G and G
[2002] FMCAfam 249
•9 August 2002
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| G & G | [2002] FMCAfam 249 |
| CHILD SUPPORT – Lump sum received by the Husband – no evidence of what it had been expended on – departure on basis of Husband’s income and earning capacity – section 117(2)(c)(I) – Child Support (Assessment) Act 1989. |
| Applicant: | J A G |
| Respondent: | S J G |
| File No: | (P)MLM 2505 of 2002 |
| Delivered on: | 9 August 2002 |
| Delivered at: | Darwin |
| Hearing Date: | 19 April 2002 |
| Judgment of: | Bryant CFM |
REPRESENTATION
| Counsel for the Applicant: | Ms G appeared in person |
| Solicitors for the Applicant: | Ms J G |
| Counsel for the Respondent: | Mr G appeared in person |
| Solicitors for the Respondent: | Mr S G |
ORDERS
THAT for the period 1 January 2001 to 30th June 2002 and 1 July 2002 to 31 May 2003 there be departure from the provisions of Administrative Assessment of Child Support payable by the liable parent S J G for the child K S G born 3 December 1988 as follows:
(a)For the said periods the liable parent’s child support income be fixed in the sum of $30,000.00 and his obligation to pay child support otherwise assessed in accordance with the provisions of the Child Support (Assessment) Act 1989.
THAT the Child Support Registrar be requested to make the necessary calculations and to amend the Child Support Registrar accordingly.
THAT the Application filed on 13 December 2001 be otherwise dismissed.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT MELBOURNE |
(P)MLM 2505 of 2002
| J A G |
Applicant
And
| S J G |
Respondent
REASONS FOR JUDGMENT
Introduction
This Application is brought by the Applicant mother pursuant to the Child Support (Assessment) Act 1989 (“The Act”) seeking to depart from an Administrative Assessment of child support for the periods 1st March 2002 to 30th June 2002 and from the 1st July 2002 to 31st May 2003 in relation to the child K S G born on the 3rd day of December 1988 (“K”).
The child support liability of the Respondent Father arises from two assessments. The first assessment is from the 1st March 2002 to the 30th June 2002. The annual rate of child support payable during that period is $1,300.00 (a monthly rate of $108.33). That assessment was established following a decision of the Child Support Agency upon an application by the Applicant Mother and the date of the decision was the 26th June 2001. From the perusal of the reason for the decision it appears that the Respondent Father had previously been assessed to pay $43.00 per month based on a child support income of $13,351.00. This was a default income used because the Father had not lodged a tax return for 1998/99 or 1999/00. It appears that the case officer was informed that the Father had offered the Mother $25.00 per week in child support. It further appears from the reasons that the Father did not reply to communications by the Child Support Agency and did not provide information which would show a complete picture of his financial position although the Agency became aware that received a significant lump sum payment in later 2000. The case officer in determining the assessment said:
“It would be likely however that he would have to draw on that sum to maintain himself at least in the short term, and it is likely from what the Applicant has said that some of the money has been used on vehicle purchase and dental work…The reality is however, that he had that lump sum, which is available to him for his own use, and to meet his own existing commitments. One commitment is the financial need of his son and to his credit he has apparently made an attempt to better meet those needs by an offer of $25.00 per week ($108.00 per month) which is more that double what the current assessment requires”.
In determining that it was fair to change the assessment, the case officer said:
“His willingness to provide $108.00 per month ($25.00 per week) however, is indicative of his own belief that he has a far greater capacity to assist his son financially than the existing assessment assumes. I consider therefore this is the commencement point. It is however, still a relatively modest level of support, which would leave the Applicant meeting the bulk of the actual day to day costs of the child in her care.
In the absence of any better evidence, I am constrained by the apparent admission of the other parent that he can afford $25.00 per week.”
Accordingly, the assessment was changed to reflect that payment.
The second assessment for the period 1st July 2002 to 31st May 2003 is based upon the 2000/01 taxable income of the Father who has now submitted a tax return for that year. The child support income amount disclosed in the tax return is $10,069.00. As the exempted income amount exceeds this sum, no support would be payable save that the minimum rate of $260.00 per annum then applies and on this basis the assessment indicates the annual rate to be paid by the Father is $260.00 or $21.67 per month.
Sections of the Act relied upon
The Mother relied upon section 117 of the Act and in particular Section 117(ii)(c)(i).
Prerequisites for an application to the Court
The Applicant has complied with the provisions of the Child Support (Assessment) Act 1989 and has objected as required by the Act against the decision by the Senior Case Officer of the 26th June 2001. Having done so she is entitled to apply for a departure under Division (4) of Part 7 of the Act.
Evidence relied upon
The Mother relied upon her Application filed on the 13th day of December 2001 and an Affidavit filed on the 13th day of December 2001. She gave some oral evidence. The Father appeared on the 14th day of January 2002 when this matter was first before the Court and when it was adjourned for hearing to the 6th March 2002, the Respondent did not appear but appeared on the adjourned date of the 18th April 2002. On the 14th January 2002 he was ordered to file and serve a financial statement on or before the 6th February 2002. The Father filed no evidence, but opposed the Application by the Mother. The Mother sought that the annual rate of child support for the period 1st January 2001 to 30th June 2002 be assessed at $6,500.00 per annum. Subsequent to her Application the original assessment which had expired on the 28th February 2002 was re-assessed and the two assessments to which I refer are now the current basis of the father’s liabilities.
The Wife asserted in her Affidavit sworn on 13 December 2001 in support of her Application that the father had stopped working in March 1999 and was on Workcover. He received a lump sum payout between December 2000 and May 2001. She says:
“I understand that this payout was not taxable income so does not get picked up under the Child Support formula. He brought a four wheel drive car, had a holiday in Queensland and had a lot of work done on his teeth.”
She goes on to say:
“After he received his lump sum, he brought a uniform for a job as a watchman, went to the D of E and T, renewed his watchman’s licence and started work at a Government Department.”
She asserted that:
“The Husband had a history of failing to notify the Agency of his employment, and that in 1995/96 and 1996/97 he enjoyed a “nil” assessment despite the fact that he was working.
She said that she could not provide the name of his employer, so she was not able to get an assessment. She asserted that on 11 June 1999 he lodged an assessment that was not indicative of his actual income.
She said that although the Husband has contact, he refuses to have K during the school holidays and that K has stayed overnight at his father’s home only once in the last 6 years. He sees his Father on average for about 5 hours a month. This means that she has the primary responsibility for K’s care and increases her financial support.
Relevant law governing this application
The obligation to pay child support is created by the provisions of the Child Support (Assessment) Act. Section 3 contains the obligation that parents maintain their children. The objects of the Act are found in section 4. Each of the objects needs to be borne in mind when deciding an application under the Act. Section 4(3) of the Act recognises the desirability of parents reaching agreement for the financial support of their children.
Sections 114 and 121 identify that the further objects of Divisions 4 and 5 of Part 7 include:
(a)That children have their proper needs met from reasonable and adequate shares in the income, earning capacity, property and financial resources of both of their parents, and
(b)That parents share equitably in the support of their children.”
Section 117 provides as follows:
117(1) Where
(a) application is made to a court having jurisdiction under this Act for an order under this Division in relation to a child in the special circumstances of the case; and
(b) the court is satisfied:
(i) that one or more of the grounds for departure mentioned in subsection (2) exists or exist; and
(ii) that it would be:
(A) just and equitable as regards the child, the carer entitled to child support and the liable parent; and
(B) otherwise proper;
to make a particular order under this Division;
the court may make the order.
In this case the Applicant relies on Section 117(2)(c)(i), namely:
(c) that, in the special circumstances of the case, application in relation to the child of the provisions of this Act relating to administrative assessment of child support would result in an unjust and inequitable determination of the level of financial support to be provided by the liable parent for the child, because of the income, earning capacity, property and financial resources of the Husband.
If the Court is satisfied that in the special circumstances of the case the ground has been established, then it is necessary pursuant to section 117(4) to determine whether it is just and equitable to make and order, and under Section 117(5) to determine whether it is otherwise proper to make the order.
This is the three step process described by the Full Court in Gyselman (1992) FLC 92-279.
Has a ground been established?
The Husband gave evidence and was cross examined by the Wife. The Husband filed no Financial Statement as he had been ordered to do and produced no documents in relation to his financial position. Other than admissions made by him, the only evidence the Wife was able to obtain as to his financial position came from information which she had subpoenaed from Charter Resources Group Holdings, his present employer.
To say that the Husband provided little information as to his financial position and particularly what he has done with his lump sum payment is an understatement. The Wife is a lay person who has little skill in Court procedures and the Husband’s answers made it difficult for her to elicit much helpful information.
The Husband described himself as a security officer employed by C R Pty Ltd in P M. He has been working for them for 12 months (approximately). He said that his gross income per fortnight is between $700.00 and $1,000.00, that he earns $12.31 per hour, that he gets time and a half after a four-hour shift and after two hours he gets double time. He said that his tax is normally between $200 and $300 per week. As to his expenses he said he had the following fixed expenses; rent $80.00; mobile phone $25.00; car $300.00 per month; petrol $104.00 per fortnight. He said that he had normal living expenses on top of those expenses plus paying off a Visa card. He said he had no real estate and that the car was being paid off. He said that he was left with about $10.00 per week to live on. He was unable to explain to the Wife in cross-examination as to how it was that he lived on $10.00 per week.
In relation to his payout, he admitted to having received a payout of $237,000.00 approximately two years ago from E H where he was then working. He said that he paid legal bills associated with obtaining the payout of approximately $50,000.00. He said that he repaid debts to people from whom he had borrowed money, invested it in shares and gambled it away at the casino. He said he has nothing left and that he has only $500.00 in his Commonwealth Bank Account.
The Husband’s evidence about the lump sum he has received is unsatisfactory. I note that during the period that he received the sum he was paying very little child support and the Wife had the major financial responsibility for the support of K. It speaks volume of the Husband’s lack of responsibility towards his financial commitments that he had a net sum of in excess of $150,000.00 yet was paying minimal child support.
The Husband, although obliged to file a Financial Statement and knowing this Application was to relate to a period in which he had fairly recently received a lump sum, chose to bring no evidence of where that sum had been deposited, corroboration of the amount, or any corroboration of how it had been spent. I do not believe that he gambled it away at the casino, and his lack of willingness to give any particularity as to the expenditure of most of the money, leads me to infer that he may still have a significant part of that sum available to him. However, I am unable to make any findings as to what it might be. Regrettably, although the Wife issued a subpoena to the E H, they did not produce any documents for inspection.
The Wife was able to tender a pay report from the C R G H Pty Ltd who had produced that information on subpoena. What that documents indicates is that between 5 July 2001 and 24 March 2002, a period of approximately 9 months, the Husband earned a gross amount of $22,454.72, which I round off to $22,455.00. Rounded out over a 12 month period, this amounts to an income of $29,940.00. It is a little more than the highest fortnightly rate that the Husband said in his evidence that he was earning, but having regard to the weight to which I can give the Husband’s evidence I prefer to rely upon the documents from his employer which in my view, provide a much more accurate record of the Husband’s earning capacity. Accordingly, I find that the Husband has a capacity at the present time to earn an income of approximately $30,000.00. I regard this as having been income which should be taken into account as his child support income amount. Application of the formula pursuant to the Child Support (Assessment) Act 1989 will produce an annual payment of approximately $3,371.00 or $280.00 per month. On a weekly basis this is approximately $65.00.
I am satisfied that the Husband has been able to get employment as a security officer and that he has an earning capacity of approximately $30,000.00 per annum. The Husband apparently has a licence and whether or not he continues in his current employment at the conclusion of these proceedings, I would be satisfied that notwithstanding that he may not remain with his current employers, he has a earning capacity of $30,000.00 per annum. In saying that I take into account that the Husband probably has other funds available to him from his payout which remain undisclosed.
The Assessment in place a the moment provides that the Husband pay $108.00 per month and in view of what I have found to be his earning capacity, if there was no departure then the application of the formula as it presently stands would result in an inequitable determination of the level of support because of the Husband’s income and his income earning capacity.
Whether it is just and equitable to depart from the current assessment
Pursuant to section 177(4) I must consider whether it is just and equitable to depart from the administrative assessment.
The Wife is a part-time shop assistant. She earns $174.00 per week from wages and in addition she has a parenting payment and family payment from Centrelink. Her total income is $487.00 per week. Apart from child support that she receives, she has the sole obligation to support K. She has no real estate and apart from household effects and a car has no other assets. She has a small amount of superannuation. She estimates K’s weekly expenditure to be $173.00 per week. Having regard to the published research on the costs of maintaining children, I find this to be modest sum. Even on that basis however, it is apparent that if the Husband was to contribute $65.00 per week he would still be contributing less than half of the cost of maintaining K and the major portion will still fall to the Wife. Regrettably in this case, I see no real alternative. However, I am satisfied that the application of the formula in relation to a child support income of $30,000.00 would go somewhere to providing the Wife with a more equitable payment in relation to K and I am satisfied that were I to depart from the present assessment it would be just and equitable to do so.
The Respondent Father has an income at the present time in excess of the child support income on which the Administrative Assessment is currently assessed. To require him to pay child support on the basis of his present income is clearly fair and reasonable. In addition the Father has had a large sum of money available to him and has not adequately explained its use. His suggestion that he had gambled it away was ingenuous. However, I have no evidence of what sum might be remaining to him, I am left only with the impression that he has other moneys. It is not therefore possible to determine this application on the basis of any other funds being available to the Father, although I suspect that there are. The Mother’s income is less than the disregarded amount, and it would be appropriate in my view, as there are no other unusual factors in this case, for the assessment to be varied by providing that the child support income of the Father is $30,000.00 which is the amount, on an annual basis that he is presently receiving and otherwise provide for the provisions of the Act to be applied administratively.
Is it otherwise proper to make the orders
Section 117(5) of the Act requires me to consider whether it would otherwise be proper to depart from the administrative assessment. In this respect I must have regard to the nature and the duty of the parent to maintain their children and that it is the parents who have the primary duty to do so. I am also required to consider the effect of making the order on the entitlement of the child or the carers income tested, pension allowance or benefit. The Wife is already receiving payments from Centrelink. In other words the Australian taxpayer is already contributing significantly to the support of herself and K. An increase in the Husband’s obligation to pay support for a child of whom he has the primary obligation will to a small extent alleviate that burden and is clearly an otherwise proper order to make.
Conclusion
Accordingly, I am satisfied that the Husband is earning and has a capacity to continue to earn a sun of $30,000.00 per annum and I propose to make orders which will provide for the Child Support Agency to re-assess the Husband’s obligations based upon a child support income of $30,000.00. Given the fact that the Husband has been in employment, on his evidence, since early 2001 and that he had a lump sump to which I have referred available to him, the Departure should date from 1 January 2001.
I certify that the preceding twenty-nine(29) paragraphs are a true copy of the reasons for judgment of Bryant CFM
Associate: Mardi Jarvis
Date: 13 August 2002
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