Cranston and Cranston
[2004] FMCAfam 210
•29 April 2004
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| CRANSTON & CRANSTON | [2004] FMCAfam 210 |
| CHILD SUPPORT – Application to vary CSA assessment – where applicant father changed employment due to health concerns – where applicant father now earns a significantly lower income – whether it is appropriate for the Court having regard to s.117 CSA Act to reduce the child support assessment income. |
Child Support (Assessment) Act1989 (Cth) s.117
Federal Magistrates Court Rules 2001
Savery v Savery (1990) FLC 92-131
In the marriage of Gyselman (1992) 50 FLR 219
| Applicant: | CRAIG JOHN CRANSTON |
| Respondent: | TONI MARIE CRANSTON |
| File No: | PAM4908 of 2003 |
| Delivered on: | 29 April 2004 |
| Delivered at: | Parramatta |
| Hearing date: | 29 April 2004 |
| Judgment of: | Raphael FM |
REPRESENTATION
| Counsel for the Applicant: | Mr Hedman |
| Solicitors for the Applicant: | King Cain |
| For the Respondent: | No appearance |
ORDERS
The applicant’s child support assessment income for the period
15 April 2002 to 31March 2003 be reduced to $38,500.The applicant’s child support assessment for the period 31 March 2003 to 30 June 2005 be based on an income of $38,500 per annum, after which time it is to be reassessed by the CSA.
Respondent to pay the applicant’s costs incurred for carrying out substituted service, assessed in the sum of $400 pursuant to Part 21 Rule 21.02(2)(a) of the Federal Magistrates Court Rules.
The Child Support Agency to recalculate the applicant’s arrears on the above basis and adjust the deductions being made from his employment.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT PARRAMATTA |
PAM4908 of 2003
| CRAIG JOHN CRANSTON |
Applicant
And
| TONI MARIE CRANSTON |
Respondent
REASONS FOR JUDGMENT
Proceedings
These proceedings relate to child support. The applicant husband seeks orders as follows:
(a)to vary the child support income amount as determined in the Child Support Agency decision dated 11 August 2002.
(b)that the Court make a provision as permitted by the Child Support (Assessment) Regulation 9 that the child support income amount of $55,848 be varied to reflect his taxable income from year to year.
(c)the Court stay the operation of the Child Support (Assessment) Act pending a determination of this application.
The respondent wife has not filed an answer. Neither has she filed any affidavits.
The Child Support Assessments
Since July 1999 the parties had a child support agreement registered with the Agency. Under that agreement the father was required to pay $105.92 per week for each child for the period 1 June 2001 to 14 April 2002. The agreement was written in terms that it would end when the father left his then current employer. The father accepted a voluntary redundancy on 14 April 2002 from the employer named in the agreement. Following from that event, the agreement ended and the child support period commenced.
The father was assessed to pay child support for the period 15 April 2002 to 31 March 2003 on an income of $88,171 at the annual rate of $20,636. Immediately prior to that, under the agreement, he paid $11,054.
The father sought review of the assessment of the Child Support Agency by way of an application dated 3 June 2002. On 11 August 2002 the officer of the Agency determined to change the father's child support assessment so that for the period 15 April 2002 to 31 March 2003 his child support income was deemed to be $55,848.
Background
The parties were married on 25 November 1989. The two children, both girls, were born on 16 September 1991, they are twins. The parties separated on 1 October 1997.
At all relevant times the father was employed by a pet food company known as Friskies, a subsidiary of Nestle. He worked on a varying shift between night and day. During the financial year ending 30 June 2001 the father earned approximately $88,171 as a result of extensive overtime being required.
The father found shift work to be detrimental to his health. He had difficulty sleeping. He found that he was unable to concentrate at work where he operated as a raw material tester. He visited his doctor approximately six times commencing on 9 March 1998 up until
27 March 2002. There is a letter annexed to his affidavit from the Westpoint Christian Medical Centre signed by Dr Eric Tran confirming that the father had a history of insomnia, tiredness and reduced ability to cope related to his shift work. The letter notes that the doctor who the father saw, Dr Pulley, had a lengthy discussion with him and one of the options suggested was for the father to change his job in order to avoid chronic insomnia and its subsequent detrimental affects on his health and life.
The father took the advice of the doctor. It happened that at that time his company was going through a reorganisation due to modernisation of its plant. Some redundancies were being offered. The father believed that if he did not take advantage of this offer it was unlikely that another one would come up soon. The factory was large and successful. The redundancies were due to the introduction of new machinery. He took redundancy and received a lump sum of approximately $26,000.
When the father took redundancy he did so on the basis that he had been offered a position with an acquaintance of his who ran a company known as Narellan Pools. The father intended to retrain as a pool installer. It was proposed that he would commence work in May 2002 but this did not eventuate, the reason being that Narellan Pools was having a common difficulty at the time in obtaining insurance under the Homeowner's Warranty Insurance Scheme. Eventually insurance was obtained and Mr Buxworth who is the proprietor of the business, was true to his word and employed the father. The father has remained employed with Narellan Pools and is earning approximately $27,000 per annum.
The father has maintained some payments of child support at all times.
The law
The provisions of s.117 of the Child Support (Assessment) Act empower a Court to make an order for departure from administrative assessment in special circumstances.
Section 117(i) provides as follows:
“(i)that in the special circumstances of the case one or more of the grounds for departure outlined in section 117(2) exist before a Court can make an order for departure;
(ii)that under section 117(1)(b)(2) it would be just and equitable, as regards the child, the carer entitled to the support and the liable parent; and
(iii)that it would be otherwise proper to make a particular departure order.
If these three conditions are satisfied then the Court should make the departure order sought.
In Savery v Savery (1990) FLC 92-131 Kay J said that "special circumstances" where "facts peculiar to the particular case which set it apart from all other cases."
In the marriage of Gyselman (1992) 50 FLR 219 at 225, the Full Court of the Family Court said as follows of the phrase "special circumstances":
"Whilst it is not possible to find with precision the meaning of that term, as a generality it is intended to emphasise that the facts of the case must establish something that is special or out of the ordinary. That is, the intention of the legislature is that the Court will not interfere with the administrative formula result in the ordinary run of cases."
The grounds for departure
Section 117(2) of the Act sets out the various grounds for departure. After considering these various bases for departure and whether or not in the special circumstances of the case it is appropriate for a departure order to be made, the Court must then consider s.117(4) of the Act which deals with the circumstances in which it is just and equitable to make the departure order sought.
Section 117(4) of the Act reads as follows:
"117(4) In determining whether it would be just and equitable as regards the child, the carer entitled to child support and the liable parent to make a particular order under this Division, the Court must have regard to:
- the nature of the duty of a parent to maintain a child (as stated in section 3); and
- the proper needs of the child; and
- the income earning capacity, property and financial resources of the child; and
- the income earning capacity, property and financial resources of each parent who is a party to the proceedings; and
- the commitments of each parent who is a party to the proceeding that are necessary to enable the parent to support:
himself or herself; or
any other child or another person that the person has a duty to maintain; and
- direct and indirect costs incurred by the carer entitled to child support and providing care for the child; and
- any hardship that would be caused:
to:
the child; or
the carer entitled to child support;
by the making of, or the refusal to make, the order; and to:
the liable parent; or
any other child or another person that the liable parent has a duty to support;
by the making of, or the refusal to make, the order."
Finally, it is necessary for the Court to consider s.117(5) and determine whether or not it is proper to make the departure order.
In Gyselman (supra) the Full Court of the Family Court said at page 240 as follows:
"As we have already indicated, the exercise under section 117 involves three steps. The first, which we have already examined, is whether one or more of the grounds in subsection 2 has been made out. The legislation then requires the Court to consider whether any proposed order is "just and equitable" and "otherwise proper".
It is clear therefore that each of these three steps must be addressed by the Court as a separate issue, namely:
(a)whether one or more of the grounds for departure in s.117 is established; if so:
(b) whether it is just and equitable within the meaning of s.117(4) to make a particular order;
(c)whether it is otherwise proper within the meaning of s.117(5) to make a particular order.
The grounds for departure upon which the applicant basis his claim are found at s.117(2)(c)(i) because of the income, earning capacity, property and financial resources of either parent or the child.
The applicant's evidence
The father gave evidence. He relied on an affidavit sworn 7 November 2003, a financial statement sworn on 7 November 2003 and the further affidavit sworn on 8 April 2004. He also gave oral evidence and was the subject of questioning from myself. I took the view that as the respondent mother was not here, she having sent a letter to the Court stating that she could not afford to attend from her current place of residence in Bundaberg, I should be particularly satisfied of matters relating to the father's earnings and ability to earn.
The matters to which the father deposed where those contained in the introduction to these reasons. I was also told that his income of approximately $55,848 per annum upon which the notice of decision had been based contained a 30 per cent shift work loading. Mr Hedman, who ably appeared on behalf of the father, advised me that this represented a non-shift work gross pay of $38,500 per annum. The father confirmed to me that he felt that he would have become ill if he had stayed much longer at the pet food factory and this could have involved him going on to sickness benefits.
The father informed me that he was being paid at a very low base rate at the moment because he was learning the pool installation business but that he had been promised a wage rise which he hoped would be forthcoming within the reasonably near future. This rise would be likely to take his wage somewhere towards the $38,500 he could have expected in a factory job that did not involve shift work. He told me that he took the job with the pool company because he felt he needed a day job for health reasons and it had nothing whatsoever to do with attempting to reduce his income for the purposes of reducing his child support obligations.
The father's financial position at the moment is dire. He tells me that out of gross earnings of approximately $520 per week the Child Support Agency are taking $250 per week by way of child support, he pays about $90 a week in tax and he had a mortgage repayment of $200 per week. It does not take Mr Micawber to work out that this will lead shortly to bankruptcy. Luckily the father is being assisted by his own father, but that is not a relevant matter for the purposes of these proceedings.
Evidence of the respondent
The respondent did not appear and did not give evidence. She did not file any affidavits.
Findings of fact
I accept the evidence of the father. I saw him in the witness box and I have no reason to believe that he is anything other but a truthful witness. I accept that he felt that he was going to be obliged to change his employment away from shift work and that he took advantage of a redundancy offer that was being made by the company. I accept that when he did so he believed that he was going to be offered employment by Narellan Pools and that the circumstances in which that employment did not occur for approximately six months were out of his control and were understandable in the context of the time. I accept that the applicant has no wish to take steps to avoid his child support obligations. I accept that the applicant is currently earning approximately $27,000 per annum and that after tax, child support and mortgage repayments he is living on the charity of his own father. On the other hand, I accept that he has a higher earning capacity, being an earning capacity related to work of a similar type to that which he was carrying out previously in a factory on a day shift only. I find that on that basis his earning capacity is approximately $38,500 per annum.
Application of the law to these facts
The first point I must consider is whether there are special circumstances in this case. I find that there are. I find that the assessment by the Child Support Agency on a figure which required the applicant to undertake shift work was inappropriate having regard to the medical evidence that was available.
I am also satisfied that the ground set out in s.117(2)(c)(i) is made out. The findings which I have made indicate that the father has an earning capacity which is less than that for which he was assessed.
The application seeks a departure from 15 April 2002 to 31 March 2003 when the applicant was assessed on a child support income of $55,848. I would make such a departure and order that the child support assessment income for that period be reduced to $38,500 per annum.
The applicant also seeks an order that the assessment for the period following on from 31 March 2003 be based upon his actual income from year to year. I am not prepared to make that departure because, as I have said, I believe the applicant father has an earning capacity higher than that which he is currently receiving. I would propose to make an order that the applicant's child support assessment be based upon an income of $38,500 per annum from 31 March 2003 until 30 June 2005 and thereafter be reassessed.
I am satisfied that it will be just and equitable as regards the children, the carer entitled to the support and the liable parent to make a variation by way of departure from the decision of the CSA in the form that I have identified. I am also satisfied that it would be proper to make this departure order in circumstances where the current order is based upon figures which I do not believe represent the true situation or a situation which a reasonable officer would assess if he had the information currently before me.
I do not believe that this is a case in which an order for costs should be made against the respondent mother save and except in relation to certain applications that were necessary to be made by the father for substituted service. This involved the preparation of affidavits and applications to the Court. Parties should not have to go to the trouble of making these applications and if they are required to do so then the party who is at fault should bear the responsibility. I assess the costs involved pursuant to Part 21, Rule 21.02(2)(a) of the Federal Magistrates Court Rules in the sum of $400.
I certify that the preceding thirty-three (33) paragraphs are a true copy of the reasons for judgment of Raphael FM
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