Lahey and Lahey
[2014] FCCA 826
•30 April 2014
FEDERAL CIRCUIT COURT OF AUSTRALIA
| LAHEY & LAHEY | [2014] FCCA 826 |
| Catchwords: CHILD SUPPORT – Child Support dispute – application for administrative assessment more than 18 months old – further application for substitution order – application in part misconceived as what applicant really wants is joint parental responsibility – delay in application not adequately explained – father seriously understating income and resources – limited time of operation of applicant’s proposed orders in any event – application dismissed. |
| Legislation: Family Law Act 1975 (Cth) Child Support (Assessment) Act 1989, ss.111, 112, 112(4), 112(4)(c),112(5), 117, 124. 124(2) |
| Applicant: | MS LAHEY |
| Respondent: | MR LAHEY |
| File Number: | MLC 4862 of 2013 |
| Judgment of: | Judge Burchardt |
| Hearing date: | 7 February 2014 |
| Date of Last Submission: | 7 February 2014 |
| Delivered at: | Melbourne |
| Delivered on: | 30 April 2014 |
REPRESENTATION
| Counsel for the Applicant: | Mr Bacon |
| Solicitors for the Applicant: | Manby and Scott Lawyers |
| Counsel for the Respondent: | Mr Glass |
| Solicitors for the Respondent: | Duffy & Simon Lawyer |
ORDERS
The application is dismissed.
IT IS NOTED that publication of this judgment under the pseudonym Lahey & Lahey is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT AT MELBOURNE |
MLC 4862 of 2013
| MS LAHEY |
Applicant
And
| MR LAHEY |
Respondent
REASONS FOR JUDGMENT
Introductory
As clarified with the Court the applicant mother seeks two remedies. First, she seeks leave to obtain an amendment of an administrative assessment that is more than 18 months old pursuant to s.112 of the Child Support (Assessment) Act 1989 (“Child Support (Assessment) Act”). Second, she seeks what her counsel described as a substitution order pursuant to s.124 of the Child Support (Assessment) Act. Ancillary relief mentioned in the Initiating Application was abandoned when the Court indicated that this was not an appropriate medium for that Application. The reasons for this are recorded in the transcript.
For the reasons that follow, although I have formed the very clear view that the respondent has been grossly understating and misrepresenting his income over a protracted period of time, it is not appropriate for the Court to exercise its discretion favourably to the applicant in relation to the retrospective assessment, nor will the Court grant the substitution order.
In order to explain why I have come to this conclusion, I will commence by a paraphrase of the parties’ affidavit materials filed with the Court.
The applicant mother’s initial affidavit filed 15 March 2013
The applicant deposed that the parties married on [omitted] 1994 and separated in April 1998. They were divorced on 21 October 2006. They have two children, [X], born [omitted] 1994 and, [Y], born [omitted] 1997.
The applicant deposed (in paragraph 3) that:
“The children reside principally with the respondent, but I have regular and extensive contact with them.”
The affidavit went on to depose that the mother pays $181 per week in Child Support for [Y] and went on at paragraphs 7-9 to complain of the allegedly inadequate way in which the father looks after [Y]’s health.
This material was advanced, as the affidavit makes clear in terms, in support of the substitution order.
Having complained of the father’s failure to deal appropriately with [Y]’s difficulties in relation to psoriasis, psychiatric health arising from an alleged sexually inappropriate advance from a family member and eye care, the mother deposed at paragraph 9:
“This situation would be remedied if I were allowed to pay a portion of whatever child support I have to pay not to the respondent, but directly towards [Y]’s doctors/dentists/psychologists (for both essential and non essential treatment). Such an arrangement would also mean i) I would be kept fully informed as to happenings regarding [Y]’s medical issues, ii) I would be given the financial ability to manage these matters if I felt the respondent was not properly addressing them and iii) would mean that I generally play a much greater part in these important aspects of [Y]’s care, welfare and development.”
Having set out thereafter a history of the father’s alleged employment and various criticisms to the effect that his lifestyle was at variance with his declared income, the mother said relevantly at paragraph 29:
“… I also say that the state of the respondent’s financial circumstances (when measured against my financial circumstances) mean that he will suffer no appreciable prejudice should the orders I seek under s112 be made. If I am given leave to go back to the Agency and have this matter dealt with by way of a change of assessment application, I will not seek that the respondent repay me any child support I may have overpaid him. I would be happy for any over payment to merely stand to my credit at the Agency and reduce my ongoing child support payments.”
From Annexure ML2, it is apparent that the respondent’s declared income for child support assessment purposes was $2,482 in 2011, $12,836 in 2012 and $20,143 in 2013.
The respondent father’s affidavit filed 16 May 2013
The respondent’s affidavit took issue with the amount of time the mother spends with the children, putting it as essentially minimal. It went on to set out the history he regarded as relevant, his denials as to the ill health of his daughter, [Y], and asserted that it was well-open to the mother to have made an appropriate timely challenge to the assessments she now seeks to review.
He deposed as to his employment circumstances and more particularly to a period of hospitalisation from 20 July 2009 for many months. He deposed that a business he had started in 2007 was effectively wound up in September 2009 having accrued substantial losses and that he had been on the Disability Support Pension since October 2010. He deposed to having sought to return to work in July 2012 but having resigned after 12 weeks owing to ill health.
At paragraph 14 he confirmed that his mother pays all his rent and assists him with the repayments in respect of his car. He also deposed in that paragraph that he obtained a casual job in administration with his former employer in April 2013 where he was earning $540 per week.
He further deposed that between July 2011 and January 2013 he had had an informal agreement with the mother to receive $600 per month by way of child support rather than the $900 per month to which he would have been entitled under administrative assessment. Indeed, it was the breakdown of that arrangement caused when [X] turned 18 that led to the current assessment in March 2013. It should be noted that the assertion as to the $600 rather than $900 per month payment is not in issue.
The affidavit of the mother filed 19 December 2013
The only matter to which I would wish to refer in this affidavit is at paragraph 7 where the mother explained her reasoning for the application, at least in part, as follows:
“I say it would be also be very constructive of [Y]’s healing process that I should become more involved in her school activities. As such, I also seek a substitution order that I be given permission to pay part of my assessed child support to [Y]’s school for her uniform and book costs. Allowing me to financially manage and otherwise become more involved in these day to day activities will be an important part of my and [Y]’s relationship moving forward.”
The affidavit of the father filed 15 January 2014
The only matter I seek to take from this affidavit for present purposes is an assertion at paragraph 7 where the father deposed:
“… say that the behaviour attributed to my brother was a joke that he made at a family gathering shortly prior to Christmas 2009. The joke was in poor taste and was raised by the Applicant during a joint counselling session. [Y] did not need counselling as a result of that joke. The counselling that [Y] was receiving in 2012 was to address issues such as feelings of being abandoned by her mother and general feelings of not belonging. [Y] concluded her counselling at [omitted] in November 2012 at the recommendation of her counsellor. As far as I am aware, [Y] is not in need of psychological treatment or counselling at this time. I do not know on what basis the Applicant has formed the view that [Y] needs such treatment. [Y] has only spent a total of 15 hours with the Applicant since 3 January 2013.”
The evidence given at Court – The mother
The mother adopted her Affidavits and Financial Statement as true and correct although she updated her Financial Statement. She confirmed that an assertion that she paid $100 a week towards education expenses for [Y] as stated in her Financial Statement was an error.
She led further evidence about the alleged joke/sexual assault. It emerged that she was not present. It was asserted however that disclosures by [Y] suggested that her uncle had put his hand down her shirt and fondled her breasts. This took place it would seem in the immediate presence of other family members.
Under cross-examination the applicant was pressed as to her level of income. She said that she is an [occupation omitted] and has been for much of the last 16 months but does not know whether that will continue. Her base salary is $78,000 per year and she denied an average of $2,000 per week over the last period of time. It is clear from exhibit R1 that her arithmetic in this regard was faulty. She accepted that child support is garnisheed at present because she had informed that she would not pay and did not do so for one month.
It emerged that although [Y] has spent some time with the mother and on each occasion $50 is spent on her, the reality is that this has only happened five times in the last year and the total thus expended is approximately $250.
The mother confirmed that she had made two challenges to Child Support Agency assessments in 2013, one of which had been partially successful in that the father’s income was assessed higher than it previously had been by the amount of rent it emerged his mother was paying for him. Each assessment challenge had led to a diminution in the amount she was required to pay.
It emerged that the mother had contacted the Child Support Agency after the father had gone into hospital in July 2009 because she was aware he was not caring for the children. She further contacted the Agency in 2008 and 2009 in any event.
The mother confirmed that she had tried to negotiate an agreement with the father but he had refused.
The mother stuck by her assertion that she had not sought to have administrative assessments between 2007 and 2012. She was scared because the father had said he would arrange a hit man and also because he said his family could afford to go to the highest Court in the land to litigate if the matter thus proceeded.
Nonetheless, the mother was forced to concede she had never taken out an Intervention Order in respect of the father, nor put in a complaint to the police even though she was a [occupation omitted]. She said that [Y] continues to suffer from severe psoriasis and was not under the proper care of a doctor until recently.
She confirmed that she could not obtain bulk billing whereas the father could.
She said that [Y] had been self-harming last year and could not cope with what her uncle had done, nor with bullying at school which apparently according to the mother has been going on since primary school.
She confirmed that although she had attended a family meeting, she had had no interaction with her daughter’s counselling since.
When asked what would happen in the event that the substitution order she sought was made, she said she would select a psychologist and it would appear from her answers that she has had made preliminary inquiries in this regard.
The last medical bill the mother paid for [X] was for some stitches three years ago and the last medical payment made for [Y] was some 10 years ago.
The evidence given by the father
The father was called and adopted his Affidavits. He was taken to exhibit A1 which is a series of documents relating to an application for car finance.
I do not propose to spend a lot of time on this aspect of the matter because I have come to clear conclusions. It is immediately apparent that the application submitted to [A] Financial Services dated
22 July 2011 was untruthful in very significant ways, even though the father warranted that the particulars contained in it were true. He had not been employed by [B] for two years as asserted. Indeed his evidence was that he never actually worked for that entity.
Self-evidently he did not have a monthly salary of $4,150 as a result. Furthermore the [B] undated, “To whom it may concern,” letter submitted with the application asserting that the father was paid $65,000 a year was likewise untrue. The assertion that the credit applied for was needed for business purposes would seem to be untrue and in any event the assertion under the Statement of Assets and Liabilities that the father possessed $93,000 worth of Publicly Listed Company Shares is also untrue. It has emerged in cross-examination that these shares in fact are the property of his grandfather and may be given to him when the grandfather dies.
A similar application made to [A] Financial Services (exhibit A2) in June 2012 suffers from very similar deficiencies and I note that the shares had been upgraded to a value of $100,000. The father’s assertion that these deficiencies were essentially caused by his broker (with the inference that the father bore no responsibility for his untruthfulness) is plainly unsustainable.
I note that from exhibit A3 the total sales of the respondent’s company for one month alone in March 2009 was $559,033 (although the accountant who prepared these figures which were admitted without objection was not called to give evidence so that figure must be approached with caution).
Although the father said that no sales of that quantum were made, the fact is that his accountant prepared a document showing them.
Likewise exhibit A3 shows loans to the father in 2008 to 2009 of about $8,000 upon which he conceded no tax was paid and a variety of other matters, all of which go to show that his income throughout has been greater than he was prepared to concede.
I do not likewise propose to trawl through the matters raised by exhibits A4, A5, A6 and A7 which are a series of bank and credit card records relating to the father. It is sufficient to say that they show very substantial amounts of income utterly inconsistent with the amounts asserted to the Child Support Agency and found by the Child Support Agency.
It should be noted that the father’s denial of the sexual assault asserted by the mother was, like the mother’s own assertion, purely hearsay and I have made it plain that I will not be able to make a factual finding about it.
What I can make a factual finding about is that [Y] has recently self-harmed. This puts the father’s denials of her ill health into stark relief. I accept that he appears to have taken appropriate steps to ensure that his daughter is properly treated but in evaluating his credit and believability this is a relevant consideration.
It is quite clear that the father’s lifestyle is relatively affluent – involving regular paid car washes – and the general picture that emerges is of substantial donations being made to him by his family from time to time and, one might say, as needed.
I have no doubt in the face of this evidence that the father has consistently misrepresented his financial position to his benefit by underestimating both the amounts of money available to him and their sources.
Observations about the credit of both the witnesses
The mother impressed as a person given to a measure of hyperbole. The assertion in her affidavit that she had regular contact with her children was misleading. Her relationship with [Y] is clearly fractured and only intermittent.
The mother’s assertions as to her daughter’s ill health and her frustration at being unable, in effect, to do anything about it stand very poorly with the fact that she has never sought from the Court an order for joint parental responsibility, nor has she otherwise sought curial redress. Indeed, I would say in passing that one of the off-putting elements of this case is the mother’s clear indication that the substitution order she seeks is in part a stalking horse for an endeavour to obtain something more akin to joint parental responsibility and to play a greater role in her daughter’s life. There is nothing improper about such a desire but this might reasonably be said not to be the appropriate avenue to pursue it.
Furthermore, the mother’s demeanour was redolent of somebody embittered by the course of events between her former partner, her children and herself. She was in my view by no means convincing in describing the extent to which her increased pay as an [occupation omitted] would continue. Her assertion that the future as an [occupation omitted], a position held for some 16 months, would be only revealed when she returned to work for her next shift was, by way of illustration, wholly unconvincing.
However, the father was much worse. His answers often had the appearance of being made up on the run and he was in my view entirely unconvincing in his endeavours to explain away the numerous payments made to him and his expenditures. True it is that he has had intermittent periods of work as he has asserted. True it also is that money may pass from one account to another account, but the picture emerging from the exhibited material is overwhelming. The father was not a witness whose evidence I would readily accept. What he said and the way that he said it was unconvincing and his admittedly false applications for car finance speak for themselves. This is a man who is quite prepared to sign untruthful documents to gain a commercial advantage.
The section 112 application
Both parties agreed that this was required to be addressed first. Indeed both parties agreed that this was required by the Statute, but both parties agreed that notwithstanding some ambiguity it was appropriate by consent to hear this matter at the same time as the s.124 application. Such a course is eminently sensible and I have had no difficulty in agreeing to it.
Pursuant to s.112(4) of the Child Support (Assessment) Act the Court has to consider a number of mandatory considerations, albeit that I accept as the mother submitted through her counsel that she has a right to apply for leave pursuant to s.111.
The first point to be considered is the question of delay.
I do not accept that the mother failed to make application for administrative assessment because of the threats to kill her and/or the threats of litigation. She has never applied for an Intervention Order against the father. She has never laid criminal charges against him. She has been able to come to informal agreements with him from time to time.
The assertion that she was sufficiently terrified by the alleged threat simply does not sit with the objective facts. The explanation for the delay is not in any way satisfactory.
The Court is next required to consider the hardship to the applicant mother if leave is not granted.
The fact is that the applicant mother has been making payments in the sums presently under discussion for some time. There is now only approximately 14 months to go before child support will cease. The applicant mother has a significant income and her Financial Statements do not appear to me to suggest that she is unable to make these payments.
If one looks at what the applicant mother is really seeking to achieve, she is seeking to have the periods of assessment from 2008 until now reassessed and as she would hope, and as I indeed think is likely, this would lead to a substantial credit in her favour. Against that, however, she has had a relatively substantial period during which she paid $300 a month less than she ought to have done. This would give rise, albeit not in assessment terms perhaps but as a matter of practical politics, to her having not paid about $300 a month that she ought to have done between July 2011 and January 2013. On any view that would give rise to an underpayment of some $5,000.
While as I have already said this was by agreement and therefore would presumably not give rise to reassessment, it is not in my view an irrelevant consideration bearing in mind that the Court’s capacity to grant leave pursuant to s.112 is, subject to consideration of the mandatory matters referred to in subsection 112(4), at large. Other relevant matters may be considered (s.112(5)).
Assuming that it is correct that the mother does not seek to have moneys repaid to her, the net effect of making an order in her favour going back to 2008 will be that by the time the assessment process is finished – and that will presumably take some months – the period during which child support will then be paid will be in all probability a year and very possibly a fairly substantially shorter period of time than that. Since overpayments are not going to be sought to be repaid, the net real benefit to the applicant will be fleeting in terms of temporal operation. A year’s worth of child support at the rate revealed by annexure ML2 is in the order of $789.33 times 12, namely $9.471.96.
In circumstances where this is the maximum conceivable amount of benefit, spread out over a period of that amount of time, in my view in all the circumstances one cannot say that a failure to make the order would give rise to hardship on the part of the mother.
To turn to the final consideration in s.112(4)(c), I have to consider the hardship to the respondent father in the event that leave is granted.
I have no doubt that if I granted leave it is highly likely to benefit the mother and cause a diminution in the amount that the father receives for the next 12 months or so. This will not cause him hardship, however, because he has substantial undeclared resources and his parents will assist him in any event.
In all the circumstances, in my view, it is clear beyond doubt that I should not grant leave. The amounts of money involved, while obviously significant, are not likely even on the largest scale achievable to be decisive in the future financial wellbeing of these parties.
I am quite unsatisfied as to the explanations advanced for the delay. I am by no means satisfied that the mother’s representation of her ongoing wages is accurate. I am positively satisfied that the father has under-declared and concealed his income and resources in a very significant and disgraceful way. Nonetheless, the utility of going back and granting leave in these circumstances is in my view decisively outweighed by the uncertain nature of the outcome. It is one thing for me to be sure that the father has under-declared his income, it is quite another to be certain that the Registrar will find proof giving rise to a particular quantum and it is wholly uncertain what the result of an assessment outcome would be. Put shortly there is just not enough time for all this to operate.
The substitution order
Pursuant to s.124 of the Act I am required to have regard to the matters set out in s.124(2) and I am required to pay proper attention to the various other mandatory considerations contained in the section.
This matter may be disposed of shortly. The reality is that the father can bulk bill. He will be able to afford to take [Y] to any necessary medical treatments. Although his behaviour has been tardy and insouciant, it is to be presumed that he loves his child and would take appropriate steps in the future.
In truth, what the mother really seeks is to become more involved in [Y]’s life and to have what would otherwise be described as joint parental responsibility, which is something she is plainly presently denied. Her own affidavit material makes this clear.
As counsel for the respondent father rightly points out, how is the order really going to work? The proposition that the mother put $50 per week to ancillary health or educational benefits suffers from the defect that [Y] is not in her care. She has only seen her five times in the last year. In circumstances where the relationship is, as the mother’s own affidavit material makes clear, fractured at best, this is an utterly inappropriate and unworkable outcome.
I should make it clear that although I am well aware of the matters required to be considered arising out of s.124 (including the relevant sections of s.117 brought into play by the section) and I have had due regard to these, the fact is that they do not bear upon the matter significantly in these particular circumstances. It is the unworkability of the order sought that makes it inappropriate.
Furthermore, the reality is that subject to any adjustments that may take place by way of reassessment, the amount assessed must be taken to be fair and reasonable.
Final observation
Nothing in this judgment or in the orders I am going to make prevents the mother from seeking an administrative reassessment back for the last 18 months. It should be noted that in all probability if she is successful in persuading a Registrar that the father’s income should be radically altered to a far greater amount, it is highly possible that the offset amounts that she has said she is seeking might in large part be generated, or even in whole. This only goes to reinforce the practical uselessness of granting the orders that the applicant mother seeks.
Conclusion
I will order that the application be dismissed. I have a measure of sympathy for the mother because I have made a number of findings very critical of the father, but the fact is that the orders she seeks are inappropriate and spring in large part from a misconception of the proper function of the legislation. It is quite clear to me that the remedies she truly seeks should have been sought in the form of appropriate parenting orders.
I certify that the preceding sixty-nine (69) paragraphs are a true copy of the reasons for judgment of Judge Burchardt
Associate:
Date: 30 April 2014
Key Legal Topics
Areas of Law
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Civil Procedure
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Abuse of Process
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Stay of Proceedings
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