P and B
[2000] FMCAfam 21
•29 August 2000
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| P & B | [2000] FMCA fam 21 |
| CHILD SUPPORT – Variation – Section 98(1) Child Support (Assessment) Act 1989 |
| Applicant: | P P |
| Respondent: | J B |
| File No: | ZB2189 of 2000 |
| Delivered on: | 29 August 2000 |
| Delivered at: | Brisbane |
| Hearing Date: | 29 August 2000 |
| Judgment of: | Baumann FM |
REPRESENTATION
| Counsel for the Applicant: | Mr Evans |
| Counsel for the Respondent: | Mr Byrne |
ORDERS
That the Child Support Agreement between the father P P and the mother J B dated 25 July 1998 be discharged absolutely effective
28 September 2000.That there be no order as to costs.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT BRISBANE |
ZB 2189 of 2000
| P P |
Applicant
And
| J B |
Respondent
REASONS FOR JUDGMENT
Introduction
This was an application by the father P P seeking an order pursuant to s98(1) of the Child Support (Assessment) Act 1989 that the Child Support Agreement dated 25 July 1998 (“the Agreement”) be varied so that the child support payable by the father for his child A J P–B (born 26 October 1995) be reduced to an annual rate of $962.00.
The response of the mother filed 3 August 2000 sought an order that the father’s application be dismissed OR IN THE ALTERNATIVE that the Agreement be discharged. Mr Byrne for the mother indicated that the alternate relief was a “last resort” position.
At the hearing Mr Evans, for the father, abandoned his application for reduction and orally amended the application to one seeking discharge of the agreement.
Relevant chronology
a)20 February 1991............... Parties marry
b)26 October 1995................. Child A born
c)28 January 1997................. Parties separate
d)June 1997............................ Father commences new relationship
e)1 July 1998........................... Father commences employment with S R RESTAURANT at wage of $400.00 per week.
f)25 July 1998........................ Parties enter into child support agreement requiring father to pay $100.00 per week to mother.
g)26 April 2000....................... Father’s salary reduced to $300.00 per week (see Exhibit “A”).
h)9 June 2000......................... Father’s application for variation of agreement filed.
The law
Section 98(1) of the Child Support (Assessment) Act 1989 provides that:
“where:
a)Under section 95, provisions of a child support agreement have effect, for the purposes of Part 5, as if they were a Court Order of a particular kind; and
b)The agreement, of those provisions of the agreement, are registered in a Court hearing jurisdiction under this Act.
the provisions may be discharged, suspended, revived or varied by the Court in the same manner and in like circumstances as the Court could discharge, suspend, revive or vary an order of that kind made by it”.
The tendering of the agreement (as Exhibit E) is sufficient to amount to registration of the agreement in this Court.
The Full court in Gilmour (1995) FLC 92-591 established the principles applicable to a variation or discharge of a previous departure order made under the Act. Essentially the principles are the same 3 stage process required by s117 of the Act whereby the Court is required:
a)To be satisfied that “in the special circumstances” of this case a ground of departure outlined in s117(2) exists; and
b)That it would be just and equitable (within the meaning of s117(4)) as regards the children, the carer entitled to support and the liable parent; and
c)It would be “otherwise proper” (within the meaning of s117(5)) to make a particular order.
All those issues must be addressed separately (Gysleman 15FLR219).
FINN J, in DeSmeth v DeSmeth (1993) FLC 92-349 at 79,693 said that an agreement for payment of periodic payments (as this subject agreement provides):
“takes effect pursuant to s95(2) as “a departure order” made by consent under Division 4 of Part 7, and could thus be varied pursuant to s98 as a “a departure order”. A “departure order” can be varied by a subsequent departure order but it would be necessary to establish one of, what can be termed, the threshold grounds in sub-section 117(2)”.
The issues
The evidence before me consisted of an affidavit by the father, an affidavit by the mother, a responding affidavit by the father and oral evidence by the father who was subject to cross-examination. Various documents were also tendered.
I find that special circumstances do exist in this case and that the applicant has established, to my satisfaction, that grounds for departure exist because:
a)The mother says she was “unaware” of the applicant’s involvement with S R’s restaurant at the time of signing the agreement believing the father to be “on the dole” at the time (para 2(c)). In a sense therefore, the agreement was entered into at a time when the mother was under a misapprehension as to the other contracting party’s ability to pay;
b)The father has suffered a reduction in salary from $400/week to $300/week. This is consistent with his oral evidence and also the wages book (Exhibit “A”).
I find that it is just and equitable to depart from the agreement because:
a)The Reduction in the father’s income reduces his capacity to meet the commitments to support himself. In this regard, some attempt was made to assert relevance of the financial position of the father’s partner. His position is not relevant, save to the extent to which the father had a reduction in his commitments subsidised by a sharing of expenses with Mr K. The evidence of the father was that Mr K, who has clearly provided significant support and benefits to the father, has now withdrawn the financial support;
b)The mother’s income and financial circumstances have recently altered significantly because of her choice to enter into a “live in nanny arrangement” which has reduced both her income and her government benefit. As I have not been asked to assess an appropriate level of child support it was not necessary to require the mother to give any evidence in respect of this change;
c)Some attention in the evidence was directed to the financial benefits, which the father secures from the business of S R. He concedes receiving meals but otherwise says, apart from his salary, he doesn’t receive any benefits by way of dividend or otherwise from the company. I infer from the evidence that Mr K has funded the business and continues to do so with the father’s only contribution being a sum of $1000.00 which he variously described as “a loan” (in his Form 17) or as the price for the shares allotted to him and detailed at paragraph 5 of his affidavit filed 9 June 2000. It is alleged that the business is not operating profitably. The evidence produced was insufficient for me to make that determination, but it is clearly a relevant issue when assessing, as will be the case, the level of any future administrative assessment.
I find, for the reasons set out above, that it is not only just and equitable but also otherwise proper that the Agreement be departed from its terms. In this respect, although the framework of the Act creates the mechanics for assessment administratively, in appropriate circumstances the parties are encouraged to enter into consensual arrangements, which if they comply with the forms and requirements of the Act, can be accepted by the Child Support Registrar. In my experience many agreements are entered into with the best of intentions but do not adequately provide the flexibility that the formula under the Act provides, for changes which inevitably occur over time. This is one such agreement which set a level of $100 per week (subject to annual review by “an inflation factor”) but no other basis for recalculation. The community would expect that the father in this case pays an appropriate sum for the support of his son and the parties will be able to have that assessed administratively as a result of the order I propose to make.
Effect of the orders
I propose to order that the Agreement be discharged. The father has maintained payments under the agreement notwithstanding his more difficult circumstances. I believe he should maintain those payments for a further 4 weeks from this date to allow sufficient time for an assessment to be made – the father saying that he has filed all required income tax returns.
Mr Evans for the father sought an order for costs. In the absence of being able to renegotiate a new child support agreement (s97), an agreement cannot be altered successfully without an application to the Court. Even though Mr Evans says that an offer to settle the matter on the basis of a discharge of the agreement was made on 25 August, the lateness of that offer (bearing in mind that the mother’s application of
3 August 2000 raised that as an alternative), does not persuade me that the mother’s actions deserve the penalty of a costs order. There will be no order for costs.
Formal orders
(1)That the Child Support Agreement between the father P P and the mother J B dated 25 July 1998 be discharged absolutely effective 28 September 2000.
(2)That there be no order as to costs.
I certify that the preceding twelve (12) paragraphs are a true copy of the reasons for judgment of Baumann FM
Associate:
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