Fink and Fink

[2014] FCCA 2221

FEDERAL CIRCUIT COURT OF AUSTRALIA

FINK & FINK [2014] FCCA 2221

Catchwords:
CHILD SUPPORT – Adult child maintenance.

Legislation:

Child Support (Assessment) Act 1989, ss.98S, 112

Family Law Act 1975, ss.66F, 66H, 66J, 66K, 66L

Applicant: MS FINK

Respondent: MR FINK

File Number: DGC 3570 of 2008

Judgment of: Judge Dunkley

Hearing date: 26 August 2014

Date of Last Submission: 26 August 2014

Delivered at: Melbourne

Delivered on: 29 August 2014

REPRESENTATION

Solicitor for the Applicant: Mr Bacon

Solicitors for the Applicant: Manby & Scott Lawyers

Counsel for the Respondent: Mr Chislett

Solicitors for the Respondent: Neesham White Gentle

ORDERS

1. The Applicant is granted leave to seek the Child Support Registrar make a determination under section 98S of the Child Support (Assessment) Act 1989 for the period from 1 October 2006 to date.

2. The balance of the Application for final orders filed on 17 September 2013 in the Magistrate’s Court of Victoria is dismissed.

3. The Response filed 21 November 2013 is removed from the list of cases awaiting finalisation.

IT IS NOTED that publication of this judgment under the pseudonym Fink & Fink is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT MELBOURNE

DGC 3570 of 2008

MS FINK

Applicant

And

MR FINK

Respondent

REASONS FOR JUDGMENT

1. These proceedings came before me for hearing of an adult child maintenance application and ancillary orders.  On 26 August 2014, I indicated at the conclusion of the hearing that I would reserve my decision and deliver Judgment orally at 2.15pm on 29 August 2014 and I excused Counsel and the parties from attendance if they so wished. No one has appeared to take Judgment.

2. This then is the Judgment.  This is an adult child maintenance case brought by Mrs Fink (the Applicant) against her former husband, Mr Fink (the Respondent). 

3. There are two other aspects of the Application that I will discuss later in this Judgment. 

4. Division 7 of Part VII of the Family Law Act1975 sets out the applicable legislative provisions relating to child maintenance cases. 

5. The Application relates to [X] and [Y], who are two of the Applicant and Respondent’s children. [X] was born on [omitted] 1993 and is 21 years of age.  [Y] was born on [omitted] 1995 and is 19 years of age.  Both are studying full-time at [omitted] University.  In the normal course of events, both anticipate completing their studies at that University in 2016. 

6. The power of the Court to make an adult child maintenance order is found in section 66L. The Court must consider other sections within the division including section 66H, section 66J and section 66K.

7. The relationship between [X] and [Y] and their father could be considered under section 66K(1)(e) if it were a special circumstance, which in this case, it is not. Therefore, the description of [X] and [Y] having no relationship with the father post-separation has no bearing or relevance on the determination of this application.

8. The Applicant is the mother of [X] and [Y] and by virtue of section 66F can bring the application.

9. The Applicant and the Respondent have a duty to maintain their children. The only commitments with priority above this is found in section 66C(2)(b).

10. This duty to maintain would cease on the children attaining their majority (18^th birthday), unless the terms of section 66L are activated.

11. [X] and [Y] are both in receipt of Youth Allowance.  That fact does not affect the primacy of the parental duty referred to above and is not to be considered when deciding how much support is needed by [X] and [Y]. 

12. [X] does not suffer from a disability. 

13. [Y] has a severe language disorder I consider this disorder to be a disability. The mother estimates this language disorder causes her to incur extra costs of about $50 per week, in maintaining [Y]. 

14. The following facts are apparent from documents on oral evidence. The Applicant is aged 55.  She is a [occupation omitted].  She works at least four days a week.  The Respondent is aged 54. He is currently a [omitted] working as much as he can. The Applicant’s oral evidence was she earned about $1600 per week, being slightly more than the amount she disclosed in her earlier filed Financial Statement. 

15. Exhibit ‘C’, tendered in the case on behalf of the Respondent, discloses expenses that he incurs of about $55,400 per annum.

16. It also discloses that pursuant to an Assessment from the Australian Taxation Office, his taxable income for the year ending 30 June 2014 was $40,278. 

17. The document marked Exhibit ‘C’ is significantly different to the Financial Statement filed by him last year when he was a self-represented litigant. 

18. [Y] completed his high school education in 2013 and commenced a diploma course at [omitted] University at the beginning of the academic year in 2014 which was in either late February or early March in 2014. The evidence is not clear, but it is of little importance.

19. [X] completed his high school studies in 2011 and commenced tertiary studies at [omitted] University at the beginning of the academic year in 2012, which would have been a date sometime in February or March of that year. 

20. [Y], according to his Affidavit, in addition to studying, works part-time at a fast-food restaurant described as [omitted], earning about $200 per week.  In his oral evidence he said his current income was $100 per week.  His Affidavit asserting his income of $200 per week was sworn on 20 June 2014.

21. The explanation given as to the reduction in his income was that he was now working less shifts.  He could not have been working less shifts for long and for how much longer he will work less shifts was not apparent on the evidence. 

22. His mother, in her material, had disclosed his income as some $200 per week. 

23. [X], in addition to studying, works part-time at a fast-food restaurant known as [omitted] and earns about $250 per week.

24. The Applicant does not charge either [X] or [Y] any, board or expenses for living with her in her home.  She allows them to use their income as they please.  She could, but does not require them to contribute to her household costs. 

25. Neither [X] nor [Y] quantifies in their Affidavits in dollar terms, what they spend their income on, preferring a more generic description of:

    My own income from work is generally all consumed with such things as buying lunch at uni, transport costs and a little bit of socialising.

    Both use identical terminology in their Affidavits. 

26. The Applicant owns a home and houses herself, [X] and [Y], amongst others.  She pays the household expenses.  She has two small mortgages totalling about $43,000. 

27. The Respondent does not own a home but has, he says, an expectant share in a house which is part of his late mother’s estate. 

28. The parties married on [omitted] 1984. 

29. They separated in June of 1999. 

30. They were divorced on 8 September 2000. 

31. They have concluded a final property settlement. 

32. The Applicant filed her current Application on 17 September 2013. 

33. Since the filing of the Application the Respondent has cleared his arrears of child maintenance.

34. Therefore Order 1 in the Applicant’s Application has now been complied with and there is now no outstanding child support pursuant to a Child Support Assessment. 

35. The Applicant seeks from 1 January 2013 adult child maintenance for [X] in the sum of $50 per week.  She has orally amended that application to seek the same amount for [Y], that is, $50 per week.

36. She also seeks an order capitalising child maintenance until 31 December 2014 in an amount of $5000. 

37. She also seeks an order that she be granted leave to apply to the Child Support Agency for a change of assessment, backdated to 1 October 2006 and in each of the applicable financial years thereafter. 

38. Her Application for a departure order for the period 1 July 2002 to 1 July 2003 was summarily dismissed at the commencement of the hearing on 26 August 2014 for reasons that were then pronounced. 

39. The Respondent filed a Response on 21 November 2013.  He seeks orders for dismissal of the Applicant’s Application and for costs. He also seeks, although not entirely clear in its expression, an order which I take to be an order seeking a declaration that the Applicant be declared as a vexatious litigant. 

40. The Application seeking a declaration for vexatious litigant can be quickly disposed of by observing that the Applicant has not repeatedly filed frivolous Applications. 

41. The Application now before the Court, is an Application that has no frivolity attached to it and is a serious attempt by her to obtain adult child maintenance.  Although part of it was summarily dismissed the remainder went to hearing.

42. She has not previously filed such Application.

43. No declaration of vexatious litigant or order restraining the filing of further applications by Mrs Fink will be made for the above reasons.

Determination

1. The Respondent ceased operating his [omitted] company in 1999 or 2000, although he has kept that company registered and updates the register as is appropriate. 

2. He started a [omitted] business in 2003. That business was not a success. 

3. He ceased work altogether in 2010 and became the carer for his ill mother.  She died in March 2013. 

4. His only income in the period 2010 till his mother’s death was a carer’s pension. 

5. He has, since her death, resumed working as a [omitted].

6. His taxable income for the last financial year ending 30 June 2014 was $40,278. 

7. He expects a benefit from his mother’s estate. His sister is also a beneficiary. 

8. There is no reliable evidence as to the gross or net value of the Respondent mother’s estate.  The Respondent estimates the value of his mother’s home to be about $400,000. 

9. The Applicant estimates a value much higher. 

10. Both are guesses and are not reliable evidence.  No expert evidence was led as to the value of that home.

11. The estate also seems to have liabilities the extent of which is unknown to me on the evidence. 

12. The document that became Exhibit ‘C’ during these proceedings, estimates that the Respondent’s expenses are $55,432 per annum or $1065 per week.  Included as an expense in that Exhibit is a claim for mortgage expenses of $25,599 per annum or $492 per week.  That mortgage has not yet been entered in to and is not a liability.  It is, on the Respondent’s evidence, an expected expense if he were to acquire his sister’s share in his late mother’s estate, which he would like to do so that he could remain living in his late mother’s home – a home in which he has been housed for many years now.

13. There is no certainty the mortgage will be sought or granted. Consequently I deduct that expected expense leaving annual expenses currently incurred, of about $30,000 per annum. 

14. His taxable income for the year ended 30 June 2014 thereby exceeds his expenses by about $10,000 but after paying his tax liability which Exhibit ‘C’ says is just over $4000, this excess reduces to a modest $6800 which, if he used it to clear his credit card liability, which is also disclosed in Exhibit ‘C’, would leave no excess whatsoever.

15. Unsurprisingly, given their respective incomes the Applicant’s expenses are not much different to the Respondent’s expenses. 

16. On the figures disclosed by the Applicant in her Financial Statement, her expenses exceed her income. Although with her disclosed increase of income to $1600 per week and her decrease in claimed educational expenses of $100 per week, the difference between her income and expenses is reduced to about $185 per week, in the negative.  That is she experiences a short fall of expenses against income of about $185. She has, therefore, prima facie, a need.

17. This need would, however, cease to exist if the adult children, the subject of these proceedings, made a contribution to her from their income. 

18. She previously received a contribution from her older son, [W], when he lived with her. 

19. In making the finding above, I prefer the evidence of [W] to that of the Applicant.  I note that [W] filed an Affidavit and was not cross-examined.  I note also that [Y] said, when cross-examined, that he had understood that [W] paid board.

20. Why she does not now seek such contribution from [X] and [Y], is a matter of her choice, but if collected erodes her shortfall completely and consequently causes me to conclude she has no need.

21. It is entirely appropriate for adult working children to assist in the payment of their mother’s costs of maintaining them, where they are able.  I am satisfied [X] and [Y] are able to do so.  Their generic description as to how they spend their income is entirely unconvincing.  Indeed, both [Y] and [X] would be self-sufficient and able to fund their own studies, it would seem, on the income disclosed.

22. After deducting his current expenses from his taxable income, as I have outlined previously with respect to the Respondent, and after the payment of his tax liability and the discharging of his credit card liabilities, the Respondent has no capacity to pay. In addition I accept his evidence that he is working and earning to capacity. Indeed, earning at a much higher rate than he has done for many years. 

23. In coming to this conclusion I have also considered the factors below.

24. He is not meeting commitments for any other person. 

25. He has a potential financial resource, unquantified in his late mother’s estate.  Neither party has lead reliable evidence as to the quantum of this financial resource.

26. For all of the above reasons, the Applicant’s claim for adult child maintenance and the claim to capitalise the amount sought, are dismissed.

27. Turning then to the issue of deciding whether leave is to be granted to the Applicant to apply to the Child Support Agency to change assessments for the period 1 October 2006 to date.

28. It is her case that the Respondent must have undisclosed income because a person could not live on the taxable income he says that he had, as disclosed to and accepted by the Child Support Agency in the Child Support Assessment, for those periods.  She says that he could not have existed on such a low disclosed taxable income and there must therefore be undisclosed or hidden income.

29. Why that would be so is not readily apparent. At the time the Respondent seemed to have no housing cost as he lived in his mother’s home. The taxation office seems to have accepted his returns without quibble or audit.

30. Further, in support of this part of her case, the Applicant suggests that she did not challenge the Child Support Agency’s assessments at the time because, she says, the Child Support Agency led her to believe there was little she could do. She says she did not realise, until she consulted her current lawyers in 2013, that she could seek leave from a Court.

31. There is an inherently unbelievable aspect to some of that evidence in that each Child Support Assessment, issued during the period, clearly sets out how to review, that is appeal, such decision. The Applicant was aware of this, having on at least one occasion, sought such a review.

32. She also claims, in support of her application, that she was lead to believe, via statements from the Respondent’s late mother, “That he would look after you.”

33. Another reason advanced as to why she did not take action at the time was her concern relevant to family violence. 

34. With respect to family violence, she says that a number of intervention orders were made to protect her post separation. The last was seemingly made in 2004, well before the period of time in which it is sought to backdate the consideration by the Child Support Agency.

35. The other evidence that she leads as to family violence was an entirely un-particularised self-serving comment, in paragraph 16 of her Affidavit sworn 11 September 2013.  I quote:

    The Respondent threatened me with violence if I did anything about the matter.

36. Finally, there was criticism of the Respondent during cross-examination by the Applicant’s legal representative but not really followed up during submissions, that the Respondent made less than full disclosure of his financial affairs by overlooking, in his filed Financial Statement, a Bendigo Bank account and by not including in that Financial Statement, information relating to the sale of a property at [D] post separation and also, because he has not produced, it would seem, his taxation returns, even though he had taxation assessments available.

37. With respect to the first two complaints, both were within the knowledge of the Applicant and bank records were available on subpoena and, indeed, the Respondent was extensively cross-examined  with respect to his Bendigo Bank account. I am therefore satisfied about disclosure of the Bendigo Bank account.

38. From 2010 to 2013, the Respondent had only a carer’s pension by way of income.  His obligation to lodge taxation returns in that period, therefore, did not exist as he had no taxable income.

39. The availability of his most recent taxation assessment evidences satisfaction by the taxation office as to his affairs and provides the raw data necessary for this case at this time.  I do not draw any adverse conclusion for reason of non disclosure, as and against the Respondent.

40. On one hand, if leave is granted to the Applicant, there is no hardship as it would involve an administrative intervention by the Child Support Agency.  On the other hand, there may be some lingering uncertainty for the Respondent, which might be considered as a hardship, but I do not do so.

41. On balancing the above, I am satisfied that the hardship of granting leave is less for the Respondent than the hardship to the Applicant if leave were not granted, notwithstanding, on the face of it that much is unlikely to be achieved.

42. The Applicant under section 112 of the Child Support (Assessment) Act was brought soon after the Applicant received her legal advice.  I am satisfied the delay in not seeking leave is not so overwhelmingly prejudicial as not to grant the leave sought.

43. On the evidence available to me, it would not be possible for this Court to undertake the enquiry that is sought to determine whether or not the assessments issued by the Child Support Agency were correct.  The raw documents for the period from 1 October 2006 to date are not available to this Court to enable it to undertake such an exercise.  Such an exercise will have to be taken by the Child Support Registrar.

44. Whether, when that happens, there is, as a consequence, any change will be a matter for the Registrar, but the registrar is much better placed to undertake that investigation and make that decision than is this Court.

45. The periods sought in the Applicant’s Application is to have leave as and from 1 October 2006. Her Application was filed on 17 September 2013. The period sought is not longer than the seven years referred to in section 112 (7)(a) of the Child Support (Assessment) Act.

46. For these reasons the leave sought for the period sought will be granted to allow the Registrar to make a determination under section 98S.

I certify that the preceding eighty-nine (89) paragraphs are a true copy of the reasons for judgment of Judge Dunkley

Associate: 

Date: 29 September 2014