Mancuso and Abbott
[2012] FMCAfam 289
•30 March 2012
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| MANCUSO & ABBOTT | [2012] FMCAfam 289 |
| CHILD SUPPORT – Whether lump sum child support should be ordered. |
| Child Support Assessment Act1989 (Cth), ss.3, 66, 90B, 98E, 117, 123A, 153A |
| Applicant: | MS MANCUSO |
| Respondent: | MR ABBOTT |
| File Number: | DGC 3401 of 2009 |
| Judgment of: | Phipps FM |
| Hearing date: | 15 February 2012 |
| Date of Last Submission: | 15 February 2012 |
| Delivered at: | Dandenong |
| Delivered on: | 30 March 2012 |
REPRESENTATION
| Counsel for the Applicant: | Mr G Holmes |
| Solicitors for the Applicant: | Tyler Tipping & Woods |
| The Respondent appearing in person: |
ORDERS
That pursuant to s.123A Of the Child Support Assessment Act1989 (Cth) Mr Abbott provide child support to Ms Mancuso for the children W born (omitted) 1998, X born (omitted) 2001, Y born (omitted) 2005 and Z born (omitted) 2007 by way of a lump sum payment of $10,000 (the payment). This amount is to be credited against the administrative assessments of child support.
That as from 11 November 2011 the lump sum is to be credited as 100% of the annual rate of child support payable until the lump sum is exhausted.
That the said sum of $10,000.00 be paid from the amount held in trust by Commins Hendricks Solicitors.
That the respondent pay the applicant’s costs fixed at $3,000.00.
IT IS NOTED that publication of this judgment under the pseudonym Mancuso & Abbott is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT DANDENONG |
DGC 3401 of 2009
| MS MANCUSO |
Applicant
And
| MR ABBOTT |
Respondent
REASONS FOR JUDGMENT
Ms Mancuso, the mother, and Mr Abbott, the father, lived together from 1997 until October 2008, but with a number of separations in between. They did not marry. They have four children, W born (omitted) 1998, X born (omitted) 2001, Y born (omitted) 2005 and Z born (omitted) 2007. The mother applies for a child support lump sum payment. The father has two older children who lived with the parties during the relationship. One still lives with the mother.
In 2001 a property was purchased in the name of the father at Property G in New South Wales. The mother says it was purchased in the father’s sole name in order to take advantage of the First Home Owners Grant. The parties lived there with the six children until separation in October 2008.
While the cause of the separation is not relevant to the child support application, the mother says that this occurred when the father's daughter disclosed sexual abuse by the father. The mother says that the bail conditions and a family violence order prevented him contacting her or the children, but despite this he attended her home in February 2009 and assaulted her friend. The husband was subsequently imprisoned, the wife says for both the sexual offence and the assault on her friend. When this proceeding commenced he was in prison in (omitted).
The property was sold in mid 2010. This was done by the father's parents under a power of attorney. The father was in prison. The balance of the sale price after payment of the mortgage was $35,304.05 and is now held on trust by the solicitors who conducted the sale in an interest bearing deposit.
This proceeding commenced on 15 September 2010. An Amended Application was filed on 23 February 2011. The orders sought in the amended application are:
a)That pursuant to s.117 of the Child Support (Assessment) Act 1989 (Cth) there be a departure from the administrative assessment of child support payable by Mr Abbott to Ms Mancuso for the children W born (omitted) 1998, X born (omitted) 2001, Y born (omitted) 2005 and Z born (omitted) 2007 as follows:
i)for the period from 11th August 2010 to 11th August 2012 the annual rate of child support be set at $17,653. This amount is to be apportioned equally between the children.
b)That pursuant to s.123A of the Child Support Assessment Act 1999 (Cth) Mr Abbott provide child support to Ms Mancuso for the children W born (omitted) 1998, X born (omitted) 2001, Y born (omitted) 2005 and Z born (omitted) 2007 by way of a lump sum payment of $35,304.05. This amount is to be credited against the administrative assessment of child support.
c)That as from 11 August 2010, the lump sum child support is to be credited as 100% of the annual rate of child support payable, until the lump sum is exhausted.
The mother's application treats the amount of money held in trust as money belonging to the father and therefore available for payment of lump sum child support.
The application went through a number of directions hearings. The father appeared by telephone from prison. He applied to have the hearing of the application adjourned until he was released from prison.
The application was listed for final hearing on 28 November 2011 in Dandenong. This was soon after the father’s expected date of release from prison. When it was fixed it was anticipated he would be able to attend. Unfortunately he was not able to attend because he had been released from prison on parole and the terms of his parole required him to obtain permission to leave the State of New South Wales. There was insufficient time for him to make that application between the date of his release and the date of the hearing.
The father was unrepresented. The one matter he raised in defence was that he had debts which exceeded the amount of money held in trust. He says the debts are:
Australian Taxation Office $17,260.30
Credit Corp $ 5,101.96
Mr & Mrs A (the father's parents) $25,206.40
The husband said that the taxation debt was from before separation. He said he was employed as a (occupation omitted). The Credit Corp debt was a loan for a motor vehicle. That motor vehicle is now in the possession of the mother.
The father said that the amount owed to his parents is for mortgage payments that they made on his behalf, council and water rates, utility bills payments to Credit Corp and one or two other items. He said he would have become bankrupt if his parents had not paid them. Documents annexed to the father’s mother's affidavit show that the mortgagee bank was threatening to take default action because the mortgage was not being paid. This was a little before the father was in prison.
At the hearing on 28 November 2011 the mother gave evidence that she had received child support assessments for the periods 11 November 2011 to 23 August 2012 which assessed the father to pay child support for the four children at a monthly rate of $245.33, and for the period 24 February 2012 to 10 February 2013 which assessed the monthly rate at $204.33. She gave evidence that she had made an application for change of child support assessment in special circumstances. This was rejected. The child support assessments and the application for change of assessments are exhibits M1, M2 and M3.
The father said he had received none of these documents. At the conclusion of evidence and submissions on the 28 November 2011 I advised that I would make arrangements for copies of the three exhibits to be sent to the father and adjourned the application to a telephone mention on 14 December 2011.
At a telephone mention on 14 December 2011 the father said he had received copies of the documents. I advised the parties that I was concerned that there were in evidence affidavits from each of the father's parents which said that they had spent money on behalf of their son in relation to the house in Property G and its sale with a list of the payments but without documents annexed. The husband said he had documents but that the applicant had not seen them and neither had I. I said that I was in a position where I would have to make a finding about the allegation of a debt to the parents on the husband's oral evidence and his parents’ affidavits where it was asserted by the husband that he had documents supporting the claim of debt.
The nature of the amounts which the parents said they had paid, mortgage payments, council and water rates, utility payments and other loan payments were such that documents should exist to support the claim. I said that potentially each side might be disadvantaged if the documents were not before the court. After hearing submissions I adjourned the application to a telephone mention on 8 February 2012 and made the following order:
That the respondent send to the solicitors for the applicant and the registry of the Federal Magistrates Court of Australia at Dandenong copies of all documents in his possession relating to payments set out in the annexures to the affidavit of Mrs A filed 10 May 2011.
The affidavit of Mrs A filed 10 May 2011 has an annexure which lists the amounts which the father's parents claim they paid on behalf of the father.
Prior to 8 February 2012 the father filed a further copy of the affidavit with attached to it documents to support the parents’ claim. On 8 February 2012 I adjourned the application to a further hearing on 15 February 2012. On that day after hearing further submissions I ordered that the hearing be reopened to receive the further copy of the affidavit of Mrs A and reserved my decision.
Section 123A of the Child Support Assessment Act 1999 (Cth) gives the court power to order a liable parent to provide child support in the form of lump-payment. Section 123(3) makes it clear that before hearing the application the court must hear and determine any pending application for a departure order.
Section 116 sets out the circumstances in which an application may be made to the court for a departure order. The mother made an application for a change in child support assessment in special circumstances. This application is made under s.90B. The application was refused by the registrar. The mother did not produce the document containing the refusal and so it is not clear under which section the refusal was made. If it was made under s.98E an application for a departure order can be made if an objection to the refusal to make a determination had been lodged and the registrar had disallowed the objection. No objection was lodged, or at least there is no evidence of an objection, and so I cannot find that there was an objection. That means the mother cannot apply for a departure order using the refusal of the application for a change in special circumstances as the basis.
Application can be made for a departure order if the administrative assessment is made under subs.66(1), that is, an assessment for the minimum amount. Subsection 66(5) sets the minimum annual rate of child support at $320 indexed under s.153A. The maximum is three times the minimum rate. The administrative assessments here substantially exceed the minimum amount and so cannot have been made under subs.66(1).
It follows that the court cannot make a departure order.
Even if there was power to make a departure order I am not satisfied that one should be made. I would have to be satisfied that one of the grounds for departure in subs.117(2) was established. The only potentially relevant ground is in the paragraph(c). It provides:
that, in the special circumstances of the case, application in relation to the child of the provisions of this Act relating to administrative assessment of child support would result in an unjust and inequitable determination of the level of financial support to be provided by the liable parent for the child:
(i) because of the income, earning capacity, property and financial resources of the child; or
(ia)because of the income, property and financial resources of either parent; or
(ib)because of the earning capacity of either parent; or
(ii) because of any payments, and any transfer or settlement of property, made or to be made (whether under this Act, the Family Law Act 1975 or otherwise) by the liable parent to the child, to the carer entitled to child support or to any other person for the benefit of the child.
The husband was imprisoned in early 2009 and released in November 2011. From then until the date of the hearing he was unemployed. Therefore he had no income. He has income earning potential because prior to being imprisoned he was a (occupation omitted). If he does obtain employment then the amount of child support can be changed administratively.
The mother’s case is that he has property and financial resources, $35,304.05 in a solicitor’s trust account.
The father’s case is that because of his debts he has no property or financial resources. He says his debts exceed $35,304.05.
The first of the claimed debts is $25,206.40 to his parents. The father's mother’s affidavit annexes a schedule which lists all the payments they have made. In summary they are:
Commonwealth Bank $11,744.00
(omitted) Shire Council $ 5,263.21
Lion Finance $ 6,000.00
Credit Corp $ 1,300.00
Country Energy, electricity $ 360.92
Clearaway Bin $ 80.00
Power of attorney
and costs and disbursements contract of sale $ 403.37
(omitted) locksmiths $ 55.00
One of the documents attached to the second copy of the father’s mother’s affidavit is a loan agreement dated 22 December 2008 between the father and his parents and signed by the father. It reads:
I, Mr Abbott of Property G, acknowledge the undertaking of my parents, Mr A and Mrs A, to pay the arrears on my mortgage and any other money owing by me in respect of my house at Property G.
I regard any monies paid out by them as being a loan and I hereby undertake to repay the total sum paid out by my parents on my behalf when they demand it.
Another of the attached documents is a notice dated 6 November 2008 from the Commonwealth Bank to the father requiring payment of $3,518.50 and stating that he was in default of the security. The notice states that unless the requirements of the notice are complied with within one month the bank proposed to exercise the power of sale over Property G,
The schedule annexed to be father’s mother's original affidavit lists the first payment to the Commonwealth Bank for house payments as having been made on 24 December 2008 for $4,000. The second payment is on the 24 February 2009 for $1,408 and then monthly payments on the 26th days of March, April, May, June, July, August, September, October, and November 2009 making a total of $11,744.
The bank statements of the parents attached to the second copy of the affidavit show that all these payments were made.
The annexure lists eight payments to (omitted) Shire Council, six for rates or land rates and two for water rates. The total is $5,263.21. Rate notices and extracts from the parents’ bank statements show these amounts were paid.
The annexure lists under the heading “Lion Finance” an item described as "Payout of loan from Mrs A. Superannuation”. The date is 30 March 2009 and the amount is $6,000. The bank statement shows an amount of $6,000 paid on 31 March 2009. Mrs A is the father's mother's first name.
The annexure lists seven payments to Credit Corp. The first is for $700 paid on 2009 described as “Payment arrears” and then six payments of $100 each on the 15th days of June, July, August, September, October, and November 2009. The bank statements show the amounts were paid.
Next the annexure lists five payments of varying amounts between 10 August 2009 and 6 July 2010 to Country Energy described as "Electric service fee". The total $360.92 and the attachment to the second affidavit has the electricity bills and extracts from bank statements showing the amounts were paid.
The annexure lists a payment on 16 November 2009 to (omitted) for Clearaway Bin. The amount is $80. The account and cheque stub for $80 is attached.
The annexure lists payments to Commins Hendriks of $275 on 5 January 2010 for Power of Attorney and $128.37 on 16 April 2010 for Costs & disbursements - Contract of Sale. The total is $403.37. The accounts and extracts of bank statements showing payment are attached. The mother's affidavit annexes correspondence between Commins Hendriks and the mother’s solicitor's about the sale of the property and the retention of the proceeds in a trust account. Commins Hendriks correspondence shows that they acted for the parents in the preparation of a Power of Attorney from the father and then the sale of the property pursuant to the Power of Attorney.
Counsel for the mother submitted that the court should not accept that the loan agreement was entered into in December 2008, but rather at some later stage. The father's parents were not cross-examined. They were not requested to attend for close examination. It appears probable that the loan agreement was entered into in December 2008. The bank was threatening to sell the property. The mother had left with the children, and the father, if he had not been charged with a serious criminal offence at that stage, it was clear that he was going to be. The father's parents clearly had the capacity to make the mortgage and other payments. It is unlikely that they intended those payments to be a gift.
The loan agreement has been proved. Even if not properly annexed to the father's mother's affidavit, the father acknowledged it in his evidence.
Counsel for the mother submitted that there is no evidence of demand made by the parents. The loan agreement says that the monies paid on behalf of the father are a loan payable on demand. That is so, but the debt still exists. A reasonable inference is that since the only way the father can pay the debt is from the proceeds of sale the parents are waiting for the release of the monies held in trust.
Even if there is not a loan the father's parents appear to be in a strong position to argue that since the money was paid on behalf of the father to enable him to retain the property and to protect and preserve the property they had an equitable mortgage or charge over the property which gives an equitable right to be paid from the money held in trust. There is no need to decide this point and not enough evidence to do so.
The father says he has a taxation debt owed to the Australian Taxation Office of $17,260.30 and a balance of loan owed to Credit Corp of $5,101.96. No documents have been produced but a loan from Credit Corp to purchase the motor vehicle now in the possession of the mother is common ground. If I had to determine whether there are special circumstances arising out of the father’s assets I would have to take into account the possibility of these debts. Overall I could not be satisfied that there should be a departure from the administrative assessment because failure to do so would result in an unjust and inequitable determination of the level of financial support to be provided by the liable parent for the children.
There remains the question of whether the court should order lump sum child support. Section 123A requires a number of matters to be taken into account. The eldest child is thirteen and the youngest four, so there on many years of potential child-support assessments ahead. The father gave evidence that he was looking for employment. Since he has previous employment as a (omitted) and skills as a (omitted) he was expecting to obtain employment as a (omitted). Even if he does not he has an established income earning potential. The mother is not employed and has many years of caring for young children ahead of her, and so is unlikely to have any substantial employment.
I am satisfied that the father's parents must be paid the money owed to them from the money held in trust. That leaves about $10,000 plus some accrued interest.
The father has not been paying child support and so has a current debt of about $1,000. The child support monthly rate is currently $245.33 and will reduce to $204.33 from 24 August 2012. The father says he has a taxation debt and a loan. Even if that is so, s.3 of the Child Support (Assessment) Act1989 (Cth) says that parents of a child have the primary duty to maintain the child and that has priority over all other commitments of the parent other than commitments to enable the parent to support himself or herself or any other child that the parent has a duty to maintain.
The father has two other children. One of them is living with the mother and so she is maintaining that child. There is no evidence of any support by the father of the other child.
The current rate of child-support is about $2,900 a year and will reduce to about $2,500 per year from 24 August 2012. The current debt is about $10,000. If that is paid from the money held in trust about $9,000 remains. That is less than 4 years child support at the current rate. The husband is supporting himself without access to the proceeds of the sale. His argument against a lump sum payment is that he has debts. One of those debts, which he does not acknowledge, is the child support debt. His duty to support his children has priority over his other liabilities other than the need to support himself.
The matters under s.117 which s.123A requires to be taken into account are dealt with by the matters already referred to. The father’s evidence shows that he considers the taxation debt and the Credit Corp debt should take priority over his child support obligation. An order for lump sum child support will mean that arrears and the next immediate period will be paid. In these circumstances it is just and equitable and otherwise proper to make a lump sum payment order for $10,000.
I certify that the preceding forty-seven (47) paragraphs are a true copy of the reasons for judgment of Phipps FM
Date: 30 March 2012
0
0
1