BELL & NAHOS
[2015] FCCA 2259
•21 August 2015
FEDERAL CIRCUIT COURT OF AUSTRALIA
| BELL & NAHOS | [2015] FCCA 2259 |
| Catchwords: CHILD SUPPORT – Child support – departure order – whether the father has deliberately changed his occupation and reduced his income in order to pay less child support for his four-year-old son – lump sum payment – whether it would be just and equitable and otherwise proper to order the father to make a lump sum payment. |
| Legislation: Child Support (Assessment) Act 1989, ss.116, 117, 123A Family Law Act 1975, s.90SN |
| Rice v Asplund (1979) FCL 90-725 Saberton & Saberton [2013] FamCAFC 89 Walsh v Barron [2014] WASCA 124 |
| Applicant: | MS BELL |
| Respondent: | MR NAHOS |
| File Number: | MLC 10071 of 2012 |
| Judgment of: | Judge Small |
| Hearing date: | 17 April 2015 |
| Date of Last Submission: | 17 April 2015 |
| Delivered at: | Melbourne |
| Delivered on: | 21 August 2015 |
REPRESENTATION
| Counsel for the Applicant: | Mr J. Stanley |
| Solicitors for the Applicant: | Farrar Gesini Dunn |
| The Respondent: | In person |
ORDERS
The Court not being satisfied under s.117(1)(b)(ii) of the Child Support (Assessment) Act 1989 that it would be just and equitable or otherwise proper to make the Departure Order sought in the Application filed 11 July 2014, the said Application for a departure order is dismissed.
The Court being satisfied that an order for a lump sum payment of child support is just and equitable or otherwise proper under s.123A(1) of the Child Support (Assessment) Act 1989, the Respondent shall pay to the Applicant within 60 days the sum of $13,853.88 less any monies the Department of Human Services (Child Support) has collected from him since 11 June 2014 (“the payment”).
Pursuant to s.125 of the Child Support (Assessment) Act 1989 the payment shall be credited 100% against any liability of the Respondent for an administrative assessment of child support in relation to the child X born (omitted) 2011 for the period 11 June 2014 to 10 June 2017.
IT IS NOTED that publication of this judgment under the pseudonym Bell & Nahos is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT MELBOURNE |
MLC 10071 of 2012
| MS BELL |
Applicant
And
| MR NAHOS |
Respondent
REASONS FOR JUDGMENT
Introduction
These proceedings arise from previous property and parenting proceedings between Ms Bell (“Ms Bell” or “the mother”) and Mr Nahos (“Mr Nahos” or “the father”) which were concluded on 3 September 2013.
There are essentially two parts to these proceedings:
· the first relates to property settlement orders made 3 September 2013 and is the result of an Application made by Ms Bell under s.90SN of the Family Law Act 1975; and
· the second is a Departure Application filed by Ms Bell under s.116 and a lump sum payment application filed under s.123A of the Child Support (Assessment) Act 1989 (“the Act”) in relation to the child support Mr Nahos pays for the support of the parties’ child X born (omitted) 2011 (“X”).
The first part of the proceedings was resolved during the trial when Mr Nahos conceded that he had known at the time final property orders were made by consent on 3 September 2013 that his property in the Sydney suburb of Property R was subject to a contract of sale signed on 23 August 2013, and that the sale price in the contract of sale was significantly higher than the value of the property used in the negotiations between the parties’ lawyers which led to final property orders being made by consent on 3 September 2013.
He then accepted that he would have to pay Ms Bell a further sum of money in order to properly effect the property settlement that had been agreed on 3 September 2013.
It was agreed between the parties that that sum of money would be $12,428.05. I made an order for that payment under s.90SN of the Family Law Act 1975 on the first day of trial, the payment to be made on or before 17 May 2015.
Therefore, only two issues remain before the Court for ultimate decision:
A.Whether there should be a Child Support Departure Order pursuant to Division 4 of Part 7 of the Child Support (Assessment) Act1989 (“the Act”); and
B.Whether there should be a lump sum payment by the Respondent to the Applicant pursuant to s.123A(1) of the Act, and if so, in what sum?
The matter comes to this court as a result of a decision made by the Registrar of the Department of Human Services (Child Support) (“the Department”) under s.98E of the Act to refuse to make a determination about the level of child support Mr Nahos ought to pay for X on the basis that the matter was too complex for the Department to determine.
Background
The parties were involved in a relationship between about August 2008 and late November 2010, although there is still some disagreement between them about the exact nature and duration of the relationship.
X is the only child of that relationship.
When the parties separated, Mr Nahos was working full-time as a (occupation omitted) and was earning about $90,000 a year.
Ms Bell was not working and was reliant on Centrelink benefits and child support payments.
On 11 June 2014 Ms Bell deposed that she was then working part-time as a (occupation omitted) and that she was earning about $49,000 per year.
At the time of trial, it was Ms Bell’s evidence that she was still working part-time and that she earned small and inconsistent amounts from (omitted).
In her Financial Statement sworn and filed 2 April 2015, Ms Bell deposes that her income, including her part-time salary, (omitted) income, dividends, bank interest, Centrelink benefits and child support, was $1290 per week. That income, if it were to be earned every week, which is by no means certain, amounts to $67,080 per year.
At the time of trial, Mr Nahos gave evidence that he was studying for a tertiary qualification in (studies omitted) at (omitted) and that he intended to obtain a (omitted) licence. It was his evidence that he was earning only irregular and uncertain amounts from buying and selling properties.
Procedural History
The Initial proceedings
The property proceedings were first commenced when Ms Bell filed her Initiating Application for parenting and property settlement orders on 1 November 2012.
On 3 September 2013 Final Orders were made by consent in relation to the property component of that Application.
On 11 November 2013 final parenting orders were made by consent in relation to X.
The current proceedings
On 31 March 2014 Mr Nahos filed an initiating application in relation to parenting orders only. He filed an Amended Application on 15 June 2014, also in relation to parenting issues.
That application was dismissed under the rule in Rice v Asplund[1] on 18 June 2014.
[1] The decision of the Full Court of the Family Court of Australia in Rice v Asplund (1979) FCL 90-725 is authority for the principle that once final parenting orders are made, a party ought not to be able to re-open the proceedings unless there has been a significant change in circumstances since the making of those orders.
On 11 June 2014 Ms Bell filed a Response seeking to have the Final Orders in relation to property made 3 September 2013 set aside and altered pursuant to s.79A of the Family Law Act1975.
Of course, as the parties were never married, that Application ought to have been made under s.90SN, but I will not dismiss it on that ground. However, I do make the point that Part VIIIAB of the Family Law Act 1975 has been in operation since 1 March 2009 and practitioners ought to be used to it by now.
Ms Bell also sought an order in the following terms:
That there be a child support departure order pursuant to Division 4 of the Child Support (Assessment) Act, and that pursuant to Section 123(1)(b) of the Child Support (Assessment) Act the Applicant Father pay child support to the Respondent Mother in the form of such lump sum as this Honourable Court deems appropriate.
The matter came before me in the Duty List on 18 June 2014 where the parties were ordered to attend a Conciliation Conference and the matter was set down for final hearing on 16 April 2015.
Mr Nahos filed a Reply on 17 July 2014 seeking that the mother’s Response be dismissed.
On 18 September 2014 the parties attended at the Court for a Conciliation Conference with a Registrar but were unable to resolve the matter.
The trial took place on 16 and 17 April 2015. The only witnesses were Ms Bell and Mr Nahos.
As I have stated above, the s.90SN application was resolved during the trial and I need make no further mention of it here, although the orders I made in relation to it will have some bearing on the practical aspects of any orders I might make under the Child Support (Assessment) Act 1989.
Evidence
Child Support Payment History
In January 2011 Ms Bell says that the parties entered a verbal agreement to the effect that when their expected baby was born, Mr Nahos would pay the sum of $650 per month in child support.
It is Ms Bell’s evidence that Mr Nahos did not make the agreed payments, which led to her seeking a Child Support Assessment from the Department on 11 June 2011.
Mr Nahos’ evidence is that he agreed to the amount of $600 per month in January 2011 and that he paid Ms Bell a lump sum of $2600 on 22 July 2011. He says that that payment amounts to the sum of $866.67 per month from X’s birth in (omitted) 2011 until June 2011.
However, Mr Nahos did not pay that amount until July and if the amount of $2600 is calculated as being for the period April to July 2011, it amounts to the sum of $650 per month, the sum allegedly agreed between the parties according to Ms Bell.
The first Child Support Assessment, made in mid-2011, was for Mr Nahos to pay the sum of $700.67 per month in child support for X.
Ms Bell did not make an application for the Department to collect her child support at that time.
It is Ms Bell’s evidence that Mr Nahos refused to pay the amount assessed and continued to pay $650 per month.
A second Assessment was made in November 2011 which set Mr Nahos’ child support at $723.42 per month, but Ms Bell says that Mr Nahos continued to pay $650 per month until January 2012 when he agreed to increase the amount to $700 per month.
Mr Nahos says that he had been unaware of the Child Support Assessments and that he had agreed to increase his child support from the initially-agreed $600 per month to $650 per month in mid-2011, and that he paid that amount until Ms Bell had asked him for an extra $50 per month in January 2012. He had agreed to that request, and thereafter paid $700 per month in child support.
A further Assessment was obtained in August 2012 which set Mr Nahos’ child support at $886.67 per month. Again, Ms Bell says that Mr Nahos failed to pay the whole amount and continued to pay $700 per month.
In May 2013 Mr Nahos reduced his child support payments to $555 per month based on Ms Bell’s income and it was then that Ms Bell asked the Department to collect the assessed amount from him each month.
In determining the amount to be collected, Ms Bell says that the Department included the shortfalls in payments made by Mr Nahos pursuant to all Child Support Assessments since June 2011, and that Mr Nahos’ wages were garnisheed in order to pay the amounts owing.
It is Mr Nahos’ evidence that having been unaware of the Child Support Assessments, he had not been in arrears as he had continued to pay child support for X according to what he believed to have been the agreement between him and Ms Bell.
It is difficult to believe that the Department did not advise Mr Nahos of the Assessments it had made in relation to his child support liability.
In his Outline of Case Document filed 13 April 2015, Mr Nahos refers to Child Support Assessments made by the Department between 1 May 2011 and 30 June 2013 as “payments recommended as a guide to monthly payments by the CSA”. Clearly he knew during that time that he had been assessed to pay child support at the level stated in those Assessments.
Given his knowledge of and involvement in the child support assessment process since at least mid-2011, I find his description of his Assessments as “recommendations” or “a guide” in April 2015 to be at very best disingenuous and at worst an attempt to mislead the court as to his understanding of the system.
Mr Nahos said that in May 2013 he advised the Department that Ms Bell had been earning cash for (omitted) work she had been engaged in, and that a further Assessment had been made for him to pay at the reduced rate of $555 per month, which he then did.
While acknowledging that the Department collected his child support from that time on, Mr Nahos denies that his wages were garnisheed to make up the shortfall from previous Assessments, saying that he agreed to pay that shortfall voluntarily. There appears to be no independent evidence of either party’s assertion in this regard.
The last Child Support Assessment document which the court has before it is dated 5 November 2014 and is annexed as “N.26” to the Respondent’s Affidavit sworn and filed 25 March 2015.
That Assessment, for the period 1 December 2014 to 30 June 2015, was calculated on the basis that Mr Nahos’ income was estimated at $44,969 while Ms Bell’s taxable income for the same period was $47,707 based on her 2013 – 2014 tax return. The amount to be paid by Mr Nahos to Ms Bell for that period was $144.75 per month.
That Assessment document also states that the current Assessment of Mr Nahos’ child support liability for the period 1 July 2015 to 29 February 2016 is $384.83 per month or $46179.96 per year. That Assessment is based on Mr Nahos’ taxable income for the 2013 – 2014 financial year, having been $59,327, and that of Ms Bell having been provisionally given as $2873.
Between mid-2013 and mid-2014 Mr Nahos lodged some five objections, reviews or appeals in relation to his Child Support Assessments.
In her initial affidavit sworn and filed 11 June 2014 in these proceedings Ms Bell sets out +those applications as follows:
58. Since the Child Support Agency began collecting child support on my behalf, Mr Nahos has made no less than five objections or appeals including as follows:
a. On 19 June 2013 I was notified by the child support agency that Mr Nahos had written to them on 5 June 2013 objecting to the child support agency’s decision on 29 May 2013 to collect arrears of child support.
b. In August 2013 I was notified by the child support agency that Mr Nahos had written to them on 5 August 2013 seeking a review of his application for a change of assessment.
c. On 30 October 2013 I was notified by the child support agency that Mr Nahos had asked the SSAT to review the objection decision made by the child support agency on 8 October 2014 (sic).
d. Towards the end of last year Mr Nahos appeal to the Social Securities Appeals Tribunal (sic) in relation to the child support agency’s calculation of Mr Nahos’ care percentage of X.
e. In or around February 2014 Mr Nahos applied to change our child support assessment.
She then goes on to say that on 30 May 2014 she had received a new Child Support Assessment for the period 1 July 2014 to 30 November 2014, the amount of that Assessment being $nil.
She filed these proceedings for a Departure Order on 11 June 2014. She deposed at that time that she had not received any child support payments at all since January 2014.
It is not in dispute that in late December 2013 or January 2014 Mr Nahos resigned his position as a full-time (occupation omitted) and began a course of study leading to a (qualifications omitted) at the (omitted) TAFE.
It is his evidence that since then he has relied entirely on income from his property development activities for his support.
As a result, his estimated income has fallen to about $45,000 a year, which has resulted in his child support liability being reduced as well.
As already stated, Mr Nahos is currently assessed to have a child support liability of $384.83 per month per month or $4617.96 per year.
The Father’s Employment History
(occupation omitted)
It is the father’s evidence that he was employed as a (occupation omitted) for some 15 years. In his affidavit sworn and filed 25 March 2015 (“his trial affidavit”), he says that he decided to leave that profession “due to a high level of stress that was severely impacting on my mental health and physical well-being”.
Mr Nahos deposes that in 2011, by which time he had attained the level of “(occupation omitted)” he had been “placed in excess” at his then (employer omitted) (“(omitted)”), which meant that he had had to apply for positions at other (employers omitted). He says that being “placed in excess” carried with it a stigma and an implication that one’s performance was not up to standard. He applied for and gained employment for 12 months at another (employer omitted), after which he applied to (employer omitted) (“(omitted)”), which he says was located about an hour’s journey from his home.
He was initially unsuccessful in that application and lodged an objection to the decision. That objection was upheld and he was appointed, he says, “under protest from the (employer omitted)”.
His position at (employer omitted) was secure for the 2013 year only. In an email from the (employer omitted) dated 29 April 2013, Mr Nahos was informed as follows:
If (omitted) offer you employment beyond 2013 then you become an ongoing employee at that (omitted). If they don’t have a position for you in 2014, then you return to this (omitted). If that is the case and I do not have an allotment for you, then you return to being in excess to the (omitted) entitlement of the (omitted).
Please note that under the new (omitted) Agreement 2013, the arrangement for over entitlement (occupation omitted) (excess) is being changed. Under the new arrangements any (occupation omitted) declared in excess will now NOT have preference for interview and placement for any (omitted) position advertised by any (employer omitted). That means that if you wish to apply for an advertised vacancy in a particular (employer omitted) you will have to apply and be shortlisted against all applications.
The second major change relates to retrenchment for any (occupation omitted) who is in excess for a period greater than 12 months. Technically this is likely to apply to you. If you return to this (omitted) and you remain in excess that (sic) I will be required to apply for you to be retrenched from the (omitted) service. The advice that (omitted) are being given is that (employer omitted) no longer wants (occupation omitted) to remain in excess for an extended period of time and have this place excessive strain on the (omitted) budget of that (employer omitted).
It is in that context that Mr Nahos went to work at (employer omitted) in 2013. In his trial affidavit he deposes that it was at that time, April 2013, that he began to consider a change in his career.
It is his further evidence that his brother died in April 2013 and that that tragic event too caused him to rethink his priorities in life, particularly as he had felt he received no support from his (employer omitted) administration in relation to his loss.
He says that in the second half of 2013 he was subjected to bullying from other staff at (employer omitted) to the extent that it became unbearable for him to remain there.
In his trial affidavit, Mr Nahos says the following:
I have worked in mainly (employers omitted) that comprised (omitted) of low socio-economic backgrounds with high degrees of violent behaviours. Over the course of the last few years of my (omitted) career I have been threatened to be physically harmed, have been physically assaulted by (omitted), have been threatened with dismissal if I complain and have received no support by the (omitted) members of the (employer omitted), namely the (omitted) and (employer omitted). I have in turn been victimised for raising genuine complaints against these violent and erratic (omitted).
He goes on to say that on 29 August 2013, as a result of an incident which occurred with a (omitted), he reported the (omitted) to the (employer omitted) as required by the (employer omitted) protocol. He says that he received no response to that report.
About a week later, Mr Nahos deposes that the same (omitted) “physically pushed me out of the way as he was walking past me”. As a result he sent a further email to the (employer omitted) and then a more detailed email, a copy of which was sent to the (employer omitted), noting that he had not received any response to his email of 29 August 2013.
It is Mr Nahos’ evidence that approximately a week after that, the (employer omitted) came to his office and informed him that as his complaints amounted to “your word against his” nothing could be done about the (omitted) behaviour.
In late October 2013, Mr Nahos deposes that he received a complaint from fellow staff members about the food he brought to work. The complaint was in the form of an email in the following terms:
Hi Mr Nahos,
Could you please empty juices from your cans of food in a bin outside or down a sink. The smell permeates throughout the room and makes it unpleasant for staff to work in here. On occasion the cleaners have also complained at the end of the day.
Mr Nahos deposes that before this complaint, he had received what he saw as bullying and belittling comments from female colleagues about the food he ate and the fact that he was physically fit. He says those comments “made me feel extremely uncomfortable and negatively affected my ability to perform my job role”.
Mr Nahos responded to that email as follows:
Dear[name]
Thank you for your email dated October 25, 2013. In response to your request that I place consumable rubbish in an external bin I advise the following:
I have had to endure unprofessional and insulting comments regarding my healthy eating habits from [name ] and [name ] for many months now
Their and now your comments have left my (sic) feeling bullied, harassed and ostracised
If these comments and requests as you stated below were to continue that I will not be able to feel comfortable in my own staffroom to perform my job role
If you or anyone else for that matter has an issue with my “healthy cans of food” then please feel free to direct a formal complaint to [the (employer omitted)] and I will respond in due course.
As the Head of our team I suggest that in future you address the fickle nature of the copious complaints at hand, rather than put forward a somewhat irrational and bewildering request in writing to me.
Mr Nahos.
Mr Nahos’ indignation about these incidents had not subsided by the time of trial where he described them as “insulting”. It is his evidence that the stress of these incidents caused him to be physically ill and that he took time off work in mid-November, lodging a WorkCover claim and obtaining a medical certificate from his doctor.
His WorkCover claim was ultimately accepted in 2014 after Mr Nahos appealed against its initial rejection, and he received compensation in the sum of $500 plus 2 weeks’ weekly payments.
In late November 2013, Mr Nahos deposes that the (employer omitted) at the (employer omitted) advised him that in the next (omitted) year he would essentially be acting as a replacement for other (occupations omitted) when they were ill, instead of having his own classes as had previously been the case. Mr Nahos says that he felt “further bullied and victimised” by that action.
In early December 2013, Mr Nahos says that he was moved into “a cramped back office that was used for storage by myself with no air conditioning with hot conditions in summer. The principal told me this was due to my complaints of being bullied and that it would be better for me to be away from the problem. I felt humiliated.”
On 5 December 2013 Mr Nahos received a further letter from the (employer omitted) of (omitted) informing him that if he returned to that (employer omitted) in 2014 there would be no place for him and he would be made redundant. A copy of that letter was annexed to his first Affidavit.
Mr Nahos deposes that he took further sick leave upon the advice of his treating psychologist from 3 to 12 December 2013, also with supporting medical certificates, and that when he returned to work, he received a letter from the (employer omitted) and the (omitted) advising him that a performance review had been conducted in his absence.
Mr Nahos annexes a copy of that letter, dated 11 December 2013, to his trial affidavit, and it begins as follows:
Dear Mr Nahos
As part of our Performance and Development processes all staff were required to undertake a Mid-Cycle Review. Despite several attempts this review has not taken place and no evidence has been submitted that indicates your progress against the standards. Consequently, and after consultation with others, I have formed a belief that currently, you are not meeting all of the Professional Standards applicable to that of an (occupation omitted).
My preliminary view is that you have not achieved the required standard in the following areas:
Demonstrate a comprehensive knowledge of relevant (omitted) areas
Demonstrate and model excellent (occupation omitted) skills
Demonstrate a significant contribution to the development, implementation and evaluation of (omitted) programs and policy and respond to initiatives that enhance (omitted)
Demonstrate a high level of commitment to (omitted) within the (employer omitted)
Demonstrate strong ongoing professional learning.
The letter then sets out what would be expected of Mr Nahos in order to bring his performance to an acceptable level. It concludes by stating that if his performance remained at its current standard at the time of the End of Cycle Review to be conducted in Term one of 2014, then “support will be provided to assist you to address the causes of the unsuccessful performance assessment.”
It is Mr Nahos’ evidence that he had never before failed a performance review during his (occupation omitted) career and that he had passed the midyear review conducted by the same administration team. He said that again he felt “humiliated and bullied” by the lack of opportunity to put forward any evidence which would support him receiving a pay increment as a result of that review.
He says that he sent an email to the (employer omitted) at (omitted) on 13 December 2013 expressing his frustration “with the continued bullying against myself”. While the (employer omitted) acknowledged receipt of that email, he “offered no apologies or support”. Mr Nahos says that he felt “ostracised once again”.
He resigned from his position during the subsequent long summer holidays.
Property Development
Mr Nahos deposes to a lifelong passion for the real estate business and says he has been buying and selling property for many years. Substantial evidence of those dealings was provided by both sides in the course of the litigation and there is no doubt that Mr Nahos was involved in those activities before he ever met Ms Bell. He continued to engage in small-scale property development activities during the relationship.
He says that in the context of the events of 2013 he decided to resign from (occupation omitted), acquire a builder’s licence and work full-time as a property developer. The study he is currently undertaking is designed to give him qualifications which will lead to him acquiring a builder’s licence.
His evidence is that he currently earns his living from buying, developing and selling property.
Issues
Ms Bell says that Mr Nahos has deliberately stopped working as a (occupation omitted) and reduced his income so as to avoid paying child support at an appropriate rate.
Ms Bell accepts that Mr Nahos has been involved in small-scale property development for as long as she has known him, but it is her case that he has done so over the years primarily to reduce his taxable income in order to avoid paying tax and that he is now doing so to avoid paying appropriate child support.
It is her case that I should make a Departure Order under s.116 of the Act and order that Mr Nahos pay her a lump sum of $42,007, which would be seven years of payments at $6,001 per year. That would account for the period until X completes his primary school education.
Mr Nahos, not unsurprisingly, rejects that description of his decision to leave (occupation omitted) and seeks to rely on the Department’s Child Support Assessments. He opposes a lump sum payment order.
The Law
The law relating to departure order applications is found in Division 4 of Part 7 of the Child Support (Assessment) Act 1989 (“the Act”).
The power to make such an order is found in s.116, which states:
(1) A liable parent or a carer entitled to child support may, in respect of an administrative assessment of child support for a child, apply to a court having jurisdiction under this Act for an order under this Division in relation to the child in the special circumstances of the case if:
(a) all of the following apply:
(i) the Registrar has, under section 98E or 98R, refused to make a determination under Part 6A in respect of the administrative assessment;
(ii) an objection to the refusal has been lodged;
(iii) the Registrar has disallowed the objection; or
(aa) all of the following apply:
(i) a decision has been made in respect of the administrative assessment;
(ii) an objection to the decision has been lodged;
(iii) in making a decision on the objection, the Registrar has, under section 98E or 98R, refused to make a determination under Part 6A in respect of the administrative assessment; or
(ab) the SSAT has, under section 98E or 98R, refused to make a determination under Part 6A in respect of the administrative assessment; or
(b) both of the following apply:
(i) the liable parent or carer entitled to child support is a party to an application pending in a court having jurisdiction under this Act;
(ii) the court is satisfied that it would be in the interest of the liable parent and the carer entitled to child support for the court to consider whether an order should be made under this Division in relation to the child in the special circumstances of the case; or
(c) in the case of a liable parent--the administrative assessment of child support payable by the liable parent for the child is made under subsection 66(1).
Counsel for the mother did not inform the court as to the specific legal basis for her Application, but I infer that it was made under s.116(1)(aa) or s.116(1)(b), and I am satisfied that Ms Bell has standing under either of those sub-sections to bring this Application.
Before making an order for departure from an Administrative Assessment under s.116 of the Act, s.117(1) requires the court to be satisfied of three matters:
(i)that a ground for departure exists under s.117(2);
(ii)that it would be just and equitable as regards the child, the carer parent and the liable parent to make such an order; and
(iii)that it would be otherwise proper to make the order.
In Saberton & Saberton[2], the Full Court said:
It is well established by authority that in determining and granting an application for an order for departure from an administrative assessment, the Court must follow the three stage approach provided by the legislation and, when a non-periodic order is sought, the two steps in accordance with Part 7 Division 5 of the Assessment Act. Reference need only be made to cases such as Gyselman & Gyselman (1992) FLC 92-279 and those which followed to establish these points.
[2] Saberton & Saberton [2013] FamCAFC 89
I will therefore follow that process as fully as is necessary.
Grounds for Departure
Section 117(2) sets out the grounds upon which such an order might be made in the following terms:
(2) For the purposes of subparagraph (1)(b)(i), the grounds for departure are as follows:
(a) that, in the special circumstances of the case, the capacity of either parent to provide financial support for the child is significantly reduced because of:
(i) the duty of the parent to maintain any other child or another person; or
(ii) special needs of any other child or another person that the parent has a duty to maintain; or
(iii) commitments of the parent necessary to enable the parent to support:
(A) himself or herself; or
(B) any other child or another person that the parent has a duty to maintain; or
(iv) high costs involved in enabling a parent to spend time with, or communicate with, any other child or another person that the parent has a duty to maintain;
(aa) that, in the special circumstances of the case, the capacity of either parent to provide financial support for the child is significantly reduced because of the responsibility of the parent to maintain a resident child of the parent (see subsection (10));
(b) that, in the special circumstances of the case, the costs of maintaining the child are significantly affected:
(i) because of high costs involved in enabling a parent to spend time with, or communicate with, the child; or
(ia) because of special needs of the child; or
(ib) because of high child care costs in relation to the child; or
(ii) because the child is being cared for, educated or trained in the manner that was expected by his or her parents;
(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:
(i) because of the income, earning capacity, property and financial resources of the child; or
(ia) because of the income, property and financial resources of either parent; or
(ib) because of the earning capacity of either parent; or
(ii) because of any payments, and any transfer or settlement of property, made or to be made (whether under this Act, the Family Law Act 1975 or otherwise) by the liable parent to the child, to the carer entitled to child support or to any other person for the benefit of the child.
The grounds relied upon in this case are found in s.117(2)(c)(ib). That is, Ms Bell says that in the special circumstances of this case (which she says are constituted by Mr Nahos’ continual objections, review applications and appeals together with the refusal of the Registrar to make a determination), it would be unjust for the current administrative assessment to stand because Mr Nahos has a higher earning capacity than that declared to the Department.
I accept that the Registrar’s refusal to make a determination, that refusal being made under s.98E of the Act, and the multiple applications made by the father, constitute special circumstances in this case.
Therefore I find that the requirements of s.117(1)(a) are satisfied – that is, that a ground for departure exists under s.117(2)(c)(ib).
Issues of Justice and Equity
The next question to be answered under s.117(1) is whether it would be just and equitable as regards the child, the carer parent and the liable parent to make such an order.
In answering that question, s.117(4) requires the court to consider the following factors and I will address each in turn so far as they are relevant.
(a) the nature of the duty of a parent to maintain a child (as stated in section 3)
Section 3 of the Act states:
(1) The parents of a child have the primary duty to maintain the child.
(2) Without limiting subsection (1), the duty of a parent to maintain a child:
(a) is not of lower priority than the duty of the parent to maintain any other child or another person; and
(b) has priority over all commitments of the parent other than commitments necessary to enable the parent to support:
(i) himself or herself; and
(ii) any other child or another person that the parent has a duty to maintain; and
(c) is not affected by:
(i) the duty of any other person to maintain the child; or
(ii) any entitlement of the child or another person to an income tested pension, allowance or benefit.
Clearly in the current matter, both parties, as X’s parents, have a legal duty to support him under s.3.
(b) the proper needs of the child
Section 117(6) relates to the “proper needs” of the child and is couched in the following terms:
(6) In having regard to the proper needs of the child, the court must have regard to:
(a) the manner in which the child is being, and in which the parents expected the child to be, cared for, educated or trained; and
(b) any special needs of the child.
There is no evidence before the court, either in any affidavit material or in evidence adduced at trial, to indicate the manner in which the parties expected X to be cared for, educated or trained.
Neither is there any evidence that X has any special needs.
(c) the income, earning capacity, property and financial resources of the child
There is no evidence that X has any independent income, earning capacity or financial resources.
(d) the income, property and financial resources of each parent who is a party to the proceeding
The mother deposes that her weekly income consists of a part-time (occupation omitted) salary of $942, (omitted) income of about $45, share dividends of about $2, bank interest of about $10, Centrelink benefits of $258, and child support of $33.
Her salary is deposed to be on a part-time, rather than casual basis[3], and I infer from that that she is paid during (omitted) holidays.
[3] Financial Statement of the Applicant sworn and filed 2 April 2015
Her (omitted) income is said to be intermittent and only paid during (omitted).
The father deposes that his income consists of the profits obtained from his property development activities.
In 2013-2014, which incorporates six months while he was still working as a (occupation omitted), his taxable income was set at $59,327 according to the Child Support Assessment dated 5 November 2014.
However, his income for the 2014-2015 year, when his evidence is that his only income is from his property development activities, is estimated to be $44,969. Of course, Mr Nahos’ tax return for that year was not available at trial.
The mother owns no real property and I can find no evidence of her having access to any financial resources other than her superannuation entitlements of $60,000 which are preserved.
In his Financial Statement sworn and filed on 17 July 2014, that being the only Financial Statement filed by the father in these proceedings, he deposes to owning the property at Property E (“the Property E property”) worth $180,000 and encumbered by a mortgage of $146,500, as well as a half share in the property at Property M worth about $262,500 and encumbered by a mortgage of about $248,000.
He had superannuation entitlements at the time of swearing his Financial Statement of $110,000, those entitlements also being preserved.
It is the nature of Mr Nahos’ business that his property holdings are somewhat fluid as he buys, develops and sells various properties.
His evidence under cross-examination at trial was that he had purchased the Property E property in November 2013 for $183,000. He had then built a house on that property and sold it in December 2014 for $520,000., with settlement having taken place in March 2015.
I note that until documents which evidenced that sale were put to him in the witness box, Mr Nahos had provided no information about it at all. That is, in his Affidavit material, Mr Nahos had not said what it cost to build the house on the property, whether or not it had been sold and for how much, and therefore what his profit, if any, might have been. I note that when he swore his Financial Statement in mid-2014, he stated that the Property E property’s value was $180,000. He did say at trial that he had made a modest $35,000 profit on the Property E property project and that he had advised the Department of that income.
In his Outline of Case Document filed 13 April 2015, Mr Nahos makes no mention of the Property E property at all, saying only that he has “other land holdings” worth $203,000 with mortgage loans attached to those holdings of $162,500. At trial he said that the Property E sale monies were included in that total.
When pushed on those holdings at trial, Mr Nahos first stated that he had disclosed them in his Affidavit material, but was unable to point to that disclosure. He then conceded that he had not disclosed any detail about his financial position in general until he filed his Outline of Case Document on 13 April 2015, some 3 days before trial and that even then he had not given full details in relation to his property holdings.
He was also forced to concede under cross-examination that at 19 December 2013 he had $280,367 in the bank. This was at a time when he had told the Department that he had no income and had been assessed to pay no child support.
More questions from counsel for the mother elicited evidence that between June and October 2014 he had withdrawn a total of $160,000 from his mortgage account (he said to pay for building expenses), and between March and August 2014 he had spent about $75,000 on building expenses via his credit card. Clearly if he had paid $183,000 for the Property E property in November 2013, and had been building a house on it spending some $235,000 by October 2014, it was not worth $180,000 when he swore his Financial Statement on 17 July 2014.
Under further cross-examination he conceded that he could have paid child support from late 2013, either from his redraw account or from his bank account. He said that if he had done so it would have affected his building business as he would not have had money to put into it. When asked if he insisted that payment of child support of $600 per month when he was paying thousands of dollars per month on his credit card would have affected his ability to conduct his building business, he replied in the affirmative.
Again, I find that evidence either disingenuous or an attempt to mislead the court as to the true state of his financial affairs at that time.
While it is not possible to set out Mr Nahos’ property holdings in detail, there is evidence that he has been circumspect (to say the least) about those holdings and their value.
That circumspection makes me sceptical about much of Mr Nahos’ evidence in relation to his property dealings.
(da) the earning capacity of each parent who is a party to the proceeding
It is this factor which is at the core of these proceedings.
As already stated, the grounds the mother relies on in this case are those set out in s.117(2)(c)(ib) of the Act. That is, she says that a departure order ought to be made because an administrative assessment based on the father’s declared income would result in an unjust and inequitable determination of the level of financial support provided by Mr Nahos for X. She says he has a greater earning capacity upon which to base a higher child support liability than that based upon his declared estimated income.
Ms Bell says that because Mr Nahos was earning about $84,000 per year in 2013, that is his earning capacity.
Mr Nahos says that he no longer has that earning capacity and that his capacity is limited to what he can earn from his property development activities.
In order to find the provisions of s.117(1)(c)(ib) have been satisfied, I would need to find that Mr Nahos is deliberately not exercising his true earning capacity in order to reduce his child support liability.
Section 117(7B) of the Act states as follows:
(7B) In having regard to the earning capacity of a parent of the child, the court may determine that the parent’s earning capacity is greater than is reflected in his or her income for the purposes of this Act only if the court is satisfied that:
(a) one or more of the following applies:
(i) the parent does not work despite there being an opportunity to do so;
(ii) the parent has reduced the number of hours per week of his or her employment or other work below the normal number of hours per week that constitutes full-time work for the occupation or industry in which the parent is occupied or otherwise engaged;
(iii) the parent has changed his or her occupation, industry or work pattern; and
(b) the parent’s decision not to work, to reduce the number of hours, or to change his or her occupation, industry or working pattern, is not justified on the basis of:
(i) the parent’s caring responsibilities; or
(ii) the parent’s state of health; and
(c) the parent has not demonstrated that it was not a major purpose of that decision to affect the administrative assessment of child support in relation to the child.
When applied to the facts of this case, this means that I may determine that Mr Nahos’ earning capacity is greater than is reflected in his declared income only if I am satisfied that:
· he has changed his occupation
and
· that decision is not justified on health or carer responsibility grounds
and
· that decision is not justified on the basis that he has not demonstrated that a major purpose of that decision was to affect the administrative assessment of his child support.
Clearly, Mr Nahos has changed his occupation from (occupation omitted) to full-time property developer. That unchallenged fact is the basis for these proceedings. Thus, I find that s.117(7B)(a)(iii) is satisfied.
He claims that his decision to change his occupation was the result of his uncertain future as a (occupation omitted) and the stress he suffered from what he saw as bullying in his previous workplace.
That his (occupation omitted) future was uncertain at the time he decided to change his career path is evidenced by the letters he received from the (employer omitted) in mid and late 2013.
In relation to the stress he says he suffered from what he saw as bullying by other staff members, it may be that others might not have responded to the behaviour of co-workers in the way that Mr Nahos responded to his fellow staff members at (employer omitted), but there is evidence before the court that he suffered from considerable stress as a result of his experience of that behaviour, whether that experience was based in reality or not.
First there is his own evidence, given both by way of affidavit and in oral evidence at trial, in relation to his subjective experience of that stress. He was pressed on that issue under cross-examination but his evidence was not shaken.
Next there is the evidence in relation to the time he took off work in the second half of 2013, in the form of medical certificates provided by his general practitioner and annexed to his affidavit sworn and filed 25 March 2015.
Then there is the report provided by his treating psychologist which not only sets out the stress that he suffered, but documents his commitment to the therapeutic process in attempting to address the mental health issues resulting from it.
Finally, there is the fact, uncontroverted by Ms Bell, that he received compensation, albeit not of great quantum, as a result of his WorkCover claim based on his experience of the deterioration in his mental health.
I find that evidence, when taken together, compelling, and I am satisfied, on the balance of probabilities, that it meets the requirements of s.117(7B)(b)(ii).
Mr Nahos impresses as a man of some intensity. He is an intelligent and educated man. He is particular in matters of diet and exercise. He is clearly devoted to his role as X’s father and was very persistent in his attempts to spend more time with X during the substantive proceedings.
He admitted under cross-examination at trial that when he lodged an objection to the Department’s assessment of his child support liability in October 2013 based on the percentage of care that he and Ms Bell had of X, he knew that the outcome would not affect the actual amount of his assessment.
When asked why he had put the mother of his son through that process when he knew it would not change the outcome, Mr Nahos stated that it was a matter of principle that the assessment should be an accurate reflection of the percentage of care of X between him and Ms Bell.
I gained the impression that he sees himself as a meticulous man, that is, one who attends to the minute detail of his life’s arrangements, especially when it comes to his child support obligations.
He is also a persistent man in fighting what he sees as injustice or an infringement of his rights or entitlements, and particularly when such injustice or infringement results from the decisions of government authorities.
That is shown in his appeal from the original decision of (employer omitted) not to appoint him, in his insistence that because, he says, he had told his then lawyer about the actual sale price of the Property R property he was absolved of any fault in not having disclosed that sale price to Ms Bell on 3 September 2013, in his appeal against the rejection of his Workcover claim, and in the multiple objections, review applications and appeals made in relation to his child support obligations.
However, it would appear that he only displays that meticulousness when it suits him.
For example, Mr Nahos gave evidence at trial that he assumed that because he had supplied his bank records to Ms Bell’s lawyers, he did not have to provide any further detail about his income, expenditure, and property holdings. When asked whether he thought the court and the Department were expected to work out his income and property holdings from his bank statements, he answered in the affirmative, saying that such information was clear from the bank statements he had provided by way of discovery. He said that in addition to those accounts discovered, further information could have been gleaned from the joint account he holds with his current partner and from the building expenses for which he had documentary proof.
I did not get the impression that Mr Nahos’ behaviour during these proceedings was founded on any stubborn or malicious unwillingness to provide child support for his son, but rather on a genuinely held, but somewhat obsessive belief that the sum he pays should be calculated absolutely correctly. I had the impression that Mr Nahos’ view of what is correct is one that, once formed, is difficult to shake, despite evidence that a different view might pertain.
I note that s.117(7B)(c) refers to “a major purpose” of the decision to change a payer’s occupation, and not to the effect of that decision. There is no doubt that Mr Nahos’ decision to enter the property development business on a full-time basis has had an effect on the administrative assessment of his child support, that being to reduce the amount he is currently required to pay. It is, of course, quite possible that in future the effect of that decision might be to increase his child support liability substantially.
The question is whether Mr Nahos has “not demonstrated that it was not a major purpose of that decision to affect the administrative assessment of child support in relation to the child”. The onus is on him to show that that decision was not made with the major purpose of reducing his child support liability.
Again, the evidence Mr Nahos provides in relation to this issue is compelling.
He cites, as his reasons for changing his occupation, the uncertain nature of his future employment with the (employer omitted), his brother’s untimely death leading to a rethinking of his goals in life, the stress he suffered from his subjective experience of being bullied in his workplace, and his long-standing interest and involvement in property development.
Again I find that evidence, when taken as a whole, to be convincing, while the mother’s evidence in relation to his purported arrangement of his working affairs to avoid tax was more in the line of assertion of that view than the provision of convincing evidence.
Under cross-examination by Mr Nahos, Ms Bell acknowledged that she had little or no understanding of his business arrangements in any detail, and she was unaware of the nuances of how the building business works. For example, she said she was unaware of the “six-year rule” in relation to capital gains tax liability payable on investment properties, and she could provide no solid evidence to support her assertion that Mr Nahos would continue to manipulate his income in order to avoid paying child support at an appropriate rate.
Mr Nahos’ evidence at trial was that he does take advantage of the taxation rules in relation to property development and that his actions do mean that he has rarely if ever paid capital gains tax (“CGT”) on the sale of properties, but he said that now that he is a full-time developer, he would not be able to continue to organise his affairs in that way.
It was his evidence that if one buys a property, lives in it, and then rents it out for six years before selling it, there is no CGT payable on the sale as long as that is the only property one owns. That has been the case, he said, with properties he owned until he left (occupation omitted) and became a full-time property developer. Now that he owns more than one property at a time, he will pay CGT whenever he sells a developed property.
Of course, it is not unlawful to arrange one’s affairs so as to minimise the amount of tax one pays as long as that arrangement is not fraudulent so as to amount to tax evasion.
I find that Mr Nahos was less than candid throughout these proceedings in relation to his property dealings, and that may well reflect on his general character, but that does not mean that he left (occupation omitted) and went into property development full-time so that he could reduce his child support payments.
I am not satisfied, on the balance of probabilities, that the evidence before me demonstrates that a major purpose of his decision to change his occupation was to affect his child support liability. I am therefore not satisfied that the provisions of s.117(7B)(c) are met.
Given that I may only make a departure order if I am satisfied that all the provisions of s.117(7B) are satisfied, it follows that Ms Bell’s application for such an order must fail.
In the words of the statute, while I am satisfied that a ground for departure exists, I am not satisfied that it is just and equitable to make such an order.
As s.117(1) requires all three of its sub-sections to be satisfied before a departure order can be made, it is not necessary for me to decide whether such an order would otherwise be proper.
B. Whether there should be a lump sum payment by the Respondent to the Applicant pursuant to Section 123 (1)(b) of the Act, and if so, in what sum?
Having decided, based on the above evidence, that I am prevented from making a departure order in this case, the question still arises whether Mr Nahos ought to be ordered to pay a lump sum in lieu of periodic child support, and if so, in what amount (that is, for what period).
Before I can order a lump sum payment, s.123(2) of the Act requires me to be satisfied that there is an administrative assessment currently in force, and that the applicant is a carer entitled to child support, or a liable parent. There is ample documentary and oral evidence before the court in relation to both these matters and I therefore find that the requirements of s.123(2) have been met.
Further, ss.123A(1)(b) and (c) require me to be satisfied that such an order would be just and equitable and otherwise proper; and that the amount sought equals or exceeds the amount which would have otherwise been paid by way of assessed periodic payments.
Ms Bell seeks a lump sum payment of $42,007, and an order that that payment be credited against all Mr Nahos’ child support liability for X until he completes primary school. That sum would consist of a capitalisation of periodic sums of $6,001 per year for the next seven years.
He is currently assessed to pay the sum of $4969.83 per year in child support.
The question of whether a lump sum order would be just and equitable and otherwise proper under s.123A(1)(b) is governed by s.123A(5) which states that the court must have regard to the matters mentioned in sub-ss.117(4), (6), (7), (7A) and (8) of the Act.
I have already considered s.117(4)(a) to (da) in the context of whether a departure order ought to be made. There is no need to repeat the whole discussion of sub-sections (a) to (d) set out in paragraphs 103 to 127 above in the context of whether I ought to order a lump sum payment, but there is one matter that is more relevant to the parties’ financial resources in this context than in the previous discussion.
In resolution of the property aspect of these proceedings, I ordered Mr Nahos to pay the sum of $12,428.05 by 17 May 2015. It was his evidence at trial that if I made a lump sum order in addition to that order, he would suffer considerable financial hardship. I take that evidence into account in the context of whether it is just and equitable to make such an order.
As the issues in relation to sub-section (da) are slightly different in this context, and the remainder of s.117(4) did not need to be addressed in the departure order context, I will begin the discussion of the remainder of those factors at s.117(4)(da) in the context of s.123A(5).
I will then continue my consideration of s.114(6), (7), (7A) and (8) in the same context.
Section 117(4)(da): the earning capacity of each parent who is a party to the proceeding
As a result of the matters set out in paragraphs 116 to 118 above, I believe that the general earning capacity of the father is at least $45,000 per year and possibly much greater.
However, the provisions of s.117(6) mean that, as I am not satisfied that the provisions of s.117(7B) have been met for all the reasons set out in paragraphs 128 to 149 above, I cannot “determine that the parent's earning capacity is greater than is reflected in his or her income for the purposes of this Act”.
I therefore must find in this context that Mr Nahos’ current earning capacity at this time is that stated in his latest child support assessment – that is, about $45,000 per year.
The mother’s earning capacity, based on her sworn evidence, is currently no more than about $67,000 and, if she does not receive (omitted) income or her (occupation omitted) salary in (omitted), considerably less.
However, due to the provisions of s.117(6), I find that her earning capacity is $47,707, that being the amount of her current income pursuant to the child support assessment dated 5 November 2014.
In other words, the income earning capacity of the parties is roughly equal, and I take that fact into consideration.
Section 117(4)(e) states that I must take into consideration the following:
(e) the commitments of each parent who is a party to the proceeding that are necessary to enable the parent to support:
(i) himself or herself; or
(ii) any other child or another person that the person has a duty to maintain and
Both parties must support themselves. That means they must fund their accommodation, food, clothing, health care, education, travel, personal expenses and the like.
The evidence of both parties as set out in their sworn Financial Statements and their evidence at trial is that while they do not earn large amounts of money, they earn sufficient to support themselves at a reasonable standard of living.
There is no evidence that either party has a commitment to support another child.
Mr Nahos has repartnered but there is no evidence before the court of the financial circumstances of that relationship.
Under s.117(4)(f) I must take into account:
the direct and indirect costs incurred by the carer entitled to child support in providing care for the child;
The only recent evidence of these costs is that found in Part N of the Financial Statement of the mother sworn and filed 2 April 2015, where she deposes that the direct costs she incurs in caring for X amount to $285 per week, and I infer that a significant portion of her rental costs of $360 per week is also for X’s care.
Overall, that Financial Statement indicates that Ms Bell is able to live within her means on a weekly basis when she receives child support as assessed.
However, s.117(8) of the Act the states that when considering the direct and indirect costs incurred by the carer parent “the court must have regard to the income and earning capacity foregone by the carer entitled to child support in providing that care”.
Ms Bell’s evidence is that she has either not worked outside the home or worked part-time since X’s birth in (omitted) 2011, and I consider the income and earning capacity foregone in providing that care as a cost of providing it.
Section 117(4)(g) requires that I consider:
any hardship that would be caused:
(i) to:
(A) the child; or
(B) the carer entitled to child support;
by the making of, or the refusal to make, the order; and
(ii) to:
(A) the liable parent; or
(B) any other child or another person that the liable parent has a duty to support;
by the making of, or the refusal to make, the order; and
(iii) to any resident child of the parent (see subsection (10)) by the making of, or the refusal to make, the order.
Ms Bell states that the hardship she would suffer if I do not make such an order is that she will be subject to further reviews, objections and appeals initiated by Mr Nahos every time an assessment is made by the Department.
As already stated, she has already been forced to defend some five such applications over the period June 2013 to February 2014 and she believes that it is likely that had she not instigated this application, there would have been more.
She says that an order for Mr Nahos to make a lump sum payment covering his child support liability until X completes primary school would alleviate the stress and pressure she feels as a result of those applications and what she sees as the inevitable applications to come.
Hardship, in this context, is usually claimed to be the result of a liable parent’s failure or unwillingness to pay child support at all when he/she is able to do so. In that situation a lump sum payment creates certainty of child support for the payee parent.
There appears to be no definition of “hardship” in the Act.
As I have already found, I am not convinced that Mr Nahos refuses to pay child support at all, but I can find nothing which would prevent me from finding that the experience of Ms Bell in having to respond to multiple applications for objection, review and appeal in the future does not constitute hardship.
It was clear from her evidence in the witness box that Ms Bell sees those applications as an attempt to control and harass her, and the frustration she feels as a result of having to participate in those multiple reviews, objections and appeals was patently obvious.
I therefore find that a decision not to make a lump sum payment would cause Ms Bell hardship at an emotional and, to a lesser extent, financial level in the sense that her child support payments are not certain and she must seek advice about responding to Mr Nahos’ applications.
I have already stated the hardship that Mr Nahos claims would be suffered by him if I were to make an order that he pay child support for X in a lump sum now, for the period up to the completion of X’s primary school education in addition to the sum he has been required to pay in final resolution of the parties’ property proceedings.
However, he did not deny that he was able to pay that sum ($12,428.05) within a month or so of the order being made.
At the time of writing, three months have passed since the due date for that payment and as no enforcement proceedings have been initiated, I assume that the payment was made.
Mr Nahos’ business relies on him having access to cash in order to pay for his property development activities.
His child support liabilities should be no less an obligation than his property developments costs, and while his evidence was that he would find it difficult to pay any lump sum, I am not convinced on the evidence before me that a capitalisation of his current assessment over a period of some years would be beyond his capacity.
That is, I find that while the payment of a lump sum might cause him some financial hardship, the amount of that lump sum is a factor to be considered.
When I consider all the matters set out above, I find that the hardship to be endured by Ms Bell in having to respond to multiple applications for review, objection and appeal is significant, and while Mr Nahos might also suffer some financial hardship if a lump sum order is made, I find it is just and equitable to make an order for Mr Nahos to make a lump sum payment of child support, despite the fact that it might cause him some financial hardship.
I now turn to the question of whether a lump sum order would be “otherwise proper” as required by s.123A(1)(b)(ii).
Section 117(5) provides as follows:
in determining whether it would be otherwise proper to make a particular order under this division, the court must have regard to:
(a)the nature of the duty of a parent to maintain a child (as stated in section 3) and, in particular, the fact that he is the parents of a child themselves who have the primary duty to maintain the child; and
(b)the effect that the making of the order would have on:
(i)any entitlement of the child, or the carer entitled to child support, to an income tested pension, allowance or benefit; and
(ii)the rate of any income tested pension, allowance or benefit payable to the child or the carer entitled to child support.
I have already considered the nature of the duty of a parent to maintain a child under s.3 in paragraphs 103 to 105 of these Reasons.
In relation to subsection (b), there is no evidence that X is entitled to any income tested pension, allowance or benefit.
Neither party has provided any evidence to the court of the impact any lump sum payment of Ms Bell’s child support would have on her entitlement to the parenting payment or Family Tax Benefits.
I note however, that the receipt of child support does mean that parenting benefits are not received at the maximum rate.
In her Financial Statement sworn and filed on 2 April 2015, Ms Bell deposes that she receives a parenting payment of $20 per week and Family Tax Benefit payments of $238 per week.
That amounts to about 26% of her gross income each week, a significant proportion in my view. At the time of swearing that Financial Statement she deposed that she was receiving $33 per week in child support from Mr Nahos, which amounts to about 3.5% of her income.
Section 117(6) refers to “the proper needs of the child” and requires me to consider the same issues in this context as I have already considered in paragraphs 107 to 108 of these Reasons. There is therefore no necessity to repeat that consideration here.
Section 117(7) of the Act states as follows:
in having regard to the income, earning capacity, property and financial resources of the child, the court must:
(a)have regard to the capacity of the child to earn or derive income, including any assets of, under the control of, or held for the benefit of, the child that do not produce, but are capable of producing income; and
(b)disregard:
(i)the income, earning capacity, property and financial resources of any person who does not have a duty to maintain the child, or who has such a duty but is not a party to the proceeding, unless, in the special circumstances of the case, the court considers that it is appropriate to have regard to them; and
(ii)any entitlement of the child or the carer entitled to child support to an income tested pension, allowance or benefit.
X is currently four years old. There is no evidence before me that he has any capacity to earn or derive income from any source.
There is no evidence of any special circumstances of the case that would allow me to have regard to the income, earning capacity, property and financial resources of any person who does not have a duty to maintain X, or who has such a duty but is not a party to the proceeding.
Again, there is no evidence or submission before the court to the effect that I should have regard to Ms Bell’s entitlement to her parenting payment or Family Tax Benefits when I am considering whether an order be made for Mr Nahos to pay his child support by way of lump sum.
The provisions of s.117(8) have already been discussed in paragraphs 194 to 198 of these Reasons.
When I take all of the above matters into account, I am satisfied that it is “otherwise proper” for Mr Nahos to pay his child support in a lump sum.
Having found that the making of such an order would be just, equitable and otherwise proper under s.123A(1)(b), I must also be satisfied under s.123A(1)(c) that the sum sought is equal to or greater than that which would be paid by way of periodic payments.
The problem with that provision is that Mr Nahos’ income is by its very nature variable as he acquires, develops and sells property. It is almost impossible to predict what his income will be for the purposes of child support assessments in the future.
It was his evidence that currently, as he builds up that business, his estimated income for the 2014-15 year would be about $45,000 per year. The child support he has been assessed to pay on that estimated income is $4679.96 per year according to the assessment dated 5 November 2014.
As already stated, I am prevented by s.123A(6) from finding that the earning capacity of either parent is greater than that found in the current Assessment.
Therefore, while I may not make an order for a lump sum in excess of that for which Mr Nahos is currently assessed, I am able to order that he pay a lump sum equal to the amount which he is currently assessed to pay.
The current rate of child support payable is $4617.96 per year. Therefore I may make an order that Mr Nahos pay that sum, for one or multiple years, in a lump sum.
I am satisfied, based on evidence previously stated in these Reasons, and particularly on findings of Mr Nahos’ lack of candour in relation to his property dealings, that he has the capacity to pay that sum for a period of three years from the date of the initiation of these proceedings, that being 11 June 2014.
Any sums of child support he has already paid for the period since that date should of course be subtracted from any lump sum.
Thus, I will make an order that Mr Nahos pay to Ms Bell the sum of $13,853.88, less any monies the Department has collected from him since 11 June 2014, by way of child support for the period 11 June 2014 to 10 June 2017.
I will allow him 60 days within which to make that payment.
In future, Mr Nahos’ income will be variable depending on his success or failure as a property developer. It might be much less than that which is the basis of his current assessment, but it might also be significantly more. It is Mr Nahos’ evidence that he intends that it will be greater as he has great hopes and ambitions for his business.
While it might be said that to some extent he has control over his taxable income in that he controls how many properties he develops in any given period, there is nothing in the evidence before me that leads me to believe that Mr Nahos’ income is likely to remain at its current level in the long term future.
The current Assessment is based on an estimate provided to the department by Mr Nahos. Given his evidence in relation to the sale of the Property E property, it is likely to change significantly for the 2014-2015 year once he lodges his tax return.
After the three year period, which will expire on 10 June 2017, the amount of child support Mr Nahos pays for X’s support after 10 June 2017 will be an amount calculated by the Department based on his taxable income as indicated by his Income Tax Assessments provided by the Australian Taxation Office.
Conclusion
It seems to me a matter of logic that the Commonwealth Parliament cannot have intended to force parents to remain in occupations and/or workplaces in which they are unhappy, or which have a deleterious effect on their health, solely in order to maintain a certain level of child support. That would be an onerous state of affairs indeed and would indicate an intention to restrict the freedom of citizens which I cannot ascribe to the Parliament.
I am aware that this decision does not prevent Mr Nahos from continuing to lodge objections and appeals in relation to his Child Support Assessments from 11 June 2017 until X turns 18 in April 2029.
As already stated, Mr Nahos lodged five objections/reviews/appeals against his child support assessments in the nine month period to February 2014.
It is possible that a continuation of that pattern of behaviour might fall under the definition of family violence as found in s.4AB(2)(g) of the Family Law Act 1975 (“the FLA”). I note that the examples of family violence found in s.4AB(2) are not exhaustive.
In Walsh v Barron[4] the Supreme Court of Western Australia found that the defendant’s multiple applications in relation to family violence restraining order proceedings constituted a breach of the original restraining order as acts of abuse under the state legislation, despite those applications being legal in themselves.
[4] Walsh v Barron [2014] WASCA 124
It is not unknown for vengeful liable parents to use child support applications to harass the payee parent and force him/her to expend significant sums in responding to those applications.
There is little doubt on the evidence before the court that Mr Nahos’ actions have caused considerable financial and personal pressure and stress to Ms Bell.
Were such a finding to be made in future proceedings between these parties in this court, the provisions of s.117(9) might well allow that finding to form the basis for the making of a departure order.
Should Mr Nahos continue to lodge multiple such objections, reviews or appeals in relation to his child support liability and Ms Bell were to make a further application to this court, he might find himself in a different position than that in which he finds himself as a result of these proceedings.
Mr Nahos would do well to consider that possibility, and indeed all the circumstances surrounding his relationship with his son, before choosing that path.
I certify that the preceding two hundred and forty-seven (247) paragraphs are a true copy of the reasons for judgment of Judge Small
Date: 21 August 2015
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