Armfield and Warnock - [2008] FMCAfam 804

FEDERAL MAGISTRATES COURT OF AUSTRALIA

ARMFIELD & WARNOCK

[2008] FMCAfam 804

CHILD SUPPORT – Departure application – cost of spending time with a child – income earning capacity.

Child Support (Assessment) Act 1989, ss.3, 117

Applicant:

MR ARMFIELD

Respondent:

MS WARNOCK

File number:

CAM 3129 of 2001

Judgment of:

Brewster FM

Hearing date:

24 February 2006

Delivered at:

Canberra

Delivered on:

31 July 2008

REPRESENTATION

Applicant:

Self Represented

Respondent:

Self Represented

ORDERS

That Order 16 made on 6 September 2006 be discharged.
That for the period 1 May 2004 to 1 August 2005 the father’s child support income be calculated on the basis that the cost of his exercising contact in this period was $8,216 and that his child support income for the period 1 July 2005 to 6 September 2006 be calculated on the basis that the cost of his exercising contact in this period was $5,640.
That for the period 1 March 2005 to 1 August 2005 the father’s child support income (not having regard to Order 1) be assessed at $92,230 per annum.
That for the period 2 August 2005 to 6 September 2006 the father’s child support income (not having regard to Order 1) be assessed at $55,000 per annum.

IT IS NOTED that publication of this judgment under the pseudonym Armfield & Warnock is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
CANBERRA

CAM 3129 of 2001

MR ARMFIELD

Applicant

And

MS WARNOCK

Respondent

REASONS FOR JUDGMENT

This matter concerns the father’s application in relation to child support. Originally he sought to vary assessments from the Child Support Agency from 6 May 2004 but at the hearing he indicated that the assessments he challenged related to the period 1 March 2005 to 6 September 2006. However I understood him to seek that there be factored into his child support assessment the costs of his exercising contact from May 2004. The issue of child support became irrelevant after 6 September 2006 as orders were made on that day that the child the subject of the assessments live with the father.
The father’s contentions are as follows:-
(a)From 1 March 2005 to 30 June 2005 he was assessed as having an income of about $105,000 per annum. He claims that he should be able to have deducted from that figure a number of items.
(b)In August 2005 the father left his employment in Sydney and moved to Hobart. When he moved to Hobart he set up a business with his wife. He claims his income there was $45,000 a year. There is the issue as to what his income was and whether I should assess him on the basis of his income in Sydney.
(c)He claims that child support should be calculated having reference to the high costs of his contact with the child.
(d)He takes issue with the Child Support Agency’s treatment of the mother’s income.
I shall deal with these in turn.
The husband seeks to have his child support income for the period
1 March 2005 to 30 June 2005 assessed on the basis of an income of $79,953 per annum. He was assessed on the basis of an income of $105,000 per annum. He claims that he should be able to deduct the following:
(a)$12,667 for motor vehicle costs and $724 for other work related travel expenses;
(b)$2,447 in relation to other work related expenses related to his telephone, printing and stationery, a subscription to a trade journal and computer consumables;
(c)a gift to [A] School of $70;
(d)$9,345 for managing his own tax affairs and paying a tax account $2,800.
My comments on these matters are as follows:
(a)I propose to allow the car and other travel expenses but make an allowance for the fact that for three months of this period he was not in employment. On this basis the deduction will be $10,043.
(b)I propose to allow the whole of the other work related expenses of $2,447.
(c)I do not propose to allow a voluntary gift to the [A] School.
(d)I do not propose to allow the costs of managing his tax affairs or most of the costs for his tax agent. His tax agent charged $2,800 for preparing tax returns for 10 years. I will allow $280.
This results in total deductions of $12,770 and as a result his income should be assessed at $92,230.
When the husband was in Sydney prior to his move to Hobart he was employed by [omitted]. He had a base salary of $50,000 plus commissions which took his income to $66,000 per annum. There is a dispute between the parties is as to whether the father voluntarily left this employment or, as he contends, involuntarily. If he left voluntarily there is authority which will support my assessing his income earning capacity on the basis of the income he earned in Sydney. He says that he was not performing to the level expected by his employer and was facing dismissal. In the end I accept his evidence and find that his leaving his job was not voluntary.
This is not an end to the matter however. His setting up in business at an income well below that which he had previously earned needs to be examined. If he had been able to demonstrate a concerted effort to obtain employment without success, I may have been inclined to assess his child support income at the $45,000 as a self employed person. However the evidence of job applications was somewhat exiguous.
In the end the only evidence of these comprise two emails written shortly before he filed his child support application.
It is not an easy matter assessing what an appropriate order is in all the circumstances. I am not satisfied that his income earning capacity is reflected in his earnings as a self employed person of $45,000 per annum. On the other hand I accept that he could not continue to hold down a job paying about $20,000 more than this. Whilst there is a degree of arbitrariness involved I have decided in the end that I should assess his child support income on the basis of an earning capacity of $55,000 per annum.
I turn now to the costs of contact.
When the father was living in Sydney he had a good deal of weekend contact with the child and some of this involved staying in Canberra. He sets out a table of his expenses. I propose to allow these except where the accommodation expenses exceed $300. I regard $300 as a reasonable upper limit and will allow that amount only.
The father set out a table of his expenses from May 2004 to June 2005. Adjusting these to limit accommodation costs to $300 the total costs for the period are $8,216.
After he moved to Hobart weekend contact ceased. However, he was liable to pay airfares for the child. These are set out in Annexure M to his affidavit and vary considerably. They only go to February 2006, the date of the hearing but I have projected them forward to September 2006. On my calculation they average about $390 a month which would total $5,640 for the fourteen months involved.
I will now place my findings and decision in the context of section 117 of the Child Support (Assessment) Act. I am satisfied that grounds for departure exist because of the high costs of contact and because of the earning capacity, as opposed to the actual earnings, of the husband.
I am satisfied that it is just and equitable to make the orders for the same reason. There being no social security issue I am satisfied that they are otherwise proper.
I turn now to the issue of the mother’s income.
The father’s complaint here is that the Child Support Agency wrongly allowed her to deduct the high costs of child care. It is reasonably apparent that they allowed this deduction during a period prior to the period under challenge but the father says the Agency continued to allow these costs within the period covered by his application. I do not propose to dilate on this. Having looked at the Child Support Agency’s determinations I am not satisfied that they continued to allow this deduction during the period under challenge.

I certify that the preceding sixteen (16) paragraphs are a true copy of the reasons for judgment of Brewster FM

Associate:

Date: 31 July 2008