G and G
[2000] FMCAfam 78
•1 December 2000
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| G & G | [2000] FMCA fam 78 |
| CHILD SUPPORT – Application for departure |
| Applicant: | J J G |
| Respondent: | Z Y G |
| File No: | ZB2765 of 2000 |
| Delivered on: | 1 December 2000 |
| Delivered at: | Brisbane |
| Hearing Date: | 8 November 2000 |
| Judgment of: | Baumann FM |
REPRESENTATION
| Counsel for the Applicant: | Ms Sweetapple |
| Solicitors for the Applicant: | N R Barbi |
| The Respondent in person |
ORDERS
That the administrative assessment payable by the father as liable parent, for the period from 12 July 2000 to 31 December 2001 be reduced to an annual rate of $14,400.00.
That there be no order as to costs.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT BRISBANE |
ZB 2765 of 2000
| J J G |
Applicant
And
| Z Y G |
Respondent
REASONS FOR JUDGMENT
Introduction
This is an application made 12 September 2000 by J G (“the father”) for departure pursuant to s116 of the Child Support (Assessment) Act 1989 (“the Act’) from an administrative assessment, determined upon review on 15 June 2000, for the period 16 February 2000 to 31 December 2001.
The respondent Z Y G (“the mother”) opposed the application.
Senior Case Officer Pickering gave her decision (“the Pickering decision”) on 15 June 2000, arising from an application by the mother for review. The said decision increased the amount payable by the father from $260.00 per annum to $21,602.00 per annum. The father objected to the decision pursuant to s98 of the Act, which was disallowed on 14 August 2000, prompting this application.
Although the father’s application does not specify the ground of departure relied upon, it was apparent that the ground under s117(2)(c)(I) was relied upon.
Documents relied upon
The father, who gave evidence, was cross-examined and was represented by Counsel relied upon the following documents:
·Application for Departure filed 12 September 2000;
·Financial Statement filed 19 October 2000;
·Affidavit of father (sworn 23 September 2000) filed by leave;
·Affidavit of father (sworn 8 November 2000) filed by leave.
The mother who gave evidence and was cross-examined, represented herself and relied upon the following documents:
·Affidavit of mother filed 7 November 2000;
·Financial Statement (sworn 8 November 2000) filed 8 November 2000.
History
The parties were married on 27 May 1978 and separated on 30 June 1998. There are 2 children of the marriage, A G (born 24 June 1985) and A G (born 9 August 1988). These are the children for whose benefit the assessment has been made.
Consent orders in relation to the property settlement between the parties were made on 26 November 1999. Although a copy of the orders was not in evidence, the parties accepted the accuracy of the statement in the Pickering decision that:
“Mrs G received $1,120,000.00 in assets from the settlement and Mr G received $570,680.”
There has been some alleged changes in the circumstances of the parties since the Pickering decision being:
a)The mother has sold a property at K and has additional funds available for investment of $450,000.00;
b)Since June 2000, the mother has been able to secure employment. She estimates her current net income from her employment as an optical dispenser, is approximately $250.00 week;
c)The father says his financial position has deteriorated and that his overdraft is now $160,000.00.
The law
Section 117(1) of the Act requires the Court to be satisfied that in the “special circumstances” of the case one or more of the grounds for departure outlined in s117(2) exists before the Court may make an order for departure and that pursuant to s117(1)(b)(ii), 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 must address each of the separate issues as part of a “clear three step process” as stated by the Full Court in THE MARRIAGE OF GYSELMAN 15 FAM LR219 at p224 namely:
“1.Whether one of more grounds of departure in s117 is established.
If so,
2.Whether it is “just and equitable” within the meaning of s117(4) to make a particular order.
3.Whether it is “otherwise proper” within the meaning of s117(5) to make a particular order.
It is clear from the careful way in which s117 has been structured that the Court must address each of those separate issues.”
Section 117(2) sets out the grounds for departure from an administrative assessment. As a threshold requirement, each of these grounds requires that there be “special circumstances” before a departure order may be made.
In Gyselman’s case (supra) the Full Court stated at p225, when considering the meaning of the term “special circumstances”,
“Whilst it is not possible to define with precision the meaning of that term, as a generality it is intended to emphasise that the facts of the case must establish something which is special or out of the ordinary. That is, the intention of the legislature is that the Court will not interfere with the administrative formula result in the ordinary run of cases.”
Therefore all of the relevant facts of the particular case must be considered to determine whether or not the circumstances which exist are “special” within the meaning of s117(1) and (2) of the Act so as to set the case apart from other cases: see SAVERY & SAVERY (1990) FLC 92-131.
In this application the father effectively seeks to rely upon s117(2)(c)(I) which provides as a ground for departure 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:
i)the income, earning capacity, property and financial resources of either parent or the child;
ii)…………..”
The father does not allege that the infant children have any income, property or resources which are relevant to this matter.
The evidence
The applicant father carries the onus of establishing, as the first step in the process that the ground for departure relied upon (s117(2)(c)(i)) has been proved.
From the material relied upon by the parties and the cross examination I was satisfied and my findings are:
a)That there has been a change in circumstances since the Pickering decision;
b)The mother’s financial circumstances have improved by:
i)Reduction in expenses relating to the K property;
ii)Capacity to earn income on the additional funds available for investment; in her financial statement she says the income from her investments is $94.00. I find this is an under estimation. It is reasonable, in my view that a net interest factor of 5% be applied to the cash funds of $530,000.00 – computing to an income of $26,500 pa ($510.00 per week);
iii)Realising her capacity to generate income as an experienced optical dispenser. Her evidence was that she could work at G C between 20 – 30 hours a week over 4 days a week. Her hourly rate is $14.00. I find it is reasonable on the evidence and considering the desire of the mother to maintain her role as mother and principal care giver to the children, that I assume her earning capacity to be 30 hours a week – a gross weekly income of $420.00 (net $300.00);
iv)I accept her current net asset position to be approximately $1,000,000.00.
d)The father’s current financial circumstances are as follows:
i)He works in his own optometrist practice in Central Brisbane, where he has practiced for 20 years. The wife says his business is worth $500,000.00, although she says, for the purposes of the property settlement, she conceded the value to be $35,000.00. Whilst I accept that the practice “is in a prestigious position”, this does not necessarily ensure a high income. No valuation evidence was produced and I accept the husband’s estimation for his practice;
ii)The father says his assets (including his practice) total approximately $800,000.00 and he has debts of $429,000.00 – a net asset base of approximately $370,000.00 He owns vacant land at 224 Y Road, T G which obviously generates no income. He could, of course, improve his debt position by selling T G land and repaying a substantial part of his debt. The fact that he has chosen not to do so is a consequence he must bear. He says he could not borrow further and the letter to him from his Accountant, R S suggests this is the case (although the letter is inadmissible in respect of the assertion it makes);
iii)The biggest issue between the parties appeared to be his income and/or earning capacity. The father says he only draws $216.00 per week. He says he is living on borrowed moneys. He says his debt level, including the repayments on the wife’s BMW, make it impossible to pay the assessed child support without trying to extend his borrowings. The mother says, he could sell his practice, and because of his experience he could command an income of $80,000.00 per annum (gross) as an employed optometrist. He admitted to purchasing a catamaran for $6000.00 in 1999 and has 2 quality bicycles;
iv)The financial statements (unaudited) for G Optical show an increase in total trading income for 1999/2000, yet a substantial drop in net profit from the previous year ($49,388.00 down to $14,124.00). The major increase in expenses are in the area of Advertising and Marketing; legal fees; motor vehicle expenses; rent; superannuation and depreciation. Some of these items are non-cash deductions (eg depreciation) or are likely to provide a benefit for the husband (eg superannuation and motor vehicle expenses). I find his income or earning capacity is higher than the sum of $216.00, however I accept he has mortgage and loan payments which the mother does not have to meet;
v)Senior Case Officer Pickering said that the father:
“Has earned money in the past from maintaining a share portfolio and he has the knowledge and ability to obtain income from this.”
The father has shares with a value of $51,000.00 and, in his current cash position, I don’t believe it is reasonable to infer any capacity to be able to generate significant income from this source. For completeness, I accept both parties have possession of some significant artwork. Neither party is prepared to sell these, again this reflects the parties’ expression of the priority they afford to child support.
e)In the Pickering decision the Senior Case Officer estimated the children’s expenses at $43,203.50 and further notes, that both parties want the children to continue at the private school. This seems a reasonable assessment on the evidence, and not really challenged before me.
Conclusions
I find that the change in the circumstances represents a special circumstance within the meaning of that term in s117 of the Act.
I find that the mother has a net income position better than or at least equal to that of the father at this time and is in a superior net asset position than the father.
I find it is just and equitable and otherwise proper to depart from the administrative decision. In my view the appropriate level of contribution to the expenses of the children is:
a)1/3 by the father; and
b)2/3 by the mother.
I find that it is fair that the new assessment should apply from 12 July 2000, being the date upon which he objected to the Pickering decision. He could not have brought his application to the Court any earlier than he did.
Orders
(1)That the administrative assessment payable by the father as liable parent, for the period from 12 July 2000 to 31 December 2001 be reduced to an annual rate of $14,400.00.
(2)That there be no order as to costs.
I certify that the preceding twenty-two (22) paragraphs are a true copy of the reasons for judgment of Baumann FM
Associate:
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