Muirden & Muirden
[2008] FMCAfam 311
•8 April 2008
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| MUIRDEN & MUIRDEN | [2008] FMCAfam 311 |
| CHILD SUPPORT – Variation of existing departure orders – special circumstances. SPOUSAL MAINTENANCE – Variation of existing orders. |
| Child Support Legislation Amendment (Reform of the Child Support Scheme – New Formula and Other Measures) Act, 2006 (Cth) Child Support (Assessment) Act, 1989 (Cth) Family Law Act 1975 (Cth) ss. 72(1), 81 |
| M & M [2007] FMCAfam 662 |
| Applicant: | MS MUIRDEN |
| Respondent: | MR MUIRDEN |
| File Number: | MLM 2825 of 2003 |
| Judgment of: | Lucev FM |
| Hearing date: | 24 October 2007 |
| Date of Last Submission: | 24 October 2007 |
| Delivered at: | Sydney (via telephone by Scarlett FM) |
| Delivered on: | 8 April 2008 |
REPRESENTATION
| Applicant: | Ms Muirden appeared in person |
| Respondent: | Mr Muirden appeared in person |
ORDERS
Order 14(b) of the Family Court orders of 18 November 2003 be discharged with effect from 1 July 2005.
That for the period 1 July 2005 – 30 June 2006 there be a departure from the provisions of administrative assessment of child support payable by the father, Mr Muirden (“the liable parent”) for the children T, born in 1997, and P, born in 2000, in that for the said period the liable parent’s child support income amount be fixed in the sum of $41,600.00 and the obligation to pay child support otherwise assessed in accordance with the provisions of the Child Support (Assessment) Act 1989.
That for the period 1 July 2006 – 30 June 2007 there be a departure from the provisions of administrative assessment of child support payable by the father, Mr Muirden (“the liable parent”) for the children T, born in 1997, and P, born in 2000 in that for the said period the liable parent’s child support income amount be fixed in the sum of $17,272.00 and the obligation to pay child support otherwise assessed in accordance with the provisions of the Child Support (Assessment) Act 1989.
That the Child Support Registrar be requested to make the necessary calculations and to amend the Child Support assessment accordingly.
That order 13 of the Family Court orders of 18 November 2003 be varied by inserting the date “30 June 2006” in lieu of
“18 November 2008”.
Otherwise, all extant applications be dismissed.
IT IS NOTED that publication of this judgment under the pseudonym Muirden & Muirden is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT SYDNEY |
MLM 2825 of 2003
| MS MUIRDEN |
Applicant
And
| MR MUIRDEN |
Respondent
REASONS FOR JUDGMENT
Application – Child Support
In M & M[1] the background and orders sought by the parties were set out as follows:
[1] [2007] FMCAfam 662 (“M & M”).
Background
20. Order 14(b) of the Family Court orders in M[2] 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:
[2] M & M (unreported, Family Court of Australia, Brown J, 18 November 2003) (“M & M Family Court”.
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.
21. 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. 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).
Orders sought by Mrs M
22. The orders sought by Mrs M are as follows:
a)that in accordance with the order made 18 November 2003 (14)(b)(i)(B) Mr 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
23. 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.[3]
[3] M & M at paras 20-23 per Lucev FM (footnotes from original omitted).
In M & M this Court made declarations that:
(1) 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.
(2) 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.
Evidence of financial position
In M & M this Court found that the evidence in relation to Mr Muirden financial position established 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.
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.[4]
[4] M & M at para 19 per Lucev FM (footnotes from original omitted).
In M & M this Court found that the evidence in relation to Ms Muirden financial position established that:
Mrs M’s most recent financial statement of June 2006 indicates total average weekly income of $840.00 and expenditure of $773.00. 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.[5]
[5] M & M at para 40 per Lucev FM (footnotes from original omitted).
Further evidence of current financial position was filed by both parties.
Mr Muirden's Financial Statement confirmed that he:
a)was unemployed;
b)had no present income (not even Centrelink benefits it would appear);
c)had liabilities of around $55,000.00 (including child support, spousal maintenance and credit card debt); and
d)had assets of $5,000.00 (being household contents and a memorabilia collection).
Taxation returns filed indicated that Mr Muirden’ taxable income was:
a)for year ending 30 June 2005 - $172,801.00;
b)for year ending 30 June 2006 - $41,600.00;
c)for year ending 30 June 2007 - $17,272.00.
The further financial information filed by Ms Muirden indicates that she:
a)has an average weekly income of $574.00, and that her total personal weekly expenditure exceeds that by $10.00;
b)has assets valued at $242,534.00; and
c)has liabilities of $119,254.00.
Ms Muirden’ income consists primarily of parenting and family benefit payments, plus an amount of $85.00 per week (averaged from employment as a casual school canteen assistant).
Taxation returns filed indicated that Ms Muirden’ taxable income was:
a)for year ending 30 June 2006 - $17,344.00;
b)for year ending 30 June 2007 - $19,203.00.
Consideration
Special circumstances
In M & M this Court said as follows:
a)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.
b)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. Whilst there is no evidence of Mr M’s current commitments, the above figures speak for themselves as to the significant reduction in capacity.
c)Given Mr M’s 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.
d)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. [6]
[6] M & M at paras 28-31 per Lucev FM (footnotes from original omitted).
There is nothing in the further financial information which changes the conclusion reached in M & M.
Whether a particular order is just and equitable
In M & M this Court said as follows:
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. [7]
[7] M & M at para 44 per Lucev FM.
Nothing in the further financial information filed changes the conclusion reached in M & M.
Whether a particular order otherwise proper
In M & M this Court found as follows:
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. [8]
[8] M & M at para 46 per Lucev FM.
Nothing in the further financial information now filed changes the conclusion reached in M & M.
Operative provisions
The application to vary the child support arrangements ordered by the Family Court in M & M Family Court was first made (albeit in different terms to those presently sought) by Ms Muirden in an application in a case filed on 13 February 2006. Mr Muirden filed a response on 2 June 2006 also seeking variation of the existing child support and spousal maintenance orders (again in different terms to those presently sought). The orders now sought by each of the parties are set out above.
As the departure application was made before the commencement of the Child Support Legislation Amendment (Reform of the Child Support Scheme – New Formula and Other Measures) Act, 2006 (Cth) it is to be determined under the provisions of the Child Support (Assessment) Act, 1989 (Cth) as they existed prior to 1 January 2007.
Consideration of the substantive matter
Having regard to the Court’s conclusions with respect to the special circumstances of this case, whether in the particular circumstances a particular order is just and equitable, and whether a particular order is otherwise proper, all of which point towards an order for Mr Muirden to pay a reduced amount of child support, and nothing having changed as a consequence of the filing of the further financial information to alter those conclusions, the question becomes one of on what basis
Mr Muirden ought to pay child support.
Ms Muirden persisted with allegations in these proceedings, notwithstanding the findings of the Court in M & M, that Mr Muirden was hiding income and assets. As the Court observed at the final hearing of this matter that may be Ms Muirden’s view, but there is nothing in the evidence which properly substantiates that view. In that regard, nothing has changed since this Court found in M & M as follows:
Mrs M filed a number of affidavits upon which she relied. 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:
any income, other than that he has declared, was received by Mr M, either directly or indirectly; or
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).
Mrs M admitted in her evidence that she was unable to identify an account or a trust where Mr M held money, or any income that was paid to him. 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, 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. [9]
[9] M & M at paras 17-18 per Lucev FM (footnotes from original omitted).
Against the background of the financial position of each of the parties, and the financial information and income disclosed in the various taxation returns filed by each of the parties, the Court has come to the view that it is appropriate for Mr Muirden’ child support payments for the financial years ended 30 June 2006 and 30 June 2007 to be based on his taxable income. To do otherwise would in the Court’s view be unjust, inequitable and improper where the evidence establishes that he is a bankrupt with income significantly diminished – for the year ending 30 June 2007 just ten per cent of his income when the Family Court’s orders were made in November 2003.
There will therefore be orders that the Family Court’s order 14(b) be set aside with effect from 30 June 2005, and that for the 2006 and 2007 financial years child support payments be based on Mr Muirden’s taxable income.
Application - spousal maintenance
Mr Muirden also sought an order discharging his spousal maintenance obligations.
In M & M the Court made the following declaration:
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.
In circumstances where:
a)Mr Muirden has become a bankrupt, and has significantly diminished income (as set out above); and
b)the Family Court orders provided for spousal maintenance to be paid to 18 November 2008,
the Court does not consider that any order, other than an order varying order 13 of the Family Court’s order of 18 November 2003, is appropriate when regard is had to the s.72(1) FL Act question of whether Mr Muirden is reasonably able to do so, and the clean break philosophy under s.81 of the FL Act. The primary purpose of spousal maintenance is to allow the recipient an appropriate period of time to retrain, enter the workforce and generally re-establish themselves. Having regard to all the circumstances, the Court considers that the purpose of spousal maintenance will have been adequately fulfilled by the Family Court’s order of 18 November 2003 if spousal maintenance is payable until 30 June 2006. Mr Muirden’ income prior to 30 June 2006 (and notwithstanding his bankruptcy in August 2005) was sufficient to be able to pay the spousal maintenance until 30 June 2006.
There will therefore be an order setting aside order 13 of the Family Court’s orders with effect from 30 June 2006.
Conclusion
There will be orders in accordance with these Reasons for Judgment as set immediately prior to the commencement of these Reasons for Judgment.
I certify that the preceding twenty six (26) paragraphs are a true copy of the reasons for judgment of Lucev FM
Deputy Associate: S Gough
Date: 8 April 2008
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