SELWOOD & SELWOOD

[2013] FamCA 228

FAMILY COURT OF AUSTRALIA

SELWOOD & SELWOOD [2013] FamCA 228

FAMILY LAW – CHILD MAINTENANCE – variation of existing child maintenance orders – with whom a child lives – where the amount of child maintenance to be paid under the existing orders is “not proper or adequate” – where the circumstances of the child have changed so as to justify variation – existing child maintenance orders varied.

Family Law Act 1975 (Cth) s 66B, 66C, 66G, 66H, 66J, 66K, 66P, 66S

APPLICANT: Ms Selwood

RESPONDENT: Mr Selwood

FILE NUMBER: DN 359 of 2010

DATE DELIVERED: 15 April 2013

PLACE DELIVERED: Darwin

PLACE HEARD: Darwin

JUDGMENT OF: Dawe J

HEARING DATE: 21 January 2013

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Rowbottom

SOLICITOR FOR THE APPLICANT: Withnalls Lawyers

COUNSEL FOR THE RESPONDENT: Mr Supljeglav (with Mr Norrington)

SOLICITOR FOR THE RESPONDENT: DS Family Law

Orders

1. The husband is to pay one half of the total medical, travel and accommodation costs for the wife and both children connected with or related to the medical treatment of B within fourteen (14) days of the wife producing receipts of such costs to the husband’s solicitor (including any such costs incurred since 1 January 2013).

2. That the parties do all things, sign all documents and give all consent necessary to ensure the current level of Private Health cover with Medibank Private for the family is maintained with the husband to meet the expense of such cover.

3. The question of the costs of this application is reserved for a date to be determined unless the parties are able to reach agreement on that issue themselves. 

IT IS NOTED that publication of this judgment by this Court under the pseudonym Selwood & Selwood has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

FAMILY COURT OF AUSTRALIA AT ADELAIDE

FILE NUMBER: DN 359  of 2010

Ms Selwood

Applicant

And

Mr Selwood

Respondent

REASONS FOR JUDGMENT

Introduction

1. B is 13 years old.  Unfortunately, he suffers from mild cerebral palsy. 

2. B’s illness requires extensive medical and rehabilitative treatment.  On 29 January 2013, B was to undergo a surgical procedure in Sydney.   Extensive post surgery recovery and rehabilitative work was required and will continue to be required throughout 2013 and potentially 2014. 

3. B’s parents are separated.  They are in dispute as to how the matrimonial property should be distributed. 

4. The parenting arrangements for the children of the marriage, including B, are also disputed.  Currently, B lives with both his mother and his father in a shared care arrangement.  Both parents live in Darwin.  As such, there arose certain travel and accommodation expenses in addition to the cost of the surgery. 

5. B has a younger sister named C.  C is 11 years old.  C travels with B when he undergoes surgery to provide her brother with support.

6. B’s mother and father are unable to reach agreement as to how the costs of the surgery and the related travel and accommodation expenses for both the mother, B and C should be paid. 

The Wife’s Application in a Case

1. The wife filed this Application in a Case on 15 January 2013 (Document 81).  It was supported by a financial statement (Document 82) and an affidavit (Document 83) filed on the same date. 

2. The orders sought in the wife’s Application in a Case are:

   1.That the husband forthwith electronically transfer from the parties National Australia Bank Loan account BSB … number … the sum of $1,800 to Consultant Psychiatrist [Dr D]. 

   2.That the fees of the single expert and such further costs relating to the expert be considered at the same time as costs generally in this proceeding.

   3.That there be a stay of the Administrative Child Support Assessment payable by the wife to the husband pending judgment. 

   4.That the wife be granted leave to re-open her case in relation to the following issues only:

   i.      Medical and other related expenses relating to [B’s] surgery for January 2013 at Sydney’s Westmead Hospital;

   ii.     Child Support payable by the wife to the husband on account of the husband’s representation to the Child Support Agency;

   iii.     The wife’s enquiries and results of those enquiries as to the following [Selwood] Pty Ltd cheques:

   a.     Cheque # …45 – 08 October 2010;

   b.     Cheque #...53 – 28 April 2011; and

   c.     Cheque # …61 – 21 June 2011.

   5.That the husband pay the costs of an incidental to this Application in a Case on an indemnity basis.

3. The husband filed a response to this Application in a Case on 18 January 2013 (Document 84).  It was supported by a financial statement (Document 85) and an affidavit (Document 86) filed on the same date. 

4. The orders sought in the husband’s response to the wife’s Application in a Case are:

   1.That Orders 1, 2, 3, 4, and 5 of the Applicant’s Application in a Case filed 15 January 2013 be dismissed.

   2.That the Wife pay to the husband the sum of $750 (plus interest) in accordance with the orders of Justice Burr dated 5 July 2011.

   3.That the Wife pay the Husband’s costs of and incidental to this Response to an Application in a Case on an indemnity basis.

Procedural History of the Wife’s Application in a Case

1. I heard this matter on 21 and 22 January 2013.  Mr Rowbottom appeared for the applicant wife.  Mr Supljeglav and Mr Norrington appeared for the respondent father.

2. Mr Supljeglav for the husband submitted that the wife’s Application in a Case ought to be summarily dismissed on the first day of hearing.  I refused to do this as I was satisfied that in these proceedings, taking into account the complex background and history of the proceedings, it would likely be of benefit to the Court to hear the evidence and have it tested in making a determination of what is just and equitable in all the circumstances. 

3. On 21 January 2013, I made the orders sought in paragraph 1 and 2 of the wife’s Application in a Case.  On the same day, the wife undertook to make the payment sought in paragraph 2 of the husband’s response to the wife‘s Application in a Case. 

4. On 21 January 2013, I gave counsel for the wife leave to re-open her case in relation to the cheque payments as sought in paragraph 4 i of the wife’s Application in a Case.  Mr Rowbottom proceeded to cross-examine the respondent on this matter. 

5. On 22 January 2013, I made the order sought by the wife in paragraph 3 of her Application in a Case.  This order was made with the consent of the parties.

6. Paragraph 4 ii of the orders sought by the wife in her Application in a Case was not agitated by counsel for the wife during the hearing. 

7. I reserved my decision in relation to the medical expenses and other related expenses concerning B’s surgery at the end of the hearing on 21 January 2013. 

The Financial Circumstances of the Parties

1. The wife’s Financial Statement, filed on 15 January 2013 (Document 82), provides the following:

   Your total average weekly income  $1,045

   Your total personal expenditure  $2,733

   Total value of property owned by you.              Unknown

   Total gross value of your superannuation          .         $113,372

   Total of your liabilities.  Unknown

   Total of your financial resources.  [left blank]

2. The husband’s Financial Statement, filed on 18 January 2013 (Document 85), provides the following:

   Your total average weekly income  $1,559.00

   Your total personal expenditure  $2,386.86”

   Total value of property owned by you.              $E[stimated]1,413,527

   Total gross value of your superannuation          .         $ E[stimated] 55,000

   Total of your liabilities.  $486,982

   Total of your financial resources.  NIL

The orders made by consent on 23 September 2010

1. On 23 September 2010, FM Turner certified assorted orders that the parties agreed to by consent.  The orders of this date applicable to the issue at hand are the following:

   2. That within 14 days the husband give all consents, sign such documents and provide relevant authorities as may be necessary to facilitate the issuing of a credit card to the wife to be used by the wife solely in relation to the medical and education expenses relating to the children and the husband shall meet such expenses incurred on the credit card.”

   3. For the purposes of the preceding paragraph, medical and education expenses shall be defined to include the following:

   (a)  Tuition fees, school uniforms, requisite text books and other such fees necessary to enable the children to complete and fulfil their education.

   (b)  General practitioners visits, specialist consultation, hospital expenses, dental expenses. 

   4. That the parties do all things, sign all documents and give all consent necessary to ensure the current level of Private Health cover with Medibank Private for the family is maintained with the husband to meet the expense of such cover.

   5. That the wife is to provide to the husband copies of receipts pertaining to all medical expenses relating to the children within 7 days of receipt of the same.

The Law

1. Counsel proceeded with their submissions at the hearing on the implicit assumption that I had the jurisdiction to make the order requested by the wife.  Neither of the parties, in written or oral submissions, attempted to conceptualise the wife’s desired orders as either child maintenance or spousal maintenance.

2. I find that the application is to be treated as an application to vary the consent orders relating to child maintenance as certified by FM Turner on 23 September 2010.

3. Division 7 of Part VII of the Family Law Act 1975 (Cth) deals with child maintenance orders. Section 66S deals with modification of existing child maintenance orders.

   66S  Modification of child maintenance orders

   (1)      This section applies if:

   (a)          there is in force an order (the first order), for the maintenance of a child (whether or not made under this Act and whether made before or after the commencement of this section):

   (i)          made by a court; or

   (ii)         registered in a court; and

   (b)  a person (being someone who could apply for a child maintenance order in relation to the child) or persons (each of whom could do that) apply to the court for an order under this section in relation to the first order.

   (1A)    With the consent of all the parties to the first order, the court may, subject to section 111AA, make an order:

   (a)  discharging the first order; or

   (b)  suspending its operation wholly or in part and either until further order or until a fixed time or the happening of a future event; or

   (c)  if the operation of the order has been suspended under paragraph (b) or (2)(b)—reviving its operation wholly or in part; or

   (d)  varying the order:

   (i) so as to increase or decrease any amount ordered to be paid by the order; or

   (ii) in any other way.

   (1B)    However, the court must not make an order under subsection (1A) that allows any entitlement of a child or another person to an income tested pension, allowance or benefit, to affect the duty of that child’s parents to maintain the child.

   Note:   For the duty of a parent to maintain a child, see section 66C.

   (2)      In any other case, the court may, by order:

   (a)      discharge the first order if there is just cause for so doing; or

   (b)      suspend its operation wholly or in part and either until further order or until a fixed time or the happening of a future event; or

   (c)      if the operation of the order has been suspended under paragraph (b) or (1A)(b), revive its operation wholly or in part; or

   (d)      subject to subsection (3), vary the order:

   (i)          so as to increase or decrease any amount ordered to be paid by the order; or

   (ii)         in any other way.

   (3)      The court must not vary the order so as to increase or decrease any amount ordered to be paid by the order unless it is satisfied:

   (a)      that, since the order was made or last varied:

   (i) the circumstances of the child have changed so as to justify the variation; or

   (ii) the circumstances of the person liable to make payments under the order have changed so as to justify the variation; or

   (iii) the circumstances of the person entitled to receive payments under the order have changed so as to justify the variation; or

   (iv) in the case of an order that operates in favour of, or is binding on, a legal personal representative—the circumstances of the estate are such as to justify the variation; or

   (b)      that, since the order was made or last varied, the cost of living has changed to such an extent as to justify its so doing (this is expanded on in subsections (4) and (5)); or

   (c)      if the order was made by consent—that the amount ordered to be paid is not proper or adequate (this is expanded on in subsection (6)); or

   (d)      that material facts were withheld from the court that made the order or from a court that varied the order, or material evidence previously given before such a court was false.

   (4)      In satisfying itself for the purposes of paragraph (3)(b), the court must have regard to any changes that have occurred in the Consumer Price Index published by the Australian Statistician.

   (5)      The court must not, in considering the variation of an order, have regard to a change in the cost of living unless at least 12 months have elapsed since the order was made or last varied having regard to a change in the cost of living.

   (6)      In satisfying itself for the purposes of paragraph (3)(c), the court must have regard to any payments, and any transfer or settlement of property, previously made to the child, or to any other person for the benefit of the child, by the person against whom the order was made.

   (7)      An order decreasing a periodic amount payable under the order, or discharging the order, may be expressed to be retrospective to such day as the court considers appropriate.

   (8)      If an order (the subsequent order) decreasing a periodic amount payable under the first order is expressed to be retrospective, amounts paid under the first order that are not payable under the first order as varied by the subsequent order may be recovered in a court having jurisdiction under this Part.

   (9)      If an order discharging the first order is expressed to be retrospective to a specified day, amounts paid under the first order since the specified day may be recovered in a court having jurisdiction under this Part.

   (10)     For the purposes of this section, the court must have regard to the provisions of Subdivisions B, C and D (to the extent applicable).

   (11)     The discharge of the first order does not affect the recovery of arrears due under the order when the discharge takes effect.

1. Section 66S(10) of the Act requires the Court to have regard to the sections of Subdivisions B, C and D of the Act where applicable.  The following sections from these subdivisions are applicable:

   66B               Objects

   (1)                The principal object of this Division is to ensure that children receive a proper level of financial support from their parents.

   (2)                Particular objects of this Division include ensuring:

   (a)  that children have their proper needs met from reasonable and adequate shares in the income, earning capacity, property and financial resources of both of their parents; and

   (b)  that parents share equitably in the support of their children.

   66C     Principles—parents have primary duty to maintain

   (1)                The parents of a child have, subject to this Division, the primary duty to maintain the child.

   (2)                Without limiting the generality of subsection (1), the duty of a parent to maintain a child:

   (a)      is not of lower priority than the duty of the parent to maintain any other child or another person; and

   (b)      has priority over all commitments of the parent other than commitments necessary to enable the parent to support:

   (i)          himself or herself; or

   (ii)         any other child or another person that the parent has a duty to maintain; and

   (c)  is not affected by:

   (i)          the duty of any other person to maintain the child; or

   (ii)         any entitlement of the child or another person to an income tested pension, allowance or benefit.

   66G     Court’s power to make child maintenance order

   In proceedings for a child maintenance order, the court may, subject to this Division and to section 111AA, make such child maintenance order as it thinks proper.

   66H     Approach to be taken in proceedings for child maintenance order

   In proceedings for the making of a child maintenance order in relation to a child, the court must:

   (a)      consider the financial support necessary for the maintenance of the child (this is expanded on in section 66J); and

   (b)      determine the financial contribution, or respective financial contributions, towards the financial support necessary for the maintenance of the child, that should be made by a party, or by parties, to the proceedings (this is expanded on in section 66K).

   66J     Matters to be taken into account in considering financial support necessary for maintenance of child

   (1)                In considering the financial support necessary for the maintenance of a child, the court must take into account these (and no other) matters:

   (a)      the matters mentioned in section 66B; and

   (b)      the proper needs of the child (this is expanded on in subsection (2)); and

   (c)      the income, earning capacity, property and financial resources of the child (this is expanded on in subsection (3)).

   (2)                In taking into account the proper needs of the child the court:

   (a)      must have regard to:

   (i)          the age of the child; and

   (ii)         the manner in which the child is being, and in which the parents expected the child to be, educated or trained; and

   (iii)         any special needs of the child; and

   (b)      may have regard, to the extent to which the court considers appropriate in the circumstances of the case, to any relevant findings of published research in relation to the maintenance of children.

   (3)                In taking into account the income, earning capacity, property and financial resources of the child, the court must:

   (a)      have regard to the capacity of the child to earn or derive income, including any assets of, under the control of or held for the benefit of the child that do not produce, but are capable of producing, income; and

   (b)      disregard:

   (i) the income, earning capacity, property and financial resources of any other person unless, in the special circumstances of the case, the court considers it appropriate to have regard to them; and

   (ii) any entitlement of the child or any other person to an income tested pension, allowance or benefit.

   (4)                Subsections (2) and (3) do not limit, by implication, the matters to which the court may have regard in taking into account the matters referred to in subsection (1).

   66K     Matters to be taken into account in determining contribution that should be made by party etc.

   (1)      In determining the financial contribution, or respective financial contributions, towards the financial support necessary for the maintenance of a child that should be made by a party, or by parties, to the proceedings, the court must take into account these (and no other) matters:

   (a)          the matters mentioned in sections 66B, 66C and 66D; and

   (b)          the income, earning capacity, property and financial resources of the party or each of those parties (this is expanded on in subsection (2)); and

   (c)          the commitments of the party, or each of those parties, that are necessary to enable the party to support:

   (i)     himself or herself; or

   (ii)     any other child or another person that the person has a duty to maintain; and

   (d)          the direct and indirect costs incurred by the parent or other person with whom the child lives in providing care for the child (this is expanded on in subsection (3)); and

   (e)          any special circumstances which, if not taken into account in the particular case, would result in injustice or undue hardship to any person.

   (2)      In taking into account the income, earning capacity, property and financial resources of a party to the proceedings, the court must have regard to the capacity of the party to earn and derive income, including any assets of, under the control of or held for the benefit of the party that do not produce, but are capable of producing, income.

   (3)      In taking into account the direct and indirect costs incurred by the parent or other person with whom the child lives in providing care for the child, the court must have regard to the income and earning capacity forgone by the parent or other person in providing that care.

   (4)      In determining the financial contribution, or respective financial contributions, that should be made by a party, or by parties, to the proceedings, the court must disregard:

   (a)          any entitlement of the child, or the person with whom the child lives, to an income tested pension, allowance or benefit; and

   (b)          the income, earning capacity, property and financial resources of any person who does not have a duty to maintain the child, or has such a duty but is not a party to the proceedings, unless, in the special circumstances of the case, the court considers it appropriate to have regard to them.

   (5)      In determining the financial contribution, or respective financial contributions, that should be made by a party, or by parties, to the proceedings, the court must consider the capacity of the party, or each of those parties, to provide maintenance by way of periodic payments before considering the capacity of the party, or each of those parties, to provide maintenance:

   (a)          by way of lump sum payment; or

   (b)          by way of transfer or settlement of property; or

   (c)          in any other way.

   (6)                Subsections (2) to (5) do not limit, by implication, the matters to which the court may have regard in taking into account the matters referred to in subsection (1).

1. Section 66P of the Act provides the powers of the Court in child maintenance proceedings:

   66P     General powers of court

   (1)      In proceedings for a child maintenance order, a court may do all or any of the following:

   (a)          order payment of a lump sum, whether in one amount or by instalments;

   (b)          order payment of a weekly, monthly, yearly or other periodic amount;

   (c)          order that a specified transfer or settlement of property be made by way of maintenance for a child;

   (d)          order that payment of an amount ordered to be paid be wholly or partly secured as the court specifies;

   (e)          order that any necessary instrument be executed, and that such documents of title be produced and such other things be done, as are necessary to enable an order to be carried out effectively or to provide security for the due performance of an order;

   (f) order that payment be made to a specified person or public authority or into court;

   (g)          make a permanent order, an order pending the disposal of proceedings, an order for a fixed period, an order until a child attains a specified age or an order until further order;

   (h)          make an order imposing terms and conditions;

   (i) make an order by consent;

   (j) make any other order (whether or not of the same nature as those referred to in paragraphs (a) to (i)) that it considers appropriate;

   (k)          make an order under this Division at any time.

   (2)      The making of an order of a kind referred to in paragraph (1)(c), or of any other order under this Division, in relation to the maintenance of a child does not prevent a court from making a subsequent order in relation to the maintenance of the child.

   (3)      The applicable Rules of Court may make provision with respect to the making of orders under this Division (whether as to their form or otherwise) for the purpose of facilitating their enforcement and the collection of maintenance payable under them.

Submissions of the Parties

Submissions of the Applicant

1. The wife relied upon her affidavit filed in support of this Application in a Case on 15 January 2013 (Document 83), and specifically on paragraphs 16 to 24 in relation to the issue of medical expenses and other related expenses concerning B’s surgery.  Therein, the wife asserts the following:

   (a)      That the father is required to meet the medical expenses relating to the children with reference to the consent orders made on 23 September 2010 and certified by FM Turner;

   (b)      That the wife has paid for numerous medical expenses and travel costs of the children since July 2012 totalling $6,203.20 (supported by annexed receipts and invoices) and that the wife expects similar expenses will arise in the near future relating to the surgery; and

   (c)      That the wife continues “to have ongoing difficulties in communication and making arrangements with the husband.

Submissions of the Respondent

1. On the first day of hearing, Mr Supljeglav called the respondent father as a witness to give evidence in relation to the matters in the wife’s Application in a Case.  Mr Supljeglav put no evidence-in-chief to the witness other than his affidavit filed 18 January 2013 (Document 86). 

2. Paragraphs 27 to 32 form the substance of the respondent’s written submission in relation to the issue of the medical expenses and other related expenses concerning B’s surgery.  Therein, the respondent asserts the following:

   (a)      The medical expenses will be fully covered by Medicare;

   …

   (d)      The respondent is unable to meet the children’s medical expenses since his financial circumstances changed in 2011;

   (e)      the applicant has not forwarded the respondent any bills in relation to this surgery (supported by an annexed email conversation between the applicant and the respondent); and

   (f)       that he was prepared to pay for one half of the medical, travel and accommodation expenses of [B].  The respondent was not prepared to pay for the travel and accommodation expenses for the applicant when she is travelling with the child to attend the surgery.  He asserts that he pays for his own travel and accommodation expenses when he travels with [B] to attend appointments, and that the wife should do the same.”

1. During cross-examination by Mr Rowbottom, the respondent largely repeated the above assertions outlined in his affidavit filed 18 January 2013 (Document 86).

2. On the second day of hearing, the husband tendered documents concerning the payment of pilates sessions and other expenses relating to B’s health issues.  During cross-examination by Mr Rowbottom, the respondent conceded that his parents had paid “more than probably 90 per cent” of the expenses relating to the Pilates sessions. 

Consideration

1. Section 66S(3)(c) allows the Court to vary a child maintenance order that had been reached by consent of the parties where the amount to be paid under the agreed orders is “not proper or adequate.”

2. Section 66S(6) provides that the determination of whether the existing consent order is “not proper or adequate” is to be made with regard to “any payments, and any transfer or settlement of property, previously made to the child, or to any other person for the benefit of the child, by the person against whom the order was made.”

3. Alternatively, the Court may vary a child maintenance order where “the circumstances of the child have changed so as to justify the variation” pursuant to s 66S(3)(a)(i). 

4. As outlined earlier in the judgment, the relevant consent orders made on 23 September 2010 are as follows:

   2.        That within 14 days the husband give all consents, sign such documents and provide relevant authorities as may be necessary to facilitate the issuing of a credit card to the wife to be used by the wife solely in relation to the medical and education expenses relating to the children and the husband shall meet such expenses incurred on the credit card.

   3.        For the purposes of the preceding paragraph, medical and education expenses shall be defined to include the following:

   (a)  Tuition fees, school uniforms, requisite text books and other such fees necessary to enable the children to complete and fulfil their education.

   (b)  General practitioners visits, specialist consultation, hospital expenses, dental expenses. 

   4.        That the parties do all things, sign all documents and give all consent necessary to ensure the current level of Private Health cover with Medibank Private for the family is maintained with the husband to meet the expense of such cover.

   5.        That the wife is to provide to the husband copies of receipts pertaining to all medical expenses relating to the children within 7 days of receipt of the same.

5. Counsel for the husband asserted at the hearing that the credit card that forms the substance of Order 2 was cancelled after “a few months.”  Clearly, the amount to be paid under this order is not “proper or adequate.” The husband has unilaterally decided that the amount to be paid under the existing child maintenance orders is nothing.

6. Accordingly, I find that the jurisdiction of the Court to vary child maintenance orders has been enlivened pursuant to s 66S. 

7. The financial circumstances of the parties is the subject of the ongoing part heard trial before me.

8. The evidence before me is however sufficient to establish a basis upon which the husband has sufficient access to funds and the wife has limited resources.

9. Taking into account the relevant matters it is just and equitable and appropriate in these special circumstances to make interim orders covering the costs incurred in January 2013 and any similar future costs.

10. I am also satisfied that I have the power to make these variations under s 66S(3)(a)(i) as the surgery that B was required to undertake and related travel and accommodation for the family was a change in his circumstances that justifies such a variation.

Conclusion

1. I delete Orders 2 and 3 in their entirety.  Order 4 remains unchanged and Order 5 is deleted.

2. I make the following variations to the consent orders certified by FM Turner on 23 September 2010:

   1.The husband is to pay one half of the total medical travel and accommodation costs for the wife and both children connected with or related to the medical treatment of B within fourteen (14) days of the wife producing receipts of such costs to the husband’s solicitor (including any such costs incurred since 1 January 2013).

   2.That the parties do all things, sign all documents and give all consent necessary to ensure the current level of Private Health cover with Medibank Private for the family is maintained with the husband to meet the expense of such cover.

3. The question of the costs of this application is reserved for a date to be determined unless the parties are able to reach agreement on that issue themselves. 

I certify that the preceding forty-three (43) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Dawe delivered on 22 April 2013

Associate: 

Date:  15 April 2013