Child Support Registrar and Holub
[2017] FCCA 2400
•3 October 2017
FEDERAL CIRCUIT COURT OF AUSTRALIA
| CHILD SUPPORT REGISTRAR & HOLUB | [2017] FCCA 2400 |
| Catchwords: CHILD SUPPORT – Application for leave to make a departure application more than seven years – leave granted. |
| Legislation: Child Support (Assessment) Act 1989 Child Support (Registration and Collection) Act 1988 |
| Cases cited: Bauer & Becker [2009] FMCAfam 480 McColl & McColl [2013] FCCA 736 |
| Applicant: | CHILD SUPPORT REGISTRAR |
| Respondent: | MR HOLUB |
| File Number: | SYC 3855 of 2015 |
| Judgment of: | Judge Henderson |
| Hearing date: | 19 September 2017 |
| Date of Last Submission: | 19 September 2017 |
| Delivered at: | Sydney |
| Delivered on: | 3 October 2017 |
REPRESENTATION
| Counsel for the Applicant: | Ms Sangha |
| Solicitors for the Applicant: | Mills Oakley Lawyers |
| Counsel for the Respondent: | Mr McCulloch |
ORDERS
I grant the husband leave under section 112 of the Child Support (Assessment) Act 1989 to make an application for a departure order of child assessments under section 118 of the Act for each period within the period 3 November 2008 to 4 November 2013, “the period”.
I make a departure order for child support for each period in “the period” and order the total amount of child support payable be set as equal to the moneys paid each period within “the period”.
The sum presently held by the Child Support Registrar of $4610.61 to be refunded to the applicant forthwith.
THE COURT NOTES THAT:
It is the intention of the parties that the overall child support liability is to be set to the amount ‘as it stands paid’ and that any debt or overpayment remaining after these Orders have been given effect by the Child Support Registrar is to be discharged, or otherwise, be gifted to the party who stands in credit with the effect that the child support debt of the applicant is extinguished and that there be no overpayment debt payable to the applicant by the respondent mother.
It is the intention of the parties that there be nil balance of account under the child support liability as a result of these Orders.
IT IS NOTED that publication of this judgment under the pseudonym Child Support Registrar & Holub is approved pursuant to s.110X(4)(h) of the Child Support (Registration and Collection) Act 1988 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT SYDNEY |
SYC 3855 of 2015
| CHILD SUPPORT REGISTRAR |
Applicant
And
| MR HOLUB |
Respondent
REASONS FOR JUDGMENT
The matter of Holub & Ms S is an application filed by the husband on 3 November 2015 seeking leave to depart from assessments of child support of greater than 18 months in time from the date of filing the application.
Leave was sought by the husband under section 112 of the Child Support (Assessment) Act 1989[1]. If granted he sought additionally
[1] Child Support (Assessment) Act 1989, s 112.
An order that the assessments stand as if they had been paid, and
$4,610.61 currently held by the Agency and having been intercepted from a tax refund be refunded to him
That each party pay their own costs.
The children’s mother did not appear and has indicated she is not particularly interested in what occurs.
The Child Support Registrar attended amicus and was represented by Ms Sangha.
Mr McCulloch assisted the husband on a duty basis for which the Court was most grateful.
The husband filed his application in answer to enforcement of child support arrears filed by the Child Support Registrar on 16 June 2015. The arrears of child support that have arisen in reality are due to the failure of the husband to file his tax returns for the years, 2011 to 2015.
At first blush, given the assessments arose due to this failure it might be anticipated that it would be difficult for him to satisfy me that there are special circumstances which would cause me to exercise a discretion under section 112 of the Child Support (Assessment) Act 1989[2]. However, each matter must be looked at in particular and on its own facts.
[2] Above, note 1.
It is correct that a Registrar cannot make a departure determination under section 98S of the Child Support (Assessment) Act 1989[3] unless a liable parent or carer is entitled to child support or has made an application under 98B[4]. That cannot be the case in this matter as the subject children are now aged 22 and 21 respectively and there was no current child support assessment in force as at the date the father filed his application for departure.
[3] Child Support (Assessment) Act 1989, s 98S.
[4] Child Support (Assessment) Act 1989, s 98B.
However, clearly at the date the assessment which has resulted in these arrears was issued there was a child support assessment in force.
Ms Sangha submitted that the circumstances of how the arrears arose and that the Registrar cannot make a departure order is a relevant matter for the Court to consider under section 112 of the Act[5] in granting leave.
[5] Above, note 1.
I am not as limited in my powers under the Act[6] as is the Registrar and I can make a departure order in these facts.
[6] Child Support (Assessment) Act 1989.
The evidence is as follows:
a)The husband’s initiating application filed 3 November 2015;
b)His affidavit of 2 November 2015;
c)His financial statement filed 3 November 2015; and
d)His affidavit of 3 November 2015.
A bundle of exhibits were tendered by the husband:
a)Husband’s exhibit 1 was a letter from his treating psychiatrist dated 28 July 2017, a Dr L;
b)Exhibit 2 is a certificate of the child support arrears which are currently at $15,390 being a child support debt of $8,232.83 and penalties of $7157.41; and
c)Exhibit 3 a minute of the orders sought.
The Child Support Registrar handed to me a bundle of documents which consisted of the payments of child support to date demonstrating how the arrears have come about, the various assessments referred to in the material and a the decision of Judge Scarlett of Dalton & Munro[7].
[7] Dalton & Munro (2015) FLC 294.
In that matter his Honour found there were no special circumstances permitting him to grant the husband leave to depart from child assessments over 18 months as at the date of filing the application. The husband’s arrears in that case had come about precisely for the same reasons as this husband namely failure to lodge income tax returns for the financial years ending 2011, 2012 and 2013. As in this case the failure to file tax returns resulted in assessments of child support being based on a default taxable income.
Brown FM, as he then was, in Bauer & Becker[8], a decision oft quoted in these matters where the principles surrounding the granting of leave under section 111 and 112 of the Child Support (Assessment) Act 1989[9]is discussed by his Honour. In that matter His Honour Judge Brown referred to the undesirability of parents being able to review assessments retrospectively saying at paragraph 74 and 75:
The object of section 111 of the Assessment Act is to prevent the re-examination of past assessments of child support for unlimited periods of time. If there was such a facility, it would undermine the integrity of the overall system.
[8] Bauer & Becker [2009] FMCAfam 480.
[9] Child Support (Assessment) Act 1989, s 111.
In 75:
In these circumstances, it is my view there must be something exceptional to justify the court revisiting of decisions which were made some time ago and the fact that some have been challenged to pay arrears is not an exceptional circumstance.
In the decision of Child Support Registrar & Rawlings[10], a decision of Judge Scarlett:
It should be by now be clear to people with an obligation to pay child support under an administrative assessment that it is essential that they lodge their income tax returns within the time required. That is an obligation that applies to taxpayers generally. In cases of hardship, a taxpayer may be granted an extension within which to lodge a return. However, repeated and continuing failure to lodge income tax returns will lead to adverse consequences for which parties can expect to receive little sympathy from the Court.
[10] Child Support Registrar & Rawlings [2013] FCCA 370 at 73.
Judge Roberts in Hacherl & Berrios[11]:
In this particular matter, the father does not come to Court with clean hands in relation to the lodgement of his tax returns. He should not be, therefore, allowed to rely on his dilatory behaviour to obtain relief in relation to a period when the Child Support Agency was hampered by his failure to lodge income tax returns.
[11] Hacherl & Berrios [2010] FMCAfam 668.
Judge Halligan, in McColl & McColl[12] set out the matters the Court must have regard to in determining leave applications.
[12] McColl & McColl [2013] FCCA 736.
The first is to ensure that parties do not unnecessarily seek to review assessments of child support going back over many years, given there are simple and easily accessible administrative processes for those matters to be determined within the Child Support Agency processes.
Secondly, as Judge Halligan said:
The Court must be satisfied the applicant has a prima facie case to have the assessments changed.
Secondly in determining whether the applicant has a prima facie case, his evidence on the issue is accepted without cross-examination unless inherently unbelievable or contradictory;
Thirdly the Court must consider whether there has been any delay by the applicant in bringing the application to change the relevant assessments and if so, who has responsibility for the delay;
Fourthly the Court must consider any hardship to be caused to all parties by granting or not granting the leave,
Finally any other relevant fact or circumstances.
The assessments sought to be departed from are contained in the Registrar’s tender bundle and are the periods, 18 September 2017 through to and including 17 October 2008. Any Court is prohibited from going back more than seven years from the date of filing an application for departure.
The applicant filed his application in 2015 and he may go back, if I grant him leave, seven years which will be back to 3 November 2008.
Hardship is a highly relevant and important factor in these matters: hardship to the father, hardship to the mother, hardship to the children.
If I grant the husband leave there will be no hardship occasioned to the mother or the children; who are 21 and 22, and it has been many years since the husband had an obligation to pay any child support or the wife received any child support from the husband.
On the other hand not granting leave would result in the wife obtaining a windfall in reality and significant hardship being visited on the husband.
Section 111 of the Act[13] is as follows:
A liable parent or a carer entitled to child support … may apply to a Court having jurisdiction under this Act for leave for the Registrar to make a determination under section 98S – or
(b) the court to make an order under 118 in respect of a day in a child support period, being a day that is more than 18 months and less than seven years earlier than the day on which the application under this section is made.
[13] Above, note 9.
The Registrar may intervene in such matters or as here appear on an “amicus” basis.
The matters to be considered in such an application are set out in section 112(4) of the Act[14]:
In considering whether to grant leave under subsection (1), the Court must have regard to the delay in :
(a) (i) making an application under section 98B or 116;
(ii) making a determination under 98S;
[14] Child Support (Assessment) Act 1989, s 112(4).
(b) the hardship to the applicant if leave is not granted;
(c) hardship to the other party or parties if leave is granted.
And:
The Court may have regard to any other relevant matter.
I must specify the period for which the order is made. If leave is granted I must go to the relevant section dealing with departure applications, which is 117(1) and (2) of the Child Support (Assessment) Act 1989[15] to determine whether I would grant the husband to depart from the assessments made.
[15] Child Support (Assessment) Act 1989, ss 117(1), 117(2).
Going first to the leave issue. The he husband’s case is clearly pleaded and he has made out a prima facie case on the facts. He has suffered from significant mental health issues in the past and continuing according to his medical practitioner who has been managing him since 2015.
Looking at the husband’s application, he says at paragraph 7 that the administrative assessments of child support from 1 November 2011 to 30 September 2013 were based on a provisional income because he had not lodged his tax return with the ATO for those periods. He had lodged his tax returns from 2005 to 2010.
Since January 2013, his sole source of income has been Centrelink benefits.
The husband’s life history.
He was in prison from 2002 to 2005. He was employed for a short time in 2006 and had a work related accident.
He was on workers compensation payments between April 2006 to January 2010 and those payments formed part of his income tax returns for the 2010 tax year.
In 2010, he received a workers compensation lump sum payment of $251,000.
He bought a home where he currently lives, purchased a car and bought some furniture, spending $170,000 on the house, $15,000 on the car and $20,000 on furniture.
He retained the balance of funds to draw down as he needed on a day to day basis. By mid-2013, he had exhausted his funds. He was unable to obtain a Centrelink benefit until 19 January 2014 which is a period of four years from receiving his workers compensation payment. Thus from 2010 to 2014, the only monies he had to support himself was what was left from his payout.
He tells the Court in his affidavit, he did some casual work in the 2011, and 2012 and earned $17,922 in 2011 and $10,429 in 2012. Otherwise he has lived off the remainder of his compensation money and when his Newstart allowance commenced in January 2014. He has not worked since 2013.
He is currently awaiting kidney surgery for a poorly functioning kidney and takes significant pain killers, Endone and Morphine, daily. He produced a letter dated 7 September 2017 to his affidavit that he was placed on the elective surgery waiting list 1 September 2015. That is now two years and still has not had an operation. This complaint is long standing.
He produced another medical report dated 15 October 2015 from the (omitted medical clinic) in relation to his condition. He suffers from consistent and continual urinary tract infection with severe abdominal pain. His infection is controlled, but the pain is not. He takes Endone, Indocid, Norspan, Valium, Voltaren all strong painkillers.
In the tax year, 30 June 2010, he had a tax refund of $4383.61 which was intercepted by the Agency and has been retained by them.
He suffers from bipolar and he is currently on a mental health plan. He takes Epilim daily and he attends the Professional Psychological Services in relation to his mental health as set out in Annexure E to his affidavit.
He is being treated for low mood and motivation, irritability, anxiety, poor sleep, diminished appetite. He has ongoing health issues and clearly a difficult personal history.
He has a residual lack of function in his left arm due to the accident he suffered in 2006 and I accept he has no capacity for work.
Any enforcement of this debt will require him to sell his home where he currently lives. He recently received a disability pension.
The husband tells me in his affidavit that he was unable to file his tax returns for the 2011/2012 year. He could not do them himself which I accept and he owed his tax agent money and so he left it.
He was of the belief that he did not have to file income tax returns for 2013, 2014 or 2015 because he was on Newstart. He believed because he did not have to file tax returns with the ATO, he did not have to file them for child support purposes.
That is wrong at law. However, his belief is not an unreasonable or without any basis. His psychiatrist’s letter tells me that he has managed his mental health from 2015. That he suffers from a bipolar affective disorder with predominant mood episode of mania and depression. His psychiatrist opines that:
It has been a difficult and prolonged course for Mr Holub who experiences ongoing depressive symptoms in spite of being managed on adequate doses of medication. He has had numerous admissions to psychiatric facilities, relapses of bipolar and his kidney pain makes his disability worse and worsens his mood as with the drugs he is taking.
His depression is severe with mild cognitive problems. He cannot concentrate with poor levels of attention and memory lapses. He has ongoing critical anxiety which interferes with his decision-making on a day to day basis. His chronic pain interferes with his sleep. He has become a recluse and this chronic pain is leading him to use high doses of pain medication which maintains his mood symptoms and that itself is a risk factor for relapsing into his bipolar.
The reality is the husband has not worked in any meaningful sense since 2006 when he suffered his injury. He filed his tax returns up to 2010 which included his workers compensation payments and child support was paid accordingly. He received a lump sum payment and then was without income for four years other than $17,929 in 2011 and $10,429 in 2012. He believed he did not have to lodge income tax returns because he was not earning income, a belief that was not unreasonably held however, incorrect at law.
In those circumstances the Registrar could only rely upon his last filed income tax return to determine ongoing child support.
I am satisfied there are special circumstances in this case that satisfy me I ought to grant leave to the husband to go back 7 years and seek a departure order.
I am not persuaded that merely because the Registrar is not now able to deal with a departure application due to the operation of order 98S of the Act[16] that this is a relevant consideration and that I should not grant leave.
[16] Child Support (Assessment) Act 1989, s 98S.
The fact that the court is not so restricted indicates to me that the Registrars inability to make a departure order may not be relevant in these factual circumstances.
The special circumstance that I have considered in the husband’s application for leave under section 111F of the Act [17] to go back no more than seven years in relation to the child support assessments issued from 2008 to date are as follows:
(1)The reality is the husband has not worked meaningfully since 2006.
(2)He suffers from a bipolar condition which has been long-standing and chronic. He suffers from significant pain in kidneys which is long-standing and chronic and he has been on a waiting list to have surgery for over two years.
(3)He had a belief that as he did not have to lodge income tax returns for ATO during the period he need not lodge them for child support purposes. This belief which although misplaced was his belief.
(4)The hardship to the husband, wife and children in granting or not leave will only impact the husband. If I do not grant leave and as he has no capacity to borrow money, he will be required to sell his home to pay the debt. He will likely become homeless.
(5)Granting the husband leave will not render any hardship to the wife and children. The children are now 22 and 21 and there has not been a child support assessment relevant to them for many years. Payment or not of the debt will not affect them at all and nor will it affect the wife as she no longer has a duty to support these adult children.
(6)If I do not grant leave most relevantly the wife will receive a windfall in child support which had his correct income been advised to the Agency at the time she would not have been entitled to receive and which if she receives now will not be used to support the children.
[17] Child Support (Assessment) Act 1989, s 111F.
In those circumstances, I find that there are special reasons why I would grant him leave, to go back to 3 November 2008, being a period of seven years from the date of filing his application for departure, namely, 3 November 2015 to make a departure application from assessed child support.
The next test for me is whether I would grant him leave under 117(2) of the Act[18] to depart from the child support assessments as issued.
[18] Child Support (Assessment) Act 1989, s 117(2).
Section 117(2) is as follows
(1)Where an application is made to a court having jurisdiction under the Act for an order under this Division in relation to a child support in the special circumstances of the case; and
(b) the Court is satisfied:
(i) that one or more of the grounds for department mentioned in subsection (2) exists; 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 grounds for making a departure order are quite numerous and are as follows:
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 person
(ii) special needs of another child or other person
(iii) commitments of the parent necessary to enable the parent to support:
(A) himself or herself
(B) any other child or person
(iv) high costs involved in enabling a parent to spend time with a child
(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 responsibilities of a parent to maintain a resident child
(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 travel; special needs of the child; high child care costs; the child is being cared for or educated or trained in a manner expected by the parents.
(c) that, in the special circumstances of the case, application in relation to the child of the provisions of this Act of administrative assessment would result in an unjust and inequitable determination of the level of financial support to be provided because:
(i) income, earning capacity of the parents
(ia) income, property, financial resources of either parent
(ib) earning capacity of either parent
(ii) because of a payment made or transfer or settlement of property under the Family Law Act;
High cost involved in enabling a parent to care for a child.
It is a three staged approach. I must be satisfied that one of grounds for departure exists, then that it would be just and equitable as regards the child, the carer and/or liable parent to depart and finally that it is otherwise proper to make the order sought.
The only special circumstance that is relevant in this matter is 117(2)(c)[19]:
[19] Child Support (Assessment) Act 1989, s 117(2)(c).
That, in the special circumstances of the case, application in relation to the child support 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 because –
(ia) because of the income, property and financial resources of either parent; and
(ib) because of the earning capacity of either parent.
and the Court may have regard to any other relevant matter.
Do those special circumstances exist? They do and are as follows.
The reality is the husband has had no income since 2006. He has been without income since that time except for 2 periods of work in 2011 and 2012 where he earned some $28,000 in total.
He was self-supporting from January 2010 to January 2014 as a result of his workers compensation payment until he received a Newstart allowance.
He has had significant physical and mental health issues from which he still suffers. He erroneously believed that as he did not need to file a Tax return for ATO purposes he did not need to file one at all even for Child Support purposes.
The reality is he has had no income over the period yet an assessment issued on the basis that he was still earning an income of some $38,000.
The next step is to determine if it is just and equitable in regards to the child, the other parent and or the liable parent and then otherwise proper to make the departure order?
I find it is just and equitable with regard to the children and other parent and the husband to make a departure order.
The children are now 22 and 21. It is many years since child support was a feature of their lives.
The wife would receive a windfall if the departure order is not made and receive child support which on the husband’s actual income she was not entitled to receive and which is not needed to support children.
It would be otherwise proper to make the departure order as the husband simply has no other asset than his home. If the arrears are enforced, his home will have to be sold and he will become yet another homeless man, with no income and with significant mental health and physical issues.
In these circumstances, I find it is just, equitable and otherwise proper to make the departure application sought and as set out in the husband’s orders marked exhibit 1.
I grant the husband leave under section 112 of the Child Support (Assessment) Act 1989 to make an order for departure from child assessments under section 118 of the Act for the period 3 November 2008 to 4 November 2013.
The total amount of child support payable in the period be set as equal to the moneys paid for that period with the effect that no arrears remain payable and no over-payment is created.
I will order that the sum presently held by the Child Support Registrar of $4610.61 be refunded to the applicant for the following.
I have determined that he was not liable to pay child support as assessed at the time the tax cheque was intercepted and his tax refund arose due to a late income tax assessments.
Secondly, there is no longer a child support assessment in force. The children are self-supporting. The mother did not contest the matter and I find it just and otherwise proper that this money is returned to the husband.
I certify that the preceding eighty-three (83) paragraphs are a true copy of the reasons for judgment of Judge Henderson
Date: 3 October 2017
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