MacDougal & Benson

[2020] FCCA 3641

FEDERAL CIRCUIT COURT OF AUSTRALIA

MacDougal & Benson [2020] FCCA 3641 

File number(s):	MLC 11661 of 2019
Judgment of:	JUDGE BENDER
Date of judgment:	2 October 2020
Catchwords:	CHILD SUPPORT – Husband’s Application for a departure order – application granted
Legislation:	Child Support (Assessment) Act 1989 (Cth)
Cases cited:	Geyselman (1991) 15 Fam LR 219
Number of paragraphs:	32
Date of hearing:	2 October 2020
Place:	Melbourne
Counsel for the Applicant:	The Applicant appeared in person
Counsel for the Respondent:	No appearance by the Respondent

ORDERS

MLC 11661 of 2019

BETWEEN:

MR MACDOUGAL

Applicant

AND:

MS BENSON

Respondent

ORDER MADE BY:	JUDGE BENDER
DATE OF ORDER:	2 OCTOBER 2020

THE COURT ORDERS THAT:

1.Pursuant to section 111(1)(a) of the Child Support (Assessment) Act 1989 the Court grant leave to the Child Support Registrar to amend the administrative assessment and issue a departure order pursuant to Part 6A of the Child Support (Assessment) Act 1989.

2.The Child Support Registrar make a determination pursuant with the power granted in section 98S of the Child Support (Assessment) Act 1989 as to the taxable income of the Applicant for the financial year ended 30 June 2015.

3.The Child Support Registrar undertake an assessment of the application of the formula provisions of the Child Support (Assessment) Act 1989 used to determine the amount of Child Support payable by the Applicant for the period 01 July 2016 to 30 June 2017.

4.The Child Support Registrar make an order for departure from the administrative assessment of Child Support to be paid by the Applicant for the period 01 July 2016 to 30 June 2017.

5.On the making of a departure order the Child Support Registrar remit the matter back to the Department of Human Services (Child Support Agency) for re-assessment and recalculation of the Applicant’s child support liability for the period 01 July 2016 to 30 June 2017.

Section 110X(4)(h) of the Child Support (Registration and Collection) Act1988 (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 under the pseudonym MacDougal & Benson is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).

REASONS FOR JUDGMENT
(Revised from Transcript)

INTRODUCTION

1. This is an Application filed by the Applicant, Mr MacDougal on 16 October 2019 (“the Application”).

2. The hearing of the Application has been delayed due to service requirements and COVID-19, matters of which are of no fault of Mr MacDougal.

3. The Applicant seeks orders under s 111(1A) of the Child Support (Assessment) Act 1989 (Cth) (“Assessment Act”) granting leave to the Child Support Registrar to amend the administrative assessment and issue a departure order pursuant to part 6A of the Assessment Act.

4. Section 111(1A) gives the Court the power to make orders that the Registrar make a determination under s 98S of the Assessment Act in relation to the assessment outside a period of 18 months.

5. Pursuant to his Affidavit filed 23 March 2020, the Applicant served the Child Support Agency on 7 November 2019 with the Application, together with his Financial Statement and Supporting Affidavit and requested that they forward those documents to the Respondent, as he did not know her whereabouts.

6. On 20 January 2020, the Applicant received correspondence from the Child Support Agency advising that they had forwarded the relevant documents to the Respondent at her last known address, but this was later returned as unclaimed mail.

7. The Applicant made an Application for substituted service and orders in accordance with that Application were made on 12 August 2020 when this matter was most recently before the Court.

8. On 12 August 2020, I also made orders adjourning the matter to today for hearing. Further orders were made that in the event either the Respondent or the Child Support Registrar wished to appear in relation to the Application they needed to file and serve submissions by today and seek to appear.

9. Neither of those things have taken place and in accordance with the orders that I made on that occasion, I am satisfied that service of those orders was affected on those two entities such that they were aware of the orders.

10. In the circumstances, I am of the view that this is an Application I can proceed to hear in the absence of either the Respondent or the Child Support Registrar.

    BACKGROUND

11. Briefly, the parties commenced cohabitation in around 1994, married in 2010 and separated on 6 February 2013. They have three children, two of whom are now adults and the youngest is aged 14.

12. Prior to separation, the parties owned and operated a child care centre and ownership of that entity was divided between two companies.

13. The Respondent was the Director and Shareholder of the company that owned the freehold and the Applicant was the Sole Director and Shareholder of the company that owned and ran the business.

14. That business and freehold was sold in April 2012, and when the parties separated in February 2013, they hadn’t finalised their tax position following the sale of the business. This was affected in February 2017 when all the tax returns were prepared by the parties’ agreed accountant.

15. There was capital gains tax payable in relation to the sale of the freehold and by agreement the parties’ affairs were arranged in such a way that reduced the capital gains tax payable.

16. However, that involved a nominal capital distribution to the Applicant in the sum of forty-six thousand dollars ($46,000) for the 2014/2015 financial year, which had the effect of, at least on paper, raising the Applicant’s taxable income from, rounding off the figures, twenty-nine thousand dollars ($29,000) to seventy thousand dollars ($70,000). It is the evidence of the Applicant that he at no time actually received that capital distribution.

17. The Child Support Agency proceeded to assess the Applicant’s child support liabilities for the period of 1 July 2016 to 30 June 2017 on the basis of the figure shown in his tax return.

18. It is this assessment of child support liability that the Applicant would like to have the Registrar re-assess.

    THE LAW

19. As noted in paragraph 4 of this judgment, s 111(1)(a) of the Assessment Act gives me the power to make orders that the Registrar re-assess the Applicant’s child support liability.

20. Pursuant to s 112(4) of the Assessment Act, when granting leave to amend the administrative assessment that is more than 12 months old, I must consider the reason for the delay in making the Application.

21. It is the evidence of the Applicant that he was not aware of the assessment for a variety of reasons, but more particularly because the Child Support Agency didn’t know where he was and he was under the impression there was not going to be an assessment made.

22. It therefore only came to the Applicant’s attention in August of 2019 that he had an outstanding child support liability of some thousands of dollars and that there was an order preventing him from being able to leave the country.

23. As soon as the Applicant became aware of this he immediately filed the Application being heard today.

24. I am therefore satisfied that whilst on paper there has been a delay in the Applicant making the Application, in reality as soon as he was aware of the assessment and resultant arrears of child support he immediately took all reasonable steps to file the Application.

25. When considering whether I should grant leave, I also need to consider the hardship to the Applicant and to the Respondent.

26. Clearly the hardship to the Applicant is apparent on the basis, at least on his evidence, that there is an assessment that is not an accurate reflection of his income for the relevant period and because the penalties that are currently being imposed on him with respect to the Departure Prohibition Order.

27. In circumstances where the Respondent has chosen not to participate in these proceedings and some of the outstanding monies have been recovered by way of seizure of monies in the Respondent’s bank accounts, I am satisfied the Respondent is not going to be disadvantaged if leave is granted.

28. Clearly the question of whether there should be a departure order from the assessment will be a matter for the Registrar. The Applicant argues that he has a basis under s 117 of the Assessment Act to argue the Registrar should make a departure order. He appropriately makes reference to the matter of Geyselman (1991) 15 Fam LR 219 as setting out the manner in which the Registrar should consider his application.

    CONCLUSION

29. In all of the circumstances set out in this judgment, I am of the view that this is a matter in which I should exercise my discretion and grant leave under s 111(1A) of the Assessment Act, to grant leave to the Child Support Registrar to amend the assessment and issue a departure order pursuant to Part 6A of the Assessment Act.

30. The Application sets out the orders that the Applicant is seeking this day that reflects my decision today.

31. The Applicant seeks an order directing the Child Support Registrar to revoke the Departure Prohibition Order issued against the Applicant on 30 August 2019.I do not have the power to make that order but note this will be a natural consequence of the orders I am making today.

32. Accordingly, I will make the balance of the orders sought by the Applicant.

I certify that the preceding thirty-two (32) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Bender.

Associate:

Dated:       1 April 2021