Seran & Hershey
[2008] FMCAfam 1396
•19 December 2008
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| SERAN & HERSHEY | [2008] FMCAfam 1396 |
| CHILD SUPPORT – Variation of overseas maintenance order. |
| Family Law Act 1975 (Cth), ss.66B, 66C, 66H, 66J, 66K, 66S Child Support (Registration and Collection) Act 1988 (Cth), ss.4(1), 18A(1), 18(4) Legislative Instruments Act 2003 (Cth), s.13 Acts Interpretation Act 1901 (Cth), s.10(b) Family Law Regulations 1984 (Cth), Regs.24A, 36 Child Support (Registration and Collection) Regulations 1988 (Cth), Reg.3A, Sched.2 |
| Streets & Streets (1994) 18 Fam LR 275; (1994) FLC 92-509 |
| Applicant: | MR SERAN |
| Respondent: | MS HERSHEY |
| File number: | NCC 1253 OF 2008 |
| Judgment of: | Halligan FM |
| Hearing date: | 20 November 2008 |
| Date of last submission: | 18 December 2008 |
| Delivered at: | Parramatta |
| Delivered on: | 19 December 2008 |
REPRESENTATION
| Applicant: | Applicant In Person by phone |
| Respondent: | No Appearance |
ORDERS
The child maintenance order of the Law Court, Rotterdam, the Netherlands, made on 30 October 2002 in relation to maintenance payable by the father for his children [X] and [Y] is discharged from the date to which it stands paid.
The father's application to vary the child maintenance order of the
Law Court, Rotterdam, the Netherlands, made on 7 April 2003 in relation to maintenance payable by the father for his children [X] and [Y] by reducing his ongoing commitment under that order is dismissed.
The father's application to vary the child maintenance order of the Law Court, Rotterdam, the Netherlands, made on 7 April 2003 in relation to maintenance payable by the father for his children [X] and [Y] by reducing the arrears under that order to $10,000 is stood over for further hearing before me at 10 am on 1 May 2009.
IT IS NOTED that publication of this judgment under the pseudonym Seran & Hershey is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT PARRAMATTA |
NCC 1253 OF 2008
| MR SERAN |
Applicant
And
| MS HERSHEY |
Respondent
REASONS FOR JUDGMENT
Introduction
In 2002 and 2003, child maintenance orders were made by the
Law Court, Rotterdam, The Netherlands, requiring the father to pay maintenance to the mother for the parties’ children [X] and [Y] in the sum of €200 per month per child, indexed annually.
On 14 January 2008, the Australian Child Support Agency (the CSA) advised the father, who had come to Australia in September 2004, that it had registered the Dutch orders for payment in Australia, both as to arrears of $41,363.97 and ongoing payments of $348.82 per month per child from 6 December 2007.
The father, who conducted the case without legal representation, contends he cannot afford the amount sought from him and has applied to vary the overseas orders. He seeks that the orders be varied to provide that prospectively he pay child maintenance in the amount calculated under normal administrative assessment of child support. When advised the administrative assessment provisions did not apply in this case, the father indicated he sought a reduction to the sum of $200 per month, that is, $100 per month per child. He also seeks that the arrears be reduced to the sum of $10,000. I interpret this latter aspect of his application as an application to vary the overseas orders to provide that he pay maintenance for the children from the date of the orders to the present in the sum of $10,000 plus any sums he has already paid.
The matter proceeded in the absence of the mother. The CSA appeared by its legal representative when the matter came before me on
22 September 2008. The legal representative informed the Court that the CSA had forwarded to the mother care of the Dutch child support authority (the LBIO) copies of the father's application and affidavit evidence. I am satisfied that on 26 September 2008 the father complied with the direction I made on 22 September 2008, when I listed this matter for hearing, that he notify the mother by ordinary prepaid airmail post to her last known residential address of the hearing date and that if she was not present in court or legally represented before the court at the hearing the matter would be heard in her absence.
I am thus satisfied the mother has been given adequate notice of the father's application and of the hearing date. She has failed to file any documents in opposition to the orders the father seeks or to appear or be represented before the Court to oppose the orders the father seeks.
Not surprisingly, the father did not understand the legal principles applicable to his case, and the initial hearing simply involved the father confirming the documents he relied on in his case. I therefore relisted the matter after I had formed tentative views on his application based on his evidence, and took him through the various tentative findings and the consequences the flowed from them to give him an opportunity to make submissions on them. In the course of doing so, he indicated he wished to have the opportunity to file further evidence about his financial circumstances from the making of the orders to the present, his evidence only dealing with his current financial circumstances. I acceded to this request, but as this could not affect his case for a prospective variation of the maintenance orders, I proceed to determine that aspect of his application. As will appear, I am satisfied on the present evidence that the 2002 order should be discharged from the date to which it stands paid.
Background
The father and the mother married in Vlaardingen, The Netherlands, in October 2000. [X] was born in 1999 and is now aged 9, and [Y] was born in 2001 and will turn 8 in under a month.
On 30 October 2002, the Rotterdam Law Court ordered on the mother's “petition for establishing temporary provisions”, inter alia, that the father pay child maintenance at the rate of €200 per month per child, indexed annually under the laws of The Netherlands except for the year 2003.
On 7 April 2003, the same court granted a divorce on the mother's “petition for a divorce with ancillary provisions”, and ordered, inter alia, that the father pay the mother child maintenance at the rate of €200 per month per child, indexed annually under the laws of The Netherlands.
The material from the LBIO on which the CSA registered the overseas orders indicates that under Dutch law, the statutory indexation rates in The Netherlands applicable to the second overseas order on 1 January each year after the making of the order, and the adjusted rates of maintenance payable for that year, are-
·2004 – 2.5%, €205.00;
·2005 – 1.1%, €207.26;
·2006 – 0.9%, €209.13;
·2007 – 1.8%, €212.89.
The registration of the overseas order took effect in Australia from
6 December 2007. As mentioned, the liability registered by the CSA is arrears of $41,363.97, with ongoing periodic child support of $348.82 per month per child payable by the father to the CSA.
The evidence
The father's evidence is unchallenged, and I accept it.
The mother filed for divorce in September 2002. The father became severely depressed, and lost his job as a result. There is no evidence what that job was or what he earned. Nor is there direct evidence as to when he lost his job. I infer from his evidence that from late 2002 until he came to Australia in September 2004 he lived on social security payments alone that he lost his job in late 2002, and I so find.
The father had not seen the Dutch orders until he recently received them through the CSA. After he came to Australia the mother told him of the orders. He was aware of the proceedings that resulted in the orders but took not part in them.
The father migrated to Australia in September 2004 to marry his current wife. They married in December 2004. They now have a son, [Z], born in 2006, aged 2.
After arriving in Australia, the father secured part time work in various jobs.
In 2005, the father and his wife bought vacant land at [K] for $120,000, on which they presently owe $75,000 and pay $560 per month in interest.
In 2006 the father secured work at [omitted]. He was injured at work and was in receipt of worker’s compensation payments for some months. He then obtained a security industry licence in December 2006 after completing the necessary course, and has worked regularly in that industry since.
In June 2007, [X] came to Australia to live with the father, at the mother's request. The father paid approximately $1,576 for his airfare to Australia, and spent $978 buying furniture for the boy. The boy did not settle into life in Australia, and in September 2007 returned to Holland, the father paying his airfare of about $1,400.
The father and his wife live rent free in a home owned by his wife's parents, who are providing the accommodation to help the father and his wife pay off their land.
The father gave no evidence of his income before commencing work in the security industry. Since commencing work in that industry, the father said he normally hoped to average about 38 hours work per week at $15.82 per hour, which equates with $601 per week. However, in his financial statement the father disclosed weekly income from his work as a security guard of $807. Either he is working more hours than disclosed, or his normal hourly rate is not the sole basis for calculating his pay.
There is also a discrepancy in the father's evidence about his wife's income. In his financial statement the father said his wife earns $427 per week, while in his affidavit he said she earns on average $280 per week.
I accept the higher figures in the father's financial statement for both his and his wife's income.
The father's fixed weekly commitments for rates, superannuation, loan repayments on the home and car, rates, car insurance and registration and child support for the subject children total $437 per week. His weekly household expenses for himself, his wife and their child are $465, which he apportions as to $235 to himself, $155 to his wife, and $75 to their child.
In his financial statement the father suggested that the land owned by he and his wife is worth only $49,000, with a mortgage debt on it of $69,800. There is no evidence to explain why a property purchased for $120,000 3 years ago would now be worth only $49,000. I also note that the mortgage balance as stated in the father's financial statement, $69,800, is significantly less than the balance stated in his affidavit, $75,000. In the circumstances, I find that the land is worth $120,000 and the mortgage balance is $69,800, giving an equity of $50,200, and that the father's interest is as to one half of this property. His equity is therefore $25,100.
The father and his wife own a motor vehicle. In his financial statement he suggested his half interest in that vehicle is worth $1500. He said he and his wife owe $17,000 for a car loan, which they repay at $360 per month. It is unexplained why the father and his wife owe $17,000 on a car loan and own a car worth only $3,000. I note in his financial statement the father said he pays $80 per week on the car loan. It thus appears that the father is meeting the whole of the car loan repayments despite it being a joint loan.
Otherwise, the father owns household contents worth $25,000, and he has 2 superannuation interests worth $5,000 and $750. He has no other liabilities.
The applicable law
The court has jurisdiction to vary a “registered maintenance liability” (Family Law Regulations 1984 (Cth), Reg.36).
A “registered maintenance liability” is a registrable maintenance liability under certain now repealed provisions of the Child Support (Registration and Collection) (Overseas-related Maintenance Obligations) Regulations 2000 (Cth) that is registered under those regulations (Family Law Regulations, Reg 24A).
On repeal of the Child Support (Registration and Collection) (Overseas-related Maintenance Obligations) Regulations, amendments to the Child Support (Registration and Collection) Act 1989 (Cth) (the Registration and Collection Act) in the same or similar terms to the repealed Regulations took effect. The references to the repealed Regulations in the Family Law Regulations are now to be read as references to the equivalent provisions of the Registration and Collection Act (Legislative Instruments Act 2003 (Cth), s.13, and Acts Interpretation Act 1901 (Cth), s.10(b)).
A “registrable maintenance liability” includes a liability of a parent of a child to pay a periodic amount for the maintenance of the child arising under an “overseas maintenance liability”, and arrears under such a liability (Registration and Collection Act, ss.4(1), 18A(1) and 18A(4)).
An “overseas maintenance liability” includes a maintenance order made by a judicial authority of a “reciprocating jurisdiction” (Registration and Collection Act, s.4(1)). The Netherlands is a reciprocating jurisdiction (Registration and Collection Act, s.4(1), Child Support (Registration and Collection) Regulations 1988 (Cth) Reg.3A and Sched.2).
The orders in this case are maintenance orders made by the Rotterdam Law Court, a judicial authority of The Netherlands, a reciprocating jurisdiction. Liabilities under those orders have been registered in Australia under the Registration and Collection Act, both as to periodic amounts payable by the father for the maintenance of the children, and as to arrears of such payments. Thus, each of the Dutch orders is a “registered maintenance liability” for the purposes of the Family Law Regulations, Reg.36(1), and the Court has jurisdiction to vary those orders.
The law to be applied in determining whether to vary a “registered maintenance liability” is the law under the Family Law Act 1975 (Cth) (Family Law Regulations, Reg.36(4)). The father's application is to be determined in accordance with s.66S, Family Law Act, which provides that the Court may not vary an 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; or
(c) if the order was made by consent—that the amount ordered to be paid is not proper or adequate; 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 (s.66S(3)).
In determining whether to make an order, and if so what order, the Court is required by s.66H to-
(a) consider the financial support necessary for the maintenance of the child, in accordance with s.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 in accordance with s.66K.
The objects of the child maintenance provisions of the Family Law Act and the principles underlying them, which must be taken into account when considering the child’s necessary financial support and in determining the level of the parents’ contributions to that support, are as follows, so far as they are presently relevant-
“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.
The basis for variation of the order (s.66S(3))
Although not expressly articulated by the father, it would seem that the bases on which he seeks variation of the overseas orders are that since the orders were made his circumstances have changed so as to justify the variation (s.66S(3)(a)(ii)), and, at least for the period June to September 2007 when [X] lived with the father, the children’s circumstances had changed so as to justify variation in their maintenance (s.66S(3)(a)(i)).
Clearly the reversal of [X]’s care arrangements, albeit for only three months, warrants some reconsideration of the previous orders.
However, of greater significance, both financially and temporally, are the changes in the father's circumstances.
The temporary or interim order was made on 30 October 2002. The father lost his job in late 2002. I find that it is more likely than not that this occurred after the first order was made. The father remained unemployed until September 2004.
The second child maintenance order was made on 7 April 2003. The father was then unemployed. He has subsequently migrated to Australia, found employment, remarried and had a further child to his second wife.
I am satisfied these are significant changes in the father's financial circumstances that warrant a re-examination of his child maintenance obligations.
The financial support necessary for the maintenance of the children
I have set out previously the objects and principles underpinning the statutory provisions as to the determination of child maintenance payable by parents.
[X] is aged 9, and [Y] is aged 7. There is no evidence as to the manner in which the children are being, and in which the parents expected the children to be, educated and trained. There is no evidence either of the children has any special needs.
At their young ages, I am satisfied neither child has an earning capacity. There is no evidence to suggest there are any assets that may be capable of, but which do not, produce income for the benefit of the children. Therefore, their parents must meet the whole cost of meeting their material needs.
There is no evidence as to the actual costs of meeting the children’s material needs. The court may take into account published research on the costs of maintaining children. While that research relates to the cost of maintaining children in Australia whereas the subject children are living in the Netherlands, it is nonetheless the only guidance available to the court in this case.
The Lovering research, based on a “basket of goods” approach, suggests the weekly cost of maintaining an 8 year old child in a middle income family is $91.64. For the two children in this case, that represents $183.28 per week. The Lee research, based on an “expenditure survey” methodology, suggests the cost of maintaining a child aged between 5 and 7 is $271.55 per week, and a child aged between 8 and 10 is $324.08 per week, a total for the two children in this case of $595.63 per week.
The Lee research “generally provides a more realistic approach to the actual cost of children” than the Lovering research (Streets & Streets, (1994) 18 Fam LR 275 at 279; (1994) FLC 92-509 at 81,277).
I therefore adopt the figures derived from the Lee research, and find that the only guidance available to the court as to the possible level of financial support necessary for the maintenance of these children is about $1295 per month each. The ongoing monthly commitment of the father under the Dutch orders is $348.82 per child, just over one quarter of this figure.
The respective financial contributions towards the financial support of the children that should be made by the parties to the proceedings
I have set out previously the objects and principles underpinning the statutory provisions as to the determination of child maintenance payable by parents.
I have set out the father's income, property and financial resources. Of particular significance is his income of $805 per week. I am satisfied his earning capacity is accurately reflected in his current income. He has a financial resource in the form of rent free accommodation in a home owned by his parents-in-law.
There is no evidence as to the mother's income, earning capacity, property and financial resources.
In determining the commitments necessary for the father to support himself, some adjustments must be made to the figures stated in his financial statement. The land at [K] is jointly owned by the father with his wife, and the debt secured on that property is a joint debt of the father with his wife. The father appears to be meeting the whole of the mortgage repayments and rates on this property, totalling $150 per week. His legal obligation is as to half of these items of expenditure. The husband's expenditure must be reduced by $75 to arrive at his necessary obligations in relation to them.
Similarly the motor vehicle is jointly owned and the car loan is a joint loan, but the father is paying the whole of the insurance and registration costs for the vehicle, totalling $16 per week, and the whole of the loan repayments of $80 per week. In submissions, the father asserted he uses the vehicle most of the time and hence should bear the bulk of the costs of it. However, while his usage of the vehicle may support an unequal apportionment of the costs for petrol and maintenance of the vehicle, in my view it does not justify regarding the capital or standing charged for the vehicle as other than and equal obligation of the two co-owners. I am satisfied that therefore his commitments must be reduced by a further $48 per week to arrive at his necessary obligations.
The $7 per week the father is paying for child support for the subject children must also be deducted to arrive at his own self-support commitments.
Thus, the husband's fixed commitments of $437 per week as stated in his financial statement must be reduced by a total of $130 per week, to $307 per week, to determine this component of his self-support commitments. He has further weekly expenditure of $235 per week as per his financial statement, which I accept. I therefore find his self-support commitments total $542 per week.
As the father's wife is in employment, and in the absence of evidence that she cannot maintain herself, I am not satisfied the father has any duty to maintain her.
The father has a duty to contribute to the maintenance of his youngest child, [Z]. His wife also has a duty to contribute to that child’s maintenance. I note the father’s evidence is that he contributes $75 per week to the support of [Z], in addition to his fixed commitments. The Lee figure for the cost of a two year old child is $248.68. This figure includes a component for accommodation, which is provided to the father, his wife and [Z] free of charge by [Z]’s maternal grandparents. I accept the only evidence I have as to the father's contribution to the maintenance of [Z], and find that the father has a commitment of $75 per week for [Z]’s support.
I therefore find that the father's commitments necessary to support himself and [Z] are in the order of $617 per week, leaving the father with a surplus of income over necessary commitments of $190 per week, or about $825 per month.
There is no evidence as to the mother’s necessary self-support commitments. Nor is there any evidence as to the costs of providing care for the subject children incurred by the mother.
Discussion and decision
Where there is no evidence on which the Court can make any findings as to the mother's financial circumstances or her necessary self-support commitments, it is difficult to properly balance between the parents their duty to maintain their children consistent with the stated objects of ensuring 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 that parents share equitably in the support of their children.
The task for the court is made even more difficult where the father, as here, seeks retrospective variation of maintenance and fails to put other than very general evidence before the court as to his financial circumstances during the period of retrospectivity. The father's evidence of his actual income and commitments is as at the present time only. As previously mentioned, the father sought and was granted the opportunity to put further evidence before the court on these matters, and I will not yet fully determine the father's application for retrospective variation of the orders. However, the evidence as it stands does satisfy me some retrospective variation is warranted.
In assessing the level of financial support the father should provide for his two eldest children, the court must acknowledge the father's duty to support his youngest child, while giving effect to the principle that his duty to support his eldest two children is not of lower priority than the duty to maintain his youngest child (s.66C(2)(a)).
I am satisfied that for the period [X] lived with the father in Australia, June to September 2007, he should pay no maintenance to the mother, each party then having the care of one of their children, and the father incurring significant expense for the boy’s airfares to travel to Australia and to return to the Netherlands.
Otherwise, from shortly after the making of the first order in October 2002 until soon after the father's arrival in Australia in September 2004, when the father was unemployed, I am satisfied that the father's capacity to contribute to the maintenance of his two eldest children was minimal at best, he being on social security benefits. I am satisfied that therefore the 2002 order should be discharged from the date to which it stands paid and that the amounts payable under the 2003 order from the date it was made until September 2002 should be reduced to nil. In the absence of any evidence as to how the arrears registered for collection in Australia were calculated, it is impossible to determine the precise effect of this on the quantum of the arrears.
From shortly after the father's arrival in Australia in September 2004 until the present, excluding the period June to September 2007, the father's capacity to contribute to the maintenance of his two eldest children cannot be determined with any certainty on the current evidence. This is the period the evidence I have given the father a further opportunity to put before the court should cover.
So far as the ongoing payments are concerned, the father seeks variation to $100 per month per child, from the current level of $348.82 per month per child. The father has the capacity to pay a maximum of about $826 per month for the maintenance of his two eldest children.
The only guidance available to the court as to the costs of maintaining the children suggests a figure in the order of $1295 per month per child. However, there is no evidence as to the actual costs of maintaining the children, and there is no evidence as to the wife's financial circumstances, denying the court any opportunity to assess the appropriate shares of the maintenance costs of the children for each of the parents.
The father put to the court that requiring him to pay the current level of child maintenance punishes him for what he suggested was the mother's bad behaviour in the breakdown of the parties’ marriage. However, as I then explained to the father, marital conduct is not relevant in determining the level of support parents must contribute to the support of their children. Nor is child maintenance use as a means of punishment of either parent.
The father also objected to the level of support on the basis that he could not see or talk to the children, suggesting the mother was even barring his attempts to phone the children. But whether or not the father is seeing or speaking to the children, the children have a need for material support that is the primary duty of both parents to meet. They must be fed, clothed, housed, educated and their health needs met whether or not they see or speak to the father, and under Australian law it is the primary duty of both parents to contribute to the cost of meeting these needs. The father cannot be excused from his duty to maintain the children because of the mother's alleged behaviour without punishing the children for the mother's behaviour.
Considering the published research on the costs of children, the father's capacity to pay, the fact that the father is paying $326 per month for the support of [Z] while having a duty to maintain his eldest two children that is not of a lower priority than his duty to maintain [Z], and the fact that part of the cost of supporting [Z] is in effect being met on behalf of the father and his wife by [Z]’s maternal grandparents, I am satisfied the father should pay the amount currently payable under the Dutch orders. I am accordingly not satisfied that those orders should be varied prospectively.
I certify that the preceding seventy (70) paragraphs are a true copy of the reasons for judgment of Halligan FM
Associate: Deanne Bush
Date: 19 December 2008
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