Child Support Registrar and McIntyre
[2017] FCCA 2384
•3 October 2017
FEDERAL CIRCUIT COURT OF AUSTRALIA
| CHILD SUPPORT REGISTRAR & MCINTYRE | [2017] FCCA 2384 |
| Catchwords: CHILD SUPPORT – Leave to bring a Departure application. |
| Legislation: Child Support (Assessment) Act 1989, ss,111, 112, 117 |
| Cases cited: Bauer & Becker [2009] FMCAfam 480 Hacherl & Berrios [2010] FMCAfam 668 |
| Applicant: | CHILD SUPPORT REGISTRAR |
| Respondent: | MR MCINTYRE |
| File Number: | SYC 8415 of 2015 |
| Judgment of: | Judge Henderson |
| Hearing date: | 11 July 2017 |
| Date of Last Submission: | 11 July 2017 |
| Delivered at: | Sydney |
| Delivered on: | 3 October 2017 |
REPRESENTATION
| Counsel for the Applicant: | Mr Gauci |
| Solicitors for the Applicant: | Hunt & Hunt Solicitors |
| Counsel for the Respondent: | In person |
ORDERS
That the assessment issued on 23 February 2015 for the Child Support period from 1 July 2014 to 31 March 2015 be reduced to nil.
The injunction against the husband from dealing with his property made 2 February 2016 continue until such time as the husband pays any debt still owing pursuant to this decision to the Agency.
The Registrar have leave to re-list the issue of enforcing any debt against the husband by giving 14 days’ notice of their intention to relist by approaching my Associate in chambers.
Upon the husband providing satisfactory proof of payment of the debt the injunction made 2 February 2016 be discharged with such application for discharge to be dealt with in chambers.
IT IS NOTED that publication of this judgment under the pseudonym Child Support Registrar & McIntyre is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT SYDNEY |
SYC 8415 of 2015
| CHILD SUPPORT REGISTRAR |
Applicant
And
| MR MCINTYRE |
Respondent
REASONS FOR JUDGMENT
The matter of the Child Support Registrar and Mr McIntyre is an application for enforcement of a child support debt brought by the Child Support Registrar, “the Registrar” by way of an application in a case filed 21 December 2015. The liable parent is Mr McIntyre.
The debt as at 11 July 2017 was $10,575.82 being arrears of $8,583.52 and penalties of $1,992.30.
Mr McIntyre was directed to file documents in answer to the application by 4 March 2016 and the matter was adjourned to 24 May 2016.
Documents in response were not filed by him until 20 May 2016. On 20 May 2016 the matter was fixed for hearing being the enforcement application and Mr McIntyre’s putative application for leave to make a departure application under sections 112 and 111 of the Child Support (Assessment) Act 1989[1].
[1] Child Support (Assessment) Act 1989, ss 111 and 112.
He was to file his application for leave within 60 days of 20 May 2016.
Mr McIntyre filed his application for leave on 28 June 2016 and the matter was fixed for hearing on 6 December 2016.
The matter could not proceed in December 2016 and was ultimately listed for hearing on both applications on 7 July 2017.
The Short Facts
Mr McIntyre and his former wife have two children, [X] born (omitted) 2004 and [Y] born (omitted) 2003. From 1 April 2015, the agency has accepted Mr McIntyre’s child support liability is nil and the mother pays child support to him having regard to his income and the care arrangements for the children.
It is agreed that Mr McIntyre was made redundant on (omitted) 2012 from (employer omitted).
What the husband now seeks by way of order is as follows:
(1)He be granted leave under 111 and 112 of the Child Support (Assessment) Act 1989 to depart from assessments issued for the period 1 December 2012 to the end of 2014;
(2)That the Child Support Agency provide a reconciliation to the husband of what they say his liabilities were and what his payments have been since 2012;
(3)That the enforcement application be dismissed;
(4)That the agency recalculate his liability for the period 1 November 2009 to date, or in lieu of that, that the Court determine his liability for that period;
(5)That if there is found to be a credit of moneys paid by him, Mr McIntyre does not seek that credit be refunded to him;
(6)That any restraints on him from undertaking international travel, making transactions on his bank account or any caveat lodged over his property be discharged.
Order 2 is not an order I can or would make.
Dealing with order 6 first.
There is a restraint on the husband undertaking international travel. He can make application to the agency using their normal administrative processes and seek to lift that ban and this application is not a matter for the Court to deal with.
There is no restraint on him freely accessing his bank account and he is at liberty, and has always been, to so do.
There is no caveat lodged over his property by the Registrar. There is an injunction made by this Court that he not deal with his property until his debt is paid. That matter will be determined at the conclusion of this judgment.
Order 3 would only be entertained if the husband is successful in orders 1 and or 4.
As it transpired, the issue of leave sought in orders 1 and 4 raise interesting legal issues.
The Chronology of Events
It is clear that as at 23 January 2015, the husband was in credit of child support of $10.57.
As at January 2015 the husband had not filed an income tax return since the tax year ended 2012.
The Registrar was notified on 21 February 2015 that the husband had lodged tax return for the tax year ended 2013 and his was $228,675.
The Registrar issued an assessment for the period 1 July 2014 to 31 March 2015 based upon this income and this is the assessment which has created the debt.
On 5 April 2015, the Registrar was notified by the Australian Tax Office that Mr McIntyre had lodged his income tax return for 2013/2014 tax year and his taxable income was $1,910.
On 5 April 2015 the Registrar advised Mr McIntyre of this notification and a new assessment of nil child support was issued.
The Registrar objects to leave being granted for any period prior to July 2014 but does not have a view in relation granting leave post 1 July 2014.
On 28 June 2016 the husband filed an application seeking leave to depart from assessments issued in respect of a day in a child support period that was more than 18 months earlier namely 1 December 2012 to the end of 2014.
I accept that the husband was not made aware until 21 February 2015 that he had a child support debt of $12,242. The child support debt has clearly arisen from the late filing of tax returns by Mr McIntyre for the tax years ended 2013 and 2014.
The representative of the Registrar helpfully set out in his submissions matters relating to the granting of leave under 112 of the Act[2]. That section reads:
[2] Child Support (Assessment) Act 1989, s 112.
In considering whether to grant leave under subsection 112(1), the Court must have regard to;
(a) any responsibility and reason for the delay in
(i) making an application under 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 parties other than the registrar if leave is granted
and the Court may have regard to any other relevant matter.
The decision of Bauer & Becker[3] and McColl & McColl[4] set out the matters the Court must have regard to in determining leave applications.
[3] Bauer & Becker [2009] FMCAfam 80 at 21.
[4] McColl & McColl [2013] FCCA 736 at 21.
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.
An inadequate explanation of delay is not the death knell of an application. Judge Roberts FM, as he then was said in Hacherl & Berrios[5] that:
The equitable principles apply and he who comes to equity must come with clean hands.
[5] Hacherl & Berrios [2010] FMCAfam 668.
The Facts
It is clear that the husband was made aware in 21 February 2015 that he had a child support debt of $12,242 arising from the late filing of his June 2013 tax return which was filed on 15 February 2015.
This debt was increased following the assessments on 28 February and 31 March by some $400.
The husband’s tax refund of $2664.06 was intercepted around 25 February 2015 thereby reducing the debt.
It is clear from reading the registrar’s written submissions, the affidavit of Ms A, filed 28 March 2017, the annexures to the affidavit and the annexures to the case outline, that Mr McIntyre had been informed on a multitude of occasions of his administrative rights in relation to how to go about objecting to the relevant assessments and disputing the debt.
Mr McIntyre objected to the Registrar using his 2012/2013 taxable income to found the assessments and one basis of his objection was that he had been made redundant in October 2012.
That issue and others went before the Administrative Appeals Tribunal on 15 September 2015 and the tribunal disallowed his objection and affirmed the decision made by the Registrar to base assessments for the period 1 July 2014 to 31 March 2015 on his 2013 taxable income in part due to the fact that at that time this was his most recent income based upon the most recently filed tax return.
The Tribunal advised in their judgment at page 4 of their decision under the heading:
Fairness in granting an extension of time as between the applicant and other persons in a similar position.
Paragraph 27:
There may be other ways in which McIntyre could address the perceived inequity in the assessment from 1 July 2014. For instance, he is still currently within the 18 month time frame to make an application for departure under part 6A of the Assessment Act on the ground that the adjusted taxable income used in the assessment does not reflect his income, financial resources and property.
At paragraph 28:
The tribunal finds it would not be fair to Mr McIntyre or to others to grant him an extension of time to seek review of a decision and to embark upon a process which is ultimately costly and fruitless, particularly as there is another avenue in which the issue may be addressed.
That other avenue referred to by the Tribunal is this Court.
The Tribunal’s decision was given on 15 September 2015. Mr McIntyre did not file an objection, or an application seeking leave and/or a departure until June 2016. Mr McIntyre only filed an application in response to the Registrar’s application for enforcement of the debt.
Mr McIntyre gave no reasonable explanation for the delay in filing his application for leave. This is particularly relevant in circumstances where not only had the Tribunal told him what he could do and how to go about doing it, so had the Agency yet he did not avail himself of the administrative option of electing to provide an estimate of his adjustable taxable income for any year post 2013 not take any other formal step available to him.
Mr McIntyre was not only told by the Tribunal on 15 September 2015 to make a departure application, and he failed to do so, he was also invited to lodge a change of assessment application with the Registrar, as he was at that time in September 2015 within time to do so, without seeking the leave of the Court. This last remedy had been outlined to him in a detailed letter sent to him on 5 May 2015 in answer to his complaint about the assessments issued.
He was again informed of this option in correspondence sent to him and dated 11 June 2015, which correspondence is annexed to Ms A’s affidavit. Mr McIntyre was specifically informed of his ability to seek a change of assessment and was also provided with a change of assessment application form by the Registrar. Yet he took no step as advised. Rather he embarked upon a course of correspondence with the agency and waited for the agency to bring an enforcement application. Only then did he make any application.
Mr McIntyre has not provided in his affidavit any answer, any cogent reason for this delay, and this matter is highly relevant to both an application for leave and also for a departure application.
Going back in time to look at what Mr McIntyre was doing in 2012/2013 this being the tax year upon which the assessments he complains of are based.
The taxable income for the tax year ended 2012 was $150,607. Mr McIntyre says it ought to be nil.
However, Mr McIntyre had failed to lodge his income tax returns for two years being and this is the reason his assessments were based upon a 2013 income as it was all the Agency had to rely upon. In any event when he finally lodged his late returns in 2015 his taxable income for the tax year ended 2014 was assessed at $228,000. Ultimately his taxable income for the tax year ended 2014 was reduced to $1904 and has been nil for subsequent years.
This, says Mr McIntyre, is why the Court should allow a departure application. He says that the reality of his income as supported by his late filed tax returns for the period 1 July 2014 to 31 March 2015 was nil and not $228,657.
I accept if I do not grant leave Mr McIntyre will suffer hardship as he had a nil income in the period 1 July 2014 to 31 March 2015. The wife will not suffer hardship if I do not grant leave. The children may, as increasing their father’s debt will impact upon his capacity to provide for the children when they are in his care.
Mr McIntyre gives no cogent reasons for his delay in filing his income tax returns on time, in not filing the departure application within time, and in not availing himself of the administrative processes which he was advised of on at least two occasions post the Tribunals decision on 15 September 2015 to do. Indeed the very forms he needed to complete were provided to him by the Agency at that time.
Mr McIntyre sat on his hands and did nothing until the Registrar took recovery action against him.
Mr McIntyre told me in evidence that he had lodged two income tax returns at the same time for the tax year ended 2013 and 2014 and that the agency should have been notified of his taxable income of $1910 for the tax year ended 2014 at the same time as they were notified of his taxable income for the tax year ended 2013 of $228,675. He says that then the assessment of 23 February 2015 would not have issued.
Mr McIntyre produced no evidence that this was the case, no evidence of the lodgement of the 2 returns on the same date or any other evidence to support his assertion which is different to the facts presented by the Registrar.
I am satisfied that the Registrar took action immediately in 2015 upon notification of his 2013 taxable income of $228,675 on 23 February 2015 and again upon notification of his 2014 taxable income of $1910 on 5 April 2015 and that the Agency adjusted his child support income accordingly on each occasion.
The application for leave was filed on 28 June 2016. 18 months prior to that date is 28 January 2015. The Registrar does not have a position on whether the Court should grant him leave to file a departure application post 1 July 2014.
Leave would need to be granted to Mr McIntyre to file a departure application from 1 July 2014 as this is a period 6 months after the 18 month period.
On these facts I refuse to grant the applicant leave to make a departure application for any period prior to 1 July 2014, however, I will grant him leave to make a departure application post 1 July 2014 due to the hardship upon him and the children in not so doing given his income was nil in the relevant assessment period and his substantial care of the children.
The next issue is should a departure order be made.
Section 117 of the Act[6] is as follows:
A Court may make a departure order
[6] Child Support (Assessment) Act 1989, s 117.
(1)Where: (a) 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 question is should I depart from the Child Support Assessment issued on 23 February 2015 for the period 1 July 2104 to 31 March 2015 and as the husband seek vary the assessment to nil.
I find that the husband has made out his case that I not only make a departure order but that the assessment issued 23 February 2015 be varied to nil for the following.
I find the ground of departure made out is under section 117(2)(c)(ia)[7].
[7] Child Support (Assessment) Act 1989, s 117(2) (c)(ia).
The special circumstance is that the application of the Act[8] in relation to the administrative assessment of child support would result in an unjust and inequitable determination of the level of financial support to be provided by the father due to his income being nil for the relevant child support period and continuing.
[8] Child Support (Assessment) Act 1989.
I so find even though I accept this issue has arisen due to his failure to file income tax returns on time and take action as he was advised so to do within time.
I find it would be just and equitable as regards the children and the father to depart. The children live with their father for 150 nights or so a year and any further financial impost upon the father will only rebound upon the children.
Given that the wife pays the husband child support, I do not see any hardship to the wife in making the proposed departure order and if I did not do so, money to care for the children would go from the father to the mother. The mother earns an income and as she pays child support to the father she clearly can support the children whereas the father’s capacity is very limited.
Further, I am satisfied that the husband had a nil income in the relevant period and even prior to the relevant period and thus, it is otherwise proper to make the departure order sought such that the assessment issued 23 February 2015 for the period 1 July 2014 to 31 March 2015 be reduced to nil.
This decision will result in a change to the current child support debt which will be re-assessed by the Agency. I will retain the injunction against the husband dealing with his property made by order on 2 February 2016 until there- calculated debt is paid.
I will make a self-executing order that upon payment of the debt the injunction is to be discharged. This can be effected by the husband forwarding a letter of acknowledgment of payment of the debt from the Agency to my Chambers with a request to discharge the injunction.
I certify that the preceding seventy-three (73) paragraphs are a true copy of the reasons for judgment of Judge Henderson
Date: 3 October 2017
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