M and M - [2001] FMCAfam 191

FEDERAL MAGISTRATES COURT OF AUSTRALIA

M & M [2001] FMCAfam 191

CHILD MAINTENANCE – Application by mother – Family Law Act 1975 (Cth) section 66.

Ganter & Grimshaw [1998] FamCA 52.

Applicant:

S J M

Respondent:

N W M

File No:

ZB 4651 of 2000

Delivered on:

17 September 2001

Delivered at:

Brisbane

Hearing Date:

14 August 2001

Judgment of:

Rimmer FM

REPRESENTATION

Counsel for the Applicant:

Mr Wadsley

Solicitors for the Applicant:

McDonald Slater & Lay

The Respondent:

The Respondent appeared in person

ORDERS

That the FATHER pay to the MOTHER by way of child maintenance for the CHILD, S J M, born 13 March 1988, the sum of $88.00 per week. The first of such payments to be made from the date of these orders and weekly thereafter.
That all arrears of child maintenance be discharged.
That there be no orders as to costs.
That the FATHER provide the MOTHER with notice of any change in his employment circumstances and within 7 days of making such change provide the following details:
(a)annual gross salary;
(b)expected tax liability.
That should the FATHER continue his employment with N Pty Ltd, he must provide the MOTHER with details of any increase in salary over the sum of $5000.00 per annum.
That all applications be removed from the Pending Cases List.
Pursuant to S65DA(2), the particulars of the obligations these orders create and the particulars of the consequences that may follow if a person contravenes these orders are set out in Annexure A to these orders.

FEDERAL MAGISTRATES COURT OF AUSTRALIA AT BRISBANE

ZB 4651 of 2000

S J M

Applicant

And

N W M

Respondent

REASONS FOR JUDGMENT

Competing applications

This matter involves competing applications by the applicant mother and respondent father for maintenance for the child of the marriage, S J M, born 13 March 1988, pursuant to Section 66L of the Family Law Act 1975 as amended. There is also an application for enforcement of the existing maintenance order pursuant to Order 33 of the Family Law Rules. The mother relied upon her application for maintenance filed in the Melbourne Registry of the Family Court of Australia on

27 April 2001, and an enforcement summons filed the same date. The father had filed an application first in time, being an application in Form 12 in the Federal Magistrates Court in Brisbane, on 11 April 2001, but due to some disputed problems with service of his application on the wife or her solicitor, it appears that it was not served prior to her filing her application in the Family Court.
In any event, both parties agreed I should determine the outstanding issues properly before this Court concerning child maintenance and payment of arrears if any are found to be outstanding. To this end, the matter was listed for hearing in Brisbane with the mother appearing through her counsel, and giving her evidence by use of video link. Both parties wish the application to be finally determined by the hearing. The husband appeared in person and gave evidence and was cross-examined.
The wife seeks an order that the existing maintenance order made on 25 November 1996 be varied by an increase of maintenance from $100 to $120 per week for S. She seeks all arrears of maintenance to be paid as she claims that there have been recently late payments and the accumulation of arrears.
The husband seeks an order that the existing maintenance order be decreased. It is difficult from his application to work out exactly what sums he wishes to be paid and when, given that he sets out that the order be varied to include extra clauses. That is, that if at any time he is in receipt of Commonwealth Government income tested pension allowance or benefits; income from casual or part-time employment; ineligible for such allowance or benefit because he is fully supported by another spouse; serving a period of imprisonment; or in receipt of income which is under or equal to an income level of 25,000; and he has sought the maintenance payable be reduced to $5 a week. Then sought further an order to include clauses that the amount payable for maintenance be reduced from the current Court order of $100 per week to $75 per week if the applicant spouse returns to full-time employment and is in receipt of an income in excess of $25,000 or if he is unemployed, and is in receipt of income in excess of $60,000 gross.
He further sought that the order be varied by including extra clauses that the amount payable for maintenance be reduced from the current Court order of $100 a week to $50 a week if he was unemployed; and if he was in receipt of income which was less than $60,000 gross but more than $25,000 gross, he then sought certain legal fees to be paid. In my view, to try and anticipate all of the variables and changes in relation to a parent's financial circumstances into the future, is almost impossible.
Maintenance should be determined on the basis of a party's current income, assets, liabilities and expenses, so that their proper financial position can be considered by the Court and by the other party in such an application. I propose to deal with the matter on that basis, dealing with the husband's financial position as the evidence discloses it to be, and making the appropriate order that flows from it.
The husband in his application also seeks that all arrears of the child maintenance under the existing order, if there are any, be discharged in full.

Background

These parties married on 4 May 1984. They separated on 1 August 1998. A decree absolute was issued on 7 September 1991. There is one child of their marriage, S J M. S was born on 13 March 1988. She is now 13 years and 5 months of age. She has lived with her mother in Melbourne since the date of the parties' separation. She has had holiday contact with her father, which has become more irregular over recent years. As I have indicated, the current maintenance order sought to be varied was made in the Family Court of Australia at Melbourne and provided for payment of child maintenance for the child S from her father in the sum of $100 per week.

The law

The law to be applied in relation to child maintenance is set out in Part VII Division 7 Subdivision D of the Family Law Act. Section 66H sets out the approach to be taken in proceedings for child maintenance. This section provides the Court must consider the financial support necessary for the maintenance of the child; and in sub-section (b), determine the financial contribution or respective financial contributions towards the financial support necessary for maintenance of the child which should be made by a party, or by the parties to the proceedings. In considering the financial support necessary for the maintenance of the child, Section 66J is to be applied.
That section provides that the Court must take into account the matters mentioned in Section 66B; the proper needs of the child; the income earning capacity, property and financial resources of the child. Section 66B sets out the objects of the division which is to ensure that children receive a proper level of financial support from their parents; that children have their proper needs met from a reasonable and adequate shares in the income earning capacity, property and financial resources of both of their parents; and that the parents share equitably in the support of their children.
In considering the proper needs of the child, the Court must have regard to the following: the age of the child; the manner in which the child has been and in which the parents expected the child to be educated or trained; and any special needs of the child. Also the Court may have regard to the extent to which the Court considers appropriate, in the circumstances of the case, any relevant findings of published research in relation to the maintenance of the children. In Australia, that published research applicable in a matter such as this would be Lee & Lovering Tables in taking into account the income earning capacity, property and financial resources of the child the Court must, inter alia, disregard any entitlement of the child, or of any other person, to an income tested pension, allowance or benefit.
In determining the financial contribution, or respective contributions that should be made by the parties, the Court must have regard to the matters in Section 66K. In particular, the Court must have regard not only to the objects of the Act set out in Section 66B, but to the principles in Section 66C which are as follows: the parents of the child have a duty to maintain the child; the duty of the parent to maintain the child is not of lower priority than the duty of the parent to maintain any other child or any other person, and has priority over all commitments to the parent other than commitments necessary to enable the parent to support him or herself or any other child or any other person that the parent has a duty to maintain and, if not affected by the duty of any other person to maintain the child or any entitlement of the child or other person, to any income tested pension, allowance or benefit.
In determining the financial contribution to be made by a party or parties, the Court must consider, in addition to the matters mentioned, the income, earning capacity, property and financial resources of the party, or each of the parties, the commitments of the party or each of the parties that are necessary to enable that party to support him or herself or any other child or any other person that person has a duty to maintain; and direct or indirect costs incurred by the parent or other person with whom the child lives in providing care for the child; and any special circumstances which, if not taken into account in a particular case, would result in injustice or undue hardship to any person.

S’s reasonable weekly needs

The first step which I must undertake in relation to an application for maintenance of a child as clearly set out in the legal principles I have already referred to, is to determine what are the proper needs for the child S. In this regard, the wife has given evidence that S's needs amount to the sum of $181 per week. Those needs cover and include her food; her household supplies; share of rates, repairs, insurance; provision for payment of utilities such as gas and electricity, water, telephone; provision for expenses related to a motor vehicle being petrol, registration, maintenance; her clothing and shoes; her school lunches; school expenses; pocket money; and entertainment.
The mother has also set out other necessary commitments including haircuts, gifts and papers. Some of these expenses were mildly challenged by the husband. However, I have found that in relation to the necessary expenses each week for a child of 13½ years of age, having regard to Lee’s Table where for middle income families the research establishes that that costs of maintaining a child each week is $267.86. I am satisfied that the mother has established, and that it is appropriate for the Court to find, that S's reasonable weekly needs are $181 per week.
I must then, as required by the provisions of the Act, turn to the financial circumstances of each of the parents.

The mother's financial position

The wife is not employed. She is unable to work as she suffers from the debilitating illness, multiple sclerosis. Her evidence is that the progression of this illness is preventing her from normal movement, and she is required to use daily medication and injections to maintain some control of it. Her only income is from benefits received from the government through Centrelink. Her evidence is that she is receiving the pension of $199 per week and parenting payment of $50 per week.
The provisions of the Act, of course, require me to disregard any income received by either parent from any benefit, pension or income tested amount received by a parent from the Commonwealth Government of Australia. Therefore, the wife's only income at this point in time is the maintenance received for the needs of the child S of $100 per week. The wife owns a house valued at $230,000 in Victoria, which is unencumbered. She has furniture and effects of $6000 and $2000 in a bank account. She owns a 1996 Holden Berlina valued at $12,000 and has no liabilities.

The husband's financial position

At the outset, I indicate that the husband's financial position has been impossible to properly and adequately determine, and the reasons for that I will refer to in some detail in these reasons for judgment. The husband's evidence is that he is employed as the sole director of a company N Pty Limited. He provides management consulting services through this company. He is also a shareholder, with the other shareholder being his present wife, N M M. He provides management consultancy to a business, T H Improvements. Mr M gave oral testimony that he provides the consultancy services and, as managing director, runs the day-to-day operations of the company.
He receives assistance with the clerical side of the business from his present wife N. His wife does not, at this time, receive a direct salary from the company N Pty Limited, but the company provides her with a vehicle with respect to which it pays all expenses including lease payments, registration, insurance, running and maintenance costs. He maintains that because of the level of liabilities for the company and the low income it receives, he can only take a salary presently of $308 per week. As already stated, the husband has remarried and his present wife N M has left paid employment, as she gave birth to their son D R M, who was born on 31 January 2001.
The difficulty in ascertaining the husband's current financial position is made more complex because N Pty Ltd has been placed under a deed of company arrangement. That company formerly traded as C T World. In that operation it was running a substantial business, earning substantial gross profits with many and varied expenses. In the documents produced by the husband about this arrangement, there is a report to creditors dated 4 July 2001 prepared by the deed administrator, Phillip J. Jefferson, of Jefferson Stevenson and Company, Chartered Accountants. This report reveals the administrators of the company had sold the business, C T World, and all the debts due had been collected.
The deed fund of $246,879.48 was used to pay the administrator's fees and outlays. Adjustments to the sale proceeds were made in respect of government fees and bank charges, and then a determination was made by the administrators with respect to the appropriate creditors who had made and substantiated claims. Those creditors were then issued with a first and final dividend of 24 cents in the dollar in full satisfaction of the company's debts. The company was then handed back to Mr M and he has kept operating it since that time. N Pty Limited entered into a contract to provide consulting services to O T Building Products Australia Pty Limited in January 2001, with the contract to become effective from 12 February 2001, and continue in force until February 2002, with a trial period of three months.
Pursuant to the terms of the contract, N Pty Limited was to be paid a retainer each week of $1000, excluding GST. It was paid fortnightly in advance of commission on sale. Then a commission of $2 per square metre on all go-ahead sales of wall board systems generated by the Brisbane sales team and offset against the accumulation of weekly retainers paid in advance, was to be paid. As at 30 June 2001, N had received $13,734 by way of commissions advanced and $2000 as a further payment, making a total of $15,734. Mr M carries out the required management consultancy for the company, and his evidence is that he is paid a wage, after the company expenses are taken out of the income derived.
His evidence is that this wage now, as at the filing of his amended application in mid August 2001, was $308 a week, as a gross wage. He then gives evidence that he receives family allowance of $19 a week and that his wife has no paid employment, and receives no separate income or wage.
Further, Mr M outlines that N Pty Limited now contracts with Trueline in lieu of O T Building Products, and that this contract commenced as at 16 July 2001, and that he still receives a retainer through N Pty Limited for his consultancy services, of $1000 per week. Under this contract, commission is paid at the standard commission structure to offset his advance and provide additional earnings and a share of profits, at 20 per cent of the profits, which are paid annually in July of the following financial years for the division which he is assisting through his consultancy services.
At the time of the hearing, this contract had only been operating for a matter of weeks, and there was no evidence provided of what the commissions had been, if any; or any projections of any possible income from such commissions, or a share of profits at 20 per cent, as outlined above. Mr M's only evidence in relation to this matter is that he receives an advance each week of $1000 paid to N Pty Limited. The evidence, as I have said, is that he receives $308 gross per week from the company. This is the amount that he says he receives as a salary, and that the balance received by the company from Trueline each week, goes to meet the company expenses.
This was disclosed in Mr M's Form 12, filed 13 August 2001 by way of amendment. In his original Form 12, filed on 11 April 2001, he disclosed at that time that his income was $160 per week, one assumes from the same source, N Pty Limited. Mr M discovered joint bank account statements for his Commonwealth bank account, in the names of himself and N M M from 1 January 2000 to 16 May 2001. There were no current bank statements provided.
He was cross-examined about deposits into his account and confirmed the regular deposits coming into this account each week from about 6 April to mid-May of $1000 per week were the payments that he was receiving from O T Building Products. His evidence was that these amounts were paid as he still had a loan due to him from

N Pty Limited as a director which had now been fully repaid.
When questioned about how he is now able to meet his weekly expenses as claimed for the family of $928 from his disclosed income of the amount to which I have referred, Mr M conceded that he could not meet these expenses and had had to borrow to meet the shortfall of approximately $600 per week. His Form 12 does not disclose the source of these funds by way of any corresponding loan to any finance company, Bankcard or any person. He did, however, mention in his evidence that it was family borrowings.
Mr M has not provided any source documents to show his current income from N Pty Limited from 16 May 2001 to the present time. There are no pay slips or bank statements to show the deposits of salary from N Pty Limited to his account, and no group certificate has been provided evidencing the wages that he received in the last financial year from N Pty Limited.
The joint Commonwealth Bank account shows a large movement of funds in and out of the account, many of which are unaccounted for in evidence. This is significant given that Mr M is the applicant for a variation of maintenance to decrease payments for the child, S, to $75 per week if his income is in excess of $25,000. He has the onus of proof, therefore, to establish that his capacity to pay the appropriate ordered level of support for the child under the existing orders has changed. He has a duty pursuant to the provisions of the Act and Rules to make full and frank disclosure of his financial circumstances.
Mr M also gave evidence that he is actively seeking employment outside the company N Pty Limited, and he believes he will be successful in obtaining such employment. His evidence was that he would expect, if he was successful in obtaining a position, to earn in the vicinity of $60,000 as income given his experience and expertise. While he says he has and will continue to actively pursue avenues of employment, he has not yet secured any position.

A further difficulty in ascertaining the appropriate income for Mr M in respect of his capacity as a parent to meet his duty of child maintenance payments, are that no current profit and loss statements with respect to the company, N Pty Limited, have been provided that reflect the current situation for that company. Those provided by

Mr M still include all the income and expenses outlaid by the company and received by it while it was conducting the business of C T World.
The company now conducts an extremely different business in a completely different manner. While operating the C T World business, it was generating a substantial amount of income from receipt of sales of products. It had expenses which in no way could correlate to the business that N now operates as a consultancy service. There is no way of comparison and no way that the Court can draw any inference from the documents provided to enable me to determine the current income and expenses of N Pty Limited.
As I have already outlined, there are no bank statements for N Pty Limited. There are no pay records. No cheque butts evidencing payment of the current expenses of N Pty Limited. It certainly appears from the evidence that from the time that Mr M has taken control of N Pty Limited back from the administrators and has commenced his services as a consultant, that he has simply used the company as a vehicle through which he derives his personal income as a consultant.
The company earns $1000 in consultancy fees for the work done by Mr M as a consultant from Trueline. Whether or not it will earn further income by way of commissions or a percentage of the profits as provided for in the consultancy agreement is unknown, and there is no evidence before me as to what likelihood or projection there would be in relation to deriving such income.
In the circumstances, it is not at all possible for the Court to determine what the income is or is likely to be for the company N Pty Limited, either now or in the near future and it is not possible for the Court to determine what expenses are then properly paid by the company in order to ascertain if Mr M is receiving an appropriate allocation of income as the Managing Director.
In ascertaining a party's capacity to meet obligations for payment of child maintenance, the Court must have regard not only to income received but also to the party's assets and liabilities, and the manner in which a party has structured their asset and liability position in the face of an existing and current obligation for child maintenance. In this regard, the Act provides that it is important for the Court to have regard to not only the income but the assets and liabilities of a party in determining their capacity for payment of child maintenance.
In this matter, balanced against the grim financial position painted by the husband in his documents and oral testimony, are certain financial decisions that he has made in relation to his assets and liabilities in the past six to eight months in particular, which, in my view require some examination. The most significant of these is the decision that he says he made jointly with his present wife, N, in January or February of 2001 to sell a property owned solely in his present wife's name situated at 46 B Street, B for the sale price of $265,000 and to then purchase a further property in her sole name for the sum of $390,000 at 10 Y Street, B.
With respect to the property sold, settlement statements provided as an exhibit in the proceedings by Mr M reveal that the sale proceeds were disbursed as follows: sale price was $265,000 less the deposit which was paid to real estate agents of $500; there were release fees on bills of mortgage of $176; there were rate and fire levy adjustments of $54.26; there were water adjustments to be deducted of $75.04; and commission of $7872.50 was paid to the real estate agents handling the sale; $432.19 was paid to the solicitors for costs and outlays in handling the sale.
The further deductions were the payment of outstanding mortgage to Aussie Home Loans through Perpetual Trustees Australia Limited of $193,542.41, and a further sum of $150 was paid to Aussie Home Loans with respect to the purchase. The balance of $62,738.31 was contributed then to the purchase price of the new property at 10 Y Street, B.
To complete the purchase of this property, Mr M jointly with his present wife, took on a very substantial liability jointly by way of a mortgage with the Commonwealth Bank of Australia. The borrowings were for $300,000. The mortgage repayments will be the responsibility of Mr M alone, given his evidence that he is the only person in his family who is presently earning income. The mortgage repayments presently are for $1827 per month for the first 12 months of the loan, and then $2080.87 per month thereafter, given the loan has a period of the first 12 months with interest calculated at a lower rate, and thereafter at the variable rate then applicable which is presently about 7.32 per cent per annum.
Mr M conceded in evidence that despite the legal title to both properties being in his present wife's name, he had taken on joint responsibility for each of the mortgages. Clearly, as his present wife has left her employment to have and care for their child, D, only quite recently born, Mr M is effectively shouldering the entire financial responsibility for the mortgage repayments. Under the previous mortgage secured on the property and owed to Aussie Home Loans, the repayment was for $1642.87 per month.
Further, it is clear if one examines the joint bank accounts for the Commonwealth Bank's Streamline account in the names of Mr and Mrs M as at 12 March 2001, there was a balance in that account of $36,280.91. There were two large withdrawals made from the account, one on 15 March 2001 for $16,514.30 which was a sum required to be contributed to finalise settlement of the purchase of the above property, and the sum of $14,800 on 6 April, which I was unable to understand its use given the lack of evidence from the Husband about this before me.
On 17 January 2001 there was a withdrawal of $17,000 from this account, which appears to relate to a part-payment of the initial deposit paid upon signing the contract to purchase the property at 10 Y Street, B, as the total deposit paid upon the signing of that contract at the end of January 2001 was $19,500.
The net effect of these transactions to the husband and his present wife was that they have increased their capital position of Mrs M by purchasing a property with an increased value over the property she then owned of $125,000. In so doing, with payment of costs of sale, costs of purchase, payment of stamp duty on the purchase, and payment of various costs associated with early repayment of the mortgage to Aussie Home Loans, and line fees and establishment costs on the mortgage taken in joint names with the Commonwealth Bank, Mr M and his present wife have depleted their overall capital position by a total of $19,944.86 to achieve this result in the changeover of properties.
That total was made up of the following amounts. There were legal costs and outlays on the sale of the first property at B of $432.19. There were legal costs and outlays on the purchase of the property at Y Street, B of $941.18. There was stamp duty paid on the purchase of that property of $7400. There was commission paid to real estate agents on the sale of the first property at B of $7872.50. There were government charges of FID on the discharge of mortgage to Aussie Home Loans of $116.05. There was an early repayment fee to Aussie Home Loans of $1292.94. There were fees to Commonwealth Bank for establishing the loan of $600, and loan on the stamp duty of $90 and the then security stamp duty of $1200. This totals the sum I have already referred to of approximately $20,000.
The further impact of these transactions upon financial position of Mr M is that he is now required to pay additional mortgage repayments of approximately $200 per month until March 2002, when those additional costs will then increase to a projected additional sum at this point in time, dependent upon the variable amount of interest that applies at the applicable date, of $360 per month. When questioned in evidence about this, he gave evidence that he believed that this transaction and changeover between the two properties had, in fact, been a decision made jointly with his present wife. He stated that he believed it would assist he and his present wife's overall financial position.
On the available evidence I can find no support for this in terms of the increased liability in the mortgage, the increased mortgage repayments, and the expenditure of capital which, in effect, has been lost in the changeover costs that will not be recouped from any source. It is true that they have increased the equity Mr M's present wife has in a property to $125,000.00.
It is also, in my view, significant that such a decision was undertaken at a time when Mr M's evidence is that the company of which he is a sole director, N Pty Limited and C Pty Limited, were known by him to be in such dire financial positions that those companies were quite unable to meet their just and due debts.
Mr M gives evidence in his application, Form 12, that:
“N Proprietary Limited still has substantial liabilities in the company, and that as the deed of arrangement is now finalised this is when the creditors will try and obtain the deficit moneys owed to them from me”.
He states that as he is the sole director he believes he will be liable to creditors. The amount which he puts into his amended Form 12 in respect of the debts still due and owing by N Pty Limited exceed $500,000.
The other matter which places a question mark upon the decision made to purchase this property, being a property of substantially greater value, at a time when the companies he operated face such grave financial difficulties, was that it was undertaken at the very time when his own family responsibilities increased so significantly. On 31 January 2001 his present wife gave birth to their son, D. Mr M's evidence is that this has dramatically increased the costs of living for himself and his wife.
His evidence is that his present wife, who was employed prior to the birth of their son, is now unemployed and, as a consequence, they no longer have her income to contribute to the family's expenses and that he has a duty to meet the costs of both his wife as a dependant wife now, and of their newborn son. Those expenses are outlined in his application and are substantial on his evidence.
In addition to this, I note that settlement of the property to purchase was on 16 March 2001. It was immediately thereafter, within a matter of weeks, that Mr M filed his application for variation of maintenance on the basis that he was no longer able to contribute in the manner that had been ordered for the proper expenses of his dependant daughter, S.
I am satisfied that there is evidence which further establishes that Mr M and his present wife still receive substantial benefits, even though it is not directly by way of cash income, from N Pty Limited by the way of provision of two motor vehicles. These are the vehicles the husband refers to in his evidence, that is, the vehicle which he drives for the purpose of his employment, a Nissan Patrol four wheel drive wagon, and the vehicle used by his present wife which is a VW Golf convertible. The total monthly lease payments paid by N in respect of these two vehicles is $2058 per month.
Mr M gives evidence that it is not possible to sell the vehicles and pay out the leases as it would not be a sound financial decision to do so. His evidence is that he would not obtain sufficient in sale proceeds to pay out the two leases, and he would then need to purchase other vehicles for both he and his wife's use.
This Court is not called upon to make decisions as to how the husband should or should not arrange his financial affairs. However, it is clearly significant that at a time when the company from whom he derives his income is in such dire financial circumstances. This was at a time when he swears to the Court that the income, of himself and his family has seriously depleted. It is at a time where he gives evidence that the company, N Pty Limited is only receiving $1000 per week as income from the consultancy services and has substantial outgoings including the lease payments on those two vehicles of $2058 per month. In these circumstances it appears cavalier that Mr M would enter into such a financial arrangement as he has in the purchase of a property for $390,000.00. As a consequence he now makes application that he cannot afford to maintain his dependant child, S, as he has done in the past.
As I said, the Court is not to make decisions about how he should arrange his financial affairs. However, clearly, as a parent with a duty to maintain a child which has a priority over all other calls upon his income, apart from those to provide for his own necessary living expenses and those who he has a duty to support, he cannot arrange his financial affairs by taking on, either through himself or through a company that is merely an alter ego of himself, liability for the purchase of capital assets and then make an application to the Court to seek that the Court vary child maintenance on the basis that he has no capacity to pay.
It is a matter for Mr M as to how he determines the structure of his assets and liabilities. I am, however, satisfied that there is capacity for him to restructure all of his assets and liabilities such that he would earn the sum of $1000 per week, and that he could decrease his expenses and liabilities considerably. I am not satisfied that there is sufficient evidence before me that there are creditor liabilities still outstanding after the deed of arrangement has been finalised now through the company, N Pty Limited.
There is no evidence before me of who those creditors are, as to whether or not they are making any direct claims by letters of demand to Mr M, whether there are any legal proceedings issued against him as a director, whether there are any personal guarantees that he has given in respect of any of those loans. For the Court to be able to make a sensible determination of his liabilities in that regard, such evidence would clearly need to be before it. As I have said, it is the responsibility of the person bringing an application for variation of maintenance to ensure that the full and frank disclosure is made to the Court. The Husband has fallen far short of that duty and requirement in this matter.
The one matter which I find has brought about a change in the financial circumstances of Mr M such as to satisfy the Court that maintenance order should be varied, is the birth of his child, D, in January this year. Clearly, the husband has a duty to maintain his newborn son. He has a duty to maintain, at this point, his wife, who is dependent upon him for support.
I am satisfied that the expenses that he has claimed in his amended application with respect to D, except for the sum of $10 which has been attributed as payment in relation to the medical and dental, should be allowed. I am satisfied that the expenses for that child at his age and stage of his life are reasonably claimed in the sum of $60 per week.
I am not satisfied that the expenses claimed by Mr M with respect to himself for $479 can be totally allowed. Clearly, that includes the mortgage repayments, which have been increased both as a claim for himself and his present wife for whom he is providing all income and support of $200 per month, and therefore, $50 per week. I am satisfied that both of those amounts should be reduced so that the overall expenses of Mr M himself will be reduced by $15 per week.
With respect to the claim for entertainment, clearly a claim for entertainment and holidays is a discretionary expense which cannot be said to be a matter which should be given priority over and above the need to provide appropriate maintenance for a dependent child, and therefore, the amounts of $15 and $8 per week should also be deducted. That should be deducted from Mr M’s expenses under his share, and also from the expenses under the share for other adults.
I am satisfied, therefore, that the total amounts which are deducted from the amounts claimed by Mr M are as follows: in respect of mortgage repayments, $50 per week; with respect of entertainment, both for him and his present wife, $15 a week, making a total of $30 per week; with respect to holidays, for himself and his present wife, of $8 a week each, a total of $16 per week. And that is a reduction from total expenses claimed of $96 per week.

Conclusion

I have already found that, on the available evidence, the only finding that the Court can make is that Mr M is now, or is capable of, earning the sum of $1000 per week. One needs to then deduct the expenses allowed for himself, for his present wife, and for his child claimed by him, I am satisfied that the calculations should be done as follows: the amount of income available as in accordance with the findings that I have already made, amounts to the sum of $1000 per week. Deducting from that the amounts claimed of $479 for Mr M, of $379 for Mrs M; and $70 for D. Then in adding back to that those amounts that I have already referred to as disallowed for Mr and Mrs M, of $96; and $10 a week for D, which totals $106 per week I am satisfied that this allows a finding that Mr M has available, in my calculations, the sum of $178 per week.
I have had regard to the fact that in this matter, by him increasing the income coming solely into the hands of Mr M from $308 to $1,000 will increase his taxation liability. I am satisfied that it is reasonable to allow him a further sum of $90 to be added in as an expense for income tax which he will have to pay if that income is received by him rather than by the company.
I am satisfied therefore that Mr M has, after taking into account as it is appropriate to do under the provisions of the Act, given that he has a duty to maintain D, and a duty to maintain his wife, and a duty to maintain S, and having regard to the Full Court decision of Ganter v Grimshaw, that is Mr M has a current capacity to meet child maintenance in the sum of $88 per week, and I propose to order that he pay, as and from today's date, the sum of $88 per week as maintenance for the child, S.
In those circumstances, I propose to order that, given that I cannot be satisfied as to the exact amount of the arrears, and that there is not sufficient evidence before me from either party as to the payment or receipt of the maintenance, other than conflicting evidence by each of them on that subject, I am satisfied that the Court should start the position as at today's date on the basis that all arrears, if any, be discharged. The current order will be varied, so that the payment of child maintenance will continue at a weekly sum of $88 per week.
I propose to make no order for costs.
I will make an order then that the husband is to provide notice to the wife of any change in his employment situation, and seven days after commencing any new employment, provide details to the wife of the following: his annual gross salary, and his expected taxation liability.
I will also make an order that should Mr M continue to receive his income through N Pty Limited that he is to advise the wife of any increase in income paid to him by the company in excess of $5000.00 per annum.

I certify that the preceding seventy-two (72) paragraphs are a true copy of the reasons for judgment of Rimmer FM

Associate:

Date: 12 October 2001