Ananyev and Ananyev (Child support)

Ananyev and Ananyev (Child support) [2019] AATA 1692 (10 May 2019)

DIVISION:Social Services & Child Support Division
REVIEW NUMBER:  2018/BC014228
APPLICANT:  Mr Ananyev
OTHER PARTIES:  Child Support Registrar
Mrs Ananyev

TRIBUNAL:Member J Thomson
DECISION DATE: 10 May 2019
DECISION:

The Tribunal sets aside the decision under review and, in substitution, decides that for the period 19 September 2017 to 31 March 2019, Mr Ananyev’s adjusted taxable income is varied to $95,000 and Mrs Ananyev’s adjusted taxable income is varied to $45,000.

CATCHWORDS

CHILD SUPPORT – departure determination – income, property and financial resources of both parents – whether liable parent unable to work due to medical condition – redirection of family trust income to current partner – decision under review set aside and substituted

Names used in all published decisions are pseudonyms. Any references appearing in square brackets indicate that information has been removed from this decision and replaced with generic information so as not to identify involved individuals as required by subsections 16(2AB)-16(2AC) of the Child Support (Registration and Collection) Act 1988.

REASONS FOR DECISION

BACKGROUND

Mr Ananyev and Mrs Ananyev are the parents of [Child 1] (born 2001), [Child 2] (born 2003), [Child 3] (born 2005) and [Child 4] (born 2007).
Mr Ananyev sought review of an objection decision made by the Department of Human Services – Child Support (the Department) on 9 January 2018. This decision allowed his objection to an earlier Department decision dated 24 October 2017 setting Mr Ananyev’s adjusted taxable income for the period 1 October 2017 to 30 September 2020 at $165,305. The Department also set Mrs Ananyev’s adjusted taxable income for the same period at $75,448.
On 22 November 2017, Mr Ananyev objected to the Department’s decision of 24 October 2017, and on 9 January 2018, an objections officer allowed his objection, setting aside the Department’s earlier decision of 24 October 2017 and deciding that Mr Ananyev’s adjusted taxable income for the period 19 September 2017 to 31 March 2019 should be varied to $105,903, and Mrs Ananyev’s adjusted taxable income for the same period should be varied to $62,443.
On 3 April 2018, Mr Ananyev sought review of the objections officer’s decision of 9 January 2018 by the Tribunal.
The Tribunal heard the matter over the course of 6 December 2018 and 28 February 2019. Both parties attended the hearings on those dates via conference telephone and gave affirmed evidence. The Tribunal had before it documentation provided by the Department (admitted into evidence and marked Exhibit 1), and the parties (admitted into evidence and marked, respectively, Exhibits A and B). Both parties had copies of these documents with them at hearing.
At the conclusion of the hearing on 6 December 2018, the Tribunal directed both Mr and Mrs Ananyev to provide further documents and, in Mrs Ananyev’s case, further written submissions in response to evidence given by Mr Ananyev at the initial hearing on 6 December 2018. Both parties have complied with the Tribunal’s directions, and the additional documentation and submissions have been added to Exhibits A and B, and circulated to the respective parties for consideration and response.
Both parties were afforded the opportunity to provide their responses at the re-scheduled hearing of the matter on 28 February 2019. Both parties had copies of these additional documents at the re-scheduled hearing on 28 February 2019.

ISSUES

The issues which arise in this case are the income, property and financial resources available to Mr Ananyev and Mrs Ananyev for the purposes of child support.

CONSIDERATION

In reaching its decision, the Tribunal has considered the affirmed evidence given by Mr and Mrs Ananyev at the hearings on 6 December 2018 and 28 February 2019 and the documentation contained in Exhibits 1, A and B.

Legislative framework

The rate of child support payable by a liable parent is usually based on an administrative assessment under Part 5 of the Child Support (Assessment) Act 1989 (the Act). A formula is used. It takes into account variables including each parent’s adjusted taxable income for the last relevant year of income, the number of children, and the level of care provided by each parent. Part 6A of the Act allows for a departure from the administrative assessment (a process commonly known as a “change of assessment”). Under subsection 98C(1), the Registrar may make such a departure determination if three matters are established:
·     one, or more than one, of the grounds for departure referred to in subsection 98C(2) exists (subparagraph 98C(1)(b)(i));
·     a departure is just and equitable as regards the children and each parent (sub-subparagraph 98(1)(b)(ii)(A)); and
·     it is otherwise proper to make a departure decision (sub-subparagraph 98C(1)(b)(ii)(B)).
Subsection 98C(2) provides that the grounds for departure are the same as the grounds set out in subsection 117(2) of the Act.
If satisfied that a ground or grounds exist and that it would be just and equitable and otherwise proper to make a particular determination, the Registrar may make one of the determinations prescribed in section 98S of the Act. It permits a range of determinations, including varying the rate of child support payable, the adjusted taxable income or the cost percentage for a child.

Grounds for departure

Income, property, financial resources and earning capacity

Subparagraph 117(2)(c)(ia) - commonly referred to as Reason 8 - provides as a ground for departure:
(c) that, in the special circumstances of the case, application in relation to the child of the provisions of this Act relating to administrative assessment of child support would result in an unjust and inequitable determination of the level of financial support to be provided by the liable parent for the child…..
(ia) because of the income, property and financial resources of either parent; or….
The words “in the special circumstances of the case” are not defined in the legislation. Whilst it is not possible to define with precision the meaning of that term, it is intended to emphasise that the facts of the case must establish something which is special or out of the ordinary. That is, the intention of the legislation in subsection 117(2) must be guided by the qualification that the Tribunal will not interfere with the administrative formula result in the ordinary run of cases. In Gyselman v Gyselman (1992) FLC 92-279, it was held that “special circumstances” were “facts peculiar to the particular case which set it apart from other cases”. The Tribunal will consider whether the application of the administrative assessment would result in an unjust and inequitable determination of child support payable, having regard to the evidence relevant to the parents’ financial position.

Mr Ananyev’s evidence at hearing

Mr Ananyev is currently unemployed and in receipt of Centrelink benefits. Prior to developing problems with his back, he was employed as a qualified [tradesman], but due to his having worked for 20 years in this occupation he asserts he is unable to continue working in the construction industry as a [tradesman] because of his back condition. Prior to the parties separating in May 2013, they conducted a [pet] business from the family home at [Property 1], which Mr Ananyev said was very successful, generating a gross income in excess of $100,000 per annum. He said the business was valued for family law property settlement purposes at over $110,000.
Since transferring the business to Mrs Ananyev in January 2014, he said the business has deteriorated, but he asserts Mrs Ananyev is currently deriving somewhere in the vicinity of $50,000 per annum from this business which he said she conducts under the business name of [Business Name 1] from her current residence at [Property 2].
Mr Ananyev gave evidence of having purchased a number of investment properties from about 2005 until separation on 13 May 2013. Prior to separation, he had arranged for Mrs Ananyev’s mother, [Ms A], and her brother Mr [B] to migrate to Australia. By agreement with Mrs Ananyev, [Ms A] and Mr [B], Mr Ananyev had purchased some of these properties in the names of [Ms A] and Mr [B]. Mr Ananyev purchased other properties in his and Mrs Ananyev’s names and in the name of [deleted] Pty Ltd in its capacity as trustee of the Ananyev Family Trust (the Family Trust). He and Mrs Ananyev were the directors of this company and its two shareholders.
[Property 2] was purchased in [Ms A]’s name for what Mr Ananyev described as income tax purposes. However, as a consequence of legal proceedings in the Federal Circuit Court of Australia, [Mrs A] has been determined to be the rightful owner of the property. Mrs Ananyev, [Mrs A] and the children are currently residing at the [Property 2].
Mr Ananyev gave evidence that most of his investment property portfolio has been sold off, and he currently holds interests in [Property 1] as joint tenants with Mrs Ananyev, (where he currently resides with his current partner, Ms [C] and their [daughter], and the Family Trust property at [Property 1], which he renovated and where he spends time when his depressive condition becomes severe, occupying the ground floor flat of the dwelling on this property. The upper level flat has been rented to tenants since 4 November 2018 at a weekly rental of $390.
Both parents acknowledged at hearing that they have yet to reach agreement on a family law property settlement.
Mr Ananyev acknowledged in evidence that Ms [C] also keeps a number of breeding [pets] at [Property 1] utilising the [facilities] on that property previously used by Mr and Mrs Ananyev prior to separation.
Contrary to Mrs Ananyev’s assertion in her evidence to the Tribunal, Mr Ananyev’s evidence was that Ms [C] does not conduct a [pet] breeding business from this property. He said he was not aware of the number of [pets] Ms [C] keeps at the property, notwithstanding that he is actually residing on the property. The Tribunal is sceptical of his evidence in this regard.
He said that although Ms [C] had considered operating a [pet] breeding business from [Property 1] she had made a conscious decision not to proceed with that option until such time as Mr and Mrs Ananyev had reached a satisfactory property settlement agreement in their proceedings presently before the Federal Circuit Court of Australia.
He also said that Ms [C]’s parents, who reside in [Country 1], provide regular financial support for Ms [C] and Mr Ananyev although no evidence of that was provided.
Mr Ananyev provided limited medical evidence to substantiate that his back problems were sufficiently serious to affect his ability to work as a [tradesman]. He submitted copies of medical certificates provided by his treating doctor, Dr [D], from December 2016 to November 2017 attesting to his back pain and anxiety/depressive conditions and according him periods of one to three months off work (see pages 22 to 30 of Exhibit 1).
Dr [D]’s latest undated report (see page A25 of Exhibit A), produced shortly before the rescheduled hearing of this matter on 28 February 2019, described lumbar deterioration at L4/5 most likely secondary to his job as a [tradesman] affecting his capacity for work for more than 24 months. Dr [D] prescribed a management plan for chronic lower back pain relief and referral for external chiropractic treatment and physiotherapy.
Dr [D]’s report also referred to Mr Ananyev’s anxiety, depression and sleeping disorders manifest since early 2015 as most likely related to stress deriving from his involvement in Family Court proceedings, the prognosis for which was uncertain and was being treated with a regime of antidepressants.
Mrs Ananyev gave evidence of Mr Ananyev’s involvement as a qualified instructor in [a sporting activity] and his participation in that activity as [a] representative at [World championships].
Mr Ananyev acknowledged that he did participate in this activity as a sporting activity. His evidence was that he was not a fully qualified instructor in the sport, and was not able to derive income from instructing in that sport, nor was it his intention to engage in that form of occupation. However he did acknowledge that his back condition did not preclude him from participating in [this activity] as a sporting pursuit.
The Tribunal is satisfied Mr Ananyev does not derive income from his [sporting] activities.
Mr Ananyev’s evidence regarding the circumstances of his most recent employment with [Business Name 2] as a [tradesman] was remarkable. Evidence before the Tribunal at pages 76 to 78 of Exhibit 1 comprised two applications he submitted to the [Bank 1] dated [in] August 2017 for loans of $616,000 and $192,000 and a supporting letter from his employer at the time, [Business Name 2], reflecting the terms of his full time employment contract as a [tradesman] on an annual salary of $90,000 for a 40 hour week including overtime as required. This suggests he was not only capable of working as a [tradesman], notwithstanding his alleged chronic back condition, but that he was capable of earning an income of $90,000.
Mr Ananyev’s further evidence at hearing that his employment with [Business Name 2] was abruptly terminated when Mrs Ananyev sought information regarding his income from [Business Name 2] was conflicting. He said his friend, who owned the business approached him and expressed a reluctance to become involved in Mr Ananyev’s family law disputations and suggested his employment be terminated. Mr Ananyev also gave evidence that his employment was terminated because of a combination of his need to take time off work to receive treatment for his back condition and his inability to complete his tiling assignments. He also asserted that he found it difficult to combine his work with his caring responsibilities for his young [daughter] and for that reason he had decided to resign his position with [Business Name 2] to become a stay at home father.
The Tribunal is satisfied that Mr Ananyev’s employment with [Business Name 2] was terminated by mutual agreement between him and his employer.
His evidence before the Tribunal regarding his current income and his financial circumstances was also complex and lacking in supporting evidence in the form of income tax returns and bank statements reflecting his expenditure and the sources of his funding to meet those expenses. The Tribunal considers that as the applicant in this matter, it was Mr Ananyev’s responsibility to provide the necessary evidence to support his submissions for a reduction in his adjusted taxable income set by the objections officer in the decision under review.
Mr Ananyev’s evidence as to his income and financial resources was that he is a stay at home father receiving Centrelink benefits in the form of carer allowance for his [daughter] and family tax benefit Parts A and B amounting to a combined weekly income of $815, annualised to $42,380. He said his partner Ms [C] was unable to care for [their daughter] because of medical complications arising from two recent miscarriages and he had successfully applied for a carer’s pension.
He provided copies of his [Bank 2, Account 1] covering the period 28 June 2016 to 28 June 2018 (see pages A187 to A238 of Exhibit A) into which his Centrelink payments referred to above are deposited on a fortnightly basis.
Mr Ananyev gave evidence that he draws cash from [Bank 2 Account 1] which he then deposits to his [Bank 1 Account 1].
Mrs Ananyev asserted in her evidence, by reference to the [Bank 2 Account 1] statement at pages A198 and his [Bank 1 Account 1] statement at page A383 of Exhibit A, that there is a correlation between amounts withdrawn from the [Bank 2 Account 1] account and deposits of similar amounts into [Bank 1 Account 1]. The statement at A198 is for December 2016 and A383 is for December 2017 so her assertion in that regard was incorrect. However, the notation on the statements suggests amounts withdrawn from [Bank 2 Account 1] were by electronic funds transfer to [Bank 1 Account 1] and not cash withdrawals. When tested, the funds transferred do correlate, confirming they were not withdrawn as cash, rather they were transferred by electronic funds transfer from [Bank 2 Account 1] to [Bank 1 Account 1].
Mr Ananyev says Ms [C] pays the household expenses from funds supplied by her family in [Country 1]. No evidence has been provided of the receipt of these funds, the frequency with which they are provided to Ms[C], or the basis upon which they have been provided, either by way of loan repayable at interest over a term or otherwise.
Mr Ananyev gave evidence of two Home Loan mortgage debts to [Bank 3] for which he and Mrs Ananyev are liable. While it was not clear from his evidence, these mortgage debts appear to relate to borrowings secured against [Property 1] and [Property 3], respectively reflected on the bank statements he provided for [Bank 3 Loan1] at pages A492 to A494, and A511 to A513 of Exhibit A, covering the period 20 September 2017 to 20 September 2018, and [Bank 3 Loan 2] at pages A526 to A528, A541 to A542, A555 to A557, and A579 to A581 of Exhibit A, covering the period 20 July 2016 to 11 July 2018.
He also provided copies of [Bank 3] statements for joint accounts he and Mrs Ananyev continue to conduct, [Loan 1 and Loan 2]. These accounts appear to be linked to the [loan] accounts referred to in the preceding paragraph and record the monthly repayments Mr Ananyev said he makes of $1,265.56 to [Loan 2] ([Property 3]), and $5,150.22 to [Loan 1][Property 1], being a monthly total of $6,415.78, annualised to $76,989.36.
Mr Ananyev’s evidence was that he services the repayments on both [Loan 1 and Loan 2] identified above from another [Bank 3] account conducted in his name alone [Bank 3 Account 1], and that the funds for this account are transferred by him from [Bank 1 Account 1](see pages A549 to A551, A559 to A560, and A565 to A566 covering the period 23 January 2017 to 23 January 2018.
Evidence before the Tribunal of other banking accounts conducted by Mr Ananyev alone, or jointly with Mrs Ananyev, namely his [Bank 1 Account 2], his [Bank 1 Account 3] and his [Bank 3 Account 2], and the joint accounts, [Bank 3 Account 3 and Bank 3 Account 4], suggests that these accounts are not active with negligible balances and transactional history.
The Tribunal concludes from its analysis of Mr Ananyev’s bank statements, and his evidence as to his income and financial resources as set out above, that, by reference to his loan applications to [Bank 1] dated [in] August 2017 and the supporting documentation he has an income of at least $90,000 per annum, notwithstanding his back condition, he derives rental income from [Property 3] of $390 per week, notwithstanding his redirection of that income to his partner Ms [C], he receives $815 per week income from his Centrelink carer allowance and other benefits, annualised to $62,660 ($390 + $815 = $1,205 X 52 = $62,660), and he has a demonstrated financial resources capacity to service Home Loan repayments totalling $6,415,78 per month, annualised to $76,989.36, reflective of a gross income to support that level of repayment of $8,800 per month, annualised to $105,600 per annum.

Mrs Ananyev’s evidence at hearing

Notwithstanding Mr Ananyev’s assertions as to Mrs Ananyev’s income derived from her activities as [a] driver, the income from which seems to be relatively small and inconsistent, the issue centred on her activities as a breeder for profit of [pets].
Mrs Ananyev acknowledged in evidence that she does maintain a number of [pets] at [Property 2] for breeding purposes and also maintains a website advertising [pets] for sale under the business name of [Business Name 1]. She asserted in evidence that this is a hobby and that she does not derive any, or any significant, income from this activity.

Although she did not comply with her undertaking at the conclusion of the re-scheduled hearing on 28 February 2019 to provide a copy of her 2016/17 income tax return to the Tribunal, she did provide copies of her [Bank 4] bank statements for her [Bank 4 Account 1] for the period 1 July 2016 to 6 December 2017 (see pages B31 to B61), her PAYG payment summary, personal income tax return and income tax assessment notice for the 2017/18 financial year (see pages B18 to B25), Business Activity Statements for the period July 2017 to June 2018 (see pages B26 to B29 of Exhibit B), and profit and loss statements for her business, [Business Name 1], for the periods 1 July 2016 to 30 June 2017, and July 2017 to June 2018 (see pages B60 to B75).
An analysis of the statements for [Bank 4 Account 1] for the period 1 July 2016 to 30 June 2017 reflects deposits for sales of [pets] totalling $27,801. For the period 1 July 2017 to 23 November 2017, a period of 146 days, the [Bank 4] bank statements reflect [pet] sales of $12,390, annualised to $30,975 ($12,390 / 146 X 365 = $30,975) for the financial year ended 30 June 2018.
The website for [Business Name 1] was last updated [in] March 2019 and the business has been registered for GST since 1 October 2016 and remains so. The profit and loss statement for the period 1 October 2016 to 31 December 2016 for [Business Name 1] records Mrs Ananyev outlaying $5,000 on 24 November 2016 for [breeding stock](see page B66 of Exhibit B) and the profit and loss statement for the financial year July 2017 to June 2018 reflects expenditure of $1,780 on stud service fees.
An analysis of the profit and loss statements for [Business Name 1] for the financial years 2017 and 2018 reflects sales of [pets] of $25,718 and $26,150 respectively, suggesting the business is other than a hobby.
However, a review of the expense items for the 2017 and 2018 financial years reveals no allowance for stock in terms of breeding stock and [pets] available for sale. The Tribunal also considers the motor vehicle and travel expense item reflected in the 2017/18 profit and loss statement of $1,215 should not be allowed, given the nature of the business.
No reliable evidence as to the quantity of breeding stock/number of [pets] available for sale was available to the Tribunal at hearing, other than the photographic evidence at pages A111 to A187 and A395 to A442 of Exhibit A, and the item “purchase of breeding stock $5,000” on 24 November 2016, reflected in the 2016/17 profit and loss statement. However, based on the evidence available to it, the Tribunal considers an allowance for breeding stock of $5,000 and $15,000 for [pets] available for sale is warranted. This is based on Mr Ananyev’s estimate given in his evidence as to the average sale price of [pets] of $1,500, and allowing for, say, 10 [pets] on hand resulting from the breeding activities.
Mrs Ananyev also provided a copy of her payment summary from [Business Name 3] reflecting a taxable income of $22,825 for the 2017/18 financial year. She gave evidence that she became unemployed in June 2018 when she ceased working for [Business Name 3].
The adjustments relating to car and travel expenses, stock of [breeders], and annualising the deposits reflected in her bank statements for [pet] sales as income, results in an adjusted profit of $28,324.90 (rounded up to $28,325) for [Business Name 1] for the 2017/18 financial year. Adding the wages from [Business Name 3] of $22,825 results in adjusted total income for Mrs Ananyev for the 2017/18 financial year of $51,149.90 (rounded up to $51,150).
In her statement of financial circumstances (SOFC) dated 11 November 2018 at pages B2 to B9 of Exhibit B, Mrs Ananyev records her average weekly income at $629.05 comprising family assistance of $368.55 (which is not considered as income for the purposes of child support) and a newstart allowance of $260.50, annualised to $13,522.60 (rounded up to $13,523). However, on the information available to the Tribunal, it appears that her combined income from Centrelink and [Business Name 1] for the 2018/19 financial year would be $41,848.
Mrs Ananyev’s [driving] activities reflected in the profit and loss statements and [Tax] Summaries she provided at pages B77 to B95 were considered by the Tribunal, but only reflect limited income. Her evidence was to the effect that the motor vehicle she was using developed mechanical problems, and her [driving] activities appear to have ceased prior to 30 June 2017.
For the period 1 October 2017 to 31 December 2017, Mr Ananyev was assessed to pay an annual rate of child support of nil. This assessment was based on his 2015/16 adjusted taxable income of $15,062, and Mrs Ananyev’s provisional adjusted taxable income of $15,511.
The Tribunal has found that Mr Ananyev’s income declared for the purposes of his [Bank 1] loan applications dated 11 August 2017 reflected at pages 76 and 77 of Exhibit 1 was $5,579.42 net per month, annualised to $66,953, which approximates the annual gross income reflected in his employer’s letter at page 78 of Exhibit 1 of $90,000 and which would have been his likely income for the 2017/18 financial year had he continued in that employment.
The Tribunal has also found that Mr Ananyev has the financial capacity to service monthly repayments of $6,415.78 on [Loan 1 and Loan 2] on the [Property 1] and [Property 3], totalling $76,989.36 per annum, during the period 1 July 2017 to 30 June 2018, grossed up to an income of $105,600.
In Mrs Ananyev’s case, the Tribunal has found she had combined income in the 2017/18 financial year from her employment with [Business Name 3] and her [Business Name 1] business of approximately $51,150. Assuming her Centrelink newstart benefits applied after her employment with [Business Name 3] ended in June 2018, her combined income from Centrelink newstart benefits of $13,552.60 and [Business Name 1] annualised to $28,324.90 totals $41,847.50 for the 2018/19 financial year.
None of these incomes is reflected in the incomes of the respective parents applied in the administrative assessment referred to above, making the case special and a ground for departing from the administrative assessment established.

Just and equitable

The requirement to consider whether a departure would be just and equitable directs attention to what is fair to the parents and their children. Regard must be had to a variety of factors such as the needs of the children, the parents’ commitments and any hardship that would be caused by departing or not departing from the formula.
Mr Ananyev provided a SOFC dated 28 October 2018 (see Exhibit A, pages A4 to A12). He lists his occupation as care/pensioner and reports pension incomes of $368 and $447 per week, totalling $815, annualised to $42,380.
No details are provided regarding his partner, Ms [C]’s income from the [pet] breeding business she conducts from [Property 1]. The Tribunal is sceptical of his evidence that, although he is aware Ms [C] maintains a number of breeding [pets] on the property in the [facilities] formally used by Mr and Mrs Ananyev for their [pet] breeding business, prior to separation, he was not aware of the number of [pets] Ms [C] has on the property, as he regards it as her business venture, in which he has no interest and from which he derives no income.
In his evidence to the Tribunal, he acknowledged that he does receive financial support from Ms [C] and her parents.
He lists only [Property 1] in his schedule of assets under the heading “Home”. According to the evidence given at hearing, this property is still registered in the joint names of Mr and Mrs Ananyev, although in his SOFC, Mr Ananyev records his interest at 100% and ascribes a value of $750,000 to the property.
Mrs Ananyev provided a copy of a valuation for [Property 1] carried out by the [valuer] dated 15 July 2016 (see page B368 of Exhibit B) reflecting an appraisal price range of $925,000 to $965,000.
Mr Ananyev did not list his interest in [Property 3]. While the evidence suggests the property is registered in the name of the Family Trust, the evidence at hearing clearly indicates that he controls the trust as principal director of the trustee company. He gave evidence that he carried out extensive renovations to the property and occasionally resides in the ground floor flat. His evidence was that the upper level of the property has been tenanted since 4 November 2018 at a rental of $390 per week. Although Mr Ananyev asserted that he has directed the rental payments to Ms [C], the Tribunal considers the rental to be income to him as the controlling mind of the Family Trust.
Mrs Ananyev also provided a copy of a valuation for [Property 3] carried out by the [valuer] dated 18 July 2016 (see page B346 of Exhibit B) reflecting an appraisal price range of $370,000-$410,000.
The only other asset listed in Mr Ananyev’s SOFC was household contents which he valued at $1,000. He listed liabilities totalling $823,000, comprising [Bank 3] Visa and MasterCard debt of $42,000, [Bank 5] debt of $56,000, unspecified personal loans of $127,000, for which no substantive evidence was provided at hearing, and home mortgage debt of $598,000, which appears to relate to [Property 1] the subject of his and Mrs Ananyev’s joint Home Loan 1 in respect of which he gave evidence he remits monthly mortgage repayments of $5,150.22.
Mr Ananyev makes no reference to [Property 3] in his schedule of liabilities, notwithstanding his evidence that he remits monthly mortgage repayments of $1,265.56 to his and Mrs Ananyev’s Home Loan 2 account.
His summary of personal weekly expenditure was unremarkable, as was his summary of average weekly household expenses totalling $1,229 which included estimated mortgage payments of $700.
Mrs Ananyev provided a SOFC dated 11 November 2018 (see Exhibit B, pages B2 to B10).
She reports her usual occupation as administrative assistant, but her current status as unemployed.
She listed her [Business Name 1] business, recording it as a [pet] breeding hobby and not a registered business, and correspondingly, recorded no income being received from that activity. She also listed her average gross weekly income at $649.34 comprising family assistance and newstart payments of $368.55 and $260.05 respectively, and child support payments of $20.74. She reported no other income earners residing in her household.
Her summary of property owned by her reflected her interests in [Property 1] and [Property 3] which she recorded as 60% pursuant to Court Orders. She recorded values for her interests in those properties of $600,000 and $180,000 respectively. Although she listed [Business Name 1] as an asset, no value was ascribed. She listed a 2011 [motor vehicle] valued at $4,500 and household contents of $1,000. The total value of her assets was $785,500.
She reported negligible superannuation at $2,389.
Mrs Ananyev reported liabilities totalling $550,569 comprising her 50% share of Home Loan 1 and Home Loan 2 mortgage debts on the [Property 1] and [Property 3] properties of $308,000 and $100,000 respectively, a [Finance Company 1] loan debt of $8,000, personal loans from friends and relatives of $110,000, a Centrelink liability of $21,569 and [Bank 4] MasterCard and [another] credit card debts totalling $3,000.
Mrs Ananyev listed unremarkable average weekly personal expenditure of $110. Her average weekly household expenses totalling $1,025, including rental of $460, were also unremarkable.
No evidence was offered that would suggest the children in the assessment have special needs.

Conclusions

The Tribunal has found that Mr Ananyev has the financial resources to maintain repayments on Home Loan 1 on the jointly owned [Property 1] and Home Loan 2 on the Family Trust’s [Property 3] totalling $76,989.36 per annum for which he would need a gross income of $105,600.
The Tribunal has also found that Mr Ananyev has a demonstrated capacity to derive a gross income of approximately $90,000 as a qualified [tradesman], notwithstanding his back condition, and that he has access to rental income from [Property 3] of $390 per week from 4 November 2018, annualised to $20,280.
The Tribunal is satisfied that he does not derive any income from his [sporting] activities, and that, considering the evidence on balance, not all of the provisions of paragraphs 117(7B)(a), (b) and (c) of the Act regarding his earning capacity could be satisfied in order to make a determination of his adjusted taxable income based on his unexercised earning capacity alone. However, his evidence suggests that he has expertise in breeding [pets] for profit, as well is renovating and managing properties for rental purposes.
He acknowledged in evidence that his partner, Ms [C] has expressed an interest in breeding [pets] for commercial purposes and the evidence before the Tribunal suggests the foundations of such a business have been established at [Property 1] where Mr Ananyev and his family reside. It would be naive to suggest that Mr Ananyev could not participate in the operation of such a business. He acknowledged in his evidence to the Tribunal that Ms [C] maintains breeding [pets] at [Property 1], with the intention of breeding [pets] for sale, if indeed she has not already commenced doing so.
Mr Ananyev also acknowledged in his evidence that he receives financial assistance from Ms [C] and her parents in [Country 1].
The evidence before the Tribunal also indicates that the current equity in [Property 3], is approximately $190,661 to $220,661, based on the [valuation] of between $370,000 and $410,000 and the Home Loan 2 statement at page A580 of Exhibit A, reflecting a balance debt as at 25 June 2018 on that property of $189,338.58.
The Tribunal finds that Mr Ananyev has the capacity to raise funds for child support purposes by either increasing the debt level on the [Property 3] or alternatively realising the equity on disposal of the property at sale.
The Tribunal also finds that Mrs Ananyev’s evidence at hearing regarding the income she derives from [Business Name 1] was less than truthful and that the business derived adjusted income of at least $28,324.90 in the financial year ended 30 June 2018.
According to her payment summary issued by [Business Name 3] for the financial year 1 July 2017 to 30 June 2018, she received income of $22,825, resulting in a combined income of $51,150 (rounded up) for that financial year, and for the financial year commencing 1 July 2018, assuming a similar income from the [Business Name 1] business of $28,325 (rounded up) plus Centrelink newstart income reflected in her SOFC referred to above annualised to $13,523 (rounded up), a combined income of $41,848 (rounded up) results.
Taking all these factors into consideration the Tribunal finds that it would be appropriate to vary Mr Ananyev’s adjusted taxable income to $95,000 and to vary Mrs Ananyev’s adjusted taxable income to $45,000.

Otherwise proper

The Tribunal finds that, on the evidence available to it, Mr Ananyev has an income and financial resources available to him of between $90,000 and $105,000 but considers it appropriate to vary his adjusted taxable income for child support purposes to $95,000.
With respect to Mrs Ananyev, the Tribunal finds that, on the evidence available to it, she has income available to her of between $41,848 and $51,150, but considers it appropriate to vary her adjusted taxable income for child support purposes to $45,000.
The requirement to consider whether a departure would be otherwise proper directs attention to what is fair to the community. It is necessary to consider the effect of any departure from the administrative assessment on entitlements to income-tested pensions, allowances and benefits. Parents rather than the community have the primary duty to maintain a child. Varying the incomes of Mr and Mrs Ananyev on which child support is calculated from that used in the administrative assessment, based on their respective incomes and financial resources which are not reflected in the administrative assessment, will result in an appropriate apportionment of financial responsibility between the parents and the community. Such a result would be otherwise proper.

DECISION

[2019] AATA 1692

10 May 2019

Key Legal Topics

Areas of Law

Family Law

Administrative Law

Legal Concepts

Statutory Construction

Judicial Review

Remedies

Jurisdiction