M and J
[2000] FMCAfam 7
•1 August 2000
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| M & J | [2000] FMCA fam 7 |
| SPOUSAL MAINTENANCE |
| Applicant: | B P M |
| Respondent: | B E J |
| File No: | ZB 2196 of 2000 |
| Delivered on: | 1 August 2000 |
| Delivered at: | Brisbane |
| Hearing Date: | 1 August 2000 |
| Judgment of: | Baumann FM |
REPRESENTATION
| Counsel for the Applicant: | Mr Ray Solicitor |
| Counsel for the Respondent: | Mr Game |
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT BRISBANE |
ZB 2196 of 2000
| B P M |
Applicant
And
| B E J |
Respondent
REASONS FOR JUDGMENT
History
In this matter I have before me an application for maintenance (filed on 2 June 2000) brought by the mother of the child, S J M, born on
4 February 1986. It appears clear on the evidence that just before the child turned 2 the parties separated and since that time the mother and father have not lived together and the mother has, apart from also combining work, been the primary care giver to the child. The parties reached some form of mutual agreement shortly after separation which, on the evidence, reflected that the father met his strong moral responsibility to S as well as his legal responsibility by maintaining payments by way of child maintenance at an amount of approximately $100 per week. Again, as a result of the mother's request made earlier this year, he voluntarily agreed to increase to $130 per week payments of child maintenance.
The solicitor for the father indicated that an amount of some $63,000 had been paid during the lifetime of S to date. Although there is no actual calculation of that figure I do not find that particularly relevant other than to show that the father has made a fair and proper contribution to the financial welfare of S to this point in time. Regrettably it seems that as a result of the desire to formulate a formal residence and contact regime the voluntary arrangement which had worked between the parties for many years came under further scrutiny.
The consent order of 28 March 2000 was before me, as was the material of the parties referred to in the initial outline by their representatives. The order indicates that the father has regular contact to S and the evidence was that the contact is slightly greater than it was under the previous, again voluntary, arrangement. It's obvious that because of the lack of communication between the parties which is obvious both from their demeanour in the witness box and from their material that it is necessary that we have a formal order. The mother in her material seeks an order of $250.00 per week (which was reduced in submissions to $180.00 per week) whilst the father proposes he pay essentially $330.71 per month ($76.30 per week).
The father for his part says that there have been some substantial changes since he appears to have voluntarily agreed to pay $130 per week, namely the increased financial obligations which arise from the increased contact. Certainly earlier than that decision was the fact that he now has two young children from his current marriage to support It must be acknowledged that all the literature reflects that the costs of maintaining a child of 14 is significantly greater than that of children of the age of his other two infants. He also says he now knows he was paying more than he may have been required to pay under a Child Support Assessment.
Proper needs of S
Section 66B(2) of the Family Law Act provides that children shall have their proper needs met from reasonable and adequate shares in the income, earning capacity, property and financial resources of both of their parents and that the parents should make an equitable contribution to those expenses. Also, pursuant to section 66H, I am required to firstly find the financial support necessary for S and then to determine the financial contributions that should be made by the parties. In respect of the child's needs the mother says in her application that the child's needs amount to $323 per week inclusive of school fees of $37 per week, a net figure of $286 per week. Those figures were not the subject of serious challenge under cross-examination although queries were raised in relation to the allowance for mortgage expenses, clothing and holidays. The father was not in a position to offer much evidence as to the proper needs of S, other than to say he estimates the amount he would pay for S (additional to the proposed maintenance) is approximately $22.00 per week (see Annexure “BPM1”).
I'm also entitled to use as a guide the tables named generally as the Lovering and Lee Tables. Although several cases have expressed a preference for the Lovering figures, as a guide and bearing in mind this is a “one child-one income family”, the Lee estimation of $261.32 per week is helpful. Taking into account the evidence before me and in so doing, excluding school fees, I find that the needs of the child amount to $220 per week. School fees according to exhibit A, which was the statement of fees payable by parents of children at the L H School, suggest that the annual amount per year is $2280, (being school fees of $1900, $260 for building fund contributions and $120 for P&F levy). In respect of the allowance above of $220 per week I have made allowance for some of the items referred to in the mother's evidence including uniform costs of $200 per annum and book hire, art fees and other similar charges including karate which may have been in the region of $500 per annum.
With a view to rounding the figures off in what is not an absolute, exact financial calculation I find it reasonable that the needs of the child, S, at this time on a weekly basis including school fees amounts to $260 per week.
Mother’s capacity to contribute
It's necessary then for me to consider the capacity of the parents to contribute. The mother is currently not working but indicated in her sworn evidence that it was her intention to seek employment approximately six months after resigning her employment with S M. She indicated as her reasons for resigning, a desire to spend time with her daughter who she said had gone through a deal of stress arising from the discussions relating to contact.
It appears that she has been the primary care giver to her daughter since separation and I find it both reasonable and consistent with the evidence that she should take some time off from work to do as she did. I find it not unreasonable, that she use the money available from her superannuation and on her mortgage, to also meet expenses during the period where she chose voluntarily to retire from the workplace. Importantly, the mother says that she will have no problem going back to work. I think that was a fair concession because it appears on the evidence that she has been in either part-time or full-time employment as a financial adviser or financial services provider for some 13 years
She indicated that she believes she could earn approximately $42,000 per annum gross and I find that that is the mother's earning capacity and that she will be able to return to the workplace. The orders which I propose to make are based on that finding.
Father’s capacity to contribute
So far as the father is concerned, he is self-employed and has operated his own company, called the M Group Pty Ltd, since the company was created in approximately 1989. There is really nothing unusual about his company's structure. We have now the benefit of financial statements for the year ended 30 June 1999.
What is important to find, and I do find, is (and the father readily conceded this), that he effectively controls the company notwithstanding the fact that his parents and wife have shares in the company. To that end I find that he has the capacity, not only to control the flow of income and payment of expenditure, but also importantly to determine how much of the income of the company is directed to his current wife for the services she renders for the company; the hours she works; and the conditions of employment including benefits which may flow from her employment.
I also accept that he is, in effect, the business. This is not unusual in small businesses of this nature where for a number of proper asset planning and tax minimisation reasons parties choose to use corporate structures. In these circumstances I am not required to make a finding as to the value of the business, other than to observe that the business appears to be profitable. The gross income for the business (see exhibit C, being the financial statement for the business), reflected an income, a gross income in the 1997/98 year of $144,871 increasing in the 1998/99 year to $186,166. I have no evidence before me to suggest that that trend has not at least been maintained and no evidence to suggest that the business is not progressing satisfactorily. Some issue in cross examination was taken to the substantial increase in motor vehicle expenses ($12,813 up to $29,336) and Travel and Accommodation ($629 to $6,813). I also note the wages increased by nearly $20,000 over the period. The father’s 1998/99 Income Tax Return reveals gross income of $38,125; and he says his wife is being paid $22,464 by the Business for her part-time involvement.
I find that I am entitled, however, both in terms of the direct evidence and the inference which I can reasonable draw from the material produced that the father has a greater earning capacity, income and financial resource than does the mother. Now, of course, that resource must also be discounted in my view for the increased expenses which the father will bear as a result of the contact to S which has increased and also the additional moral and legal obligations he has to the two younger children and wife. Because I find he has a greater income, earning capacity and financial resource than the mother and even after discounting for the factors above I find that he and the mother have an equal capacity to contribute to the reasonable and proper needs of the child, S.
Conclusion
In those circumstances I propose to order that the father pay the equivalent of $130 per week to the mother being 50 per cent of the assessed needs of the child. I would propose to order that that amount be paid monthly to a bank account nominated by the mother. I see no reason why I should at this stage direct the Child Support Agency to be involved in collection as it seems to me that the father, being in a business, can make arrangements for the transfer of the amount I've ordered in a normal business sense but of course that's an option open to the wife at a later stage if he should fall into arrears. I considered whether it was appropriate that I should order he pay his share of the school fees to the school direct. It seems to me that as, until recently, those school fees were paid by the mother from the maintenance she received from the father, it is appropriate that the arrangement should continue.
I did take account of the father's concern that the child may not perceive that he is, in fact, contributing to her education expenses but it seems to me that with the contact he is now having to the child and to the extent that she is now older and able to understand these concepts, it wouldn't seem difficult for him to be able to show that he is, in fact, contributing to a whole range of her expenses including her schooling. Now, to enable me to make that formal order which amounts to $563 per month, I propose to make the first payment payable on 15 August. That will take account of the lesser payment paid recently.
The order will be that the father pay to the mother in respect of child maintenance for the child, S J M, an amount of $563 per month payable on 15 August 2000 and monthly thereafter by payment to the mother's bank account conducted with – and I will put in the details you've given me. I further order that the amount be reviewed annually by an increase by the percentage increase in the Consumer Price Index for Brisbane based on the June quarter.
I certify that the preceding seventeen (17) paragraphs are a true copy of the reasons for judgment of Baumann FM
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