proposes.
The parties circumstances.
[12] Exhibit D
70.In the mother’s financial statement filed 17 August 2004 she shows an average weekly total income of $456 made up of Carer’s Payments and $182 child support. Her Carer’s Payments must be disregarded. At that time (period one) she paid $140 per week mortgage, $18 rates and $25 insurances. Additionally, her total average weekly expenses were $451 of which $226 related to her expenses and $225 for Matthew. Her total assets were $468,040, $450,000 of which comprised her home. The mother had $55,140 liabilities the majority of which ($52,000) comprised her mortgage. Thus during period one the mother had no capacity to contribute to Matthew’s expenses.
71.In the mother’s financial statement filed 10 January 2005 she shows an average weekly total income of $170 made up solely of Carer’s Payments (which must be disregarded). Following the sale of her home she receives $341 per week investment income from her term investment, which gives her total income of $511 per week. She also receives the equivalent of $24 per week health insurance cover for Matthew which is paid by the father. In consequence of her investment income her DSS income has fallen. Excluding Matthew’s expenses to which I have already made reference her average weekly expenses are $190, plus $30 tax, $20 health insurance, $33 car insurance and $130 rent, which totals $392 each week. The mother’s expenses thus exceed her income and she has no capacity to contribute to Matthew’s expenses from her income during period’s two to four inclusive.
72.Presently, the mother has the sale proceeds, a car worth $18,000 and household items worth $2000. Upon the sale of the home she paid out all liabilities, including the mortgage. Having received the home unencumbered I infer the mother has borrowed money in order to meet occasional capital costs such as repairs and other expenses she has been unable to afford from her modest income. A trend which appears likely to continue.
73.The mother gave up paid employment so that she could care for Matthew full time. Although she would have enjoyed the opportunity to undertake tertiary education the amount of time and energy needed to care for Matthew made these ambitions impossible to fulfil. Working part time the mother may be able to obtain occasional child care work for which she would earn about $20 per hour. However, for the foreseeable future, even while Matthew is studying she feels unable to work in the paid workforce. Caring for Matthew has basically worn the mother out. I doubt that presently she has the physical capacity for paid employment, even on a part time or casual basis. Once Matthew has completed his study, this may change. One cannot overlook by that time the mother will have been absent from the paid workforce for about fifteen years. Common experience suggests that by then the barriers for returning to paid work will be significant. The effect of this is the mother has virtually no chance to supplement her capital assets through paid employment. She cannot be expected to use capital in order to meet her or Matthew’s necessary expenses as she has no realistic opportunity to replenish her capital assets. Until she buys her new home she must preserve her cash assets in order to buy reasonable accommodation and thereafter will have very little left. Although I must take into account the mother’s assets, in this case she cannot be expected to draw on these in order to meet Matthew’s expenses.
74.The next issue then requires examination of the father’s circumstances in order to decide whether he has a reasonable capacity to contribute to Matthew’s expenses and if so, to what extent. The father’s circumstances are not as straight forward as the mother’s.
75.The father’s financial circumstances are summarised in his financial statement filed 6 September 2004. His total average weekly income is $362. This comprises salary for working 17 hours per week at Caltex, interest and dividends of $14 and $96 for domestic cleaning. His financial statement shows total personal expenditure of $1,142 per week. However, this amount includes $198 per week for Matthew. The father stopped paying for Matthew’s support when he finished school. Presently, he pays about $25 per week. In September 1998 the father and his partner SL purchased a home as joint tenants at Sylvania Waters for $465,000. The house on the property was demolished and they contracted with Clarendon Homes to build a substantial two storey property. The property has been improved with landscaping, fencing and adding a swimming pool. Including the costs of improvements and other acquisition costs, the total cost of Sylvania Waters was $776,300. SL contributed $215,000 and the father $10,800. They borrowed the remaining $550,000 from the Commonwealth Bank. The father and SL each pay one-half of the mortgage repayments. Thus, the father pays $511 per week to the Commonwealth Bank and rates of about $17 per week. He pays $58 per week taxation, $32 per week insurance and $4 registration. The father’s average weekly expenses are $312. Thus his total weekly expenses are $969. This finding applies to all four periods. It is immediately apparent the father’s weekly expenses exceed his income, by $647.
76.It is apparent the father cannot meet his expenses from income. His expenses have exceeded his income since November 2002 when he was made redundant. This was not a voluntary redundancy. Upon being made redundant the father received $92,795 redundancy, plus $16,145 (gross) for long service and $7,093 (gross) for recreation leave. From long service and recreation leave he receives $15,919 net. The effect of his long service and accrued recreation leave payments was that the father continued to receive his salary, albeit paid in advance until May 2003. The father has met the shortfall in expenses by selling shares, then using capital and finally withdrawing unpreserved superannuation funds. As at November 2002 the father had cash and shares of $120,714. The father operates bank accounts with St George Bank and Commonwealth Savings Bank. His self managed superannuation fund is operated in a ComSuper Direct Investment Account. Between 5 December 2002 and 12 December 2003 the father withdrew $100,000 from the St George account and paid it into his Commonwealth Savings Bank account. $35,000 of the $100,000 was paid into his superannuation fund by three deposits of $10,000 and one $5,000 deposit. Subsequently, he has withdrawn approximately $100,000 from his superannuation fund. The father first drew down on his unreserved, unpreserved superannuation in about mid-2004. All monies withdrawn from his superannuation fund went into his Commonwealth Savings Bank account. None of these transactions were disclosed. The father explained that he provided net balances and that the balances are the end result of these transactions. This is a rather coy response as in maintenance cases it is important to understand the manner in which parties meet their living expenses. The father’s evidence did not make it plain that he had been able to access his superannuation fund to the full extent cross-examination revealed.
77.Altogether, since 5 December 2002 the father has spent $150,000 of capital meeting his living expenses. This comprises $65,000 for the period 5 December 2002–12 December 2003 and $85,000 since mid-2004. As at 27 November 2002 the father’s superannuation fund had a credit balance of $495,543.50. Notwithstanding his withdrawals from the fund, its value has increased. The father actively manages his superannuation fund trading shares through ComSec. As at 30 June 2004[13] his fund had a net equity of $634,643. For that financial year, the superannuation fund earned $92,801.31 profit on share transactions. When interest is taken into account, the superannuation fund earned $119,682.03. The $92,801.31 is gross profit on the share sales. Presently, the father is able to withdraw a further $44,000 from his superannuation fund. If he does so, the superannuation fund must pay tax at the rate of 21.5% of the amount withdrawn. Presently, the net equity in the fund is approximately $620,000. Therefore, if the father withdraws $44,000, the fund will stand at $576,000 less tax.
[13] Exhibit C
78.The father turns 55 in September 2006. At which time he is able to access his superannuation. He is an astute share trader and if the fund remains intact it is likely that it will continue to produce considerable income. Not necessarily at the rate achieved during 2004. The point is that the father will be able to continue to earn an income without depleting his capital assets. Alternatively, he may decide to pay part of the fund into the mortgage, reducing his and SL’s weekly mortgage payments at the cost of his capacity to produce income at the same rate through share trading. No doubt, he and SL will jointly decide the financially prudent course.
79.From 1 November 2002 until 30 April 2003 the father paid $14,441 per annum or $277 per week child support. From 1 May 2003 until the end of September 2004 he paid child support at an annual rate of $9,500 or $182 per week. The latter amount was set by departure. Although challenged by the mother as inadequate, her challenge failed. The father advised the agency that he was content to pay $1,200 per month until July 2003 and thereafter proposed $600 per month child support.
80.Although he did not concede it, it is plain that the father plans to draw down the remaining $44,000 to supplement his income. Averaged over the remaining 15 months (before he turns 55), the father will have $2,750 per month additional income. His weekly shortfall is $780. However, this amount includes $198 per week for Matthew. The father stopped paying for Matthew’s support when he finished school. Presently, he pays about $25 per week. Therefore, the father needs about $647 per week or $2,588 from the $44,000 in order to pay his expenses. Without compromising his lifestyle, the father can contribute $162 per month towards Matthew’s necessary living expenses. Upon turning 55 the father has a substantial lump sum some of which he can properly use to contribute to Matthew’s expenses. The extent to which he should do so it highly contentious.
81.The father claims only a 10% interest in Sylvania Waters, calculated by reference to the contributions made towards its acquisition, modified somewhat by his subsequent contributions to the mortgage. If the father and SL owned this property as tenants in common 90 % SL and 10 % the father I would accept this assertion. However, the combined effect of their ownership as joint tenants, joint and several liability for the entire mortgage and they pay all outgoings equally suggests that the father has a half interest in the property. This means the father has assets comprising half share in Sylvania Waters worth $450,000, cash at bank, cars and personalty of $9,000. The $44,000 he is able to withdraw from his superannuation is an asset. The father’s cash resources are difficult to quantify. This is because he did not complete this item in his financial statement. Including his 10% interest in Sylvania Waters he claims total assets of $109,982. Deducting his identified assets from his total assets leaves $59,342. It appears the difference is likely to be his available cash. On this basis his total assets are approximately $562,342. However because this is far from certain I do not consider it appropriate to place real weight on this particular finding. His liabilities are the mortgage at $245,000, Mastercard $263 and $1395 ATO. His net assets are thus $315,684. As I have already found the husband’s superannuation fund has assets worth $620,000. As I have treated the available $44,000 as an asset his superannuation falls to $576,000 less a small tax liability.
82.The mother asserts that the court would accept that the father’s earning capacity is significantly greater than his present income. In order to accept this submission, the court would need to be satisfied that the father has only made half hearted attempts to secure employment. To the contrary, I am satisfied that he has made exhaustive attempts to secure appropriately paid full time employment in his career of choice, information technology. At paragraph 26 of his affidavit the father sets out in detail the numerous positions he has applied for in information technology, banking, manufacturing, telecommunications, public service and other industries without success. In the face of continuing rejection the father took the only responsible avenue available and sought casual work wherever he could find it, irrespective of the nature of the work. He obtained a casual position as a service station console operator and in April 2003 started a cleaning business as a sole trader. Currently he works three shifts totalling 17 hours per week at a service station and has about eight hours per week cleaning. I am not satisfied that the father has the capacity to earn greater income than he currently produces. The only change will be when he is entitled to access his superannuation and can use the asset to earn income, rather than have it earned by his superannuation fund. Just as I accept that the mother faces real difficulty in returning to the paid workforce, so I also accept it is a unfortunately common occurrence that people retrenched in their early fifties, notwithstanding their experience and capacity frequently find it impossible to obtain work in their chosen field at the same level from which they were made redundant. The problem of mature age workers securing equivalent income following redundancy is well accepted.
83.The father’s most substantial expense is his contribution to the mortgage. The court must consider whether $511 per week towards the mortgage is reasonable or necessary. The law distinguishes reasonable mortgage debts from those that can be classified as extravagant. In Mee & Ferguson[14] the Full Court held the trial judge was in error treating a husband’s mortgage repayments as a “non negotiable deduction” from his salary taken into account before the husband’s capacity to pay maintenance was considered. The court held it was not appropriate for the husband to enter into additional liabilities and then treat that as a basis for reducing his maintenance payments for his own children. In this case the father entered into the mortgage in 1997, approximately five years prior to his redundancy. There is no evidence he knew his employers were contemplating a forced redundancy program. When the father entered into the mortgage, he reasonably anticipated continuing well-paid employment which enabled him to pay his share of the mortgage, enjoy a reasonable standard of living and pay proper child support. When he and SL upgraded their home and purchased Sylvania Waters, there were no financial clouds on the horizon. They cannot be criticised for acting foolishly or without regard to the father’s obligation to support Matthew. If the father entered into the mortgage shortly prior to being made redundant and was aware that redundancy was possible, his actions could be seen as unreasonable and his share of the mortgage repayments unnecessarily incurred. However, the unfortunate reality of the situation is the father’s reasonable ambitions, which underpinned the acquisition of Sylvania Waters and liability to the Commonwealth Bank for the mortgage were made far more onerous that he would have preferred by his redundancy. This is not a situation where a parent has deliberately incurred debt hoping to avoid child support or child maintenance. Although with hindsight, the decision to upgrade may be regarded as overly ambitious, it is only unforseen circumstances that make it so. Regrettably, the father is obliged to meet the mortgage payments. While his partner is jointly liable, it would be plainly unreasonable to require her to pay more than half the mortgage repayment when she and the father own the property jointly. Doing so would inappropriately require SL to in effect contribute towards Matthew’s support. Although the father’s housing and costs of accommodation is extensive than the mother’s and Matthew’s circumstances, nonetheless, make these costs reasonable and necessary.
[14] (1986) FLC 91-716
84.The father’s repartnering may impose on him some duties to maintain his new spouse, however these are limited. Kay J in In the Marriage of Humphries (1993) 17 Fam LR 120 states that, “The husband's legal duty to maintain his [second wife] is governed by the provisions of s 72 of the Family Law Act. He is only liable to maintain her to the extent that he is reasonably able to do so, and only to the extent that she is unable to support herself adequately.”[15] While the court has not been provided with his new partner’s income, evidence of her financial stake in the home indicates that she has the ability to support herself.
[15] In the Marriage of Humphries (1993) 17 Fam LR 120 at 124
85.The remaining issue is to determine the quantum of the father’s contribution to Matthew’s costs. In addition to paying Matthew’s health insurance the father will be ordered to pay $162 per month until the father turns 55. This order will operate from 24 September 2004, the date upon which the father stopped paying child support. Although this creates arrears the father has been aware since 22 April 2004[16] the mother sought child maintenance prior to this action starting. He has had ample time to plan for the possibility that she may succeed and it is thus proper to order the payment of maintenance from when she filed her application. This is a modest contribution compared to Matthew’s expenses. It is also more than the mother will contribute. However the inequity is proper having regard to her limited financial circumstances. The child maintenance order will increase upon the father turning 55 when the father has access to his entire superannuation from which point his financial circumstances are materially superior to the mother’s. From that time he will pay $160 per week, half of Matthew’s expenses. It seems likely that at most the father would pay this higher amount for about one year. Any more would erode his capital inappropriately. Any less is an inadequate response to Matthew’s needs and his father’s proper capacity to contribute. The effect of these orders is the father will contribute more towards Matthew’s expenses than the mother. While in some cases this inequity would be inappropriate, the father’s financial circumstances make this a proper outcome.
[16] Exhibit B
86.The father must pay arrears within eight weeks. While this may mean that he must temporarily rearrange his finances the consequences to him of doing so are insignificant. He must have anticipated that the mother may succeed to at least some extent and prudence dictates that he makes some provision for this eventuality. The order will continue for as long as Matthew is studying and until he completes his first TAFE course. If Matthew studies part time he must do more than the bare minimum. The mother’s application is presented on the basis that Matthew’s course runs for two years. As both parties accept Matthew may have some difficulty with the course, it is reasonable to anticipate he may need to repeat a few subjects or take the course part time depending on his health from time to time. Provided he is enrolled and the total study time does not exceed three years the order will continue to operate. If Matthew has been unable to complete the course within three years there is a real question about whether he is capable of doing so. Hence the father’s continuing liability to support his education warrants further consideration. If Matthew suspends his course for more than one year or leaves altogether the order is discharged.
87.The effect of the over 18 maintenance order is that it will continue the child’s partial dependence upon the father for his necessary expenses. Although Matthew has faced numerous hurdles for completing his secondary education, there is every reason to be optimistic that with his parent’s support he will successfully complete his TAFE course and then start paid work. Without his parent’s financial support his prospects of doing so are lessened. Whilst some children are sufficiently robust that full time study and working part time are compatible, this does not apply to Matthew. If too much is expected of Matthew in terms of his own financial support I consider the prospect that he will successfully complete his study would be undermined.
88.The mother’s claim for $300,000 lump sum payment was always doomed to failure. The father does not have $300,000 available. He cannot draw on his superannuation beyond the $44,000 which I have already taken into account. To date he has paid all periodic child support he has been ordered to pay, using capital where necessary to do so.
The relevant law – departure order
89.The obligation to pay child support is created by the provisions of the Child Support (Assessment) Act 1989. Section 3 contains the obligation that parents maintain their children. The objects of the Act are found in s.4. Each of the objects needs to be borne in mind when deciding an application under the Act. Section 4(3) of the Act recognises the desirability of parents reaching agreement for the financial support of their children. Sections 114 and 121 identify that the further objects of Divisions 4 and 5 of Part 7 include:
(a)that the children have their proper meeds met from reasonable and adequate shares in the income, earnings capacity, property and financial resources of both of their parents and
(b)that parents share equitably in the support of the children.
90.The Full Court of the Family Court in Gyselman (1992) FLC 92-279 set out a three step process that courts must follow in determining an application for a departure order under s.117. The first step is whether one or more of the grounds in s.117 are established. If so, the next step is whether it is just and equitable within the meaning of s.117(4) to make a particular order. The final consideration is whether it is otherwise proper within the meaning of s.117(5) to make a particular order.
91.An issue in this matter is whether the court might properly base its decision on earning capacity rather than actual income. It is clear from DJM v JLM (1998) FLC 92-816 that a court can take into account earning capacity in situations other than those in which a person has deliberately weakened his or her economic position in an attempt to avoid their responsibility to pay child support. What distinguishes these cases from those in which the court does focus on actual income seems to turn on whether the person acted reasonably in taking the step that led to their reduced income.[17] What is reasonable must be determined not only in light of the particular facts but also in the light of the particular area of law involved. In child support cases an important part of the context for determining what is reasonable is the explicit statement of the objects of the Act in s.4 in which there is reference to the parents, “capacity to provide financial support”. Thus a different answer to “what is reasonable” may be given in spouse maintenance compared to child support proceedings. Partly, this is because child support legislation prioritises the obligations of parents to support their children.
[17] See, for example, discussion in DJM v JLM (supra.).
Child support – applying the law to the facts
92.The mother’s approach to her child support application was somewhat curious. The mother’s counsel opened the case on the basis that this was a child maintenance application and opposed the father being given leave to pursue a child support application as this expanded the issues the court needed to deal with. When leave was granted the mother’s counsel effectively abandoned her application for lump sum relief and only passing reference was made to her child support departure application. Probably because it was presented on a flimsy basis.
93.I have already made findings concerning the parties financial positions and do not repeat them.
94.The mother’s application for departure relies on s.117(2)(c)(i). She seeks departure effective from 1 May 2003 so that the father’s child support is increased to $14,400 per annum. The focus of her documents [18] concerned the father’s redundancy. His circumstances are no less relevant than hers. The mother provides a paucity of evidence concerning her income and expenses, for both herself and Matthew prior to September 2004. Counsel agreed that there was little evidence from his client concerning the period May 2003 – September 2004 and submitted that the court could base its decision upon the figures included in the various notices of decision by the Child Support Agency. Notices of decision were made 17 July 2003[19], 22 December 2003[20] and 25 February 2004[21]. The mother’s counsel submitted that these documents comprise admissions against interests. That is, admissions by the both parties that the Child Support Agency figures are correct in terms of the mother’s assets, income and expenses, property, liabilities and financial resources. I do not agree. The mother needed to prove in her case her income, expenses, property and financial resources for the period under challenge. She probably needed to do little more than give written evidence for the various periods or say that her financial circumstances attested in September 2004 have persisted since May 2003. With respect to her she gave little information to the CSA concerning Matthew’s expenses during the period. So too her information to this court was lacking overall for the period under challenge.
[18] Exhibit A
[19] Annexure A Father’s affidavit
[20] Annexure B Father’s affidavit
[21] Annexure C Father’s affidavit
95.In the child maintenance phase of the proceedings, I explained that I am satisfied the father’s earning capacity is no greater than his actual income. The CSA on review took his redundancy into account properly. Simply put there is insufficient evidence in the mother’s case to establish a ground for departure based on her circumstances or the father’s circumstances. Her departure application will be dismissed.
96.The father applies on departure on the basis of s.117(2)(c)(i), in particular Matthew’s income. Matthew’s income included allowances that are not income tested. By virtue of s.117(7) only income tested pensions, allowances or benefits shall be disregarded and it is alleged that the Child Support Review Officer (CSRO) wrongly disregarded Matthew’s non-income tested benefits. In the notice of decision dated 17 July 2003 the Child Support Review Officer correctly states, “Under the legislation I am required to disregard any entitlement of the child or the payee to an income tested pension, allowance or benefit.” The question is having correctly stated the applicable law did the CSRO nonetheless overlook it? There is nothing in the notice of decision that indicates the CSRO treated Matthew’s allowances as income tested benefits. The CSRO acknowledges Matthew’s disability entitlement, a phrase which seems to include Matthew’s disability benefit and allowances he receives because of his disability. That is both the income tested and non income tested benefits. The focus of the decision, and hearing, appears to have been on the father’s income and assets, particularly the manner in which his redundancy should be treated. Reading the decision as a whole I am not persuaded the CSRO overlooked that parts of Matthew’s income while studying was income to be taken into account in determining the level of the father’s liability.
97.If I am wrong, I would not be satisfied the father should succeed. In this application he proposes to pay less child support than he offered to pay at the time. After the 17 July 2003 decision the father did not raise the issue in the later reviews and objections the mother pursued. It seems to me that he constructed an argument for this hearing in an attempt to minimise the amount of child maintenance he may have to pay or at least have a sum against which he could offset any future payments. Having willingly paid the assessed child support he has left it too late to complain about the quantum of child support paid. The mother has spent all the child support on Matthew, money the child sorely needed. It would be manifestly unjust to order its repayment and even if a ground for departure had been established the application would be refused.
98.For these reasons I make the orders identified at the start of this judgment.
I certify that the preceding ninety-eight (98) paragraphs are a true copy of the reasons for judgment of Ryan FM
Associate: S. Mashman
Date: 30 May 2005
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