Kemp and Parsons
[2014] FamCA 865
•14 October 2014
FAMILY COURT OF AUSTRALIA
| KEMP & PARSONS | [2014] FamCA 865 |
FAMILY LAW – CHILD SUPPORT – Jurisdiction – Application by mother seeking orders pursuant to s 116(1)(b) for a departure from administrative assessment in the context of parenting proceedings between the parties to the assessment pending in the Family Court of Australia – Whether Court is able to make order – Application adjourned for determination at same time as parenting issues.
| Family Law Act 1975 (Cth) Child Support (Assessment) Act 1989 (Cth) s 116 and 117 |
| Harris & Ellis [2011] FamCAFC 90 |
| APPLICANT: | Ms Kemp |
| RESPONDENT: | Mr Parsons |
| FILE NUMBER: | LNC | 628 | of | 2012 |
| DATE DELIVERED: | 14 October 2014 |
| PLACE DELIVERED: | Hobart |
| PLACE HEARD: | Hobart |
| JUDGMENT OF: | Benjamin J |
| HEARING DATE: | 27 August 2014 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mrs Mooney |
| SOLICITOR FOR THE APPLICANT: | Wallace Wilkinson & Webster |
| COUNSEL FOR THE RESPONDENT: | Mr Murray |
| SOLICITOR FOR THE RESPONDENT: | Murray & Associates |
Orders
The application in a case filed on behalf of the applicant mother on 1 August 2014 be stood over for determination at the same time as the hearing of the parenting proceedings listed to commence 10.00am 13 October 2014.
IT IS DIRECTED
The mother file and serve, on or before 4.00pm 12 September 2014, the following:-
(a)her application for departure from the administrative assessment issued 28 July 2014 (for the assessment period 7 July 2014 to 6 October 2015) including the basis upon which she seeks departure from the administrative assessment having regard to the provisions of s 117 of the Child Support (Assessment) Act 1989 (Cth). Such application and supporting affidavit shall comply with the Family Court Rules, including Div 4.2.5 of the Rules; and
(b)any affidavits upon which the mother seeks to rely regarding the change of departure application include such issues as her income, expenditure, assets, liabilities and financial resources and those of the father, the alleged high cost of child care, medical insurance, school fees and paternity leave.
The mother be restrained from filing or serving any further material in relation to the child support aspect of her claim after 12 September 2014 without the leave of the Court.
Nothing in this order derrogates from the directions made 7 July 2014 with regard to parenting proceedings.
The father file and serve any response to the application for departure from administrative assessment and affidavits in support of that response on or before 8 October 2014.
Nothing in this order derrogates from the directions made 7 July 2014 with regard to parenting proceedings.
Each party shall ensure that sealed copies of their respective application and response to application in regard to child support are served upon the Registrar of the Child Support Agency, together with a letter informing the Registrar that the proceedings may be heard at the hearing commencing 13 October 2014.
IT IS CERTIFIED
Pursuant to Rule 19.50 of the Family Law Rules 2004 it was reasonable to engage counsel to attend.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Kemp & Parsons has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
| FAMILY COURT OF AUSTRALIA AT HOBART |
FILE NUMBER: LNC628 of 2012
| Ms Kemp |
Applicant
And
| Mr Parsons |
Respondent
REASONS FOR JUDGMENT
INTRODUCTION
Mr Parsons (‘the father’) commenced proceedings against Ms Kemp (‘the mother’) in the then Federal Magistrates Court in December 2012.
On 13 August 2013 those proceedings were transferred by Judge Baker of the Federal Circuit Court to the Family Court of Australia.
On 7 July 2014 the parenting proceedings between the parties was listed for hearing at Hobart on 13 and 14 October 2014. Trial directions were made and on 7 July 2014 the solicitor for the wife sought leave to include proceedings under the Child Support (Assessment) Act 1989 (Cth) (‘the Child Support (Assessment) Act’) at the same time. A direction was made that any such application be filed and served on or before 1 August 2014.
An application in a case was filed by the mother on 1 August 2014 and it was listed for interim determination before me on 27 August 2014.
ISSUES
The questions for the Court were whether it is, at the present time, satisfied that pursuant to s 116(1)(b) of the Child Support (Assessment) Act that:-
(a)the parties to the subject assessment have an application pending in a court having jurisdiction under the Act; and
(b)it would be in the interest of the liable parent and carer entitled to child support (the father and mother respectively) to consider whether an order should be made under the division in relation to the children in the special circumstances of the case.
BACKGROUND
The mother is aged 46 and is presently a home-maker although she is on maternity leave from her Government employment. The mother deposes that if or when she returns to full time employment she has the ability to earn about $85,000 per year.
The father is aged 43 and is a professional by occupation.
The mother has one child of a previous relationship, N, who is aged about 11½ for whom the mother asserts she receives child support of about $260 per week from her father.[1]
[1] Mother’s financial statement filed 21 August 2014 part D (paragraph 13)
There are three children of the relationship between the mother and father, namely, B aged seven, W aged six and L aged three.
The mother is the primary carer for the children and has been on long term leave from paid employment since about 2006.
The parties separated in February 2012 and proceedings were commenced in December of that year in the then Federal Magistrates Court.
The proceedings were transferred to the Family Court in 2013 and in early 2014 a hearing was commenced in relation to the mother’s application to set aside a financial agreement under the provisions of the Family Law Act 1975 (Cth). The parties resolved that issue and the property agreement was set aside by a consent order made 4 February 2014.
On 29 April 2014 an order was made that the father pay to the mother a sum of $50,000 within seven days and that some of this amount be treated as a partial property settlement. By orders made 20 May 2014 the father and mother settled their property disputes by way of consent orders which included a further payment to the mother of $1,100,000 and other consequential orders. At the same time the Court was asked to note, and did note, that the parties were entering into a financial agreement bringing an end to the parties responsibility to pay spousal maintenance, one to the other, into the future.
It was said that it was ‘the intention of both parties that these orders be in full and final settlement of their rights and claims pursuant to Part VIIAB of the Family Law Act for spousal maintenance and property settlement pursuant to Part VIIB of the Act for superannuation orders’.[2]
[2] Orders made 4 February 2014.
Once those property orders were made the only issue, at that time, left to be determined was the question of parenting orders in respect of the parties’ three children.
The father conceded that he has an income in excess of seven hundred thousand dollars per year. The father was unable to file an up to date financial statement due to the complexities of his financial arrangements and the proximity of time to the end of the 2013/2014 financial year.
Within the last week or so the mother vacated the former matrimonial home and the father took full occupation of that home.
The mother’s application to enable the hearing of the child support departure application at the same time as the property application is made pursuant to s 116(1)(b) of the Child Support Assessment Act.
In the mother’s financial statement of 21 August 2014 she asserted that the cost of maintaining the children of the relationship amounts to some $1,322 per week. The mother is entitled to receive $616.75 per week pursuant to the Child Support Assessment.
There was an issue between the parties as to the father’s willingness to pay child support. On the evidence the father asserts that he will only pay child support to the mother to the extent that he is required to pay under any assessment. However, he asserts that he will pay other expenses for the children such as school fees, medical insurance and the like.
THE EVIDENCE
The mother relied upon her:-
(a)Application in a case filed 1 August 2014;
(b)Affidavit of the mother filed 1 August 2014;
(c)Affidavit of the mother filed 21 August 2014; and
(d)Financial statement of the mother filed 21 August 2014.
The mother tendered the Costs of Children Tables.[3]
[3] Exhibit W1.
JURISDICTION AND POWER
The jurisdiction of the Court in relation to a change of assessment and under the Child Support (Assessment) Act is contained in s 99 of the Act.
The power pursuant to which the mother seeks to have these proceedings dealt with other than through the administrative process is contained in s 116(1) which provides:-
(1) A liable parent or a carer entitled to child support may, in respect of an administrative assessment of child support for a child, apply to a court having jurisdiction under this Act for an order under this Division in relation to the child in the special circumstances of the case if:
(b)both of the following apply:
(i)the liable parent or carer entitled to child support is a party to an application pending in a court having jurisdiction under this Act;
(ii) the court is satisfied that it would be in the interest of the liable parent and the carer entitled to child support for the court to consider whether an order should be made under this Division in relation to the child in the special circumstances of the case; or [emphasis added].
This section provides at the commencement that a party may ask the Court having jurisdiction under the Act for an order in relation to a child in the special circumstances of the case ‘ if’ and then sets out the thresholds contained in ss (b)(i) & (ii).
This provision empowers the Court to make a departure having regard to the provisions contained in s 117 of the Child Support (Assessment) Act.
There is no issue between the parties that there is an application pending or the Court having jurisdiction under the Act between the liable parent and the carer.
The question for the Court to determine is whether it is:-
(a)satisfied that it will be in the best interests of the liable parent; and
(b)the carer entitled to child support.
to consider whether an order should be made under this Division in relation to a child in the special circumstances of the case.
The special circumstances referred to in s 116(1)(b)(ii) is different from the special circumstances referred to at the commencement of the section. It does not relate to the factors under s 117 but relates to that threshold consideration.
Thackray J noted in Harris & Ellis [2011] FamCAFC 90 at 23 and 24 the following:-
23. There have always been limitations on the circumstances in which a party can apply to a court for a departure order. Those limitations were significantly amended by the Child Support Legislation Amendment (Reform of the Child Support Scheme – New Formula and Other Measures) Act 2006 (Cth) (“the Reform Act”).
24. The major difference following the commencement of the amendments made by the Reform Act was the requirement for a party aggrieved by a decision of the Agency to seek a review from the Social Security Appeals Tribunal (“the SSAT”), rather than applying to a court for a departure order. A party aggrieved by a decision of the SSAT may appeal to a court, but the right of appeal is restricted to questions of law: Child Support (Registration and Collection) Act 1988 (Cth) s 89 and s 110B.
His Honour noted that in the clear understanding that the policy that:-
35. The clear policy intention of the legislation is that the internal review/objection processes of the Agency are generally to be preferred over court based processes. Nevertheless, s 112(2) and s 116(1)(b) make clear that there are circumstances in which it will be in the interests of the parties for a court to deal with the dispute, even when the Agency’s internal objection procedures have not been utilised, because the court is, at the same time, already dealing with matters involving the parties.
The Child Support (Assessment) Act provides an administrative review process to which Thackray J referred to above.
The extant proceedings do not necessarily need to be property or spousal maintenance proceedings (see Blanchard & Blanchard [2009] FamCA 321 at 55). There is no requirement under s116(1)(b) for there to be such financial proceedings of one form or another.
I accept the submissions made on behalf of the mother that the onus on establishing special circumstances is that of the mother’s.
The mother asserted the following special circumstances:-
(a)The dispute between the parties has been long running and that it is the father’s desire for there to be a long term joint parenting arrangement for the children. The submission on behalf of the mother was that the determination of the complex financial arrangements regarding child support would run for some time in the child support administrative system and it could be quickly and effectively resolved in the Family Court. I accept that a determination in the Family Court is likely to be more prompt (albeit more expensive) than in the child support administrative system.
(b)The mother asserted that she will adduce evidence as to the high cost of child care in the event that she returns to work. The mother has not been in paid employment since 2006 although she asserted that it is open for her to return to work.
(c)The mother asserted that the father has shown a disinclination to be co-operative with the administrative process. The father asserted that he will comply with the orders and has complied with the orders although he wishes to make payments directly for the needs of the children rather than through the mother. It is submitted that there is complexity to the father’s financial affairs and given his income and his financial statements I accept that that is likely to be the case.
As a consequence of the complexity it is likely that lawyers and accountants will need to be involved so that there can be a clear understanding of the financial circumstances of the father to enable an adequate determination.
The mother claimed that the children would suffer financial hardship if she is forced to go through the administrative review process. I do not accept that submission although I accept that it will take time and will prolong the conflict.
The application would need to be seen in the stark light of it being capped at an income of $176,423 given the profound income of the father.
It was submitted, and I accept, that the legislation relating to departure from an administrative assessment discourages parties from coming to court but the exception is put there given the special circumstances and as asserted in s 116(1)(b) of the Child Support (Assessment) Act.
The father relied upon his response to an application in a case and his affidavit both filed 19 August 2014. Written submissions were prepared and lodged. There was little disagreement between the parties as to the law although counsel for the father asserted, as I said earlier, that the special circumstances in terms of sub-section (b)(ii) was different to that at the commencement of the section. I accept that submission.
Counsel for the father submitted that the mother had an opportunity to include the child support aspect in her property proceedings but did not do so and only sought to make that part of these proceedings after property was settled. That is a significant factor to which I have had regard in this determination.
Counsel for the father asserted that the addition of child support will add time to the hearing. I accept that submission. It is likely to add at least one possibly two days to the proceedings and force the parties to provide further evidence.
It is asserted that the facts are not complex. Given the complexity of the income of the father I do not accept the facts, in all of the circumstances, are not complex.
It was submitted by counsel for the father that the determination would involve ongoing litigation. The application only relates to the period up to 15 October 2015 and any further assessments would be subject to the usual administrative entitlements to which the parties would be otherwise entitled.
The father asserted that he wishes to change the parenting arrangements for the children to enable it to return to equal time. I reiterate what I said earlier in relation to the limited time.
The father asserted that his capacity to earn a large income is not a special circumstance. That will be a matter for determination either administratively or by curial determination in the future.
At the end of submissions counsel for the mother asserted that she did not need leave, she simply needed to file the application and then it was a threshold question to be determined by the Court.
It is of course open for the Court to have that consideration ahead of the hearing (which was what this short interlocutory hearing was to determine).
However, given the lack of evidence of the father’s financial circumstances and the lack of clarity as to the nature of the departure sought by the mother, I am not satisfied that that threshold determination can be made given the current status of the proceedings.
Accordingly, I will make direction for the filing of material in relation to the child support proceedings taken by the mother and I will consider the threshold question at the same time as I consider other questions during the course of the hearing.
I certify that the preceding forty nine (49) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Benjamin delivered 14 October 2014.
Associate:
Date: 14 October 2014
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