Beale and Beale
[2004] FMCAfam 670
•30 November 2004
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| BEALE & BEALE | [2004] FMCAfam 670 |
| CHILD SUPPORT – Application for departure for period of six years – application that time limits be waived – where no time limit, application must be filed within a reasonable time – onus upon applicant to properly explain delay – Court must take earning capacity into account – parent chooses to accept a lower income. Child Support (Assessment) Act 1989 (Cth), ss.4, 60, 98X, 106(1), 106A(1), 107(1), 110, 116, 117 and 132 Savery and Savery (1990) FLC ¶92-131 |
| Applicant: | MS BEALE |
| Respondent: | MR BEALE |
| File No: | LNM1384 of 2003 |
| Delivered on: | 30 November 2004 |
| Delivered at: | Devonport |
| Hearing date: | 23 March 2004 |
| Judgment of: | Roberts FM |
REPRESENTATION
| Counsel for the Applicant: | Ms. Hiller |
| Solicitors for the Applicant: | Legal Aid Commission of Tasmania |
| The Respondent appeared on his own behalf. |
ORDERS
That there be a departure from administrative assessment of child support for D born in 1986, B born in 1988 and E born in 1993 payable by MR BEALE to MS BEALE as follows:
(a)For the period commencing on 3rd January 2003 and concluding on 30th June 2005 the child support percentage is varied to 27%; and
(b)For the said period the child support income amount of
MR BEALE is varied to $30,000.That any child support already paid by MR BEALE for the said period be credited towards the liability created by the preceding order hereof.
IT IS NOTED that publication of this judgment under the pseudonym Beale & Beale is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT DEVONPORT |
LNM1384 of 2004
| MS BEALE |
Applicant
And
| MR BEALE |
Respondent
REASONS FOR JUDGMENT
Applications
These proceedings relate to child support payments in relation to three children D born in 1986, B born in 1988 and E born in 1993.
The Applicant, MS BEALE (“the Mother”) filed an Application seeking departure orders on 4th July 2003. In part, that Application read as follows:
“1. That pursuant to Division 5 Part 7 of the Child Support Assessment Act 1989, there be a departure from child support assessment, operative for the child support year commencing on the 1st June 1998 and for each child support year and/or period thereafter, relating to the children D born in 1986, B bon in 1988 and E born in 1993 (the children).
2.(I) That in order to give effect to the departure order sought in paragraph 1 herein the child support income amount of respondent be varied to $30,000 per annum or at such other rate as this Honourable Court deems fit and used in the administrative assessments operative from 1st June 1998 and in each administrative assessment thereafter be set at the figure of $30,000 per annum or at such other rate as this Honourable Court deems fit.
OR/AND
(i) In the alternative or in addition to, pursuant to Division 5 Part 7 of the Child Support Assessment Act 1989, the respondent provide child support for the children in a form other than periodic amounts paid to the applicant.
3. Such further order or other orders and determination as the Court considers appropriate, including statements under s. 125 of the Child Support Assessment Act 1989.
4. That if necessary, any time limits, pursuant to the child support legislation, be waived.”
At the hearing, counsel for the Applicant indicated that she wished to have the Application amended so that it referred to “Division 4” rather than “Division 5” where that appeared. She also sought to have the relevant departures commence on 1st June 1997 and not 1998 as stated in the Application.
The Respondent, MR BEALE (“the Father”) opposed the Applications of the Mother.
Documents
The Mother relied upon the following affidavit material:
·Her affidavits filed 4th July 2003 and 24th October 2003
·Her Financial Statement filed 4th July 2003
·An affidavit from her general medical practitioner filed 27th October 2003
·An affidavit of Ms N filed 21st November 2003
·An affidavit of Mr C filed 16th January 2004
·An affidavit of Mr J filed 16th January 2004
·An affidavit of Mr B filed 23rd January 2004
Only the Mother and Mr. B were cross-examined.
The Father relied upon his affidavits filed 24th October 2003, 25th November 2003 and 4th March 2004. In addition, he relied upon his Financial Statement filed 20th October 2003. The Father was cross-examined.
I can say at this point that the affidavits of Ms. N, Mr C and Mr. J were not of any real assistance. Particularly, because the Father wisely chose not to pursue the argument that the Mother could really earn more money if she tried.
Background
The parties were married in late 1985 and separated in early 1995. It is the unchallenged evidence of the Mother that they resolved their property settlement shortly after they separated. She received $20,000 and various chattels. It was her evidence that the Father sold the former matrimonial home approximately two years after the settlement and received $20,000. However, it was his evidence that he received only $8,000 and the Mother’s counsel chose not to pursue that further. I therefore take it that she accepts that he received $8,000, and I accept his evidence in relation to that as being correct.
The documentation provided to the Court, particularly by the Mother, is voluminous and it shows that on numerous occasions the parties have made applications to the Child Support Agency for departure from administrative assessment. A summary of those applications to the Child Support Agency is as follows:
a)The Father lodged an application with the Child Support Agency on 6th April 1995, the result of which was that child support was reduced.
b)The Father lodged an Application with the Child Support Agency on 1st October 1997, the result of which was that there was no departure.
c)The Mother lodged an application with the Child Support Agency on 22nd April 1998, the result of which was that the child support was increased.
d)The Father lodged an application with the Child Support Agency on 7th July 1998, the result of which was that child support was reduced.
e)The Mother lodged an Application with the Child Support Agency on 13th June 2001, which resulted in a decision that there would be no departure. The Mother objected to that decision and, although she was granted an extension of time in relation to that objection, it was not upheld.
The Father provided an estimate of his income to the Child Support Agency for the period 3rd January 2003 to 31st December 2003, and the Mother objected to the Child Support Agency’s decision to accept that estimate by a letter that she forwarded to the Child Support Agency on 3rd February 2003. The Child Support Agency responded to that objection on 1st April 2003 indicating that their objection was not upheld. The basis upon which they rejected the objection was that the Agency had not received sufficient evidence to prove that the Father’s estimate was not correct at the time that it was lodged.
In their letter to the Mother dated 1st April 2003 the Child Support Agency indicated to the Mother that she was able to apply for a change to the assessment on the basis that it “does not take into account the income, earning capacity, property or financial resources of one or both of the parents” (The emphasis of the words “earning capacity” was made by the Regional Child Support Registrar in his letter to the Mother of 1st April 2003.).
In that letter of 1st April 2003 the Regional Child Support Registrar also indicated that an application form was enclosed for the Mother’s consideration. In addition, he informed the Mother that if she did not agree with their decision not to uphold her objection, she could apply to a Court to have the decision changed. The Regional Child Support Registrar noted in his letter that “Courts usually require you to do this within 28 days of receiving this letter”.
Relevant Law
The provisions of section 117 of the Child Support (Assessment) Act 1989 (“the Act”) empower a Court to make an order for departure from administrative assessment in special circumstances.
Section 117(i) of the Act provides as follows:
“i)That in the special circumstances of the case one or more of the grounds for departure outlined in section 117(2) exist before a Court can make an order for departure;
ii)that under section 117(1)(b)(ii) it would be just and equitable, as regards the child, the carer entitled to the support and the liable parent; and
iii)that it would be otherwise proper to make a particular departure order.”
If these three conditions are satisfied then the Court should make the departure order sought.
In Savery and Savery (1990) FLC ¶92-131 Kay J said that “special circumstances” were “facts peculiar to the particular case which set it apart from other cases.”
In Re Gyselman and Gyselman (1992) FLC ¶92-289, the Full Court of the Family Court said the following in relation to the phrase “special circumstances”:
“Whilst it is not possible to find with precision the meaning of that term, as a generality it is intended to emphasise that the facts of the case must establish something that is special or out of the ordinary. That is, the intention of the legislature is that the Court will not interfere with the administrative formula result in the ordinary run of cases.”
Section 60 of the Child Support (Assessment) Act makes it possible to provide the Child Support Agency with an estimate of income. Rights of objection to the acceptance of an estimate arise under paragraph (c) of sub-section 98X(1) of the Act.
Discussion
It is clear that the Mother is seeking that there be orders for departures from assessments on the basis that the Father’s income, earning capacity, property and financial resources justify a departure.
The Mother included an application that “if necessary any time limits, pursuant to the child support legislation, be waived”. She must be aware of the substantial lengths of time between her application for departure orders and some of the periods to which she wants the departures to apply.
During the hearing, I asked the Mother’s counsel to point me to the evidence that justified the Court waiving any applicable time limits and she conceded that there was no such evidence. Nowhere in the Mother’s evidence does she explain why she has delayed for such a long time.
As mentioned above, the Mother’s application states that she wants any departures backdated to 1st June 1998. She also states in an attachment to her application that the “decisions prior to 1998 are not disputed”. However, at the hearing her counsel sought to amend that to backdate the departures to June 1997. Given that she filed her application in July 2003, she seeks a backdating of up to six years.
At the time that the application came before the Court, Order 31B of the Family Law Rules 1984 was applicable to the Child Support jurisdiction of this Court and the Family Court of Australia. (The provisions of Order 31B have since been generally incorporated into the Family Law Rules 2004 and the 2004 amendments to the Federal Magistrates Court Rules 2001).
Although rules 10, 11 and 14 of Order 31B of the Family Law Rules 1984 provided 28 day time limits in relation to Sections 106(1), 106A(1), 107(1), 110 and 132 of the Act, there appears to be no such specific time limit in relation to applications under Section 116 of the Act. I am therefore of the view that any applications under Section 116 must be filed within a reasonable time from the date upon which the right to file an application came into existence. Further, if an application is not filed within a reasonable period, then there is an onus upon the applicant to properly explain the delay.
The Court has a broad discretion to extend time, but the fundamental issue is whether an extension of time will enable the court to do justice between the parties. This usually requires the applicant to demonstrate that there are adequate reasons for the delay, that there is a substantial issue to be determined and that no hardship or injustice will be caused to the respondent which cannot be compensated by orders for costs or otherwise. See McMahon and McMahon (1976) FLC ¶90-038 at p 75,143; Tormsen and Tormsen (1993) FLC ¶92-392 at p 80,014 and OP v HM (2002) FLC ¶98-017 at p 95,703.
In this matter the Mother seeks departures from all Child Support assessments since 1st June 1997. She has not explained the delay and I note from material attached to the application that, as long ago as 19th May 1995, she was informed by the Child Support Agency of her right to make an application for a judicial departure order. The documents filed on her behalf show that similar advice has been given to her by the Child Support Agency on a number of occasions since that time. I am therefore of the view that her delay has been unreasonable in relation to all periods prior to the period that included the date upon which she filed her application. Consequently, there was an onus upon her to properly explain why she did not make her application within a reasonable time. She did not do that so I am of the view that it would be unreasonable to make departure orders in relation to those earlier periods.
Even if I am wrong about that, the Mother is seeking departures that provide for a variation of the Father’s child support income to $30,000 per annum. If the Court was to grant that, it would result in massive arrears that the Father has absolutely no chance of meeting. Given that the enormity of such arrears would in large part be caused by the delays on the part of the Mother, it is my view that any such orders would not be “just and equitable, as regards ………the liable parent” within the meaning of Section 117 of the Act (even if they were capable of enforcement).
Consequently, I will not accede to the Mother’s requests to backdate departures to 1st June 1997 and I will concern myself only with the period commencing 3rd January 2003 and subsequent periods.
Having come to that conclusion, I am of the view that I do not need to make any finding about any differences between the evidence of the Father and that of the Mother’s witness, Mr. B.
The assessments in relation to the periods commencing 3rd January 2003 are as follows:
Period
Father’s Child Support Income
Child Support percentage
Monthly payment
3/1/03 – 31/8/03
$12,066.00
32%
$21.67
1/9/03 – 30/6/04
$15,598.00
32%
$87.58
1/7/04 – 30/11/04
$15,598.00
27%
$78.85
Although the latter two periods post-date the application, it was clear that the mother was seeking departures in relation to them all because the relevant assessments were attached to her affidavit filed 24th October 2003.
Section 116 of the Act provides that a person may not make an application for a departure unless an objection has been made and the Registrar has either disallowed that objection or allowed it in whole or in part. It also provides that this restriction does not apply if an application is pending in a Court and the Court is satisfied that it would be in the interests of either party to hear that application at the same time as the pending application. Clearly, in this matter there were pending applications before the court so it is not a bar to the Mother that she has not complied with the objection procedure of Section 116 in relation to some of the periods set out in paragraph 30 above. See McGuiness v Cowie (2002) FLC ¶98-018
Relevant evidence
The Mother has had some medical difficulties and she works part-time. Her income from paid employment has not been over $18,000.00 per annum because of the part-time or temporary nature of her work.
Her doctor’s evidence is that she cannot do any work that requires repeated use of her forearms or wrists.
As mentioned above, the Father chose not to pursue the argument that she could earn more if she tried.
The three children of the parties’ relationship have lived with the Mother since separation. Two younger children are still at school but the eldest has left school and at the time of the hearing he had been working fairly consistently since January 2003. The Mother’s evidence at the hearing was that the eldest child’s income could be as high as $1,000 per week when he does a lot of overtime.
The Mother has not re-partnered.
The Father resides with his partner in Northern Tasmania and he works on a casual basis. As can be seen from the table shown at paragraph 30 above, his income from that source has not been high in recent years. However, the Father conceded that in 1993/94 his income was $33,500. In 1994/95 it was approximately $34,000. In 1995/96 it was $38,000 and in 1996/97 his income was in excess of $40,000.
Thereafter, the Husband took a redundancy that was offered by his former employer and at no time since then has he earned anywhere near the amounts he was earning between 1993 and 1997.
In cross-examination, he conceded that he could earn up to $33,000 if he was able to work for a full year. However, he cannot be sure of earning that sort of income, because of the casual nature of his employment.
The Father lives with his partner on a property that is owned by his partner. He does not have any legal interest in that property.
The Father’s Financial Statement shows that his assets are minimal savings and a 1996 Toyota which he estimated to be worth $9,000. However, his liabilities were almost exactly the same value as his assets, mainly because he borrowed money to purchase the Toyota.
When he was cross-examined, the Father conceded that he has a heavy rigid truck licence and that he drove trucks for approximately fifteen years before he took his redundancy. He conceded that there was nothing to stop him applying for truck driving positions and it was clear from his evidence given in cross-examination that he preferred not to seek more lucrative employment because he enjoys the work he is doing. He was asked whether he would take another position if it meant that he could earn more money and his response was: “Well, not when you’re happy where you are, no.”
Shortly after that the Mother’s counsel put it to him that if he obtained employment as a truck driver he could earn a minimum of $30,000 per annum. His answer to that was: “Well, I probably could.”
Conclusions
It is clear to me that the Father chooses not to have a higher income because he prefers not to do so. However, Section 4 of the Act makes it clear that the principal object of the Act is to ensure that children receive a proper level of financial support from their parents. Further, subsections (2) and (4) of Section 117 require the Court to take account of a person’s actual income as well as his or her earning capacity.
In short, children should not suffer a lack of financial support because a parent chooses to accept a lower income than he or she is capable of earning.
In the facts of this particular case it is quite clear that the monthly child support assessments found in the table at paragraph 30 above are hopelessly inadequate for the support of the children.
I come to the conclusion that the Father is capable of earning $30,000 per annum if he really tried and I am therefore of the view that the ground for departure in relation to the period commencing 3rd January 2003 has been established. I conclude that from that date the Father’s child support income should be set at $30,000 per annum.
I also conclude that the child support percentage should be set at 27% (and not 32%) because the eldest child has been working for almost the entirety of that period, and at times he has earned a very high income for one so young. He was therefore not in need of support from either of his parents.
A departure order in this matter should provide the Father with incentive to seek more remunerative employment. When he has done that, the administrative assessment procedure should again become operative. I am therefore of the view that my order for departure should be from 3rd January 2003 until 30th June 2005.
I am aware that this departure order will immediately create some arrears. The Father will therefore have to negotiate with the Child Support Agency about how he meets those arrears.
Having given this matter careful consideration, I am of the view that the Orders that I will make are both just and equitable, and otherwise proper.
I certify that the preceding fifty-two (52) paragraphs are a true copy of the reasons for judgment of Roberts FM
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