P and G
[2004] FMCAfam 7
•9 January 2004
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| P & G | [2004] FMCAfam 7 |
| CHILD SUPPORT – PRACTICE & PROCEDURE – Application to discharge a consent order requiring the father to pay education expenses for child – child resides with the mother – ‘special circumstances’ – whether the order made by the Family Court was without any jurisdictional basis under the Child Support (Assessment) Act 1989 – no application ever made in relation to child support –father’s obligation to pay education expenses discharged. |
Child Support (Assessment) Act 1989 (Cth), ss.3, 4, 4(3), 124, 125, 125(2), 128, 129, 129(2), 129(3), 129(4), 129(5), 129(6)
Family Law Act 1975 (Cth)
Family Law Rules 1984
Lightfoot & Hampson (1996) FLC 92-663
Ivanovic & Ivanovic (1996) FLC 92-689
| Applicant: | P P |
| Respondent: | M G |
| File No: | MLM 7780 of 2003 |
| Delivered on: | 9 January 2004 |
| Delivered at: | Melbourne |
| Hearing Date: | 6 January 2004 |
| Judgment of: | Bryant CFM |
REPRESENTATION
| Counsel for the Applicant: | In person |
| Solicitors for the Applicant: | In person |
| Counsel for the Respondent: | In person |
| Solicitors for the Respondent: | In person |
ORDERS
That order 3 of the orders made in the Family Court of Australia on
4 August 1995 be discharged as from 1 January 2004.That all outstanding applications otherwise be dismissed and the matter be removed from the list of cases awaiting finalisation.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT MELBOURNE |
MLM 7780 of 2003
| P P |
Applicant
and
| M G |
Respondent
REASONS FOR JUDGMENT
Introduction
This is an application by the father to depart from the provisions of an order requiring him to pay education expenses for the one remaining dependant child in the wife's care. The order was made by consent on 4 August 1995 in the Family Court of Australia. It is order 3 of a number of orders in relation to parenting and property which were made on that day. The order itself provides as follows:
“(3) The husband shall pay all reasonable fees (including all arrears) and educational expenses for the children of the marriage at the S C in Victoria (or at an equivalent Catholic school agreed upon by both parties) for their secondary education.”
In addition to that order which was made in August 1995, the father was the subject of an administrative assessment of child support in accordance with the provisions of the Child Support (Assessment) Act 1989 (Cth) (the Act)
The father's application is to discharge the obligation for payment of education expenses and that application is opposed by the mother. The order now relates only to one child who lives with the mother.
The grounds
The father relies upon two special circumstances which he says arise from changes to his position since the order was made, which are as follows:
a)that at the time of the making of the order the four children of the parties were residing with the mother, but that since that time two of the children have moved from the mother's care to his care; and
b)that since the making of the order the father's income has significantly reduced.
The evidence
In 1995 when the order was made for education expenses, the father was a subcontractor for a Transport company driving trucks. In 1997 he sustained a back injury and was unable to work for a period. For about two years he received WorkCare payments of about $400 per week. Shortly before injuring his back, he acquired a business. As a result of his back injury, he was unable to do the work himself but employed someone else to do it for him. He conducted this business until 2003 when, as a result of his overall financial position, he found it necessary to sell the business. He received approximately $5000 net after sale of the business. In 1998 he received approximately $26,000 for pain and suffering as a result of his injury.
It would appear that despite the changes to his income position between 1995 and 2003, he initially continued to pay the school fees and subsequently, although there is money owing to the school, he has continued to accept responsibility for those fees and to pay arrears owing from time to time when he is able.
In about August 1999 two of the children went to live with him. G was then 17 and completed his secondary education at the S C in that year. D was then 13 and continued at S C until 2003. The father initially said that D left College because he was unable to afford the payments but in cross‑examination he conceded that it was really because D did not want to keep going to that school any longer and because he could not see that D's results justified expenditure on private school fees. Thus the father continued to support and pay fees to the extent that I have indicated for the two children in his care and for the two children in the care of the mother.
Of the two children in the care of the mother, D is 17 but J is over 18 and has some modest income. A is 14 and at present attends the S C. She is the one child whose school fees are in issue and the child to whom these proceedings really relate.
In addition to the obligation to pay school fees contained in the order, a child support assessment required the father to pay about $250 per month until the most recent assessment when his assessment was reduced to nil. His evidence was that the reason for a nil assessment is that he has a modest income and it was taken into account that he has the responsibility for the support of D who is only 17 and still a dependant child.
The husband is presently doing some work, about three to four part days per week, and clearing about $150 per week. He has remarried and does not own any real estate or have any other significant resources but lives in a property owned by his present wife which is subject to a mortgage. His wife is working and earns approximately $1000 per week. His son G lives with them but he is self-supporting.
About a year or two ago the husband, either personally or through his present wife, offered to pay half of the school fees on a continuing basis if the mother was prepared to pay the other half and indicated to her at that time that his financial position was worsening and that he was having difficulty meeting the payments. That offer was then rejected and the father's position now is that he cannot even afford to pay half the fees for A given what he is presently earning and his support of D. He concedes that when he first separated he was earning excellent money but that as a result of his back injury, he was forced to get out of the truck driving and look for alternate work, which he did. He says that despite purchasing a business it was still difficult to make a living, and that is partly explained by the modest amount which is available to him after the sale of his business. He contends that he is not in a position to meet the payments for education expenses for A.
The mother's financial position is that she is now working and has had to get a part‑time job because she is not receiving any child support for A. Her job provides her with an income of $520 per week and she receives family allowance of $100 and $50 from a sole parent pension. She has another child who is aged three, for whom she receives $90 per week support. She lives in a home worth $240,000 with a mortgage of $68,000. She otherwise has no significant assets and some modest liabilities. She is paying off a loan for her car.
The relevant law
The obligation to pay child support is created by the provisions of the Child Support (Assessment) Act 1989. Section 3 contains the obligation that parents maintain their children. The objects of the Act are to be found in section 4. Each of the objects needs to be borne in mind when deciding an application under the Act. Section 4(3) of the Act recognises the desirability of parents to reach an agreement for the financial support of their children. Sections 114 and 121 identify that further objects of Division 4 and Division 5 of Part 7 include:
“(a) that children have their proper needs met from reasonable and adequate shares in the income, earning capacity, property and financial resources of both their parents; and
(b) that parents share equitably in the support of their children.”
Part 7 of the Act deals with jurisdiction of Courts. Division 4 deals with orders for departure from administrative assessment in special circumstances. Division 5 deals with orders for provision of child support otherwise than in the form of periodic amounts paid to their carer. The provision for education fees contained in a consent order between the parties falls within Division 5 and is an order for provision of child support otherwise than in the form of a periodic amount. Section 129 deals with the modification of orders under Division 5. It provides that:
“If an order under section 124 is in force in relation to a child -
the court may under this section:
(i) discharge the order;
(ii) suspend or revive its operation; or
(iii) vary it in any way.”
When a court makes an order under subsection (1) it must not do so unless it is satisfied that it would be:
“(a) just and equitable as regards the child, the carer entitled to child support and the liable parent concerned; and
(b) otherwise proper.”
(See section 129(2).)
Furthermore, the Court must not vary an order unless it is also satisfied:
“(a) that the making of the variation is justified because of a change in the circumstances of the child, the carer entitled to child support or a liable parent concerned since the order was last made or varied; or
(b) that the carer entitled to child support has made an application under section 128 and the order is no longer proper or appropriate; or
(c) that making the variation was justified because of a change in the cost of living since the order was last made or varied; or
(d) in a case where the order was made by consent, that the order is not proper or adequate; or
(e) that material facts were withheld from the court that made the order or from a court that varied the order, or that the material evidence previously given before such a court was false.”
(See section 129(3).)
If the Court proposes to vary the order, then it must consider whether it would be just and equitable and otherwise proper to do so (see sections 129(4), 129(5) and 129(6).)
I raised with the parties, who were both unrepresented, the question of how the order came to be made. The husband's evidence contained in his Affidavit sworn on 10 November 2003 was that he did not understand initially that the payment of education fees was to be a binding obligation upon him and believed it to have been a voluntary undertaking. He said that he was surprised to later find that it was the subject of an order. The parties were unable to explain exactly how the order came about and agreed that I should obtain the Family Court file and consider the basis upon which the order was made. I did so with the consent of the parties and have looked carefully at the file.
Proceedings were commenced in the Family Court of Australia by an application filed on 18 November 1994. The orders sought relate to parenting orders and to property. The application was filed by the father. Interim orders for contact with the children were sought. The mother responded by the filing of an answer and cross-application (in accordance with the Family Law Rules 1984 as they then stood) on 12 January 1995. She sought parenting orders, property orders and an order pursuant to the Family Law Act 1975 (Cth) for spousal maintenance. She sought interim orders for spousal maintenance and an injunction in relation to property matters.
Interim orders were made on 13 January 1995 by consent. Those orders provided for the parties to have joint guardianship of the children, for the children to be in the sole custody of the wife and for contact to the father. They further provided that spousal maintenance at $65 per week should be paid, together with mortgage and loan payments to the Bank. A date for an Order 24 Conciliation Conference was listed and the matter was placed in the pending Cases List. Directions were made for filing material. A notation to those orders contained the note that the husband would continue to pay child support as assessed at $424.75 per month from January 1995.
The parties attended a Conciliation Conference but the matter did not resolve and it was subsequently fixed for hearing before in the Family Court on 4 August 1995. The husband filed a lengthy Affidavit constituting his evidence-in-chief and a Financial Statement. No further material was filed by the wife at that point and on 4 August 1995 the matter was resolved by consent. At that time some of the interim orders were discharged and there were final orders for contact and property. The orders contained order 3 in relation to education expenses which is the order to which I have referred in paragraph 1.
It is clear from a careful perusal of the Family Court file that there was never at any stage an application brought by either of the parties pursuant to the Child Support (Assessment) Act 1989. The Act provides the sole source of jurisdiction for the making of an order for child support, whether it be by way of departure in respect of periodic amounts pursuant to Division 4 of Part 7 or whether it be by way of provision of child support otherwise than in the form of periodic amounts paid to the carer pursuant to Division 5 of Part 7. Division 5 of Part 7 is the part under which an order for payment of school fees would need to be made if that order was to be a valid order.
Apart from the obvious question of jurisdiction, there are good reasons why the order must be carefully made pursuant to the Act. Section 125 provides that if the Court makes an order under section 124, which is an order for a payment other than periodic amounts paid to the carer, then the court must state in the order whether the child support order to be provided is to be credited against the liable parent's liability under an administrative assessment or not. If it is to be credited against the liable parent's liability under any administrative assessment, then the Court must also state in the order either:
“(a) that the child support has an annual value of a specified amount and the annual rate of the child support payable under any relevant administrative assessment is to be reduced by that amount; or
(b) that the child support is to count for a specified percentage of the annual rate of child support payable under any relevant administrative assessment.”
(See section 125(3).)
Section 125(2) deals with the case where an order is to be made under section 125 but it is not to be credited against a liability under a relevant administrative assessment. Section 125(2) says as follows:
“125(2) [Special circumstances] The court may state that the child support is not to be credited against the liable parent's liability under any relevant assessment only if it is satisfied that, in the special circumstances of the case, it would be:
(a) just and equitable as regards the child, the carer entitled to child support and the liable parent; and
(b) otherwise proper; and
that the child support should not be credited.”
However, when the Full Court of the Family Court has considered this section, it has given it a somewhat narrow meaning. In Lightfoot & Hampson (1996) FLC 92-663, Fogarty J at page 82,857 said:
“The overall structure of section 125 is readily understandable. If a substitution order is made under Division 5, it is necessary for the court to order that that is to be credited against the existing liability and provide the manner in which that is to be calculated. That is the primary position established by subsection (1). However, subsection (2) enables the court to state that the Division 5 order (or part of it) is not to be credited. Those circumstances are very confined, namely, "only if it is satisfied that, in the special circumstances of the case" a credit should not occur, having regard to the matters in paragraph (a)”
In Ivanovic & Ivanovic (1996) FLC 92-689 the Full Court considered the matters to which Fogarty J had referred to in Lightfoot & Hampson and said as follows:
“We also respectfully agree with the dictum of Fogarty J that section 125 was inserted in the legislation "because it was apprehended there might be unusual circumstances where there should not be a credit" (Lightfoot's case at 84). We must therefore consider whether the facts of the present case come within the ambit of this description.”
There is nothing to indicate that the Family Court at any stage had his attention directed to the matters under the Child Support (Assessment) Act which the Court was required to consider under section 125(2) before making an order which required non periodic payments to a third party which were not to be credited against a liability under the Act. That is probably because as paragraph 1 can discern, after a careful consideration of the Family Court file, there was no application on foot under the Child Support (Assessment) Act which would have provided a jurisdictional basis for the making of such an order. Nor do the orders made in the Family Court provide leave to make an oral application for such an order.
I am left in the position where it appears to me fairly clear that the legal practitioners for the parties inserted in the consent orders a provision for education fees and the orders were made without the court having before it an application under the Act which would provide it with the jurisdiction to make such an order. That would also lead to the problem that no apparent consideration was given by the court to whether there were special circumstances which would have entitled the court to make an order which was not to be credited against child support. I am left therefore in a position where it appears to me that the order which the father now seeks to discharge was an order made without jurisdiction. That being the case, it appears to me that I should now clarify the matter by discharging any obligation for payment of education expenses payable by him.
I should also add, however, that given his evidence and the fact that it was essentially unchallenged, were the orders been validly made, I would in any event find that there are changes in the circumstances of the liable parent such as to justify a discharge of the order and that it would be just and equitable and otherwise proper to do so. The father established that two of the children had come to live with him and that at the present time he is maintaining a dependant child himself. I am also satisfied that his financial circumstances are such that given the support of the dependant child with him, he is unable to make a contribution to the education expenses for A.
Whilst the father’s administrative assessment is presently fixed at nil, the mother retains all her rights under the Act to seek a departure from that assessment if she considers the circumstances would justify her in doing so.
I certify that the preceding thirty (30) paragraphs are a true copy of the reasons for judgment of Bryant CFM
Associate: Peter Smith
Date: 7 January 2004
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