GW & EC

[2005] FamCA 396

[2005] FamCA 396

FAMILY LAW ACT 1975

IN THE FAMILY COURT OF AUSTRALIA

AT MELBOURNE  Appeal No SA69L of 2004

File No. MLM5891 of 2002

BETWEEN:

GW

(Applicant Father)

and

EC

(Respondent Mother)

CORAM:  THE HONOURABLE JUSTICE KAY

DATE OF HEARING:         26 April 2005

DATE OF JUDGMENT:      17 May 2005

REASONS FOR JUDGMENT

APPEARANCES:

The father in person.

Ms Tulloch of Counsel, instructed by Anthony Peterson & Co, Solicitors, Level 7, 170 Queen Street, Melbourne, Vic 3000, appeared on behalf of the mother.

GW & EC

Appeal No:   SA69L of 2004

Coram:         Kay J

Date of Hearing:     26 April 2005

Date of Judgment: 17 May 2005

Catchwords:  CHILD SUPPORT – Appeal - Departure order – lump sum order – need to apportion equitably the sharing of the obligations to meet the proper needs of the child pursuant to s 114 (b) of the Assessment Act

1. This judgment arises from the hearing of an application for leave to appeal and, if leave is granted, the hearing of the appeal against orders made by Federal Magistrate Walters on 29 October 2004.  The orders concerned child support payable by the applicant father in respect of his son B born September 1989.

1. Section 102A of the Child Support (Assessment) Act 1989 (hereinafter referred to as the “Assessment Act”) provides that an appeal lies, with leave of the Family Court, to the Family Court from a decree of the Federal Magistrates Court exercising original jurisdiction under the Assessment Act. Section 102A(2) provides that the jurisdiction of the Family Court in relation to such an appeal is to be exercised by a Full Court unless the Chief Judge of the Family Court considers that it is appropriate for the jurisdiction of the Family Court in relation to the appeal to be exercised by a single judge. Arrangements were made for this appeal to be heard by me sitting alone pursuant to that section.

1. The principles to be applied in determining whether or not to grant leave in child support cases were discussed by the Full Court in Hendy v Deputy Child Support Registrar (2001) 164 FLR 236; 27 Fam LR 641 which principles were adopted by a differently constituted Full Court in OP v HM (2002) FLC 98-017; 29 Fam LR 251. I shall approach my task in determining whether to grant leave bearing in mind that I should not be too restrictive if I perceive there has been an error of principle which has affected the applicant’s substantive rights.

1. The orders, the subject matter of the appeal, relate to three separate periods for which child support was payable.  The first period concerned 2 January 2002 to 30 September 2002, the second period 1 October 2002 to 31 December 2003, and the third period from 1 January 2004 to 7 September 2007. 

1. For the first two periods the orders effectively provided that child support was to be calculated by attributing to the father the maximum possible child support income under the provisions of the formula contained in the Assessment Act and attributing to the mother a child support income amount being $1,000 less than the disregarded income amount.  According to calculations made by the trial Federal Magistrate this set the weekly rate for the period 2 January 2002 to 30 September 2002 at $337.36 and for the period 1 October 2002 to 31 December 2003 at $352.39.

1. The third period was covered by a lump sum order in the sum of $67,250 which was calculated by requiring the child support to be fixed according to the maximum possible child support income being attributed to the father and fixing the mother’s disregarded income amount at $1,000 under the amount prescribed in the formula.  That led to a calculation of child support becoming payable at $370.92 per week.  That sum was then capitalised for a period of 3.7 years using the 3 per cent tables. 

1. The orders went on to provide that the lump sum so paid was to count for 100 per cent of the child support that would otherwise have been payable by the father under any relevant child support assessments during the period until the child B attained 18 years of age.

1. By his Notice of Appeal the applicant father simply sought an order that Federal Magistrate Walters’ orders be set aside.  In the course of the hearing of the application before me the mother’s counsel conceded that if I found error on behalf of the Federal Magistrate it would be appropriate for me to re-exercise the discretion rather than remit the matter for rehearing.  The applicant father, who appeared in person, was silent upon the issue of whether or not a remitter would be necessary having regard to the nature of whatever error I found.  Neither party sought to lead any further evidence in relation to the relevant and significant findings that I shall make reference to in a moment.

1. The Notice of Appeal sought to argue six grounds.  They were as follows:

1.    The Federal Magistrate did not give reasons as to any jurisdiction for the court to be “seized with power” pursuant to s 115 and/or s 116 of the Assessment Act.

2.    The Federal Magistrate erred at law and discretion in deciding that the mother had satisfied the threshold question as to “special circumstances” and s 117(2) of the Assessment Act.

3.    The Federal Magistrate erred at law and discretion in deciding “just and equitable” amounts at s 117(4) of the Assessment Act.

4.    The Federal Magistrate erred as to jurisdiction in dealing with enforcement of amounts which were registered [legally or otherwise] under s 17 of the Child Support (Registration and Collection) Act for collection by the Child Support Agency.

5.    The Federal Magistrate erred as to fact in concluding that the father was not motivated to paying child support.

6.    The Federal Magistrate did not give reasons as to “otherwise proper” in capitalising future child support, particularly in regard to s 128, the “25 per cent rule”.

Background

1. The parties married in the United States in 1987 and separated in 1991 when they were resident in Australia.  The marriage was dissolved in 1993.  B is the only child of the parties’ marriage.  He has lived with his mother since separation and has not seen his father for several years. 

1. The applicant father is a professional.  The mother is involved in the retail business.  There have been arguments concerning the appropriate amount of child support to be payable in relation to the child since the time of separation. 

1. In July 1995 the parties entered into a child support agreement which, by its terms, was to operate until 1 January 2002.  It provided for monthly child support of $430 with 5 per cent annual increases. 

1. At the time the agreement was entered into B was a pupil at a private school, due to complete his primary education at the end of 2001.  The mother paid all of his primary fees and in the proceedings before Walters FM sought to have the father contribute to his secondary school fees at the same private school.

1. On 9 September 2002 the applicant was administratively assessed to pay child support for the period 2 January 2002 to 30 September 2002 in the sum of $400.33 per month.  On the same date an assessment issued for the period 1 October 2002 to 31 December 2002 in the sum of $491.08 per month.

1. It would appear that the assessment for the period 1 October 2002 to 31 December 2003 was amended by a subsequent assessment that issued on 7 October 2002 increasing the monthly amount to $547. 

1. Each of the assessments mentioned was calculated by reference to the parties’ taxable incomes as known to the Child Support Registrar.  The assessment for January 2002 showed the father as having a child support income amount of $42,871 and the mother as having a child support income amount of $43,539.  The first of the assessments that issued for 1 October 2002 showed the father as having a child support income amount of $44,479 and the mother as having a nil amount, and the latter assessment for 1 October 2002 showed the father as having a child support income amount of $48,207 and the mother as having a nil amount.

1. By 2002 there had been substantial litigation involving the Child Support Agency and the father concerning arrears that the mother had alleged had accumulated under the terms of the child support agreement.  As at 22 November 2002 the Child Support Registrar was requesting that the father pay $16,527.84 including penalties and arrears.  For his part the father brought an action against the Child Support Agency asserting that they were in contempt of the Family Court of Australia.

1. On 31 October 2003 the applicant father filed a departure application seeking to vary downwards the child support assessments to $240 per month from 2 January 2002 to 31 December 2003 with consumer price index variations.  When the case was opened before the Federal Magistrate he sought to have the first assessment reduced to $318 per month increasing to $368 per month from 31 July 2003 to 31 December 2003.  He sought to have $368 per month payable with consumer price index adjustments as and from 31 December 2003.

1. For her part the mother, in an application filed 8 October 2003 sought that the child support be payable in the sum of $30,000 per annum from 2 January 2002 with annual consumer price index adjustments from 30 June 2004 and that for the whole of that period the child support be capitalised and payable in a lump sum of $140,000.  In addition she sought an order that the father be responsible for the full payment of all of the child’s private school education expenses until the child completed secondary school.  Finally she sought an order that the father pay all arrears of child support and all unpaid secondary school fees.

1. In opening her case at trial counsel for the mother indicated that she was seeking to amend her claim down so as to have the child support calculated at a rate of approximately $18,000 per annum.

Judgment

1. The Federal Magistrate reserved his judgment which was delivered 10½ months after the hearing concluded.  In the course of the judgment he dealt extensively with the question of the mother’s claim that the father share in the payment of the child’s private school education.  He found that the child was:

“…not being educated in the manner which was expected by both his parents.  The husband has never agreed to [B] attending [the private school] (although he has not opposed the child attending the school – provided that he does not have to meet the costs associated with the attendance).  Further, there are no reasons relating to [B’s] welfare which would dictate that he should attend [the private school] rather than some other (non-private) school.”

1. There is no appeal against the dismissal of the claim relating to the private school fees. 

1. After indicating that he intended to regard the evidence of both parties with some caution, he went on to make such findings as he could relating to the parties’ relative financial position.  The key findings that were not the subject of attack in the appeal before me were:

• The father’s overall income (including superannuation) is likely to be in excess of $140,000 per annum.  At the very least it is comfortably in excess of the payer’s income cap under the child support legislation (currently approximately $126,500).

• The father did not say he could not afford to pay any child support that the Court might be minded to order him to pay.  Rather that his case was that apart from the provision of bare necessities for the child he should have the choice as to how much he pays.

• The father resides in a property which is owned by his girlfriend and her parents and pays $149 per week board.

• The father has $470,000 standing to his credit in bank accounts, a share portfolio valued at approximately $100,000 (subject to a liability of $67,500 for funds borrowed to acquire it) and a superannuation share portfolio worth approximately $311,000.

• The mother’s  income is likely to be closer to $40,000 per annum than $20,000 per annum but unlikely to be higher than $38,000 per annum.

• She has a half interest in the home in which she resides with her present husband, her equity being worth approximately $446,000.  She has business liabilities and credit card liabilities of $70,000 and a superannuation entitlement of $20,000.  She has remarried and lives together with her present husband.  He earns approximately $75,000 per annum and shares the expenses of the home where she resides with the child.  She and her present husband have a comfortable lifestyle, including overseas travel and maintaining the child at a private school.

1. The learned Federal Magistrate noted that each party had conceded that a ground for departure within the meaning and contemplation of s 117(2) of the Assessment Act had been established and he then went on to examine in accordance with the provisions of the legislation that which he concluded would be just and equitable and otherwise proper to order in the circumstances.  He particularly drew attention to the issue of the proper needs of the child and said:

“107.It is extremely difficult to ascertain the proper needs of B from the material presented to me during the trial. In Part F of her financial statement sworn 28 November 2003, the wife estimates that her average weekly expenses for B are $704.00 per week (although the correct total of the figures referred to in the schedule is $707.00). The estimate includes $350.00 in respect of education expenses for B (relating, of course, to B's fees at [the private school]). The wife's estimate (totalling $707.00) was not (or not seriously) challenged by the husband.

108.The wife's estimate of her average weekly expenses for B does not include any allowance for items such as household supplies, house repairs, motor vehicle expenses and health insurance.

109.I am satisfied that a reasonable allowance for B's needs (excluding school fees) is something in the order of $400.00 per week.”

1. His Honour dealt with the remaining considerations under s 117(4) in the following manner:

“110.I have already dealt with the financial circumstances of each of the parties. I find that the husband has the capacity to earn in excess of (and, perhaps, significantly in excess of) the payer's income cap under the child support formula. I find that the wife has the capacity to earn significantly more than she has said that she earns, but not more than the disregarded income amount under the child support formula.

111.I do not propose to deal with the other factors referred to in s.117(4) in any detail - but I have not overlooked them.

112.Taking into the account the provisions of s.117(2) and (4) of the Assessment Act, and having regard to the findings that I have made regarding the parties' respective financial circumstances, I am of the view that it is just and equitable to make an order varying the appropriate child support formula in each of the two assessments in such a manner as to substitute the payer's income cap amount for the husband's child support income amount referred to in each assessment. I recognise that the payer's income cap will be a different figure for each of the two assessments. Further, the wife's child support income amount in each assessment should be varied to an amount that equates to $1,000.00 less than the disregarded income amount for each period.”

1. He then carried out calculations to see the effect of the orders that he was making and calculated that for the first assessment period under consideration, being 2 January 2002 to 30 September 2002 the father would have to pay $337.36 per week and for the second assessment period under consideration, 1 October 2002 to 31 December 2003, the rate would be $352.39 per week.

1. He also said:

“117.I am aware that the Court must follow the three step process described in Gyselman in respect of each year for which a departure order is sought. In the circumstances of the present case, however, the evidence does not reveal that any significant distinction should be drawn between the two assessments. Relevantly, none of the evidence relating to any of the three steps in the Gyselman process is any different when applied to each of the two assessment periods -- and neither party sought to draw any relevant distinction between those periods.”

1. Before turning to deal with the claim for a departure order and its capitalisation for the remaining period from 1 January 2004, the learned Federal Magistrate dealt briefly with a submission put on behalf of the applicant father that in determining the proper costs of the child the Court should pay attention to a report published by the Social Policy Research Centre of the University of New South Wales that applied what was described as the “Budget Standards Unit” in attempting to assess the costs of children in Australia.  The learned Federal Magistrate dismissed the submission and made reference to a decision of Rimmer FM in Swiatek (2003) FMCA Fam 301 which decision was upheld on appeal by Warnick J (2003) FamCA 1133. The argument in Swiatek was that the BSU research demonstrated that the cost of maintaining a child at a “modest but adequate level” was less than the figure that was created by application of the child support formula and accordingly that of itself was a sufficient basis for departing from administrative assessment of child support.

1. Both Rimmer FM and Warnick J on appeal held that establishing that the costs of maintaining a child were less than the sum payable by operation of the formula was not of itself a ground for departure within the meaning of s 117 of the Assessment Act.

1. His Honour then turned to the issue of lump sum child support and concluded that this was an appropriate case for making a lump sum order because

136     …

a)I have made findings regarding the husband's credibility and his failure to make full and frank disclosure of all relevant aspects of his financial position. The husband has had significant funds invested in his name (or otherwise available to him - including in the form of cash). Notwithstanding that fact, the husband did not voluntary meet his obligations (or, at least, the entirety of his obligations in relation to child support).

b)There exists a very long history of litigation between these parties - particularly in relation to the issue of child support. The husband is, I find, a determined, intelligent and resourceful person, and any decision on the part of the court to leave future child support assessments in the hands of the Child Support Agency will lead - as night follows day - to further objections, reviews, and (ultimately) litigation.

c)I find that the husband is likely to manipulate his financial affairs to the extent that he is able to do so, to ensure that his assessed child support is as low as possible - or, alternatively, that it will be as difficult as possible for the Child Support Agency to enforce the payment of any relevant assessment. I refer in this regard, and by way of example only, to the husband's evidence regarding his decision to cease using cheques.

d)The husband has a deep seated and long established antipathy to and disdain for the Child Support Agency, and is unlikely to cooperate with it in any meaningful way.”

1. He then calculated that by applying his findings as to the earning capacities of the parties the formula would create a current liability of $370.92 per week.  He applied the relevant multiplier for 3.7 years being the remainder of the time until the child turned 18 and concluded that the sum of $67,250 should become immediately due and payable and that it should count for 100 per cent of the child support that would otherwise have been payable by the father under any relevant child support assessment from 1 January 2004:

“149.I fully understand that ‘the longer a lump sum order operates, the greater the chance of circumstances necessitating a variation of that order, thereby making the order unjust’. A lump sum award of maintenance or child support prevents account being taken on a regular, periodic basis - of ‘the vicissitudes of life’.  But, as ordinarily undesirable as order for lump sum child support may be, such orders can (and should) be made in appropriate circumstances. I regard the circumstances of this case as justifying the making of an order for lump sum child support. Unfortunately, I cannot trust the husband to meet his obligations in relation to the payment of periodic child support at an appropriate rate, and the on-going disputes between the parties as to the appropriate quantum of child support (involving considerable time, effort and expense -- not to mention stress and anxiety - for all relevant parties) lead me to conclude that it is proper to sever the financial relationship between them to the extent that I am able to do so.

Effect of Orders

150.I am aware that the effect of the orders that I propose to make will be to create ‘instant arrears’ of child support, as it were. I am satisfied, however, that the husband earned enough (or, alternatively, had practical access to funds that would have enabled him) to have paid the level of child support that I have found to be proper and appropriate. As a consequence of his conduct of failing or refusing to pay child support at such a level, the wife has clearly incurred a financial detriment.

151.In my opinion, the husband has not been motivated to pay child support at an appropriate level. He gave it a very low priority.

152.I am satisfied (for the reasons which I have expressed) that the husband has sufficient assets available to him to meet the obligations which will flow from the orders which I am about to make.”

The legislation and case law

1. The Assessment Act provides a regime by which child support liabilities are established by the application administratively by the Child Support Registrar of a formula provided in the legislation.  A party dissatisfied with the child support as calculated by application of the formula may apply for a determination to vary the rate of child support payable.  Part 6A of the Assessment Act contains the procedures which are normally undertaken to seek a departure from administrative assessment by an application made to the Child Support Registrar.  A party dissatisfied with that determination may lodge an objection and once that objection has been dealt with an application may then be made to a court exercising jurisdiction under the Assessment Act to have a departure order made under the provisions of Division 4 of Part 7 of the Act.

1. Alternatively, where a party seeks to have an order made for the provision of child support otherwise than in the form of a periodic amount paid to the carer, a party may make a direct application to a court exercising jurisdiction under the Assessment Act to have such an order made.

1. In this case the mother made application to the Court seeking to have such an order made in relation to the provision of school fees and education expenses as well as the making of a lump sum order for the payment of child support.  At the same time she also sought departure orders in relation to the child support periods as and from February 2002. 

1. For his part the applicant father simply sought to have departure orders made in relation to all assessments.

1. A court exercising jurisdiction under the Assessment Act may make a departure order so long as the provisions of ss 115 and 116 have been met, namely that the parties have sought a determination under the provisions of Part 6A of the Assessment Act or alternatively that:

(a)     the person is a party to an application pending in a court having jurisdiction under this Act; and,

(b)     the court is satisfied that it would be in the interests of the carer entitled to child support and a liable parent for the court to consider, at the same time as it hears that application whether an order should be made under this Division in relation to the child in the special circumstances of the case.

1. It should be noted that in the matter before me at no point in the trial before the Federal Magistrate was any issue raised as to the propriety of the Magistrate exercising jurisdiction.  It was never suggested that it would be anything other than appropriate for the Magistrate to be satisfied that it was in the interests of the parties to hear the departure applications at the same time as he heard and entertained the applications for education expenses and the payment of a lump sum in lieu of periodic payment.

1. In all of the circumstances it was unnecessary for the Federal Magistrate to specifically express his satisfaction, there being no challenge by either of the parties to the Magistrate hearing and determining a matter that was clearly within his jurisdiction.

1. Division 4 of Part 7 of the Assessment Act provides the procedure by which the Court may make an order that departs from administrative assessment.  Where the Court concludes it is appropriate to depart from the assessment s 118 (if necessary coupled with s 141), gives the court wide powers to vary and discharge the assessment including, although not limited to, varying one or more of the component parts of the formula.

1. As the Full Court said in Gyselman (1992) FLC 92-279; (1991) 15 Fam LR 219:

“The structure of that section is that s 117(1)(b) identifies concisely the matters about which the court must be satisfied and those components are then expanded in subss (2)-(9). Section 117(1)(b) identifies a clear three step process.

1.Whether one or more grounds of departure in s 117(2) is established.

If so:

2.Whether it is ‘just and equitable’ within the meaning of s 117(4) to make a particular order.

3.Whether it is ‘otherwise proper’ within the meaning of s 117(5) to make a particular order.

It is clear from the careful way in which s 117 has been structured that the court must address each of those three separate issues. “

1. In this case each of the parties was asserting that there were special circumstances that existed that made it appropriate to depart from the administrative assessment.  Each party was asserting that the taxable income of the other was not an accurate reflection of the income or earning capacity of that party and that accordingly there was an unjust and inequitable determination of the level of financial support that be provided by the liable party either because in the father’s case he sought to argue that the mother’s income was far higher than that which was relied upon by the Child Support Registrar, and in any event the costs of keeping the child were far less than any sum he had been assessed to pay, and in the mother’s case she sought to argue that the father’s income and earning capacity were far higher than the taxable figures provided to the Registrar.

1. As already indicated, the Magistrate made findings relating to those matters, particularly as to the earning capacity of each of the parties and, as will be seen, as to the needs of the child.

1. As the Full Court said in Gyselman, having established an existence of a ground for departure it is necessary to determine whether it is just and equitable to make an order: 

“Section 117(4) provides that ‘In determining whether it would be just and equitable as regards the child, the custodian entitled to child support and the liable parent to make a particular order under this Division, the court must have regard to…’ the matters set out in paragraphs (a) to (g) of that subsection. The legislature has made it clear that the court is required to undertake that task. However, some of the matters listed in subs (4) may overlap with matters already considered under subs (2) and some of the paragraphs in subs (4) may be more significant in one case than they would be in another or of little relevance in a particular case. It is an essential part of the s 117 exercise to carry out the obligation under subs (4). However, that does not mean that it is necessary in each case to slavishly go through each of the paragraphs. The extent to which it is necessary to do so will depend upon the facts and conduct of the individual case and the analysis already performed under subs (2).”

1. Their Honours said that:

“…if a departure ground has been established, in the exercise under subs (4) the parties are to call evidence about the ‘proper needs of the child’ and that it is not sufficient or appropriate to rely upon the formula level to perform that task…”

1. In this case evidence was given by the mother of the costs that she incurred in supporting the child.  The evidence was not the subject of any serious challenge in cross-examination and was ultimately accepted by the Federal Magistrate who concluded that the costs of meeting the proper needs of the child other than for the child’s private school education were in the vicinity of $400 per week.

1. Having turned its mind to the matters required to be given consideration under the provisions of s 117(4), the Court must also bear in mind the general objects of the Act and the particular objects of orders made under the departure provisions.  The relevant objects are to be found in ss 4 and 114.  Of particular importance in relation to a departure application are the objects set out in s 114, namely:

(a)     the 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)     the parents share equitably in the support of their children.

1. The issue of determining the sums necessary to met the proper needs of the child and the ratio in which those proper needs should be met as between the parents are matters for the exercise of a judicial discretion.  The Appeal Court will only interfere in such an exercise if it can be shown that there has been an application of wrong principle, inappropriate or inadequate findings of fact or the making of an order that is clearly unjust.  To the extent only that the orders made in this case concentrated entirely upon the income and financial resources of the parties and did not seek to apportion equitably the sharing of the obligations to meet the proper needs of the child, there has been an error demonstrated, which error ought now be remedied. 

1. There may well be circumstances in which it is appropriate that one parent meet all, or almost all, of the proper needs of the child if they have the capacity to meet those needs and the other parent does not.  There may well be cases such as Savery (1990) FLC 92-131; 13 Fam LR 812 where justice is simply met by adjusting one or more of the child support formula elements. But when such a course is adopted it must be done with an eye to ensuring the objects of the legislation are met, in particular the equitable sharing of responsibility for the support of the child if that can be achieved.

1. In this case the key findings relate to the proper needs of the child, namely $400 per week for his support and the relevant financial circumstances of the parties.  It is not apparent from the reasons for judgment of the Federal Magistrate that the Federal Magistrate then turned his mind to independently determining whether the result thrown up by adjusting the components of the formula that related to the parties’ income would meet the requirement of s 114 (b), namely that the parents would be seen to be sharing equitably in the support of their children. 

1. The three different periods dealt with by the Magistrate create a liability for the father to contribute $337 per week, $352 per week, and $371 per week towards the costs of supporting the child.  At its lowest that is 84.25 per cent of the costs and at its highest 92.75 per cent of the costs.

1. On the facts in Savery I concluded that the substitution of different income figures would still leave the liable parent paying a sum that would not exceed a fair share of the likely costs of support of the child.  I left open for discussion what to do in a future case where the application of the formula would lead to a result that would more than adequately provide for the needs of the child.  That situation has not been reached in this case but the effect of the orders made by his Honour is that it could be fairly said, in my view, that they impose upon the father an inequitable share in the support of the child.  In my view an appropriate order would have been that the father be responsible for 75 per cent of the costs of maintaining the child which would amount to $300 per week.

1. Returning to the grounds of appeal outlined at the commencement of this judgment I have already indicated that in the circumstances it was unnecessary for the Federal Magistrate to give any reasons relating to his assumption of jurisdiction. 

1. I have already indicated that the issue of the threshold question as to the existence of special circumstances had been conceded by both parties and it was clearly unnecessary for the Magistrate to spell out those circumstances given the facts outlined in the case, namely that the earning capacities of the parties were vastly different to those which had been relied upon by the Child Support Registrar in creating an administrative based assessment. 

1. I have already dealt with the matter raised in Ground 3 namely that the end result was not just and equitable. 

1. Ground 4 was effectively abandoned in the course of argument before me on the basis that there was nothing that the applicant could point to that indicated that the Federal Magistrate had in any way attempted to enforce existing orders. 

1. Ground 5 asserted that the Magistrate erred as to fact in concluding that the father was not motivated to paying child support.  The actual finding of the Magistrate which I have set out above was that the father had not been motivated to pay child support at an appropriate level.  That finding was clearly open to the Magistrate having regard to the nature of the case being run by the applicant namely that he was of the view that $318 per month was an adequate amount for him to be contributing towards the needs of the child even though he conceded he could afford to pay more.  Further it was quite open to the Magistrate to find that the father gave the issue of paying appropriate levels of child support very low priority given the many years of litigation that had ensued between the parties in an endeavour to ensure an appropriate level of child support was regularly flowing from the father to the mother.

1. The final ground sought to be argued was that the Magistrate did not give reasons as to “otherwise proper” in capitalising future child support, particularly in regard to s 128, the “25 per cent rule”.

1. Section 128 of the Assessment Act provides that the section has application if the carer entitled to child support is in receipt of an income-tested pension allowance or benefit (whether or not he or she was in receipt of the pension, allowance or benefit, when the order was made).  There was no suggestion in the proceedings before the Magistrate that the mother was in receipt of any such benefit or was likely to be in receipt of any such benefit during the period of dependency of the child.  Accordingly the section had no application.

1. As I have indicated in the passage set out above, the Magistrate gave extensive reasons why he was of the view that it was appropriate to capitalise the future payment of child support in this case.  He relied on the significant difficulties the mother had had in obtaining appropriate levels of child support for a period of more than 10 years since the parties had separated.  He relied upon the evidence relating to the father’s attitudes towards his dealings with the Child Support Agency and the manner in which he had arranged his affairs so that he had minimum exposure to enforcement proceedings brought on behalf of the Agency, and he relied upon the present availability of adequate lump sums to meet the needs of the mother without causing undue hardship to the father.  In my view each one of those matters was properly considered by the Federal Magistrate.  The order that he made fitted within the proper ambit of his discretion. 

Outcome

1. By reason of my findings above that the equitable sharing of the support of the child ought result in the father having to pay $300 per week for the support of the child for all of the relevant periods, it will be necessary to allow the appeal in part and to amend the orders accordingly.  Adopting the multiplier identified by the Federal Magistrate as being appropriate, namely 181.32, and substituting the sum of $300 for the sum of $370.92 identified by the Magistrate, the lump sum payable will be reduced for $67,250 down to $54,400.

1. The orders I make are as follows:

1.        That the applicant have leave to appeal against the orders made by Federal Magistrate Walters on 29 October 2004.

2.        That the appeal be allowed in part.

3.        That Orders 1(a) and (b) be set aside and in lieu thereof it is ordered that there be a departure of administrative assessment payable by the father for the period 2 July 2002 to 31 December 2003 and that the amount of child support payable be fixed in the sum of $300 per week.

4.        That Orders 1(c) and (d) be amended by substituting the sum of $54,400 for the sum of $67,250 therein appearing.

5.That the Court grants to the respondent a costs certificate pursuant to the provisions of s 6 of the Federal Proceedings (Costs) Act 1981 being a certificate that, in the opinion of the Court, it would be appropriate for the Attorney-General to authorise a payment under that Act to the respondent in respect of the costs incurred by the respondent in relation to the appeal.

I certify that the preceding 61 paragraphs are a true copy of the reasons for judgment herein of the Honourable Justice Kay
The 17th day of May 2005

Associate: Elizabeth Hore

Postscript

Subsequent to the orders being made on 17 May, the wife's solicitors drew attention to an apparent error in Order 3 of the orders made that day in that "2 July 2002" should read "2 January 2002".  After notice being provided to both parties the orders were amended accordingly.