Jacobs and Vidito
[2009] FMCAfam 396
•18 May 2009
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| JACOBS & VIDITO | [2009] FMCAfam 396 |
| CHILD SUPPORT – Application for departure order – whether ground is established – just and equitable – otherwise proper – government drought assistance policy. |
| Relationships Act 2003 (Tas) Child Support (Assessment) Act 1989 (Cth) ss.112, 116, 117 |
| Gilmour and Gilmour (1995) FLC 92-591 Liesert v Nutsch (1996) FLC 92-665 Bryant and Bryant (1996) FLC 92-690 Savery and Savery (1990) FLC 92-131 Gyselman and Gyselman (1992) FLC 92-279 |
| Applicant: | MR JACOBS |
| Respondent: | MS VIDITO |
| File Number: | HBC 715 of 2007 |
| Judgment of: | Roberts FM |
| Hearing date: | 24 April 2009 |
| Date of Last Submission: | 24 April 2009 |
| Delivered at: | Hobart |
| Delivered on: | 18 May 2009 |
REPRESENTATION
| Counsel for the Applicant: | Mr M Trezise |
| Solicitors for the Applicant: | Dobson Mitchell & Allport |
| Counsel for the Respondent: | Mrs A Burrows-Cheng |
| Solicitors for the Respondent: | Murdoch Clarke |
ORDERS
That there be a departure from administrative assessment of child support for [X] born in 1998 and [Y] born in 2001 payable by
MR JACOBS to MS VIDITO as follows:
(a)From 1 July 2007 to 31 December 2008 the child support income amount of MR JACOBS is set at twenty five thousand dollars ($25,000).
That the Court directs that as soon as practicable the solicitors for
MR JACOBS are to provide the Child Support Agency with copies of the Reasons delivered and the orders made today.
IT IS NOTED that publication of this judgment under the pseudonym Jacobs & Vidito is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT HOBART |
HBC 715 of 2007
| MR JACOBS |
Applicant
And
| MS VIDITO |
Respondent
REASONS FOR JUDGMENT
Applications
In this matter the Court must decide whether there should be any variation to child support payable by MR JACOBS (“the father”) to MS VIDITO (“the mother”) for the support of their two children aged ten and eight years (“the children”).
In his application filed 19 December 2008 the father is seeking that there be a departure from administrative assessment of Child Support and that:
a)for the period 1 January 2006 to 31 December 2008, the annual rate be set at $1,800; and
b)the sum of $1,800 be adjusted by annual variations in accordance with movements in the Consumer Price Index for Hobart, with the first such variation to commence from 1 January 2008.
However, in his closing submissions, counsel for the father suggested that the father’s child support income amount should be set at $20,000, which would result in payments of approximately $46 per week (being the sum that he is currently paying) rather than the sum of approximately $106 that he is assessed to pay.
The mother opposes any departure order being made.
Background
The parties lived together for a time and the two children are the children of their relationship. They separated in 2000.
Proceedings between them under the Relationships Act 2003 (Tas) were resolved in March 2008 when an Order was made by the Supreme Court of Tasmania requiring the father to pay to the mother $50,000. In order to pay that, he borrowed the totality of those funds from his mother.
The children live predominantly with the mother but spend each second weekend and some periods during school holidays with the father.
The level of child support payable by the father for the period
1 January 2006 to 31 December 2008 has been calculated under the provisions of the Child Support (Assessment) Act 1989 (“the Act”) in accordance with a determination by a Senior Case Officer on 5 May 2006 pursuant to Part 6A of the Act (“the determination”). The determination set the father’s child support income at $35,000 per annum.In her determination, the Senior Case Officer said the following:
I am satisfied that Mr Jacobs has an earning capacity at least $631.00 per week which is the average income earned by labourers and related workers in the 30 to 34 year age group according to the 2004 edition of “What Jobs Pay 2004-05” by Rodney Stinson. This is equivalent to $32,812.00 per week (sic). It is probable that Mr Jacobs assists his mother with bookkeeping, financial matters or farm management, and so his earning capacity is likely to be even higher.
She went on to say:
Having given this matter careful consideration, I have decided it is fair to increase the assessment so that Mr Jacobs is assessed on an income amount of $35,000.00. This figure allows for the likelihood that Mr Jacobs performs some tasks that are beyond the role of a labourer. The resulting rate is $5,954.00 per annum according to my calculations. This represents a contribution of approximately $57.00 per week for each child. If Ms Vidito contributes approximately the same amount, a total of $114.00 per child per week would probably go close to meeting the children’s basic needs.
The new rate will be set for an extended period so that both parents have some financial certainty.
In June 2006, the father lodged an objection to the determination with the Child Support Agency. That objection was disallowed in August 2006.
The father’s child support payments fell into arrears and in August 2007, the Child Support Registrar commenced enforcement proceedings in this Court seeking recovery of child support arrears of $11,720.56 and late payment penalties of $2,378.18 (“the enforcement proceedings”).
In October 2007, the father applied for a change of assessment seeking a reduction in the rate of child support set by the determination. That application was considered by a different Senior Case Officer, but in January 2008, it was refused on the basis that no new matters had been raised. The father objected to that decision but that objection was disallowed in April 2008.
The father lodged an appeal with the Social Security Appeals Tribunal. Following a pre-hearing conference convened by the Tribunal in May 2008, the father indicated that he did not wish to proceed with his appeal and it was dismissed.
On 9 December 2008, Declarations and Orders were made in this Court in the enforcement proceedings to the effect that:
a)the father’s liability for child support arrears and late payment penalties was fixed at $17,025.46 and $4,970.70 respectively;
b)he be restrained from dealing with his interest in a property known as “[D]” in [O]; and
c)he file and serve an Application for a departure from the administrative assessment on or before 19 December 2008.
He filed his application on 19 December 2008 and that is the subject of these proceedings.
On 23 January 2009 the further hearing of the enforcement proceedings was adjourned until a date to be fixed, approximately fourteen days after the determination of these proceedings.
Jurisdiction
The father says that the Court is able to hear and determine his Departure Application under the provisions of Section 116(b) of the Act. In this regard, no challenge was made to the Court’s jurisdiction to hear the matter and I am satisfied that:
a)as the respondent to the pending enforcement proceedings, the father is “the liable parent” and is “a party to an application pending in a court having jurisdiction under (the) Act”; and
b)it is in the interests of both parties “for the court to consider whether an order should be made … in relation to the child(ren) in the special circumstances of the case”. (I will refer to the special circumstances of the case further below.)
The father also says the following in his affidavit:
In relation to the period 1 January 2006 to 19 June 2007, comprising that part of the determination which is more than 18 months old, I am obliged to seek the leave of this Court under Section 112(2) of the Assessment Act.
Section 112(4) requires the court to look at any responsibility and reason for the delay in making the application and the hardship to either party. I shall refer to that further below.
Law to be applied
The provisions of section 117 of the Child Support (Assessment) Act 1989 (“the Act”) empower Courts to make orders for departure from administrative assessment in special circumstances.
The approach that the court must adopt in relation to periodic child support has been well settled by decisions of the Full Court of the Family Court of Australia[1]. It is clear that I must apply the three-stage process that is required under Section 117 of the Act and I must be satisfied that:
a)one or more of the grounds for departure in sub-section 117(2) is established;
b)it is “just and equitable” within the meaning of sub-section 117(4) to make a particular order; and
c)it is “otherwise proper” within the meaning of sub-section 117(5) to make a particular order.
[1] See Gilmour and Gilmour (1995) FLC 92-591, Liesert v Nutsch (1996) FLC 92-665 and Bryant and Bryant (1996) FLC 92-690.
Section 117(2) of the Act sets out the various grounds for departure. In Savery and Savery[2] Kay J said that “special circumstances” were “facts peculiar to the particular case which set it apart from other cases.”
[2] (1990) FLC 92-131
In Gyselman and Gyselman[3], the Full Court of the Family Court said as follows in relation to the phrase “special circumstances”:
Whilst it is not possible to find with precision the meaning of that term, as a generality it is intended to emphasise that the facts of the case must establish something that 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.[4]
[3] (1992) FLC 92-279
[4] At page 79,065
After considering these various bases for departure and whether or not in the special circumstances of the case it is appropriate for a departure order to be made, the Court must then consider subsection 117(4) of the Act which deals with the circumstances in which it is just and equitable to make the departure order sought.
Finally, it is necessary for the Court to consider subsection 117(5) and determine whether or not it is proper to make the departure order.
Is a ground for departure established?
In short, it is the father's evidence that he cannot afford to pay child support at the required rate of $106.21 per week from his total income of $242.00 per week and also meet his other necessary expenses. Consequently, he has been paying child support at the lower rate of $45.70 per week.
In his affidavit the father says:
12 ……The principal ground is that, in special circumstances of my case, a continuation of that assessment of child support would result in an unjust and inequitable determination of the level of financial support to be provided by me for the children because of my true income, earning capacity, property and financial resources. In simple terms, my actual income is and has been far lower than the child support income level set by the determination.
13. The special quality of my situation lies in the fact that I am and have been in receipt of a NewStart Allowance pursuant to the Drought Assistance Program at the rate of $223.00 per week, which equates with approximately $11,600.00 p.a. The determination sets a child support income amount of $35,000.00 p.a., largely by reference to a publication, “What Jobs Pay 2004 - 05”, which bore no relevance to my own situation under the Pastoral Industry Award and, particularly, as a farm employee working in a drought declared area.
14. I refer to the Financial Statement which has been filed with this affidavit. As that document shows, I presently receive a NewStart Allowance under the “Drought Force” initiative at the rate of $223.00 per week. I have limited savings and only a limited capacity to meet expenses beyond those which are necessary for my own support.
15. The “Drought Force” payment is an aspect of the “Work for Dole Scheme” established by the Commonwealth Government and, in my own instance, is paid to me with reference to the work which I carry out for [R] Pty. Ltd., the family company which owns and operates the “[A]” farm. I live and work on the farm, undertaking day to day stockwork, maintenance, fencing and general “dogs-body” work 10 - 12 hours per day. I receive no wage, other than the Drought Force payment, but do receive benefits from [R] Pty. Ltd. in the form of “keep” (i.e. accommodation, electricity and some food) and motor vehicle/petrol expenses. I have no shareholding in [R] Pty. Ltd. but understand that I am a beneficiary of the [R] Family Trust, a trust established by my father prior to his death in a motor vehicle accident in June 1989. I believe that [R] Pty. Ltd. is the trustee of the family trust and further believe that the directors of the company are my mother, Ms M, and my sister, Ms G. I have never received a distribution of profit from the trust and doubt that I ever will. Quite apart from anything else, “profits’ simply do not exist. In practical terms, I do not expect that I will receive anything by way of a legal or beneficial interest in [A] until
Ms M’s death when I will share alike with my sister Ms G, and our other two (2) siblings.
16. In about May 1998, I did purchase a property called “[L]” from my grandfather. The purchase price was $260,000.00. I borrowed the total amount required to complete the purchase, a total of $265,402.00, from [R] Pty. Ltd. [R] Pty. Ltd. in turn borrowed those funds from the Anglican Diocese. This led in time to a family dispute involving Ms G and, at my mother’s request, I transferred my interest in [L] to my mother for her to deal with as she sees fit.
17. I do have a legal interest as a 25% owner of a property known as “[D]” near [O]. That property has a value of approximately $235,000.00 and, similarly, is subject to a loan liability to [R] Pty. Ltd. That property is, for all intents and purposes, part of the [A] and is no more capable of sale than the other properties.
In cross-examination, the father was not really shaken in relation to his evidence quoted above. However, he was asked if he had ever in enquired about work in other places, and in Hobart in particular. His evidence was that he had not made any such enquiries.
Clearly, it is the mother’s case that the father has a capacity to earn a higher income than he is currently earning, and as a result the father should not have his child support assessment reduced.
In my view, the position adopted by the mother does not take account of the special position of farmers and farm workers badly affected by drought, nor does it take account of the Government’s special programme to stop farm workers drifting to the cities to find work. One of the Government’s websites explains the purpose of the Drought Force scheme as follows:
Drought Force helps individual farms and farm communities that have been severely affected by drought. Drought Force aims to help farming properties with their workforce needs and to help keep the pool of farm labour from moving away from the region.
That statement accords with what the father said in the witness box about the rationale behind the Government’s “Drought Force” policy.
I also note that there is no challenge by the mother to the evidence of the father that the area in which he works is in the grip of a severe drought. Indeed, it was clear from the evidence of the mother that her new partner’s income as a shearer has been reduced because of the drought in that area. She clearly conceded that “times on the land are difficult”.
It is because of the drought and the tough times that farmers are facing that I am of the opinion that there are special circumstances existing in this matter. I am also of the opinion that it is inappropriate to say that the father should be assessed against an income that he might be able to earn if he moved away from the family farm, when he has clearly satisfied criteria specified by Government to enable him to receive an allowance specifically designed to keep him working on the farm. It is therefore not necessary for me to determine what such an “off-farm” income might be.
In my opinion, in the special circumstances of this particular case, the application of the determination results in an unjust and inequitable level of financial support to be provided by the father for the children because his income is overstated. Consequently one of the grounds for departure in sub-section 117(2) is established. [5]
[5] See section 117(2)(c)(ia)
Clearly, in the determination, the Senior Case Officer was more concerned about his income earning capacity than his actual income.[6] However, it is also clear that I am not considering an appeal from that determination. I must consider this matter de novo. Notwithstanding that, I think it is fair to say that the Senior Case Officer could not have forecast the intensity or length of the drought, nor could she have foreseen that the father would be granted Drought Force assistance.
[6] See section 117(2)(c)(ib)
Is it “just and equitable”?
The father's income comprises his drought Force allowance of $223 per week and his one quarter share of the income from his interest in the [D] property of $19 per week, making a total of $242 per week. That is $12,584 per annum. However, he also has the “financial resource” of the “accommodation, electricity, some food and motor vehicle/petrol expenses”[7] that are paid by his “employer”. Unfortunately, that financial resource is not quantified in his Financial Statement - in Part F of that document he only discloses that his legal fees are being met for him by [A]. It therefore falls to me to estimate the value to the father of that financial resource.
[7] Paragraph 15 of his affidavit
I note that the father states that he pays nothing for rent, house repairs, gas, heating fuel or motor vehicle expenses, and I further note that generally those expenses form a large part of a person’s household budget, particularly for those on lower incomes. I am therefore of the opinion that the father has the standard of living of a person earning $25,000 per annum, and further that it is just and equitable to apply that as his current child support income amount (and not $20,000 as suggested by his counsel). Although the mother’s partner is earning only $18,000 in these “tough times”, I have no evidence that he is receiving any “keep” from his employer like the father is receiving.
While I consider it to be appropriate to apply a child support income amount of $25,000 currently, I do not consider it to be just and equitable to apply that child support income amount over the whole of the three-year period in question. My main reasons for that are as follows:
a)it was the father's evidence that he first started receiving Drought Force assistance in 2007; and
b)the father has not adequately explained why he did nothing in relation to the level of child support between his objection being disallowed in August 2006 and his application for a change of assessment in October 2007. (I infer that his application in October 2007 was in large part stimulated by the enforcement proceedings, but even if I am wrong about that, the fact remains that an adequate explanation has not been given.)
I am therefore of the opinion that the father should not be granted the leave that he seeks under Section 112 of the Act and that any departure order made should only apply to the 18 month period commencing
1 July 2007 and concluding 31 December 2008.
Is it “otherwise proper”?
Sub-section 117(5) of the Act clearly requires the Court to take into account the clear policy that children should be properly supported from their parents’ resources in preference to being a greater burden upon the public purse in the form of income tested pensions, allowances or benefits.
The mother currently receives $265 per week in Family Tax Benefits. That will not be increased to any appreciable degree (if at all) by a reduction in the father’s child support income amount from $35,000 to $25,000 for the period 1 July 2007 to 31 December 2008.
Conclusions
In view of the above, I propose to make a departure order which will reduce the father’s child support income amount from $35,000 to $25,000 for the period 1 July 2007 to 31 December 2008. I consider such a departure to be both “just and equitable” and “otherwise proper”.
Comment
My decision in this matter is based almost entirely upon what is an appropriate child support income amount to be attributed to the father. However, that should not cause the mother to think that I have ignored her evidence. I have not. It is very clear to me that the mother has made admirable efforts to improve her income earning capacity and that must be to her children’s benefit. She is to be congratulated for that.
The handing down of this decision will cause the following:
a)a re-calculation of any arrears of child support by the Child Support Agency, so I will require the solicitors for the father to provide that Agency with copies of these Reasons and today’s orders as soon as practicable; and
b)the reinstatement of the enforcement proceedings, so I will request my Associate to;
i)re-list the enforcement proceedings and inform the relevant solicitors of that listing; and
ii)provide a copy of these Reasons to the solicitors acting for the Child Support Registrar in those proceedings.
I certify that the preceding forty four (44) paragraphs are a true copy of the reasons for judgment of Roberts FM
Associate:
Date:
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