Lee and Ryder

[2007] FamCA 519

FAMILY COURT OF AUSTRALIA

LEE & RYDER [2007] FamCA 519

FAMILY LAW - CHILD SUPPORT - Assessment - Remittal to Child Support Agency

APPLICANT: MR LEE

RESPONDENT: MS RYDER

FILE NUMBER: ADF 5495 of 1989

DATE DELIVERED: 8 May 2007

PLACE DELIVERED: Adelaide

JUDGMENT OF: Bell J

HEARING DATE: 2 & 3 May 2007

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr McQuade of Counsel

SOLICITOR FOR THE APPLICANT: David Fidler, Solicitor

COUNSEL FOR THE RESPONDENT: Mr Childs of Counsel

SOLICITOR FOR THE RESPONDENT: Georgiadis Lawyers

Orders

1. IT IS DECLARED THAT for the purpose of assessment of the correct amount of Child Support to be paid for the last six (6) years the husband’s income is the amount of $80,000.00 per annum and the wife’s income is the amount of $17,000.00 for the past twelve (12) months.  It is otherwise just and equitable to vary the assessment if necessary in accordance with Child Support practice and procedure.

2. The matter is referred to the Child Support Agency for the purpose of assessment.

FAMILY COURT OF AUSTRALIA AT ADELAIDE

FILE NUMBER: ADF 5495  of 1989

MR LEE

Applicant

And

MS RYDER

Respondent

REASONS FOR JUDGMENT

1. I have already indicated to the parties that it might have been advisable for them to consider accepting a lump sum amount in lieu of future child support obligations on the part of the father, but this was rejected.  Consequently, I feel as though I have done as much as I possibly can in an endeavour to forestall future litigation which I see looming on the horizon.

2. The applications before me are confusing in the extreme, as far as I am concerned.

3. I make it quite clear that this matter has been litigated since around about 1998.  The parties have been married.  They separated from the marriage.  Two children were born.  All of this has been investigated thoroughly in two judgments which have been put before me, one by Judicial Registrar Forbes and the other by Murray J, which was the later.

4. The facts as contained therein are not, as I understand, in issue, and I am talking about the historical facts in relation to the marriage and the separation; nor, in particular, have the facts in relation to the subsequent dealings of the various properties been in any way suggested to the contrary, save - and if my memory serves me correctly - a document came to light during this trial which appears to have not been known of by the mother, nor to any great extent was any emphasis put upon it by the father in any of the previous applications and/or assessments and/or reviews of various child support assessments.  That document is a document which appears to be a consent order filed pursuant to the rules of this court.  It is not a section 87 agreement but it is a consent order which was filed in relation to financial matters, property settlement matters, between the respondent the husband and his now wife Ms A.

5. This took place as a result of a separation between himself and his wife Ms A in 1998.  That document, which is filed 16 November 1998, in its recital says inter alia the following things:  that the parties were married, and separated initially in January 1998.  They attempted reconciliation with the parties - that being Ms A, his present wife, and the husband - separating on 29 June 1998.  At that stage there was no likelihood of cohabitation being resumed.

6. It further goes on to say that the parties had jointly purchased vacant land at C.  This is the property which looms comparatively large in the wife's application.  It is a palatial property; it is huge.  It recites that it was purchased with funding partly by the payment by the wife, a deposit, and the remainder thereafter being borrowed in joint names.

7. In January 1998 - and this is important - this property, according to the recital to this order, was transferred by the husband to the wife.  There is exhibited to the husband's affidavit a transfer.  This is mentioned in the judgment of Murray J.  Since that time it is alleged that the wife has paid all payments of mortgage instalments, rates, taxes and other outgoings.

8. There was cross‑examination of the parties - of the husband and his present  wife in relation to this matter, and it appears that according to their evidence - and unfortunately the only evidence which is before me - that this property as at the date of the transfer of the husband's - and I refer to the respondent as "the husband" - interest to his wife Ms A came about since there was virtually no equity in the property whatsoever and, as a result thereof, the consideration was virtually nothing, as is pointed out by Childs of counsel for the husband, stamp duty was paid on $42,500, which was of course the husband's half‑interest in the property, and it must have been valued at around about $85,000 to $90,000.  Since that time it is alleged that this property has remained in the present wife’s name and that she has carried out all expenses in relation to utilities as well as the building of what appears to be a mock castle on the premises.

9. At that time or thereabouts, the husband was also the shareholder in a company.  He sold his shareholding and interest in the company S Pty Ltd, and it is alleged on one hand, I think he said, as early as 1994.  The registrar of share dealings does not show that, but does tend to indicate that he may have still had some interest in the property, I think I am right in saying, until 1998 and thereafter it appears as though the shareholding in this property has bounced back and forth between Ms A - that is, his present wife - and, I think, her brother‑in‑law Mr N, who appears to have had some definite interest in the property.

10. As it stands at present and it has stood since about the year 2002, there is no evidence before me which I accept, and there is no evidence, that the husband has any interest in the company, nor does he have any interest in the land.  That is legal interest.  Mr McQuade, of counsel for the applicant mother, has indicated that on the material before me I should be able to infer that the husband does in fact still have an interest in the company and the land and that, if anything at all - whilst I do not think he used these words precisely - there should be some interest insofar as a trust is concerned, on the part of his present wife, for the benefit of the husband.

11. What then is the evidence as to any interest he may have in this property?  It is alleged by the husband that for the last six years, if my memory serves me correctly, he has been a labourer upon this property and has worked continuously in labouring fields, has been an assistant to stonemasons and has done a tremendous amount of running around solely for the building.  I put to him that he may be a clerk of works.  This fell on deaf ears, as he did not seem to understand what perhaps may be a peculiarly Queensland position.

12. There is no evidence before me that he receives any benefit from the company other than that for some years he has been receiving amounts of money from the company, which is totally controlled legally by his present wife.  This company somehow or other - and with great respect to the present wife, she did not impress me as being a livewire businesswoman - has been remarkably successful.  Not only is she the managing director of this company, which at this stage has at least moneys in the bank of some $800,000, but also runs other companies as well and, notwithstanding she did not impress, she must be a woman of some expertise in the commercial field.  She has done remarkably well.

13. But she has once again, it appears, because of love and affection for her present husband and also for the work that he does upon the house situated in L, photos of which are exhibited to the affidavit of the former wife, been paying him in effect a salary or wage of something like $40,000 per year.  She gave evidence that this money was paid basically to enable him to comply with his child support indebtedness.  That has been considerable since particularly the year 2000 or 2001, I think, wherein he was assessed as having the capped rate of $126,000 or thereabouts per year and as a result thereof he was paying a considerable amount of child support for his children.  This was capped until 2005, when it was dropped to $100,000.

14. There have been assessments.  There have been applications for reassessment.  There has been one case of an application for a departure which was heard by Judicial Registrar Forbes in 1997.  There has been a review by Murray J in 1998.  He has been paying up to, I think, $11,000 per year by way of child support and it is said by the present wife that in fact he could not do this if it had not been for the moneys which she has, I expect - I am not quite sure how it is worked out in the books - either lent him or has paid him as a result of the work that he carries out on the house.

15. To such an extent he was in debt for an amount of some $38,000, which appears also to have been given, lent or somehow or other it came into his possession as a result of the present wife paying to him from, as I understand, the company's accounts the amount which was attributed to the arrears, and such arrears have been paid out.  He is no longer in arrears, save perhaps for one instalment of some $800.

16. The two children who are in issue here are a daughter, who was born … April 1989, and a son, who was born … April 1991. The daughter of course is no longer the subject of the Child Support Act, other than for any applications that may be made for adult child maintenance, and the son will be no longer subject to the act in about two years' time. Consequently, the father's assessment, one would have thought, will drop considerably since the daughter is no longer able to claim child support from him.

17. The wife, the applicant is now employed partially, receiving $17,000 take‑home per year.  At this stage she had not been employed for a period, but she is now.  She had, I understand, entered into a previous relationship and is in another relationship at this stage.  She indicates that she wishes the husband's income to be increased in all particulars up to whatever cap there may be, and she points to the evidence which she says has taken her some two to three years to amass, indicating that the father has the capacity under the act to be able to, either by way of income and/or financial resources, be declared to have an income of about $126,000 per year for at least the years for which he has been assessed at $100,000.

18. In one of the reviews the review officer indicated that they were satisfied, as I read it, that he had an income of about $50,000 per year from whatever source it may be at S Pty Ltd, plus he had a financial resource of being able to use the assets of the company to another $50,000, raising it to $100,000.  With great respect to the assessor, it appears as though that was a guess, but we can all hope that it was a qualified guess.

19. What then is the evidence that the mother has before me to indicate that the father has an income of in excess of $100,000?  Nothing.  There is no evidence to support that at all.  There is evidence to support at least $40,000 per year.  There is evidence to support that in all probability the father has access to the financial resource of the company, which is a successful company.  There is evidence to support the fact that the father is living rent‑free in the property which he is building, with the assistance of experts in the various trades.  There is obviously evidence that he must have the use of a vehicle, whether it is the present wife’s vehicle or the company vehicle, since the property is situated some little distance away from Adelaide.  I am quite satisfied that in fact he does have a financial resource which is the company and which is, in effect, his present wife, who appears to be most generous towards him.

20. What is it?  What is the financial resource?  Am I able to say I have $50,000, as the assessing officer has said?  Am I able to say $5000, or am I able to say that there is some amount of money there, there is some resource there which would enable him to more readily be able to meet any assessment that could be made by the Child Support Agency for the maintenance of the son.

21. It is essential, for the wife's case to succeed, that she is able to give me evidence, in whatever form it is, to say (a) that the father has an income, (b) has a financial resource, or otherwise.  I am satisfied that he has an income.  I am satisfied that he has no legal interest in S Pty Ltd.  I am satisfied on the evidence before me that he has no other source of income, and I emphasise that.

22. I am more than satisfied, however, that there is a resource that he can action or access; that is, either his wife's largesse or the company itself, it being clearly, on the evidence before me, considered by the present wife to be the alter ego of herself.  But what figure can I put upon that?  All I can say is that it must be reasonably substantial.  Although there is no evidence before me, it is quite clear that the use of a motor vehicle nowadays is a substantial asset, some $15,000 to $20,000 per year.  I would not be surprised if he has a mobile phone which is paid for by S Pty Ltd or his wife.  I do not believe that there is sufficient evidence before me to indicate that he does not have the use of a mobile phone; equally, of course, some people would say there is no evidence to say that he does.  But, as a man who is working particularly hard physically on this property, one would have thought it was absolutely essential that he have some form of communication so that he can deal with independent contractors who are building this enormous property in L, which is some 25 kilometres from Adelaide.

23. So she fails, but then again, of course, on the other hand, we have the father seeking a reassessment of so many assessments, attempting to bring it down considerably.  As I read his outline of case document, however, he says that it should be brought down in the period 1 June 2004 till 2005 to $7303, and from 1 July 2005 to 31 December 2007, and he says that because he is only receiving some $38,000 to $40,000 per year.

24. I am more than satisfied that, notwithstanding cashwise he is receiving that amount, he does have access to financial resources considerably in excess of that.  I am put in the invidious position - because, as I have said, this case appears to be prepared on the run - of being unable to quantify that figure but to say that there is at least a free car of some $15,000 to $20,000, at least a telephone, and other things - for instance, food, et cetera, and things of that nature.  I do not feel that I could be wrong in saying that he would not be entitled to look at a financial resource of some $30,000 per year.  Consequently, I am more than satisfied that his income and his access to a financial resource would be in the vicinity of $80,000 per year and has been since he has commenced working on the property almost full‑time.

25. What then am I to do? It is a matter which is peculiarly within the arithmetical geography of the Child Support Agency. Consequently, I am satisfied that I should declare that the husband's income and financial resource is in the vicinity of $80,000 per year; take into consideration that the daughter is no longer subject to the Child Support Act and that the son still is. I would have to return the matter to the Child Support Agency with a request that they do ascertain the proper assessment to be made in favour of the son on the materials which I have found: that is, (1) his income and financial resources are $80,000 per year, (2) that the wife applicant’s income is $17,000 per year. They are more readily able and more properly able to do the assessment than I am.

26. I remit the matter to the Child Support Agency.

27. I must say in passing that I think he does on odd occasions some work for S Pty Ltd, but of a very little amount, and I must say in passing that I did accept the evidence of the present wife notwithstanding there is a finding of fact against her in relation to paying out the charge that was upon the house prior to her receiving the whole of her now husband's interest.  It appears to me that the charge is there on the title and that someone paid it, because I doubt very much whether the title could have been transferred if such charge remained there and was not lifted by a payment.

I certify that the preceding twenty-eight (28) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Bell

Associate: 

Date:  1 June 2007

IT IS NOTED that this judgment for all publication and reporting purposes be referred to as LEE & RYDER