McFarlane and McFarlane

[2017] FCCA 994

FEDERAL CIRCUIT COURT OF AUSTRALIA

MCFARLANE & MCFARLANE [2017] FCCA 994

Catchwords:
CHILD SUPPORT – Departure order.

Legislation:

Child Support (Assessment) Act 1989, ss.98(b), 112, 117(2)

Applicant: MR MCFARLANE

Respondent: MS MCFARLANE

File Number: SYC 6849 of 2016

Judgment of: Judge Henderson

Hearing date: 4 April 2017

Date of Last Submission: 4 April 2017

Delivered at: Sydney

Delivered on: 15 May 2017

REPRESENTATION

Solicitors for the Applicant: Shore Stack Lawyers

Counsel for the Respondent: In Person

ORDERS

1. A permanent stay of collection of child support be granted for the father and the Child Support Registry is injuncted and restrained from collecting any further child support against the applicant for the child support period, including any amount in arrears and late payments being from 2011 to the date of these orders.

IT IS NOTED that publication of this judgment under the pseudonym McFarlane & McFarlane is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT SYDNEY

SYC 6849 of 2016

MR MCFARLANE

Applicant

And

MS MCFARLANE

Respondent

REASONS FOR JUDGMENT

1. In the matter of McFarlane, I propose today to proceed. The mother does not contest any issue the father raises and agrees for the child to continue to live with his father. The child support agency has indicated they do not propose to intervene in the proceedings or come to court. 

2. Thus I am effectively left with the father’s application uncontested. The father’s application is as filed on 20 October 2016 that I grant him leave under section 112 of the Child Support (Assessment) Act1989[1] for a departure from child support under section 98(b) part 6(a) of the Act[2] going back more than 18 months from the date of the assessment and that I then depart from the assessments issued.

   [1] Child Support (Assessment) Act 1989, section 112.

   [2] Child Support (Assessment) Act 1989, s98(b), part 6(a).

3. If successful that would be departures for the years 30 June 2011, to date.

4. The father seeks this order for the following reasons.

5. It is clear from his supporting affidavit forming part of his application that the Australian Taxation Office assessed him having a capital gains tax obligation in the 2011 financial year when he had sold a property. The assessment of capital gains tax enlivened a child support change and the father’s income was inflated for that year by the capital gains he received. The child support agency continued to use the inflated income which had included a one off capital gain in one year as his income for every subsequent year.

6. It is true that the reason the father finds himself in this pickle is because he did not file his subsequent tax returns on time. That is perhaps a salutary lesson. However, having said that, it is as clear as a bell to me from the annexures to the father’s affidavit, particularly starting annexure F, that the Australian Taxation Office have accepted that this inflated income in one year was not the father’s income for the next five years, but was his income for one taxation year.

7. For reasons unknown to me the agency has not accepted the Australian Taxation Office’s reassessed notices of assessment which they have issued to the father for the tax assessment periods of 30 June 2011 up to and including 2015. The Agency continues to assert the father has an income inflated by some $115,000 odd thousand dollars each year and assessment shave issued accordingly.

8. The injustice of that position and the consequence of this error is compounded by the fact that the child has been in his father’s care since 2015. The father asserts that a representative at the Agency told him no more assessments would issue after 2015 because the child was in the father’s care. The father said that thereafter he did  not access the Agencies portal believing no further assessment would be issued.

9. The mother appears today and does not contest these issues. The father says it is clearly just and equitable and other wise proper in light of these facts that I would grant him leave to go back more than 18 months to have his child support assessment varied to reflect his income as determined by the ATO and that is would be otherwise proper to grant the re-assessments sought.

10. I accept this submission. The evidence supports the two threshold tests being that is it just and equitable and otherwise proper to grant leave under section 112[3] and that it is just and equitable and otherwise proper to allow a for a departure from child support assessment under section 117(2)[4] .

    [3] Above note 1, section 112.

    [4] Above note 1, section 117(2).

11. In granting leave and re–assessment of child support, I may then create a debt to the father from the mother because she has been paid child support over and above that which should have been paid to her due to a re–assessment of the father’s income. The father does not want that to happen. It is fairly clear from his material that he has taken great pride in the fact that he has always paid child support and has paid more than would have been required of him had the agency/Child Support Registrar assessed his income correctly in accordance with the ATO assessments. This is a very proper approach the father takes. He does not want to create any more difficulty between he and the mother and says, effectively, “I’ve paid this money. We will leave it where it is”.

12. To achieve these two ends, namely, to ensure the mother is not asked re-pay the father money upon the issuing of new assessments and to allow the father’s applications on both counts, I have determined to grant a permanent stay against the agency from collecting what they say are arrears of child support from the father for the entire child support period including late payment fees and penalties.

13. I find this order will achieve a just and equitable and otherwise proper outcome given my finding that the father has paid more child support during the period than he ought to have paid. The inexplicable failure of the Agency to accept the ATO assessments of the father’s income when produced by him from 2011 to 2015, that the child has lived with him since 2015 and that the father does not want the mother to re-pay any overpayment made to her are the factors that have exercised my discretion in granting a permanent stay.

I certify that the preceding thirteen (13) paragraphs are a true copy of the reasons for judgment of Judge Henderson

Date: 15 May 2017