Brenner & Chessington
[2022] FedCFamC2F 1354
Federal Circuit and Family Court of Australia
(DIVISION 2)
Brenner & Chessington [2022] FedCFamC2F 1354
File number(s): SYC 6482 of 2021 Judgment of: JUDGE MONAHAN Date of judgment: 6 October 2022 Catchwords: FAMILY LAW – Child Support – child support departure application – two children now aged 22 – where amount of child support payable was significantly increased by the applicant withdrawing his superannuation entitlements prior to the relevant child support terminating events –where the Applicant unsuccessfully applied to the Administrative Appeals Tribunal for a review of the Child Support Registrar’s decision – where there was no appearance by the Respondents – where leave is granted to depart from the assessment of child support payable by the applicant – where departure order made Legislation: Child Support (Assessment Act) 1989 (Cth) ss 64AH, 98S, 111, 112, 117, 118 Cases cited: [2021] FCCA 668
Yewen & Child Support Registrar & Anor [2014] FCCA 2399
Division: Division 2 Family Law Number of paragraphs: 70 Date of last submission/s: 14 July 2022 Date of hearing: 14 July 2022 Place: Sydney Solicitor for the Applicant: Ms Hawes First Respondent: No appearance Second Respondent: No appearance ORDERS
SYC 6482 of 2021 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MR BRENNER
Applicant
AND: MS CHESSINGTON
First Respondent
MS MATTHEWS
Second Respondent
order made by:
JUDGE MONAHAN
DATE OF ORDER:
6 October 2022
THE COURT ORDERS THAT:
1.Pursuant to section 112 of the Child Support (Assessment) Act 1989, leave is granted to depart from the assessment of child support payable by the Applicant, Mr Brenner to:
(a)the First Respondent, Ms Chessington (for the child, Mr B born 2000) for the period from 1 July 2017 to 10 July 2018; and
(b)the Second Respondent, Ms Matthews (for the child, Ms C born 2000) from 1 July 2017 to 12 August 2018.
2.Pursuant to section 118 of the Child Support (Assessment) Act 1989 there be a departure to the child support assessment payable by the Applicant, Mr Brenner to:
(a)the First Respondent, Ms Chessington (for the child, Mr B born 10 July 2000) for the period from 1 July 2017 to 10 July 2018 and the annual rate of child support payable by the Applicant be adjusted to the minimum annual assessment rate; and
(b)the Second Respondent, Ms Matthews (for the child, Ms C born 12 August 2000) from 1 July 2017 to 12 August 2018 and the annual rate of child support payable by the Applicant be adjusted to the minimum annual assessment rate.
3.All extant applications be otherwise dismissed.
AND THE COURT DIRECTS THAT:
4.The legal representative for the Applicant serve the Child Support Agency with a copy of these Orders (and the written reasons) for their attention, together with a request for a copy of these Orders to be forwarded to the First and Second Respondent.
AND THE COURT NOTES THAT:
A.Mr B turned 18 years old in 2018 and Ms C turned 18 years old in 2018.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 110X(4)(h) of the Child Support (Registration and Collection) Act 1988 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in child support review proceedings.
IT IS NOTED that publication of this judgment under the pseudonym Brenner & Chessington is approved pursuant to s 110X(4)(h) of the Child Support (Registration and Collection) Act 1988 (Cth).
REASONS FOR JUDGMENT
Judge Monahan:
Introduction
This final decision arises from child support proceedings between the Applicant, Mr Brenner (“the Applicant”) and the First Respondent, Ms Chessington and the Second Respondent, Ms Matthews (collectively, “the Respondents”).
The children relevant to the child support assessments are Mr B (“Mr B”), born 2000 and Ms C (“Ms C”), born 2000, (collectively, “the children”).
The proceedings came before me by videoconference for final hearing on 14 July 2022 (“the final hearing”). At the final hearing, the Applicant was represented by his solicitor, Ms Hawes and there was no appearances by the Respondents.
As a consequence of the non-appearances of the Respondents, and their lack of engagement in these proceedings, I granted the Applicant leave to proceed with his application on an undefended basis.
The issues requiring determination in this decision are:
·whether leave should be granted under sections 111 and 112 of the Child Support (Assessment) Act 1989 (Cth) Act for a retrospective re-assessment of child support owed by the Applicant from 1 July 2017 (being the start of the first financial year when the Applicant stopped receiving income) to the relevant terminating events (being the respective 18th birthdays of the children); and if so,
·whether the Court should make an Order pursuant to section 118(g) of the Child Support (Assessment) Act 1989 (Cth) to adjust the Applicant’s taxable income to ‘nil’ for the relevant periods or to otherwise amend the assessment “so that approximately $201,000 of his superannuation payments are not considered ‘taxable income’ within the last 5 years”[1]; or alternatively, whether the Court should make an Order pursuant to section 118(a) of the Child Support (Assessment) Act 1989 (Cth) for there to be a departure to the child support assessment payable by the Applicant to each of the Respondents for the period from 1 July 2017 (being the start of the first financial year when the Applicant stopped receiving income) to the relevant terminating events (being the respective 18th birthdays of the children) by adjusting the annual rate of child support payable by the Applicant to the minimum annual assessment rate.
[1] Page 4 of the Applicant’s Initiating Application, Order 2 of the final Orders sought
Unless otherwise stated, any statutory references in these reasons will be to the Child Support (Assessment Act) 1989 (Cth) (“the Act”).
Background
The Applicant was born in 1959 and he is currently 63 years of age. The dates of birth of the Respondents are unknown.
The Applicant is retired, and the employment statuses of the Respondents are unknown.
The Applicant fathered one child with each Respondent. The child of the Applicant and the first Respondent is Mr B, born 2000 and he is currently 22 years old. The child of the Applicant and the second Respondent is Ms C, born 2000 and she is also currently 22 years old.
The details and specifics of the Applicant’s relationships with the Respondents are unknown, as is the care arrangements for the children following separation.
Although the Applicant’s Affidavit does not detail his relationships with the Respondents, the following background information has been adapted from the Applicant’s chronology, which was included in his Outline of Case Document. The chronology is reproduced in full below.
It would appear that the Applicant met the First Respondent in or around late 1999 and had a one-time intimate relationship with her, which led to the birth of Mr B. The Applicant then met the Second Respondent in or around late 1999 and had a one-time intimate relationship with her, leading to the birth of Ms C. In his chronology, the Applicant alleges that all contact with the Respondents had ceased prior to the birth of each respective child in 2000.
The Applicant began payment of weekly child support to both Respondents in 2000 and the payments continued until the children reached the age of 18.
The Applicant married Ms Brenner (“his wife”) in 2005.
On 6 June 2017, the Applicant ceased employment. On 15 June 2015, the Child Support Agency was notified that the Applicant was no longer employed, and the Applicant was advised to pay the minimal amount of child support until the children reached the age of 18 in 2018.
The Applicant alleges that since July 2017, his wife had been financially supporting him.
In September 2017, the Applicant was diagnosed with cancer. Following his diagnosis, the Applicant withdrew funds from his superannuation to assist his wife with living costs, and to assist with medical expenses.
In his chronology, the Applicant states that his taxable income for the 2016-2017 period was $56,348 as he had received no income since 15 June 2017 due to his ill health. The Applicant alleges that this figure was accepted by the Department of Human Services, and that a representative from the superannuation trustee informed the Applicant that a tax return lodgement was not required as his superannuation fell under the tax threshold.
Between October 2017 and July 2018, the Applicant underwent treatment for his cancer and was unable to continue working. During this period of time, the minimum child support continued to be paid.
In 2018, Mr B turned 18 and the Applicant was no longer required to pay child support for Mr B.
Similarly, in 2018, Ms C turned 18 and the Applicant was no longer required to pay child support for Ms C.
On 18 May 2020, the Child Support Registrar undertook an estimate of income reconciliation and assessed the Applicant’s adjusted taxable income for the period of 2017-2018 as $201,106 due to the Applicant’s failure to provide a tax return. The Applicant incurred a debt of $18,896.65 owing to the first Respondent, and $18,827.38 owing to the second Respondent.
In August 2020, the Applicant lodged an Objection to the decision made by the Child Support Registrar through an internal review process. On 24 November 2020, the Child Support Registrar upheld its decision and the Applicant’s objection was dismissed.
In November 2020, the wife’s business became affected by the COVID-19 pandemic. The Applicant was successful in applying for JobSeeker payments, however due to the debts, a substantial amount of the payments were redirected to the child support debt. The Applicant’s JobSeeker payments ceased in February 2021.
On 25 November 2020, the Applicant applied to the Administrative Appeals Tribunal (‘AAT’) for an independent review of the Child Support Registrar’s decision.
On 23 April 2021, the AAT upheld the decision of the Child Support Registrar.
Procedural History
On 6 September 2021, the Applicant commenced proceedings in the Federal Circuit and Family Court of Australia by way of filing an Initiating Application.
In summary, the Applicant sought Orders:
·seeking leave to vary his child support payments for a period of up to 5 years; and
·if leave is granted, an amendment of the calculation so that $201,000 of the Applicant’s superannuation, within the 5 year period, is not considered taxable income.
The matter first appeared before a Judicial Registrar on 22 November 2021, and on that occasion the Respondents did not appear. The Judicial Registrar made Orders, inter alia, for the Applicant to file a costs notice, file and serve a Financial Questionnaire, and for the Respondents to file and serve their responding material.
The matter once again returned before the Judicial Registrar on 28 February 2022, in which Orders were made for, inter alia, the matter to be adjourned for a compliance and readiness hearing before a Judge.
The matter came before Her Honour Judge Boyle on 25 May 2022 in which Orders were made, inter alia, for the matter to be listed for a half-day final hearing, the parties to file updating trial material, and the Applicant to serve the Orders on the Respondents through the Child Support Agency. A copy of the Orders made by Judge Boyle are reproduced in full in Schedule 1 to these reasons.
As stated above, the final hearing proceeded before me via videoconference on 14 July 2022. At the final hearing I was satisfied that the Applicant had caused a copy of the Orders made by Judge Boyle on 25 May 2022 to be forwarded to the Child Support Agency, together with a request for the Orders to be served on the Respondents (‘Exhibit A2’).
On the day of the hearing, I made Orders staying the collection and enforcement of arrears of child support owed by the Applicant from 1 July 2017 until the final determination of the matter, and granted the Applicant leave to proceed on an undefended basis. A copy of the Orders made on 14 July 2022 are reproduced in full in Schedule 2 to these reasons.
Following the hearing, the Court reserved its decision.
Chronology
As stated previously, the following Chronology has been adapted from the material provided by the Applicant in his Outline of Case Document.
As this matter proceeded on an undefended basis, the Court considers the following Chronology to be uncontroversial, and all references in the Chronology are to the Applicant’s documents.
Date Event Reference[2] Late 1999 Applicant and the first Respondent meet. Procreation occurs. Applicant informs respondent that he did not want any more children. Late 1999 Applicant and the second Respondent meet. Procreation occurs. Applicant informs respondent that he did not want any more children. 2000 Birth of Mr B, child between the Applicant and the first Respondent. The Applicant and the first Respondent had already ceased contact by this point. IA p. 5 2000 Birth of Ms C, child between the Applicant and the second Respondent. The Applicant and the first Respondent had already ceased contact by this point. IA p. 5 2000 The Applicant started paying the nominated amount estimated by Child Support to both women which was taken from his wages each week. The payments were made until both children turned 18 years old. 2005 The Applicant enters into a marriage with Ms Brenner (‘the wife’). 6 June 2017 The Applicant ceases employment D Organisation after 32 years of service and relocates to Queensland to commence cohabitation with the wife. Affidavit p. 3 15 June 2017 A phone call was made to Child Support to inform them that the Applicant was no longer working therefore a new estimate would be required. The Applicant was advised to put a ‘nil’ income amount by Child Support because the Applicant had no job lined up. Child Support advised the Applicant that in this current situation, he was to pay minimal amount of child support until the children reached the age of 18. Mid-2017 The Applicant and his wife relocated to E Town. Late 2017 The Applicant became ill and was taken to hospital. An endoscopy and colonoscopy revealed that the Applicant had a tumour. Further tests confirmed that the Applicant was diagnosed with cancer. TB p. 3 Late 2017 Following the cancer diagnosis of the Applicant, he withdrew his superannuation. The Applicant estimated his taxable income for the period of 2016 – 2017 to be $56,348, which was accepted by a representative of the Department of Human Services (‘Services Australia’). After being informed that the Applicant’s superannuation fell under the tax threshold, he assumed that he did not need to lodge a tax return and there would be no effect on his child support payments.
The super was withdrawn to assist with medical bills for his cancer diagnoses, mortgage payments to assist his wife.
Had the Applicant been made aware of this situation prior to withdrawing his superannuation, he would have applied on invalidity grounds. But instead, he relied on the professional advice which was provided to him.Affidavit pp. 2-3 Late 2017 – Early 2018 The Applicant underwent substantial treatment for his cancer which included a high dosage of Chemotherapy which was administered at hospital as well as at his residence. An overnight bottle was attached to him through a chest peg. This chemotherapy incapacitated Mr Brenner and he required constant care which he received from his wife, Ms Brenner, who was also providing him with financial support as she had done since mid-2017. March 2018 The Applicant finished his chemotherapy and was advised of an 8-week recovery period for the purpose of being ready for a major operation. 2018 The Applicant underwent major surgery. The Applicant recuperated in hospital for a period of 10 days and was subsequently discharged into the full-time care of his wife. Mid-2018 The Applicant was taken back to hospital with a severe medical condition. This made him extremely ill, and his weight plummeted to 63 kg (he was 97 kg prior to diagnosis). The Applicant’s survival was tentative during this period. After being in and out of hospital for a period of two months, his health began to stabilise. During this whole time, the minimum child support was still paid each month. 2018 The child of the Applicant and the first Respondent, Mr B, turns 18 years old. Child Support informed the Applicant that the support case for Mr B was now closed as he had turned 18 and was working full time. 2018 The child of the Applicant and the second Respondent, Ms C, turns 18 years old. Child Support informed the Applicant that the support case for Ms C was now closed as she had turned 18 and was working. Late 2018 – Mid-2020 The Applicant continues to make a slow recovery. He received no income during this period. 18 May 2020 The Applicant receives a letter from Child Support outlining that his estimate may be amended. TB p. 5 May 2020 – July 2020 Child Support Registrar is notified that the Applicant’s adjusted taxable income for the period of 2017 – 2018 was $201,106. The estimate was undertaken based on the Applicant’s actual adjusted taxable income which resulted in an additional child support liability. This meant that the Applicant incurred a debt of $18,896.65 to the first Respondent and $18,827.38 to the second Respondent. When the Applicant sought clarification from the Child Support Registrar, they informed him that he should have filed a tax return from the period of 2017 – 2018 and declare his superannuation. This contradicted previous advice which was given to him. Affidavit pp. 2, 9
TB pp 7-8
July 2020 The Applicant files a tax return, which issued a refund that was paid straight to Child Support because of the newly established debt. 2 August 2020 The Applicant objects to the decision made by the Child Support Registrar through internal review. Affidavit pp. 3, 11-15 3 August 2020 Letter from the Applicant’s Accountant, Ms F, states that the Applicant’s tax return of 2017/2018 will only have the superannuation lump sum that was withdrawn in September 2017. Affidavit p. 16 24 November 2020 The Child Support Registrar upheld its original decision and the Applicant’s objection is dismissed. Affidavit p. 3 November 2020 The Applicant applied for job seeker payments due to the wife’s business incurring a 40% loss due to the COVID-19 pandemic. While his application was successful, a substantial amount of payment was taken from Child Support in to pay for the debt owed. Affidavit p. 4 25 November 2020 The Applicant applies to the Administrative Appeals Tribunal (‘AAT’) for an independent review of the Child Support Registrar’s decision. Affidavit p. 4 February 2021 The wife’s business recovered and the Applicant’s job seeker payments ceased. Affidavit p. 4 23 April 2021 The AAT Hearing related to both the Respondent’s and the Child Support Registrar is conducted. The AAT upheld the original decision by the Child Support Registrar. The AAT were bound by legislation and informed the Applicant that he was required to apply to the Court for a backdating which exceeded 18 months. Affidavit
pp.4-5, 26-336 September 2021 The Applicant commences proceedings in the Federal Circuit and Family Court of Australia September 2021 The Applicant presents to the Emergency Department at G Hospital due to collapsing from mild heat exhaustion as brought on by effects of cancer symptoms. TB p. 10 12 October 2021 The Applicant serves both the Child Support Registrar and requests that service be issued to the Respondent’s through the relevant channels via the Child Support Registrar. TB p. 15 13 October 2021 The Child Support Registrar confirms in writing that the service documents were sent to the recorded address of the first Respondent. TB p 16 14 October 2021 The Child Support Registrar confirms in writing that the service documents were sent to the recorded address of the second Respondent. TB p 17 25 October 2021 The Applicant’s legal representative received a phone call from the second Respondent who acknowledged proceedings. November 2021 The Applicant presents to the Emergency Department at G Hospital due to a syncopal episode and hypotension as brought on by effects of cancer symptoms. TB p. 11 22 November 2021 The First Return date is heard to commence proceedings. The Applicant appeared. No appearance by either of the Respondents. Orders were made in their absence.
The Applicant serves the Respondents a sealed copy of the Orders dated 22 November 2021 with an enclosed letter outlining non-compliance.TB pp. 18-20 24 November 2021 The Child Support Registrar confirms in writing that the service documents were sent to the recorded address of both Respondents. TB p. 21 1 December 2021 The Applicant served each Respondent the Financial Questionnaire (filed 29 November 2021) through the Child Support Registrar. TB p. 22 2 December 2021 The Child Support Registrar confirms in writing that the Financial Questionnaires were sent to the recorded address of both Respondents. TB p. 23 16 December 2021 Health scan from 15 December 2015 highlights symptoms which raised suspicion of the Applicant’s recurrent disease. TB pp. 12-13
[2] A reference to “IA” is to the Initiating Application filed 6 September 2021; a reference to “TB” is to the Applicant’s Tender Bundle; and a reference to “Affidavit” is to the Applicant’s Affidavit filed on 6 September 2021.
Orders Sought
In his Application filed on 6 September 2021, the Applicant sought the following orders:
“1. The Applicant seeks the Court to grant leave in pursuant to section 111 of the Child Support (Assessment) Act 1989 (Cth) to vary his Child Support payments for a period of up to 5 years in support of section 112(6). Specifically, the Applicant seeks to adjust his taxable income in pursuant to section 118[1](g).
2. If the Court grants leave under section 112(6), the Applicant seeks to amend the calculation so that approximately $201,000 of his superannuation payments are not considered ‘taxable income’ within the last 5 years in pursuant with section 112(6).”
However, in his written submissions filed 27 February 2022, the Applicant sought the following outcome:[3]
“The applicant seeks leave from the Court for a departure application to amend the administrative assessment that is more than 18 months old.
The Applicant seeks the Court to determine that no money is payable, and all penalties and interests are hereby waived.”
[3] Applicant’s Written Submissions, 27 February 2022, page 3.
That said, it was clear to the Court during the hearing that the Applicant was now seeking the following outcome:
·that leave be granted under sections 111 and 112 of the Child Support (Assessment) Act 1989 (Cth) Act for a retrospective re-assessment of child support owed by the Applicant from 1 July 2017 to the relevant terminating events (being the respective 18th birthdays of the children);
and assuming leave is granted,
·that an Order be made pursuant to section 118(1)(g) of the Child Support (Assessment) Act 1989 (Cth) to adjust the Applicant’s taxable income to ‘nil’ for the relevant periods.
Evidence
The Applicant relied on the following documents at the final hearing:
·His Initiating Application filed on 6 September 2021;
·His Affidavit filed on 6 September 2021;
·His Financial Statement filed on 6 September 2021;
·His two Financial Questionnaires filed on 29 November 2021; and
·Written Submissions filed on 27 February 2022.
The Applicant provided an Electronic Tender Bundle (‘Exhibit A1’). As this Tender Bundle comprised 77 pages, only the pages referred to by Ms Hawes during submissions were read by the Court for the purposes of this decision. I note that the Tender Bundle contained the following documents:
·Letter from H Medical Centre confirming the Applicant’s cancer diagnosis;
·Letter from the Child Support Agency dated 18 May 2020 regarding the child support assessment for the period of 1 July 2017 to 30 June 2018;
·Correspondence from Service Australia representatives dated 28 May 2020 - 29 May 2020;
·Clinical notes from G Hospital;
·Documents evidencing service on the Respondents;
·Statement of debt owed to the Respondents from the period of 18 December 2021 – 20 January 2022; and
·Commonwealth Bank of Australia statement for the periods of 1 May 2021 and 31 October 2021 and February 2022.
Law, Discussion and Findings
Application for leave to apply for a departure order out of time
Court’s discretionary power
The Applicant requires leave pursuant to section 111(1) of the Act to apply for a departure from the administrative assessments for the periods sought because they are more than 18 months old. Section 111(1) of the Act provides as follows:
(1)A liable parent, or a carer entitled to child support, (the applicant) may apply to a court having jurisdiction under this Act for leave for:
(a) the Registrar to make a determination under section 98S; or
(b) the court to make an order under section 118;
in respect of a day in a child support period, being a day that is more than 18 months, and less than 7 years, earlier than the day on which the application under this section is made.
Considerations for granting leave
Upon the making of an application pursuant to section 111, section 112 sets out further considerations to which the Court must have regard before leave is granted (emphasis added):
(1)If an application is made to a court under section 111, the court may grant leave for:
(a) the Registrar to make a determination under section 98S; or
(b) the court to make an order under section 118.
(2)The court may grant leave for an order to be made under section 118 if the court is satisfied that it would be in the interest of the parties to the proceeding for the court to consider, at the same time as it hears the application under section 111, whether an order should be made under section 118. If the court does so, the applicant is taken to have made an application to the court under section 116 for such an order.
…
(4)In considering whether to grant leave under subsection (1), the court must have regard to:
(a) any responsibility, and reason, for the delay in:
(i) making an application under section 98B or 116; or
(ii) making a determination under section 98S;
as the case requires; and
(b)the hardship to the applicant (other than the Registrar) if leave is not granted; and
(c)the hardship to the other party or parties (other than the Registrar) if leave is granted.
(5)The court may have regard to any other relevant matter.
Whether in the exercise of its discretion the Court should grant leave
The Applicant does not need to demonstrate exceptional circumstances to persuade a Court to grant leave under section 111 but the Court does need to carefully consider the matters in section 112 subsections (4) and (5).
It does not follow that if leave is granted pursuant to sections 111 and 112 that the Court will necessarily make a departure order; leave simply facilitates the Court considering the matter.
The first relevant matter is the responsibility for the delay. While it is clear from the evidence that the Applicant was responsible for the delay, he does provide a reasonable explanation for the delay and his predicament. This is discussed further below.
The second relevant matter is the issue of hardship to the Applicant and to Respondents should leave be granted. In addition to his serious illness, the Applicant relied on advice about the impact of his withdrawal of his superannuation entitlements which, with the benefit of hindsight, was to his detriment. Although he was eligible to withdraw his superannuation monies because of his age, there are rules about how those monies may be treated for income tax purposes and for child support purposes. Moreover, had the Applicant simply waited to withdraw his superannuation entitlements to a date after both children had turned 18 years of age in July/August 2018, this child support problem would not have arisen. It is therefore arguable that the Applicant made a mistake in withdrawing the funds at the time he did but was genuine in his reasons for seeking those monies. The revised child support assessment only came about because of the Applicant’s mistaken belief that the superannuation monies would not be relevant for child support purposes. In circumstances where the child support assessments were to terminate in July/August 2018, it is difficult to see how the Respondents would suffer hardship because, had the Applicant known about the ramifications of withdrawing the superannuation funds before August 2018, he would not have done so. That said, any assessment of alleged hardship by the Respondents would be difficult because they did not put forward any evidence to suggest such.
In relation to delay, I note that the Applicant did seek to address the child support problem once he became aware of it and opted to pursue, unsuccessfully, a review application through the Child Support Agency and then to the Administrative Appeals Tribunal. Apart from avoiding the whole problem by delaying the withdrawal of his superannuation monies, had the Applicant opted to amend his child support income estimate at the time he withdrew his superannuation monies, and applied to the Agency for a change of assessment to have his child support liability reduced, that change of assessment application would not have been out of time. This was noted by the Administrative Appeals Tribunal in paragraph 17 of their decision dated 23 April 2021.[4]
[4] Review Number 2020/BC020316.
The third relevant consideration is a requirement to consider “any other relevant matter”. It would be relevant for the Court to consider whether, in the exercise of its discretion, the Court is satisfied that the Applicant has established a prima facie case to have the relevant child support assessment changed. This has been discussed in a number of decisions including Yewen & Child Support Registrar & Anor [2014] FCCA 2399 at [102] and [104] by His Honour, Judge Brown and in [2021] FCCA 668 at [39] by Her Honour, Judge Terry. Given the available evidence, I am satisfied that the Applicant has established a prima facie case to have the relevant child support assessment reconsidered.
Findings
Given that the Court is satisfied that the Applicant has:
·provided an explanation for his delay in making his application;
·provided evidence that he would suffer hardship if leave was not granted;
·made out a prima facie case to have the child support assessments changed;
and further noting that the Respondents did not take up the opportunity to participate and put contrary evidence before the Court, I find in favour of exercising the Court’s discretion that the Applicant be granted leave pursuant to section 111 of the Act.
As noted previously, pursuant to section 112(1) of the Act, the Court can grant leave for a Registrar to make a determination under section 98S as to whether a departure order should be made or for the Court to make an order under section 118. The Applicant asks that the Court consider a departure order under section 118 of the Act. The Court agrees that that would be appropriate given that the child support assessments have terminated.
Application for a departure order
Court’s discretionary power
Section 117(1) of the Act gives the Court a discretionary power to make a child support departure order. The section states (emphasis added):
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.
Grounds for departure
Section 117(2) contains the grounds for departure (emphasis added):
(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.
In this case, the Applicant relies on section 117(2)(c)(ia) and submits that his application is ‘out of the ordinary’. The Applicant argues that the superannuation monies he received were in the nature of savings and were not income that he earnt in the relevant child support year. Moreover, the necessity to withdraw the superannuation monies was largely because of Applicant’s serious illness and his inability to earn an income.[5]
[5] Applicant’s written submissions, paragraph 3.3.1.
I accept this submission and I am satisfied that a ground for departure has been established because the Applicant had been assessed to pay child support at a rate not commensurate with his actual income in the relevant period for which he sought a departure order.
Is it just and equitable to depart from the administrative assessment
If the Court is satisfied that a ground for departure has been established, then, pursuant to section 117(1)(b)(ii)(A) of the Act, the Court must also consider whether it would be just and equitable to depart from the administrative assessment. To do so, the Court must have regard to section 117(4) which provides as follows:
(4)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 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
(b)the proper needs of the child; and
(c)the income, earning capacity, property and financial resources of the child; and
(d)the income, property and financial resources of each parent who is a party to the proceeding; and
(da)the earning capacity of each parent who is a party to the proceeding; and
(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
(f)the direct and indirect costs incurred by the carer entitled to child support in providing care for the child; and
(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.
I note the following submissions from the Applicant in relation to the relevant criteria:
“4.The second principle that the Court is to consider is whether it is just and equitable to make a departure order
4.1In determining this, the Court relies on principles set out in 117(4) of the Child Support (Assessment) Act 1989 (Cth), namely;
4.2 The nature of the duty of a parent to maintain a children;
4.2.1The Applicant has never had a relationship either child, but still paid the required child support payments until they reached the age of 18.
4.3 The proper needs of the children.
4.3.1Both children turned 18 in 2018 and at the time, had secured employment.
4.3.2Furthermore, the children were both 19 at the time that the Applicant had been notified of his re-assessed taxable income.
4.4The income, earning capacity, property and financial resources of the children;
4.4.1The children had obtained employment in 2018 when child support employments initially ceased.
4.5The income, property and financial resources of the parent who is a party to the proceedings;
4.5.1The Applicant possesses no substantial assets and has accrued a substantive liability owed to both the Respondent’s.
4.5.2He owns no real property.
4.5.3He also has no funds in his superannuation. He is primarily supported by his wife.
4.6The earning income capacity of each parent who is a party to the proceeding;
4.6.1The Applicant has no earnings including government payments. He is solely supported by his wife.
4.6.2Moreover, he has no superannuation left. It is noted that superannuation is not independent income.
4.7The commitments of each parent that are necessary to enable the person to support either themselves, the children or the carer entitled to child support;
4.7.1The Applicant has no substantive means to support himself financially due to his ongoing health adversities.
4.7.2The Applicant also has no superannuation.
4.7.3Both of the children between him and the Respondent’s are over the age of 18 and the Applicant has been made aware that they were employed.
4.8The direct and indirect costs incurred by the carer entitled to child support in providing for the children;
4.8.1The Applicant submits that there are no substantial entitlements that should be given to the carer in relation to child support with children who are:
4.8.1.1Over the age of 18; and
4.8.1.2Capable of employment.
4.9Whether any hardship would be caused to the children, the carer entitled to child support, or the liable parent.
4.9.1The Applicant submits that no hardship would be caused to the Respondents and the Children.
4.9.2The Applicant fulfilled his obligations by paying for child support until the children reached the ages of 18.
4.9.3The Applicant submits that no financial hardship should be considered with adults who are either employed or capable of employment in relation to child support proceedings.
4.9.4The Applicant has suffered severe financial hardship as a result of his liability and has no substantial assets. Moreover, due to his health decline, he is unable to gain employment.
4.9.5The Applicant is also currently 62 years old, which also hampers his ability to obtain employment on top of his declining health.”
I am satisfied that the available evidence supports these submissions.
Is it otherwise proper to depart from the administrative assessment
Finally, pursuant to section 117(1)(b)(ii)(B) of the Act, the Court must also consider whether it is otherwise proper to depart from the administrative assessment. To do so, the Court must have regard to section 117(5) of the Act which provides as follows:
(5)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.
I note the following submissions from the Applicant in relation to the relevant criteria:
“5The final principle for the Court to have determination to is that a departure order would be otherwise proper
5.1In determining this, the Court relies on principles set out in 117(5) of the Child Support (Assessment) Act 1989 (Cth), namely:
5.2The Nature of the duty of a parent to maintain a child;
5.2.1The children in this matter do not need maintenance or priority as both are adults with capability of employment.
5.3The effect that the order would have on the entitlements of the child, the carer entitled to child support, to an income tested pension, allowance or benefit;
5.3.1The children as adults are capable of employment. The Applicant submits that there are no entitlements in these proceedings.
5.3.2Because of the superannuation withdrawal, the Applicant does not qualify for any pension or allowance.
5.4The rate of any income tested pension allowance or benefit payable to the child of the carer entitled to child support.
5.4.1As the Applicant paid the required allowance to both children until the age of 18, no further benefit is required.”
I am satisfied that the available evidence supports these submissions.
Departure orders that may be made
Section 118 of the Act prescribes the departure orders that can be made by the Court and the requirements that must apply. Section 118 states (emphasis added):
(1) The orders that a court may make under this Division are as follows:
(a)an order varying the annual rate of child support payable by a parent;
(b) an order varying a parent's or non-parent carer's cost percentage for a child;
(c)an order varying a parent's child support income;
(d) an order varying the parents' combined child support income;
(e) an order that:
(i) the column in the Costs of the Children Table that covers a parent's child support income or combined child support income that is, or is ordered to be, greater than 2.5 times the annualised MTAWE figure for the relevant June quarter, is the column headed "2 to 2.5"; and
(ii) the column is to apply as if the second dollar amount in the heading to that column did not apply;
(f) an order varying a parent's child support percentage;
(g) an order varying a parent's adjusted taxable income;
(h)an order varying a parent's relevant dependent child amount or multi-case allowance;
(i) an order varying a parent's self-support amount;
(j) an order varying the costs of the children.
(2) An order under this section may make different provision in relation to different child support periods and in relation to different parts of a child support period.
(2B) A court may only make an order under this Division in respect of a day in a child support period, being a day that is more than 18 months earlier than the day on which the application for the order is made under section 116, if the court has granted leave under section 112 for the order to be made.
(2C) If the court has granted leave under section 112, the court may only make an order under this Division in respect of a day in a child support period if the day is within the period specified by the court, under subsection 112(6), in the order granting the leave.
(3)If the court makes an order under this section, the court must:
(a) give reasons for making the order (including reasons for its satisfaction as required by paragraph 117(1)(b)); and
(b) cause the reasons to be entered in the records of the court.
(4) Subsection (3) does not apply in relation to an order if:
(a)it is an order made by consent; and
(b) the carer entitled to child support concerned is not in receipt of an income tested pension, allowance or benefit.
(5)A contravention of subsection (3) in relation to an order does not affect the validity of the order.
As previously noted, the Applicant initially sought an order pursuant to section 118(g) to adjust his taxable income by amending “the calculation so that approximately $201,000 of his superannuation payments are not considered ‘taxable income’ within the last 5 years”.[6] However, in his written submissions filed 27 February 2022, the Applicant sought a determination “that no money is payable, and all penalties and interests are hereby waived”.[7]
[6] Application filed on 6 September 2021.
[7] Applicant’s Written Submissions, 27 February 2022, page 3.
That said, it was clear to the Court during the hearing that, assuming leave was granted under sections 111 and 112 of the Act, the Applicant was seeking an order pursuant to section 118(1)(g) of the Act to adjust his taxable income to ‘nil’ for the relevant periods.
The Court agrees with the Applicant that, given leave will be granted to apply for a departure order, section 118(1)(g) of the Act gives the Court the power to adjust the Applicant’s taxable income to ‘nil’ for the relevant periods. Nevertheless, given the nature of this dispute, and the Applicant’s circumstances, it would be more appropriate for the Court to use its powers under section 118(1)(a) of the Act to adjust the annual rate of child support payable by the Applicant to the minimum annual assessment rate for the relevant periods, noting that the Applicant has already paid the minimum annual assessment rate for the relevant periods.
This Court does not have the jurisdiction to remit the penalties that have been included in the Applicant’s child support debt. Under section 64AH of the Act, only the Child Support Registrar has the power to remit a penalty incurred in circumstances where a parent underestimates an income amount. However, as the Applicant’s annual child support rate has been set to the minimum annual assessment, and due to the limitations of the Court to remit a penalty, the Court would consider it inappropriate for the penalties to remain.
Findings
After considering the evidence in light of the relevant law and submissions, the Court makes the following findings:
·Firstly, the Court is satisfied that a ground for departure has been established because the Applicant was assessed to pay child support at a rate not commensurate with his actual income in the relevant period for which he sought a departure order. I am satisfied that the Applicant withdrew the superannuation monies largely because of his serious illness and his inability to earn an income. Had the Applicant realised the child support impact that the withdrawal of the superannuation monies at the relevant time he would have deferred the timing of the withdrawal until after August 2018.
·Secondly, the Court is also satisfied and finds that it is just and equitable and otherwise proper to make a departure order given that the Applicant can establish hardship in circumstances where the Respondents have not opposed these proceedings or provided any evidence of any hardship that they or the children would incur if the order was made. I have also taken into account that there was no evidence that the Applicant had deliberately reduced his income during the periods in question to evade his child support responsibilities.
Consequently, I am satisfied that the Court should make orders for there to be a departure from the assessments of child support payable by the Applicant from 1 July 2017 to the relevant terminating events (being the children’s 18th birthdays). As to the form of the order, I am satisfied and find that the annual rate of child support payable by the Applicant should be adjusted to the minimum annual assessment rate for the relevant period rather than adjusting the Applicant’s taxable income to ‘nil’ for the relevant periods.
Conclusion
The Court’s findings are now stated. In summary, the Court will make orders for:
·There to be a departure from the assessments of child support payable by the applicant from 1 July 2017 to the relevant terminating events (the children’s 18th birthdays); and
·The annual rate of child support payable by the applicant during that period be adjusted to a minimum assessment rate.
There will be Orders of the Court in accordance to reflect this decision.
I certify that the preceding seventy 70) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Monahan. Associate:
Dated: 6 October 2022
Schedule 1
Orders made on 25 May 2022
PENDING FURTHER ORDER THE COURT ORDERS THAT:
1.The matter is listed for a half day hearing on 14 July 2022 at 10:15am with respect to the child support departure application.
2.No later than 21 days prior to the trial date, the Applicant file and serve:
(a)any Amended Initiating Application setting out with particularity the precise final orders sought;
(b)an updated single consolidated trial affidavit;
3.No later than 14 days prior to the trial date, the First and Second Respondents file and serve:
(a)any Amended Response setting out with particularity the precise final orders sought;
(b)an updated single consolidated trial affidavit;
4.Within 7 days, service of the orders made today on the First and Second Respondents are to be made in the usual terms through the Child Support Agency.
5.No later than 2 days prior to the trial date, all parties are to file and serve a case outline document in the approved form which shall not, without leave, exceed 5 pages in respect of parenting issues and 5 pages in respect of financial issues and shall include:
(a)a list of the material relied upon;
(b)a brief chronology listing significant events that are relevant to the issues to be determined by the Court;
6.Lists of authorities which Counsel intend to cite to the Court during the presentation of any argument, together with copies of any unreported decisions to which it is intended that reference shall be made, should be filed and served not later than two days prior to the hearing.
7.Each party will be permitted to rely on one consolidated trial affidavit and one affidavit in reply (if applicable) only. Reliance on earlier or additional affidavits will not be permitted.
8.All documents required to be filed and all other documents sought to be relied upon (including any court books) must be filed or provided (as applicable) in electronic format to the Court and to each other party.
Schedule 2
Orders made on 14 July 2022
THE COURT FINDS THAT:
I.The Court is satisfied that the Applicant has complied with paragraph 4 of the Orders made by Judge Boyle on 25 May 2022.
AND THE COURT ORDERS PENDING FURTHER ORDER THAT:
1.Pursuant to s111C(3) of the Child Support (Registration and Collection) Act 1988 there be a stay on the collection and enforcement of arrears of child support owed by the Applicant from 1 July 2017 to date until the final determination of the Applicant’s Initiating Application filed on 6 September 2021.
AND THE COURT FURTHER ORDERS THAT:
2.The Applicant be granted leave to proceed on an undefended basis.
3.Final judgment delivery be reserved to a date and time to be fixed.
AND THE COURT DIRECTS THAT:
4.The legal representative for the Applicant serve the Child Support Agency with a copy of these Orders, together with a request for a copy of these Orders to be forwarded to the First and Second Respondent.
AND THE COURT NOTES THAT:
A.The Court is satisfied that the Applicant caused the Orders of Judge Boyle dated 25 May 2022 to be forwarded to the Child Support Agency, together with a request for the Orders to be served on the First and Second Respondents.
B.Final judgment is reserved on the issue of whether leave is granted for a retrospective re-assessment of child support pursuant to section 112 of the Child Support (Assessment Act) 1989 (Cth), and if so, whether Orders should be made pursuant to section 118(g) of the Child Support (Assessment Act) 1989 (Cth) to assess the Applicant’s taxable income at nil for the relevant periods.
C.The First and Second Respondents were called at 10:25am, 11:06am and 11:32am, and there was no response to the calls.
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