Child Support Registrar and Leigh
[2008] FMCAfam 1424
•14 November 2008
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| CHILD SUPPORT REGISTRAR & LEIGH | [2008] FMCAfam 1424 |
| CHILD SUPPORT – Enforcement – Child Support arrears and penalties – order for sale of real estate – costs. |
| Child Support (Registration and Collection) Act 1988 (Cth) s.116 Child Support (Assessment) Act 1989 (Cth) ss.3, 4 Partition Act 1869 (Tas) Family Law Act 1975 (Cth) s.118 Federal Magistrates Court Rules 2001 (Cth) Schedule 1 |
| Hendy v Deputy Child Support Registrar (2001) 27 FamLR 641 |
| Applicant: | CHILD SUPPORT REGISTRAR |
| Respondent: | MR LEIGH |
| File Number: | HBC 431 of 2007 |
| Judgment of: | Roberts FM |
| Hearing date: | 14 November 2008 |
| Date of Last Submission: | 14 November 2008 |
| Delivered at: | Launceston |
| Delivered on: | 14 November 2008 |
REPRESENTATION
| Counsel for the Applicant: | Mr Boughton |
| Solicitors for the Applicant: | Australian Government Solicitor |
| The Respondent was not represented by a lawyer. |
ORDERS
That it is declared that as at 14 November 2008 the respondent MR LEIGH owes the applicant CHILD SUPPORT REGISTRAR on behalf of the Commonwealth the sum of $38,045.08 (“the Child Support debt”) consisting of $31,306.17 in arrears of Child Support and $6,738.91 in late payment penalties.
That on or before the close of business on 12 December 2008 the respondent must pay to the applicant the sum of $47,476.08 (“the total debt”) comprising as follows:
(a)The Child Support debt declared above;
(b)The sum of $1,125.00 being costs ordered to be paid pursuant to an Order of this Court on 18 September 2008;
(c)The sum of $8,306.00 being costs of and incidental to the Enforcement Summons issued 28 March 2007.
That the respondent is hereby restrained from dealing with in any way with his interest in the real property situated Property D in Tasmania more particularly described in Certificate of Title Volume [1] Folio [1] and Volume [2] Folio [1] (“the D property”) unless and until the total debt is paid.
That in the event that the respondent defaults in paying the total debt in compliance with these Orders on or before 12 December 2008 the Official Receiver of the Bankruptcy District of Victoria and Tasmania (“the Trustee”) is hereby appointed Trustee for the sale of the D property pursuant to Order 33 Rule 7 of the Family Law Rules 1984 (which applies by virtue of Rule 25B.05 and Schedule 5 of the Federal Magistrate Court Rules 2001).
That the respondent shall upon the request of the Trustee sign all documents and provide all relevant Certificates of Title in his possession custody or control and do all things necessary to transfer his interest in the D property to the Trustee.
That if the respondent does not comply with the preceding Order hereof a Registrar of the Federal Magistrates Court of Australia shall be empowered pursuant to Section 106A of the Family Law Act 1975 to sign all documents and do all things necessary to transfer the respondent’s interest in the D property to the Trustee.
That if the respondent defaults on payment under these orders he is to do all within his power to give the Trustee vacant possession of the
D property within 30 days of such default.
That the Trustee shall as soon as reasonably practicable sell the respondent’s legal and equitable interest in the D property for the best price that can be reasonably obtained and shall apply the proceeds of sale in the following order:
(a)firstly, in payment in payment of costs, commissions and expenses of the said transfer and sale including all costs incurred by the Trustee or his servants or agents;
(b)secondly, in discharging any prior encumbrance on the titles to the D property;
(c)thirdly, in payment of all such sums that are then outstanding to the Commonwealth pursuant to any Order of this Court in respect the total debt; and
(d)fourthly, in payment of any residue to the respondent.
That the applicant has liberty to apply in the event that the proceeds of sale of the D property are insufficient to discharge the total debt and any costs otherwise incurred as a result of these Orders.
That until further Order or until the total debt is paid in full the respondent’s interest in the D property remains charged in favour of the applicant for the full amount owing and the applicant is at liberty to retain any existing Caveat secured over the title to that property.
IT IS NOTED that publication of this judgment under the pseudonym Child Support Registrar & Leigh is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT LAUNCESTON |
HBC 431 of 2007
| CHILD SUPPORT REGISTRAR |
Applicant
And
| MR LEIGH |
Respondent
REASONS FOR JUDGMENT
The Enforcement Summons
The matter before the court is an Enforcement Summons, by which the Child Support Registrar is seeking payment of an unpaid child support liability in relation to two children; [X], born in 1998; and [Y], born in May 2001 (“the children”).
The Enforcement Summons has had a long and sorry history in this court. It was filed on 28 March 2007 and supported with an affidavit by Ms H, who is an employee of the Child Support Agency. She has filed two further affidavits since then and the latest affidavit was filed on 4 November 2008.
The matter has been set down and adjourned on a number of occasions. It was set down for final hearing today. Earlier today Mr Leigh made an application for an adjournment which I have refused and I do not repeat my reasons for that refusal.
There are a number of important documents before me. The first one to mention is Exhibit “CSR2”, being a certificate under subsection (2) of section 116 of the Child Support (Registration and Collection) Act 1988 showing that, as at yesterday, the unpaid amount owing to the Commonwealth (Child Support Agency) was $38,045.08. That is made up of a child support debt for the children of $31,306.17 and penalties of $6,738.91.
That document pursuant to section 116(2) is prima facie evidence of the matters stated in the certificate and I have no evidence before me that displaces the evidentiary value of the certificate. I accept that those are the sums owed.
Those figures have changed over time for a number of reasons. The two basic reasons, as were mentioned in evidence today, are that:
a)child support assessments change for one reason or another, for example when the parties take the matter back to the Child Support Agency to get a decision from a case officer, or when a tax return is filed; and
b)assessments change if nothing is paid because the balance increases.
How the balance has increased in this matter is set out in another important document that is before me, that being the Child Support Payer Transaction Statement. The payer in that transaction statement is Mr Leigh, the respondent to the Enforcement Summons.
That statement refers to other children. However, on about the seventh page, as at 21 June 2002 the liability for the children that are the subject of these proceedings went immediately to $880.39.
Ms H, who was cross-examined in relation to her affidavits, was questioned about how that arose. She gave evidence, which I accept, as follows:
·On 20 June 2002, the children’s mother, Ms G, asked the Child Support Agency to collect child support.
·Prior to that, it was being collected privately.
·Ms G indicated quite clearly to the Child Support Agency that there were arrears. However, the Child Support Agency was only able to collect three months’ arrears, thereby explaining the sum of $880.39.
The transaction statement goes on from that entry on 21 June 2002 right through to a balance as at 13 November 2008. The last entry is 31 October 2008.
The simple fact is that not one cent in child support has been paid since 21 June 2002, and as I have already said, I accept the calculation of the child support by the agency.
A further variation in relation to the amount has come about as a result of the respondent lodging tax returns for six or seven years. They were only lodged in September, and on 17 September 2008 a number of adjustments were made. Most were adjustments upwards, although two of them gave him some credit. As I have said, the result is that he now owes more than $31,000 in child support and nearly $7,000 in penalties, making the total of $38,045.08.
Mr Leigh has said that he needs to get his tax returns re-done because of some mistakes. That was one of the reasons why he sought an adjournment this morning, which I did not allow. In my view if he does get those tax returns re-done, and there is an adjustment in his favour, to put it bluntly, it will all come out in the wash because his liability for child support for these two children will continue for some time yet. At this stage he has not had that done, and it remains to be seen whether that will occur.
The orders sought by the Child Support Registrar are in a sense draconian, in that they are seeking to sell up his assets sufficiently to pay what is owed.
The respondent has personal assets in the form of two cars and tools of trade, all of which on his estimate do not appear to amount to very much. He has a Ford Falcon and Mercedes that he thought would not be worth very much at all. He says that the Falcon is 13 years old and the Mercedes is a 1984 model. He has a 25-year-old trailer and his tools of trade are worth $3,000 to $4,000. He says that he may have $500 worth of building materials lying around.
He does not have any shares or superannuation and, according to him, his furniture is worth approximately $500.
I do not see much point in making the sort of orders that are sought by the Child Support Registrar in relation to his personal assets. That is because I suspect that the costs that would be incurred by selling any of those assets might far exceed their value.
What is important, however, is that he owns real estate. It is comprised in three titles, but is essentially two properties; one at D and one at S.
The property at S is a property that he owns as a tenant in common in equal shares with a Mr L, so he is in essence a half owner of that property. He lives there full-time and Mr L comes and goes as he chooses. It was a holiday home or, to use the Tasmanian term, “a shack”, which can vary between being a mansion and literally being a shack.
The respondent he gave his view of what he thought the property was worth and there is probably an equity of about $90,000. The complication is that he does not have a right to sell the property as things stand at the moment; that is not without taking action under the Partition Act 1869 (Tas), or something similar, as a person who is a half owner of the property.
Under the Partition Act a person who has a half interest or more can seek a sale of the property. That would however have an effect on
Mr L who is the other half owner, and I suspect he would not be wildly happy about that property being sold.
However, the property in D is different. Although not entirely in
Mr Leigh's name, I am satisfied that he is the legal owner of one of the titles, and the legal and equitable owner of the other. What I mean by that is that he has a legal interest in the latter title as a joint tenant according to the search result of the title, and he is the only owner of the former title. The two particular titles are:
a)Certificate of Title Volume [2], which he owns jointly with his former wife, Ms L, and
b)Certificate of Title Volume [1], of which he is the sole legal owner.
As I understood the respondent’s evidence, he believes that there is one tiny piece of that land, being about 10 square metres, which is the title that has not been transferred to him as it should have been pursuant to a property settlement approximately 20 years ago.
There is no doubt in my mind that, if Ms L should have transferred it to him 20 years ago, he owns it in equity and he would not have great difficulty having it transferred to him because he is entitled to have it so transferred. It therefore seems to me that he is able to sell that property without much complication.
I did not ask, so I do not know whether Ms L is still alive, but if she is, it would not be hard to get her signature on the transfer. Further, I would have thought that it would not be hard to find details of the property settlement which Mr Leigh said went through the Family Court of Australia about 20 years ago. He might not have the records, but I am sure that they could be found in the Family Court archives. Consequently, it seems to me that that is a property that is available to be sold.
As I have said, it is fairly draconian to order that a property be sold, and in my view that should only be done if a respondent has shown a consistent failure to pay his or her child support obligations.
It seems to me that all the evidence points to a consistent failure by
Mr Leigh to meet child support obligations. As I indicated earlier the liability started in June 2002. Shortly thereafter Mr Leigh would have received notification that he owed a child support debt.
It would appear from annexures to Ms Hogg's latest affidavit, that the respondent been involved in variations of assessment where there was a change of assessment decision, so he has been involved in disputes in relation to the amount owed before the Child Support Agency.
He has not, as far as I am aware, ever initiated an application before this Court or the Family Court of Australia seeking any sort of departure order. Those procedures would have been available to him had he gone through all the correct procedures. He has not done that.
He claims that his reason for not paying child support was not that he was saying he was not the father; he just could not be sure that he was the father. He should have done something about that back in 2002 if that is what he thought the situation was. No such application was made.
It was only after the Enforcement Summons was issued that Mr Leigh sought to have DNA testing. That DNA testing has resolved the issue. He is the father of the two subject children.
Continuing with what I have said about him consistently failing to meet his child support obligations; while he might have had a concern about whether he was the father or not, he should have known there was at least a chance that he was the father and that that could be resolved by DNA testing (as was done in March this year).
He has had sums of money come through his hands which would have enabled him to put money aside if he thought that there was a possibility that some child support should be paid:
·he sold three properties in the last four years;
·he borrowed $20,000 from his home loan account;
·he got a payout of $27,000; and
·he got a further payout just recently of $33,500.
He says he used the $33,500 to pay his solicitor $1,200, his accountant $9,000, and pay $8,000 back to Centrelink. That still left a reasonably significant amount which he could have put aside for child support.
He says that he received that money in March. He did not pay his accountant until May. One has to query why he then took two months to pay his accountant to start doing his tax returns.
That leads me to the issue of delay. I am satisfied that Mr Leigh has done everything he can to delay this matter. He has been quite successful at it, because the matter has been in this court since March of 2007.
He says he has only ever made one application to adjourn. I do not accept that. Applications have been made on his behalf for adjournments. Agreements have been reached between his former solicitor and the Child Support Agency for adjournments. In the main those adjournments have suited him, so that he could file his tax returns, but he still did not file his tax returns within a number of deadlines that he was given.
Then, when he did file those returns, they resulted in an overall increase in the amount of child support that has to be paid and he now says the amount owing is wrong. As I have said, that will come out in the wash at some stage later if indeed it is wrong. That is something that can be labelled “watch this space”.
As far as I am concerned the respondent, Mr Leigh, has made it abundantly plain that he has not really wanted to pay child support for these two children, and yet at the same time he says he has been quite happy to pay child support for his other children. That is not the way the law works. The Child Support legislation is designed to ensure that people pay child support and generally provide adequately for all of their children[1]. It seems to me that for some considerable time, right back to June 2002, the mother of these two children has had to support them entirely without assistance from Mr Leigh.
[1] See sections 3 and 4 of the Child Support (Assessment) Act 1989
It is for those reasons that I come to the conclusion that Mr Leigh should be required to pay the amount owing within a relatively short time frame. I note that the Child Support Registrar suggests that that time frame should be on or before 30 November. That is a particularly short time frame. I think it should be slightly longer than that, but not very much longer. It should be paid by 12 December, which gives him an additional two weeks over and above that sought by the Child Support Registrar.
What is owed, including the child support penalties payable to the Child Support Agency and $1,125 in costs already ordered should come from the sale of the D property.
Costs
I now turn to the question of the costs of the application generally and whether they should come out of the sale. Costs are determined under section 117 of the Family Law Act 1975.
I must consider the financial circumstances of the parties. One of the parties is the Child Support Registrar and Mr Leigh is the other party. It does seem to me that the Commonwealth Government is somewhat better off than Mr Leigh. However, I hear what Mr Boughton says in relation to the decision in Hendy[2]; that really this ought to be looked at more as a civil proceeding than as a Family Law proceeding. However I do need to look at the other factors in section 117(2A).
[2] Hendy v. Deputy Child Support Registrar (2001) 27 FamLR 641
As I said the first is the financial circumstances. The financial circumstances of the Commonwealth are obviously considerably greater than that of Mr Leigh. However, thanks to the world financial crisis, I do not imagine that even they are as good as they were a few weeks ago, but still the Commonwealth is better off than Mr Leigh.
Mr Leigh's financial circumstances are such that he has an asset which is not earning him any income because the tenant is not paying anything and it has an equity that should cover the debt that he owes, so it seems to me that that is where any costs order could come from.
Another factor that I need to take into account is the success or otherwise in the proceedings in relation to the child support payable. Mr Leigh has been wholly unsuccessful in opposing the matter.
I need also to consider his conduct in relation to the proceedings.
I have already alluded to that, but in my view Mr Leigh has delayed wherever possible. He quite clearly avoided service so that I had to make an order that required him to be given notice of the proceedings by text message. He says he came along as soon as he got that text message. Of course he did. He knew that he had been told in that text message, as I recall, that the Court would proceed without him if he did not, or he might be arrested. So I do not think he had any choice but to come along after he received that text message. He certainly made it difficult for the Child Support Agency to find him and serve him with the summons.
He has delayed consistently along the way and he is, in my view, responsible for substantial increases in costs that have been entirely unnecessary, including an hour and a half or more in relation to his application for an adjournment today.
Mr Boughton has set out the costs sought on behalf of the Child Support Registrar. For the record, I will make the document that he handed up Exhibit “CSR4”. The costs are in accordance with Schedule 1 of the Federal Magistrates Court Rules 2001 and I find that they are all acceptable. Costs payable will be a total of $8,306.
I certify that the preceding forty-nine (49) paragraphs are a true copy of the reasons for judgment of Roberts FM
Associate:
Date: