Nares & Haddacks
[2021] FedCFamC2F 292
•5 November 2021
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Nares & Haddacks [2021] FedCFamC2F 292
File number(s): BRC 1550 of 2021 Judgment of: JUDGE LAPTHORN Date of judgment: 5 November 2021 Catchwords: CHILD SUPPORT – Application for leave to bring an Application for a Departure from Administrative Assessment of Child Support. Legislation: Child Support (Assessment) Act 1989, ss 116, 117 Cases cited: Gyselman & Gyselman (1992) FLC 92-279 Division: Division 2 Family Law Number of paragraphs: 19 Date of last submission/s: 28 May 2021 Date of hearing: On the papers Place: Brisbane Solicitor for the Applicant: Behlau Murakami Grant Ilp Counsel for the Applicant: Mr Eylander Solicitor for the Respondent: Evans Brandon Family Lawyers ORDERS
BRC 1550 of 2021 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MR NARES
Applicant
AND: MS HADDACKS
Respondent
ORDER MADE BY:
JUDGE LAPTHORN
DATE OF ORDER:
5 NOVEMBER 2021
THE COURT ORDERS THAT:
1.That pursuant to section 116 of the Child Support (Assessment) Act 1989 (Cth) the Respondent Mother is hereby granted leave to bring an Application for Departure from an Administrative Assessment of Child Support.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (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 by this Court under a pseudonym Nares & Haddacks has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
JUDGE LAPTHORN
INTRODUCTION
The parents of two year old X are in dispute as to her parenting arrangements and child support. In this judgment I am asked to consider whether the mother, Ms Haddacks, should be granted leave to have a Child Support Departure Application heard at the same time as the parenting proceedings. The father, Mr Nares, opposes the granting of that leave.
The mother who is 30 years of age is a stay at home parent with the primary care of the child. She lives with her parents in a suburb of the Region B. The father also lives on the Region B and is a self-employed tradesman. He is 35 years of age. According to the father, the parties were in a de-facto relationship from 1 March 2018 until 1 July 2019. The mother however gave evidence of the parties commencing their de-facto relationship on 27 May 2017 with a separation in April 2018 and another period of cohabitation from 26 January 2019 until 10 February 2019. For the purposes of this judgment nothing turns of this dispute.
The father filed his Initiating Application seeking parenting orders on 8 February 2021. The mother in her Response filed 20 April 2021 introduced the child support application. The orders sought by her in relation to child support were:
8. That the Court grant leave, pursuant to Section 116 of the Child Support (Assessment) Act 1989 (Cth) for the Mother to bring this application.
9.That pursuant to Section 118 of the Child Support (Assessment) Act 1989 (Cth), there be a departure from the administrative assessment of child support in respect of the child X for the period 20th April, 2021 to 20th April, 2022 or for such other period as the Court deems meet.
10.That the terms of the departure be as follows:-
a.That the annual rate of child support payable by the Father to the Mother be set at the sum of $11,841 per annum or such other sum as the Court deems meet; and
b.That the liability determined as payable pursuant to this departure Order be in substitution for any assessment made or calculated by the Child Support Registrar.
This judgment relates solely to the question of whether the leave is to be granted.
LEGAL APPROACH
Section 116(1) of the Child Support (Assessment) Act 1989 reads:
(1) A liable parent or a carer entitled to child support may, in respect of an administrative assessment of child support for a child, apply to a court having jurisdiction under this Act for an order under this Division in relation to the child in the special circumstances of the case if:
(b) both of the following apply:
(i) the liable parent or carer entitled to child support is a party to an application pending in a court having jurisdiction under this Act;
(ii) the court is satisfied that it would be in the interest of the liable parent and the carer entitled to child support for the court to consider whether an order should be made under this Division in relation to the child in the special circumstances of the case; or
(c) in the case of a liable parent--the administrative assessment of child support payable by the liable parent for the child is made under subsection 66(1).
There is a child support assessment in place for this child with the father being the liable parent and the mother the carer entitled to child support. They are both parties before the court in relation to parenting proceedings. I am therefore satisfied that section 116(b)(i) applies. It is then necessary for the court to consider whether it is satisfied that it would be in the interests of the parties for the court to make such an order in the special circumstances of the case.
Section 117(1) of the Child Support (Assessment) Act 1989 is the relevant provision enabling the Court to make a departure order in special circumstances. It provides as follows:
117 Matters as to which court must be satisfied before making order
Court may make departure order
(1) Where:
(a)application is made to a court having jurisdiction under this Act for an order under this Division in relation to a child in the special circumstances of the case; and
(b) the court is satisfied:
(i)that one or more of the grounds for departure mentioned in subsection (2) exists or exist; and
(ii) that it would be:
(A)just and equitable as regards the child, the carer entitled to child support and the liable parent; and
(B) otherwise proper;
to make a particular order under this Division;
the court may make the order.
The Full Court of the Family Court of Australia considered the term 'special circumstances' in Gyselman & Gyselman[1]:
Section 117(2) sets out the grounds for departure from administrative assessment. Each of the grounds is prefaced by the words, “in the special circumstances of the case”. Whilst it is not possible to define with precision the meaning of that term, as a generality it is intended to emphasize that the facts of the case must establish something which is special or out of the ordinary. That is, the intention of the Legislature is that the Court will not interfere with the administrative formula result in the ordinary run of cases. In Savery's Case [(1990) FLC 92-131] (p77,897), Kay J, adopting the view in Philippe and Philippe (1978) FLC 90-433 at p 77,202 in a different context, said that “special circumstances” were “facts peculiar to the particular case which set it apart from other cases”. The approach to the interpretation and application of the particular grounds in s117(2) must be guided by that qualification.
[1] (1992) FLC 92-279 at [34]
There is a three step process to be undertaken when considering the exercise of the power to depart from an administrative assessment. Firstly the court needs to be satisfied that one or more grounds of departure set out in s117(2) exist. Secondly the court needs to be satisfied that it is just and equitable within the meaning of s117(4) to make such an order and thirdly that it is otherwise proper to do so.
Section 117(2) of the Act sets out the grounds for a departure order. It was argued on behalf of the mother that the relevant grounds for departure are to be found in paragraph (2)(c)(ia) and (ib) of that subsection. Namely:
(c) 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:
…
(ia)because of the income, property and financial resources of either parent; or
(ib) because of the earning capacity of either parent;
…
DISCUSSION
At the time of filing her Response the mother gave evidence of the relevant child support assessment being in the amount of $1,578 a year based on the father having a provisional income of $34,000 a year. The provisional income used for the assessment arose out of the father’s failure to lodge his tax returns. She rejected this amount saying that she never knew him to be limited to $34,000 a year in income. On either party’s account they were not in a relationship for any lengthy period. Although the mother gave evidence of assisting the father with invoicing when they were on reasonable terms they were not together long enough for her to be able to give evidence as to the extent of his income. She did not give any evidence of being involved in his business other than the assistance referred to above. There was no evidence of her being privy to his bank accounts or having seen any of his previous tax returns.
Since the mother filed her affidavit material the father lodged his outstanding tax returns. His taxable income for 2017/18 was $52,014; 2018/19 was $34,009; and 2019/20 was $41,983. He has requested an updated child support assessment to reflect the income recorded in his returns. Notwithstanding the lodgement of up to date returns, the mother argued that the father has either structured his business affairs to show an income far less than he has earned and/or he has the capacity as a tradesman to earn an income greater than that which he has disclosed. This, it was asserted, warranted a finding that special circumstances exist as otherwise the administrative assessment of child support would result in an unjust and inequitable determination of the level of financial support to be provided by the father.
The court was also invited to find that the father’s failure to lodge his tax returns on time and his failure to file his Reply material in a timely matter were indicative of his failure to prioritise his responsibilities to the child’s financial support. It was argued that this failure has led to an injustice. It was asserted that if leave was granted for the mother to pursue the Departure Order Application it would be put to the father that he has deliberately avoided fair market salaried employment in order to limit his child support liabilities. It was conceded by the lawyer for the mother that the Child Support Agency is the place for determination of child support issues but it was argued that the process there only works when parties comply with their duties and responsibilities.
The mother also highlighted the suburb where the father was living was a more expensive suburb suggesting he was living a lifestyle greater than his asserted income would allow. He gave evidence of renting a unit owned by family friends at $200 per week. His financial statement indicated he had significant debts exceeding the value of his assets. The father argued that the court should take into account his modest financial circumstances, his legitimate business expenses and the capacity for the mother to return to work.
The mother argued that the court would be assisted by the evidence needed in the child support application when also considering the parenting application as one of the factors required to be considered in that case would be the parties' attitude to the responsibilities of parenthood and discharging obligations to pay child support.
The father argued that the mother had failed to establish any special circumstances warranting the grant of leave as there was nothing out of the ordinary in this case and the appropriate forum for determining the appropriate child support payable was through the child support agency.
CONCLUSION
There can be no doubt that the father’s failure to lodge his tax returns and his apparent modest income given his skills, would have raised doubt in the mother’s mind as to his preparedness to properly support this child financially. The mother denied receiving the increased child support the father said he was paying. There was no evidence of any updated assessment consistent with his assertions that he was paying $156 per week.
The father’s evidence suggests that he has significant debt but does not address the amount of work he undertakes and why his income is quite low. Although the tax returns annexed to his affidavit show what appear, at first glance, to be legitimate motor vehicle related expenses there is a lack of supporting material that would have assisted the mother in overcoming her doubt as to his frankness overall. I share that concern.
The issues raised in dispute can of course be considered within the administrative process. This was conceded by the mother. The father asserted this case is not out of the ordinary and that the applicant mother has failed to establish that there were any special circumstances warranting this court granting her leave to have her Departure Order Application heard at the same time as the parenting proceedings. Whilst it is a finely balanced case, I am satisfied that the scales are tipped in favour of a finding of special circumstances. I have come to that view as I am not satisfied the father has explained why his income is so modest given his skills and therefore there is an issue as to his earning capacity. Should he be capable of earning more than that which he has disclosed, or has in fact earned more, there is the prospect that an unjust and inequitable outcome to the mother would arise. This falls within what is contemplated by s117(2)(c)(ib) as a ground for departure from administrative assessment. I am therefore satisfied, in the special circumstances of this case, that it would be in the interests of the father and the mother for this court to consider whether a Departure Order should be made.
I certify that the preceding nineteen (19) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Lapthorn. Associate:
Dated: 5 November 2021
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