Mellish and Mellish - [2004] FMCAfam 378

FEDERAL MAGISTRATES COURT OF AUSTRALIA

MELLISH & MELLISH

[2004] FMCAfam 378

CHILD SUPPORT – Where applicant father seeking reduction in child support assessment – where applicant father claims he is earning a third of his previous income – whether applicant father capable of earning higher income – whether respondent mother’s child support income should be increased – whether it is appropriate for the Court to make an order for costs.

Child Support (Assessment) Act 1989 (Cth), ss.3, 110
Family Law Act 1975 (Cth), s.117

Applicant:

COLIN BRIAN MELLISH

Respondent:

CECILY MARGARET MELLISH

File No:

PAM2764 of 2002

Delivered on:

30 July 2004

Delivered at:

Parramatta

Hearing date:

30 July 2004

Judgment of:

Raphael FM

REPRESENTATION

Counsel for the Applicant:

Mr G Johnston

Solicitors for the Applicant:

Mulally Mylott

Counsel for the Respondent:

Mr G Thistleton

Solicitors for the Respondent:

Bowring Macauley & Barrett

ORDERS

ORDERS AMENDED UNDER THE SLIP RULE

That the appeal under s.110 be allowed.
That for the period commencing 1 November 2003 to 31 January 2005 the father's child support income be set at $70,000.00 per annum gross.
That for the period from 13 January 2004 to 31 December 2004 the mother's child support income be set at $40,000.00 per annum gross.
That for the period 1 January 2005 to 31 January 2005 the mother's child support income be set at $50,000.00 per annum gross.
That the Child Support Registrar be requested to make the necessary calculations and to amend the child support register accordingly.
That the father pay any arrears calculated by reference to these orders at the rate of $100 per week until the same shall be discharged commencing 14 days from date of advice from CSA of the amount of the arrears.
That all applications be removed from the pending case list.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
PARRAMATTA

PAM 2764 of 2002

COLIN BRIAN MELLISH

Applicant

And

CECILY MARGARET MELLISH

Respondent

REASONS FOR JUDGMENT

These proceedings come to me by way of hearing on the application of the father under s.110 of the Child Support (Assessment) Act 1989. This Act allows a liable parent or carer entitled to child support who is aggrieved by any of the particulars of an administrative assessment to appeal to a Court having jurisdiction against the assessment. The grounds for appeal are those contained in s.110(2)(a) that the annual or daily rate of child support specified in the assessment was incorrectly assessed.
The applicant filed his appeal on 16 February 2004. He sought that the administrative assessment of his child support, based upon a child support income amount of $85,000 be recalculated to indicate a child support income amount of $38,194.
The mother disagrees with the father's complaints and wishes the child support assessment to be affirmed.
I heard evidence today from the father, from his "employer" and from the mother. The salient facts are these. The father is a ticketed backhoe operator who, during the reasonably lengthy marriage, operated a business as a backhoe operator with the considerable assistance of his wife. It was the mother who undertook all the fairly complex accounting and administrative activities of the business. The father claims to be, and I accept having regard to the evidence of Gerard Glancey who filed an affidavit on 27 July 2004, a man of limited intellectual abilities. But he is, nonetheless, quite clearly an excellent tradesman. This I gathered from his own evidence and his admissions in cross-examination and the evidence of Mr Michael who was called by the father.
The business was wound up in about 2003 and it is not disputed that the equipment, consisting of a backhoe, lorry and parts were sold. At that time and for some considerable time previously, the father had been working for Mr Michael as a subcontractor. The evidence is that Mr Michael was paying the father about $3,000 per week when he was working with his backhoe. But Mr Michael told the Court that his business had fallen off a bit and he could not employ the applicant any longer as a backhoe operator but he took him on as a general labourer at $1,000 a week.
The money paid to the father by Mr Michael was paid to him as a subcontractor, which allowed him certain benefits in relation to his taxation liabilities. The father had been earning this amount of money since 2003 and in his evidence indicated that he was not in receipt of any income from any head contractors other than Mr Michael.
The mother sought to challenge the father's evidence by suggesting that Mr Michael had entered into arrangements with the father whereby he received benefits in kind as opposed to strict payment. Both the father and Mr Michael were frank enough to agree that this had occurred in the past but both of them denied that it had occurred recently or since the commencement date of the assessment of the Child Support Agency in November 2003. This is the evidence and I have no reason not to accept it.
Child support is not just about a person's earnings. It is about their earning capacity and their general financial situation. Thus, a person liable for child support cannot avoid his or her liabilities merely because he or she chooses to take a job paying very much less than that which they might otherwise be capable of earning.
Having heard the evidence and noting in particular that when he was a backhoe operator working for Mr Michael, the father was earning three times that which he is currently earning and having taken into account his quite considerable skills, I believe that he does have an earning capacity which is higher than the $52,000 per annum which he is currently being paid.
I note that when the father recently applied for a mortgage from RAMS he completed a form which indicated that his earnings were $70,000 per annum. I quite accept that in this day and age people are not always entirely truthful when completing forms for financial institutions. But my experience, from sitting in this Court on these matters for some two years now, is that the figures used generally have some connection with the truth, albeit sometimes more distant than others.
Mr Johnston, who ably appeared on behalf of the father, urges me to say that the connection between the two figures was the fact that in the financial year in which the father made the application to RAMS, he received a capital gain of $23,000 which would have made his income somewhere near that stated in the form. That may well be the case, but I think that in truth the father was aware that if push came to shove he probably could earn $70,000 per annum given his skills and given the current status of the building industry. As I said, the payment to him previously of three times what he currently says he is earning must be indicative of those talents and not solely of the existence of a backhoe machine.
Mr Thistleton, who equally ably appeared on behalf of the mother, suggested that the father's earning capacity should really be judged upon his earning capacity with a backhoe. But I accept what the father told the Court would be the cost of purchasing a backhoe and the necessary equipment, namely approximately $140,000. I also accept that the father, at this stage in his life, is not in a position to borrow that sort of money and does not have it readily available.
This is not an end to the matter however. Child support is something which both parents are duty bound to pay pursuant to s.3 of the Child Support (Assessment) Act 1989 and it behoves me to look into the financial situation of the mother as well. I am prepared to accept, for the purposes of these proceedings, that up until approximately

30 January 2004 the mother was not earning. But on that day she completed the purchase of a business. The evidence that has come out before me today is the business was earning approximately $55,000 per annum for the previous owners, of which $45,000 was put in the books as wages. Exact figures are not really important because the mother frankly admitted that the business should be earning for her, this year, approximately $45,000, although I would accept that this requires her to work in the business alone and for her to disregard certain expenses which she has paid towards re-equipping the business for its current use.
My impression of the mother, from her evidence and from what has been said about her generally, is that she is at least as efficient a businesswoman as the father is a builder’s labourer and I have little doubt that she intends to, and will, increase the earnings of this business. It is therefore appropriate that these matters be taken into account when considering the distribution of child support obligations between the parties. In the orders which I am about to make, I have allowed a lesser sum for the earnings of the business for this year but have increased it commencing from 1 January 2005.
The orders that I would make based upon the findings which have been adumbrated above are these:
(i)That the appeal under s.110 be allowed.
(ii)That for the period commencing 1 November 2003 to 31 January 2005 the father's child support income be set at $70,000.00 per annum gross.
(iii)That for the period from 13 January 2004 to 31 December 2004 the mother's child support income be set at $40,000.00 per annum gross.
(iv)That for the period 1 January 2005 to 31 January 2005 the mother's child support income be set at $50,000.00 per annum gross.
(v)That the Child Support Registrar be requested to make the necessary calculations and to amend the child support register accordingly.
(vi)That the father pay any arrears calculated by reference to these orders at the rate of $100 per week until the same shall be discharged commencing 14 days from date of advice from CSA of the amount of the arrears.
(vii)That all applications be removed from the pending case list.
I have heard submissions on costs. I am referred to s.117(2A) of the Family Law Act 1975. I note that in considering what order should be made in relation to costs I am entitled to have regard to the financial circumstances of each of the parties to the proceedings and whether any party to the proceedings has been wholly unsuccessful in the proceedings. In regard to the financial circumstances of each of the parties to the proceedings I do not regard their circumstances as particularly good, either of them, and I think that a burden upon either one of them to pay costs would not assist them. Secondly, I would say that nobody here has been wholly successful. The father sought a much greater reduction in the calculation than he obtained. The mother sought that the orders remain as they were and not the figure proposed by the father. I think, in all the circumstances, this is not a case in which I would make an order for costs.

I certify that the preceding sixteen (16) paragraphs are a true copy of the reasons for judgment of Raphael FM

Associate:

Date: 12 August 2004