Wadsworth and Wadsworth
[2013] FCCA 2043
•11 December 2013
FEDERAL CIRCUIT COURT OF AUSTRALIA
| WADSWORTH & WADSWORTH | [2013] FCCA 2043 |
| Catchwords: FAMILY LAW – Adult child maintenance – twin adult children studying at university – enforcement application filed and later withdrawn – whether order should be discharged or varied because of refusal by twin adult children to undertake any paid work – competing costs arguments. |
| Legislation: Child Support (Assessment) Act 1989, s.24 |
| Arman & Arman [2009] FamCA 8 Colgate-Palmolive Co v Cussons Pty Ltd (1993) 118 ALR 248 at 256 Fennessy & Gregorian [2009] FamCAFC 44 (2009) FLC 93-399 Kohan & Kohan (1993) FLC 92-340 (1992) 16 Fam LR 245 In the Marriage of Ryan (1988) 12 Fam LR 529 (1988) FLC 91-970 Tobin & Tobin [1999] FamCA 446; (1999) FLC 92-848 (1999) 24 Fam LR 635 Yunghanns & Yunghanns (2000) FLC 93-029 (2000) 26 Fam LR 331 |
| Applicant: | MR WADSWORTH |
| Respondent: | MS WADSWORTH |
| File Number: | SYC 7629 of 2010 |
| Judgment of: | Judge Monahan |
| Hearing date: | 24 July 2013 |
| Date of Last Submission: | 24 July 2013 |
| Delivered at: | Sydney |
| Delivered on: | 11 December 2013 |
REPRESENTATION
| Counsel for the Applicant: | Not Applicable |
| Solicitors for the Applicant: | Mr Ryrie, Elliot Tuthill, Solicitors |
| Counsel for the Respondent: | Not Applicable |
| Solicitors for the Respondent: | Mr Purdon, William Purdon, Solicitor |
ORDERS
The Orders made on 21 March 2011 be varied as follows:
(a)MR WADSWORTH (“the father”) pay to MS WADSWORTH (“the mother”) the sum of $646.00 per month for 12 months from the date of these Orders (i.e. from December 2013 until and including November 2014) being for adult child maintenance for the two children of the marriage X born (omitted) 1993 and Y born (omitted) 1993.
or
(b)in the alternative, the father may elect to make a final lump sum payment to the mother in the sum of $7,362 and in that event he must notify the mother in writing of his intention to do so within 14 days from the date of these Orders and if so pay such sum to the mother as she directs in writing within 28 days from the date of these Orders.
Within 28 days of today’s date the mother pay the father in such manner as he directs in writing the sum of $153.00 by way of costs.
All extant applications before this Court be otherwise dismissed.
AND THE COURT NOTES THAT:
(A)The figure of $153.00 in paragraph 2 herein is the result of setting-off costs orders made against each party, that is a costs order in favour of the mother in the sum of $2,112.00 and a costs orders in favour of the father in the sum of $2,265.00.
IT IS NOTED that publication of this judgment under the pseudonym Wadsworth & Wadsworth is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT SYDNEY |
SYC 7629 of 2010
| MR WADSWORTH |
Applicant
And
| MS WADSWORTH |
Respondent
REASONS FOR JUDGMENT
Introduction
This decision concerns adult child maintenance proceedings between MR WADSWORTH (“the father”) and MS WADSWORTH (“the mother”).
The relevant children are X born (omitted) 1993 (“X”) and Y born (omitted) 1993 (“Y”) (collectively, “the twins”).
In his Initiating Application filed on 6 July 2012, the father seeks to discharge the current adult child maintenance orders that were made pursuant to the relevant provisions of the Family Law Act 1975 (Cth) (“the Act”) on 21 March 2011 (“the current orders”). The father also seeks to recover from the mother the amount of child maintenance paid by him as from the date his application was filed and his legal costs.
The father’s Initiating Application is opposed by the mother who seeks the retention of the current orders and payment of her legal costs (on an indemnity basis) in respect of both the father’s application to discharge the current orders and her application for enforcement of arrears. This is detailed further below. The mother also seeks an order that the father “pay interest on all overdue payments in respect of both Applications”. I will consider this aspect of the mother’s Response later in these reasons.
At the Final Hearing the parties were represented by their respective solicitors; Mr Ryrie for the father and Mr Purdon for the mother.
Background
The current orders followed an Initiating Application filed by the mother on 3 December 2010. Her claim for adult child maintenance was made just prior to the twins 18th birthday and sought monies to assist her with the costs of maintaining Y and X during their university studies.
The current orders, that were made by consent following a Conciliation Conference with Registrar Bastiani on 21 March 2011, provided that:
·the father pay the mother $1,250.00 each month as child maintenance for the twins “to enable them to complete their education at the University of (omitted)”; and that
·in the event either twin moves out of the mother’s residence, the father pay to the twin who no longer resides with the mother the sum of $625.00 each month.
The matter subsequently returned before me in a duty list on 26 March 2012 as a result of an Application in a Case being filed by the mother seeking enforcement of the consent orders (“the Enforcement Application”). Following a further Conciliation Conference with Registrar Bastiani on 4 May 2012 the matter returned for further mention on 14 June 2012. It was on this occasion that the Court was advised that, firstly, the mother may be withdrawing the Enforcement Application as the alleged arrears had been paid, and secondly, that the father, who was now legally represented, would shortly be filing an Initiating Application seeking the discharge of the consent orders (which he did file on 6 July 2013) (“the Discharge Application”).
As foreshadowed, when the matter next returned before me for mention on 6 August 2012, orders were made withdrawing and otherwise dismissing the mother’s Enforcement Application and listing the father’s Discharge Application for Final Hearing on 21 March 2013. Due to changes in the judicial calendar, the Final Hearing of this matter was relisted to 28 February 2013 for 2 days to be heard by Henderson FM (as she then was).
Although the matter was reached by her Honour on 1 March 2013, the Final Hearing did not proceed that day. I will canvass the reasons for this shortly. Suffice to say at this point that the father is seeking an indemnity costs order against the mother as a result of the matter not proceeding to Final Hearing on 1 March 2013 (and the mention date that followed).
When the matter returned before me on 10 April 2013 I listed the Discharge Application for Final Hearing on 24 July 2013.
Chronology
In addition to the above procedural background, each party provided the Court with a chronology of events. Unless otherwise indicated, the following dates and events were agreed upon by the parties:
Date Event (omitted) 1956 Father born (omitted) 1958 Mother born (omitted) 1982 Parties marry (omitted) 1993 Y and X born (the “twins”) 10 January 2001 Date of separation 4 December 2002 Date of divorce 15 November 2010 Twins finish high school 3 December 2010 Mother commences adult child maintenance proceedings 29 January 2011 Twins commence (course omitted) studies at (omitted) University 21 March 2011 Parties enter into consent orders made by Registrar Bastiani in relation to adult child maintenance to be paid for by the Father for the twins 20 December 2011 The twins attend with father at father’s workplace and ‘offer’ of holiday work made to the twins 21 December 2011 Father asserts Mother allegedly tells the twins that they will be evicted if they accept the holiday employment offer - Twins reject holiday employment offer Late 2011/Early 2012 Mother asserts that Father ceases paying agreed adult child maintenance January 2012 Father asserts he recommences paying agreed adult child maintenance, including payment of arrears 5 June 2012 Mother asserts Father requests a variation to the current orders 6 July 2012 Father files Initiating Application 6 August 2012 Mother withdraws Application in a Case, Father’s Initiating Application comes before the Court in a duty list and the matter is listed for a Final Hearing of two days duration, commencing 21 March 2013 (later re-listed to 28 February 2013 due to changes in the judicial calendar) 25 February 2013 To ensure readiness for hearing, the matter is mentioned before Henderson FM (as she then was) and is assessed to require only one day, the matter is subsequently listed for a one day Final Hearing on 1 March 2013. 1 March 2013 Final Hearing does not proceed and matter adjourned for subsequent mention on 10 April 2013 before Monahan FM (as he then was) 10 April 2013 The Court determines the matter to be prepared for trial, and relists the matter for a Final Hearing of one day duration on 24 July 2013. 24 July 2013 Final Hearing and judgment reserved
Issues
As stated, the father seeks the discharge of the current orders. This is opposed by the mother who seeks their retention.
Both parties seek their legal costs be paid by the other party. The mother’s claim for costs is on an indemnity basis (noting that she also seeks the costs of the Enforcement Application). The father’s claim for costs is on ‘party/party’ basis, with the exception of the costs referrable to the court events on 1 March 2013 and 10 April 2013 where he seeks his costs be paid on an indemnity basis.
The mother also seeks an order that the father “pay interest on all overdue payments in respect of both Applications”. The intent that underpins this proposed order is not entirely clear and was not the subject of submissions. Presumably, the mother is seeking an order for interest to be paid on the costs sought in respect of both the Enforcement Application and the Discharge Application.
Evidence
Father
The father relied on the following documents at the Final Hearing:
·Initiating Application filed 6 July 2012;
·Affidavit sworn on 3 July 2013 and filed on 5 June 2013; and
·Financial Statement affidavit sworn on 3 July 2013 and filed on 5 June 2013.
In addition, the father tendered the following documents:
·Copy of screen shot of text message sent by X to the father on 29 November 2011 (Exhibit “(omitted)1”);
·Child Maintenance Payment Schedule (prepared by the father) for the period 4 May 2011 until 3 July 2013 (Exhibit “(omitted) 2”);
·Copy of screen shot of text message sent by the father to the twins on 12 December 2011 (Exhibit “(omitted) 3”); and
·Bundle of documents relating to father’s claim for legal costs (Exhibit “(omitted) 4”).
The father was a well spoken witness; his responses were both considered and polite. The father was never confrontational under cross-examination and he was willing to make concessions where appropriate.
Mother
The mother relied on the following documents at the Final Hearing:
·Response filed 23 July 2012;
·Affidavit sworn on 30 June 2013 and filed on 1 June 2013;
·Financial Statement affidavit sworn on 30 June 2013 and filed on 1 June 2013;
·Affidavit of X sworn 24 April 2013 and filed 3 May 2013; and
·Affidavit of Y sworn 24 April 2013 and filed 3 May 2013.
In addition, the mother tendered a copy of page 15 of the Transcript when the proceedings were before Henderson FM (as she then was) on 1 March 2013 (Exhibit “(omitted) 1”).
The mother was a well spoken witness and her responses were also both considered and polite. The mother was clearly concerned as to how she would manage financially if the current orders were discharged. She was also clear in her view that the twins’ university studies prevented them from obtaining any casual or part-time work at all.
X and Y were also well spoken, polite and generally candid. Not surprisingly, both twins appeared anxious in having to give evidence in this dispute, in particular Y.
Law and discussion
The Court will now consider the dispute in light of the relevant law and available evidence.
Firstly, I will consider the liability of parents to support their children before secondly considering Court’s power to make an adult child maintenance order and whether the current orders were properly made. Thirdly, I will consider whether the current orders can (or should) be discharged. If the Court is not satisfied that the current orders should be discharged, then it will go on and consider whether the current orders should be modified in any way. Once those aspects of the case have been determined, I will thereafter consider the Court’s power to make a costs order and each party’s entitlement to such an order.
Parents have the primary liability to support children
Generally speaking, the primary liability to maintain children rests with the children’s parents (see s.66C(1)). In other words, subject to ss.66L and 66T of the Act which I discuss below, the parties have the primary duty to financially support X and Y. Each party’s duty to support the children has priority over all their own commitments other than those commitments necessary to support himself or herself or any other person they have a duty to support, such as a partner (see s.66C(2)). That should not be read as meaning that such other commitments take priority over a parent’s duty to support their child; any asserted priorities must be reasonable in the circumstances and would be taken into account in considering the primary duty to maintain a child.
In this case I note that there are no other relevant children that either party has a duty to support and that the father has asserted that he has the financial capacity to continue adult child maintenance payments, should the Court find against him in relation to the Discharge Application.
Court’s power to order child maintenance
Section 66G of the Act gives the Court the power to “make such child maintenance order as it thinks proper”. Generally speaking, a child maintenance order will cease upon a child’s 18th birthday.[1] That said, s.66L of the Act allows to Court to make an order for a child aged 18 or more in certain circumstances such as when the Court is satisfied that the provision of maintenance is necessary to allow the child “to complete his or her education”.[2]
[1] See s.66L(3); also note s.66T which states that “As stated in subsection 66L(3), a child maintenance order in relation to a child stops being in force when the child turns 18, unless the order is expressed to continue in force after then”.
[2] See s.66L(2)(a).
At this stage let me note that the ‘paramountcy principle’ (ie. the best interests of the children criteria applicable in parenting matters such as ‘live with’ and ‘spend time with’ disputes) does not apply to child maintenance cases.[3] The relevant criteria in child maintenance disputes are discussed below.
[3] For a discussion see Tobin & Tobin [1999] FamCA 446; (1999) FLC 92-848; (1999) 24 Fam LR 635 (per Finn, Kay and Chisholm JJ).
Prior to considering the application of the relevant criteria in light of the evidence in this case, there are a number of preliminary considerations and jurisdictional factors that need to be canvassed.
Jurisdiction
As stated, a number of jurisdictional matters require consideration in a case such as this.
Relevant child
Section 69E of the Act prescribes that proceedings may only be instituted under the Act in circumstances where the child and/or the parents and/or a party to the maintenance proceedings is present in, or a resident or citizen of, Australia.
Non-application of the child support assessment legislation
Section 66E of the Act prohibits the Court from hearing a child maintenance application if the matter is one which should be assessed administratively under the relevant child support assessment legislation.
In this case, the relevant child support assessment legislation has no application as the children are over 18 years of age.[4]
[4] Child Support (Assessment) Act 1989 s.24(1)
Eligible applicant
According to s.66F(1) of the Act, an application for child maintenance may be sought by: either or both of the child’s parents, the child, a grandparent of the child or any other person concerned with the care, welfare or development of the child.
Relevant criteria
Section 66H of the Act sets out the approach to be adopted by the Court in child maintenance proceedings:
·firstly, the Court must consider the financial support necessary for the maintenance of a child (and this is expanded upon in s.66J); and
·secondly, the Court must determine the financial contribution, or respective financial contributions, towards the financial support necessary for maintenance of the child, that should be made by a party, or by parties, to the proceedings (and this is expanded upon in s.66K).
Required financial support
According to s.66J(1) of the Act, the Court must take the following matters (and no others) into account:
·the primary duty of parents to support their children (see ss.66B and 66J(1)(a));
·the proper needs of the children which includes the children’s ages, education and training and any “special needs” that they may have: (see ss.66J(1)(b) and 66J(2)). In addition, the Court may also take into account the relevant findings of published research in relation to the maintenance of children; and
·the children’s income and capacity to meet their own needs (see ss.66J(1)(c) and 66J(3)). The Court is required to have regard to the capacity of a child to earn or derive an income but to disregard the income of “any other person” (eg. a new de facto partner of the payer parent) unless there are “special circumstances” or any entitlement of the child, or any other person, to an income-tested social security benefit.
There is a live issue in this case as to whether X and Y have the capacity to meet their own needs. That said, in considering this aspect of the case, the Court must ignore any Centrelink benefits that the twins receive.[5] Any income tested social security benefits may, of course, be reviewed by Centrelink in light of there being an adult child maintenance order.
[5] Section 66K(4)(a) of the Act.
Available financial contribution
Section 66K of the Act sets out the matters which must to be taken into consideration in determining the contribution that a party should make. Apart from considering the parental primary duty (s.66K(1)(a)), the following four specific matters must be taken into account:
·the income, earning capacity, property assets and financial resources of the relevant party or each of the parties (see s.66K(1)(b));
·the commitments of the relevant party, or each of the parties, that are necessary to enable the party to support himself or herself or any other child or another person that the person has a duty to maintain (see s.66K(1)(c));[6]
·the direct and indirect costs incurred by the parent or other person with whom the child lives in providing care the child (see s.66K(1)(d)); and
·any special circumstances which, if not taken into account in the particular case, would result in an injustice or undue hardship to any person (see s.66K(1)(e)).
[6] For a discussion see In the Marriage of Ryan (1988) 12 Fam LR 529; (1988) FLC 91-970.
Section 66K(4) of the Act stipulates that the following two matters must be disregarded by the Court:
·firstly, any entitlement of the children, or the person with whom the children live, to an income-tested social security benefit (see s.66K(4)(a)); and
·secondly, the income, earning capacity, property and financial resources of any person who does not have a duty to support the children, or if so, is not a party to the proceedings unless, in the special circumstances of the case, the Court considers it appropriate to have regard to them (see s.66K(4)(b)).
As previously stated, the father has acknowledged that he has the financial capacity to meet the adult child maintenance order.
General powers of the court
Section 66P of the Act sets out the general powers of court in relation to child maintenance. These include the power to:
·order a lump sum payment, by instalments or in one amount (see s.66P(1)(a));
·order periodic payment (weekly, monthly or yearly) (see s66P(1)(b));
·order a transfer of property (see s.66P(1)(c));
·order that payment of an amount ordered be wholly or partly secured (see s.66P(1)(d));
·order that any necessary instrument be signed or document produced (see s.66P(1)(e));
·order payment to a specified person, public authority or into court (see s.66P(1)(f));
·make a permanent or interim order (see s.66P(1)(g));
·make an order imposing terms and conditions (see s.66P(1)(h));
·make an order by consent (see s.66P(1)(i));
·make any other order that the court considers appropriate (see s.66P(1)(j)); and
·make an order under [Pt.VII Div.7 of the Act] at any time (see s.66P(1)(k)).
I should also note, given the nature of the current orders in this dispute, that Registrars of this Court have been delegated the power to make certain orders pursuant to s.102 and s.103 of the Federal Circuit Court Act 1999 and Reg.20.00A of the Federal Circuit Court Rules 2001, including orders made with the consent of the parties.
Analysis of the current orders
In this case, I am satisfied that at the time the current orders were made:
·the mother was an eligible applicant;
·the twins were eligible children;
·the current orders were made pursuant to s.66L and s.66P(1)(b), (h) and (i) of the Act; and
·the Registrar had the power to make the current orders.
Consequently, the current orders are valid orders of the Court.
Modification to a child maintenance order
Section 66S of the Act provides the mechanism for the modification of child maintenance orders. The Court may discharge, suspend, revive or vary a child maintenance order (see s.66S(2) which is discussed further below). The Court may also modify the order with the consent of all the parties to the first final order, unless that allows any entitlement of a child or other person to an income-tested pension, allowance or benefit, to affect the duty of that child’s parents to maintain the child (see ss.66S(1A) and (1B)).
A child maintenance order may be dealt with under s.66S of the Act on any number of occasions provided that on each occasion the relevant ground is established. In considering whether to deal with a maintenance order under s.66S, the Court is required by s.66S(10) to have regard to the ordinary provisions for the making of a child maintenance order.
As stated, under s.66S(2)(a) of the Act the Court may, by order, “discharge the first order if there is just cause for so doing”. This is the provision of the Act that the father relies upon.[7]
[7] Transcript, 24 July 2013, page 70.
I note the mother relies on s.66S(3) of the Act in her submissions.[8] This section deals with the criteria to be considered if the Court makes an order varying the current order. Given that the father seeks a discharge of the current orders, rather than a variation, s.66C(3) is not immediately applicable unless s.66S(2)(d) is enlivened.
[8] See Mother’s Case Outline document dated 18 July 2013, pages 1, 3 and 5.
In the event that the Court declines to discharge the current order but forms the view that a variation pursuant to s.66(2)(d) is relevant, s.66C(3) of the Act sets out the grounds upon which a Court may increase or decrease a current child maintenance order. Broadly speaking, these grounds are:
·a change in circumstances (of the child, payer or payee) (see s.66S(3)(a));
·a change in the annual cost of living (see s.66S(3)(b));
·that the order was made by consent and the amount ordered to be paid is now not proper (see ss.66S(3)(c) and 66S(6)); and
·that at the time the order was made either material facts had been withheld from the court or material evidence was false (see s.66S(3)(d)).
Should the current orders be discharged?
The father asserts that the ‘just cause’ in this case is not just the failure of the twins to seek any casual or part-time work to earn income to assist with their expenses, but their rejection of a casual job opportunity that the father had arranged for them with (employer omitted).
There is evidence to suggest that, prior to the current orders being made, and prior to them commencing their (omitted) degree at (omitted) University, the twins both applied for a (position omitted) at (employer omitted). It would appear that X progressed to the final shortlist of candidates and was interviewed but was ultimately unsuccessful with his application. The father asserts in his affidavit that the (position omitted) would have been for 7 years in duration and would have comprised the (omitted) working full-time work with time off to attend classes, study and examinations.[9]
[9] See father’s affidavit, paragraph 11.
In respect of the alleged casual employment opportunities at (employer omitted), the father asserts that, during November 2011, he made tentative arrangements with the company that would have enabled the twins to commence casual employment as from early January 2012.[10] The father further asserts that, subject to an interview with (employer omitted), it would have offered the twins a “casual full-time” employment opportunity with payment of $700.00 each per week.[11]
[10] Ibid, paragraph 12.
[11] Ibid, paragraphs 12-18.
There is also evidence that on or about 14 December 2011, the twins attended with the father at (employer omitted) for an interview. The father details his evidence about what he asserts occurred at this interview in paragraphs 19 to 22 of his affidavit. In their respective affidavits, the twins confirm that that they attended the offices of (employer omitted) with father on 14 December 2011.[12]
[12] See X’s affidavit, paragraphs 8-9 and Y’s affidavit, paragraphs 8-9.
That said, the twins each deny that they knew they were attending (employer omitted) for the purposes of a job interview. Their evidence is that they were only made aware of the ‘interview’ when they were being driven to the (omitted) office of (employer omitted).[13] The twins each give identical evidence that X told the father that he was “not interested in work” and that he wanted “to continue studying full time at University and get a good mark”.[14] The twins also give identical evidence as to what they assert occurred during the interview. They each assert that the proposed employment at (employer omitted) would have involved them each be required to (duties omitted) on external sites (omitted), in addition to (omitted).[15] The twins each give evidence as to their disappointment in not being able to speak to (omitted) employed at (employer omitted) and both recall that “all that was mentioned was jobs as (omitted)”. The twins also recall that X advised the father that the job opportunity “does not seem too good” and that the father replied that “if you do not accept it I am not going to be happy”.[16]
[13] Ibid.
[14] Ibid.
[15] Ibid.
[16] Ibid.
The twins’ evidence as to their lack of knowledge as to the purpose of the visit to (employer omitted) on 14 December 2011 is clearly contradicted by the exchange of text messages sent by the father to the twins in the period from 29 November 2011 until 13 December 2011 (see Exhibits “(omitted)1” and “(omitted)3”). In light of the text messages it is difficult for the Court to accept that the twins had no fore knowledge that they are attending (employer omitted) for a job interview. It is quite clear from the father’s text to the twins on 12 December 2011 the father’s employer may be able to offer them both “uni holiday work … in an (omitted) environment”.[17]
[17] See Exhibit “(omitted)1”.
At paragraphs 23 to 30 of his affidavit, the father provides his evidence of what he asserts occurred in the days following the twins’ visit to (employer omitted), and in particular the text and email exchanges between the twins and the father that occurred on 20 and 21 December 2011. The twins each provide their evidence of what they say occurred on 20 and 21 December 2011 in paragraph 10 of X’s affidavit and paragraphs 9 and 10 of Y’s affidavit.
It would be fair to say having read the affidavit material, and heard each of the witnesses under cross-examination, that the father and the twins have each omitted certain information (and in particular, certain emails and text messages) that would be relevant.
It would appear that the father caused an email to be sent to the twins around lunchtime on 20 December 2011. This email seems to confirm that the twins could be offered work at (employer omitted) during the university vacation periods. The father also gives evidence of an exchange of text messages with the twins (that he asserts preceded this email) that would suggest that the twins were not adverse to considering taking up the (employer omitted) ‘offer’. That said, it is clear that on 21 December 2011 the twins (through X) informed the father by telephone that they would not be taking up the (employer omitted) ‘offer’.
There are two curious aspects of the twins’ evidence. Firstly, I note that both twins attach to their respective affidavits a handwritten statement (written by X on 21 December 2013) that purports to explain why the twins decided not to take up the (employer omitted) offer. Secondly, both twins go out of their way to state that their mother “has never tried to influence” them “with regard to their relationship with” the father. Despite these assurances, it is clear from the twins’ evidence that they discussed the (employer omitted) offer with their mother and that she was, at the very least, an influencing factor in their decision not to accept the (employer omitted) offer.
It would appear that the mother’s email to the father dated 21 December 2011 (see Annexure “I” in each of the twins’ affidavits) was sent after the email sent by the father to the twins on 21 December 2011 (see Annexure “H” in each of the twins’ affidavits). Regardless, the tone of each email reflects the poor relationship between the parties.
While the mother’s email purports to justify the twins’ university studies as preventing them from undertaking any paid employment, it is also clear that the twins assist the mother with work “around the house” which is not surprising given their age and circumstances. What the mother appears to be arguing is that the combination of the twins’ studies, together with their chores around the house, prevents them from undertaking paid employment. I note the mother broadly denies that she threatened to evict the twins if they accepted the (employer omitted) offer and that she concludes her email with the following comments:
“We all support one another. You stated that you see no other option than to terminate any future payments to me regarding maintenance. This was sorted out in court with a magistrate’s decision only 9 months ago so let’s just get on with our lives. Please don’t respond to this.”[18]
[18] See annexure “I” to the Affidavit of Y, sworn 24 April 2013 and annexure “H” to the Affidavit of X sworn 24 April 2013.
The father’s email clearly expresses his frustration with the twins’ refusal to accept the (employer omitted) offer and his belief that the mother influenced that decision. While the father makes some valid points to the twins about the benefits of obtaining some employment ahead of their graduation, he bluntly indicates his intention to terminate the adult child maintenance payments subject to resuming payment of a lesser sum (being $500.000 each per month) should they take up the (employer omitted) offer. Apart from flagging his intention to end the child maintenance payments, the father’s email appears to suggest that if the (employer omitted) offer is declined it will not be offered again. Curiously, (employer omitted) did make a further offer of casual work to the twins in its letters dated 26 June 2012 (see Annexure “I” to the father’s affidavit) (“the (employer omitted) letter”). I note that the (employer omitted) letter specified an offer for work on a casual basis during the twins’ “university holidays with some flexibility to allow for study periods, personal holidays and other relevant matters that may affect [the twins] availability”. The offer of work, based on an eight hour day, would be remunerated at a daily rate of $150.00 per day.
There is no evidence to suggest that the twins solicited the offer of work outlined in the (employer omitted) letter. Indeed, both twins attached to their affidavits a copy of their joint letter dated 12 July 2012 to Mr A of (employer omitted) (see Annexure “J” in X’s affidavit and Annexure “K” in Y’s affidavit). The letter expresses surprise in receiving the offer of casual work and purports to state their reasons for non-acceptance. Interestingly, the reasons expressed by the twins include not only their wish to concentrate on their university studies but also the ongoing court proceedings between their parents.
The question for the Court to decide is whether the failure of the twins to seek any casual or part-time work to earn income to assist with their expenses, and their specific rejection of the (employer omitted) offers, are circumstances that would justify the Court discharging the current order.
Having considered this question in light of the available evidence, the Court is not persuaded that the circumstances would justify a complete discharge of the current orders. The current orders were not conditional in any way upon the twins seeking employment. The current orders only appear to have anticipated that the twins may leave their mother’s home prior to finishing the university studies. While the amount of money to be paid would not change should that particular circumstance arise, it would be unusual for one or both of the twins to leave their mother’s home without first having obtained some type of paid employment.
While the Court is satisfied that the father’s motives in assisting the twins to gain offers of casual employment from (employer omitted) were genuine, there is insufficient evidence to suggest that the mother influenced the twins in their rejection of both of the (employer omitted) offers.
That said, the Court is of the view that the twins’ decision not to actively seek any casual or part-time employment prior to the conclusion of their university studies amounts to a changed circumstance that may justify a variation to the current orders.
Should the current orders be varied?
The Court finds aspects of the twins’ evidence unsatisfactory. While they appeared genuine in their desire to concentrate on their university studies, their evidence that they proposed to study full time during most of their university vacation periods was not believable.
The twins appeared somewhat naïve as to the benefit or otherwise of having a history of casual or part-time employment appearing on their resumes, prior to obtaining any full-time employment in the (omitted) industry. That said, I note the twins referred to the following in their letter to Mr A dated 12 July 2012:
“We are both interested in (occupation omitted) in the (omitted) industry and will pursue this is our final year. We have a contact who seems interested when we have finished our degree. It is a hard course and we have seen many fail including some of our friends.”[19]
[19] See annexure “J” to the Affidavit of X sworn 24 April 2013 and annexure “K” to the Affidavit of Y, sworn 24 April 2013.
It was also noteworthy that the twins’ reasons for refusing the initial (employer omitted) offer was that the work appeared somewhat menial because it involved the delivery of documents and making coffee. I note that the second (employer omitted) offer proposed payment of $150.00 per day (or $18.75 per hour based on an eight hour day or more likely $21.43 per hour based upon seven hours work each day with a one hour lunch break) is higher than the hourly rate currently paid to 20-year-old ‘juniors’ (being $16.00 per hour), is also higher than the current minimum wage paid to adults (being $16.37 per hour), and is also marginally higher that the amount payable to ‘four-year trained apprentices’ (being $18.11 per hour).[20]
[20] See National Minimum Wages for Apprentices, Juniors and Trainees, as at 1 July 2013, Fair Work Ombudsman website: >
In light of the evidence, the Court is satisfied that the circumstances of the twins have changed so as to justify a variation of the current orders. In determining whether a decrease in the amount currently paid is appropriate, the Court must consider the relevant statutory provisions outlined previously.
Having taken those provisions into account in light of the evidence, the Court is satisfied that an amount of $500.00 per month per twin (or $125.00 per week per twin), is appropriate in the circumstances. The relevant adult child maintenance payments will cease in November 2014 (noting that the examinations for the Spring Session in 2014 appear to end on or about 20 November 2014)[21] or such earlier date if either twin ceases or defers his current full-time university course. That said, there was no evidence to suggest that the twins were proposing to leave or defer their course. There was also no evidence to suggest that the twins are not performing well in their studies. In other words, there is a high expectation that they will graduate with their degree following the conclusion of their studies in November 2014.
[21] See University of (omitted) 2014 Academic Year Session Dates: >
Given the circumstances, I am satisfied that it is appropriate that the variation be backdated to commence on and from 6 July 2012 until 20 November 2014. For simplicity of calculation, and balancing fairness, the adjustments can commence on and from 1 July 2012 and end on 30 November 2014.
I note that the father provided the Court with a list of payments made by him to the mother from 4 May 2011 to 31 July 2013 which became Exhibit “(omitted)2” in the proceedings. Assuming the father has continued to make payments during the period 31 July 2013 to date in accordance with the Orders made 21 March 2011, the calculation of the adjustment to be made should be as follows:
Period Payment Made Varied Payment Adjustment
1 July 2012 – 31 July 2012 $1250 $1000 $250 1 August 2012 – 31 August 2012 $1250 $1000 $250 1 September 2012 – 30 September 2012 $1250 $1000 $250 1 October 2012 – 31 October 2012 $1250 $1000 $250 1 November 2012 – 30 November 2012 $1250 $1000 $250 1 December 2012 – 31 December 2012 $1250 $1000 $250 1 January 2013 – 31 January 2013 $1250 $1000 $250 1 February 2013 – 28 February 2013 $1250 $1000 $250 1 March 2013 – 31 March 2013 $1250 $1000 $250 1 April 2013 – 30 April 2013 $1250 $1000 $250 1 May 2013 – 31 May 2013 $1250 $1000 $250 1 June 2013 – 31 June 2013 $1250 $1000 $250 1 July 2013 – 31 July 2013 $1250 $1000 $250 1 August 2013 – 31 August 2013 $1250 $1000 $250 1 September 2013 – 30 September 2013 $1250 $1000 $250 1 October 2013 – 31 October 2013 $1250 $1000 $250 1 November 2013 – 30 November 2013 $1250 $1000 $250 TOTAL $21,250 $17,000 $4,250 Consequently, an adjustment of $4,250.00 therefore needs to be made in favour of the father. As previously noted, I will set the date at which the payments are to end as 30 November 2014.
In addition, I think there is merit in giving the father the option to either continue to make the adjusted monthly payments, or to make a final lump-sum payment to the mother.
Should the father continue to make adjusted monthly payments he will pay to the mother the rate of $646.00 (rounded up from $645.83) per month.[22]
[22] The adjustment for the monthly amount is calculated as follows: $7,750.00 ($12,000.00 less $4,250.00) divided by 12 (ie. $645.83).
As stated, I consider that there is merit in offering the father the option of making a final lump sum payment as it will finalise the financial relationship between these parties and reduce the likelihood of further litigation between them. Should the father choose to make a final lump-sum payment, the Court finds it appropriate to apply a 5% discount to such a payment. Consequently, the lump sum payment option would require a payment of $7,362.
To summarise, should the father elect to continue to make the payments on a monthly basis, he will be required to pay to the mother the sum of $646.00 per month for 12 months from the date of these Orders. Alternatively, should the father elect to make the final lump sum payment, he will be required to pay to the mother the sum of $7,362 and he will be given a period of four weeks to do so. This outcome assumes, of course, that the payments under the current orders are up-to-date and not in arrears. A claim for any arrears should not be affected by the variation to the current orders.
The Court will now consider the claims for costs each party makes against the other.
Costs
Power of the Court to make a costs order
Pursuant to reg.21.02 of the Federal Circuit Court Rules 2001 (“the FCC Rules”), the Federal Circuit Court has the power to make an order for costs at any stage in a proceeding. Generally speaking, a costs order is not intended as some form of punishment for engaging in litigation “but rather to act as a compensation for the party who has had to participate when they probably ought not to have been there”.[23]
[23] Arman & Arman [2009] FamCA 8 at [16] (per Cronin J).
In family law matters, the Court also needs to consider s.117(1) of the Act which states the principle that each party shall pay their own costs. The exception to that rule is contained in s.117(2), which relates to circumstances where the Court finds there is justification for departing from the principle. This exception is subject to the matters referred to in s.117(2A) of the Act.
Section 117(2A) of the Act states:
“In considering what order, if any, should be made under subsection (2), the Court will have regard to:
(a) The financial circumstances of each of the parties to the proceedings;
(b) Whether any party to the proceedings is in receipt of assistance by way of legal aid and, if so, the terms of the grant of that assistance to that party;
(c) The conduct of the parties to the proceedings in relation to the proceedings, including - without limiting the generality of the foregoing - the conduct of the parties in relation to the pleadings, particulars, discovery, inspection, directions to answer questions, admission of the facts, production of documents and similar matters;
(d) Whether the proceedings were necessitated by a failure of a party to the proceedings to comply with the previous orders of the Court;
(e) Whether any party to the proceedings has been wholly unsuccessful in the proceedings;
(f) Whether either party to the proceedings has made an offer in writing to the other party to the proceedings to settle the proceedings and the terms of any such offer; and
(g) Any such other matters as the Court considers relevant.”
Quantum of costs
Unless the Court otherwise specifies, costs are paid on a “party/party” basis.
“Party/party” costs are costs necessarily incurred, paid at a reasonable rate. The FCC Rules incorporate a schedule of costs as a guide to party/party costs in family law proceedings. Party/party costs would not ordinarily cover all the legal costs incurred by a party.
I note again that the father is only seeking that his legal costs be paid on a party/party basis and not on an indemnity basis, except for the Court events that occurred on 1 March 2013 and 10 April 2013 (where he does seek that his costs be paid on an indemnity basis).
The mother seeks her costs of both the Enforcement Application and the Discharge Application. She also seeks that these costs be paid on an indemnity basis.
“Indemnity” costs are ordered when the Court intends the costs order to cover all the legal costs reasonably incurred by that party. When a costs agreement is involved, the charges to be imposed on the other party are subject to the requirement of reasonableness. I note that “indemnity costs” are not defined in the FCC Rules.
The authorities in family law cases are very clear that indemnity costs will only be made in exceptional circumstances. In Fennessy & Gregorian [2009] FamCAFC 44; (2009) FLC 93-399 the Full Court of the Family Court of Australia (“Fennessy”),[24] discussed the issue at length and made reference to a number of cases in which the question of indemnity costs was considered.
[24] Coleman, Boland and Thackray JJ.
Amongst their discussion was reference to their earlier decision of Kohan & Kohan (1993) FLC 92-340; (1992) 16 Fam LR 245 in which their Honours held that there is “nothing in s 117 or 123 of the Family Law Act 1975 (‘the Act’) prevents the Court making an order for costs on an indemnity basis” and that:
“2.The intent of s 117(1) and 117(2) is that in this jurisdiction costs should not follow the event as a matter of course. However, where the justice of the matter so requires, the Court may make such order as the Court considers just. As we have pointed out, the Court may depart from the scale of costs prescribed under the rules. However, the purpose of fixing a scale of costs must be understood to signify that they contain the normal rates of charges. By O 38 r 2, the provisions of O 38 apply to costs ordered to be paid or taxed, and costs payable or to be taxed between solicitor and client. Order 38 rule 7 makes provision for the allowance of additional amounts for complexity, difficulty or novelty and special skill, knowledge or responsibility. Consequently, the Court should not depart lightly from the ordinary rules relating to costs between party and party and the circumstances justifying the departure should be of an exceptional kind. See Degmam v Wright (No 2); Wentworth v Rogers (No 5); Hobartville Stud v Union Insurance Co.
3.Indemnity costs orders are still an exception in this and other jurisdictions.”[25]
[25] (1993) FLC 92-340 at [2].
The judgment in Fennessy additionally referred to comments made in Colgate-Palmolive Co v Cussons Pty Ltd (1993) 118 ALR 248 in which Sheppard J held:
“24….
4. In consequence of the settled practice which exists, the Court ought not usually make an order for the payment of costs on some basis other than the party and party basis. The circumstances of the case must be such as to warrant the Court in departing from the usual course …it is useful to note some of the circumstances which have been thought to warrant the exercise of the discretion. I instance the making of allegations of fraud knowing them to be false and the making of irrelevant allegations of fraud (both referred to by Woodward J in Fountain and also by Gummow J in Thors v Weekes evidence of particular misconduct that causes loss of time to the Court and to other parties (French J in Tetijo)… the making of allegations which ought never to have been made or the undue prolongation of a case by groundless contentions (Davies J in Ragata)…”[26]
[26] (1993) 118 ALR 248 at [24]
Finally, Fennessy looked at the decision in Yunghanns & Yunghanns (2000) FLC 93-029; (2000) 26 Fam LR 331 where their Honours “acknowledged that the category of cases in which an indemnity costs order is appropriate is not closed.” In particular, their Honours considered that “it is not a condition precedent to the exercise of the discretion that some collateral purpose or species of fraud be established against the party against whom such an order is sought.”[27]
[27] (2000) FLC 93-029; (2000) 26 Fam LR 331
Lastly, I note that Reg.21.02 of the FCC Rules allows the Court to refer the costs for assessment via Chapter 19 of the Family Law Rules 2004. That said, when party/party costs are ordered, the usual approach of this Court is to fix the amount pursuant to Schedule 1 of the FCC Rules.
Should a costs order be made against the mother?
The father seeks his costs of his application, and if successful, seeks that the cost of the appearances on 1 March 2013 and 10 April 2013 be payable on an indemnity basis.
The Court must first consider whether a costs order should be made in light of the relevant criteria and evidence. I make the following comments:
·The mother’s evidence is that her financial circumstances are stretched as documented in her Financial Statement. Therein the Mother asserts that she has liabilities in the amount of $77,986.00 and a weekly income that matches her weekly expenditure.[28]
·The father’s evidence is that his financial circumstances are similarly strained. He asserts in his Financial Statement that his current expenditure is higher than his weekly income, and he has liabilities in the amount of $307,500.00.[29]
·Neither party indicated that they were legally aided in these proceedings.
·The father raises conduct issues by the mother that resulted in the final hearing not proceeding before Henderson FM (as she then was) on 1 March 2013.
·While the father’s Discharge Application will succeed in having the current orders varied, he failed to persuade the Court that the current orders should be discharged.
·There is no evidence from either party of any offers of settlement.
[28] Mother’s Financial Statement filed 1 July 2013 at Part B.
[29] Father’s Financial Statement filed 5 June 2013 at Part B.
As noted, the father did not succeed in having the current orders discharged. While the Court has reached the conclusion that it is appropriate to vary the current orders the costs of pursuing that application should not rest with the mother.
In light of the evidence and statutory criteria I am satisfied that each party should pay their own costs associated with the father’s Discharge Application. That said, I am persuaded by the father’s arguments that a costs order should be made in his favour and against the mother for those costs related to the failure of the final hearing proceeding before Henderson FM (as she then was) on 1 March 2013. This is because of the mother succeeded in getting an adjournment in order to file affidavit material from the twins in support of her case by wrongly suggesting to the Court that she had not done so in her preparation for the final hearing because I had in some way previously directed the parties not to have the twins on affidavit.[30]
[30] Having looked at the Transcript of 26 March 2013, I clearly had some discussions with Mr Purdon, and the Father appearing in person on that date, as to the twins filing affidavits. At this time the application before the Court was the mother’s enforcement application and the father’s response to reduce the payments and the parties consented to attend a further Conciliation Conference in an attempt to resolve the matter. The result of this discussion was that I suggested that Mr Purdon put his proposal as to having the twins on affidavit to the Father and if the Father “doesn’t object to it, then I won’t stand in the way”. I again stated moments later “At this stage, if the boys were going to be put on affidavit, I would like some agreement on it, otherwise it’s probably an issue that I would prefer to wait until after the conciliation conference, but if there’s agreement that their evidence might assist in the conciliation process, I’m not going to stand in the way…” (Transcript, 26 March 2012 pages 5-6)
As to quantum, I am not persuaded that such costs should be paid on an indemnity basis. The claim for costs does not fall within the exceptional category. Consequently, such costs will be calculated in accordance with Schedule 1 of the FCC Rules. The relevant amount is $2,265.00 made up as follows:
Item 13 (full day hearing) $1,994.00
Item 13 (short mention) $ 271.00
$2,265.00
Should a costs order be made against the father?
The mother seeks her costs for the Enforcement Application and for defending the father’s Discharge Application. She seeks at such costs be paid on an indemnity basis.
As stated, the Court must start by considering whether a costs order should be made in light of the relevant criteria and evidence. I make the following comments:
·I refer to the above comments about each party’s respective financial circumstances, noting again that neither party indicated that they were legally aided in these proceedings.
·The mother’s Enforcement Application was filed after the father unilaterally stopped making the payments due under the current orders.
·The mother’s Enforcement application was withdrawn and dismissed on a date after there was agreement that the father had, by then, paid the alleged arrears.
·There appears to be no evidence in relation to offers of settlement from either party.
In light of the evidence and statutory criteria I am persuaded by the mother’s arguments that a costs order should be made in her favour and against the father for those costs related to the now withdrawn Enforcement application. It is clear from the evidence that the father unilaterally stopped making child maintenance payments prompting the mother to file the Enforcement application.
As to quantum, I am not persuaded that such costs should be paid on an indemnity basis. As with the father’s claim discussed above, this claim by the mother does not fall within the exceptional category. Consequently, such costs will be calculated in accordance with Schedule 1 of the FCC Rules. The relevant amount is $2,112.00 made up as follows:
Item 10 (lump sum – enforcement proceedings) $ 844.00
Item 13 (half day/conciliation conference) $ 997.00
Item 13 (short mention) $ 271.00
$2,112.00
Conclusion
As stated, there will be orders varying the current adult child maintenance orders. Should the father elect to continue to make the payments on a monthly basis, he will be required to pay to the mother the sum of $646.00 per month for 12 months (that is, from 1 December 2013 until 30 November 2014). Alternatively, should the father elect to make the final lump sum payment, he will be required to pay to the mother the sum of $7,362 and he will be given a period of four weeks to do so.
In relation to costs, there will be cost orders made in favour of the father and against the mother in the sum of $2,265.00. There will also be cost orders made in favour of the mother and against the father in the sum of $2,112.00. Allowing for set-off, the mother will be required to pay the father the sum of $153.00 by way of costs. I will give the mother four weeks to pay this amount as the father directs in writing.
There will be final Orders and Notations of the Court to reflect these reasons.
I certify that the preceding one hundred and five (105) paragraphs are a true copy of the reasons for judgment of Judge Monahan
Date: 11 December 2013
Key Legal Topics
Areas of Law
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Family Law
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Civil Procedure
Legal Concepts
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Costs
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Remedies
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Appeal
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