T and T
[2001] FMCAfam 58
•29 May 2001
FEDERAL MAGISTRATES COURT OF AUSTRALIA
T & T [2001] FMCA fam 58
CHILD SUPPORT – Maintenance Order – Application to vary order retrospectively – Arrears subject to Enforcement Orders – Application dismissed – Family Law Act 1975 s 66B, 66C, 66J, 66K(1)(c), 66S (3).
Mee v Ferguson (1986) 10 Fam LR 971; 1986 FLC 91-716
Ganter and Grimwshaw, (1998) 23 Fam LR 39; (1998) FLC 92-810)
Gyselman v Gyselman (1991) 15 Fam LR 219; (1992) FLC 92-279)
Tuck v Tuck (1979) 7 Fam LR 492 and Beck v Sliwka (1992) 15 Fam LR 520
DJM v JMM (1988) FLC 29,816
Rowe v Rowe (1994) Unreported Decision Fogarty J delivered 12 December 1994.
| Applicant: | K T |
| Respondent: | C T |
| File No: | ZM4504 of 2001 |
| Delivered on: | 29th May 2001 |
| Delivered at: | Melbourne |
| Hearing Date: | 29th May 2001 |
| Judgment of: | McInnis FM |
REPRESENTATION
| The Applicant: | In Person |
| The Respondent | In Person |
ORDERS
Application dismissed.
FEDERAL MAGISTRATES COURT OF AUSTRALIA AT MELBOURNE
ZM4504 of 2001
K T
Applicant
And
C T
Respondent
REASONS FOR JUDGMENT
This is an application by K T (the Applicant) for the following orders:
(1)That paragraph 1 of the orders made at the Magistrate's Court at Frankston on 8 September 1995 be varied to provide that the applicant pay the respondent child maintenance for the children, S T born 28 August 1981 and T T born 29 August 1987, the sum of $5 per week in total from 1 April 1998 to the present date.
(2)That from this date child maintenance for the said children be paid according to the child support formula as assessed by the Child Support Agency from time to time pursuant to the Child Support Assessment Act 1989 as amended and the Child Support Registration and Collection Act 1988 as amended.
(3)That paragraph 11 of the orders made at the Family Court at Melbourne on 28 March 2001 be discharged.
The application is opposed by C T (the respondent). The applicant and the respondent were married on 8 November 1980. They separated on 4 December 1988. A decree nisi became absolute on
3 May 1990 according to the court file. There are two children of the marriage, namely S T born 28 August 1981, (child A), and T T born
29 August 1987, (child B). The children reside with the respondent and have done so since separation.
The applicant and the respondent appeared in person before this court. In support of the application the applicant relied upon an affidavit sworn by him on 19 April 2001, the applicant's affidavit. At the hearing I heard oral submissions from both the parties and noted further facts which were not in dispute. I received as exhibits a copy of a notice of assessment for the year ending 30 June 2000 of Mrs J T, the applicant's wife, and a photocopy of a Newstart allowance 1998 group certificate for the applicant.
The affidavit of the applicant is brief and indeed, contains just seven paragraphs. Essentially after reciting the details to which I have just referred, the applicant claims that when the orders were made in 1995 he was then employed:
“Full-time as a sales representative and my salary was approximately $35,000 per year. In February 1998 I became unemployed and was unable to pay $45 per week per child. Since 1 April 1998 and the present date I have paid $948.40 towards child maintenance”.
The applicant in the same affidavit refers to the fact that he had set up a business with his current wife called “D B”. The business relates to the purchase of docket books and related stationery which is then sold, together with cash register rolls, to restaurants. Annexed to his affidavit is the applicant's tax return for the financial year ending 30 June 1999 in which he claims demonstrates an income of approximately $10,000. In fact the document shows an income it appears of $9380. He also annexed to the affidavit a tax assessment for the financial year ending 30 June 2000 which demonstrates a taxable income of less than $24,000. He asserts that his tax assessment for the current financial year will be much the same as last year.
In his affidavit the applicant refers to the fact that he has a nine-year-old child of his current relationship and has further indicated that in challenging the orders made by the Family Court at Melbourne on
28 March 2001 that he did not agree to pay the legal costs ordered of $783.91 and in submissions made before me, as indicated, that he did not consent to any of the orders made on that occasion. It is noted, however, that he seeks to challenge only paragraph 11 of those orders before this court.
The applicant in his affidavit finally suggests that if the requested orders are made then this will discharge the arrears of child maintenance or wipe them out substantially. The applicant indicated in the affidavit material and before this court that essentially his financial circumstances had changed significantly since he ceased employment and commenced his current business in partnership with his wife. He, as I indicated, exhibited to his affidavit the taxation returns. He also has attached to his application a detailed statement of his financial circumstances. The tax returns show the income levels which the applicant has asserted for himself. They also show, however, that in relation to his current spouse for the financial year ending on 30 June 1999 the income was $38,545.
In the statement of financial circumstances attached to the application it is noted that in terms of the property and financial resources the applicant is the joint owner of a property at K Avenue in S (the property) which has attached to it a value of $150,000. It is further noted that that home appears to be the subject of a loan and the amount owed on the loan is $40,000. That is a joint debt with the applicant's wife. Other items are referred to - to which I do not need to refer - in that document, but significantly there are assets, albeit very limited, jointly owned either with the applicant's wife or owned by, the applicant asserts, “D B”. Before the court the applicant indicated that D B is a business name and he is the proprietor of that, although I note it appears that he has an equal share of the assets of that business.
At the hearing the applicant confirmed that he had received Newstart allowance for the period 18 March 1998 to 13 May 1998. It also became evident at the hearing that there was certain information that was not in dispute, that is uncontested, namely that the applicant conducts the business that I have referred to of D B in partnership with his wife. I was told that a company has been formed, named D B Pty Ltd, and note, however, that there were no records produced in relation to that company.
The respondent asserted that her current income is $300 per week which she earns in part-time employment and is now working three days a week. That likewise was not in dispute before me. The respondent asserted that she has the care of the two children to which I have referred and asserted that she does not live with any partner. The respondent did not produce any other evidence by way of affidavit material or otherwise. She indicated that her preference was to finalise this matter and strongly submitted that the arrears of maintenance outstanding should be paid.
At the hearing it was difficult for the court to obtain a clear indication of the basis upon which the arrears were calculated. It was agreed that the amount was owing from 1 April 1998. It was also not in dispute that another amount of $3577 had been outstanding prior to
1 April 1998, though that matter is irrelevant for the purpose of the present application.
The orders made by the Frankston Magistrate's Court on
8 September 1995 were as follows:
“1 Order that payments for maintenance in respect for the children, S T born 28/8/81 and T T born 29/8/87 at the rate of $45 per week for last child recommence on and from the husband's first pay period after 10 July 1995.
2 Order that payment of arrears totalling $3577.51 be further suspended until further order.”
It will be evident from the orders that I have just read out that there appears to be a typographical error in order 1 and I interpret the word "last" before "child" to mean "each". I also note the reference to suspension of the arrears and it would seem that in fact that is the amount that had been referred to as being an amount owing prior to
1 April 1998. I have not had evidence placed before me as to what has happened to that amount, nor is it particularly relevant to the application before the court.
The material before me was inadequate in terms of providing a history of payments and/or orders. I was told by the applicant that prior to 1995 maintenance had been paid at the rate of $35 per week per child. It is agreed that since 1995 there has been no application to vary the maintenance by either the applicant or the respondent. The application demonstrates yet again the difficulty encountered by courts in dealing with applications with unrepresented parties. I accept that both parties have endeavoured to place before me relevant information and to do their best in making submissions in relation to this application.
The application was made in this matter following orders made by the registrar on 28 March 2001 which was attached to the application. The registrar's orders were made in application number ML 9766/88 though I note the orders refer incorrectly to application number ML 9766/98. The relevant orders for the purposes of this application are:
“1. Any application by the respondent for a variation of the said application in respect of his child support liabilities be filed on or before 2 May 2001.
2. The respondent deliver to the applicant a copy of the said application and a copy of all supporting documents filed with it within seven days of the application and documents being filed.
3. The respondent verbally notify Mr Bahlen of the Australian Government Solicitor's office on telephone number 9242-1259 of any orders or decisions made in respect of the said application within 24 hours of the said order or decisions being handed down.
4. The respondent deliver to the applicant a sealed copy of any orders/decision made in respect of the said application within seven days of the said sealed copy being made available to the court.
5. Documents to be delivered to the applicant pursuant to these orders shall be delivered by post or otherwise to the office of the Australian Government Solicitor at 21st floor, 200 Queen Street, Melbourne, and shall be marked to the attention of Mr Bahlen.
6. If the respondent has not filed the said application in accordance with paragraph 1 of this order, the whole of the moneys then outstanding at 28 March 2001 pursuant to these orders shall become immediately due and payable.”
I do not propose to refer to the other orders, but note that they are effectively orders to seek compliance with the arrears. It is noted, however, that before the registrar a declaration was made that the respondent owes the applicant the sum of $8717.38 for arrears of child support and late payment penalties. It is clear that the applicant has complied with those orders to the extent that he has in fact filed and served the appropriate application.
I have decided, however, in the circumstances it is appropriate in the interests of justice to access the court file, ML 9766/88 which was before the registrar to determine how the arrears were calculated. In particular there was some confusion about whether child A, who has attained the age of 18 years in 1999, was still subject to any order for maintenance. I was told by the respondent - and it was not contested - that child A is still a full‑time student. My examination of the court file reveals the following:
·An enforcement summons was filed on 9 November 2000.
·That enforcement summons sought collection of an amount of $11,316.54 as at 27 October 2000.
·In support of that summons there was also on the court file an affidavit sworn by Lauren Samantha Fay on 27 October 2000. That affidavit has attached to it two exhibits: the first is exhibit A which is a document under subsection 116(1) of the Child Support Registration and Collection Act 1998, the Act, and exhibit B is a certificate of the Child Support Register under subsection 116(2) of the Act. When one looks at exhibit A it is clear that the child support referred to is child support for the child, T; that is child B. There is no document seeking to recover arrears for child A.
·
The amount sought for child B is $45 per week from 13 May 1998. The exhibit refers to court orders dated 27 July 1989,
23 October 1992 and 2 June 1995.
·Whilst I have referred to the orders made by the Magistrate's Court on 8 September 1995, I cannot locate other orders that have been referred to in that document. Exhibit A also refers to the collection being first enforceable by the Child Support Agency on 26 July 1989. It asserts: “Not enforceable by the agency from 5 March 1998 to 12 May 1998.” I note in passing that that covers the period of time and is consistent with the time when the applicant was receiving the Newstart allowance.
·The document further asserts that the collection is enforceable by the agency from 13 May 1998.
·Exhibit B simply certifies the amount, as I have indicated, of $11,316.54 being due and payable as at 27 October 2000.
·
A consent order I note from the material was made on
21 February 1989 and on that occasion, consistent with what the applicant has told this court, an order was made for maintenance for each child of $35 per week.
Unfortunately, the method of calculation of the arrears was not apparent, save that the period when the applicant received Newstart allowance was excluded from enforcement and the arrears only related to child B, although, as I have noted, child A is a full‑time student.
As noted earlier in this judgment, the decree nisi became absolute on 3 May 1990 and the parties separated on 4 December 1988. The applicant had incorrectly claimed in his application the decree nisi became absolute in August 1989 and that separation occurred in July 1988. The correct dates are revealed in the decree nisi and the application for divorce which is on the court file to which I have referred.
In assessing the issue of maintenance, and in particular a significant retrospective reduction, I am obliged to consider the relevant provisions of the Family Law Act 1975 (the Act). Section 66C provides that the parents of a child have the primary duty to maintain the child and that duty is not of a lower priority than the duty of the parent to maintain any other child or another person. It is accepted however that the duties to maintain may be of equal priority does not necessarily translate into the equal provision of financial resources. (See Ganter and Grimwshaw, (1998) 23 Fam LR 39; (1998) FLC 92-810).
Section 66K(1)(c) requires that: the court consider the commitments of a party necessary to enable that party to support himself or herself and any other child or another person the party has a duty to maintain. It is accepted that what the court must consider is the commitments which are reasonably needed for the purpose (see Mee v Ferguson (1986) 10 Fam LR 971; 1986 FLC 91-716; Gyselman v Gyselman (1991) 15 Fam LR 219; (1992) FLC 92-279.) A balance, it is said, must be struck between the obligation of the absent parent to continue to support his or her children and the need of that parent to continue to maintain himself or herself at a reasonable level (see Tuck v Tuck (1979) 7 Fam LR 492 and Beck v Sliwka (1992) 15 Fam LR 520.
The duty, it is accepted, to maintain - which is referred to in section 66K(1)(c) is a legal duty, not merely a moral one. I note that in the present case no application has been made for child A pursuant to section 66L of the Act and so far the applicant, on the material before me, appears to have been relieved of that potential expense.
In considering the issue of variation of maintenance, it is appropriate to also have regard to sub-section 66S(3) of the Act which provides:
“(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.
(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 ……”
The other parts of that subsection are not relevant to the present case nor, of course, is part (iv) that I just read out of subsection (3)(a). In general terms it is accepted that before the court can vary a child maintenance order it must be satisfied of one or more of the matters specified in sub section 66S(3), namely there has been a sufficient change in circumstances of a relevant person or there has been a sufficient change in the cost of living. They are the two relevant considerations for the present application.
It is also important in an application of this kind, however, to be mindful of the fact that the Act provides in sections 66B and 66C principles and objects which are to be observed. In particular section 66B provides:
“66B(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)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 the parents share equitably in the support of their children”.
For completeness I set out in full s 66C:
“66C(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 a 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;
(c)and 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.”
Sub-section 2 is important in the present case.
The financial support of the child is not in issue in this case. There is no evidence that the needs of the child have altered since 1995. It is appropriate to refer to section 66J of the Act which provides:-
“66J (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 sub section (2)); and
(c)the income, earning capacity and financial resources of the child (this is expanded on in sub section (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) Sub sections (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 sub section (1).”
I find that the provisions set out in that section are matters not really in dispute before me. It is not suggested by either party that the needs of the child, who is the subject of maintenance, have altered at all and I find as a matter of fact indeed that those needs have not changed since 1995. Certainly there is no evidence before me to suggest that the needs of that child have diminished or decreased since the order was made by the court in 1995.
Whilst I accept that the employment of the applicant has changed resulting in a reduction of his direct income, I am not satisfied that his capacity to earn, which is an important factor, has altered to such an extent to justify a variation of the 1995 order. He has had, in my view, the benefit of a static order for six years, despite cost of living increases over that period of time. Whilst I am mindful of the factors to be taken into account and certainly accept that there have been alterations to the financial circumstances of the applicant, it is my view that that alteration has not occurred to such an extent as to justify varying the 1995 order.
I note, for example, that the income evidence provided by the applicant reveals that he is in partnership in a business. It is clear that the direct income received from the applicant as a consequence of that business is lower than the income he received when employed. However, the way in which the income or the amount of income from the business is distributed between the applicant and his current wife is a matter of choice. It is a matter of allocating the resources that might then be available as a consequence of the income generated by that business.
In my view I am entitled to consider that choice made by the applicant which has resulted in his change of direct income, but not necessarily a change in earning capacity I refer to DJM v JMM (1988) FLC 29,816 at page 85,266. In that case the Full Court referred to the unreported decision of Fogarty J in the matter of Rowe v Rowe delivered on 12 December 1994. Interpreting what his Honour said in that case and what the Full Court said in DJM v JLM it is my view that the court is entitled in an application of this kind to look not just at the income revealed in taxation returns but to look at the income generated from a business and to look at the choices made in terms of a change of source of income over the relevant period.
A change of the source of income does not, in my view, reflect a change in earning capacity. In the present case I find that there has not been a change of earning capacity of a significant kind which would enable me to properly vary the order as sought. This is not a case where the applicant claims to be unemployed. There is no evidence that the financial needs of child B have altered. As I have indicated, the tax returns and the financial circumstances indicate that there is a level of income which is of some significance generated by the business.
It is relevant to consider that income and the income of the current wife of the applicant in terms of the applicant's expense obligations to the current household. It is also relevant for the court to note that he has a current asset worth, on his valuation, $150,000 subject only to a loan of $40,000 and it is noted that that property is jointly owned and the obligation under the loan is a joint obligation.
In my view, the amount of $45 per week is a proper level of financial support for the child and should not be varied. I should refer to the fact that this is a retrospective reduction being sought in the absence of any application to vary the earlier maintenance order of 1995 and indeed, at least no application has made since the alleged change of circumstances which occurred in April 1998. The court, in those circumstances, in my view should be careful not to adversely affect, retrospectively, the maintenance benefit which was the subject of an order in 1995. Indeed, on a simple cost of living analysis, one might argue that an amount of $45 per week for a child is indeed a low amount.
It is therefore in this case not necessary for me to, having regard to those findings, consider the orders sought in paragraph 2 of the application, although I note in passing that the separation date predates 1 October 1989 and child B might be what is referred to as a stage 1 child to which the Child Support Assessment Act and Child Support Registration and Collection Act do not apply. In any event, as I have indicated, it is not necessary for me to consider that issue.
It is necessary, however, to consider the third order sought by the applicant, that is to discharge the order made by the registrar on 28 March 2001. In my view there is no power in this court to so discharge that order. It was an order made by the registrar in Family Court proceedings and not proceedings issued in the Federal Magistrates Court of Australia and , in any event, was a final order made in relation to enforcement and appeal rights arising out of that order are not appeal rights which can be exercised by this court.
I should note that effectively this judgment has been delivered in an extempore manner and accordingly I will direct that the reasons for judgment be transcribed and upon review shall become the reasons for judgment in this matter. It follows that having regard to my findings of fact and consideration of the law and applying the appropriate principles that the order that the court should make is that the application be dismissed.
I certify that the preceding thirty seven (37) paragraphs are a true copy of the reasons for judgment of McInnis FM
Associate:
Date: 5 June 2001
0