Faga and Faga (Child support)

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.