Kadis & Elmore
[2023] FedCFamC2F 479
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Kadis & Elmore [2023] FedCFamC2F 479
File number(s): MLC 3484 2021 Judgment of: JUDGE O'SHANNESSY Date of judgment: 28 April 2023 Catchwords: FAMILY LAW – application for enforcement of child support debt – where the mother sought a superannuation splitting order to pay child support debt – where the mother’s application for a superannuation splitting order was abandoned – application for leave to make an application for departure from the administrative assessment of child support – where parties did not have information as to how the debt accumulated at trial – where the senior judicial registrar did not have powers to grant leave for an application for a departure order – leave not granted. Legislation: Child Support (Registration and Collection) Act 1988 (Cth), ss 113A, 116(2)
Child Support Assessment Act 1989 (Cth), ss 111, 112, 116, 118
Cases cited: Michar & Baileford [2019] FamCAFC 60 Division: Division 2 Family Law Number of paragraphs: 76 Date of last submission/s: 18 April 2022 Date of hearing: 7 March 2022 Place: Melbourne Solicitor for the Applicant: Litigant in Person Counsel for the Respondent: Mr A. Combes Solicitor for the Respondent: RM Commercial & Family Lawyers ORDERS
MLC 3484 2021 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MS KADIS
Applicant
AND: MR ELMORE
Respondent
order made by:
JUDGE O'SHANNESSY
DATE OF ORDER:
28 April 2023
THE COURT ORDERS THAT:
1.The Father’s application for leave for the Court to hear an application for departure from administrative assessment of child support from 1 January 2016 to 31 December 2020, and his application that the Mother’s application for enforcement be stayed as contained in Exhibit H1 dated 7 March 2022, be dismissed.
2.The Mother’s application for enforcement be fixed for Mention on 24 July 2023.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under a pseudonym Kadis & Elmore has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
JUDGE O’SHANNESSY
INTRODUCTION
The question I must determine in this matter is whether to grant leave to the Respondent, Mr Elmore (‘the Father’) to file an application out of time for a departure order from the administrative assessment or determination of child support. The Applicant, Ms Kadis (‘the Mother’), opposes such application and seeks to proceed with her application for enforcement of a child support debt (‘the debt’).
BACKGROUND
The Mother was born in 1969 and at the time of this hearing was aged 52 years. She works as an allied health worker. The Father was born in 1967 and at the time of the hearing was aged 54 years. The Father is not employed and is engaged in home duties. The parties were married in 1996 and separated on a final basis in 2003. They have two children, Child A born in 1999 and Child B born in 2002. The Mother’s evidence is that, whilst both children still live with her and have either completed or are completing university studies with some employment, they are still predominantly financially dependent on her.
Following separation in 2003, the Father remarried and had three more children with that wife. That marriage subsequently failed. In 2012 the Father again re-partnered and subsequently married. He shares two children with his wife who are of primary school age.
From 11 September 2003 the Father was assessed to pay the Mother via the Child Support Registry (‘CSR’) $28,932 per annum with periodic reassessments based on the Father’s changing income and other relevant factors. The parties facilitated such payments through a private agreement. In or around July 2015 the Father lost his full time employment and undertook legal action for wrongful termination. He was successful with such legal action and received a settlement of around $50,000 plus costs. It is an agreed fact that the Father made all Child Support payments prior to his termination.
The Mother’s initial affidavit suggested that the Father had not paid child support since his termination which she placed in 2013 however this is not supported by other evidence produced during these proceedings. The Mother conceded to receiving funds deducted from the Father’s subsequent tax returns in 2016 and 2017. The Father’s case is that some payments were made, ceasing in 2016, with two additional payments deducted from his tax returns in 2016 and 2017.
Whilst the Father was not initially forthcoming with this information, the Father became an employee at Employer B for six months in 2016 and subsequently worked at Employer C from 2016 to 2018, albeit earning minimally at the latter. The Father’s evidence is that he has not been engaged in paid employment since 2018.
During the period of the Father’s termination of employment in 2015 to 2021 the Father accrued a Child Support debt of $41,473.
THE PROCEEDINGS
The Mother’s case is that after failed attempts to recover the debt from the Father through the Child Support Agency (‘CSA’), she attempted to contact him directly to settle the debt. On 9 November 2020 she received a letter from the Father’s lawyer acknowledging the debt with a proposal to settle the debt. No one objected to this offer being in evidence. The Mother did not accept the Father’s proposal to settle the debt, and after having given notice to the Father of her intention to initiate proceedings in this Court, she notified the CSR pursuant to section 113A of the Child Support (Registration and Collection) Act 1988 (Cth) (‘CSRCA’) of her intention to commence enforcement proceedings. She filed an Application in a Case (as the document was then known) in this Court on 30 March 2021. Hence, being as generous as I can to the Father, in one sense he has commenced to agitate this matter since 9 November 2020.
The Mother initially sought, among other orders, the following:
1.That a default judgment debt recovery order be made against the Respondent for the child support liability arrears, in accordance with the Child Support Debt Certificate (as provided by Child Support Registry [or a minimum of $41,473 for arrears ‘as at’ 8 December 2021]), pursuant to Child Support Assessment No. […] (“the payment amount”)(as per [CSRCA], s 113A).
2.That the payment amount be paid as a lump sum payment (as per the Child Support Assessment Act 1989 … s 123(1)(b) & 123A and the CSRCA s 69A) with an enforcement order having immediate effect (as per Family Court Rules … rules 16.02 & 16.03).
3.That a judgment debt recovery order be made with accumulated interest (as per CSRCA, ss 66), with an enforcement order having immediate effect (as per FCR, rules 16.02 & 16.03).
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5.That a penalty be payable to the Commonwealth by the Respondent, as this Honourable Court deems appropriate (as per CSRCA, ss 67 & 67A).
The Mother also sought costs against the Father for her application in this Court.
The Mother relies on the Father’s principle place of residence having a value of approximately $1.1million and, as at November 2015, the Father having a superannuation balance of around $318,685, showing his capacity to pay The Mother deposed to the following in her initial Affidavit:
15.… Both myself and our children have verily suffered economic and non-economic damage as a result of [the Father]’s actions, which I consider to be a form of neglect and ultimately abuse, towards them.
The Mother filed a further affidavit on 26 April 2021 annexing a Certificate under sub-section 116(2) of the CSRCA which identified the debt being $41,475.58 at 12 April 2021.
On 14 May 2021 the Father filed a Response to Application in a Case seeking leave to make an application for a departure from the Administrative Assessment of Child Support (‘AACS’) from 14 May 2014 to ‘the present date’, an order that that there be a departure from the AACS payable by the Father from 14 May 2014 to present, and no order as to costs. Hence, in a formal sense the Father made his actual application as and from 14 May 2021 in response to the Mother’s Application in a Case.
The Father’s case is that the AACS has been incorrectly assessed and seeks to make an application for the debt to be wiped. His evidence is that he does not have an interest in his principle place of residence, producing a title search to show that his wife solely purchased this property in 2006, some six years before their relationship commenced. His case is that he used the funds from his wrongful termination for general living expenses as he engaged in home duties for his then very young children. The Father’s case is that he does not have capacity to pay the debt, and his offer of 9 November 2020, funded by a family member, which is now withdrawn, was the only ability he has to contribute any funds towards the debt. His case is that whilst he does have what some might consider a substantial superannuation balance, he cannot access it, I infer, as he has not achieved retirement age nor qualifies for an early release.
The matter was first heard before a Judicial Registrar on 19 May 2021. Orders were made for the parties to each file any amended application and affidavit in support by certain dates, with the Mother being permitted to file an affidavit in reply. There were two relevant notations:
A.The Applicant intends to seek superannuation splitting orders to enforce the child support debt that is the subject of the enforcement application. The applicant will be required to produce evidence that the trustee of the superannuation fund has been accorded procedural fairness of the proposed orders together with evidence of the value of the respondent’s interest in that fund (s 90XT(2)(b) of the Family Law Act 1975). This evidence may be contained in an affidavit or tendered at the adjourned hearing date.
B.The Respondent has sought an order for a departure from the administrative assessment. If he intends to pursue these orders he must file and serve an Initiating Application together with the other documents in accordance with Rule 25A.03 of the said Rules.
The matter was then listed in the Child Support Enforcement List on 21 July 2021.
On 7 July 2021 the Mother filed an Amended Application in a Proceeding, no longer seeking what was proposed Order 2 above and sought instead:
2.The superannuation splitting orders be made to enforce the child support debt which is the subject of the enforcement application and should this evidence be still outstanding, that the member fund provider, [Super Fund 1] (“the Trustee”) superannuation fund (member number ….) (“the Trustee fund”), be ordered to provide evidence of the Respondent’s current ‘interest-value’ with the Trustee, in accordance with s 90XT(2)(b) of the Family Law Act 1975 (Cth), with enforcement orders applicable to the Trustee fund, being reserved pending receipt of the foregoing evidence by this honourable court.
3.That the child support debt be remitted by the Trustee to the relevant Commonwealth agency (“Child Support)”) as a lump sum payment (as per Child Support Assessment Act 1989 … ss 30, 123(1)(b) & 123A and the CSRCA s 69A) with an enforcement order having immediate effect (as per Family Court Rules … rules 16.02 & 16.03)
The Mother further sought to amend the proposed order seeking costs be fixed at a minimum of $8,264. The Father did not file any further material to rely upon at that time.
On 21 July 2021, being the day the matter was listed again before the Judicial Registrar, solicitor for the Mother filed an affidavit outlining the steps he had taken to obtain procedural fairness from the Father’s superannuation fund, and annexing a portfolio valuation of the Father’s superannuation as at 25 November 2015 (6 ½ years earlier) being $318,684.61. That same day, the Judicial Registrar set the matter down for Final Hearing on 27 September 2021 before me, with trial directions for each party. An order was made that the costs of that day were reserved.
The notations listed on the orders of that day are:
A.The applicant is seeking to privately enforce the child support debt owed by the respondent to the Child Support registrar pursuant to s113A of the Child Support (Registration & Collection) Act 1988.
B.The respondent has submitted that the Court cannot make an order in accordance with s 90XT of the Family Law Act 1975 in the absence of an application for orders pursuant to s 79 or s 90SM of the said act[.]
C.The respondent seeks a departure from the child support assessment but has not applied for a change of assessment from the Child Support Registrar[.]
27 September 2021 hearing
Neither party filed any further material before the matter then came before me for Final Hearing on 27 September 2021. Once the matter was called upon, it was submitted by counsel for the Mother that the Mother no longer pressed orders 2 and 3 of her Amended Application in a Proceeding, namely the orders relating to a superannuation split. Counsel for the Mother indicated that the Mother was seeking a default debt judgment pursuant to section 116(2) of the CSRCA, a requirement, he says, to have it registered with this Court so that further action could be taken by the Mother to pursue the debt. Counsel for the Mother indicated that both lawyers were ‘following the lead’ of the Judicial Registrar with respect to the superannuation path and were “simply obliging the Court in terms of pursuing that.”
The Father continued to press for an order granting him leave to file an application for departure from the AACS from 14 May 2014 to ‘the present date’, an order that there be a departure from the AACS payable by the Father from 14 May 2014 to present, and no order as to costs. No further Initiating Application and supporting affidavit as described by Notation B of the interim orders made 19 May 2021 (referred to above) was filed.
At that time, it was unclear to me how the debt arose if the Father was no longer working. No evidence was put before me as to how the debt arose, and it was clear that more information was required before the matter could proceed as a Final Hearing. I made the following orders that day:
1.Within 60 days the Respondent file an affidavit setting out the matters under section 112(4) of the Child Support (Assessment) Act that he seeks to rely on, and information of when and how any arrears arose, including details of the relevant assessment/s and his income at the material time/s arrears arose (“the Respondent’s section 112(4) affidavit”).
2.The Applicant file an affidavit in response within 30 days of service of the Respondent’s section 112(4) affidavit.
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The requirement of the person making an application seeking leave of the court to include relevant information or evidence is axiomatic, except that it was not complied with, at first instance, by the Father in this case.
On 24 November 2021 the Mother’s lawyer withdrew and she became a litigant in person thereafter.
On 9 February 2022 the matter was listed before a Senior Judicial Registrar. The powers delegated to the Senior Judicial Registrars did not extend to granting leave under section 111 and 112 of the Child Support Assessment Act 1989 (Cth) (‘CSAA’) as sought by the Father.
On 7 March 2022 this matter came before me again. The Mother, as a litigant in person, indicated that the parties had entered into negotiations to try and resolve the matter, and she now sought only $25,000 of the total debt. The Father, having previously sought orders for both leave to file the departure application and to be heard on the departure application, sought only leave to make the application and, should he succeed, a separate hearing occur for determination as to whether a departure order would be made. If granted leave to file the application, the Father sought a stay of the Mother’s enforcement application.
I made orders for the Father to file and serve by 21 March 2022 an updated paragraph 11 of his Affidavit filed 7 December 2021 with amendments to include the relevant dates of assessment and any other relevant information (including the basis of income amounts used in assessments) about how the arrears arose. The Mother was permitted to tender any further evidence and/or contradiction in relation to the Father’s amendments by 4 April 2022 by email. I otherwise reserved the decision as to whether the Father be granted leave to bring an application for departure orders until receipt of this information.
On 18 April 2022 the Mother provided or tendered by email to the Court (and to the Father to week prior – see Exhibit M2).
Documents relied upon
The Father relied on the following documents:
·Affidavit of the Father filed 22 March 2022;
·Affidavit of the Father filed 7 December 2021;
·Amended Response to Application in a Proceeding filed 20 July 2021;
·Financial Statement filed 20 July 2021;
·Affidavit of the Father filed 13 May 2021; and
·Outline of Case filed 7 February 2022.
The Mother relied on the following documents:
·Amended Application in a Proceeding filed 30 March 2021;
·Affidavit of the Mother filed 30 March 2021;
·Affidavit of the Mother filed 5 May 2021;
·Affidavit of the Mother 13 January 2022; and
·Outline of Case filed 8 February 2022 (3 pages).
The following documents were exhibited in the matter:
·H1: Orders sought by Father exhibited 7 March 2022;
·H2: AAT Decision dated 12 May 2017 exhibited 7 March 2022;
·H3: Child Support Payer Transaction Statement for period 19/11/2015 to 14/05/2020 exhibited 7 March 2022;
·H4: Child Support Account statement for the period 21 May – 19 June 2020 exhibited 7 March 2022; and
·M1: Decision regarding change of assessment document dated 8 May 2018 exhibited 18 April 2022;
·M2: Email dated 18 April 2022 from the Mother providing the 8 May 2018 decision exhibit 18 April 2022.
·H5: Email chain between Court and Father’s solicitor on 28 April 2023 exhibited 28 April 2023.
It is more practical to detail the Father’s case first and the Mother’s second.
How the debt occurred
Following the Father’s child support payments ceasing after his termination, the Mother sought to collect payments through the Child Support Agency as opposed to their previous private agreement. The Father’s case is that he notified the Child Support Agency in July 2016 that he was no longer employed or had an income. However, and this was not in the Father’s initial Affidavit, the Father began working in paid employment for six months in 2016 and then, separately, as an allied health worker at Employer C between 2016 and 2018. The Father’s Outline of Case, and not deposed to, refers to the Father’s income from retail employment being a ‘short term contact’ that was treated as annual income. The Father’s case is that he has not worked since January 2018.
After filing his 2015/2016 tax return, in which the Father’s taxable income was $130,007 comprising of his termination pay out and income from Employer B, $7,642.64 was deducted from his tax refund for child support arears and, the Father says, should have covered the arrears he had accrued during that period. The Father deposed to making various payments in 2017, although corroborating evidence puts that in 2016. The Mother denied receiving any of those funds, but conceded during the hearing on 7 March 2022 to receiving funds garnished from the Father’s 2015/2016 and 2016/2017 tax refunds.
Annexed as Exhibit -5 of his affidavit filed 22 March 2022, the Father produced a ‘Child Support Payer Transaction Statement for the period 19/11/2015 to 14/05/2020’. This documents details the assessed payments and whether or not any payment was made. There are many references to adjustments which either increase or decrease the amount owing, and penalties for incorrect income estimates and overdue funds which drive up the debt owed by the Father. Unfortunately, the document also combines the Father’s outstanding debt to the mother of his three non-resident children from his second marriage. As at 30 April 2020 the combined debt accrued to $136,717.91. I was informed by the Father’s counsel on 7 March 2022 that those three children reside in the Country D however I note that this does not affect the Father’s child support obligations.
Annexed as Exhibit -6 is a document generated by the Father’s solicitor which specifies the debits which relate to the Mother of these proceedings. They include:
·5 January 2016 $135.17;
·9 February 2016 $188.46;
·8 March 2016 $137.17;
·8 April 2016 $135.17;
·9 May 2016 $135.17;
·6 July 2016 $135.17;
·11 July 2016 $135.17;
·6 September 2016 $135.17;
·7 October 2016 $135.17;
·21 October 2016 $7,642.64 (tax refund intercepted); and
·15 November 2017 $2,238 (tax refund intercepted).
The Father’s asserted tax return figures in his Affidavit filed 7 December 2021 are verified by his tax returns subsequently provided. The Father includes his wife’s income in tax returns of 2017/2018, 2018/2019 and 2019/2020 in which he asserts she earned $270,000, $371,000 and $300,000 respectively.
The Mother refers to an attempt by the Father in January 2020 to settle the debt for $5,000 which was rejected by her, and a further offer on 9 November 2020 of $12,000 which was again rejected. Both parties relied without objecting upon offers put as assisting his or her case. I place weight on those offers.
Exhibit H2
In the Father’s first affidavit he had explained the situation as follows:
7.In relation to paragraph 7 of [the Mother]’s Affidavit of 19/03/2021, my employment with [the company] was terminated in July 2015 - not 2013 - nonetheless, I agree that I later sued for wrongful dismissal. [The company] offered me around $50,000 and I took them to Court. In the end, the matter settled shortly prior to court for $50,000 plus costs in around July 2016. I was not working at the time and my youngest child had recently been born in 2015. [My wife] and I made a decision that I would live at home and look after our 2 young children at the time. The money from the employment pay-out was spent on living costs as I was not working.
8.In relation to paragraph 8 of [the Mother]’s Affidavit of 19/03/2021, this is not accurate. I paid child support reliably until around March 2016. I had lost my job in July 2015. After that point, I struggled to find a reliable source of income and also, I had re-married and had 2 young children with my wife … My youngest had been born in 2015, just before I lost my job. [My wife] and I made the decision that I would stay home and look after the children while she earned the income for the household.
9.In relation to paragraph 9 of [the Mother]’s Affidavit filed 19/03/2021, I agree that my solicitor wrote to [the Mother] advising that:
a.I was prepared to resolve my outstanding arrears on the basis of a payment of $12,000 that could only be funded with assistance from a third party;
b. that I had no means of paying anything myself; and
c.Given that any payment to [the Mother] would have to come from a third party then such amount was, in all likelihood, more than she would obtain by pursuing me personally.
I otherwise dispute the claim at paragraph 9 of [the Mother]'s Affidavit of 19/03/2021. At the present time, I am the primary care-giver for my 2 children, … aged 7 and 5 respectively. My wife … is the 'bread-winner' in our home. The offer elucidated in the letter from my solicitors was made in a genuine attempt to give [the Mother] something and to resolve the matter.
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11.In relation to paragraph 11 of [the Mother]'s Affidavit of 19/03/2021, I confirm that the facts set out in the letter from my solicitor were correct then and are correct now. I have no assets and I have no income other than my superannuation.
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It turns out that there has been three reviews or examinations of appropriate child support assessment/s in this matter.
·On 23 January 2017 an Objection Officer (‘the Objection Officer’) at the administrative authority (‘the Department’) has heard the Mother’s objection to the Father’s zero income estimate lodged by the Father and allowed the Mother’s objection and revoked the Father’s estimate.
·On 6 February 2017 the Father applied to the Administrative Appeals Tribunal (‘AAT’) for an independent review of the Objection Officers decision and the AAT heard that decision on 12 May 2017. The review of that decision confirmed the Objection Officers decision (Exhibit H2).
·An application or objection by the Mother to the assessment based on the Father’s income of $15,239 that was heard or determined by, I infer, an Objection Officer on 8 May 2018 (Exhibit M1).
The Father’s first affidavit made no reference to any of these decisions. The Mother’s affidavit filed on 13 January 2022 referred to the 2017 AAT decision.
On 7 March 2022 the Father’s counsel tendered Exhibit H2 being the AAT Decision dated 12 May 2017, or the second review of child support referred to above. Relevant sections of this decision shed light on how the debt arose and are as follows:
2.On 22 July 2016, [the Father] lodged an estimate of nil income with the Department of Human Services – Child Support (the Department). The estimate was accepted by the Department that day.
3.On 24 November 2016, [the Mother] sought an extension of time to object to the Department’s decision. On 2 December 2016, the Department granted [the Mother]’s request.
4.On 23 January 2017, an objection officer at the Department allowed [the Mother]’s objection and revoked the income estimate lodged by [the Father] on 22 July 2016.
5.On 6 February 2017, [the Father] applied to the [AAT] for an independent review of the objection officer’s decision. That application was heard on 12 May 2017 …
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7.The issue to be determined is whether [the Father]’s estimate of nil income on 22 July 2016 should be accepted.
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8.Pursuant to subsection 60(3) of the [CSAA], it is open to [the Father] to estimate his adjusted taxable income for the remaining part of a year of income, in this case until 30 June 2017. Pursuant to subsection 63AA(2) of the Act, that election may not be accepted if it is less than the amount considered likely to be [the Father]’s actual income for that period.
9.It was [the Father]’s evidence that I could not accept that his income was nil on 22 July 2016. He was, at that time, working and receiving income. On 20 and 21 July 2016, he received income totalling $3,000. He gave evidence that he had lied to the Department when he claimed to have nil income at that time.
10.I am satisfied that the amount of [the Father]’s estimate of income is less than is likely to be his actual adjusted taxable income for the remainder of the financial year ending 30 June 2017. The direction to refuse to accept his income is enlivened.
11.[The Father] sought that I exercise that direction in his favour because he has multiple child support cases with two ex-wives, both of whom he claims to continue to harass him. He gave evidence of not being able to deal with child support issues. He gave evidence of being depressed and behaving erratically, although conceded he was working from July 2015. He gave evidence of gambling which put his third marriage at significant risk.
12.The principle object of the Act is to ensure that [the children of these proceedings] receive a proper level of financial support from their parents. To exercise the direction in the favour of [the Father] would not promote that object.
13.I refuse to accept [the Father]’s estimate of nil income on 22 July 2016.
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I reiterate that on 6 February 2017 the Father applied to the AAT for an independent review of the revoking of his income estimate being $0, knowing that he had in fact earned an income during that period.
Exhibit M1
On 18 April 2022, via email and in accordance with order 2 of the interim orders made 7 March 2022, the Mother tendered a ‘Decision regarding change of Change of Assessment’ document (the third review referred to above). Such decision occurred after the 2017 decision of the AAT (Exhibit F2 above). This document is dated 8 May 2018 and sheds further light on how the debt arose.
Relevant sections of the decision are as follows:
A decision was made by that Tribunal on 15 February 2017 based on the above findings, the COA decision was set aside and the following changes were made:
-for the period between 1 April 2016 and 30 June 2016 the adjusted taxable income of [the Father] was varied to $243,257.00;
-for the period between I July 2016 and 30 June 2017 the adjusted taxable income of [the Father] was varied to $162,086.00; and
-for the period between 1 January 2017 and 31 December 2017 the annual rate of child support was increased by $2,500.00.
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In order to establish Reason 8A I must be satisfied that the child support assessment is unfair because of [the Father]’s income, property or financial resources.
[The Father] has not provided a satisfactory response to the application or any evidence as to his finances and the finances of his business. …
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The evidence in this matter is unsatisfactory but the law is that I must do the best that I can with the evidence that I have. The unsatisfactory nature of the evidence is largely due to the failure by [the Father] to provide a response and full disclosure as to his finances.
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The income currently used in the assessment is $15,239.00. Based on the evidence set out above and [the Father]'s failure to respond to the application or provide evidence as to his income, I find [the Father]'s current income is significantly higher than he has been assessed upon. I am satisfied that this makes the child support assessment unfair and so special circumstances exist. Reason 8A is established.
[The Mother] also asked DHS to consider the earning capacity of [the Father]. If I am to determine that a parent's earning capacity is greater than is reflected in his or her income used in the child support formula I have to be satisfied on the balance of probability (what is more likely than not to be the case) about all of the following three matters:
The parent is:
- not working despite ample opportunity to do so; or
- has reduced his or her weekly hours of work to below full time work; or
- has changed his or her occupation, industry or working pattern.
AND
The parent's decision about his or her work arrangements is not justified by either:
- his or her caring responsibilities; or
- his or her state of health
AND
The parent has failed to show that the decision about his or her work arrangements was not substantially motivated by the effect this would have on the child support assessment.
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The third test is framed as a 'rebuttable presumption' and this means that the starting point is that affecting the child support assessment is presumed to be a major purpose of the parent's decision about his or her working arrangements. The parent can rebut this presumption by demonstrating, to a decision maker's satisfaction, that affecting the child support assessment was not a major purpose of his or her decision. This is a subjective test and I must consider what the parent's purposes were in making the decision about his or her working arrangements and whether a major purpose was to affect the child support assessment.
The uncontested is [the Father] was working for [Employer B] on a very good level of income but left that position. In the AAT it was shown that he has failed to disclose relevant information about his employment and earnings. He has also not provided DHS any evidence in regard to his circumstances or as to why he chose to leave a well-paid job. In the circumstances I am satisfied that [the Father]:
- has changed his occupation, industry or working pattern.
AND
his decision about his work arrangements is not justified by either:
- his caring responsibilities; or
- his state of health
AND
that he has failed to show that the decision about his work arrangements was not substantially motivated by the effect this would have on the child support assessment. That being the case I am satisfied that [the Father] has a higher earning capacity in line with his previous earnings from [Employer B]. Special circumstances are therefore established and I find that Reason 8B is established.
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[The Mother] is employed and only earns a very modest level of income. She resides in a rented home and her main assets consist only of her car, household contents and superannuation. Her evidence is, and I accept, that she is struggling financially and had to enter into a Debt Agreement Proposal under the Bankruptcy Act 1966 on 6 September 2017. [The Mother] did not claim that there are currently any necessary costs that can be said to be special or out of the ordinary for her support or the support of the children.
I have already discussed [the Father]'s income and earning capacity. Unfortunately I have no other current financial information in regard to him due to his failure to take part in this process. Nevertheless, in the absence of evidence to the contrary I will take it that there is nothing about his commitments necessary for his support that can be said to be special or out of the ordinary.
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Having regard to the matters set out above I am satisfied that it would be just and equitable to change the administrative assessment of child support.
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In deciding whether or not to change the assessment I must also consider whether a change to the assessment would be fair to the community (otherwise proper). This means that where the receiving parent receives an income tested pension or benefit, I have to consider the effect a change to the assessment would have on the pension or benefit.
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I note that any increase in the level of child support to be provided by [the Father] would be likely to, if anything, decrease the burden on the community through the provision of income tested payments to [the Mother] and would ensure that the primary duty to maintain the children is borne by the parents. I am therefore satisfied that it would be otherwise proper to change the administrative assessment of child support.
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Having carefully considered the evidence I am satisfied that as from 1 January 2018 the adjusted taxable income of [the Father] should be set at $147,500.00 which will give an annual rate of child support around $12,000.00 as requested by [the Mother]. I have decided that the change to the annual rate of child support should commence on 1 January 2018 as that is the date from which the changes made by the AAT ended. This will create a substantial level of arrears of child support and I am satisfied that this is fair in the circumstances.
The change that I am making will last until a terminating event occurs with regard to the child support liability for the younger child. This would normally occur when the child attains the age of 18 years. However, if he is still at school at that time [the Mother] can apply to this Department for the child support liability to be extended until the child's last day of school. This will require a letter being obtained from the school specifying that date and an application being made to this Department prior to the child's 18th birthday.
It is open to either parent to make a further application in the future if he or she believes it is warranted due to circumstances that have arisen.
(Emphasis added)
Father’s case
Pursuant to Exhibit H1, the Father seeks that I make the following orders:
1.That pursuant to section 116 of the Child Support (Assessment) Act 1989 the Respondent have leave for the Court to hear his Application for a Departure from the Administrative Assessments of Child Support for dates from 1 January 2016 to 31 December 2020 with respect to the children …
2.The Applicant’s Application in a Case (for Enforcement) filed 30 March 2021 and amended 7 July 2021 be stayed pending the outcome of the Respondent’s Application for Departure.
3. The Respondent's costs in connection with this Application be reserved.
The Father’s case is that his tax returns clearly show that he was not earning the sums that he was assessed to earn, and accordingly, he seeks leave to file an application seeking a departure from assessments back to 1 January 2016. The Father’s application, evidence and submissions do not address or come to grips with the reviews or decisions that have impacted on the assessment that created the debt.
The AAT found that the Father was untruthful and the 2018 objection hearing found that the Father had failed to respond or provide evidence other than a financial statement to his circumstances. A failure by the Father to alert the Court, in his first affidavit, of the three significant decisions (see dot points above) created the possibility that there may have been some underlying serious error or injustice that led to the creation of a child support liability.
The Father failed, in his first affidavit, to alert the Court that he had in fact been employed after his wrongful termination and again as an allied health worker. The failure to be upfront about how the debt arose, and that child support had been reviewed back in 2017, twice, and in 2018, so confused me to the point where I ordered the Father expand upon paragraph 11 of his affidavit of 7 December 2021 so I could ascertain how the child support debt arose. The answer to the question of how the debt arose is the 2017 objection decision, the 2017 AAT decision (Exhibit H2) and the 2018 review (Exhibit M1).
Mother’s case
The Mother seeks that I make a “default judgment order” for the debt pursuant to section 116(2) of the CSAA. There is already a certificate of debt of$41,475.58 annexed to the Mother’s affidavit filed 5 May 2021 described as ‘-03’.
The Mother’s case is that she has exhausted all avenues through the CSA and, pursuant to her lawyers advice, making an application in this Court was the next step.
The Mother’s case includes:
14.... The amount assessed by the CSA is not governed by me. They have their processes and calculations and have obviously done so based on information either provided or not provided by [the Father]. I am seeking what is owed to my 2 boys. Their current age is irrelevant, [Child A] isn’t working other than here and there. He is financially dependent on me and has been since 2016. [Child B] has been studying since 2015 and works part time.
15.... I entered into a debt agreement five years ago … due to not being able to afford credit card repayments, rent and bills. Earning 35k at the time and being fully responsible for 2 teenage boys meant we were living week to week. My parents helped with buying the school ipad for [Child B] and some excursions at school. They did however go without when it came to school camps etc.
16. ... [the Father] has failed to provide evidence of financial hardship. …
APPLICATION FOR LEAVE TO APPLY FOR A DEPARTURE APPLICATION
The Father seeks leave of the Court pursuant to section 116 of the CSAA to hear his Application for a Departure from all assessments of child support from 1 January 2016 to 31 December 2020. He seeks that the Mother’s application for enforcement be stayed pending the outcome of such application should he be successful in his application for leave. The Mother also seeks to pursue her application in accordance with section 116 to obtain a debt judgment, assuming there is such a thing.
The sections relevant to the Father’s application include section 111(1)(b), 112, 116 and 118 of the CSAA which provides:
111Application for amendment of administrative assessment that is more than 18 months old
(1)A liable parent, or a carer entitled to child support, (the applicant) may apply to a court having jurisdiction under this Act for leave for:
…
(b) the court to make an order under section 118;
in respect of a day in a child support period, being a day that is more than 18 months, and less than 7 years, earlier than the day on which the application under this section is made.
…
112Court may grant leave to amend administrative assessment that is more than 18 months old
(1)If an application is made to a court under section 111, the court may grant leave for:
…
(b) the court to make an order under section 118.
(2)The court may grant leave for an order to be made under section 118 if the court is satisfied that it would be in the interest of the parties to the proceeding for the court to consider, at the same time as it hears the application under section 111, whether an order should be made under section 118. If the court does so, the applicant is taken to have made an application to the court under section 116 for such an order.
…
(4)In considering whether to grant leave under subsection (1), the court must have regard to:
(a) any responsibility, and reason, for the delay in:
(i) making an application under section 98B or 116; or
(ii) making a determination under section 98S;
as the case requires; and
(b)the hardship to the applicant (other than the Registrar) if leave is not granted; and
(c)the hardship to the other party or parties (other than the Registrar) if leave is granted.
(5) The court may have regard to any other relevant matter.
Orders granting leave to specify period
(6)An order granting leave under this section must specify the period in respect of which the Registrar may make a determination or the court may make an order.
(7) The period specified under subsection (6):
(a)must not include a day in a child support period if the day is more than 7 years earlier than the day on which the application under section 111 was made; and
(b)is not limited by the terms of that application.
No requirement to make determination or order
(8) The granting of leave under subsection (1) does not imply that:
…
(b)the court is required to make an order under section 118.
…
116 Application for order under Division
(1)Application may be 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.
(2)An application:
(a)may only be made if an administrative assessment is in force in relation to the child, the custodian entitled to child support and the liable parent concerned; and
(b)may be made by the custodian entitled to child support or the liable parent.
(3)Subject to section 145 (Registrar may intervene in proceedings), the parties to the application are the liable parent and the custodian entitled to child support.
…
118 Orders that may be made under Division
(1) The orders that a court may make under this Division are as follows:
(a) an order varying the annual rate of child support payable by a parent;
(b)an order varying a parent's or non-parent carer's cost percentage for a child;
(c)an order varying a parent's child support income;
(d)an order varying the parents' combined child support income;
(e)an order that:
(i)the column in the Costs of the Children Table that covers a parent's child support income or combined child support income that is, or is ordered to be, greater than 2.5 times the annualised MTAWE figure for the relevant June quarter, is the column headed "2 to 2.5"; and
(ii)the column is to apply as if the second dollar amount in the heading to that column did not apply;
(f) an order varying a parent's child support percentage;
(g) an order varying a parent's adjusted taxable income;
(h)an order varying a parent's relevant dependent child amount or multi-case allowance;
(i) an order varying a parent's self-support amount;
(j) an order varying the costs of the children.
(2)An order under this section may make different provision in relation to different child support periods and in relation to different parts of a child support period.
(2B)A court may only make an order under this Division in respect of a day in a child support period, being a day that is more than 18 months earlier than the day on which the application for the order is made under section 116, if the court has granted leave under section 112 for the order to be made.
(2C)If the court has granted leave under section 112, the court may only make an order under this Division in respect of a day in a child support period if the day is within the period specified by the court, under subsection 112(6), in the order granting the leave.
(3)If the court makes an order under this section, the court must:
(a)give reasons for making the order (including reasons for its satisfaction as required by paragraph 117(1)(b)); and
(b)cause the reasons to be entered in the records of the court.
(4) Subsection (3) does not apply in relation to an order if:
(a) it is an order made by consent; and
(b)the carer entitled to child support concerned is not in receipt of an income tested pension, allowance or benefit.
(5)A contravention of subsection (3) in relation to an order does not affect the validity of the order.
(Emphasis added)
Pursuant to the above provisions, the Father is required to obtain leave of the Court to seek a departure as such application is more than 18 months after the decision or assessment. The Father seeks leave for reassessment on the 7 years prior to his application, in this case back to 1 January 2016.
I was not addressed at all as to whether a departure order application is the appropriate way to challenge the 2017 AAT determination (Exhibit H2) and/or the 2018 decision (Exhibit M1). However, assuming it is, I will deal with the leave out of time provisions.
Section 111 & 112(1)(b)
The Father has filed for leave pursuant to section 111(1)(b) as described above.
Matters to be considered: section 112(4)
I must have regard to any responsibility and reason for delay in making an application under section 116. The application is very late and long out of time save for the leave up to 7 years provision.
The Father’s evidence as to his delay in making an application in this Court is contained in his Affidavit filed 7 December 2021:
13.After the last change of assessment during 2016 I was told by the Child Support Agency that I had run out of options to appeal. I had appealed to the Administrative Appeals Tribunal unsuccessfully. I was told that if I wanted to change the assessment I would have to do it through the Courts at my own cost. This was not an option for me because I had very little to no income. I also note that during the period of time I was employed at [Employer B] I was going through a period of time where my marriage was in a state of crisis and it may not recover which led me to seek [psychological] and marriage counselling and a bout of depression.
14.In the latter part of 2015 I had engaged the services of a person named [Mr E] to help me file for bankruptcy. … I felt I had no choice other than to go Bankrupt as I had no means of paying my creditors. I paid a sum of $5,000 to [Mr E] to assist me with filing for Bankruptcy. During 2016 after several failed attempts at contacting [Mr E], I was informed that he was arrested for fraud and subsequently jailed.
…
16.… I had been attempting to communicate with [the Mother] in an attempt to resolve the question of the outstanding child support arrears. This was another reason I had not filed a departure application though primarily, I simply did not have the financial resources to do so …
…
18.I had never thought I would need to bring a departure application as I hoped that [the Mother] would realise that as I did not have capacity to pay, there was very little point in pursuing me and I had offered to settle with her on the basis that my current wife would help me pay the modest settlement sum primarily so as to avoid incurring legal costs to protect her property.
19.However, since [the Mother] instigated this litigation I have been forced into reconsidering my position and given that the Child Support liability is being pursued, I believe I have little alternative other than to seek to correct the amount that is being pursued.
20.I first raised my intention to seek leave to issue a child support departure in my Response … I did so as I genuinely believe the amounts I have been assessed to pay were incorrect and unfair as I had been assessed on income I did not earn. Whilst I had always believed these amounts were incorrect, it was not until it was clear to me that [the Mother] sought to enforce the debt against me that I realised I needed to have the arrears re-assessed. …
It is clear from the 2017 AAT (Exhibit H2) decision and the 2018 objection decision (Exhibit M1) that, back then, when evidence would have been more current or fresh, the Fathers account of his inability to earn income as determined was not accepted.
It is clear from the 2018 decision that the Father failed to properly engage in the process which had the knock on effect of a substantial level of arrears and a requirement that the Father contribute $12,000 per year to the Mother by way of Child Support payments until a terminating event happened.
Exhibits H2 and M1 show why the Father was assessed on particular earnings. The reality is that the Father sought to challenge the relevant assessment in 2017 twice and again in 2018. The 2018 decision further stated that either parent could make a further application if either considered there were “circumstances that have arisen.” The Father does not allege any new circumstances have arisen. In substance, once Exhibit H2 and Exhibit M1 are available, it is clear the Father seeks to again challenge the underlying assessments, appeal and determinations. This application is, in substance, a fourth attempt some years out of time to challenge the underlying obligation to pay any child support. That obligation arose by the proper application to the law and the factual circumstances of the time. The Father’s failure to inform the court of the two 2017 and 2018 decisions at the outset is a significant matter to be taken into account in the exercise of discretion to grant leave. That is of sufficient significance that of itself it would warrant the dismissal of the application. Notwithstanding that, I have attempted to balance that consideration with all and any aspect that could contend in favour of granting the application notwithstanding the years it is out of time and assuming the legislation permits the Father to now do so.
I must consider the hardship to the Father if leave is not granted. The Father’s evidence, contained in his Affidavit filed 7 December 2021, as to hardship is as follows:
22.I submit that [the Mother’s enforcement of the debt] will significantly affect me and may eventually result in me being Bankrupted for amounts that far exceed the amounts that I should have been assessed to pay [the Mother] in the first instance.
The enforcement of the now twice established debt (see Exhibit H2 and Exhibit M1) will cause personal hardship to the Father but not hardship in the legal sense. The consequence of a regular debt established in accordance with the law of the land, without more, is not hardship that the legislation contemplates.
The Father’s financial circumstances are set out in his Financial Statement filed 20 July 2021. This document was not challenged by the Mother. This document details that the Father has no weekly income, expenses of $210 per week paid for him by his wife, insurance and TPD deducted weekly from his superannuation of $93.30, and a single bank account totalling $5.14. The Father’s liabilities include five credit cards totalling $211,122.47, a formal loan to his wife of $50,000 for settling credit card debts (although this loan document was not provided), and an unidentified debt of $150,472. The Father’s superannuation has a balance of $471,000, some $152,315.39 more than was identified in a portfolio valuation produced by the Mother as at 25 November 2015.
The Father deposed to seeking to file bankruptcy in 2015 however was scammed of the funds he produced to commence that process. Since then, the Father has not filed bankruptcy despite his enormous, and I infer growing, liabilities.
This is not a determination on the merits of the Father’s application for departure. Nor is this application an appeal (out of time) of either of the three applicable decisions in 2017 (Exhibit H2) and 2018 (Exhibit M1).
I must consider the hardship to the Mother if I grant leave for the Father to file an application for departure. On this point, the Full Court in Michar & Baileford [2019] FamCAFC 60 (‘Michar & Baileford’) says:
[40]In respect of the respondent, the primary judge found she had received “little or no child support” and so, although she had been primarily responsible for the financial support of the children, her obligation to also supervise and care for them confined her employment opportunities to only part-time work and thereby limited her earning capacity, causing her hardship. But that was hardship she endured because of the paucity of child support she received from the appellant over numerous preceding years. It was not hardship she would suffer if the appellant was granted leave to pursue his review application which, if granted, might either succeed or fail. Section 112(4)(c) of the Assessment Act required the primary judge to consider the hardship she would suffer if the appellant was granted leave to pursue his application, not the hardship she had already endured due to impecuniosity. While s 112(5) of the Assessment Act might well have permitted the latter consideration to be taken into account, the exercise of discretion miscarried because the primary judge failed to correctly take into account the material factor prescribed by s 112(4)(c) of the Assessment Act. As it was not even taken into account, it could not be balanced against the countervailing consideration of the hardship the appellant would suffer if leave was denied (s 112(4)(b)).
(emphasis added)
The Mother is not currently legal represented and is not accruing those fees. However, the Father is represented and I must consider the disadvantage of conducting her case against legal representation (paragraph 41 Michar & Baileford). I accept the additional stress and difficulty that may carry with further proceedings about events long ago. I am satisfied that the Mother will suffer hardship should leave be granted for the Father to now file an application for departure.
The Father has or had a duty to maintain the children relevant to these proceedings. The most significant matter is that the Father has already, and as at May 2021, long ago, challenged the underlying obligation and the law of the land confirmed that obligation. To permit another challenge at this time would be an injustice to the Mother. The Mother has responded to, or been subjected to, two challenges to the underlying obligation to pay child support and herself brought another. For those decisions and the underlying obligation to pay child support to be now challenged would be a hardship to the Mother.
I must have regard to any other relevant matter. The Father has no assets of value save for his right to the due administrative of his substantial superannuation fund. To my knowledge, his principle place of residence is not at risk of being sold from under him due to such home being in the sole name of his wife and purchased prior to the commencement of their relationship. The Father is not in paid employment, however I am not satisfied that he did not have and does not have capacity to work.
The application for leave to bring the departure application was heard on the papers with oral submissions on 7 March 2022. At that time, it was apparent that further information was required. Further information was provided by both parties and the evidence of the third review, Exhibit M1 of 2018 was significant and no party sought to make any further submission. I do not make any finding of dishonesty by either party in their submissions or evidence to me, however the inference that is open to draw assuming complete candour by both parties, is that how the underlying obligation arose has become unclear or obscure to the parties in the mists of time, since the underlying assessments, objection determination and the AAT appeal were made.
CONCLUSION
I am not satisfied that the Father has satisfactorily explained his delay in seeking to challenge the underlying assessments. The delay is the responsibility of the Father and not in any way the Mother. A very relevant matter is that this is the fourth attempt or application by the Father or the Mother to challenge the underlying child support obligation that arises because of the due application of the law and reviews of administrative assessments in 2017 (twice) and 2018. The circumstances of the Father having thrice been involved in reviews of the underlying decisions, means that the Father’s complaints have been ventilated or he had the opportunity to ventilate the same in those three decisions. In those circumstances, it is not appropriate that his 2021 application for a leave to bring an out of time application to depart from assessments dating back to 2016 be granted.
The Father’s application (Exhibit H1 7 March 2023) for leave to make application to depart from the underlying child support obligation or determination, and his application to stay the enforcement proceedings, are dismissed. I have not dealt with or dismissed his opposition to enforcement.
I will list the Mother’s enforcement application for Mention.
I certify that the preceding seventy-six (76) numbered paragraphs are a true copy of the Reasons for Judgment of Judge O'Shannessy. Associate:
Dated: 28 April 2023