M and M
[2007] FMCAfam 662
•21 September 2007
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| M & M | [2007] FMCAfam 662 |
| CHILD SUPPORT – Variation of existing departure orders – special circumstances. |
| FAMILY LAW – Parenting orders – changeover – psychiatric assessment. |
| SPOUSAL MAINTENANCE – Variation or discharge of existing orders. |
| Child Support (Assessment) Act 1989 (Cth), ss.111(1), 112(1)(b) and (2), 117(2)(a)(iii), 2(c)(ia) & (ib), (4)(a), (b), (d)(da) & (e), (5)(a) & (b), (6)(a) & (b), (7B)(a)(i), (b) & (c), and 118(2B) Family Law Act 1975 (Cth), ss.60CC(2)(a) & (3), 83(1)(c) & (f)and (2)(a)(ii) |
| Bevan & Bevan (1995) FLC 92 - 600 Goode & Goode (2006) 206 FLR 212; [2006] FamCA 1346 Hungerford & Tank [2007] FamCA 637 In the Marriage of Gilmour (1994) 18 FamLR 646 In the Marriage of Gyselman (1991) 15 FamLR 219 In the Marriage of JM & PJ Bryant (1996) 20 FamLR 575 M & M (unreported, Family Court of Australia, Brown J, 18 November 2003) |
| Applicant: | C J M |
| Respondent: | C T M |
| File Number: | MLM 2825 of 2003 |
| Judgment of: | Lucev FM |
| Hearing date: | 18 June 2007 |
| Date of Last Submission: | 18 June 2007 |
| Delivered at: | New South Wales (via telephone to Melbourne) |
| Delivered on: | 21 September 2007 |
REPRESENTATION
| Applicant: | Mrs M appeared in person |
| Respondent: | Mr M appeared in person |
DECLARATION AND ORDERS
The Court declares that:
the Respondent has established that:
(a)a special circumstance ground of departure under s.117(2)(c)(i) of the Child Support (Assessment) Act 1989 (“the Assessment Act”) warranting the making of an order or orders departing from the existing assessment of child support under order 14(b) of the orders of the Family Court of Australia dated 18 November 2003 (“the existing child support orders”);
(b)it would be just and equitable under s.117(4) of the Assessment Act to make an order or orders departing from the existing child support orders;
(c)it would be otherwise proper under s.117(5) of the Assessment Act to make an order or orders departing from the existing child support orders; and
(d)the final form of any such order or orders will be determined following the filing of updated financial material by the parties.
The Respondent has established grounds for an order or orders under s.83(1)(c) and (f) and 83(2)(a)(ii) of the Family Law Act 1975 (Cth), for the discharge or variance of the existing quantum of spousal maintenance under order 13 of the orders of the Family Court of Australia dated 18 November 2003, but that the final form of any such order or orders will be determined following the filing of updated financial material by the parties.
AND THE COURT ORDERS THAT:
Orders 13 and 14(b) of the orders of the Family Court of Australia dated 18 November 2003 be stayed until further order of this Court.
The Applicant and Respondent are to file and serve:
(a)copies of personal income tax returns for the financial years ending:
(i)30 June 2005;
(ii)30 June 2006; and
(iii)30 June 2007,
and that if personal income tax returns have not been filed for any of those years, that the parties do all things necessary to file such returns in time to ensure compliance with these orders;
(b)copies of documents evidencing any:
(i)remuneration or income received from any employment, engagement or provision of service of any kind; and
(ii)Centrelink benefits received,
from 1 July 2007 to 30 September 2007; and
(c)Updated Form 13 – Financial Statements,
by 4.00 pm 17 October 2007.
The matter be adjourned to 24 October 2007 at 9:00 am for hearing (of not more than one hour) to determine the final form of order for child support and spousal maintenance.
Otherwise, all extant applications by the Applicant and the Respondent be dismissed.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT COFFS HARBOUR |
MLM 2825 of 2003
| C J M |
Applicant
And
| C T M |
Respondent
REASONS FOR JUDGMENT
Introduction
Mr and Mrs M were married in March 1996, separated in 2001 and divorced in 2003. There are two children of the marriage: T aged ten and P aged six.
Following a four day hearing in September 2003, the Family Court of Australia delivered judgment and made orders on 18 November 2003 concerning parenting issues (including changeover), child support (including the payment of school fees) and spousal maintenance. [1]
[1] M & M (unreported, Family Court of Australia, Brown J, 18 November 2003)(“M”).
Mrs M now alleges that Mr M stopped school fee payment for T in late 2004, and the remaining child support and spousal maintenance in early 2005, both contrary to the Family Court orders.
In August 2005 Mr M declared himself bankrupt. Mrs M alleges that Mr M has undisclosed assets and sources of income.
Mr M still resides in Victoria but is considering moving to Queensland. Mr M’s parents have been supporting him for the last seven or eight months, and he has now applied for unemployment benefits.
Issues
The issues in these proceedings are:
a)whether Mr M should continue to pay child support and school fees:
i)on the basis set out in the Family Court orders;
ii)as sought by Mrs M, on the basis set out in the Family Court orders amended to provide for payment of school fees for P; or
iii)as sought by Mr M by administrative assessment effective from 6 August 2005 (on the basis of his income from that time, being the date of bankruptcy);
b)whether all arrears of child support and spousal maintenance owed by Mr M are to be discharged;
c)whether the changeover arrangements ought be amended; and
d)whether Mr M’s time spent with the children ought to be supervised.
In order to put the child support and spousal maintenance matters in their proper context it is necessary to deal with Mrs M’s assertion that Mr M has undeclared assets and income.
Undeclared assets and income
Mrs M’s cross-examination of Mr M established that much of the information contained in Mr M August 2005 bankruptcy petition was incorrect or inaccurate or simply not included, including the following:
a)Mr M failed to declare various bank accounts to which he was a signatory at the time of bankruptcy.[2] Mr M said this was an “oversight”, caused by his resigning as a director from various companies consequent upon his bankruptcy, and that he had only one active bank account.[3] Mr M denied purposely failing to declare that he was a signatory to the various undeclared bank accounts.[4]
[2] Transcript at 24-27.
[3] Transcript at 24 and 27.
[4] Transcript at 28.
b)Mr M failed to declare shares held in F F marketing and F F A.[5] Mr M said that he was “a little confused” because bankruptcy required his resignation from various companies.[6]
[5] Transcript at 28.
[6] Transcript at 28.
c)Mr M failed to declare a managed blue gum investment,[7] the purchase price for which was $15,000.[8] Intended to be a tax effective investment the maturity value of the lots may be $12,000 to $14,000 sometime between 2007 and 2009.[9] The lots are an asset of Mr M’s bankrupt estate.
[7] Transcript at 28.
[8] Exhibit A4, Trustee’s Report 6 June 2007.
[9] Exhibit A4, Trustee’s Report 6 June 2007.
d)Mr M agreed that he had not included the 2003 sale of an asset, the family home in Victoria for $952,000. That too he said was an oversight.[10]
[10] Transcript at 29.
e)Mr M indicated that he had not included the value of various memorabilia in the bankruptcy petition.
f)Mr M agreed that whilst his bankruptcy petition declared “income tax” debts of $317,000 owing to the Australian Taxation Office:
i)his assessment for the year ended 30 June 2005 showed an amount of $196,000 owing;[11] and
ii)the amount claimed in the bankruptcy petition may have included non-income tax debts (eg CGT and GST) for which he was advised he was liable.[12]
g)Mr M agreed that he failed to declare a debt of $7,600 on an American Express credit card. Again, Mr M said this was an “oversight” on his part.[13]
h)Mr M implicitly conceded that the amount of the American Express debt appearing on his Form 13 – Financial Statement was ($7,500) not correct, and that at the time the Form 13 was signed he “wasn’t sure of what debt there was to Amex”,[14] but did not deny Mrs M suggestion that it was $21,500.
i)Mr M conceded that on the bankruptcy petition he had incorrectly said that he had not been in business as a sole trader or partner at any time in the last five years, when he had been involved in a number of registered businesses over the previous five years (including M F S, F (registered in Victoria and Queensland) and A F E (registered in Victoria and Queensland)). Again, he said it was an “oversight” but that the answer was premised on the requirement to resign as a director of various companies upon becoming bankrupt.[15] Mr M made a similar concession concerning his failure to list all of:
i)the companies with which he had had a role as a director or manager (he did list one company but there were several);[16] and
ii)the trusts of which he had been a unit holder or beneficiary.[17]
[11] The actual amount on the Notice of Assessment is $196,781.50: Exhibit A2.
[12] Transcript at 30-34.
[13] Transcript at 34-35.
[14] Transcript at 34-35.
[15] Transcript at 37-38.
[16] Transcript at 38-39.
[17] Transcript at 39-41.
Mr M did not concede that he had failed to declare distributions from any trust.[18] Mr M said that he was “advised”, it seems by his then accountant, that he had not received any money from two trusts (C and C M T and the C M T), and that was why he had said he had not declared any income from the trusts in the relevant period for bankruptcy purposes.[19] Further, he gave evidence that he had received no income from another trust (the M U T) in the last two years. He further said he had “not hidden anything intentionally”[20] in relation to his bankruptcy.
[18] Transcript at 41-42.
[19] Transcript at 41-42.
[20] Transcript at 41.
Mr M was challenged as to a statement in his bankruptcy petition that his financial difficulties commenced in 2001. He said that at that time taxation debts were rising, and that income was being spent upon the renovation of the former matrimonial home in Toorak rather than payment of taxation liabilities. Mr M said that he was left with “taxation debt, a lot of debt” upon the property settlement “and was accumulating a hell of a lot more” taxation debt. Mr M account is confirmed, at least in part, by the judgment and orders in M, which provide for Mr M to indemnify Mrs M and to keep her indemnified in respect of any liabilities of any of the entities and trusts referred to in the orders, which were:
a)F F A Pty Ltd and any associated company or entity; and
b)the C & C M F T.
Those liabilities included “any liability of the wife to the Commissioner of Taxation, howsoever such liability arises” in relation to the company, associated companies or entities, and trust mentioned above. Mr M said that the consequence was that he got further and further behind in payment of outstanding taxation debt.[21]
[21] Transcript at 45-47 and 50.
It is clear that Mr M failed to make full and proper disclosure of relevant matters upon bankruptcy. Mrs M’s cross-examination of Mr M proved this without doubt. Mr M was a less than impressive witness, not so much from a credibility standpoint, but simply because he gave his evidence with the honest appearance of a person who “literally gave up” when his taxation debt burden became (through his own financial mismanagement it appears) too much, and declared himself bankrupt. Accordingly, he paid little or no proper attention to the declarations made in respect of the bankruptcy petition. In the Court’s view (having seen and heard Mr M) Mr M was not deliberately dishonest in those declarations, but rather inadvertent.
In any event, whether full disclosure was made in the bankruptcy petition is now irrelevant for present purposes. An investigation was conducted by the Official Trustee in Bankruptcy into Mr M’s affairs. In a report to the Court dated 12 April 2007 the Trustee raised concerns about Mr M income and assets, and advised the Court that they were the subject to further investigation.[22] The Trustee conducted an investigation and produced a further report dated 6 June 2007.[23]
[22] Exhibit A3, Trustee’s Report 12 April, 2007.
[23] Exhibit A4, Trustee’s Report 6 June, 2007.
The Trustee’s report of 6 June 2007 indicates that:
a)Mr M earned substantial income in the three years prior to bankruptcy;[24]
b)Mr M was on Centrelink benefits and not working;
c)the C & C M F T ceased to trade after the 2004 financial year, due to the breakdown in the marital relationship, and at which time Mr M was advised to create another trust through which to conduct his business interests;
d)the C M F T was established but only traded during the 2005 financial year (that is prior to bankruptcy);
e)the MO C Pty Ltd as trustee of the MO U T is the registered proprietor of a business called A F E which conducted furniture expos in April 2005 and April 2006. Mr M resigned as a director of MO in May 2005. MO continues to trade, but does not hold any assets;
f)Mr M had operated a number of bank accounts, for various entities, but that those entities were either in liquidation, had been deregistered, or were not trading in bankruptcy;
g)F M was a business operated by J and P P;
h)a parcel of lots in the B I T was purchased by Mr M in 1996 for $15,000, and will have a maturity value of $12,000 – 14,000 sometime in 2007-2009. The lots are an asset of the bankrupt’s estate; and
i)Mr M has a memorabilia collection, of uncertain value, and that its sale would realise little or no funds for the benefit of the bankrupt’s estate.[25]
[24] The report says “bankruptcy in 2006”, but it should be 2005.
[25] Exhibit A4, Trustee’s Report, 6 June 2007.
The Trustee concluded that:
a)“the financial affairs of Mr M over the last ten years have been very complex, it appears that there may be no assets available to creditors of the bankrupt estate, apart from the parcel of lots in the [B I T]”; [26] and
b)a public examination of Mr M and his various business associates was not warranted.[27]
[26] Exhibit A4, Trustee’s Report, 6 June 2007.
[27] Exhibit A4, Trustee’s Report, 6 June 2007.
It is evident from the Trustee’s Report that, with minor exceptions, the Trustee’s view is that Mr M does not have undisclosed assets and income. The Trustee’s Report was consistent with Mr M evidence that he did not have undisclosed assets and income.
Mr M’s evidence was that in the 2006 financial year his taxable income was $40,565. The employment that resulted in that income ceased in September 2006 with payments by way of leave and termination payments continuing until 23 November 2006.[28] Mr M is now on Centrelink benefits, and those benefits are likely to be $424 a week.[29]
[28] Exhibit A2, Notice of Assessment for year ending 30 June 2006; Mr M’sAffidavit of 9 May 2007, Annexures B and D.
[29] Transcript at 6; Mr M’s Affidavit of 9 May 2007, para 20.
Mrs M filed a number of affidavits upon which she relied.[30] Much of the material in her affidavits was speculative and inadmissible hearsay. Some of it related to matters already determined in the judgment leading to the Family Court orders. It is not necessary to particularly identify that evidence as such because the affidavits do not prove that:
a)any income, other than that he has declared, was received by Mr M, either directly or indirectly; or
b)any asset was hidden by Mr M, or otherwise dealt with on his behalf, save for the failure to declare the lots in the B Investment T (The lots were hardly a secret though: they are discussed in M, where the Family Court ordered that he retain the lots).[31]
[30] Mrs M’s Affidavits of 13 February 2006; 15 May 2006; 22 May 2006; 18 October 2006; 20 March 2007.
[31] M at para 150 per Brown J.
Mrs M admitted in her evidence that she was unable to identify an account or a trust where Mr M held money,[32] or any income that was paid to him.[33] There was evidence of withdrawals from bank accounts of companies and trusts with which Mr M had some association, but again there is no direct link to Mr M,[34] and nothing otherwise to suggest that the money withdrawn went to Mr M. There was no evidence which proved that the transactions concerned were other than the consequence of the normal trading activities of the relevant entities. Speculation and supposition are no substitute for proof.
[32] Transcript at 5.
[33] Transcript at 7, 8 and 10.
[34] Transcript at 10.
The evidence establishes that:
a)Mr M is bankrupt, and has been so since 6 August 2005, and that on bankruptcy his principal creditor was the ATO, in the sum of $317,428, with other creditors to whom slightly more than $100,000 was owed.[35]
b)Mr M had a taxable income of $40,565 for the financial year ending 30 June 2006, and was earning that level of income until 23 November 2006; and
c)Mr M is presently unemployed and on Centrelink benefits,
and it is against that background that the child support and spousal maintenance applications are to be determined.
Child Support
[35] Mr M’s Affidavit of 9 May 2007, Annexure A. Even on the evidence relied on and argued about by Mrs M, the debt to the ATO is the not insubstantial sum of $196,781.50: see para 8(f)(ii) and footnote 11 above.
Background
Order 14(b) of the Family Court orders in M provide for a departure from administrative assessment for child support, and that for the period from 23 December 2002 to 1 February 2006 that Mr M pay child support of:
a)$220 a week (CPI varied from 30 June each year) for each child to the Child Support Agency ($440 a week total);
b)all private school fees and compulsory charges for T at G G S, plus reasonably incurred extra curricular costs, including books and uniforms, to a maximum of $2,600 each school year; and
c)private health insurance for T and P at current rates.
In M the Family Court was satisfied that having regard to the actual income, earning capacity and financial resources of Mr M, and that because T was being educated in the manner expected by his parents, there were special circumstances justifying departure from the administrative assessment.[36] The Family Court assessed Mr M child support income as being $119,470 a year, the then maximum amount, and he was ordered to pay a sum equal to $632 a week, that amount to be re-assessed once P started school (on 1 February 2006).[37]
[36] M at para 162 per Brown J.
[37] M at paras 159, 161, 163 and 164 per Brown J.
Orders sought by Mrs M
The orders sought by Mrs M are as follows:
a)that in accordance with the order made 18 November 2003 (14)(b)(i)(B) Craig M will pay all private school fees and compulsory charges for the child T, at G G S, up to and including 1 February 2006. This order having the effect of payment of arrears up to and including the period covered by this order 18 November 2003 to 1 February 2006;
b)that from 1 February 2006, C M pay all private school fees and compulsory charges for the child T at G G, up to and including the child’s 12th year in 2014;
c)that the order made 18 November 2003 (14)(b)(i)(C) be altered to the effect that C M pay all reasonable incurred extra curricular costs for T at G G S, including books and uniforms, to a maximum sum of $1000 in each school year;
d)that the order made 18 November 2003 (14)(b)(i)(A) be altered to the effect that C M pay the sum of $235 per child per week, a total weekly sum of $470, such sum to be paid to the Child Support Agency;
e)that in addition to the child support amount at (d), C M will pay an additional $100 per week towards payment of arrears. And that this amount is payable until the arrears in child support are nil;
f)that C M, in accordance with the order made 30 October 2006 6(a)(b)(c)(d) do attend and complete an appropriate post separation parenting program; and
g)that C M pay, to C M, by way of bank cheque, and within 14 days of the date of this order, her costs associated with this application for the amount of $2,860.
Orders sought by Mr M
Mr M seeks:
a)discharge of all arrears of child support;
b)that the rate of child support be set by administrative assessment;
c)that order 14(b) of the Family Court orders in M be discharged; and
d)that Mrs M’s application otherwise be dismissed.
Variation of departure order – principles
In an application for variation of an order already made by a court under Part 7 of the Assessment Act for departure from an administrative assessment, this Court must first consider whether any of the special circumstances under s.117(2) of the Assessment Act apply, and thereafter determine whether it is just and equitable within the meaning of s.117(4) of the Assessment Act, and otherwise proper within the meaning of s.117(5) of the Assessment Act, to make an order varying the earlier departure order.[38] It is necessary to address each of any of the relevant matters set out in s.117 of the Assessment Act in any reasons for judgment.[39]
[38] In the Marriage of JM & PJ Bryant (1996) 20 FamLR 575 at 586 per Fogarty, Finn and Kay JJ (“Bryant”), see also In the Marriage of Gilmour (1994) 18 FamLR 646 and In the Marriage of Gyselman (1991) 15 FamLR 219.
[39] Bryant at 588 per Fogarty, Finn and Kay JJ.
Special Circumstances
There is sufficient evidence before the Court to consider, albeit broadly, the questions of:
a)the capacity of the Father, Mr M to provide financial support for the Children, and whether that has been significantly reduced because of his commitments to enable him to support himself;[40] and
b)whether there is an unjust and inequitable determination of the level of financial support to be provided by Mr M because of his income, property and financial resources, and also, his earning capacity.[41]
[40] Assessment Act, s.117(2)(a)(iii).
[41] Assessment Act, s.117(2)(c)(ia) and (ib).
It is reasonably self-evident that Mr M’s financial position is much diminished since the decision in M. At that time his child support income was $119,470 a year, but his actual income was much larger.[42] He was declared bankrupt in 2005. He obtained employment which paid about $40,000 a year. Having ceased employment he now receives Centrelink benefits of about $424 a week.
[42] M at paras 118-125 per Brown J.
Mr M appears to have minimal asset backing. His earning capacity, whilst much diminished by reason of the bankruptcy and its effects, might be greater than his current Centrelink income, as indicated by his income level when employed. However, the Court is not satisfied that:
a)Mr M does not work despite ample opportunity to do so;[43]
b)Mr M’s decision not to work is not justified on the basis of his health;[44] and
c)it was a major purpose of the decision not to work to affect the administrative assessment of child support in relation to the Children.[45]
[43] Assessment Act, s.117(7B)(a)(i).
[44] Assessment Act, s.117(7B)(b).
[45] Assessment Act, s.117(7B)(c).
Thus it is not possible to find that Mr M has greater earning capacity than he presently earns, because the Court can “only” do so if it “is satisfied” that various factors apply, including those of which it is not satisfied as set out above.[46]
[46] Assessment Act, s.117(7B).
Having regard to Mr M present income ($424 a week) there can be no argument that his capacity to provide financial support for his Children (previously assessed in M at $632 a week) has been significantly reduced because of his commitments to enable him to support himself.[47] Whilst there is no evidence of Mr M’s current commitments, the above figures speak for themselves as to the significant reduction in capacity.
[47] Assessment Act, s.117(2)(a)(iii).
Given Mr M current income, and the findings made above concerning his earning capacity, the payment of child support at the level determined in M, which is at a rate which is 149 per cent of his weekly Centrelink benefits, would clearly be an unjust and inequitable determination of the level of child support required to be provided.
In the circumstances, a special circumstance exists warranting variation of the existing departure order, both under s.117(2)(a)(iii)(A) and (2)(c)(ia) and (ib) of the Assessment Act.
Whether a particular order is just and equitable
There are a variety of matters that the Court must have regard to in determining whether a particular order is just and equitable.[48]
[48] Assessment Act, s.117(4).
The Court must have regard to the nature of the duty of a parent to maintain a child.[49] The nature of the duty must of course have regard to the financial resources of a parent, in this case, the changed circumstances of the Father in particular. Neither party here seeks to avoid the duty to maintain the Children, but both have different views as to what is required to do so and the financial capacity of Mr M to maintain the Children.
[49] Assessment Act, s.117(4)(a).
The Court must also have regard to the proper needs of the children in this case.[50] In having regard to the proper needs of the child, the Court must have regard to:
a)the manner in which the child is being, and in which the parents expected the child to be, cared for, educated or trained; and
b)any special needs of the child.[51]
[50] Assessment Act, s.117(4)(b).
[51] Assessment Act, s.117(6)(a) and (b).
T is presently being educated at G G S.[52] He is in year four. At the time of the decision in M both Mr and Mrs M wanted T to go to G, and it was anticipated that P would attend a private school.[53]
[52] “G”.
[53] M at paras. 154-165 per Brown J.
Mr M seemingly no longer considers it financially possible (at least on his account) for T to attend G, nor for P to attend a private school.[54]
[54] Mr M’s Affidavit, 9 May 2007, para. 19.
Mrs M seeks payment of all arrears of school fees and levies, all school fees and levies, and a sum of $1000 per year for uniform, book, excursion and extra-curricular costs for T’s attendance at G.[55] Mrs M now goes further and argues that T “must remain” at G “to remain stable, happy and to develop to the best of his abilities.”[56] Essentially, she says he has “special needs”, and that removing him from G will have a detrimental effect upon him. His school reports are set out (in part at least) and demonstrate that he is making good progress at school.[57] Mrs M suggests that if T is forced to change school “he may never regain his achievements.”[58] The Court accepts that T has an anxious disposition, and that the separation of his parents may have made life difficult for him. This however does not put him in the category of a child with special needs. Further the evidence is not sufficient to indicate that T:
a)“must” stay at G;
b)that he would not do as well at another less expensive private school or a state school; or
c)that he would suffer detriment if he went to another school.
[55] Mrs M’s Affidavit, 12 October 2006, Annexure A, p.19.
[56] Mrs M’s Outline of Case, p.6.
[57] Mrs M’s Affidavit, 18 October 2006, para. 36.
[58] Mrs M’s Affidavit, 18 October 2006, paras 35-36.
The school reports indicate a reasonably normal boy, with some slightly anxious tendencies and an occasional bullying aspect which is being overcome, it seems. On balance, there is nothing on the face of the evidence that puts T in a special needs category.
Mr M’s financial position and earning capacity is discussed above. The Court must have regard to the parties financial positions, earning capacity and necessary commitments to support themselves.[59]
[59] Assessment Act, s.117(4)(d)(da) and (e).
Mrs M’s most recent financial statement of June 2006 indicates total average weekly income of $840.00 and expenditure of $773.00.[60] Her income is principally comprised of single parenting payments and part A and B family tax benefits, and child support form Mr M. Mrs M earns a small income (less than $100 a week) from employment with a real estate agent.[61]
[60] Mrs M’s Financial Statement, 7 June 2006, Part B-2.
[61] Mrs M’s Financial Statement, 7 June 2006, Parts C and D.
It is apparent when regard is had to the financial position of both parties, and making due allowance for the necessity for each parent to support themselves, that there are not significant surplus sums available for child support payments.
In making or refusing to make an order the Court must also consider any hardship that would be caused to either the Children or Mr M, as the liable parent.
The potential hardship for the Children on the evidence is that to the Child T referred to above.[62] It may be that the variation of child support payments will affect the Children, but there is no evidence of particular hardship in that regard. There is potential hardship for Mrs M dependent upon the final level of child support.
[62] See para 37 above.
It appears to the Court that it will be just and equitable for a particular order, probably at the least varying downwards the amount of child support payable in this case by Mr M. A declaration to that effect will issue. The final determination of quantum of any order can await the filing of further updated financial material by both parties. The Court reserves the right to make a declaration that a particular order is not just and equitable upon consideration of the further updated financial information.
Whether a particular order is otherwise proper
In determining whether a particular order would be otherwise proper the Court must have regard to:
a)the nature of the duty of a parent to maintain the child, which is discussed above;[63] and
b)the effect that the making of an order would have on any of the specified entitlements which will be relevant in this case with the parents entitled to various government benefits.[64]
[63] Assessment Act, s.117(5)(a), and see para 33 above.
[64] Assessment Act, s.117(5)(b).
It appears that a particular order varying the amount of child support payable by Mr M in this case will be proper, and that a declaration to that effect ought now issue, with the final determination of the quantum of a particular order to award the filing of further updated financial evidence by both parties. The Court reserves the right to make a declaration that a particular order is not otherwise proper upon consideration of the further updated financial information.
Operative date
There is no application for an order that any variation to the present departure order be backdated for a period over 18 months and hence no leave of the Court for such an order.[65] Any departure order variation can therefore not take effect earlier than a date 18 months prior to the relevant application. What constitutes the relevant application or applications in this case will doubtless be a matter of argument.
[65] Assessment Act, ss.111(1), 112(1)(b) and (2) and 118(2B).
Spousal maintenance
Given the significant changes in the financial position of Mr M it appears to the Court that there may be either:
a)just cause for the discharge of any spousal maintenance order;[66] or
b)reason to vary the existing spousal maintenance order by reason of the circumstances of Mr M having so significantly changed.[67]
[66] Family Law Ac, 1975 (Cth) s.83(1)(c) (“FL Act”).
[67] FL Act, s.83(2)(a)(ii).
Section 72 of the FL Act is still applicable to any variation and therefore it will be necessary for the Court to consider, or reconsider for the purposes of this case:
a)a threshold finding under s.72(1) of the FL Act;
b)consideration of ss.74 and 75(2) of the FL Act; and
c)the proper exercise of the discretion by the Court under s.74 of the FL Act,
having due regard to the no fettering principle insofar as it might apply to the current circumstances.[68]
[68] Bevan & Bevan (1995) FLC 92-600.
Updated financial information
Given the history of this matter, and in particular its somewhat disjointed journey to this point, it is desirable that the parties file updated financial information for the purposes of a proper assessment of the child support and spousal maintenance issues.
The Court will require Mr and Mrs M to file copies of personal income tax returns for the last three years, and if those returns have not been filed, to do all thing necessary to file them in time to ensure compliance with the Court’s orders. Additionally, the Court will order that copies of any documents evidencing any remuneration or income received for any employment, engagement or provision of service of any kind and any Centrelink benefits received form 1 July 2007 to 30 September 2007 be filed and served. The parties will also be required to file updated Form 13 – Updated Financial Statements.
Parenting order
The parenting order issues are limited.
The Father seeks an order that all changeovers occur at a point mid-way between his residence and that of Mrs M in M and B respectively. Mrs M seeks an order that Mr M’s contact with the Children be supervised.
In considering these issues the Court has had regard, to the extent necessary, to the principles in Goode & Goode.[69] In Hungerford & Tank it was said that the failure to follow the steps laid out in Goode was an error of law.[70]
[69] (2006) 206 FLR 212; [2006] FamCA 1346 (“Goode”).
[70] [2007] FamCA 637 at para. 62 per Warnick, May and Boland JJ.
The only evidence in support of this application by the Father is that once his financial position changed and he no longer provided the level of financial support previously paid to Mrs M she thereafter refused to deliver the Children to a mid-way point between M and B and insisted he collect them from B. He says he does not wish to do this because of the cost and time involved in the travelling and because it is simply too onerous.[71]
[71] Mr M’s Affidavit of 9 May 2007, para. 13.
The basis for Mr M’s current application is one which was considered by the Family Court when making the orders in November 2003.[72] Although Mr M’s financial circumstances have changed significantly, the rationale behind the changeover orders made by the Family Court in November 2003 still pertain. Namely, that although the order requires Mr M to travel to B for changeover, there are less changeovers in return for greater periods of time spent with the Children on each occasion, and that the resultant lesser number of changeovers was more likely to result in the attendance of both Mr and Mrs M, and require less need for communication between them. Given the nature of the relationship between the parties those factors are still relevant and applicable. It is still in the best interest of the Children that changeover occurs in accordance with the Family Court’s orders of November 2003.[73]
[72] M at para. 25 per Brown J.
[73] See especially FL Act, s.60CC(2)(a) and (3).
Mr M’s application for the place of changeover to be changed will therefore be dismissed.
Mrs M made application for Mr M’s time spent with the children to be supervised. She did so on the basis of a telephone message that Mr M sent her on 13 May 2007, which was Mother’s Day. The telephone message said:
“You’ve destroyed out future and you’ve taken everything. I am so tired. All I want to do is sleep and I hope one day the children will understand.”
or words to that effect.
It was on this basis that Mrs M asserted that Mr M was at risk of self harm and at risk to the Children.[74] Mr M gave evidence that he had no such intention.[75] Mrs M also relies upon the fact that Mr M says in his affidavit material that he is at his “lowest ebb” and is finding “it more difficult to cope with everyday life”.[76] In the Court’s view Mrs M has read too much into the telephone text message and Mr M affidavit. There is nothing otherwise in the evidence which would indicate that Mr M is at risk of self harm, or, more importantly, harming the children.
[74] Transcript, at 16-17.
[75] Transcript, at 20.
[76] Mr M’s Affidavit of 9 May 2007 at para. 22.
Further, the comments, particularly those in the affidavit have to be looked at in the context of what he says his financial position is, because it is in that context that the comments were made. In relation to the text message he has given specific evidence that it does not have the import that Mrs M attributed to it, and the Court is more inclined to the view that the text message is now being used against him to try and obtain an advantage in the parental relationship with the Children.
In all the circumstances, the Court does not consider that it would be in the best interests of the Children for contact with their Father to be supervised, and no such order will issue.
Conclusions
In order to finally determine the appropriate orders for child support and spousal maintenance it will be necessary to have a further hearing of the matter to determine the final form of order for child support and spousal maintenance having regard to the updated financial information to be filed.
Declarations will issue with respect to child support and spousal maintenance as indicated in the body of these reasons, but with the Court reserving the right to make further declarations, and such orders as are ultimately necessary once the updated financial information is filed.
Otherwise, all extant applications will be dismissed.
I certify that the preceding sixty-four (64) paragraphs are a true copy of the reasons for judgment of Lucev FM
Associate: M Hewitt
Date: 22 September 2007
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