T and C - [2003] FMCAfam 287

FEDERAL MAGISTRATES COURT OF AUSTRALIA

T & C

[2003] FMCAfam 287

FAMILY LAW – CHILD MAINTENANCE – Variation – child receiving private school education – assessment of necessary expenses – increase ordered.

Family Law Act 1975, ss.66B, 66C, 66J, 66K

Streets and Streets (1994) FLC 92-509

Applicant:

Respondent:

File No:

PAM1115 of 2003

Delivered on:

25 July 2003

Delivered at:

Parramatta

Hearing date:

17 July 2003

Judgment of:

Ryan FM

REPRESENTATION

Counsel for the Applicant:

Mr G. Kenny

Solicitors for the Applicant:

Lamrocks

Respondent:

In person

ORDERS

That the order that the husband pay child maintenance for L born 26 May 1988 made 29 August 2001 at Local Court Blacktown be varied by increasing the amount payable from $80 per week to $150 per week.
That the first payment is made seven (7) days from today’s date and fortnightly thereafter.
That all outstanding applications are dismissed.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
PARRAMATTA

PAM1115 of 2003

Applicant

And

Respondent

REASONS FOR JUDGMENT

The application

This is an application by T (“the applicant”) for an increase in the amount of child maintenance she receives from her former husband, C (“the respondent”). Presently, he pays $80 per week for L who was born on 26 April 1988. L is the parties’ youngest child and their only child now under 18 years. L lives with the applicant.
After the parties’ elder daughter R celebrated her 18^th birthday the parties agreed that the respondent would increase the child maintenance he paid for L. On 22 August 2001 orders were made at the Local Court Blacktown, which varied prior orders, made 23 March 1995. The effect of the 2001 orders was that the child maintenance for L increased from $65 to $80 each week. The applicant has registered the child maintenance order for collection with the Child Support Agency and the respondent’s child maintenance liability is deducted directly from his salary.

Background

The applicant was born in the Philippines on 23 July 1949. The respondent was born on 28 January 1960. He was also born in the Philippines. The parties married on 23 May 1987 and separated in September 1988. They were divorced during 1990. They have two children R who was born on 19 July 1982 and L who was born on 26 April 1988. The children have always lived with the applicant.
R works part time and studies two days each week at X. L is in year 10 at Z. Both parties are Catholic and agree that L should complete her education at a private Catholic school. The respondent has not seen L since January 2003. This is his decision. L has contacted him by telephone from time to time. The respondent does not know when he will make arrangements to see her. The respondent has remarried. Other than the children, the applicant lives alone.

Relevant law

The law to be applied in relation to child maintenance is set out in Part 7 Division 7 of the Family Law Act 1975. Section 66H sets out the approach to be taken in proceedings for child maintenance. The objects[1] of the division are to ensure that children receive a proper level of financial support from their parents. Particular objects include ensuring that children have their proper needs met from reasonable and adequate shares in the income, earning capacity, property and financial resources of both parents and that the parents share equitably in the support of their children.
[1] Section 66B
Parents have a primary duty to maintain their children. The duty of a parent to maintain a child is not of lower priority than the duty of the parent to maintain any other child or another person, and has priority over all commitments of the parent, other than commitments necessary to enable the parent to support himself or herself, and any other child or another person that the parent has a duty to maintain. It is not affected by the duty of any other person to maintain a child, or any entitlement of another person to an income tested pension or allowance or benefit.[2]
[2] Section 66C
The court may make, “such maintenance order as it thinks proper”[3]. In child maintenance proceedings the court must consider the financial support necessary for the maintenance of the child, and then determine the financial contributions towards that financial support to be made by each party. In relation to the financial support necessary for the maintenance of the child, s.66J sets out detailed matters that the court must consider. These include the age of the child, the manner in which the child has been and which the parents expect the child to be educated and any special needs that the child may have. The court may have regard to any relevant findings of published research in relation to the costs of maintaining children.[4] In Australia, that published research is commonly referred to the Lovering “Costs of children in Australia” tables and also the Lee “Expenditure survey” tables. The Full Court has stated that the Lee tables represent a more accurate guide to the costs of children. See Streets and Streets (1994) FLC 92-509.
[3] Section 66G
[4] Section 66J(2)(b)
Although somewhat exaggerated, in the present case there is no great issue about L’s needs. The difficult question relates to the extent to which the child’s needs should be met by each parent. In determining what financial contribution should be made by the parents, the court is to take into account first, the matters referred to in s.66B(objects) and s.66C(principles). Next, the court must take into account the income, earning capacity, property and financial resources of the parties. In determining this matter the court must take into account the capacity of the parties to earn and derive income, and any assets which are capable of producing income. The court is to take into account the commitments of each party necessary to enable that party to support himself or herself and any other child or person that the parent has a duty to maintain. In determining what financial contribution each party, should make, the court must disregard any entitlement of the person with whom the child lives to an income tested pension, allowance or benefit. The court must also disregard the income, earning capacity, financial resources of any person who does not have a duty to maintain a child, unless in the special circumstances of the case the court considers it appropriate to have regard to them.[5] There have been no submissions that any such special circumstances arise in the present case.
[5] Section 66K

Applying the law to the facts

The applicant’s evidence is that L needs $434 per week for her average weekly expenses[6]. Those needs do not include housing costs. The applicant pays $325 per week to AMP banking as mortgage payments. The evidence does not enable me to distinguish between that portion of the repayment that relates to capital payment, capital reduction and that which supports the borrowing. Taking a broad-brush approach, including a portion of the amount claimed for rates, I allow $100 per week as L’s reasonable housing costs. The applicant also claims $138 for L’s school expenses. This is in addition to the $100 she claimed as education expenses in her answer to question 55. School fees are $1,200 per term and in paragraphs 35-59 inclusive of her affidavit the applicant outlines the expenses she incurs for school-related activities, school uniforms and associated costs. I do not accept that the applicant pays approximately $5,500 per annum additional school costs beyond school fees. It seems to me that the applicant has double counted school expenses and may also have done likewise in relation to medical insurance. Nor do I accept that as the youngest member of the household, L is the most expensive to feed. The amount claimed as groceries generally seems excessive and I allow $60 as reasonable food costs.
[6] Paragraph 55 applicant’s financial statement
It is implausible to me that with a total weekly income of $771 the applicant’s expenses are approximately $2,000 per week. In making this finding I am conscious that the applicant has used her credit cards to supplement a shortfall of expenses over income. However, the differential is too great and was not credibly explained. Because the applicant’s evidence is somewhat exaggerated that I should have regard to the lee tables in order to decided her proper and necessary expenses. When I examine the Lee tables[7] the total weekly expenditure for an

11 – 13 year old child of a middle income family is $294.97. This is as at the November 2002 quarter. These costs do not include school fees at private schools, nor housing costs greater than $36.90. When the actual costs of L’s housing and school costs are added to the notional costs identified on the Lee table the result is an average weekly expenditure of $458. I am satisfied that this amount reflects the child’s proper costs. To the extent that the applicant claimed a larger amount it seemed to me that she was trying to supplement L’s expenses by including some of her own and R’s.
[7] Exhibit B
L is a full time student and does not have any income or assets.
The applicant works performing data entry or clerical work temping with an employment agency. She was made redundant in April 2002 from P. Since then she has been unable to obtain permanent full time employment. The applicant was injured on the way to work in December 2002 and has required minor knee surgery. She worked for about five or six weeks between April 2003 and

24 June 2003, earning $603 per week. Currently she receives workers compensation benefits of $603 gross ($482 nett after tax) each week, child maintenance at $80 per week and a family assistance benefit of $88 per week. I must disregard the family assistance benefit[8]. Subject to her ability to do so, the applicant is keen to obtain full time work, but faces an uncertain employment future if her experience of the last twelve months is used as a measure of her future prospects. I am satisfied that there is a proper basis for taking a cautious approach to her prospect for future full time permanent employment. When she does work her average weekly earning is about $600. The applicant sets out her assets and liabilities in her financial statement. She owns her home at XX, which she estimates has a current value of $165,000. It is subject to a mortgage of $97,000. She owns a 1998 Mitsubishi Solara worth $10,000. Although registered in her name the car is used by R and is subject to a personal private loan of $9,300. Otherwise the applicant has household furniture, jewellery and savings of limited value. She has credit card debts with NAB, Citibank and ANZ in the total amount of $9,293.
[8] Section 66K(4)(a)
The applicant cannot meet her weekly expenses from her income. She has used credit cards to meet expenses that she could not otherwise pay from her weekly income. Although I am satisfied that some of her expenses are exaggerated, and that her overall weekly expenses are less than as presented in her financial statement the relevant issue is that I am satisfied her expenses exceed her income.
The applicant has no legal responsibility to support her parents, nor her adult daughter R. She attributes approximately $400 per week to their expenses which expenses I do not take into account. Having used credit cards to pay regular expenses it is double counting to claim the credit card payments as well as the expenses that the credit card was used for. Nor do I accept that $20 per week for a gardener, with teenage and adult children is a reasonable expense. Including L’s expenses in relation to which I have already made findings, I am satisfied that the applicant’s fixed and average expenses approximate $1,200 weekly. She does not have any assets that she can realise that would reasonably meet the shortfall between her income and expenses.
I now turn to the respondent’s situation. The respondent went to considerable effort to present a detailed account of his income, assets and liabilities. His oral testimony corroborated his written testimony and was supported to a significant degree by his financial records. The respondent works full time with P as a sales officer. He is based at S and works as a relief officer. This means he can be allocated to work at places other than S. He is entitled to free rail travel. With disarming frankness he described his reluctance to use rail services, being concerned about some fellow travellers and timeliness. In the financial year ended 30 June 2001 he earned $37,881 salary and $19,640 overtime, shift penalties and allowances. For the year ended 30 June 2002 he earned $37,881 salary and $13,917 overtime, shift penalties and allowances. For the financial year ending 30 June 2003 he earned $40,973 salary and $18,416 overtime, shift penalties and allowances.[9] Together with his wife he jointly owns his home at N. He estimates that the home is valued $170,000, subject to a mortgage of $124,119. They have a second mortgage to St George Bank in relation to which $49,974.69 is outstanding. Together with his wife he jointly owns a 1997 Chrysler Voyager and 1997 Mazda Astina. They treat the Mazda Astina as his wife’s car and the seven seater Chrysler as the family car. Although he identified the cars as having valued at $51,000, that is their combined insured value. I accept that the cars are worth a lesser amount. Their home is fully furnished and the respondent gave the insured rather than real value of the contents. I am satisfied that the home contents are worth significantly less than the $51,500 he attributed to them. He has $5,806 in a savings account held jointly with his wife. She contributed to that account and clearly some of the money in it is hers. The husband carries significant credit card liabilities, $3,789 (American Express), Bankcard (Westpac) $6,065, MasterCard (Commonwealth Bank) $3,838; and Citibank RediCredit $8,255. Additionally, he borrowed $10,000 from a friend to help his late mother in law. I cannot make precise finding about the value of the respondent’s assets. Presently, the respondent and his wife’s liabilities exceed their assets.
[9] Exhibit A
Until R celebrated her 18^th birthday, the respondent was paying $130 per week total child maintenance. Because he was no longer liable to pay maintenance for R he purchased his dream car, the Chrysler Voyager. It cost $37,000 of which $10,000 came by trading in his former motor vehicle. The remaining $27,000 was drawn from savings and additional borrowings. Because he did not anticipate this application for child maintenance he was satisfied he could support the borrowing.
The respondent travels annually to the Philippines, where his wife’s family still live. Whilst work intrudes into his capacity for a social life, he supports expenses which do not seem, in the circumstances of this case, entirely necessary. Because he eschews rail travel he pays $100 per week for petrol. Although his car is large, if he used free rail travel driving himself to and from the train station for work, he could easily reduce those expenses by at least half. Sixty dollars per week is spent on cigarettes and I do not accept that he spends $200 per week on food expenses. If he does so that is excessive. I do not accept that $50 each week for landline and the ubiquitous mobile phone is necessary, and reduce it to $15, similarly I allow clothing at $30. In his financial statement the respondent said he pays $248 per week income tax. However his 2003 group certificate[10] indicates he paid $16,694 last year which is $321 per week. I allow the larger figure.
[10] Exhibit A
Exhibit A demonstrated that between June 1999 and June 2003 the respondent received regular and substantial overtime and penalty allowances. He has been employed by P since 1988 and he appears to be a valued employee and securely employed. I am satisfied that he has the capacity to continue to earn an income (including overtime and other allowances) at least at the rate he is currently earning indefinitely. The respondent indicated that he does not expect his wife to contribute to the costs of their mortgage or other household expenses. She is a joint registered proprietor and is legally liable, at least to the extent he is, for the mortgage and their personal loans. Both the respondent and his wife support relatives who live overseas. While the respondent feels a moral obligation, he does not have any legal obligation to do so. Thus, I do not take into account the $50 per week identified in his financial statement as a reasonable expense.
Doing the best that I can I am satisfied that the respondent has an average gross income of $1,142.10 per week. Without shift allowances and overtime his weekly income is $787.95. Because I have found that the respondent’s wife has a legal liability to pay half of their loans, I include in the respondent’s weekly expenses half of the utilities, rates etc. Thus he has reasonable weekly expenses of about $1,022 (including $80 child maintenance). I accept that he must make some credit card payments for debts incurred prior to this application and allow $50 per week for this liability. It is immediately apparent that unless he continues to receive regular shift penalties and other forms of income supplement, the respondent cannot meet his weekly expenses. However, because I am satisfied that he is likely to continue to have available overtime at least at the level that he currently works, he has an excess of income over expenses of about $70 per week.
In considering the respondent’s capacity to support L I must take into account his obligation to his present wife. J is in full time employment and earns $590 per week. Her income supports the Mazda Astina and she pays the rates, taxes and utilities on their home. She is largely self-sufficient and her income is such that the respondent does not need to contribute to her support. I am satisfied that I can properly increase the amount of child maintenance that the respondent pays without undermining his capacity to meet his necessary expenses and to keep his home. There is no suggestion that the respondent should pay maintenance to the extent that it would prevent him making necessary repayments on the mortgage. At $200 per week that may, nonetheless, be the outcome. I do not think that an order having this effect would be proper.
It is not the court’s responsibility to make decisions about how the respondent should arrange his financial affairs. As a parent, he has a duty to maintain L, which duty has priority over all other calls upon his income apart from those needed to provide for his own necessary living expenses and those who he has a duty to support. For all the reasons outlined above, I am satisfied that it is appropriate that the order for child maintenance is varied by increasing the weekly payment from $80 to $150. I am not satisfied that the maintenance order should automatically increase by movements in the CPI index. L will be 18 in about two and half years. Within that time frame I am not satisfied that the child maintenance payable should automatically increase. If they were intended to continue for a longer period I may have come to a different view. I also take into account that I cannot be confident that the respondent’s income will increase in accordance with movements in the CPI. This outcome will result in the applicant carrying a greater share of the child’s expenses than the respondent does. I have considerable sympathy for the position that the applicant is in. However, I am satisfied that the respondent cannot afford more than $150 per week and that this is the proper level of financial support that he should pay towards his daughters support. This closely approximates to the amount that would be payable by the respondent were the parties child maintenance arrangements governed by the child support legislation.

The order will increase immediately. In some cases the court will order that the increase take effect from the date of the application. However the matter has come on for hearing quickly and backdating the order will effectively exhaust the respondent’s share of his savings. I am not satisfied that he should be put into further debt and that the increased payment should be derived from his weekly income.
For these reasons I make the orders identified at the start of this judgment.

I certify that the preceding twenty-three (23) paragraphs are a true copy of the reasons for judgment of Ryan FM

Associate:

Date: 24 July 2003