R and R
[2002] FMCAfam 290
•13 September 2002
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| R & R | [2002] FMCAfam 290 |
| CHILD SUPPORT – Child support agreement entered into with legal advice – no apparent means of paying – insufficient evidence to establish a ground for departure. Family Law Act 1975, ss.65E, 68F(2) Wild and Ballard (1997) FLC 92-771 |
| Applicant: | C R |
| Respondent: | M R |
| File No: | (P)DGM42 of 2001 |
| Delivered on: | 13 September 2002 |
| Delivered at: | Melbourne |
| Hearing Date: | 22 August 2002 |
| Judgment of: | Bryant CFM |
REPRESENTATION
| Counsel for the Applicant: | Applicant appeared in person |
| Solicitors for the Applicant: | Mr C R |
| Counsel for the Respondent: | Respondent appeared in person |
| Solicitors for the Respondent: | Ms M R |
ORDERS
IT IS ORDERED
THAT the father's Application filed 11 June 2002 seeking to depart from the provisions of a Child Support Agreement dated 30 October 2000 be and is hereby dismissed.
IT IS FURTHER ORDERED
THAT the orders made by the Federal Magistrates Court of Australia at Dandenong, on 1 June 2001, whereby the Husband is to have contact with the children, B C R born 16 July 1992, F J R born 2 January 1994 and N W R born 20 November 1998, be varied:
(a)by deleting paragraph 2(b) and providing in lieu “thereafter each alternate weekend from 5.00 pm Friday until 6.00 pm Sunday (non-daylight saving hours) and 7.00 pm Sunday (Daylight saving hours) save that on each third contact weekend commencing the second contact weekend following the making of these Orders the contact extends to Monday morning and the Husband return B and F to school and Nicholas to the wife's residence.”
(b)By adding the following to the orders “that for the purpose of holiday contact the Wife permit the children to bring with them to contact visits their bicycles and such other items of their choice, and the Husband ensure the items are returned to the Wife at the conclusion of contact in the same condition as they left and in the event of the items being damaged the husband be responsible for their replacement or repair.”
THAT the Application otherwise be dismissed and removed from the list of cases awaiting finalisation.
THAT pursuant to section 65DA(2) of the Family Law Act1975, 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 and these particulars are included in these orders.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT MELBOURNE |
(P)DGM42 of 2002
| C J R |
Applicant
And
| M J R |
Respondent
REASONS FOR JUDGMENT
Introduction
This Application is brought by the father pursuant to the Child Support (Assessment)Act 1989 ("the Act") seeking to depart from the provisions of a Child Support Agreement dated 30 October 2000, (the agreement) to discharge the obligations pursuant to that agreement whereby the father is required to pay the sum of $343 per week for the three children of the marriage; B C R born 16 July 1992, F J R born 22 June 1994, and N WR born 20 November 1998 (the children). The father is also seeking to discharge any arrears that have accrued pursuant to the agreement.
In addition to an Application pursuant to the Child Support (Assessment) Act 1989, the father also brought an Application filed
11 June 2002 seeking a variation of orders for contact made on 1 June 2001 in the Federal Magistrate's Court of Australia at Dandenong. The orders for contact between the father and the children include an order for contact for each alternate weekend from 6.30 pm Friday until 6 pm Sunday, (non daylight saving hours), and 7.00pm Sunday (daylight saving hours). The father seeks to vary those orders to provide that the contact commence at 5.00pm Friday and conclude at 9.00am the following Monday; the husband to return B and F to school, and Nicholas to the wife's residence at the conclusion of the weekend contact visits. He further seeks that for the purpose of alternate weekend contact, the mother deliver the children to his residence for the commencement of contact on a Friday evening, and that he return B and F to school at the conclusion of alternate weekend contact; and otherwise be responsible for returning the children to the wife's residence at the conclusion of contact
He seeks an order that the wife permit the children to bring with them to contact visits such items as they choose and he ensure those items are returned at the conclusion of the visit. Finally, he seeks an order that the wife allow him to phone the children after school between
4.00pm and 7.00pm on week days and on special occasions.
Current child support liability
An agreement was entered into between the parties on 30 October 2000 providing for the father to pay child support in the sum of $343 per week for the children apportioned as to $115 per week for N and $114 per week for each of the children, B and F. The agreement also provides for increases each year.
The agreement was accepted by the Child Support Agency (the Agency) on 21 November 2000. There is no administrative basis on which the agreement can be varied if the parties do not agree, and to do so requires an Application pursuant to the provisions of s.117 of the Act (s.98). The only prerequisite to the exercise of jurisdiction is that the child support agreement be registered in the Federal Magistrates Court.
Sections of the Act relied upon by the father
The father relies upon s.98 of the Act, together with s.117(2)(c)(i), that in the special circumstances of the case, application of the provision of the agreement would result in unjust and inequitable determination of the level of financial support provided by the liable parent to the children because of the income, earning capacity, property and financial resources of the Husband.
Relevant law governing this Application
The obligation to pay child support is created by the provisions of the Act. Section 3 contains the obligation that parents maintain their children. Each of the objects of the Act are found in s.4 and are to be borne in mind when deciding an Application. Section 4(3) of the Act recognises the desirability of parents reaching agreement for the financial support of their children. Sections 114 and 121 identify that the further objects of Division 4 and 5 of the Act include:
a)that the 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 support of their children.
The Act includes provisions that provide a scheme for the implementation of consent arrangements. Part 6, Division 3 contains the provisions that relate to Applications to the Child Support Registrar for acceptance of Child Support Agreement executed in accordance with the terms of Divisions 1 and Part 2 of the Act. Once accepted, the liability to pay child support arises where child support was not already payable pursuant to an administrative assessment. Provisions contained in the Child Support Agreement for periodic payments have effect, for the purposes of Part 5, as if there were an Order made by consent by a Court under Division 4 of Part 7 [s.95(2)].
An Application to vary a child support agreement must be determined in accordance with the provisions of s.117 of the Act. Wild and Ballard (1997) FLC 92-771.
When considering an Application for departure pursuant to s.117 of the Act, the Court must engage in the three-step process described in Gyselman (1992) FLC 92-279. Those three steps are as follows:
a)the requirement by the Court to be satisfied that in the special circumstances of the case one of the grounds for departure in s.117 has been established;
b)in determining whether to make an order under this division, the Court is required to consider whether it would be just and equitable as regards to the child, the carer entitled to child support and liable parent to make a particular order [s.117(4)], and
c)in determining to make an order whether it would be otherwise proper to make a particular Order under this division [s.117(5)]. In determining whether it would be otherwise proper to make a particular Order under this division, the Court must have regard to the fact that it is the primary duty of the parents to maintain their children and the effect that the making of an Order would have upon any entitlement of the child or carer, to an income-tested pension allowance or benefit.
In considering whether it is just and equitable to make an Order, the Court must have regard to;
a)The nature and duty of the parent to maintain a child (as stated in s.3);
b)The proper needs of the child;
c)The income earning capacity, property and financial resources of the child and each of the parents, and
d)The commitments of each parent necessary to support themselves and any other person to whom they have a duty, and
e)Any hardship that would be caused to the child, the carer or the liable parent or any person the liable parent is due to support by the making or refusal to make the Order.
Background
The parties were married on 11 November 1990 and have three children. The children are aged 10, 8 and 3 respectively. The parties separated on 2 July 2000. After separation the husband moved out of the matrimonial home to commence a relationship with D McC who is also a family friend. On 25 September 2000, the parties reached agreement in proceedings between them that the children were to live with the wife. There were interim Orders made for contact and the question of contact was finally resolved by Orders made in the Federal Magistrates Court by consent on 1 June 2001. Several interim Orders in the intervening period increased the contact the father was having to the children.
The parties resolved financial matters by Orders which were made on 31 October 2000 in the Family Court of Australia at Dandenong.
Pursuant to those Orders, the husband transferred his interest in the former matrimonial home to the wife and the wife was to indemnify him against all liability pursuant to the mortgage over the property. Certain shares were transferred to the wife and the wife transferred her interest in businesses known as “R T” and "E T and F" to the Husband, and the husband indemnified her in relation to liability for those businesses. Subject to exchange of some chattels, each of the parties retained what assets they had and the wife was able to retain a caravan at L E for her sole use.
Contemporaneously with the consent Orders, the parties entered into a child support agreement. The notations to the Orders made on that date indicate that:
“the parties have entered into a child support agreement wherein the husband will pay to the wife the sum of $114 per week for B and F, and $115 per week for N. The notations also provide that the husband warrants that there are no other encumbrances on the title to the former matrimonial home other than three mortgages with a total amount outstanding of $202,995.63.”
The parties agree that the amount of child support was calculated by direct reference to the mortgage payments which the mother was then required to pay.
The mother does not work and her income is, essentially, a pension of $332 per week. She lives in the former matrimonial home with the three children. She values the home, in her financial statement, at $360,000 with a mortgage of $202,800.
The expenses set out by the mother for the maintenance for herself and the children indicate that her own expenses come to $119 per week and the children's expenses total $295 per week. This is a total of $414 per week, and is exclusive of the mortgage payments which she says are $343 per week. It is clear that the wife's pension does not provide sufficient income to maintain herself and the children, let alone enable her to meet the mortgage payments.
The father's case
The father has paid no child support since 25 July 2002. He asserts that the figures bear out, that the child support which he agreed to pay, would, if administratively assessed pursuant to the provisions of the Act, require an income of approximately $65,000. He asserts that his income from the business operated by him is approximately $20,000 and he cannot afford to pay the current child support. He relies upon the fact that various changes have occurred since that time. They are:
a)that the National Australia Bank has increased the interest rate on his business loan from 9 per cent to 16 per cent;
b)his de-facto wife has a modest income and otherwise has to support her four children who live with them.
In support of his Application, the Applicant produced profit and loss statements for R T from 1 July 1999 to 30 June 2000 and then for the a new company formed by him for E T and F Pty Ltd for the
1 November 2000 to 30 June 2001. It appears from documents produced by the husband that the husband has a discretionary trust
(C D T).
The Applicant provided no financial information for the financial year 2001/2002 or the current financial year, despite the fact that the application was heard on 22 August 2002, nearly two months after the end of the financial year. The husband's explanation for this was his accountant had not yet prepared the profit and loss statement. However, he admitted that the previous statements were prepared from a program known as MYOB in which the financial data is recorded and from which in my view he could easily have produced figures for the last financial year, and even for part of the current year. It follows then the information that I am considering is 14 months out of date.
In short, the husband's position is that the profit and loss statement for the year ended 30 June 2000, which is shortly before the Orders were made by consent, indicate an operating loss of $34,561. The figures for the eight month period through to 30 June 2001 for E T and F Pty Ltd indicated a net operating loss of $38,353. There is no financial information regarding the past year or the current year. It is apparent from the accounts that the premises from which the Applicant conducts his business is owned by C N (A) Pty Ltd, and that rent is paid by the business to C N and then paid to the bank for interest on the loans secured over the property.
The Husband asserts in his financial statement that he receives wages of $343 per week. He states that apart from a benefit of $50 per week in petrol, that is the income from which he must support himself and pay $343 per week to the mother. Mrs McC's income and Centrelink payment is totally expended in support of herself and her four children.
The Husband’s position is curious because the accounts indicate that he was in no better position at the time that he entered into the Agreement than he was at the end of June 2001, when he alleges his position had deteriorated.
If the accounts as at 30 June 2000 are to be believed, then it is unlikely he could have afforded the child support he agreed to pay. The figure in the profit and loss statement for wages in 2000/2001 is $20,912 or $402 per week. There is no figure for wages in the profit and loss statement for R T as at 30 June 2000. There is no evidence of what the husband's income was at that time, save that a refund notice from the Australian Taxation Office for the year ended 30 June 2000, indicates that his taxable income was nil.
If I were to accept the husband's profit and loss statements at face value, it would appear that as well as the business having losses in 2000 and 2001, in the year before the Agreement was entered into, the husband had a taxable income of nil, and in the year in which he signed the Agreement, $402 per week.
It is difficult to accept if that was the true position, that the husband would have entered into a Child Support Agreement that committed him to make payments to the wife of $343 per week. I accept that the purpose of the payment was so that the wife could make the mortgage payments and presumably provide a home for herself and children. Nevertheless, I note the father had solicitors acting for him at the time the agreement was made and the property settlement was entered into and find that he was well aware of what he was committing himself to do, and believed he could afford it.
I have no evidence of his financial position at the end of 2002, nor at the present time, other than a statement that he has wages of $343 per week.
I note that the husband's evidence is that at a time when he apparently was in no better position than he is at the present time, and at a time when he had solicitors acting for him, he entered into a Child Support Agreement whereby he committed himself to pay, and paid, until July this year, $343 per week.
The present evidence from the husband does not assist me in coming to any conclusion as to what the husband' s present financial position is, or what it was at the end of the last financial year.
Having regard to the evidence that he has given, and the manner in which it conflicts with the commitment undertaken by him, I cannot accept at face value a statement in his financial statement that he earns $343 per week without seeing any supporting documents of any kind to corroborate this evidence. Accordingly, on the evidence before me I cannot be satisfied that the husband has, in the special circumstances of the case, established that as a result of his income and earning capacity the present level of child support as provided for in the agreement should be departed from.
I appreciate that there is nothing to prevent the husband from bringing another Application supported by appropriate financial evidence if he wishes. It appears that at the present time he is not paying any child support and given the obligations of parents to support their children, it appears to me unlikely that whatever may happen in the future, he will be left with no obligation of any kind. In order to avoid what would seem to me to be inevitable arrears, it would be sensible for him to re-commence paying child support to the mother, otherwise he may find himself in the position where he has a liability which may have to be met from sale of assets.
Contact issues
The husband's case is to extend the alternate weekend periods he has with the children to enable him to return them on Monday morning rather than Sunday evening. The mother lives in Mc and the father lives in E. The distance between the two homes is approximately 40 kilometres. At present the father does all of the travelling between E and Mc. The existing Orders provide for him to collect the children at 6.30 pm and he says he arrives home at about 7.30pm (Husband's affidavit 11 June 2002). He wishes the mother to share the driving by bringing the children to his residence at 5.00 pm Friday, and for him to be able to return the two older children to school on Monday morning, and not to the wife's residence. He asserts that the children would enjoy the extra Sunday night contact and would benefit from not having to rush home and to have some quiet time available with their father to prepare for school the next day.
He also says that he has spoken to the school and offered his services as a classroom helper. The weekend contact occurs in conjunction with the weekend when Mrs McC's children are at home so that there are seven children in the household on that weekend. He says that the children are disappointed when contact is cut short due to the necessity to return them on Sunday evening. The father's complaint in relation to the phone contact seems to be that the children are not always available and that he would like to be able to ring up at other specified times when the children are not available when he calls.
The mother opposes any changes to the contact arrangements. She asserts that the changes regarding the transport of the children on Monday morning from E to Mc, far from being less stressful for the children would be more so, and that the children will be playing with the four McC children rather than readying themselves for school the next day, and that their return on the Monday morning will only leave them tired for the school week. As to the transporting of the children, the mother said that it is not practical for her to do any of the transporting as she does not have a car. Furthermore, her financial situation is perilous at the moment as a result of the non-payment of child support.
Neither party called any expert evidence of any kind in relation to the children and neither advanced any evidence of any greater substance than that to which I have referred.
Section 65E of the Family Law Act requires that I have regard to the best interests of the children as being the paramount consideration. Section 68F(2) sets out the facts which I must consider when determining what is in the best interests of children.
Other than putting forward what each of them wanted and the basic reasons why they preferred this position, the evidence of the parties did not take the matter any further. There is therefore very little evidence upon which I can make findings as to the interests of the children. That evidence can be summarised as follows:
a)That at the present time the alternate weekend contact between the father and the children commences at 6.30 pm Friday, and concludes at 6.00 pm on Sunday, or 7.00 pm in daylight saving hours.
It includes contact on each alternate week between Thursday 6.00 and 8.00 pm. The alternate weekend includes any public holiday on either the day preceding or following the contact.
b)In addition to the alternate weekend contact, provided the husband is on holidays, he is to have the second half of all school term holidays and the second half of the long summer vacation.
c)In addition the father is to have contact on each of the children's birthday and his birthday, and on Father's Day, and at Christmas.
d)The father is entitled to telephone the children three times per week between 4.00 and 5.30 pm, on each Monday, Tuesday and Wednesday and the children are at liberty to telephone him whenever they choose.
e)For the purposes of contact the father collect and return the children from the wife's residence.
f)The history of the matter indicates that the husband's contact with the children has built up from daily contact to the present regime of alternate weekends and half of the school holidays.
g)It is the husband's view that the children would benefit by being able to stay with him on Sunday nights and not have to rush home. The father also says that he could be able to help out at the children's school.
h)The mother says that the children would be tired for the school week if they spent Sunday evening at the father's residence with the McCracken children and then had the relatively long drive on Monday morning prior to the commencement of school.
i)As far as transporting the children is concerned, the mother has no vehicle.
Conclusions
There is no reason to disbelieve what either of the parties assert. That is, from the husband's perspective, and probably from the children's, they would enjoy staying on Sunday nights with him and the McCracken children rather than returning home on each occasion of the contact.
Similarly, I have no reason to doubt the wife's assertion that such an arrangement would tire the children for the next week at school, and create logistical problems regarding school uniforms, etcetera.
Having regard to the distance travelled and the age of the children,
I accept that at this stage it is more likely to be detrimental to the children and their schooling, if the father's proposed arrangement occurred at every contact visit. On the other hand an occasional overnight stay on Sunday night would allow the children to enjoy an extra night with their father and the disadvantage of the children being tired before school could be minimised by the number of times during the year that this occurs. An arrangement whereby the children would stay on Sunday night with their father once every two months, (or one in every four contact periods) would in my view have the benefits contended for by the father, and minimise the disruption which is the concern of the mother.
As the mother does not have a vehicle, it is impracticable for her to be involved in the transporting of the children.
It appears that the father is able to go to school on any day he wishes to be a carer, and he can make these arrangements to suit himself so I see no need to make an Order to that effect.
Furthermore, I see no reason to vary the Orders which provide for the husband to ensure that the children attend Little Athletics on a sufficient number of occasions when they are with him to ensure they qualify or receive awards at the end of the season. From the evidence
I heard this does not appear to be an onerous obligation.
As far as telephone calls are concerned the husband is able to call home three times per week, and the children are at liberty to call him whenever they choose. I am not satisfied on the evidence I have heard that there is any need to vary these Orders.
Finally, I am satisfied that it would be in the interests of the children to be able to take their bikes to the father's home during holiday periods, but in view of the wife's evidence that there was some damage to the bikes when this occurred, the husband ought to be responsible for repair or replacement in the event that the bikes are damaged at his home as the wife will clearly be unable to afford to do this.
I certify that the preceding forty-six (46) paragraphs are a true copy of the reasons for judgment of Bryant CFM
Associate: Mardi Jarvis
Date: 13 September 2002
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