Child Support Registrar and Simmons
[2014] FCCA 1245
•18 June 2014
FEDERAL CIRCUIT COURT OF AUSTRALIA
| CHILD SUPPORT REGISTRAR & SIMMONS | [2014] FCCA 1245 |
| Catchwords: CHILD SUPPORT – Enforcement – arrears of child support – where respondent claimed to have sold his interest in real estate – where respondent claimed to have sold his interest in a partnership – where respondent claimed to hold property in trust for his brothers and sisters – no evidence of trust deed – where respondent relied on a purported contract of sale – clear evidence that title to the real estate was not transferred – where respondent has not filed an income tax return since 1995 – no satisfactory explanation for failure to file income tax return. |
| Legislation: Child Support (Assessment) Act 1989 (Cth) s.58 Child Support (Registration and Collection) Act 1988 (Cth) s.116 Real Property Act 1900 (NSW), s.46 |
| Cases cited: Bauer & Becker [2009] FMCAfam 480 Cantrell & Jennings [2009] FMCAfam 229 Child Support Registrar & Rawlings & Anor [2013] FCCA 370 Hacherl & Berrios [2010] FMCAfam 668 McColl & McColl [2013] FCCA 736 |
| Applicant: | CHILD SUPPORT REGISTRAR |
| Respondent: | MR SIMMONS |
| File Number: | SYC 6064 of 2013 |
| Judgment of: | Judge Scarlett |
| Hearing date: | 10 June 2014 |
| Date of Last Submission: | 10 June 2014 |
| Delivered at: | Sydney |
| Delivered on: | 18 June 2014 |
REPRESENTATION
| Counsel for the Applicant: | Ms Fusitu'a |
| Solicitors for the Applicant: | Australian Government Solicitor |
| The Respondent: | In person |
DECLARATION
As at 10 June 2014 the Respondent owes the Applicant the sum of $50,231.43 (child support debt) consisting of $27,489.45 in arrears of child support and $22,741.98 in late payment penalties.
ORDERS
The Respondent is to pay to the Applicant the child support debt of $50,231.43 within 60 days from the date of these Orders.
Until further order of the Court or payment in full of the total debt the following provisions apply:
(a)The Respondent is restrained from selling, assigning, transferring, encumbering or dealing in any way with his interest at Property W in the State of New South Wales, being the whole of the land in Certificate of Title Lot [omitted] in Deposited Plan [omitted] (real property), without the prior written consent of the Applicant.
(b)The Respondent’s interest in the real property is charged in favour of the Applicant for the total debt and the Applicant is at liberty to lodge a caveat over the real property to secure the interest created in this charge.
(c)The Respondent is restrained from assigning, transferring, further encumbering or dealing in any way with his interest in the 1997 Holden [vehicle details omitted] without the prior written consent of the Applicant.
(d)The Respondent’s interest in his personal property is charged in favour of the Applicant for the total debt and the Applicant is at liberty to lodge an encumbrance over the personal property to secure the interest created by this charge.
If the Respondent defaults in making any of the payments ordered to be paid under these Orders or deals with any of the personal property or real property in breach of these Orders, the amount of the total debt outstanding shall be immediately due and payable.
THE COURT NOTES THAT if the Respondent defaults in making any of the payments ordered to be paid under these Orders or deals with any of the personal property or real property in breach 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 Subdivision 25B.2.3 – Enforcement warrants, and/or Subdivision 25B.2.4 – Third Party Debt Notice).
IT IS NOTED that publication of this judgment under the pseudonym Child Support Registrar & Simmons is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT SYDNEY |
SYC 6064 of 2013
| CHILD SUPPORT REGISTRAR |
Applicant
And
| MR SIMMONS |
Respondent
REASONS FOR JUDGMENT
Application
This is an Application by the Child Support Registrar to enforce the payment of arrears of child support in respect of the Respondent’s four children, all of whom are now adults. The Respondent is the father of four children, who were born between [date omitted] 1987 and [date omitted] 1994.
The Child Support Registrar claims that the Respondent owes the sum of $27,489.45 for arrears of child support and $22,741.98 for late payment penalties, making a total of $50,231.43 as at the date of the hearing.
In order to enforce payment of the amount claimed, the Child Support Registrar seeks a restraint on the Respondent’s ability to deal in any way with his interest in a piece of real estate at Property W and a restraint on his ability to deal with a Holden [omitted] motor car.
The Respondent challenges the basis upon which the Registrar has calculated the arrears of child support. He also claims that he no longer has an interest in the property at Property W, having sold it to his brother. Further, he claims that he holds an interest in property only as a trustee for his siblings.
Evidence and Submissions
The Registrar relied on the following:
a)The affidavit of Ms W sworn 10th October 2013;
b)The second affidavit of Ms W sworn 5th March 2014;
c)The affidavit of Paulina Fusitu’a affirmed 27th May 2014;
d)A Certificate under s.116(2) of the Child Support (Registration and Collection Act 1988 (Cth) showing amounts totalling $50,231.43 being due and payable on the day of the hearing, made up of the child support debt of $27,489.45 and penalties of $22,741.98;
e)A Child Support Payer Transaction Statement for the period 17th January 1996 to 10th June 2014;
f)A Chronology;
g)A title search in respect of Lot [omitted] in Deposited Plan [omitted]; and
h)A title search in respect of Lot [omitted] in Deposited Plan [omitted].
The Respondent did not file a Response, but he had always maintained his opposition to the orders sought.
The Respondent relied on the following:
a)His affidavit of 3rd March 2014;
b)His Financial Statement filed on 3rd March 2014; and
c)His affidavit of 29th May 2014.
Ms W set out in her affidavit of 10th October 2013 a detailed history of the matter, commencing with the commencement of the child support liability on 17th January 1996, noting that the liability was collected privately from 17th January 1996 until 1st July of that year, when it was registered for collection. The liability ended on [date omitted] 2012, the day before the Respondent’s youngest child attained the age of 18.
In her affidavit of 5th March 2014, Ms W annexed the results of a search of the records of the Australian Securities and Investment Commission which showed that the Respondent remained a shareholder of a company known as [S] Pty Ltd.
Also annexed to Ms W’s affidavit were copies of a title search against Lot [omitted] in Deposited Plan [omitted], which is the title to the land at Property W, New South Wales. The search showed the Respondent and Mr M to be the registered proprietors as joint tenants in equal shares.
Ms W was cross-examined in some detail by the Respondent. In particular, he challenged the assessments of child support made by the Registrar since 1996 on the basis that they were “made up”. He conceded that he had not filed any taxation return since 1996.
Ms W explained that the Respondent’s assessments of child support had been made under the provisions of s.58 of the Child Support (Assessment) Act 1989 (Cth) in the absence of his having filed any income tax returns over the relevant period.
The Respondent also cross-examined the witness about the perceived failure of the Child Support Registrar to be aware that he had sold his share in the property at Property W to his brother in 2000. Ms W replied that she only knew what she perceived from the computer in front of her.
The affidavit of Paulina Fusitu’a of 27th May 2014 annexed copies of letters written on 2nd April by Liam James, a lawyer acting for the Child Support Registrar, to the Respondent’s siblings, Mr M, Mr D, Ms J, Ms S, Ms J, Ms M and Mr P. In those letters, Mr James informed the recipients that the Child Support Registrar was seeking orders requiring the Respondent to pay the child support debt and that the Registrar may seek orders which may result in the sale of the properties at Property W and Property R.
The recipients of the letters were invited to advise the writer if they intended to attend court on 15th April 2014, the original hearing date.
Ms Fusitu’a also annexed to her affidavit copies of letters which she wrote to those same seven people, advising them of the hearing on 10th June 2014 and informed them that:
Based on the information Mr Simmons[1]has provided, these proposed orders will affect your interest in the properties and, accordingly you may wish to obtain legal advice.[2]
[1] The Respondent
[2] Affidavit of P. Fusitu’a 27.5.2014 Annexure PF-2
Ms Fusitu’a also invited the recipients to advise her if they attended to appear at court on the hearing date.
Ms Fusitu’a was not required for cross-examination.
None of the Respondent’s brothers or sisters attended court or advised the court as to their views about the matter.
The Respondent annexed to his first affidavit copies of various financial documents and a sealed copy of Orders made by Faulks J in the Family Court of Australia at Canberra on 2nd May 1997.
In his second affidavit, of 28th May 2014, the Respondent annexed a copy of a document headed “Record of Sale”, upon which he relied to support his contention that he had disposed of his interest in both the property at Property W and the company [S] Pty Ltd.
As this document is a key part of the Respondent’s case, it is reproduced in full:
RECORD OF SALE
RECEIVED FROM Mr P (THE BUYER) THE SUM OF $43,000.00 AS DEPOSITED TO COMMONWEALTH BANK ACOCUNT[3] No (deleted for reasons of privacy) ON THE NINTH DAY OF AUGUST 2000 AS BEING PAYMENT IN FULL FOR THE PURCHASE OF ALL INTERESTS HELD BY MYSELF, Mr Simmons (THE SELLER)
IN
THE [siblings’ initials omitted] Simmons and Ms M PARTNERSHIP, BEING THE PROPERTY LOCATED AT Property W
AND
[S] PTY LTD
BEING THE PROPERTY LOCATED AT Property R
Signed (date) Signed (date)
THE BUYER WITNESS
Signed (date) Signed (date)
[3] sic
SELLER WITNESS
The document is dated 30/09/2000.
Also forming part of the annexure is a photocopy of a partly torn stub from a deposit slip from the Commonwealth Bank showing that an amount of $43,000.00 was paid into the Respondent’s account (account identification is not reproduced for reasons of privacy). The stub from the deposit slip is dated 9th August 2000.
The Respondent was cross-examined by Ms Fusitu’a. He was also asked some questions by the Bench. It was put to him that the title to the property being Lot [omitted] in Deposited Plan [omitted] being the land at Property W remained in the names of the Respondent and Mr M as joint tenants as evidenced by a title search made on 6th June 2014 and admitted in evidence.
When asked why the title to the Respondent’s interest in the land had not been transferred to the Respondent’s brother Mr P the Respondent referred to the Orders made by Faulks J in the property proceedings between the Respondent and his former wife on 2nd May 1997 as his reason for not doing so.
The relevant order refers to payment by the Respondent to his former wife of a sum of $28,000.00 by way of settlement of property, or rather an enforcement provision should he fail to pay the amount within the specified time:
4.4If he should fail to pay the said sum within the period stipulated the following conditions will apply:
4.4.1He shall do all things as may be necessary to sell his interest in the property at Property W immediately. If a purchaser cannot be found for his interest in that property within a period of thirty (30) days, after the sixty (60) days hereinbefore mentioned then, he shall do such things as may be necessary (including making such applications to a Court if that is required) to cause the sale of his interest, (whether under the Conveyancing Act of New South Wales or otherwise) and from the proceeds of such sale shall discharge the balance of money due pursuant to these orders.
The Respondent explained that the words “or otherwise” were his justification for entering into the document referred to above.
The Respondent also said that he held his interest in the other property on trust for his seven brothers and sisters.
Conclusions
The Respondent’s defence to the Registrar’s claim must fail.
The document headed “Record of Sale”, which is more or less a receipt for a payment of $43,000.00, purports to be a contract of sale, but no stamp duty has been paid on the document, if it is a contract, and the Respondent has never signed a Transfer of his interest in the land, as required by s.46 of the Real Property Act 1900 (NSW).
The Respondent’s justification for entering into this dubious document is the use of the words “or otherwise” in Order 4.4.1 of the Orders made by the Family Court, but it is quite obvious that the Order does not in any way support the Respondent’s contention that the Family Court authorised this transaction.
What can be established is that he received the sum of $43,000.00, presumably from his brother, on 9th August 2000, several weeks prior to their execution of the document.
It is patently obvious that the Respondent has not transferred his interest in the real property.
Similarly, the Respondent’s contention that he holds the property on trust for his brothers and sisters is entirely unsupported by any evidence. It is noteworthy that the solicitors acting for the Child Support Registrar wrote to the Respondent’s brothers and sisters on two occasions, making it quite clear that the litigation was taking place and advising them that the Orders sought by the Registrar might affect any interest that any of the parties may have. No party contacted the Court or the Registrar’s solicitors.
I am not satisfied that there is any evidence at all that the Respondent holds the property on trust for his brothers and sisters.
The Respondent challenged the basis upon which the Registrar had calculated his child support liability. The amounts are set out in the Child Support Payer Transaction Statement tendered in evidence by the solicitor for the Registrar.
There is also in evidence a Certificate under sub-section 116(2) of the Child Support (Registration and Collection) Act, showing an amount of $50,231.43 as being due and payable by the Respondent, made up of a child support debt of $27,498.45 and penalties for late payment of $22,741.98. Sub-section 116(2) provides that:
The mere production of a certificate in writing signed by the Registrar, certifying that an amount specified in the certificate was, on the date of the certificate, due and payable by a specified person to the Commonwealth in relation to a specified registrable maintenance liability or under a specified provision of Part IV, is prima facie evidence of the matters stated in the certificate.
The Respondent has been unable to challenge the amount specified in the certificate under s.116(2). As Ms W said in her evidence, the Registrar had made a determination under s.58 of the Child Support (Assessment)Act where the Respondent had not submitted an income tax return. It was her evidence that the Registrar’s records showed that the Respondent had not submitted an income tax return since 2000. The Respondent himself said that he had last filed an income tax return in 1995.
The Respondent was asked by the Court to explain why he had not filed an income tax return for the past 18 years. He said that he had been “on the dole” for seven years and had been living in Canberra for some period of time. This is an entirely unsatisfactory explanation.
In Child Support Registrar & Rawlings & Anor[4] I held at [73]:
It should 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 tax 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.[5]
[4] [2013] FCCA 370
[5] [2013] FCCA 370 at [73]
There is a clear line of authority in this Court, in the decisions of Cantrell & Jennings[6], Bauer & Becker[7], Hacherl & Berrios[8], Child Support Registrar & Rawlings & Anor[9] and McColl & McColl[10] that delay in lodging income tax returns or, indeed, failure to lodge income tax returns, is a relevant factor to be considered.
[6] [2009] FMCAfam 229
[7] [2009] FMCAfam 480
[8] [2010] FMCAfam 668
[9] [2013] FCCA 370
[10] [2013] FCCA 736
The Respondent has failed to lodge an income tax return for 18 years. He seems to be oblivious to the need for him to comply with this obligation. He can hardly be heard to complain that the Registrar has made an assessment under s.58 of the Child Support (Assessment) Act.
The fact is, that due to the Respondent’s consistent failure to lodge income tax returns, the Registrar has applied the provisions of s.58 to make an assessment. Section 58 allows the Registrar to make a determination where a parent’s taxable income for the last relevant year of income in relation to the period has not been assessed under an Income Tax Assessment Act or the Registrar is unable to ascertain whether it has or not. It is hardly surprising that the Registrar utilised this power in the circumstances.
It follows that the Respondent has been entirely unsuccessful and the Registrar’s application must succeed.
I propose to make the Orders sought. I will consider the question of costs if the Registrar chooses to make an application.
I certify that the preceding forty-six (46) paragraphs are a true copy of the reasons for judgment of Judge Scarlett
Associate:
Date: 18 June 2014
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