W and J
[2003] FMCAfam 115
•11 April 2003
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| W & J | [2003] FMCAfam 115 |
| FAMILY LAW – Child maintenance – financial needs of the child – capacity of father to pay maintenance – relevance of comparison of liability under Child Support formula. Family Law Act 1975, ss.66B, 66C, 66H, 66J, 66K, 66S Coon & Cox (1994) 17 Fam L.R. 692 |
| Applicant: | W T W |
| Respondent: | C E J |
| File No: | DNM2662 of 2002 |
| Delivered on: | 11 April 2003 |
| Delivered at: | Darwin |
| Hearing date: | 7 April 2003 |
| Judgment of: | Brown FM |
REPRESENTATION
| The Applicant in person: | Mr W W |
| Counsel for the Respondent: | Ms S Kapetas |
| Solicitors for the Respondent: | NT Legal Aid Commission |
ORDERS
That the order of the Family Court at Darwin made on the 16th of June 2000 be discharged other than in respect of an amount of $1,000.00 that have accrued pursuant to the said order prior to the making of these orders.
That from the 11th of April, 2003 the father W T W pay to the mother
C E J the amount of $40.00 per week in respect of maintenance for the child of the relationship R A J born the 1st of March 1989.That the father pay the arrears of maintenance referred to in order 1 hereof at the rate of $10.00 per week from the 11th of April 2003.
That this order be registered with the Child Support Agency for collection of the maintenance on the behalf of the mother.
That the Child Support Agency be provided with a copy of the written reasons for judgment in this matter.
That the applications herein be otherwise dismissed.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT DARWIN |
DNM 2662 of 2002
| W T W |
Applicant
And
| C E J |
Respondent
REASONS FOR JUDGMENT
Introduction
The applicant in these proceedings, which relate to periodic child maintenance is W T W. The respondent is C E J. The parties are the parents of one child, R A J, who was born on the 1st of March 1989 and is thus 14 years of age.
On the 16th of June 2000 the following orders were made in respect of R:
(1)That the father W T W pay by way of maintenance to the mother C E J, for the child of the relationship R A J, born 1 March 1989, the sum of $70.00 per week from 17 January, 2000. This sum of $70.00 to be linked to and varied according to the Consumer Price Index as calculated at Darwin on 1 February of each year.
(2)That the father pay all arrears of maintenance pursuant to this order fixed at $1,540.00 at the rate of $10.00 per week from the date of these orders.
(3)That the amount of maintenance payable pursuant to order one hereof be reduced to $5.00 per week in the event the father is in receipt of the full rate of unemployment benefit or full rate of other Commonwealth benefit. The father shall notify the mother in writing in the vent that he commences or ceases to receive such benefit and in the event such benefit ceases to be payable to the father, the payment of maintenance due to the mother pursuant to order one hereof will recommence.
(4)That the parties share the cost of parentage testing in respect of the child equally.
Both parties now seek a variation of those orders on the basis that there has been a change of circumstances since they were made.
Applications
In his application filed the 16th of October 2002, Mr W (hereinafter referred to as the father) seeks the following orders:
(1)That the order made by Registrar Brown on the 16th of June 2000 be discharged.
(2)That the applicant W T W pay the respondent C E J the amount of $20.00 per week in maintenance for the child R A J born 1st march 1989.
(3)That the arrears, save $1000 be discharged and the outstanding arrears be paid at the rate of $5.00 per week from the date of these orders.
(4)That should the financial situation of the applicant W T W change this order be reviewed by the Court.
(5)That this order be registered by the Child Support Agency.
(6)That such further or other orders as this Honourable Court deems fit.
In her amended response filed the 10th of March 2003, Ms J (hereinafter referred to as the mother) seeks the following orders:
(1)That the order made on 16 June 2002 be varied and the amount of maintenance payable be increased to $100.00 per week.
(2)That the applicant father pay the respondent mother’s costs of these proceedings.
The father appeared on his own behalf during the proceedings. The mother was represented by her solicitor, Ms Kapetas. The parties themselves were the only parties cross-examined. Ms Kapetas chose not to call the deponents of other affidavits relied on by the father, namely those sworn by his current wife K J W; his father in law K I B-O and his brother in law, M J B-O. Ms Kapetas’ cross-examination of the father was brief and concentrated on a number of documents that were put to him in cross-examination. These documents included a joint account he holds with his wife at the Australian Central Credit Union; his most recent tax return for the financial year ending the 30th of June 2002 and some photographs that had been taken of his home situated at 38 R Road, M.
Background
The parties lived together briefly in 1988 and separated prior to R’s birth. There exists a high level of tension between them. The father has not had any contact with R since mid 2000. The mother commenced proceedings against the father in the Family Court at Darwin in early 2000 seeking periodic maintenance for R and orders relating to parentage testing in respect of him. This was the background to the orders of the 16th of June, 2000.
The father is a painter and decorator by trade. He works both as a self-employed subcontractor and also from time to time as an employed painter with a firm known as All Pro Painters and Decorators. He married on the 26th of August, 2000. His wife, K J W has two children from a previous relationship, T-M L K aged 16 and S-K V K aged 14. The father and Mrs W have a newly born daughter, A W born on the 31st of December 2001.
The father has deposed that his wife receives no child support or maintenance from the father of T-M or S-K. Neither he nor Mrs W were cross-examined in respect of this matter. The father gave the existence of a Domestic Violence Order, as the explanation for the failure of the children’s father to support them. However, it is not disputed that Mr W himself has no legal duty to maintain either of these two children.
Mrs W gives her occupation as Ministerial Adviser. She earns an income of $57,720.00 per annum.
The father has paid irregular amounts of maintenance since the orders of the 16th of June 2000. Chiefly the maintenance that he has paid has come because the Child Support Agency has diverted payment due to him by way of tax refund to the mother for child maintenance. As a result of this procedure, the mother received $2,520.00 on the 23rd of January 2001; $468.00 on the 15th of June 2002 and $2,426.29 in December of 2002.
Neither party provided me with a current figure of the arrears pursuant to the orders of the 16th of June 2000, but they must be in the vicinity of $2,500.00 on my rough calculations.
The mother is in receipt of a government pension of $400.00 per week. Besides R, she has responsibility for a daughter, M J-D aged 5. She indicated in her form 12B response that she receives $25.00 per week maintenance. Apart from these two sums, she has no other income. She is not regularly in the paid work force, although she had some temporary employment for one month at a local primary school. She is not currently in a relationship and lives with M and R in rented accommodation.
Applicable law
These proceedings are to be determined pursuant to Division 7 of Part VII of the Family Law Act 1975. As is apparent, both parties seek a variation of an existing maintenance order.
Before the Court can vary an order, so as to increase or decrease any amount ordered to be paid, it must be satisfied that the facts of the case fall within the provisions of section 66S(3) which provides as follows:
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 circumstance 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.
The father relied on the following grounds in support of his application for variation of the orders of the 16th of June 2000:
(1)Applicant has a daughter born 31 December 2001.
(2)Mortgage repayments for the applicant W T W have risen.
(3)Previous orders were based upon a projected, not a real income which has not been attained.
(4)Earning capacity of the applicant W T W has over the past 2 financial years been reduced due to a depression in the local building industry.
(5)Evidence of advertising for the business of the applicant W T W was not previously before the court.
The wife relied on the following grounds in support of her application for variation:
(1)The circumstances of the person(s) for whose benefit the order was made have changed
(2)The circumstances of the payer of the maintenance have changed.
Neither of these grounds was expanded upon in any great detail other than that the mother said that the costs of maintaining R had increased since June of 2000 and the father had conducted renovations on his home. However, I am satisfied that the change of circumstances in the father’s household, particularly those occasioned by the birth of A, justify a revisiting of the orders of June 2000. It is also apparent that the father has been irregular in his payment of the maintenance required to be paid pursuant to the order of the 16th of June 2000. At best he has paid approximately $80.00 per month for R’s maintenance. It is the father’s position that he is not in a financial position to pay any more than this sum. It is the mother’s position his financial position is measurably superior to hers and he has a capacity to pay $100.00 per week towards the financial support of R. Although the positions of the parties are diametrically opposed, I am satisfied that there exists sufficient circumstances to overcome the initial hurdle of section 66S from the point of view of both parties.
The relevant law – child maintenance orders
As I have already indicated, the law in relation to child maintenance orders is set out in Division 7 of Part VII of the Family Law Act 1975.
Section 66B sets out the principle objects of this division. These objects include ensuring that children receive a proper level of financial support from both their parents; that 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 that parents share equitably in the support of their children.
Section 66C places the primary duty of maintaining children upon the parents of those children. This duty has priority over all other commitments a parent has other than those commitments necessary to support him or herself, or any other children that he or she has a legal duty to maintain. Thus in the present case, the duty to support R resides solely with Ms J and Mr W. The Court must ensure that, as far as possible, this duty is met equally by both Mr W and Ms J, from shares in their respective incomes, earning capacities, assets and financial resources. In essence, the law requires parents to share the burden of maintaining their child, according to the levels of their respective means, so far as this is equitable. In this day and age, the costs of maintaining children are considerable. The consequence of this, is that the parties concerned must make sacrifices to ensure that each of them makes an equitable contribution to R’s financial support.
As I have already indicated, Mr W has no legal duty to maintain financially T-M or S-K. The duty to support these two children resides with their parents. However, Mr W has a legal duty, which he shares with his wife, to support A. That duty is no less and no more than his duty to support R. The law does not differentiate between whether or not a parent lives with the child concerned in an application for maintenance such as this one.
The approach that the Court must take in assessing a child maintenance order is set out in section 66H. It is essentially a two step process. Firstly the Court must consider the level of financial support necessary for the maintenance of the child. Secondly the Court must determine what contributions each parent should make to providing that financial support[1].
[1] See Coon & Cox (1994) 17 Fam L.R. 692
In assessing the financial support required by the child concerned, I am required to consider the matters set out in section 66J. In summary, it is necessary for me to establish the following:
1)The proper needs of the child, which in this case includes any special needs he may have;
2)The income earning capacity of the child;
3)However, I am required to disregard the entitlement of the child to an income-tested pension, allowance or benefit. I may however have regard to any published research in relation to the maintenance of children generally.
In determining what contribution each parent should make to providing R’s financial support, I must have regard to the matters set out in section 66K of the Family Law Act. These matters include the following:
1)The income, earning capacity, property and financial resources of the parties;
2)The commitments of the parties that are necessary to enable each of them to support:
i)Himself or herself; or
ii)Any other child or another person that party has a duty to maintain;
3)The direct or indirect costs incurred by the person or other person with whom the child lives in providing care for the child; and
4)Any special circumstances, which have not taken into account in the particular case, would result in injustice or undue hardship to any person [section 66K(1)(e)].
The matters set out in both sections 66J and 66K are subject to the matters mentioned in section 66B and section 66C, to which I have already referred.
The evidence
The evidence in this matter left me with a sense of disquiet. I do not believe that Mr W’s financial affairs were subject to a great deal of scrutiny. In particular, I am uncertain about the exact extent of his income earning capacity. He is a qualified painter and decorator and enjoys good health. However, it is his position that he is not able to earn a reasonable income from his endeavours, due to the current parlous state of the building industry in Darwin. No specific evidence was called in regards to this particular issue and he was not cross-examined about it. Nor was Mr W cross-examined about his exact hours of work each week or what measures he takes to obtain work. However, although he was not cross-examined in any great detail, I have no reason to doubt the general veracity of the evidence that he gave.
Mr W acted on his own behalf in these proceedings. He too chose not to cross-examine Ms J in any great detail. However, there is no dispute between the parties that she has not been in regular employment for many years and has maintained R by means of social security payments she receives. When Mr W was briefly cross-examining Ms J, there was no disguising the mutual antipathy that they each felt for one another.
a) Financial support required by the child
There was not a great deal of evidence provided regarding R’s financial support. He is currently 14 years of age and presumably attending school. In her form 12B response, the mother estimates the costs of supporting R each week as $135.00. His major expenses being food of $75.00 per week and clothing and shoes of $42.00 per week. It seems that R has no independent income of his own, certainly no evidence was led in regards to such an income. The father did not seek to challenge any of the expenses that related to R’s financial maintenance. It seems that R has no particular special needs.
As has already been indicated, section 66J(2)(b) provides that the Court may have regard to any relevant findings of published research in relation to the maintenance of children, in coming to a conclusion as to the proper level of financial support required by any particular child. In this jurisdiction, regard is generally had to two pieces of research, namely the Lee Scale and the Lovering Scale, which are regularly updated to reflect changes in living standards.
In 1984 Kerry Lovering of the Australian Institute of Family Studies, in a paper entitled ‘Costs of Children in Australia’, published tables relating to the costs of raising children based on a ‘basket of goods’ approach. Included in the basket were food and clothing, fuel, household provisions and so on and so forth.
In 1989 Donald Lee of Deakin University, working under contract to the Australian Institute of Family Studies, published tables relating to the cost of children, based on an expenditure survey approach.
In Coon and Cox[2], Nicholson C.J. indicated a preference for the Lee Scale as being a more accurate approach. He said:
“…the Lee scale published by the Australian Institute of Family Studies… is an approach which I consider realistically takes into account the many and varied and often hidden and neglected costs of maintaining children by custodial parents. It is, I think, a more comprehensive approach than the calculations which go to compromise the Lovering scale which has several important and acknowledged omissions, for example, housing, medical and dental expenses, transport and school uniforms…”
[2] Coon and Cox (supra) at page 695
At the present time, the Lovering Scale gives as the cost of maintaining a teenage child in a low income family, the sum of $91.30 per week and in a middle income family the sum of $151.89 per week. The Lee Scale, as at the August quarter of 2002, gives as the cost of maintaining a child of 11 – 13 years of age, the sum of $290.44 per week.
Bearing in mind both the Lee Scale and the Lovering Scale, the mother’s estimate of the costs of providing for R’s needs do not appear to be exaggerated. On any view, the father’s proposal that he pay maintenance at the rate of $20.00 per week in respect of R will provide a small fraction of the financial support that is required for R. Accordingly, the more difficult aspect of this case is to determine how the division of financial support in the range of approximately $135.00 per week is to be divided between Mr W and Ms J, bearing in mind the provisions of the Family law Act. This will require a comparison of the respective financial positions of the parties.
b) The mother’s financial position
No evidence was provided as to Ms J’ qualifications or level of skills for paid employment. She appears to be in good health. Clearly, she has responsibility for caring for M and R, a responsibility that it seems she carries largely alone. She worked briefly last year for one month, in an unskilled position, at the Alawa Primary School, when one of the teachers was ill. Otherwise, it seems she has been out of the work force for sometime. The mother’s financial position is not strong. As has already been indicated, her major source of income is a government benefit. She is currently living in rented accommodation and her major expenses are her rent and food for herself and her children. She owns a car which she estimates is worth $1000.00 and has car running expenses, which she estimates at $43.00 per week. Her only other assets are her furniture and household effects and her personal effects, which she values at $13,000.00 in total. However, she has no debts to speak of. No doubt the reason for this is that no lender would consider her for a loan, in the absence of any suitable security. On any view, the mother belongs to a significantly disadvantaged sector of the community.
c) The father’s financial position
As I have already indicated, the father was not cross-examined in any great detail about his financial circumstances. Given the obvious antipathy he feels for Ms J and his history of dereliction in respect of the earlier maintenance order, he has no great incentive to be forth coming about either his income or his prospects for employment in future.
The father gives as his average weekly income before tax, the sum of $413.00 or $21,476.00 per annum. He indicated to me in his evidence that he has been a painter and decorator for about 20 years and loves his trade. He charges his work out at between $20.00 and $25.00 per hour. Accordingly, on his figures, he is working on average 20 hours per week. However, it was interesting to note that during his evidence, he protested that “it was costing him money” to come to Court for these proceedings. Mrs W provided a letter from All Pro Painters and Decorators which indicated that Mr W had been employed as a subcontractor by that firm for the past 6 months. The proprietor of the firm indicated that Mr W had been paid around $400 to $700.00 per week gross as a subcontractor. However he was responsible for payment of his own materials, GST, personal tax, superannuation and both public liability and workers compensation insurance. Mr W himself indicated that he worked as both a PAYE tax payer and a self-employed subcontractor from time to time. No other details were provided in respect of his weekly income other than his most recent tax return. Certainly no records were provided by or obtained from All Pro Painters and Decorators or any other firm with which Mr W had been associated.
Mr W estimated the value of his property and financial resources as follows:
38 R Road, M
$250,000.00
Furniture and household effects
$ 40,000.00
Personal effects
$ 5,000.00
Money held in respect of GST and tax
$ 10,000.00
Savings
$ 100.00
Motor vehicle
$ 27,000.00
Colonial Life Insurance Policy
$108,000.00
Superannuation
$ 7,472.00
Painting equipment
$ 2,000.00
TOTAL
$449,572.00
Mr W was not cross-examined in any detail about these matters.
I assume that he and his wife are the joint proprietors of the property at 38 R Road, M. No details were asked of him in respect of the Colonial Life Insurance policy and in particular whether any amount of it could be redeemed at the present time.
In respect of those assets, the father estimates his debts as follows:
Home loan
$193,562.00
Business loan in respect of motor vehicle
$ 21,472.00
Taxation debt
$ 10,000.00
Paint account
$ 500.00
TOTAL
$225,534.00
Accordingly, at the present time, Mr W has access to assets in excess of his liabilities in an amount of $224,038.00. However, I would anticipate that Mrs W is the joint owner of the majority of those items. However, on any view, the financial position of the father is vastly superior to that of the mother. However, the most significant matter in this case is the amount of surplus income that Mr W has after providing the necessary financial support for himself and his daughter.
Mr W was not cross-examined about the list he had complied of his necessary weekly financial commitments in his form 12 application. He gave his weekly expense as being $588.00. Clearly an amount in excess of his stipulated weekly income of $413.00. His major expenses are food ($60.00); mortgage payment ($150.00); car loan and running expenses ($150.00); child minding expenses ($50.00); telephone ($25.00) and optional superannuation ($46.00). He estimates his weekly liability for tax at $6.00 per week.
Mrs W’s weekly expenses are also listed in the application. It seems apparent that she and the father combine their incomes and share their expenses. No doubt these expenses include those that relate to T-M and S-K as well as A. Mrs W’s major expenses are food ($90.00); telephone ($10.00); mortgage payment ($150.00); income tax ($357.00); child minding ($55.00) and compulsory superannuation ($55.00). in total, her weekly expenses are estimated to be $920.00, slightly less than her weekly wage of $1,110.00.
Mrs W is engaged in full time work. It is part of the father’s case that of late he has been forced to curtail his own employment because of the necessity for him to care for A, whilst Mrs W is at work.
As I say, these various expenses were not examined during the evidence lead before me. However, Ms Kapetas did tender a copy of the father’s taxation return for the year ending 30th of June 2002. This document was admitted without objection by the father. This document indicates the following:
Mr W’s taxable income
$25,761.00
Tax payable
$ 4,108.30
Medicare levy
$ 386.41
Less tax instalments deducted
$ 4,941.00
Refund
$ 446.29
A closer examination of the tax return indicates that the father’s income came from two major sources during the financial year ending 30 June 2002, namely salary and wages which reveal a gross income of $23,476.00 and his business, which produced a gross income of $20,680.00. However, in order to earn this income, the father apparently incurred expenses of $18,410.00.
The father acknowledged that he had earned $2,200.00 from the Lucindale Football Club. Apparently he coached at this club. $21,028.00 from the Stockland Hotel Group and $248.00 from Grace Worldwide.
The expenses related to his business included the following:
Depreciation
$ 2,133.00
Motor vehicle expenses
$ 9,619.00
Repairs and maintenance
$ 134.00
Other expenses
$ 6,524.00
TOTAL $18,410.00
Included in the other expenses is an allowance for telephone expenses of $1,788.00, which on my calculations equates to a sum of $34.38 per week. The claim for car running expenses equates to a weekly sum of $184.98. Regrettably, none of these matters were raised with the father in cross-examination. However, it would seem open to me to conclude that the father claims at least two of his major expenses – telephone and car running – through his business. There are often considerable benefits to be gained from running a business.
No questions were asked of the father regarding his payment of $46.00 for what is described as “optional superannuation” and how this relates, if at all, to his life insurance policy, which he values at $108,000.00.
I note, in passing, that $46.00 is more that twice the amount that the father proposes paying for financial support for R. In particular, I have no evidence if any or all of that insurance policy is redeemable.
Counsel for the mother also tendered, without objection from the father, an account transaction list from the Australian Central Credit Union in respect of an account held by the father and Mrs W from the 2nd of January 2002 to the 3rd of January 2003. The father indicated that this was his “GST and tax account”. I take it that this equates to his GST and tax account and the complementary Australian Taxation debt, both of which total $10,000.00 and which are listed in his property and financial resources in his application filed herein. The opening balance of the account as at the 2nd of January 2002 was $60.52 and the closing balance on the 3rd of January 2003 was $4,109.15. In that period of 12 months, on my calculation, a total sum of $15,235.00 was deposited into this account.
Counsel for the mother’s position is that this account and particularly occasions when its balance stood in excess of $10,000.00, indicates that the father has a capacity to pay maintenance pursuant to the order of the 16th of June 2000. The father was not cross-examined as to the source of this income – that is whether it was part or all of the income he received from his painting business. If the purpose of the account is to make provision for his personal tax and GST liability this would tend to indicate that he anticipates earning considerably more than he did in the year ending 30 June 2002, when the tax he paid amount to somewhere in the vicinity of $4,500.00.
The father was cross-examined by counsel for the mother about a series of photographs that had been taken of his home. These photographs were not tendered. The father confirmed that a new fence, renovations and extensions had been completed at the property. He and Mrs W had borrowed a sum of $60,000.00 for the Australian Central Credit Union for this purpose. The loan was taken out 4 or 5 years ago.
Discussion
As I indicated at the outset, I felt a sense of disquiet of much of the father’s evidence in respect of his financial affairs. This sense of disquiet was compounded by the limited extent of his cross-examination. I was left with the feeling that I was being kept in the dark about his true financial position, which was not as parlous as he would have the Court believe. However, the difficulty I have is that his financial affairs were not subject to any great scrutiny. The reasons that I have a sense of disquiet about his evidence can be summarised as follows:
·The apparent range of his weekly income between $400 and $700;
·His acknowledged charge out rate of between $20 and $25 per hour for painting services;
·His claiming of considerable weekly expenses for car running and telephone through his business, which must necessarily reduce his claimed weekly expenses;
·His claim that $10,000.00 is currently being earmarked by him for taxation and GST compared to an amount of $4,494.71 for the last financial year – suggesting a more profitable current financial year that the former;
·The lack of detail regarding his weekly payment of “optional superannuation” and the status of his life insurance policy;
·His overall vastly superior asset position when compared to that of the mother, albeit that Mrs W has undoubtedly made a significant contribution towards the acquisition of those assets.
All of these various factors loom larger in my deliberations when I consider the obvious distaste that the father has for the mother and my suspicion that he is unwilling to pay maintenance to her in respect of R. I must also bear in mind that although the reality may be different, the father has no legal obligation to financially support either of his two step-daughters.
It is the father’s position that there has been a down turn in the building industry in Darwin since the inception of the GST and his business has suffered as a consequence. It is also his position that he has played a large part in caring for A and so has been unavailable for full time work. I accept the truth of both these assertions.
The central question in this matter is to what extent I can look behind the father’s tax return as an indication of strength or otherwise of his financial position and in particular his assertion that his average weekly income is about $413.00. It being the father’s position that his most recent tax return should form the basis for the calculation of the maintenance that he should pay for R.
As the parties will be aware, in Australia at the present time, there exist two systems by which the amount of maintenance to be paid by a non-custodial parent in respect of his or her children is calculated. Firstly, there are cases such as the present one, that fall to be determined under the child maintenance provisions of the Family Law Act – so called stage 1 matters. I have already outlined the principles that apply to such applications. The Court has a discretion as to the amount of maintenance to be assessed in any given case pursuant to the provisions contained in Division 7 of Part VII of the Family Law Act. Secondly, the remainder of cases fall to be determined pursuant to the formula provided by the Child Support (Assessment) Act – so called stage 2 matters. Whether a particular case is a stage 1 or stage 2 matter depends on a nexus between the case and a date after October 1989. As the parties have never been married and separated prior to October of 1989 and R was born prior to this date and does not have a sibling that is the child of the parties born after this date, this particular matter is a stage 1 matter and falls to be determined pursuant to the Family Law Act. Stage 2 matters do not, as a general rule, attract a discretion as to the amount of child support payable. Rather the amount to be paid falls to be determined pursuant to a set formula and is capable of being ascertained by the application of that formula to the circumstances of the parents of the child concerned. In basic terms, the formula works as follows:
·First, the taxable income of the non-custodial parent is taken into account.
·Second, an amount is deducted from that income for the living expense of the non-custodial parent and any natural or adopted children living with that parent.
·Third, if the custodial parent’s taxable income exceeds average weekly earnings, plus a fixed allowance for child care costs, the excess reduces the non-custodial parents income.
·Finally, a percentage of the non-custodial parent’s remaining income is paid as support for the child or children involved.
·The Act provides for a range of modifications to the formula in cases where the care of children is split or shared by the child’s biological parents.
·An appeal lies to a Court, such as this one, where one of the parties considers that the application of the applicable formula provided by the Act has been incorrectly applied or interpreted.
Although I am not bound to follow the Child Support Assessment scheme in making judgments under the child maintenance provisions of the Family Law Act, in some situations the scheme may provide a useful guide for determining such cases. In Beck & Sliwka (1992)
15 Fam LR 520 Nicholson CJ and Fogerty J said as follows at page 530:
Whilst it must be emphasised that under the Family Law Act the court is required to consider the facts of the individual case in accordance with the structure in Division 6, nevertheless in the sort of case with which we are concerned now and which is not untypical of many cases litigated both in this court and in the Magistrates Court, and where the issue is the capacity of the non-custodian to make an equitable contribution to the costs of the children, it seems not unreasonable to at least pay regard to the formula in determining the amount of a Stage 1 order.
At the present time, the applicable child support formula in respect of a child who is in the care of one parent who seeks child support from the other parent is as follows:
Child support income = (child support income – exempted income amount) x 18%[3]
[3] 18% being the relevant child support percentage for one child
For the purposes of the formula, child support income is the liable parent’s taxable income in the last year of income. At this stage that income is Mr W’s income for the year ending the 30th of June 2002, namely $25,761.00. From this sum must be deducted his exempted income amount. This calculation would include an allowance in respect of A, as she is a dependant of the father. At the present time, the exempted income where the liable parent concerned has relevant dependant children is 220% of the relevant partnered rate of social security pension ($19,597.00) plus an additional amount for each dependant child ($2,169.00). On my calculation, the application of the formula to Mr W’s situation would result in a child assessment for the year ending the 30th of June 2002 of $719.10 or about $14.00 per week.
In my view, to extrapolate the child support formula to this case would not properly reflect the principles and objects of Division 7 of Part VII of the Family Law Act in that it would place too much of the burden of financially supporting R onto the shoulders of the mother. In addition, it is my view that to make an order for the payment of maintenance in such terms would not properly reflect the true income, earning capacity, property and financial resources of the father.
The costs of financially supporting R are in the vicinity of $135.00 per week. Fourteen dollars represents only about 10% of this sum. On any view, the father is in a superior financial position to that of the mother. He has a trade. He owns real property and a motor vehicle. He is able to claim considerable expenses each week through his business for telephone and car running expenses. He is able to contribute a sizeable sum to optional superannuation each week. In my view, he has managed his affairs in such a way so as to, on the one hand, maximise his apparent weekly living and business expenses and on the other hand minimise his weekly income. For obvious reasons he is at pains to paint as bleak a picture for himself of his current financial circumstances. In my view, there is clearly an element of “double dipping” in respect of his claim for telephone and car running expenses. His commitment to pay superannuation for himself and his future financial security does not have precedence over his obligation to provide financial support for R.
That is not to say that I necessarily think that the father is in a strong financial position. In my view, the evidence is clear that Mrs W is the principle financial mainstay for the W family through her full time employment. I accept that as a result of this Mr W must play a more active role in caring for A and that this reduces, to some extent, his income earning capacity. However, the failure of Mrs W to pursue maintenance for T-M and S-K is not a burden that, either morally or legally, should be transferred to Ms J. Although financially things are tight within the W household, their circumstances are more comfortable than those prevailing in the mother’s household.
As I said at the outset, I am concerned that due to the manner in which this case has been conducted, I do not have a proper picture of the father’s financial circumstances. I must be careful not to make an order for maintenance that is unrealistic. But I must also ensure that both parents share equitably in the burden of providing financial support for R. No doubt, the father points to his previous history of payments in respect of the earlier order, as proof that the bar was set too high in June of 2000. I am not altogether convinced of that. In my view, the father has to a large degree exhibited a cavalier disregard for the order. It seems to me that he has always been able to find sufficient funds to maintain other of his activities that he believes have priority over R’s need for financial support. However, in reaching a conclusion in respect of this matter I bear in mind what was said in Beck & Sliwka (supra) where at page 530 Nicholson CJ and Fogarty J said:
The issues in this case are typical of many Stage 1 child support cases. The custodian is in receipt of a pension or otherwise has a modest income for herself and the children. Of the approximately 400,000 single parent households in Australia, approximately 260,000 of those custodians are in receipt of the Sole Parent Pension. The non-custodial parent is usually on a moderate income or wage. The costs of raising children are very substantial. In most cases it would be impossible for the non-custodian to pay an adequate proportion of those costs and, at the same time, maintain himself at a reasonable level. The consequence is that sacrifices are often required in the custodian’s family. It is important in those cases that the non-custodian makes as substantial a contribution as is reasonable. At the same time, there is no point in making orders which are unrealistic.
Bearing in mind all of these competing factors, I have reached the view that an appropriate level of maintenance to be paid by the father for R is an amount of $40.00 per week at the present time.
Arrears
There remains the question of the arrears of maintenance due under the order of the 16th of June 2000. It is clear that the Court has a discretion as to the enforcement of arrears of maintenance[4]. In this regard, a rule of practice has arisen wherein generally speaking, arrears of maintenance over 12 months are not enforced. The rational for this rule is that maintenance is regarded as being a means of providing for a child’s present requirements and needs.
[4] See Hamilton & Nowak (1988) FLC 91-981
In Tingle v Tingle (1947) 65 W.N. (NSW) 43 Bonney J said:
“There is no cast iron rule, but as a rule the Court does not, without sufficient reason make an order for attachment in respect of an alimony or maintenance claim more than a year old. On the other hand, the Court should be very cautious not to encourage people against whom alimony and maintenance orders have been made, to sit back and disobey those orders and keep on disobeying them, hoping for the best.”
In exercising my discretion in regards to the question of arrears, I must have regard to all the circumstances of the case, including the conduct of the parties. In this regard, for the reasons I have already provided, I find that the father’s attitude to the responsibility to pay maintenance for R in the past has been poor indeed. In these circumstances, I am not prepared to forgive all arrears of maintenance currently outstanding under the orders of the 16th of June 2000. Once again however, I must endeavour not to make an order that will fix the arrears at an unrealistic level that will prevent them from being paid. In this regard, I propose to adopt the position as advocated by the father and fix the arrears at an amount of $1,000.00, which the father will be required to pay off at the rate of $10.00 per week. R is currently 14 years of age. This will mean that the arrears will be paid off when he is about 16 years of age. I anticipate that this will coincide with the period of his life when the expenses in regards to his upkeep are likely to be at there highest.
I also bear in mind that for most of his life R has grown and developed with little financial support from his father.
Conclusions
Boiling down all the evidence in this case, I have reached the conclusion that Mr W has the capacity to pay a sum of $50.00 per week towards the maintenance of R. I believe that this represents a just and equitable outcome in the case, bearing in mind the principles contained in the Family Law Act. After all is said and done, to satisfy the order Mr W will be required to work an extra 3 or 4 hours each week in his trade as a painter, a trade he professes to love.
It is appropriate that the Child Support Agency be provided with a copy of these reasons for judgment.
For all these reasons the orders of the Court will be as set out at the commencement of these reasons for judgment.
I certify that the preceding seventy-three (73) paragraphs are a true copy of the reasons for judgment of Brown FM
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