Faga and Faga (Child support) - [2020] AATA 5833

Faga and Faga (Child support) [2020] AATA 5833 (20 November 2020)

DIVISION:Social Services & Child Support Division
REVIEW NUMBER:  2020/MC019394
APPLICANT:  Mr Faga
OTHER PARTIES:  Child Support Registrar
Dr Faga

TRIBUNAL:Member S Brakespeare
DECISION DATE: 20 November 2020
DECISION:

The decision under review is varied so that there is a departure determination in the following terms:

for the period 1 July 2019 to 31 October 2021 Dr Faga’s adjusted taxable income is varied to $160,727;
for the period 21 May 2019 to 17 November 2019 Mr Faga’s adjusted taxable income is varied to $91,345;
for the period 18 November 2019 to 30 November 2021 Mr Faga’s adjusted taxable income is varied to $99,840;
for the period 1 July 2019 to 31 December 2019 the annual rate of child support payable by Mr Faga is increased by $6,500;
for the period 1 January 2020 to 31 December 2020 the annual rate of child support payable by Mr Faga is increased by $6,700;
for the period 1 January 2021 to 31 December 2021 the annual rate of child support payable by Mr Faga is increased by $7,124;
for the period 1 January 2022 to 31 December 2022 the annual rate of child support otherwise payable by Mr Faga is increased by $7,998; and
for the period 1 January 2023 to 31 December 2023 the annual rate of child support payable by Mr Faga is increased by $7,912.

CATCHWORDS

CHILD SUPPORT – departure determination – income, property and financial resources of both parents – legitimate business deductions – a ground for departure established based on the financial resources of both parents – costs of education – manner expected by both parents – decision to depart – decision under review varied

Names used in all published decisions are pseudonyms. Any references appearing in square brackets indicate that information has been omitted from this decision and replaced with generic information so as not to identify involved individuals as required by subsections 16(2AB)-16(2AC) of the Child Support (Registration and Collection) Act 1988.

REASONS FOR DECISION

BACKGROUND

Mr Faga is the parent liable to pay child support to Dr Faga in respect of their two children, [Child 1] who is aged 10 years and [Child 2] who is aged 7.
On 21 May 2019 Mr Faga lodged an application for a change of assessment citing a number of grounds. During the change of assessment process he withdrew all his grounds bar one. The remaining ground was that his liability under the administrative assessment was unjust and inequitable because of the income, property or financial resources of either parent.
The relevant administrative assessment provided that for the child support period 1 February 2019 to 29 June 2019 Mr Faga was required to pay Dr Faga an annual child support amount of $14,726. The assessment was based on an adjusted taxable income for Mr Faga of $101,272, an adjusted taxable income for Dr Faga of $81,065 and an additional amount of $5,064 (in respect of school fees). The…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2020] AATA 5833
Decision Date

CaseChat Overview and Summary

This matter concerned an application for review of a child support objection decision made by the Child Support Registrar. Mr Faga, the liable parent, sought a departure from the administrative assessment of child support payable to Dr Faga, the carer parent, in respect of their two children. Mr Faga’s sole remaining ground for departure was that the administrative assessment was unjust and inequitable due to the income, property, and financial resources of either parent.

The tribunal was required to determine whether a ground existed to depart from the administrative assessment, and if so, whether it was just and equitable and otherwise proper to make a particular departure determination. The primary legal issue was whether the application of the Child Support (Assessment) Act 1989 provisions would result in an unjust and inequitable determination of child support due to the financial circumstances of the parents. This involved examining the adjusted taxable incomes of both parents, particularly considering legitimate business deductions and the proper quantification of income for child support purposes, drawing on case law regarding "special circumstances" and the lifting of corporate veils.

The tribunal found that a ground for departure was established under subparagraph 117(2)(c)(ia) of the Act. This was based on the adjusted taxable income of Dr Faga being determined as approximately $160,727 per annum, after disallowing certain expenses claimed as legitimate business deductions but considered normal costs of living or not directly related to income production. The tribunal also adjusted Mr Faga’s adjusted taxable income to $91,345 for a specific period and $99,840 for a subsequent period, after adding back disallowed expenses and considering his employment income and irregular overtime. The tribunal concluded that the application of the administrative assessment, given these adjusted incomes, would result in an unjust and inequitable determination of financial support.

Consequently, the tribunal varied the decision under review. The departure determination included revised adjusted taxable incomes for both Dr Faga and Mr Faga for specified periods, and an increase in the annual rate of child support payable by Mr Faga for various periods between July 2019 and December 2023.

Orders