BELL & NAHOS (No.2)
[2017] FCCA 2408
•4 October 2017
FEDERAL CIRCUIT COURT OF AUSTRALIA
| BELL & NAHOS (No.2) | [2017] FCCA 2408 |
| Catchwords: HELD – Order made for a departure order – order made for the Father to make a lump sum payment to the Mother to be credited 100% against his child support liability until child completes primary school. |
| Legislation: Child Support (Assessment) Act 1989, ss.3, 98E, 116, 117, 123, 123A, 125 |
| Cases cited: Saberton & Saberton [2013] FamCAFC 89 |
| Applicant: | MS BELL |
| Respondent: | MR NAHOS |
| File Number: | MLC 10071 of 2012 |
| Judgment of: | Judge Bender |
| Hearing date: | 18 May 2017 |
| Date of Last Submission: | 4 August 2017 |
| Delivered at: | Melbourne |
| Delivered on: | 4 October 2017 |
REPRESENTATION
| Counsel for the Applicant: | Ms Dellidis |
| Solicitors for the Applicant: | Farrar Gesini Dunn |
| Counsel for the Respondent: | Self-Represented |
| Solicitors for the Respondent: | Not Applicable |
ORDERS
There be a child support departure order pursuant to section 116(1)(b) of Division 4 of the Child Support (Assessment) Act 1989 (Cth).
Pursuant to section 123(1)(b) of the Child Support (Assessment) Act 1989 (Cth) the Father pay child support to the Mother by way of a lump sum payment in the sum of $30,346.12 on or before 3 December 2017.
Pursuant to section 123A(3) of the Child Support (Assessment) Act 1989 (Cth) the payment shall be credited 100% against any liability of the Father for an administrative assessment of child support in relation to the child X born (omitted) 2011 for the period 11 June 2014 to 12 December 2023.
IT IS NOTED that publication of this judgment under the pseudonym Bell & Nahos (No.2) 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
This is the Mother’s application there be a child support departure order pursuant to section 116(1)(b) of Division 4 of the Child Support (Assessment) Act 1989 (“the Act”) in relation to the child support the Father pays for the parties’ son X born (omitted) 2011 (“X”).
The Mother is also seeking orders be made pursuant to section 123(1)(b) of the Act that the Father pay child support to the Mother by way of a lump sum payment of $50,774, less any monies already paid to the Mother pursuant to the orders made on 21 August 2015 by Judge Small within 60 days. The Mother seeks that pursuant to section 125 of the Act the lump sum payment by the Father be credited 100% against any liability of the Father for an administrative assessment of child support in relation to X for the period 11 June 2014 to 12 December 2023. It is noted that the latter application ought properly have been made pursuant to section 123A(3) of the Act.
The Father seeks the Mother’s application be dismissed and that the monies paid by him pursuant to the orders made on 21 August 2015 be credited against any assessed child support payable by him in relation to X.
Background
The Mother was born on (omitted) 1978 and is aged 39 years. She is employed as a (occupation omitted) working a .8 workload. Her salary is $62,993.30. She is currently on a 12 month temporary contract for the (employer omitted) as a (occupation omitted) for which she receives a higher duties allowance of $16,488.95. The Mother does not know if she will be re-appointed as a (occupation omitted) in 2017. The Mother has not repartnered.
The Father was born on (omitted) 1974 and is aged 43 years. He was, until his resignation at the end of 2013, employed as a (occupation omitted) earning approximately $80,000 per annum. Since 2013 the Father has been undertaking a (course omitted) at (omitted) and has been self-employed undertaking property developments. Shortly prior to the hearing of the matter, the Father sat the examination to become qualified as a (occupation omitted). His individual taxation returns for the financial years ending June 2014, 2015 and 2016 reflect the Father’s income to be, in order: $58,415, nil and a $6,772 loss.
The Father has been in a de facto relationship with Ms S since 2012. Ms S is a (occupation omitted) working in her own practice.
The parties were involved in a relationship between (omitted) 2008 and late November 2010, although they do not agree as to the nature of the relationship or its duration.
It is the Mother’s evidence that prior to X’s birth the parties entered into a verbal agreement that the Father would pay child support of $650 per month when he was born. It is the Father’s evidence he agreed to pay $600 per month.
When X was born, the Father did not immediately start paying child support so the Mother made application for a child support assessment by the Child Support Agency.
In July 2011 the Father paid the Mother a lump sum payment of $2,600. This equates to $650 per month for the period of April to July 2011.
In mid-2011 the Child Support Agency assessed the Father’s child support at $700.67 per month. In November 2011 they issued a second assessment setting the Father’s level of child support at $723.42 per month.
Despite these assessments, the Father paid child support at the rate of $650 per month. It is the Mother’s evidence that this is because he refused to pay the assessed rate. It is the Father’s evidence this is because he did not know of the assessments.
In January 2012 the amount of child support paid by the Father increased to $700 per month when, the Father says, the Mother requested an additional $50 per month.
In August 2012 a further assessment issued which set the Father’s child support at $886.67 per month. The Father continued to pay child support at the rate of $700 per month.
In May 2013 the Father unilaterally reduced his level of child support to $555 per month on the basis the Mother’s income had increased. Because of this, the Mother, for the first time, asked the Child Support Agency to collect child support.
It is the Mother’s evidence that the Child Support Agency calculated the monthly payment to be collected from the Father to include arrears of child support from June 2011. It is also her evidence the Child Support Agency “garnished” the Father’s wages. It is the Father’s evidence his wages were not garnished and that he volunteered to pay the arrears.
In (omitted) 2013 the Father’s brother sadly committed suicide.
It is the Father’s evidence that throughout 2013 he was subjected to bullying by staff and physical abuse by a (employee omitted). He did not receive support from the (employer omitted) of his (employer omitted).
Because of the stress and anxiety suffered by the Father as a result of his brother’s death and the bullying and lack of support at his (employer omitted), the Father sought assistance from psychologist Mr S between May 2013 and January 2014.
The Father took sick leave because of his stress and anxiety between 8 November 2013 and 25 November 2013 and again between 2 December 2013 and 13 December 2013.
Upon the Father’s return to work on 13 December 2013 he was given the outcome of his “standard performance review” which was conducted by the (employer omitted) whilst he was on sick leave. He failed the review.
It is the Father’s evidence that the death of his brother and his increasing unhappiness with (employment omitted) because of the bullying and lack of support he was receiving, caused him to suffer significant anxiety and depression. In consultation with his psychologist, he made the decision to leave (employer omitted) and embark on a new career pursuing his passion for property investment and development. On 20 December 2013 the Father ceased work with the (employer omitted) as a (occupation omitted).
On 1 March 2014 the Father commenced a two year (course omitted) at (omitted).
When the Father resigned from (employment omitted), he immediately notified the Child Support Agency of this fact and that his income was therefore nil. He ceased paying child support.
On 17 February 2014 the Mother lodged a Change of Assessment application with the Child Support Agency challenging the Father’s claim to having a nil income.
Pursuant to section 98E of the Act, on 5 May 2014 the delegate of the Child Support Registrar refused the Mother’s application for Change of Assessment on the basis the issues raised in her application were too complex. The delegate recommended an application be made to the Court for an order under Division 4 of Part 7 of the Act.
The Father filed an Initiating Application seeking to vary parenting orders made 19 April 2013. On 11 June 2014 the Mother filed a Response to the Father’s Initiating Application. In her Response the Mother not only sought the Father’s application for parenting orders be dismissed but that the final property orders made 3 September 2013 be set aside and there be a departure from the child support assessment and that the Father pay child support to the Mother in the form of such lump sum as the Court deemed appropriate.
The Father’s application for parenting orders was dismissed on the first return date of that application. The Mother’s property and child support applications were listed before Judge Small for final hearing on 16-17 April 2015. The Mother’s property application settled by consent at the commencement of the final hearing and the Mother’s child support application proceeded to hearing. On 29 August 2015 her Honour delivered judgment in which she ordered there be no departure from the child support assessment and that the Father pay lump sum child support of $13,853 for the period 11 June 2014 to 10 June 2017.
The Mother appealed Judge Small’s decision. On 30 November 2016 the Mother’s appeal was upheld and her Honour’s orders were set aside and the matter remitted to the Federal Circuit Court for rehearing.
The matter proceeded before me on 18 May 2017. Because of the illness of the Father’s witness, the matter was adjourned part-heard to
4 August 2017.
Litigation and Child Support History
It is the Mother’s submission that the Court should make an order that the Father pay child support by way of a lump sum payment because this is the only way the Mother can be confident that she will not be subjected to the Father’s repeated objections and challenges to any child support assessments.
Neither party provided the Court with a coherent history of their many family law and child support matters. However, as best as can be determined on the information provided to the Court, the parties’ family law and child support history is as follows:
| 11/06/2011 | The Mother lodged an application with the Child Support Agency. The Father was assessed to pay $700.67 per month. |
| 11/2011 | Child Support Agency issued a revised assessment. The Father was assessed to pay $723.42 per month. |
07/2012 | The Mother obtained an intervention order against the Father arising from an incident at X’s swimming lesson. |
| 01/08/2012 | Child Support Agency issued an assessment for the period 01/08/2012 – 25/04/2013 with the Father to pay $886.67 per month. |
| 01/11/2012 | The Mother issued proceedings in Federal Circuit Court seeking property orders. |
| 10/12/2012 | The Father filed a Response seeking property and parenting orders. |
| 19/04/2013 | Final parenting orders made by consent. |
| 05/2013 | The Mother sought the Child Support Agency collect child support when the Father reduced his payments to $555 per month. |
| 29/05/2013 | Child Support Agency adjusted the assessment on the basis the Mother is now working part-time. |
| 05/06/2013 | The Father lodged an objection to 29/05/2013 decision relating to the collection of arrears. |
| 19/06/2013 | Child Support Agency determined amount of arrears. |
| 23/07/2013 | After review, the Father assessed to pay $560.25 per month for period of 30/05/2013 – 31/10/2013. |
| 08/2013 | The Father objected to the 23/07/2013 decision. The objection was dismissed. |
| 15/08/2013 | The Father lodged an objection to the Child Support Agency’s finding that his level of care of X is 19% arguing it should be 32% (the child support payable by him did not alter whether his care of X is 19% or 32%). |
| 03/09/2013 | Final property orders by consent. |
| 09/09/2013 | The Father filed an Initiating Application in the Federal Circuit Court seeking to vary parenting orders. |
| 08/10/2013 | The Father’s objection to the percentage of his level of care of X partly allowed. His percentage of care assessed as 20%. |
30/10/2013 | The Father sought SSAT review of percentage of care decision. |
| 01/11/2013 | The Father assessed to pay child support at rate of $500.08 per month for period 01/11/2013 – 23/01/2014. |
| 11/11/2013 | The Father’s application to vary parenting orders dismissed on the first return date. |
| 25/11/2013 | SSAT hear the Father’s application and determine the Father’s percentage of care of X be increased to 28%. |
| 24/01/2014 | The Father assessed to pay nil child support for period 24/01/2014 – 30/10/2014. They determined his level of care of X at less than 20% (exact % is unclear) |
| 02/2014 | The Father appealed the Child Support Agency percentage of care determination to the SSAT. |
| 17/02/2014 | The Mother filed a Change of Assessment with the Child Support Agency regarding the Father’s nil assessment. |
| 25/03/2014 | SSAT uphold Child Support Agency’s percentage of care determination. |
| 31/03/2014 | The Father files a second Initiating Application seeking to vary parenting orders. |
| 05/05/2014 | Pursuant to section 98E of the Act, the Mother’s Change of Assessment refused on basis too complex and recommends the matter be dealt with by the Court. |
30/05/2014 | The Father assessed to pay nil child support for period 01/07/2014 – 30/11/2014. |
11/06/2014 | The Mother files a Response seeking property orders be set aside and departure from child support and lump sum child support payment. |
| 18/06/2014 | The Father’s application to vary parenting orders is dismissed. |
| 07/2014 | The Father assessed to pay child support of $210.17 per month for the period 17/07/2014 – 30/11/2014. |
| 11/2014 | The Father assessed to pay child support of $144.75 per month for the period of 01/12/2014 – 30/06/2015 and $384.83 per month for the period of 01/07/2015 – 29/02/2016. |
| 03/06/2015 | Revised Child Support Agency assessment for the Father to pay child support of $111 per month for the period of 01/07/2015 – 29/02/2016. |
| 16/06/2015 | Further revised Child Support Agency assessment for the Father to pay nil child support for period of 01/07/2015 – 29/02/2016. |
| 21/08/2015 | Judge Small delivered judgment in relation to the Mother’s departure application. |
| 21/08/2015 | The Mother filed and Application in a Case seeking to take X on a family funded overseas holidays. |
| 08/09/2015 | Consent orders made allowing X to travel with the Mother. |
| 18/09/2015 | The Mother appealed Judge Small’s orders. |
| 12/2016 | The Father assessed to pay child support as follows: |
| 25/07/2016 | The Father filed an Initiating Application in the Federal Circuit Court to vary parenting orders seeking sole parental responsibility, that X live with him and spend two nights per fortnight with the Mother. |
| 21/09/2016 | The Mother filed a Response seeking sole parental responsibility for decisions for X’s education and for X to attend a local primary school when he commences school in 2017. |
| 24/12/2016 | The Father filed an Amended Application in a Case seeking X attend private school in Property A. |
| 02/02/2017 | Judge O’Sullivan ordered equal shared parental responsibility be suspended and for X to attend a local primary school. |
| 02/02/2017 | The Father’s application to vary parenting orders listed for final hearing for two days commencing on 22 March 2018 |
The Father’s work history/property dealings
(occupation omitted)
The Father’s (occupation omitted) history and the circumstances leading up to his resignation from (occupation omitted) is accurately set out in paragraphs 58-82 of Judge Small’s judgment as follows:
“58. It is the father’s evidence that he was employed as a (occupation omitted) for some 15 the 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”.
59. 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), 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), which, he says, was located about an hour’s journey from his home.
60. 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)”.
61. His position at (employer omitted) was secure for the 2013 year only. In an email from the (employer omitted) of (employer omitted) dated 29 April 2013, Mr Nahos was informed as follows:
If (employer omitted) offer you employment beyond 2013 then you become an ongoing employee at that (employer omitted). If they don’t have a position for you in 2014, then you return to this (employer omitted). If that is the case and I do not have an allotment for you, then you return to being in excess to the (occupation omitted) entitlement of the (employer omitted).
Please note that under the new (employer omitted) Agreement 2013, the arrangement for over entitlement (occupations 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 (occupation 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 (employer omitted) and you remain in excess that (sic) I will be required to apply for you to be retrenched from the (employer omitted). The advice that (employers omitted) are being given is that (employers omitted) no longer wants (occupations 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).
62. 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.
63. It is his further evidence that his brother died in (omitted) 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) in relation to his loss.
64. 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.
65. In his trial affidavit, Mr Nahos says the following:
I have worked in mainly (employers omitted) that comprised (duties omitted). Over the course of the last few years of my (occupation 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 (employer omitted). I have in turn been victimised for raising genuine complaints against these violent and erratic (omitted).
66. 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) behaviour to the (employer omitted) as required by the (employer omitted) protocol. He says that he received no response to that report.
67. 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) Manager 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.
68. It is Mr Nahos’s 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.
69. 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.
70. 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”.
71. 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.
72. Mr Nahos’s 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.
73. 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.
74. In late November 2013, Mr Nahos deposes that the (employer omitted) advised him that in the next (duties omitted) he would essentially be acting as a replacement for other (occupations omitted) when they were ill, instead of having his own (duties omitted) as had previously been the case. Mr Nahos says that he felt “further bullied and victimised” by that action.
75. 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 (employer omitted) 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.”
76. On 5 December 2013 Mr Nahos received a further letter from the (employer omitted) informing him that if he returned to that (employment 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.
77. 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) advising him that a performance review had been conducted in his absence.
78. 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 (duties omitted) areas
Demonstrate and model excellent (omitted) skills
Demonstrate a significant contribution to the development, implementation and evaluation of (duties omitted)
Demonstrate a high level of commitment to (employer omitted)
Demonstrate strong ongoing professional learning.
79. 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.”
80. It is Mr Nahos’s evidence that he had never before failed a performance review during his (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.
81. He says that he sent an email to the (employer 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”.
82. He resigned from his position (employment omitted).
Property Development
It is the Father’s evidence that he has had a lifelong passion for property and property development and that he has been buying and selling properties since he was in his twenties.
The Mother agrees the Father was involved property development activities prior to, during and after their relationship whilst he was (employment omitted).
It is the Father’s evidence that because of the events of 2013 and its impact on his mental health, he decided to resign from (employment omitted) and to embark on a career as a property developer.
It is the Father’s evidence that he completed the (omitted) Course in late 2016. When questioned as to why he took three years to complete a two year course the Father explained it was because he was looking after X.
The Father gave evidence he has just completed the examinations to become a licensed builder. It is his evidence this required considerable study as well as preparing an extensive portfolio detailing his construction/development of three separate properties
It is the Father’s evidence that upon obtaining his building license he intends to become a self-employed builder. This will enable him to build other people’s homes as well as undertake his own property development.
The Father has not filed an affidavit in these proceedings since his “trial affidavit” sworn 25 March 2015 for the final hearing before Judge Small. Accordingly, the details of the Father’s property developments since leaving (occupation omitted) are as best that can be determined on the limited evidence before the Court.
At the time the final property orders were made between the parties on 3 September 2013 the agreed value of the Husband’s property in Property E, NSW was $770,000 (“the Property E property”). He did not disclose that at the time the orders were made he had entered into a contract to sell the Property E property for $853,000. The Husband’s failure to disclose the sale of the Property E property for an amount greater than the value attributed to it in negotiations led to the application by the Mother to set aside the initial property orders and the subsequent orders that the Father pay the Mother an additional $12,428.05.
Two to three weeks after the final property orders were made in September 2013, the Father and his partner Ms S jointly purchased a property at Property B (“the Property B property”). The Property B property consisted of a residential property and a vacant lot and was on separate titles.
The purchase price for the Property B property including stamp duty was $655,000. The Father and Ms S obtained a mortgage of $497,000 to complete the purchase.
It is the Husband’s evidence the balance of the purchase price for the Property B property came from the proceeds of sale of the Property E property and his savings from 15 years of (employment omitted). In the Father’s loan application to (omitted) Bank to purchase the Property B property he deposes to having $404,000 in savings.
Upon his retirement from (occupation omitted), the Father established a business entity, (omitted). From 2013 he operated as a self-employed (occupation omitted) and conducted this business either in the name of (omitted) or under his own name.
At or around the same time the Property B property was purchased, the Father also purchased a vacant block of land at Property C, (“the Property C property”) for $183,500. A mortgage to (omitted) Bank was registered over the Property C property but the Father was unable to advise the Court as to how much was borrowed by him from (omitted) Bank or how the borrowed funds were utilised.
The Father built a residence on the Property C property and sold it in January 2015 for $520,000.
On 16 March 2015 the Father bought a vacant block of land at Property D, (“the Property D property”) for $203,000. There was a mortgage to (omitted) Bank registered over the Property D property. When giving his evidence, the Father was unable to advise the Court as to how much was borrowed by him from (omitted) Bank or what any borrowed funds were used for.
Through his business (omitted) the Father built a residence on the Property D property. He sold it in May 2016 for $560,000.
The Father and his partner Ms S purchased a block of land at Property A (“the Property A property”) for $317,000 plus $12,200 stamp duty. This property is in Ms S’s name only. It is the Father’s evidence that the property is registered in Ms S’s sole name because he is without a regular income and therefore unable to obtain finance.
It is the Father’s evidence that the funds used to purchase the Property A property came from his property developments, his savings “from 44 years of living” and $100,000 Ms S realised from the sale of a property retained by her as part of a property settlement with her former partner.
The Father and Ms S have built a house on the Property A property utilising the Father and Ms S’s savings, the proceeds of sale from the Property D property and a construction loan of $200,000(E) from the (omitted) Bank.
It is the Father’s evidence that he and Ms S recently moved into Property A and it is intended that this will be their permanent home.
It is the Father’s evidence that he has not undertaken any property developments since the Property D property as he has been focussed on building he and Ms S’s home and completing his qualifications.
The Law
Division 4 of Part 7 of the Act sets out the law relating to departure orders.
Section 116 of the Act sets out the Court’s power to make such an order as follows:
“116. Application for order under Division
(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:
(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).
Note 1: For the orders that a court may make under this Division see section 118.
Note 2: With a court's leave, a court may make an order under this Division in respect of a day that is more than 18 months earlier than the day on which the relevant application was made (see subsection 118(2B)). A person is taken to have applied under this section if leave is granted.
Note 3: A court may make an order under this Division if the court sets aside a child support agreement under section 136.
At the time of the Mother’s application for a departure order there were proceedings before the Court. As such the Mother had standing to bring her application.
Further, given the decision of the Child Support Agency to dismiss the Mother’s Change of Assessment application pursuant to section 98E of the Act and its recommendation an application be made to the Court for an order under Division 4 of Part 7 of the Act, it is apparent that this application is properly before the Court.
Section 117(1) of the Act sets out the requirements the Court must be satisfied of before making a departure application as follows:
Court may make departure order
(1) Where:
(a) application is made to a court having jurisdiction under this Act for an order under this Division in relation to a child in the special circumstances of the case; and
(b) the court is satisfied:
(i) that one or more of the grounds for departure mentioned in subsection (2) exists or exist; and
(ii) that it would be:
(A) just and equitable as regards the child, the carer entitled to child support and the liable parent; and
(B) otherwise proper;
to make a particular order under this Division;
the court may make the order.
As was previously noted by Judge Small in her decision of 21 August 2016, the Full Court in Saberton & Saberton [2013] FamCAFC 89 held:
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.
Section 117(2) of the Act sets out the grounds for a departure order in the following terms:
“Grounds for departure order
(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.”
It is the Mother’s application that there should be a departure made on the basis of section 117(2)(c)(ib) of the Act because the Father has a higher earning capacity than that determined by the Child Support Agency.
Section 117(1)(b)(ii) requires the Court to consider whether it would be just and equitable as regards to the child, the carer and the liable parent, that the Court make a departure order.
Section 117(4) of the Act sets out the matters to be considered for the purposes of subparagraph 117(1)(b)(ii). Each of the factors will be addressed in turn where relevant.
s 117(4)(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.
In this matter both parents have a duty to maintain and support X.
s 117(4)(b) the proper needs of the child
Section 117(6) sets out the factors the Court must have regard to in relation to the proper needs of the child as follows:
“(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 that X has any special needs.
The question of X’s education was resolved by Judge O’Sullivan in February 2017 when his Honour determined that X was to be educated in the State system and not in a private school as proposed by the Father.
s 117(4)(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.
s 117(4)(d) the income, property and financial resources of each parent who is a party to the proceeding
As previously set out in this judgment, the Mother is employed as a (occupation omitted), working a .8 workload. Her base salary is $62,993.30 per annum. She is currently on a 12 month temporary contract for the (omitted) year as a (occupation omitted) and receives an additional higher duties allowance of $16,488.95, making her total income for 2017 $79,482.25.
It is the Mother’s evidence that she does not know if she will be reappointed as a (occupation omitted) in 2018.
It is submitted on behalf of the Mother that any consideration of her earning capacity should be based on her base salary only because of the uncertainty as to whether she will be reappointed as a (occupation omitted) in the future.
It is the Mother’s evidence that she is currently working a .8 workload in order to be available to care for X outside his current kindergarten and school commitments.
It is the Mother’s evidence that when X settles into school, she has not decided whether she will seek to obtain a full-time position as a (occupation omitted).
If the Mother were to become employed on a full-time basis, then her base salary would be approximately $80,000 per annum.
The Mother owns no real property and her only financial resource is her superannuation entitlements which are preserved.
In the Father’s Financial Statement sworn 28 April 2017 he deposes to having an average weekly income of $270 from his occupation as a property developer. In cross-examination the Father explained that this figure was based on advice from his accountant.
In the same Financial Statement the Father deposes to having weekly expenses of $2,935, the major component of which is credit card payments of $2,500 per week as well as living expenses of $250 per week.
The Father also deposes to paying $560 per week rent on behalf of he and his partner Ms S, even though this is not a payment listed in Part G of that document.
The Father deposes in his Financial Statement to having $56,382 of property consisting of $21,382 of savings, a motor vehicle worth $10,000, the assets of (business omitted) being $14,000, household contents of $10,000 and a $1,000 trailer.
The Husband deposes to a credit card liability of $13,000.
The Husband sets out his financial resources to consist of his (omitted) Super entitlements of $183,350 and “equity in partner’s house” of $240,000(E).
The Father has not filed an affidavit in these proceedings since that sworn by him on 24 March 2015 when the matter was heard for the first time by Judge Small, despite there being orders for him to do so. Accordingly, the only evidence before the Court is that given by the Father at the hearing of this matter.
It is fair to say that the Father’s evidence was inconsistent, vague and was of no assistance whatsoever in enabling this Court to have any objective evidence before it as to his current income, property and financial resources.
Tendered into evidence by the Mother were those financial documents pertaining to the Father that had been made available to them by the Father or obtained by them through the issuing of subpoenas. They make appropriate complaint about the Father’s lack of full and frank disclosure.
The very incomplete snapshot of the Father’s financial circumstances that can be gleaned from the evidence before the Court is as follows:
Credit Cards
·Tendered were statements for two credit cards in the name of the Father, both with the (omitted) Bank, one ending (omitted) and the other ending (omitted). Both credit cards have a credit limit of $37,000.
·For the credit card ending (omitted), the statement for the period 22 February 2017 – 21 March 2017 showed usage for a combination of living expenses, restaurants and hotels, social activities, (omitted) and lighting purchases. An amount of $6,838.79 was paid off that credit card in that month.
·For the credit card ending 6977, the statement for the period 22 April 2017 – 22 May 2017 also showed payments for living expenses, (omitted), hotels, restaurants, travel and (omitted). An amount of $6,425.56 was paid off that credit card in that month.
·In the statement for the period 23 May 2017 – 21 June 2017 for the credit card ending (omitted), the same mix of personal expenditure, entertainment, (omitted) and lighting expenses are shown. An amount of $6,425.56 was paid off that credit card in that month.
Bank Statements
·The Court was provided with copies of the bank statements for the Father's (omitted) Bank Account ending in (omitted) for the period 22 July 2016 – 16 May 2017. In that period $50,302.56 was deposited into that account. A perusal of the statement indicates that the majority of those transfers were internal transfers from an unnamed linked account in the name of the Father. Most of the funds were expended on what appears to be building expenses.
·The Court was also provided with bank statements for the Father's (omitted) Bank Account ending (omitted) for the period 19 January 2017 – 14 June 2017. In that period $263,373.71 was deposited into that account. A perusal of the statements disclose that those funds were deposited by way of internal transfers from accounts in the name of the Father, save for $42,000 that was deposited into the account by the Father’s partner, Ms S in April and May. The funds were transferred back to accounts in the name of the Father. It would appear this account was the source of the funds that paid the large monthly credit card payments referred to above.
·In June 2017 this account was placed into the joint names of the Father and Ms S. In June 2017 $34,481.06 was credited to that account from a (omitted) Bank Account.
The Father was cross-examined as to the source of the funds that were credited into the (omitted) Bank Account. It is his evidence those funds have come from the (omitted) Bank building construction loan taken out by Ms S for the construction of the Property A property.
When questioned as to how much has been drawn down by he and Ms S on the (omitted) Bank building construction loan, it is the Father’s evidence he believes they have drawn down between $170,000 and $180,000 to date.
When questioned as to Ms S’s income, it is the Father’s evidence that she is a self-employed (occupation omitted) who runs her own (business omitted). It is the Father’s evidence that he is not aware of Ms S’s income. In his Financial Statement sworn 28 April 2017 he deposes to Ms S’s income being $746 per week. When asked the basis of that figure, it is the Father’s evidence that this was the information provided to him by the parties’ accountant.
In the Father’s Financial Statement sworn 28 April 2017, he deposes in Part 37 of that document, under the hearing “Funds in banks, building societies, credit unions or other financial institutions” to (omitted) Bank Account ending in the numbers (omitted), (omitted), (omitted), (omitted) and (omitted). As can be seen, the financial statements tendered into evidence in relation to the Father’s bank accounts do not include many of the accounts to which the Father makes reference in his Financial Statement.
Also tendered into evidence was an application made by the Father and Ms S to (omitted) Bank for a loan on 18 October 2013. In that application the Father and Ms S declare assets of $1,600,000 which includes savings of the Father of $404,200.
In his vive voce evidence the Father confirmed that he had savings at that level at that time.
Tendered into evidence was a (omitted) Bank loan application of the Father dated 6 March 2015. In that document the Father deposes to having a monthly income of $4,695 arising from his employment with (omitted), which is Ms S’s business. Supporting that application were payslips issued to the Father by Ms S evidencing that level of income for a three month period.
It is the Father’s evidence that he was not actually working for
Ms S at that time and that these documents were “manufactured” at the suggestion of his accountant in order to enable the Father to qualify for a loan from the (omitted) Bank to fund his then-building development. In the (omitted) Bank loan application the Father swears to having property assets of $1,100,000 and liabilities of $200,000 to the (omitted) Bank.
Also tendered into evidence was a (omitted) bank credit card application form in which the Father was seeking to increase his credit limit to $37,000. This was signed by him on 9 February 2015. In that document he indicated he was working full-time and earning between $70,000 and $100,000 per annum.
Under cross-examination the Father advised the Court that the information in this application was incorrect but that this incorrect information was not an issue as “it was only an online application.”
The Father’s taxation returns for the financial years ending 30 June 2014, 2015 and 2016 were also tendered into evidence.
The Father’s income in 2014 was $58,764. His income in 2015 was a loss of $298,141, being “all other expenses” under the name of his business (omitted). In 2016 his income was shown as a loss of $6,893 which was calculated on the basis of an eligible income of $541,846 less expenses of $277,520 and the carry-over of the losses of $298,141 from the 2015 financial year.
It is reasonable to say that the Father’s taxation returns did not assist the Court in any way to being able to establish what, if any, the Father’s income was from his occupation as a property developer.
It is the Father’s evidence that he believes the Property A property to have a current value of approximately $700,000 and that the amount currently owing on the construction loan is approximately $180,000. Interestingly, a recent title search shows this property to be unencumbered.
It is the Father’s evidence that whilst the property was purchased in the sole name of his partner, this was done solely to enable borrowings to take place in order to complete the construction of the property. It is his evidence that this property is owned jointly by he and his partner and that he has a 50% equitable interest in the property.
As noted earlier in this judgment, it is the Father’s evidence that he has just completed the examination to enable him to become a registered licensed builder and that upon receiving that qualification he will be in a position to obtain employment as a builder, either working for himself or for other builders. He anticipates with this qualification he will be able to generate an income building houses for other people and undertaking his own property developments.
It is the Father’s evidence that the assessments by the Child Support Agency for the preceding three years that he had nil income is an accurate reflection of his earnings and financial resources during that period and that there is no basis under the Act for a departure order to be made.
Section 117(7)(a) of the Act provides that when considering the question of the income, property and financial resources of a parent of the child, the Court must first have regard to the capacity of the parent to derive income from any asset under their control that does not currently produce income but is capable of producing income. It also provides that the Court must disregard the income of any person who does not have a duty to maintain the child as well as the entitlement of the child or his carer to an income tested pension allowance or benefit.
It is the Father’s evidence that the Property A property has not been built for the purposes of property development but rather as a permanent home for he, Ms S and X when he is living with them. I accept the Father’s evidence in this regard.
Whilst Ms S is in full time employment, the consideration of the Father’s financial circumstances has focussed entirely on the funds coming into his accounts from accounts that are solely in the Father’s name.
The (omitted) Bank Account was only placed into the Father and Ms S’s joint names in June 2017. Perusal of the statements for this account show monies were deposited into the account from Ms S’s account in April and May 2017 only, that is slightly prior to it becoming a joint account. I am satisfied that until that time this account was very much managed by the Father and reflected movement of monies that were totally in his control.
Therefore, the matters of relevance considered in the determination of the Father’s income and financial resources very much reflect the income and financial resources of the Father only.
s 117(4)(da) the earning capacity of each parent who is a party to the proceeding
It is on the basis of this subsection that the Mother brings her application to the Court for a departure application.
It is the Mother’s submission that the Father has a greater earning capacity upon which to base his child support liability than that declared by him as his income as a property developer.
It is the Mother’s evidence that as a (occupation omitted) the Father has a capacity to earn between $80,000 and $90,000 per annum and that this Court should depart from the assessment of the Child Support Agency that the Father has an income of nil and substitute the figure of $84,000 as the Father’s income for the purposes of the assessment of child support.
When considering the provisions of section 117(4)(da) the Court must have reference to section 117(7B) of the Act. Section 117(7B) provides 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 ample 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 employed or otherwise engaged;
(iii) the parent has changed his or her occupation, industry or working 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.
In order to be satisfied that the Father’s earning capacity is greater than is reflected in his declared income, the Court must be satisfied that:
1)he has changed his occupation; and
2)the decision is not justified on health or carer responsibility grounds; and
3)he has not demonstrated that it was not a major purpose of that decision to reduce the level of his child support (my emphasis).
Clearly the Father changed his occupation from (occupation omitted) to full-time property developer/student at the end of 2013. Thus, section 117(7B)(a)(iii) is satisfied.
It is the Father’s evidence that he decided to leave (occupation omitted) and pursue his passion in property development at the end of 2013 because of the stress, distress and anxiety he suffered as a result of the death of his brother and more particularly because of the impact on him of bullying in his workplace and the complete lack of support that he received from the (employer omitted) during that period.
Further, it is the Father’s evidence that his career path as a (occupation omitted) was uncertain at the end of 2013 given the correspondence received by him in mid-late 2013 that he would be placed into excess in 2014 and because of the unfair assessment at the end of 2013 that he had not met the required standards of his role.
In support of his claim that his change of occupation was as a result of his mental health issues, the Father filed an affidavit from his then treating psychologist Mr S sworn 29 March 2017. Mr S also gave vive voce evidence at the final hearing.
In his affidavit sworn 29 March 2017, Mr S deposes that he provided intervention and support to the Father following a family crisis and incidents at work for seven sessions between May 2013 and January 2014.
Mr S deposes to the Father’s brother committing suicide in (omitted) 2013 and the distress the Father suffered after being shown the tree where his brother had hanged himself.
Mr S also deposes to the Father reporting to him that he had been bullied by a work colleague and that his (employer omitted) had minimised the impact of the bullying and sided with the perpetrator.
In paragraphs 5-7 of his affidavit sworn 29 March 2017 Mr S deposes as follows:
“5. Mr Nahos’s mental-health correlates were prominent consequently. I hypothesised the apparent bullying from Mr Nahos’s work colleague and (employer omitted). With Mr Nahos’s pronounced trauma history, and also profound grief, loss, shame and fear were associated with his struggle to find a way to have more contact with his son.
6. At the time of, and following the workplace incident, Mr Nahos developed clinically significant symptoms of anxiety, depression, associated with sleeplessness, disturbed sleeping patterns cued to intrusive dreams and nightmares, elevated arousal, and associated with strong avoidance of traumatic stimuli. At symptom peak, Mr Nahos presented with some dissociative phenomena. He struggle with episodic panic attacks, helplessness, hopelessness and suicidal ideation, which were co-morbid features of very clear mental-health phenomena.
7. His symptoms were consistent with panic disorder, major depression and post traumatic stress disorder. Those are three co-morbid conditions, manifesting with varying intensity, late in the (employment omitted).”
Mr S concludes in paragraph 10 of his affidavit sworn 29 March 2017:
“After an acute-phase peak in symptoms, Mr Nahos had restored some adaptive self-soothing and emotional self-regulatory capacity by mid 2014. Mr Nahos has always been an extremely hard working and diligent client. His particular strength is in a repeated, demonstrated capacity to tolerate very confronting therapeutic feedback. His capacity in this regard is greater than most, and is a feature that has emerged in treatment.
In his vive voce evidence Mr S confirmed that he has a doctorate of psychology and qualifications in therapeutic treatment. Whilst practising as a psychologist when treating the Father, Mr S is no longer a practising psychologist and is now a (omitted).
Mr S indicated that he did not bring his notes from his consultations with the Father with him, explaining his previous experience of giving evidence at court had not involved that requirement.
It is Mr S’s evidence that he identified three causes of the Father’s stress; his brother’s suicide, his bullying at (employer omitted) and grief about not seeing his son.
It is Mr S’s evidence that he did not refer the Father to a psychiatrist for medication because the Father’s autonomy was intact and therefore the Father was able to decide for himself if he wanted to seek alternative treatment or assessment.
It is Mr S’s evidence that he treated the Father with corrective feedback therapy and confrontative therapy feedback, which involves encouraging the Father to take himself out of a toxic situation and to re-remember himself as the man that he was.
Mr S described the Father’s response to the death of his brother as a normal reaction to a horrific incident.
In relation to the bullying at the Father’s (employer omitted), Mr S indicated he came very close to making a serious complaint to the (employer omitted) for the manner in which the Father was being treated by the (employer omitted), but refrained from doing so in the interests of the wellbeing of the Father.
Mr S confirmed that he discussed with the Father that a career change might be an appropriate response to his stress and anxiety and his options for invigorating his career.
It is Mr S’s evidence that he is of the view that the Father made a very sound decision in changing his career and that that decision had an almost immediate impact on improving the Father’s mental health, such that he had no reason to see the Father after that decision had been made.
In the second half of 2013 the Father took time off work as a result of the stress he was suffering in his workplace, that time being supported by medical certificates.
In 2014 the Father successfully received compensation by way of a work-cover claim arising from his mental health issues, albeit of a relatively small amount.
Having considered all this evidence, I am satisfied that the Father’s decision to change his occupation is justified on the basis of his state of health and that accordingly section 117(7B)(ii) is not met.
Section 117(7B) requires all three subsections to be satisfied if the Court is to be satisfied that the provisions of section 117(4)(da) are met.
Given I have determined that the Father’s decision to change his occupation was justified on the basis of his health, I do not need to make a determination as to whether the major purpose for his decision to change his employment was to reduce his level of child support.
I would however make the observation that I am not of the view that the Father changed his profession from (occupation omitted) in order to reduce the level of child support paid by him.
I am satisfied that the Father was genuinely dissatisfied with (occupation omitted) because of the bullying and lack of support he was receiving, that he was devastated by the loss of his brother, and that he made the decision to move into property development, a long time passion of his because he genuinely felt he needed a change of career.
His applications for review and in particular his appeals to the SSAT on the question of there being an accurate the percentage of time that he spends with X is, I am satisfied, a reflection of his personality and part of his ongoing battle with the Mother about X’s living arrangements. I am not satisfied that it reflects an unwillingness per se by the Father to pay child support for X, but rather his refusal to pay child support other than strictly in accordance with the assessments of the Child Support Agency, as long as those assessments properly accord with the Act.
s 117(4)(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
Not relevant.
s 117(4)(f) the direct and indirect costs incurred by the carer entitled to child support in providing care for the child
Not relevant.
s117(4)(g) 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
A refusal to make the departure order as sought by the Mother would effectively result in the Father continuing to pay no or minimal child support. This will obviously cause considerable hardship to the Mother and particularly to X, as the non-payment of child support impacts on the Mother’s financial ability to fully provide for him.
Sadly for the Father and Ms S, their efforts to start their own family have been unsuccessful despite multiple attempts at in vitro fertilisation (“IVF”).
It is the Father’s evidence that he and Ms S have decided to foster a child on a full time basis and are anticipating this will commence shortly.
It is the Father’s evidence that he anticipates becoming a licensed builder in the very near future and he will therefore be in a position to properly embark on his career as a property developer.
Conclusion
It is the Mother’s application there should be a departure order made on the basis that the Father’s earning capacity is greater than assessed on the basis that he gave up (occupation omitted) in order to reduce the amount of child support paid by him.
As set out in paragraphs 135-139 of this judgment, the Court does not accept the Mother’s submissions in this regard and is of the view that the Father’s change of profession was partly as a result of health issues and also a reflection of a genuine desire for a change of career in circumstances where he had become disenchanted with the (occupation omitted) profession and was looking to pursue his long-standing passion for property development.
However, that finding does not see the end of the Mother’s application for a departure order.
Section 117(4)(d) of the Act requires the Court to consider the income, property and financial resources of each of the parties when determining a departure application.
After the Father left (occupation omitted), he embarked on the first stages of his career as a property developer. Between 2014 and 2017 the Father developed three properties: the Property C property, the Property D property and the Property A property.
The monies to initially start his development projects came from the sale by the Father of properties owned by him in NSW. The monies for starting subsequent developments came from the sale of each of the properties as they were developed until finally the Father was able to build a home for he and Ms S in Property A. The Property A property would appear to have an equity of approximately $500,000.
Whilst that property is solely in Ms S’s name, it is the Father’s clear evidence that he has an equitable interest in that property.
Whilst the Father’s taxation returns for the financial years 2014, 2015 and 2016 disclose little income from his property development enterprises, the Father was able to appropriately manage his taxation affairs, such that he could offset against his income the various expenditures associated with the construction of those properties and the running of his business generally.
When the, admittedly sparse, financial documents relating to the Father’s finances are examined, it is apparent that he has been able to live comfortably meeting all his expenses whilst undertaking the various developments and in particular, in the last twelve months, the construction of the Property A property.
It is not possible on the information before the Court to determine the Father’s income per se over the last three years with any precision. However, what is apparent is that the Father had available to him financial resources that enabled him to comfortably maintain his lifestyle and at various times generate savings of over $400,000 and ultimately establish a property with equity in excess of $500,000.
I am satisfied that the Father has income, property and financial resources such that the assessment of the Child Support Agency that he had an income of nil is not correct and that there should be a departure order made.
What amount the Father should pay is set out subsequently in this judgment.
Should there be a lump sum payment by the Father to the Mother pursuant to section 123(1)(b) of the Act
The Mother is seeking an order that the Father pay child support for X by way of a lump sum payment of $50,774 less any monies already paid to the Mother pursuant to the orders made 21 August 2015. She seeks such payment be credited 100% against any liability of the Father for an administrative assessment for child support in relation to X for the period 11 June 2014 – 12 December 2023 which is when X finishes primary school.
Section 123(1) of the Act provides that an application may be made to a Court having jurisdiction under the Act for an order that a liable parent provide child support in the form of a lump sum payment to be credited against the amount payable under the liability under the relevant administrative assessment.
Section 123A(1) of the Act sets out the circumstances where the Court may make an order for a lump sum payment as follows:
“(1) The court may make an order that a liable parent provide child support for a child to a carer entitled to child support in the form of a lump sum payment to be credited against the amount payable under the liability under the relevant administrative assessment if:
(a) the carer entitled to child support or the liable parent makes an application to a court under paragraph 123(1)(b); and
(b) the court is satisfied that it would be:
(i) just and equitable as regards the child, the carer entitled to child support and the liable parent; and
(ii) otherwise proper;
to make an order under this section; and
(c) the amount of the lump sum payment equals or exceeds the annual rate of child support payable for the child under the administrative assessment.
Note: If the court makes such an order, the lump sum payment is credited under section 69A of the Registration and Collection Act against the amount payable under the liable parent's liability (rather than reducing the annual rate of child support payable under the administrative assessment).
Section 123A(4) sets out that the factors the Court must have regard to in determining an application made under paragraph 123(1)(b) include the administrative assessment and any departure orders made pursuant to Division 4 of this Part.
As set out in paragraph 157 of this judgment I have determined that there should be a departure order made in relation to the current assessment that the Father pay nil child support.
Section 123A(5) provides that in determining whether it would be just and equitable as regards the child, the carer entitled to child support and the liable parent to make an order under subsection (1), the Court must have regard to the matters set out in subsections 117(4), (6), (7), (7A) and (8) of the Act.
Those subsections have been considered in this judgment but I will consider them in the context of the question of whether a lump sum order should be paid.
I have determined that the Father has the income, property and financial resources that justify a departure order. A perusal of his bank statements show an ability to easily meet his various expenses on a monthly basis as well as having in excess of $500,000 equity in the property owned by he and his partner Ms S.
It is submitted on behalf of the Mother that the failure by this Court to make an order for a lump sum payment would result in the continuation of ongoing objections, reviews and appeals to the AAT by the Father in relation to every assessment issued that did not accord with what he believes is the appropriate level of child support payable by him.
It is the Mother’s evidence that the only reason the reviews and applications in relation to child support have stopped since 2014 is because of these proceedings and because there is a current assessment he pay nil child support.
It is the Mother’s evidence that the Father has continued to litigate in relation to parenting matters since consent orders were made in April 2013. There are current parenting proceedings that are before this Court and listed to be heard on a final basis in March 2018.
It is the Mother’s evidence that an order for the Father to pay a lump sum payment that will be credited 100% against any assessments for the Father for the entirety of X’s primary school will afford her certainty of support by the Father for X and ensure that for the next six and a half years she will not face the ongoing stress and burden of having to continuously battle the Father through the Child Support Agency, the AAT and the Court for adequate child support for X.
It is the Father’s evidence that he is currently not earning an income and he does not have the capacity to pay any form of lump sum payment.
It is clear from this decision that I am not in agreement with the Father’s claims in this regard. The manner in which he conducts his financial affairs clearly indicates he has the capacity to regularly expend large amounts of money. This is best evidenced by the bank statement for their (omitted) Bank Account which shows that in the month of June he spent nearly $20,000.
There is also the hardship incurred by X by the non-payment by his father of regular child support that would be ameliorated if orders were made in the terms sought by the Mother.
Section 123A(7) provides that when determining whether it is otherwise proper under subsection (1) to make an order for a lump sum payment, the Court must have regard to the matters mention in subsection 117(5). 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 it 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; or
(ii) the rate of any income tested pension, allowance or benefit payable to the child or the carer entitled to child support.
That the parties have a duty to maintain X is not in issue in this matter.
Further, there is no evidence before the Court that X or the Mother are entitled to any income, pension, allowance or benefit.
Finally, section 123A(8) of the Act provides that subsections (4), (5), (6) and (7) do not limit the matters to which the Court may have regard.
The Father is about to become a registered licensed builder which will allow him to fully pursue his career as a property developer. He will do so under the auspices of his business structure with the resultant taxation benefits that flow to him from that structure. The Father is not criticised in any way for doing this.
The practical outcome of the Father being able to channel and manage his income through his business structure is that the Father’s taxation returns may not necessarily reflect the income that he receives or the benefits afforded him by being able to channel many of his day-to-day expenses through the business structure.
Accordingly his child support assessments may not reflect the true level of his income. This leads to the very high likelihood that there will continue to be applications for departure lodged by one or other of the parties into the future. Given the complexity of matters of this type, there is the strong likelihood the Child Support Agency will decline to determine those applications pursuant to section 98E of the Act and, as was the case with the application currently being heard, those departure applications will be referred to this Court for determination.
Further, if an order for a lump sum payment is made, the Father will have the benefit of being able to fully focus on developing his business without the continuing spectre of ongoing dispute and possible litigation about child support issues.
It can therefore be seen that an order for a lump sum payment will have the benefit of bringing certainty to both parties and X about the level of child support payable for X until X finishes primary school in some six and a half years’ time.
Having considered all the relevant factors I have formed the view that this is a matter where it is just and equitable as regards X, the Mother and the Father that an order be made for the Father to pay child support for X by way of a lump sum payment for the period 11 June 2014 – 12 December 2023.
What amount should be paid?
The Mother seeks payment in the sum of $50,774 less any monies already paid to her pursuant to the orders made 21 June 2015. This would mean a payment to the Mother of $35,742, as she has been paid $13,853.88 in accordance with the orders of Judge Small.
Counsel for the Mother explained the basis for the calculation of that amount as follows:
a)for the period 11 June 2014 – 11 December 2016, the sum of $6,001 per annum based on the Father having an income of $81,000 per annum and the Mother having an income of $45,000 per annum. This would be a total amount of $15,025.
b)for the period 11 December 2016 – 12 December 2023, the sum of $5,106 per annum based on the Father having an income of $81,000 per annum and the Mother having an income of $62,993 per annum. This would be a total amount of $35,742.
As has been clearly indicated in this judgment it is very difficult, if not impossible, to ascertain the Father’s income since he left (employment omitted) at the end of 2013. It is also difficult to estimate the Father’s income over the next six and a half years.
Similarly, the Mother’s income is currently $79,482.25. This reflects a current employment level at .8 plus a higher duty allowance as the Mother currently has a temporary contract as a (occupation omitted). It is impossible to know whether the Mother may increase her working hours to full time or continue to be employed as a (occupation omitted).
It is therefore an artificial exercise to try and arbitrarily allocate income to the parties and try and calculate what the level of child support would be using the formula under the Act.
Given the findings in relation to the Father’s income and financial resources and the Mother’s ability to generate a reasonable income as a (occupation omitted), I have formed the view that an appropriate level of child support to be paid by the Father to the Mother on behalf of X is $100 per week, a total of $5,200 per annum.
Accordingly, pursuant to section 123A(1)(b) of the Act, an order will be made that the Father pay to the Mother the sum of $44,200, less the amount paid by him to the Mother pursuant to the orders of Judge Small on 21 August 2015, being $13,853.88, being an amount of $30,346.12.
The order will also specify in accordance with section 123A(3) that the lump sum payment is to be credited 100% against any administrative assessment for child support in relation to X for the period 11 June 2014 to 12 December 2023.
I certify that the preceding one hundred and ninety-one (191) paragraphs are a true copy of the reasons for judgment of Judge Bender
Date: 4 October 2017
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Family Law
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Statutory Interpretation
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