FENBERG & FENBERG
[2011] FMCAfam 17
•18 January 2011
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| FENBERG & FENBERG | [2011] FMCAfam 17 |
| CHILD SUPPORT – Termination of child support agreement made in March 2003 – consideration of significant change in circumstances of one or both of the parties to the agreement – consideration of significant change in respect of the children the subject of the agreement – credit of each of the parties – financial circumstances of each of the parties. |
| Child Support (Assessment) Act1989 (Cth), ss.74(1)(b), 80C, 80E, 80F, 80G, 136 |
| Applicant: | MR FENBERG |
| First Respondent: | MS FENBERG |
| File Number: | NCC 1881 of 2008 |
| Judgment of: | Coakes FM |
| Hearing dates: | 24 & 25 November 2009 |
| Date of Last Written Submission: | 1 February 2010 |
| Delivered at: | Newcastle |
| Delivered on: | 18 January 2011 |
REPRESENTATION
| Counsel for the Applicant: | Mr J Hamilton |
| Solicitors for the Applicant: | Priest McCarron Port Macquarie |
| Solicitor for the Respondent: | Mr K Byrnes |
| Solicitors for the Respondent: | Byrnes & Cox Lawyers Port Macquarie |
ORDERS
That the application by the husband filed 21 October 2008 is dismissed.
That the order made by consent and pending further order on
10 November 2008 in the Federal Magistrates Court of Australia at Newcastle that the respondent wife is restrained from disposing of the sum of $5,000.00 from the $50,000.00 to be paid to her by the Husband pursuant to Order 8 of the Orders made in the Port Macquarie Local Court on 12 November 2003, is discharged.
That the enforcement summons filed on 24 July 2008 in the Federal Magistrates Court of Australia at Newcastle by the Child Support Registrar be listed for directions on Thursday 10 February 2011 at 2.15pm with leave granted to each party to appear by telephone.
Leave is granted for the Solicitors to appear by telephone on
10 February 2011with the Solicitors to notify the Associate to Federal Magistrate Coakes not later than 4.00pm on 4 February 2011 on
02 4929 0261 the telephone number upon which they will be available.
IT IS NOTED that publication of this judgment under the pseudonym Fenberg & Fenberg is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT NEWCASTLE |
NCC 1881 of 2008
| MR FENBERG |
Applicant
And
| MS FENBERG |
First Respondent
REASONS FOR JUDGMENT
Introduction
It is common ground that on 25 March 2003 the Child Support Registrar registered a Child Support Agreement, agreement number 718 121 providing for the applicant father as the paying parent to pay $30.00 per week for each of the four children of the marriage to the respondent mother as the payee with the first payment to be made for the period starting 28 March 2003.
It is common ground that the agreement also contained a CPI adjustment clause.
No copy of the agreement can be found in spite of extensive searching and the Child Support Registrar does not have a copy.
It is common ground that the periodic Child Support payable by the father was to be reduced to $50.00 per week for any period that he was entitled to receive benefits and that the agreement is to end on 3 September 2011.
It is common ground that the Child Support Agreement has not been varied or discharged or terminated.
The four children the subject of the Child Support Agreement were W born (omitted) 1987, X born (omitted) 1989, Y born (omitted) 1991 and Z born (omitted) 1993.
The agreement in relation to the eldest child W ceased to apply on 15 August 2005 when she attained the age of 18 years, and ceased to apply to X from 26 August 2007 when she attained the age of 18 years and 13 October 2009 when Y attained the age of 18 years. The agreement survives in relation to Z who will attain the age of 18 years on 4 September 2011.
It is common ground that on or about 13 February 2006 the living arrangements for Y and Z changed in that instead of living predominately with the mother, they began to spend a week about arrangement with each of their parents which continued until the time of the hearing. It is not in dispute that prior to 13 February 2006 all four children had lived predominately with their mother and spent time with the father under circumstances to which I will refer in more detail later in these reasons.
The father claims that this change of arrangements for the care of the two youngest children amounted to a significant change in the circumstances of such children. The father also claims that as a consequence of both children living with him pursuant to this arrangement, there was a significant change in his circumstances in relation to his ability to work.
The father seeks therefore that the Child Support Agreement be terminated.
The mother opposed the termination of the agreement asserting that there has been no significant change in the children’s circumstances and that whilst the two boys may spend an equal number of nights with their father each week, she continues to provide significant daytime care for them, and argues further that the father’s financial circumstances have not changed and that he has undisclosed income.
The application brought by the father was prompted by enforcement proceedings brought by the Child Support Registrar against him pursuant to an enforcements summons filed on 24 July 2008 seeking to orally examine the father in relation to his financial circumstances asserting that the father was in arrears of Child Support, including late payment penalties to a total amount of $7,305.79 as at 9 July 2008. When that matter came before the Court for the first time on
22 September 2008 the Court noted that the father was considering filing an application for departure from a Child Support Agreement.
When the matter came before the Court again on 10 November 2008 directions were made which ultimately led to the matter being listed for a final hearing in Wauchope, and by consent an interim order was made that the respondent mother be restrained from disposing of the sum of $5,000.00 from the sum of $50,000.00 to be paid to her by the husband pursuant to some orders made in the Local Court at Port Macquarie on 12 November 2003 relating to a property settlement between the parties.
It was the father’s case in the Child Support proceedings that he had overpaid Child Support and that if his application was successful, the mother would be obliged to repay him such overpaid support.
On 25 November 2008 an order was made, pending further order, that the operation of the Child Support Agreement be suspended in its execution conditional upon the father making payments in the sum of not less than $217.00 per month to the Australian Government Solicitor on behalf of the Child Support Registrar, first payment to be made on
7 December 2008 and on or before the seventh day of each calendar month thereafter, and in default, the suspension of the Child Support Agreement ceased to have effect. It was also ordered that the Child Support Registrar ensure that all monthly payments made by the father be held on trust, pending further order and if possible, to earn interest.
For simplicity, I will abbreviate the “Child Support (Assessment) Act 1989” to “Assessment Act”.
The respective applications at the hearing
The father relied upon his application filed 21 October 2008, namely that the Child Support Agreement be set aside from 13 February 2006 as it applied to the two youngest children Y and Z, and that the mother be restrained from disposing of an amount of $5,000.00 or such other sum as the Court considered fit, from monies due to her by the father pursuant to the property settlement orders.
The mother relied upon her response filed 7 November 2008 and sought an order that the father’s application be dismissed and that the father pay her costs.
The father’s application at the hearing was modified, as contained in the father’s case outline when he sought the following orders:
a)That the Child Support agreement registered on 25 March 2003 (number 718 121) be terminated from 13 February 2006 as it applies to Y and Z;
b)That the father pay all outstanding Child Support payments due for W and X for the duration of the Child Support Agreement;
c)That the father pay all outstanding Child Support payments for Y and Z to 13 February 2006;
d)That any overpayment of Child Support by the father be deducted from the sum of $20,000.00 owed by the father to the mother pursuant to the property orders made on 12 November 2003;
e)That the mother pay the father’s costs to the application to have the Child Support Agreement set aside.
Existing orders
I have referred to the orders made in these proceedings in the introduction above.
The only other relevant order was the order made on or about
12 November 2003 in the Local Court at Port Macquarie being property orders pursuant to Section 79 of the Act between the parties which required the father to pay the mother $50,000.00 within 28 days in return for which the mother transferred to the father her interest in the former matrimonial home at Property R, which the father continues to occupy, and with the father also in that period to refinance into his sole name the mortgage over such property, and which the father did.
A number of other orders related to personal property with a further lump sum payment, also of $50,000.00 to be paid by the father to the mother within 5 years, that is by 12 November 2008 and not the subject of any interest and with the mother permitted to lodge a caveat to protect such interests.
It was common ground at the time of the hearing that the father had paid only $30,000.00 of the remaining $50,000.00 and therefore owed the mother $20,000.00.
Background
At the time of the hearing the father was 42 years of age and a qualified (occupation omitted) self employed and doing sub contract work. On the evidence before me, the father has not re-partnered and the children Y and Z live with him on a week about basis.
The mother was 43 years of age at the time of the hearing with some occasional employment.
The mother has not re-partnered on a permanent basis but has a relationship with a Mr T which commenced in about October 2004 with the mother giving birth to their daughter A on (omitted) 2006. The mother and Mr T do not live together.
It was a little less than a fortnight following A’s birth that Y and Z entered into the week about residential arrangement.
The parties married on (omitted) 1988 and separated either in 2001 or 2002.
There are four children of the relationship, to whom I have referred in the introduction above. I accept the mother’s evidence that the eldest child W left the mother’s home in October 2005 at the age of 18 years and that X left the mother’s home in about February 2007 at the age of 17½ years.
The evidence
In the father’s case I read the following affidavits:
a)His affidavit affirmed 20 October and filed 21 October 2008;
b)His second affidavit affirmed 20 October and filed 21 October 2008 (50 paragraphs and annexures);
c)His financial statement affirmed 20 October and filed 21 October 2008;
d)His financial statement affirmed 6 May and filed 12 May 2009;
e)His affidavit affirmed 19 May and filed 25 May 2009.
In the mother’s case I read the following affidavits:
a)Her affidavit sworn 20 April and filed 22 April 2009 (Paragraphs 15-20 plus annexures A & B);
b)Her financial statement sworn 20 April and filed 22 April 2009;
c)Her affidavit sworn 31 July and filed 3 August 2009.
There were the following exhibits:
Exhibit W1
Statements numbered 5 & 6 for the father’s account number (omitted) with National Australia Bank for the period 10 October 2008 to 9 October 2009 together with one statement for the father’s home loan account number (omitted) with the Commonwealth Bank of Australia for the period 3 March 2009 to 30 June 2009.
Exhibit H1
Letter signed by Ms B.
Exhibit H2
Acknowledgement in name of Ms B.
Exhibit W2
Letter of 11 November 2009 from the Commonwealth Bank of Australia to the mother re mortgage default.
Both the father and the mother gave oral evidence and were cross examined.
The father also sought leave to call Ms B as a witness in his case to give oral evidence in relation to financial loans to him, and whilst it was opposed it seemed to me essential for Ms B to give evidence to refute any suggestion of a Jones v Dunkel argument. Similarly, evidence was given by the father’s mother Mrs Fenberg as to non financial assistance given by her to the father.
At my request, Mr Hamilton and Mr Byrnes prepared concise and constructive written submissions and I am grateful to them both for doing that.
The issues
It seems to me the issues are these:
a)Has there been a significant change in the circumstances of the two boys Y and Z as to their domestic living arrangements with each parent and if so, whether it would be unjust not to set aside the Child Support Agreement;
b)Has there been a significant change in the circumstances of the father, in particular his financial circumstances, and if so, such that it would be unjust not to set aside the Child Support Agreement;
c)To what extent is the Court able to accept the father’s evidence, both written and oral as to his change of circumstances and his financial circumstances;
d)To what extent is the Court able to accept the mother’s evidence both written and oral as to her financial circumstances and her financial support of the two children;
The relevant law
The Child Support (Assessment) Act 1989 underwent very significant amendments between 2006 and 2008 following the publication of the report “Every picture tells a story” in December 2003 by the House of Representatives Standing Committee on Family and Community Affairs which recommended, among other things, that there be a review of the Child Support System, particularly the formulas.
The Government subsequently adopted a number of recommendations made by a Ministerial Task Force and passed legislation in 2006 to introduce the very significant reforms in three separate stages.
The third stage which became effective from 1 July 2008 included, amongst other things, changes in relation to Child Support Agreements which from that date are of two types, i.e a Binding Child Support Agreement and a Limited Child Support Agreement.
Section 80C of the Assessment Act defines a Binding Child Support Agreement and its essential requisites. A distinguishing feature of a Binding Child Support Agreement is that each party must have had independent legal advice from a Legal Practitioner as to the effect of the agreement on that parties rights and the advantages and disadvantages of signing the agreement. Such advice must be given before the agreement is signed and the Legal Practitioner must sign the certificate which forms part of the agreement.
The other type of Child Support Agreement is defined in Section 80E of the Assessment Act and is a Limited Child Support Agreement. It must be in writing and must be signed by both parties. However, there is no requirement for independent legal advice.
A Limited Child Support Agreement also needs to comply with Section 81(2) of the Assessment Act which requires simply that the agreement must comply with Section s82, 83 and 84 of the Assessment Act and must be accepted by the Child Support Registrar.
It was conceded by both Mr Hamilton and Mr Byrnes that the parties did not receive any independent legal advice prior to entering into the Child Support Agreement registered in March 2003.
Section 74(1)(b) found in Schedule 5 of the Child Support (Registration and Collection) Act 1988, transitional provisions provides that the Child Support Registrar must review Child Support Agreements in force immediately before 1 July 2008 and determine whether the agreement is to be taken to be a Binding Child Support Agreement or to be terminated.
There is no evidence before me that the Child Support Registrar terminated the Child Support Agreement between the parties.
Consequently, it seems to me that the existing Child Support Agreement entered into in March 2003 and accepted by the Child Support Registrar has continued to operate both prior to 1 July 2008 and subsequent to that date and is to be considered as a Limited Child Support Agreement. There is nothing in the amending legislation to suggest the amendments do not apply to Child Support Agreements made prior to 2006.
Both Mr Hamilton and Mr Byrnes made submissions to this effect and I accept those submissions.
Consequently, it becomes necessary to consider the circumstance under which a Limited Child Support Agreement can be terminated.
Section 80F of the Assessment Act, relating to Limited Child Support Agreements provides that such agreement cannot be varied but can only be terminated or replaced with a new agreement.
Section 80G provides how Limited Child Support Agreements can be terminated, including an order by a Court setting aside the previous agreement under section 136 of the Assessment Act (Section 80G(1)(c)).
Section 136, which took effect from 1 July 2008 provides as follows and applies to both Binding Child Support Agreements and Limited Child Support Agreements:
(1) A party to either of the following agreements may apply to a court having jurisdiction under this Act for the court to set aside the agreement:
(a) a child support agreement that has been accepted by the Registrar under section 92 or 98U;
(b) a termination agreement, or a written agreement referred to in paragraph 80G(1)(b), that has been accepted by the Registrar under section 92.
(2) If a party has applied under subsection (1), the court may set aside the agreement in accordance with the application if the court is satisfied:
(a) that the party's agreement was obtained by fraud or a failure to disclose material information; or
(b) that another party to the agreement, or someone acting for another party:
(i) exerted undue influence or duress in obtaining that agreement; or
(ii) engaged in unconscionable or other conduct;
to such an extent that it would be unjust not to set aside the agreement; or
(c) in the case of a limited child support agreement:
(i) that because of a significant change in the circumstances of one of the parties to the agreement, or a child in respect of whom the agreement is made, it would be unjust not to set aside the agreement; or
(ii) that the agreement provides for an annual rate of child support that is not proper or adequate, taking into account all the circumstances of the case (including the financial circumstances of the parties to the agreement); or
(d) in the case of a binding child support agreement--that because of exceptional circumstances, relating to a party to the agreement or a child in respect of whom the agreement is made, that have arisen since the agreement was made, the applicant or the child will suffer hardship if the agreement is not set aside.
(3)Subject to section 145 (Registrar may intervene in proceedings), the parties to a proceeding under subsection (1) are the parties to the agreement.
(4) If:
(a) the court sets aside a child support agreement under this section; and
(b) the court is satisfied as mentioned in paragraph 117(1)(b) (departure orders);
the court may make an order under Division 4 of Part 7 without an application having been made under section 116.
(5) If:
(a) the court sets aside a child support agreement under this section; and
(b) the court is not satisfied as mentioned in paragraph 117(1)(b) (departure orders); and
(c) the payee has received or will receive benefits pursuant to the agreement;
the court may still make an order that departs from the administrative assessment where it is just and equitable to do so, having regard to the benefits that the payee has already received pursuant to the agreement.
The father brings his application pursuant to Section 136(2)(c)(i).
Consequently, I find that the current applicable law enables the Court either to set aside the existing Child Support Agreement or refuse to set aside such agreement. There is no power to vary the existing Child Support Agreement (Section 80F).
Discussion
Has there been a significant change in circumstances in respect of the children Y and Z
The father asserts that from the time of the Child Support Agreement until February 2006 Y and Z and their two older sisters lived with the mother and spent time with him on weekends and in school holidays[1]. The father asserts that from 13 February 2006 and continuing until the time of the hearing Y and Z lived with the mother for one week and with him for one week and alternating in that fashion thus giving rise to an equal shared care arrangement and equal time with each parent.
[1] Paragraph 10 of the father’s affidavit filed 21 October 2008
The mother asserted that the boys generally spent every second weekend with the father and half the holidays with him[2].
[2] Paragraph 9 of the mother’s affidavit filed 3 August 2009
The mother also deposed to the boys spending far more time with her than the father from February 2006 in that they would frequently come to her home early in the morning and have breakfast with her before going to school, and returning to her home in the afternoon after school for tea or dinner before returning to the father’s home to stay overnight[3].
[3] Paragraph 26 of the mother’s affidavit filed 3 August 2009
That evidence was the subject of an objection and the mother was given leave. The mother said in her evidence in chief that from February 2006 and for a minimum of three days per week both boys came for breakfast and for a minimum of three days for week also had dinner.
The mother did not change her evidence when cross examined extensively as to the amount of additional time the boys spent with her and maintained the evidence she gave in chief. She said that the days varied sometimes, that the father used to drop the boys off in the morning sometimes and that sometimes Y drives himself.
I accept the mother’s evidence in relation to the additional time they spend with her whilst spending nights with their father. The mother said that they went home to their father at night during his week because it was the number of nights spent with each parent which was the Child Support arrangement.
It was also suggested to the mother that the father had continued to coach the boys in rugby league and that Z stays with the father overnight on his training nights. The mother said that whilst Y had played league in the past, he was not playing anymore but agreed that Z maintains his interest in rugby league but does not stay overnight with his father on the training night. The mother said, and I accept, that Z is dropped back to her after training.
The father also gave evidence during part of his cross examination in relation to financial matters that there had been a shared care arrangement for the boys prior to February 2006.
The father did not give any evidence in reply to refute the mother’s evidence as to the amount of additional time the children were spending with her.
Whilst the evidence does not enable me to make a finding with precision as to the amount of time the two boys were spending with the father prior to February 2006, such time was at least fortnightly weekends and half holidays but in all probability for longer periods as asserted by the father.
I find that since February 2006 the boys have spent an increased number of nights with the father on a fortnightly basis, something in the order of four or five nights.
The evidence does not enable me to determine the additional cost, if any, to which the father has been put in maintaining the children for these additional nights.
I find on the evidence that the mother has borne by far the greater cost of feeding these two teenage boys, or rather young men, not only during her week with them but during the week that they were spending nights with their father. I take into account in particular that the father was already meeting fortnightly, weekend and holiday costs for supporting the boys.
I find therefore on the evidence that there has not been a significant change in circumstances relating to the cost of supporting the boys from February 2006. The mother met the greater cost prior to that date and whilst the cost for her has fallen to some extent since February 2006, it has not been a significant reduction. Whilst the number of nights spent with the father has increased, that by itself is not sufficient to amount to a significant change in circumstances for the children within the meaning of Section 136 of the Assessment Act.
It would be otherwise if the boys were living with one parent for the whole of the week quite independent of the other parent and vice versa in the following week.
Has there been a significant change in the circumstances of the father
It was submitted on behalf of the father that the fact of the boys spending equal time with him from February 2006 gave rise to an increase in his costs of supporting the boys and a restriction on his earning capacity consequent on his obligation to care for them for longer periods of time. It is this which the father asserts amounts to a change in circumstances affecting him within the meaning of Section 136 of the Assessment Act.
The father asserts in both of his financial statements filed respectively on 21 October 2008 and 12 May 2009 that the weekly costs of supporting the two boys are $118.00 but the father adduces no evidence at all as to the costs he met for the boys for the time he spent with him prior to February 2006.
It is logical, and I find on the balance of probabilities that the father would have paid the costs of food, electricity, telephone, motor vehicle petrol, clothing and shoes, childrens activities, gifts and sporting expenses prior to February 2006. The failure by the father to adduce evidence of such expenditure, even in general terms makes it impossible to determine the additional cost, if any, which the father now bears for the children. It behove the father to produce that evidence but he has failed to do so.
The father asserts also[4] that the mother was in a stronger financial position to meet the costs of supporting the children based upon her taxable income for the years ending 30 June 2006, 30 June 2007 and 30 June 2008 when respectively her taxable income amounts shown in notices of assessment and income tax return were $27,331.00, $33,951.00 and $36,496.00. These are gross amounts.
[4] See fathers affidavit filed 25 May 2009
The father asserts that his taxable income for the year ended 30 June 2006 was $2,838.00 and that his taxable income for the year ending 30 June 2007 was $10,363.00[5].
[5] See annexures “E” & “F” to the fathers affidavit filed 21 October 2008
In his evidence in chief, the father said that he had not lodged his income tax return for the 2007/2008 financial year because he was missing two or three months dockets and receipts for a period when he was working at (omitted) as a sub-contractor and he is waiting to recover those documents. He had calculated his gross income for that financial year to be $17,706.00 based on labour only.
In his affidavit filed 25 May 2009 the father annexed[6] a number of receipts for payment for school excursions, sports clothing, the boy’s rugby league expenses, exercise books and other items of general expenditure. The father asserted that he had met these expenses himself, even though some of the receipts are in the mother’s name because the children are enrolled at school under her name.
[6] See annexure “C”
In cross examination the mother disputed that these receipts related to items of expenditure incurred by the father. The evidence does not enable me to establish whether the father incurred such expenditure or not.
The total amount of expenditure evidenced by the dockets and receipts is about $3,050.00 and was incurred between January 2006 at the earliest and November 2008 at the latest although the majority appears to be incurred up to mid August 2008. It follows that this represents expenses of about $24.00 per week for the two boys or $12.00 per week each over this period. On any interpretation, this is not a significant amount of expenditure. It is less than the amount to be paid pursuant to the Child Support Agreement.
The evidence establishes that the father has continually been in arrears of payment of Child Support both prior to February 2006 and since[7].
[7] See annexure “A” to the mother’s affidavit filed 3 August 20009
Between March 2006 and November 2007 the Child Support Agency intercepted the father’s income tax refunds and recovered a total amount of $6,385.15[8]. The father made some voluntary payments of Child Support together totalling $2,675.60 between 8 December 2006 and 16 November 2007.
[8] See annexure “A” to the mother’s affidavit and paragraph 32 of her affidavit filed 3 August 2009
I find on the evidence that the father has continually failed to meet his obligations pursuant to the Child Support Agreement.
There were some aspects of the father’s evidence in cross examination as to his financial circumstances which were far less than satisfactory and raises very considerable doubt as to his truthfulness. This is best illustrated by four examples.
For the year ended 30 June 2006 the father’s evidence is that his taxable income was less than $60.00 per week and that he had no other income. The father did not apply for Centrelink benefits on the premise that he hoped to get more work. He thought Ms B had probably helped him that year with home loan repayments but could provide no accurate evidence in that respect. He agreed that his mortgage interest alone for that financial year was about $14,265.00, the equivalent of a little more than $274.00 per week and that at that time he was paying about $325.00 per week to the bank.
For the first half of 2006 the father was meeting expenditure for the children of about $24.00 per week[9].
[9] Supra paragraphs 74 - 76
This expenditure ignores completely the father’s average weekly expenditure for his self support which in both financial statements he asserts is $173.00 per week. This does not take into account other fixed weekly expenses including rates, house insurance, personal accident insurance, vehicle insurance and vehicle registration.
Consequently, I find on the evidence that on the balance of probabilities, the father had an income from other sources which he failed to disclose and from which he met his expenses and liabilities. I note in particular that the father denied each time it was put to him during the course of his cross examination that he was paid in cash for work he did and did not declare such income. The father also denied on several occasions that he survived financially by having access to monies which he had not disclosed and from which he paid various accounts including his home loan repayments.
The second illustration arises from his financial statement affirmed
6 May 2009 and filed 12 May 2009 which in paragraph 37 discloses a credit balance of $300.00 in his National Australia Bank account number (omitted).
The father’s bank statements for this period[10] establish that on 5 May 2009 there was a credit balance in such account of $2,016.00 with the same credit balance for 7 May 2009. The father denied that he knowingly misstated the balance in his account and endeavoured to explain the mistake in reference to payment for work done and deductions for home loan payments. The father went on to say that he obviously did not read the statements and must have looked at the entry on the bank statement for 22 May 2009.
[10] Exhibit W1
This explanation by the father is entirely implausible. The father failed to give any logical explanation for this oversight which I find on the balance of probabilities was deliberate. Even when faced with the impossibility of the assertion that he referred to an account balance as at 22 May 2009 when his financial statement was affirmed some 13 days previously, he refused to concede the implausibility of his own evidence.
It was put to the father on several occasions that he was paid cash which he did not disclose to the Australian Taxation Office or the Child Support Agency so as to avoid his liability both for income tax and Child Support obligations, which he denied.
The third illustration relates to the father’s loan from Ms B. This appears as a liability of $47,500.00 in paragraph 50 of the father’s financial statement filed 12 May 2009 but does not appear in his financial statement filed 21 October 2008.
The father said in cross examination that at the time of the hearing he still owed Ms B about $50,000.00. It was about the same in January 2009. Initially the father agreed it was about the same in January 2008 but then claimed he was confused by the questions and changed his evidence to say that as at May 2009 he owed Ms B about $80,000.00.
He said that the amount varied from time to time by up to $10,000.00 or possibly $20,000.00 based on the fact that he had borrowed monies over the years from Ms B to keep his home loan going and to pay some property settlement monies to the mother. The father said there were no documents at all recording the loan transactions between he and Ms B.
When shown his financial statement and asked whether the amount of $47,500.00 shown as owing to Ms B was accurate he said that that part was accurate and that the other $30,000.00 is what he had borrowed over the year to pay the mortgage.
When asked why he had left out an amount of $30,000.00 or thereabouts he then said it was not a loan but a gift.
When pressed as to why he had just said previously it was a loan of $80,000.00 the father claimed that Mr Byrnes’ questions in cross examination were really confusing.
The evidence of Ms B contradicted that of the father. I found Ms B to be a truthful witness with an accurate recollection of the money she had lent the father.
I accept her evidence that the father owes her $47,500.00 which had been advanced in the form of a cheque left by her at the father’s mother’s home. Prior to that advance, Ms B said the father did not owe her any money. In the past, she had lent him about $4,000.00 which she was quite certain took place a couple of years before 2008 or possibly 4 – 5 years ago. She then said the amount of $4,000.00 was a gift.
Ms B was very clear she had not advanced the father any other sums of money and was certain that during 2006 she had not lent him about $12,000.00 to make his mortgage repayments. When it was suggested to her that perhaps this was advanced on a monthly basis when he could not pay the mortgage and he requested assistance from her she said she was pretty sure that would not have happened because she would remember an amount of $12,000.00 and was not aware of lending him that amount of money. The only additional amount she could recall was the amount of $4,000.00.
Consequently, I find on the evidence that the father’s assertion that Ms B probably helped him in 2006 with mortgage repayments was untruthful and which the father knew to be untruthful.
Similarly, I find that the father’s evidence in relation to loans from Ms B totalling $80,000.00 is untruthful and reject the father’s explanation in the alternative that the amount of $30,000.00 was a gift from Ms B. The father’s evidence as to these amounts was untruthful and I find on the balance of probabilities that he knew such evidence was untruthful. The questions being put by Mr Byrnes to the father were in no way confusing. The father demonstrated clearly that his evidence had been inconsistent in relation to these monies and left me with the impression that he sought to gain a bit of time whilst trying to think of a plausible explanation. He failed completely.
The fourth illustration relates to mortgage repayments in March and April 2009. The father could not give an account of two deposits on 24 March 2009, one for $550.00 and the other for $775.00 as to the source of such monies.
When compared with the home loan statement, the father was obliged to agree that the amount credited to the home loan does not correspond with any withdrawal from the bank evidenced by bank statements he produced.
On 24 April 2009 there was a credit of $1,300.00 to the home loan account but did not correspond to any withdrawal from the father’s personal account with NAB and neither were there any withdrawals which together made up an amount of $1,300.00. The father asserted that the April payment had come from the deposit of $1,500.00 but he did not provide any satisfactory evidence in support.
I find on the balance of probabilities that the father made payments to his mortgage account in March and April from monies the father had either earned and not declared to the Australian Taxation Office or the Child Support Agency or he had otherwise accrued at an unknown place. The father was very clear to say that neither Ms B or his parents had given him any financial assistance with mortgage repayments during 2009.
It is significant in my view that for the financial year ended 30 June 2004 the father had a taxable income of about $51,000.00 whilst he had a permanent job with Mr W where he was a leading hand with lots of overtime. The father explained that as a consequence of the Child Support Agency chasing Mr W, he was laid off quick smart and he has not been able to earn anything like that sort of money since that time.
The father asserted that in the last 5 or 6 years he has had difficulty obtaining permanent employment because the Child Support Agency has made it very difficult for local employers.
The father also made it very clear during his cross examination that the Child Support Agency has continually harassed him.
I do not accept these assertions by the father. I find on the balance of probabilities that the father as a qualified (occupation omitted) has the ability and capacity to earn considerably more than his declared income for the financial years since 30 June 2006.
When I come to weigh the whole of the evidence concerning the father’s financial circumstances I find on the balance of probabilities that he has received income from undisclosed sources which has not been declared to the Court in these proceedings nor the Australian Taxation Office or the Child Support Agency.
The father’s mother Mrs Fenberg also gave evidence. I accept her as being truthful. Her evidence was to the effect that she had not provided any financial assistance to the father but had provided food on a reasonably frequent basis when the children were with the father and for about 5 years since her retirement.
I accept the submission made by Mr Byrnes that the Court would have no hesitation in finding that the father was an untruthful, evasive and entirely unimpressive witness.
I find it is likely, on the balance of probabilities, that the father’s discontent with the Child Support Agency has led him to resort to not declaring the whole of his income from his earnings. It is likely that the father receives significantly more income than he has disclosed to the Australian Taxation Office. There can be no other explanation given the father has made his mortgage repayments of about $1,400.00 per month more or less consistently and with only minimum arrears from time to time, and maintained his home and a motor vehicle and met his other liabilities to support himself and the children when they are with him and pay Child Support to the extent that he has.
I find on the whole of the evidence that there has been no significant change in the circumstances of the father within the meaning of Section 136 of the Assessment Act.
The mother
There were a number of inaccuracies and inconsistencies in the mother’s evidence as to her financial circumstances.
The mother was working until the end of 2008 when she ceased employment to study to be a (omitted) undergoing a 12 months course which she anticipated completing at the end of 2009.
The mother deposed to her only income being a Centrelink benefit of $418.00 per week. The mother did not disclose Austudy benefits she had been receiving for Y from the age of 16 to 18 and which ceased on 13 October 2009 and which over the period of two years totalled about $10,500.00.
Z became eligible to receive Austudy benefits from the age of 16 on 4 September 2009 and which is paid at the rate of $207.00 per fortnight. The mother said in cross examination these benefits were transferred to his account but I find on the evidence that it is money coming into the mother’s household available for the costs of his support.
The mother conceded readily that the combined income into the household in the form of Centrelink benefits and Austudy is about $520.00 per week.
In her financial statement filed 22 April 2009 the mother showed her mortgage liability as $1,536.00 which, when shown to her she recognised as a misprint although thought it may have been the arrears at that time. The evidence establishes that the mother’s mortgage liability is in the order of $187,000.00.
The mother readily conceded from her financial statement that she had a weekly shortfall of expenditure over income in the order of $800.00 adding that is the reason that her home and car are about to repossessed.
The mother readily conceded in her cross examination that she had additional income in addition to Centrelink benefits.
In relation to her skills as a (omitted), and whilst it was suggested that the mother derived income from (omitted), I find on the balance of probabilities that the mother (omitted) for only friends and relatives, and only occasionally, and that they pay only for the product which she purchases.
The mother admitted readily that she had worked for cash in hand payments for (omitted) between July and September 2009 and that she reported herself to Centrelink as to her earnings.
I do not accept the mother’s explanation that she was not 100% sure as to the amount she earned during this period and that she was waiting for a figure. A more likely explanation is that the mother well knew her domestic financial circumstances were dire and that she needed additional income to meet day to day expenditure. It is more likely the mother well knew the amount of income she was receiving.
Whilst the mother did not include this evidence in her affidavit filed
3 August 2009, I do not find on the evidence that it was a deliberate omission.
The mother thought her income from (omitted) was about $15.00 per hour and she was doing about 15 hours per week. She thought the work was a trial for about 4 weeks but it went on for a longer period.
The mother also conceded readily that she had worked at the (omitted) for about 5 to 6 weeks but with some gaps filling in for a (omitted) who was sick and working for about one hour on each occasion.
At the time the Child Support Agreement was made the mother was working as a (omitted) at (omitted) on a casual basis. She recalled that she had left that employment in about May 2007 and had worked there for about 4½ years. She left on giving notice consequent upon three injuries she had received, and her carpal tunnel syndrome was causing her some difficulties. She received workers compensation benefits up to the day she left. She then obtained work as a (omitted) on a permanent part time basis at (omitted) which she gave up at the end of 2008 or the beginning of 2009 to study for qualifications as a (omitted). The mother is confident that she will obtain employment in a casual capacity as a (omitted) earning about $27.00 per hour.
The mother was asked to explain the short fall in expenditure over income of between $700.00 and $800.00 dollars per week and said that she got some assistance from her family and friends and that her mother had helped her pay mortgage repayments and buy food and that she had obtained a temporary loan from a girlfriend of about $2,000.00 which she has repaid for all but about $400.00. She said that her parents had assisted her with thousands of dollars.
The mother failed to disclose such assistance in part F of her financial statement.
The mother also failed to disclose that she received $50.00 per week Child Support for her daughter A from the time of her birth.
The mother conceded that the father was now making some contribution towards school accounts for the children but did not concede that the father had made the payments referred to in annexure “C” to the father’s affidavit filed 25 May 2009 suggesting that each document did not have the father’s name and contending that she may have paid some of them, and there was no proof that the father had bought the shoes identified adding that she had also bought shoes and paid for them. Further, she thought that Ms B had constantly given him receipts for items she had purchased for the children.
The mother asserted that she had purchased all school uniforms for the children.
As to costs of maintaining the two boys, the mother said that her weekly food costs of $150.00 represented $50.00 for her and A and $100.00 for the boys. She said that she paid school fees of $25.00 per week and that school accounts were separate from that and which she and the father paid equally.
The mother deposed to the father paying her $30,000.00 on
23 December 2008 being part of the second instalment of the property settlement and in respect of which a further $20,000.00 is still outstanding. The mother applied the sum of $30,000.00 to mortgage and other bills with about $7,000.00 being applied towards the mortgage and further sums towards two credit cards and rates. She took the children on a holiday at a cost of about $3,000.00.
When I come to compare the deficiencies in the mother’s evidence as compared with those of the father, the mother’s deficiencies pale almost to insignificance. The mother readily admitted she had earned monies cash in hand but gave evidence that she was well aware of the risk this entailed as she had been caught twice before by Centrelink.
The monies earned by the mother are insignificant compared with those I find the father is likely to have earned, and it is clear on the mother’s evidence that she has not been able to maintain her mortgage repayments and that the mortgagee is now taking action which could result in the repossession of the mother’s home and her motor car[11].
[11] See exhibit W2
The evidence establishes further that the mother has met a considerably greater portion of expenditure for the children including $3,347.50 for school fees between February 2006 and the end of the school year 2008 and had paid $375.00 towards school fees for 2009.
Whilst the father asserts that it is not appropriate for them to attend Catholic Schools, and it is something with which he disagreed, the mother gave unchallenged evidence that the children would attend Catholic Schools[12]. Whilst the mother may receive some concession towards school fees from the school, I am satisfied that she has borne that liability alone.
[12] Paragraph 37 of the mother’s affidavit filed 3 August 2009
Further, from February 2006 until the time of hearing, the mother has paid $10,460.00 towards orthodontic treatment for X and Y. There is a further outstanding amount of $2,000.00 which the mother is endeavouring to pay. The father has made no contribution towards such treatment.
The father asserts he did not agree to Y receiving orthodontic treatment but adduces no evidence to support a contention that it was unnecessary or should not have been performed. I find on the balance of probabilities that such work was necessary.
The mother deposes to the need for Z to have orthodontic treatment but which she has deferred until the completion of these proceedings.
Conclusion
When I come to weigh the whole of the evidence I prefer the mother’s evidence over that of the father where there are conflicting versions.
I have no hesitation in finding that the mother has borne the greater responsibility for the costs of supporting the boys since February 2006 with little assistance from the father and with the mother meeting the greater proportion of their day to day costs.
Further, I find the father has failed to pay Child Support pursuant to the Child Support agreement from about 21 October 2008.
I accept the submission from Mr Byrnes that there is no merit in comparing the parties’ present financial circumstances as to their assets. I find on the evidence it is not a comparison to be performed with any confidence given my finding that the father’s correct financial position is unknown both as to income and likely assets.
The conduct of the father in these proceedings as to his financial circumstances and his evidence is far from satisfactory.
Last, but by no means least, I find that the father has the ability to continue to meet his obligations pursuant to the Child Support Agreement both in respect of the current arrears and the continuing liability for Z.
The amount of $30.00 per week per child is a token contribution towards the actual cost of supporting the boys whilst in the mother’s care in respect of their day to day needs and is an amount which the father has the ability and capacity to pay.
Accordingly, the father’s application fails and is to be dismissed.
I make the following orders.
I certify that the preceding one hundred and fifty-one (151) paragraphs are a true copy of the reasons for judgment of Coakes FM
Date: 18 January 2011
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