Child Support Registrar and Garaty
[2016] FCCA 2078
•12 August 2016
FEDERAL CIRCUIT COURT OF AUSTRALIA
| CHILD SUPPORT REGISTRAR & GARATY | [2016] FCCA 2078 |
| Catchwords: CHILD SUPPORT – Enforcement – debt to the Commonwealth of Australia – discretion to enforce – discretion not to enforce Child Support considered – application dismissed. |
| Legislation: Child Support (Registration and Collection) Act 1988, pt.VA, s.116(2). Federal Circuit Court Rules 2001 r. 25B.54. |
| Cases cited: Jones & Dunkel (1959) 101 CLR 298 |
| Applicant: | CHILD SUPPORT REGISTRAR |
| Respondent: | MR GARATY |
| File Number: | MLC 1897 of 2014 |
| Judgment of: | Judge Stewart |
| Hearing date: | 13 April 2016 |
| Date of Last Submission: | 13 April 2016 |
| Delivered at: | Melbourne |
| Delivered on: | 12 August 2016 |
REPRESENTATION
| Counsel for the Applicant: | Ms Devine |
| Solicitors for the Applicant: | Hunt & Hunt |
| Solicitors for the Respondent: | Mr Bacon of Manby & Scott Lawyers |
ORDERS
The Respondent pay to the Applicant the Child Support Debt (in the sum of $181,461.33) within 60 days.
Pursuant to Rule 25B.54 of the Federal Circuit Court Rules2001, a receiver be appointed to the Respondent’s income and personal property (“the Receiver”).
The Receiver’s remuneration be fixed in accordance with the fee scheduled to be provided with the Receiver’s consent to act.
The Receiver not be required to provide any security.
The Receiver be authorised to:-
(a)exercise all available rights in order to collect and sell the Respondent’s personal property, including exercising any director and shareholder rights in relation to the ordinary shares held by the Respondent in any company;
(b)extinguish any liability held by any secured creditor to property held by companies to which the Respondent is a member; and
(c)immediately thereafter, apply the proceeds from the sale of any personal property held to:-
(i)the total debt;
(ii)its remuneration; and
(iii)the remainder to the Respondent.
The Receiver shall submit accounts to the following parties each three months:-
(a)the solicitors for the Applicant by ordinary pre-paid post;
(b)the solicitors for the Respondent by ordinary pre-paid post;
(c)any of the companies (being (omitted) Pty Ltd ACN, (omitted) Pty Ltd ACN, (omitted) Pty Ltd ACN, (omitted) Pty Ltd ACN and (omitted) Pty Ltd ACN) in which the Receiver has exercised rights by ordinary pre-paid post to their registered office; and
(d)the Principal Registrar of the Melbourne Registry of the Federal Circuit Court of Australia for placement on the Court file.
If the Respondent defaults in making any of the payments ordered to be paid under these orders, deals with any of the personal property in breach of these orders or otherwise breaches any of these orders, the Applicant may proceed to enforce the total debt then owing in accordance with Part 25B of the Federal Circuit Court Rules 2001 (including but not limited to subdivision 25B.2.3 enforcement warrants).
All extant applications are dismissed and the matter removed from the list of pending cases maintained by the Court.
IT IS NOTED that publication of this judgment under the pseudonym Child Support Registrar & Garaty is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT MELBOURNE |
MLC 1897 of 2014
| CHILD SUPPORT REGISTRAR |
Applicant
And
| MR GARATY |
Respondent
REASONS FOR JUDGMENT
These proceedings come before the Court on the application of the Child Support Registrar (“the Applicant”) for the Respondent to pay to the Applicant the child support debt, fixed in the sum of $106,185.24. This debt was revised as at 13 April 2016 (the date of final hearing). A certificate pursuant to section 116(2) of the Child Support (Registration and Collection) Act 1988 was provided, fixing the child support debt at $181,461.33.
In accordance with their Application in a Case filed 5 March 2014, the Child Support Registrar seeks orders that a receiver be appointed to the Respondent’s income and personal property so that the total alleged debt can be collected.
The proceedings relate to child support arrears for three children, X (“X”) born (omitted) 1995, Y (“Y”) born (omitted) 1999 and Z (“Z”) born (omitted) 2004 (“the children”).
X is now almost 21 years old. Y is 17 years old and Z is 12 years old.
All three children live with their mother Ms J (“the Payee”).
X and Y spend time with the Respondent at times agreed between them. Z spends alternate weekends, special occasions and school holiday time with the Respondent.
The Respondent’s position is that the Court should exercise its discretion to not enforce the Child Support arrears on the basis that:-
a)the assessments were based on incomes which were assessed at a much higher level than the Respondent’s actual income;
b)the Payee’s financial position was superior to what the Child Support Registrar understood it to be when the relevant assessments were conducted; and
c)as the Payee of child support has managed for the past periods without any apparent financial difficulty then the child support arrears should not be fully enforced as “child support is not intended to be used as some type of lump sum compensation to payees for period distant in the past”.
History of child support assessments
Prior to proceedings being initiated in this Court there have been numerous changes to assessments conducted by the Child Support Agency and decisions handed down by the Social Security Appeals Tribunal.
On 14 September 2007 the Payee’s application to change the child support assessment was refused because the matters raised were considered to be too complex.
Three years later, on 30 March 2010, and on the application of the Payee, a change of assessment decision was made as follows:-
a)for the period 1 December 2009 to 28 February 2010, the rate of child support payable by the Respondent to the Payee was fixed at $1,000 per month.
b)for the period 1 March 2010 to 31 March 2012, the Respondent’s adjusted taxable income was set at $100,000 per annum and the adjusted taxable income of the Payee was set at $54,556.
In addition to the aforementioned adjustments to periodic child support and adjusted taxable incomes, the Respondent’s child support was increased by an additional $958 per annum, referable to a 50% contribution to the cost of Z’s school fees.
On 18 June 2010 an objection decision was given in relation to the change of assessment decision made on 30 March 2010. The objection lodged by the Payee was disallowed.
On 17 March 2011 the Social Security Appeals Tribunal (“the Tribunal”) made a decision in relation to the Notice Of Objection decision dated 18 June 2010, that had been initiated by the Payee. The Tribunal’s decision was to set aside the decision under review and substitute a new departure determination as follows: –
a)for the period 8 December 2009 to 30 June 2010, the Respondent’s adjusted taxable income was set at $248,500 per annum;
b)For the period 1 July 2010 to 30 June 2012, the Respondent’s adjusted taxable income was set at $204,750 per annum;
c)For the period 8 December 2009 to 30 June 2012, the Payee’s adjusted taxable income was set at $40,617 per annum;
d)For the period 30 May 2010 to 30 June 2012, the annual rate of child support payable by the Respondent was increased by the following amounts:-
i)for the period 10 May 2010 to 31 December 2010, by $864 (with respect to contributions towards Z’s school fees and X’s medical treatment, approximating 50% in 2010);
ii)for the period 1 January 2011 to 31 December 2011, by $1,361 (with respect to contributions towards Z’s school fees and X’s medical treatment, approximating 50% in 2011); and
iii)for the period 1 January 2012 to 30 June 2012, by $446 (with respect to contributions towards Z’s school fees for the first half of 2012, approximating 50%).
Upon the application of the Payee, a change of assessment decision was made on 19 July 2012. The decision recorded that: –
a)for the period of 1 July 2012 to 31 December 2014 the adjusted taxable income of the Respondent was set at $204,705 per annum;
b)for the period of 1 January 2012 to 31 December 2012 the annual rate of child support payable by the Respondent was to be increased by an additional $15,952;
c)for the period of 1 January 2013 to 31 December 2013 the annual rate of child support payable by the Respondent was to be increased by an additional $15,973; and
d)for the period of 1 January 2014 to 31 December 2014 the annual rate of child support payable by the Respondent was to be increased by an additional $8,535.
On 17 August 2012 a Departure Prohibition Order was approved pursuant to Part VA of the Child Support (Registration and Collection) Act 1988. This prevented the Respondent from travelling overseas while the arrears remained outstanding. The Respondent states in his affidavit material that this Departure Prohibition Order prevented him in obtaining employment with ‘(employer omitted)’ in 2013, as a requirement of that employment was approximately 26 weeks per year of overseas travel.
On 16 November 2012 the Respondent’s application for a change in assessment was refused on the grounds that no reasons were established.
On 10 September 2013 a letter was sent from the Child Support branch of the Department of Human Services (as they then were) to the Respondent confirming his withdrawal of his application for a change of assessment.
On 20 September 2013 the Respondent’s application for revocation of the Departure Prohibition Order was refused.
On 31 January 2014 the Respondent’s change of assessment application was refused by way of change of assessment decision, as again, no reasons were established.
On 20 August 2014, there was a change of assessment decision whereby both the Respondent’s application for a change of assessment and the Payee’s cross application for same were considered and refused, given no reasons were established.
On 20 January 2015 a change of assessment decision was made on the application of the Payee. The decision was that for the period of 1 January 2015 until 31 December 2017 the adjusted taxable income of the Respondent was set at $204,705.
On 30 March 2015 a change of assessment decision was made on the application of the Payee. That decision was that for the period 1 January 2015 to 31 December 2015 the annual rate of child support payable by the Respondent was increased by $12,083, and for the period 1 January 2016 to 31 December 2016 the annual rate of child support payable by the Respondent was increased by $12,125.
The procedural history
Aside from the extensive history of applications for assessment and reassessment, proceedings were initiated by the Child Support Agency in the Federal Circuit Court on 5 March 2014.
The Child Support Agency sought, inter alia, that the Respondent pay to the Applicant the child support debt, and in order to effect this payment, a receiver be appointed to the Respondent’s income and personal property.
The matter first came before the Court on 23 April 2014. Interim orders were made in relation to service and the Applicant’s costs were reserved.
The proceedings next came before the Court on 16 May 2014. A declaration was made that the debt owed by the Respondent was in the sum of $106,329.06, consisting of $92,596.88 in child support arrears and $13,732.18 in late payment penalties. Orders were made restraining the Respondent from resigning as a director, voluntarily winding up, de-registering or effecting any change in shareholdings for (omitted), (omitted) Pty Ltd or (omitted). The Applicant’s costs were fixed and reserved.
The matter next came before the Court on 1 December 2014 with no appearance by or on behalf of the Respondent. Orders were made providing for substituted service and requiring the Respondent to attend Court on the adjourned date of 5 September 2014. The Applicant’s costs were again reserved. On the adjourned date a further declaration was made (by consent) that as at 20 November 2014, the Respondent owed the Applicant the sum of $112,843.83, which consisted of $94,789.98 in arrears and $18,053.85 in late payment penalties. The orders provided for, inter alia, the Respondent not to resign from, voluntarily wind up, de-register or effect any change in shareholdings in (omitted), (omitted) Pty Ltd and (omitted). The orders further provided for the proceeds of sale of a property in (omitted) to be held on trust until further order. The proceedings were adjourned for final hearing on a date to be advised.
The matter then came back before the Court for mention on 25 March 2015, where it was declared that the Respondent then owed the Applicant $127,627.36 (made up of $102,577.46 in arrears and $21,949.72 in late payment fees). Again orders were made preventing the Respondent from disposing of any of his interests in (omitted), (omitted) Pty Ltd or (omitted) in any of the abovementioned ways, and the proceedings were adjourned to 16 September 2015 for final hearing.
The matter did not conclude on 16 September 2015. Further orders were made preventing the Respondent from disposing of any of his interests in the aforementioned companies (along with (omitted) and (omitted) Pty Ltd) or his interest in a (omitted) Holden Sedan. Costs were again reserved.
Prior to the final hearing the Respondent issued a subpoena to the Payee’s (employer omitted), seeking the production of documents relating to the payment of fees. An objection was filed by both the Payee and the Child Support Agency and the subpoena was subsequently struck out. The Respondent was ordered to pay the Child Support Agency’s costs of that day in the sum of $917, as well as the costs of the Payee in the sum of $1,650.
Final hearing occurred on 13 April 2016. Ms E (“Ms E”) was called on behalf of the Child Support Agency and the Respondent was the only witness called in support of his case. The Child Support Agency relied upon the evidence of Mr R (“Mr R”), the proposed receiver for the Respondent’s property, and Ms R (“Ms R”), a litigation officer within Child Support Services at the Department of Health and Human Services.
The issues
The Applicant seeks an order that a receiver and manager be appointed to pursue child support arrears owing. Their position is supported by a certificate exhibited in these proceedings pursuant to Section 116(2) of the Child Support (Registration and Collection) Act 1988, stating that as at 13 April 2016 the debt payable by the Respondent to the Applicant totals $181,461.33, made up of $147,896.71 in child support debts and $33,564.62 in late payment penalties.
The receiver and manager is to be appointed pursuant to Rule 25B.54 of the Federal Circuit Court Rules 2001 which provides as follows:-
(1) A payee may apply for an enforcement order appointing a receiver of the payer’s income or property by filing an application in a case and an affidavit.
(2) The affidavit must:
(a) comply with rule 25B.12; and
(b) include the full name and address of the proposed receiver; and
(c) include details of the receiver’s fees; and
(d) have attached to it the consent of the appointment of receiver, signed by the proposed receiver.
(3) The Court may hear an application under subrule (1) in chambers, in the absence of the parties, on the documents filed.
In essence, the position of the Child Support Agency is that a receiver should be appointed due to the complexity of the Respondent’s affairs which involve a number of corporate entities in which the Respondent has various shareholdings and various positions. By way of example, a company known as (omitted) Pty Ltd owns real property in Victoria. The Respondent is the sole director and secretary of that company and holds 80 of the 100 shares. The Respondent’s de facto partner Ms E holds the other 20 shares.
The difficulty and complexity in enforcement arises with respect to this and other corporate entities and legitimate interests in the corporate assets held by other shareholders.
For that reason a manager and receiver was sought by the Applicant in order to ascertain whether the Respondent’s assets can be liquidated, and if so, what other interests need to be taken into account.
The Child Support Agency quite properly put that within these corporate structures there are other liabilities that might reasonably need to be taken into account and it is impossible to ascertain the extent of such liabilities at this enforcement stage. Ultimately, the submission of the Child Support Agency is that to manage a structured liquidation of the Respondent’s affairs, if that is at all possible, the only practical and feasible way to do so is by the appointment of a receiver. The Child Support Agency’s position is that the Respondent has not demonstrated any willingness or intention to comply with the payment of the outstanding arrears and, therefore, this step is not only feasible but necessary. Furthermore, the position of the Applicant is that the matter requires an investigation into the Respondent’s asset holdings, and it is quite likely that the Respondent holds assets which he has failed to declare and which may be available to satisfy the child support debt.
It is the Respondent’s contention that the Court should decline to enforce the child support arrears. That contention is based on the following matters.
In the first instance it is said that the child support assessments, as they have issued, are based on an income amount which is significantly greater than the actual income earned by the Respondent over the relevant assessment periods.
The Respondent also suggests that the Payee’s assessed income amount does not reflect her actual earnings and is significantly understated.
The fundamental weakness in those submissions is that the legislative scheme for the assessment of child support contains a detailed and comprehensive method for review of child support, both within the Child Support Agency itself, via the Social Security Appeals Tribunal and via the appeal process to this Court from the Social Security Appeals Tribunal. The Respondent has availed himself of review procedures but has failed to exhaust those procedures in the appropriate forum/s. This is a significant factor militating against the exercise of my discretion in favour of the Respondent as he has not availed himself of the entire review processes.
A further point made by the Respondent in attempting to persuade me to exercise my discretion not to enforce is the application of the so called “12 month rule”. If there was ever a “12 month rule” at all (as opposed to a statement of discretionary considerations to be taken into account in maintenance cases), that issue has been determined by the decision of the Full Court of the Family Court of Australia in the decision of Wreford & Caley [2010] FamCAFC 21.
Their Honours, in referring to the “12 month rule” cited with approval the reasoning of Federal Magistrate Walters (as he then was) in the decision of Mathieson & Hamilton [2006] FMCAfam 238. They said: -
In Mathieson & Hamilton (supra) Walters FM provides an extensive analysis of relevant cases which we do not need to repeat, save to say that we agree with him. At paragraph 219 Walters FM said:
I conclude, on the basis of the authorities discussed above, that the “12 months rule” (if it ever was a rule) is — like the thylacine — extinct. That is not to say that there are not those who are convinced that they have caught a glimpse of it from time-to-time. In my opinion, it could, at most, be accorded the status of a cryptid — which, according to Wikipedia is an animal presumed extinct, or a hypothetical species of animal known only from anecdotal or other evidence insufficient to prove its existence with certainty. (footnote omitted)
I note that his Honour Federal Magistrate Walters (as he then was) also dealt with the factors to be taken into account in a consideration as to whether or not to exercise the discretion to enforce, and I am greatly assisted by his Honour’s comprehensive analysis of that matter in the case of Mathieson & Hamilton [2006]. In that case, his Honour said at paragraph 228: –
…in exceptional cases it might be possible for a liable parent to demonstrate that he or she has changed his or her financial circumstances to his or her detriment, whilst at the same acting in good faith, due to the actions (or unexplained inaction) of the residence parent. Other circumstances can be envisioned, but they will always be exceptional. The Court should not lightly relieve a liable parent from his or her demonstrated obligation to support his or her children. But if the facts support such a conclusion or result, then there can be no doubt that the Court has power to make the appropriate orders.
Also at paragraph 230 of Mathieson & Hamilton [2006], his Honour summarised the principles that would be applied with respect to enforcement of arrears. His Honour said as follows: –
In my opinion, it is possible to distil the following principles, considerations or factors relating to the enforcement of arrears of maintenance or child support:
(a) The “12 months rule" is extinct. It was, in any event, never more than a discretionary guideline or rule of practice, and the 12 months period was an arbitrary one.
(b) The Court has a discretion, not only as to the period in respect of which accumulated arrears of maintenance or child support will be enforced, but as to whether they should be enforced at all.
(c) The Court is not prevented from enforcing arrears of maintenance or child support simply because the time for payment of the same has long since passed, or because (in the case of child maintenance or child support) the relevant child has long since left school, commenced paid employment or otherwise ceased to require such child maintenance or child support.
(d) In considering whether to enforce arrears (and, if so, for what period), the Court's discretion is unfettered, but the following considerations (at least) might be considered to be of relevance:
(i) whether the party who was obliged to pay the maintenance or child support ("the Payer”) knew or ought to have known of his/her obligation to pay maintenance or child support;
(ii) whether the party entitled to maintenance or child support ("the Payee”) pressed or pursued – directly or indirectly – his/her rights to the same, and whether the Payee did so in a timely fashion;
(iii) whether, by words or conduct, the Payee led or permitted the Payer to form a reasonable view that the Payer’s obligation to pay maintenance or child support would not be enforced, and whether (and in what way) the Payer was thereby induced – whilst acting in good faith – to change his/her financial position;
(iv) whether, by words or conduct, the Payer led or permitted the Payee to form a reasonable view that the Payer’s obligation to pay maintenance or child support would be met, and whether (and in what way) the Payee was thereby induced – whilst acting in good faith – to change his/her financial position;
(v) whether the Payer had (other) appropriate or adequate reasons for failing or refusing to pay;
(vi) the financial circumstances of the Payer, the Payee and the children during the period of the non-payment, and at the time that the enforcement of the arrears is sought (including the Payer’s ability to pay at all relevant times);
(vii) whether the Payer has made a full and frank disclosure of his/her financial position at all relevant times; and
(viii) whether the Payee has made full and frank disclosure of his/her financial position at all relevant times.
(e) The Court should be very cautious not to encourage a Payer to metaphorically sit back and ignore his/her liability for maintenance or child support, and to continue to ignore such liability "… hoping for the best."
His Honour’s reasons have been cited with approval in numerous Full Court authorities, including Wreford & Caley [2010] and Oxenham & Oxenham [2008] FamCAFC 199.
Background
I therefore now turn to the background facts of this case.
The Respondent was born on (omitted) 1965 and is 50 years old. He refers to himself as a “Businessman” and described his position as the “(occupation omitted)”, an entity to which he deposes to establishing. In his most recent affidavit sworn 24 February 2016 he states an income of $1,200 per week, although over the course of the proceedings he claims his income has varied.
The Payee is a (occupation omitted). She has been self-employed for around 16 years. While not a party to these proceedings, her taxable income is said to be approximately $60,000.
It is suggested by the Respondent that the Payee’s taxable income as set out in her child support assessment, and, necessarily, her lodged taxation returns, does not reflect her real income, which the Respondent alleges is much higher.
This is an issue that is squarely referable to the review process undertaken or available to be undertaken by the Respondent in the Child Support Agency. This issue was raised by the Respondent in his three applications for a change of assessments (that were refused on 16 November 2012, 31 January 2014 and 20 August 2014).
In further support of that contention, the Respondent raised the attendance of the Wife at a previous subpoena proceeding where she appeared, and the Respondent was ordered to pay costs to her. The nature of the appearance by the Payee on that day was as a result of a subpoena issued by the Respondent directed to the Wife’s (employer omitted), seeking the production of documents in relation to her fees and other financial material available through the (employer omitted). On that day the objection to the subpoena was allowed and the subpoena was struck out. Subsequently, the Wife sought and was granted an award of costs of her attendance in the sum of $1,650.
During the substantive hearing the Respondent seized upon this sum as demonstrative that the stated income of the Payee could be extrapolated at $1,650 per day, demonstrating that her taxable or child support income significantly understates her real income. There are numerous flaws in that submission. Firstly, the Payee is a self-employed person and it impossible to extrapolate her annual income in the way suggested by the Respondent. That exercise is based on numerous assumptions such as frequency of work and adjustment for expenses. Secondly, the arrears of child support accrued by the Respondent has occurred over many years, and, even if the Respondent’s assertions were correct, it is not possible to then assume that such a situation would have been applicable across all the years of the assessments when the child support arrears accrued. Thirdly, these issues were ventilated in the review processes at least insofar as the various aforementioned applications for assessment and reassessment.
In my view the only safe evidence available as to the Payee’s income is the child support income amounts, which are based on her taxation returns. The submissions put by the Respondent are merely speculative and it would be unsafe to superimpose a different figure for the Payee’s income based on such speculation.
Furthermore, in this matter it can hardly be said in the circumstances, and relying on the principles espoused in Mathieson & Hamilton [2006], that the circumstances of the Payee, in terms of her financial position, are so unusual that it puts the matter into the exceptional category. While I do suggest that the Payee’s financial situation is irrelevant, in this case I do not accept that the Wife’s income is such that it is significantly higher than her child support income amount on the basis of the evidence in this case. Even if that were so, the payer has had the opportunity to review that decision in the Child Support Agency and has done so (unsuccessfully), which should have allayed any further concerns of the Respondent in relation to this supposed discrepancy.
Ms E
Ms. Ms E affirmed an affidavit in these proceedings on 5 March 2014, on behalf of the Child Support Registrar. In her affidavit she sets out the child support liability of the Respondent, at that time totalling the sum of $106,185.24 (made up of $93,874.76 in arrears and $12,310.48 in late payment penalties). She also sets out the knowledge of the Child Support Agency in relation to property, income and business interests held by the Respondent and annexes numerous documents demonstrating the same.
Ms E was cross-examined by the legal representative for the Respondent. It was put to her that it was likely correct that the highest income amount for the Payee upon which the child support assessments had been based was approximately $63,500. Ms E indicated that the Payee did not wish to be involved in the proceedings as they were between the Child Support Agency and the Respondent, and the Payee had for many years elected that her child support be collected through the Child Support Agency.
In pursuit of the central plank of the Respondent’s case, being the understatement of the Payee’s income, the solicitor advocate for the Respondent criticised the witness on the basis that she had not arranged for the Payee to attend court and give evidence in the case, and as such, and by virtue of that fact, the solicitor advocate indicated that he would attempt to persuade the court that a Jones & Dunkel (1959) 101 CLR 298 inference should be drawn as a result.
Save for eliciting evidence from the witness that the Payee had not attempted to enforce the child support debt privately (rather than through the Child Support Agency), a proposition that the witness agreed with, there was no further challenge to Ms E’s evidence.
Mr R
The Child Support Agency further relied on an affidavit of Mr R, who was not required for cross-examination.
The affidavit of Mr R contains information and evidence with respect to his consent in being appointed the receiver for the Respondent’s property and income. He annexes to his affidavit his consent to the appointment pursuant to rule 25B.54(2) of the Federal Circuit Court Rules 2001.
Ms R
Ms R, a litigation officer in the Child Support Services within the Australian Government Department of Human Services, affirmed an affidavit in the proceeding son 31 August 2015. The affidavit was filed on behalf of the Child Support Registrar and Ms R was not required for cross-examination. I accept her evidence.
The Respondent
The Respondent gave evidence and was cross-examined.
The Respondent relied on his affidavit, Financial Statement and Response, all filed 15 May 2014. He further relied upon three subsequent affidavits, two of which were sworn 10 September 2015 and the third sworn 24 February 2016.
The Respondent gave further evidence regarding the Payee’s failure to respond to a request by the Respondent for further financial material, that request being sent by email from the solicitor for the Respondent to the Payee on 1 April 2016. The Payee indicated that she did not wish to respond to that email.
The gravamen of the case of the Child Support Agency is that the Respondent has failed to make full, frank and accurate financial disclosure which has impacted firstly on the accuracy of the determination of the assessments which have issued against him, and secondly militate against the exercise of the Court’s discretion not to enforce arrears. Put bluntly, the Child Support Agency submits that the Respondent’s evidence is untruthful, the assessments have been based on hearings which have exposed his untruths, and as a result the Child Support Agency has upheld and issued the various assessments. They assert that the Respondent’s untruthfulness has been further exposed during the course of this hearing. There is some force in that submission.
The Respondent said he could not pay the arrears. He maintained his position that his assets were incorrect, and in a troubling passage of evidence, seemed to think that somehow these proceedings were to change an assessment which had been unjustly levelled against him. The Respondent was emotional and agitated when giving his evidence. From the Respondent’s point of view he had paid appropriate child support, however he felt that the Payee had always wanted more. Further, he said that he paid his child support on an income of $60,000 per year at a rate of $565 per month, on what could only be styled as some form of self-assessment.
At every turn the solicitor advocate for the Respondent attempted to turn the proceedings into a de-facto departure application for a departure from administrative assessment, although in essence the consideration of whether or not to enforce the arrears owing is a different proceeding. Quite clearly the Respondent was of the view that the Court would undertake a review of the assessments, as he regularly and emotionally implored the Court to accept his position that the assessments were based on incorrect income amounts.
Although this Court has jurisdiction to enforce some, all or none of the arrears, I am not persuaded in this case that I should exercise my discretion not to enforce.
My decision in that regard is primarily based on two factors. Firstly, I can see no utility in a Court not enforcing a child support assessment, save in exceptional and compelling circumstances, particularly where parties have been able to avail themselves of the child support departure procedure and have done so. I agree with the submissions of the solicitor advocate for the Respondent that the circumstances within which a Court would consider not enforcing arrears would be unusual and unique. Although I am not necessarily persuaded by the submission of Counsel for the Applicant that a Respondent in a case such as this should come to Court with “clean hands”. I am persuaded that in the circumstances of this case, the Respondent has been less than truthful with respect to his financial disclosure. I can have no confidence that the Respondent has accurately portrayed his financial circumstances.
In those circumstances, and in the exercise of my discretion, I decline to accede to the application of the Respondent not to enforce the arrears.
The inaccuracies and the unreliability of the Respondent’s evidence were manifested in numerous ways. For instance, evidence included in the proceedings was an application made by the Respondent to (omitted) Bank. The document was signed on 13 August 2013 and contained a statement of assets and liabilities. Although the Respondent denied that he had completed the document himself, it is a document applying for finance on the Respondent’s behalf. It records that at the time the Respondent had $100,000 in a bank account, an interest in a property at (omitted) worth $2.2 million and that he owned a houseboat worth $800,000. The document also referred to a Harley Davidson motor vehicle valued at $30,000. The Respondent implored me to accept a proposition that his finance broker had inaccurately filled out the form (save for ownership of the Harley Davidson motorcycle) and that, notwithstanding that he had signed the document, it was false. I do not accept that explanation on the part of the Respondent. I also have regard to the fact that in that document the Respondent set his income at a significantly higher amount than he disclosed to the Child Support Agency.
It appears from the (omitted) Bank application (that was exhibited in these proceedings), that the Respondent put his financial position as being at a net position of over $2.2 million.
The Child Support Agency did not accept the Respondent’s stated earnings and nor do I.
In a further demonstration of the Respondent’s lack of candour he was cross-examined about his reliance on Centrelink payments and Transport Accident Commission (“TAC”) payments, and said in his affidavit material that he had been in receipt of Centrelink payments since August or September 2012 and during that period the Centrelink payments were his only source of income. The Respondent said he stopped receiving Centrelink payments on 25 October 2013 because he had been involved in a severe car accident and became entitled to TAC payments instead. He then said in his affidavit material that between 7 October 2013 and 17 November 2014 his sole source of income was from these TAC payments in the sum of approximately $1,200 per week. The evidence was contained in his affidavit dated 29 February 2016. He did not disclose in his affidavit material his evidence that criminal proceedings had been brought against him in the Ringwood Magistrates’ Court in March 2016 for fraud in respect of those TAC payments and he was found guilty. The omission of that evidence, and it being raised in cross-examination, does the Respondent no credit at all. Although he said he has appealed the decision, nevertheless, it is a highly relevant matter with respect to the charges and the exercise of my discretion in this case.
I find it implausible that the Respondent has been victimised by the Child Support Agency, the TAC, the Ringwood Magistrates’ Court and other who, in the words of the Respondent, have made findings that are “totally wrong”.
The Respondent was also cross-examined regarding monies paid through the Garaty Family Trust to (omitted) in (country omitted) being the payment for a boat in December 2012. The Respondent conceded that he made the payment but refused to concede that he had an interest in that boat. He attempted to convince me that he owed money to an unidentified person and therefore paid the money to the purchase of the boat on their behalf. I do not believe his evidence.
In resisting the application by the Child Support Registrar the Respondent also sought to convince me that I should have regard to an assertion that the Payee is earning $1,500 per day (exclusive of GST). I do not accept that assertion and in any event, these are matters which also could be raised with the Child Support Agency and they do not impact on my assessment as to whether or not to exercise my discretion at this time.
In summary, at the core of the Respondent’s case is that I should exercise my discretion in his favour because firstly, the assessments are wrong, and on a secondary basis because the financial resources of the Payee have also been inaccurately assessed. He says that I should draw a Jones & Dunkel (1959) inference on the basis that the Payee was not called to give evidence. Further, the Respondent asserts that in exercising my discretion I should determine that the Payee earns well in excess of her disclosed amount. I do not accept that as a proposition, and again the Jones & Dunkel (1959) inference is a discretionary exercise on my part, and I decline to exercise it in the circumstances of this case.
Furthermore, I reiterate that the Respondent had every opportunity to pursue this matter through the appropriate procedures within the Child Support Agency.
With respect to the Respondent’s non-disclosure, the solicitor advocate for the Respondent attempted to persuade me that the Respondent’s misstatement in his loan application was something that I should simply overlook on the basis that there are numerous authorities which refer to people exaggerating their financial situation to further a specific purpose. I do not accept that the difference between $33,000 (the net worth the Respondent was prepared to concede in these proceedings) and $2.2 million (the net worth that he set out in the application to the (omitted) Bank) can be styled as an exaggeration, nor do I accept that such documents are simply routine administrative forms.
Overall, the Respondent’s evidence is wholly unsatisfactory.
In the circumstances of this case I decline to exercise my discretion not to enforce, and I will make the orders sought by the Applicant.
I certify that the preceding eighty-three (83) paragraphs are a true copy of the reasons for judgment of Judge Stewart.
Date: 12 August 2016
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