Palkvig and Bowden
[2018] FamCA 973
•23 November 2018
FAMILY COURT OF AUSTRALIA
| PALKVIG & BOWDEN | [2018] FamCA 973 |
| FAMILY LAW – PRACTICE AND PROCEDURE – Stay of Child Support Assessment – Where the Child Support Agency has issued an updated Child Support Assessment, increasing the amount of periodic child support payable by the father – Where the father has filed an appeal against that decision in the Administrative Appeals Tribunal – Where the father seeks that the updated Child Support Assessment be stayed, pending that appeal – Where the mother opposes that application – Where the Court finds that the balance of convenience favours the mother – Application dismissed. |
| Child Support (Registration and Collection) Act 1989 (Cth) s. 111C |
| Jones v Child Support Registrar [2007] FCA 1732 |
| APPLICANT: | Mr Palkvig |
| RESPONDENT: | Ms Bowden |
| FILE NUMBER: | SYC | 657 | of | 2017 |
| DATE DELIVERED: | 23 November 2018 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Sydney |
| JUDGMENT OF: | McClelland J |
| HEARING DATE: | 12 November 2018 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Ms McIntosh |
| SOLICITOR FOR THE APPLICANT: | Proctor & Associates |
| SOLICITOR FOR THE RESPONDENT: | Karras Partners Lawyers |
Orders
THE COURT ORDERS THAT:
The father’s application for orders pursuant to s 111C of the Child Support (Registration and Collection) Act 1989 (Cth) is dismissed.
Note: The form of the order is subject to the entry of the order in the Court’s records.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Palkvig & Bowden has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).
| FAMILY COURT OF AUSTRALIA AT SYDNEY |
FILE NUMBER: SYC 657 of 2017
| Mr Palkvig |
Applicant
And
| Ms Bowden |
Respondent
REASONS FOR JUDGMENT
Introduction
This decision concerns an application brought by the father for, what is effectively, a stay of a Child Support Assessment requiring him to pay an increased periodic amount child support. That updated Child Support Assessment came into effect on 19 July 2018. The father seeks that stay, pending a decision in relation to his appeal against that updated Child Support Assessment in the Administrative Appeals Tribunal.
The mother opposes the father’s application, in that regard.
Background
The mother was born in 1983 and is now 35 years of age.
The father was born in 1985 and is now 33 years of age.
In 2005, the mother received a lump sum compensation figure of $2,029,750.63 in respect to an injury she sustained.
The parties commenced cohabitation in 2008 and were married in 2009. There are three children of the parties’ relationship, a 10 year old and twin seven year olds.
The parties separated on 17 October 2016. The children reside in the primary care of the mother and spend regular time with the father.
On 26 February 2018, the mother applied for a further assessment of the child support payable by the father.
On 20 April 2018, the Child Support Agency made a decision in respect to that application by the mother. The father’s adjusted taxable income was assessed in respect to the period from 1 April 2018 to 30 June 2019 as being $150,018. The adjusted taxable income of the mother was assessed as being $131,850. As a result of that determination, the decision was made by the Child Support Agency to reduce the annual rate of child support from $27,498 to $13,216. That adjustment was effective as from 1 April 2018.
The mother is not currently in paid employment. It appears that her taxable income was assessed as being the difference between the compensation figure she received and that which was, at that time, still held by her, being $315,699.32, extrapolated over 13 years, being the timeframe in which she expended that money.
On 18 May 2018, the mother raised an objection to the decision of the Child Support Agency dated 20 April 2018.
On 19 July 2018, the Child Support Agency made a decision in respect to the mother’s objection. The outcome of that decision was as follows (Annexure “B” to the father’s Affidavit):
SUMMARY OF OBJECTION DECISION
Outcome: The objection is allowed and I have made the following decision:
The decision of Decision Maker (DM) [B] ceases to have effect from l April 2018 and is replace with:
For the period 1 April 2018 to 31 December 2019 [the father’s] adjusted taxable income is set at $176 000 and [the mother’s] adjusted taxable income is to be set at $55 000.
For the period 1 January 2018 to 31 December 2018 the annual rate payable is to be increased by $6597.
For the period 1 January 2019 to 31 December 2019 the annual rate payable is to be increased by $6795.
Impact on assessment: This decision will result in the annual rate of child support increasing from 1 January 2018 and further from 1 April 2018 and as a result arrears of $6443 will be owing to [the mother] for the period 1 January 2018 to 30 June 2018.
It appears that the Child Support Agency agreed that the mother’s adjusted taxable income had been calculated incorrectly. It was also found in that decision that the parties had mutually agreed that the children would receive a private school education and that the father should be required to meet 50 per cent of the cost of that education. The reviewer also found that the original decision maker had negatively adjusted the father’s income by a greater amount than was warranted as a result of having deducted several weeks of unpaid leave, which the father contended he took as result of his parenting responsibilities.
On 30 July 2018, the father appealed the decision of the Child Support Agency to the Administrative Appeals Tribunal.
In his Affidavit, the father states that he has a salary package of $150,000 per annum, including superannuation. He asserts that, if he is required to pay the current assessed rate of child support, he will have very little if any money remaining, with which to support himself. In that respect, he notes that he is incurring ongoing costs in respect to this litigation.
The husband further states that he has borrowed $6,000 from his mother, which he is required to repay as soon as he is able.
In her Affidavit, the mother refers to difficulties which she alleges she has had in obtaining child support from the father. In these interim proceedings, I am unable to determine whether or not the father has previously met his child support obligations.
It did not appear to be disputed that, despite the decision of the Child Support Agency dated 30 July 2018, the father has continued to pay child support to the mother in accordance with the assessment made on 20 April 2018. That is, the father has continued to pay the sum of $1,100 per month, rather than the current, larger sum of $2,162 per month.
It was not disputed that the father has not contributed to the children’s private school fees, as I understand it, in the period subsequent to 20 April 2018.
Evidence
At the hearing, the father relied upon the following documents:
a)Financial Statement filed on 15 August 2018; and
b)His Affidavit filed on 15 August 2018.
The mother relied upon her Affidavit filed on 8 November 2018.
The application
The orders sought by the father in his Application in a Case filed on 16 August 2018 are, as follows:
1. That pursuant to section 111C Child Support (Registration and Collection) Act 1989, the annual rate of child support is reduced to $13,206 per annum commencing from 20 July 2018 until the date the Administrative Appeals Tribunal makes a decision on the Respondent Father's application for a change to the child support assessment dated 19 July 2018.
NOTATION
A. To avoid any doubt, the Order sought at Order 1 above is in effect a stay of the child support assessment dated I 9 July 2018 and that the child support assessment dated 20 April 2018 remains in effect.
B. The Court notes that proceedings by the Respondent Father appealing the decision/assessment dated 19 July 2018 commenced in the Administrative Appeals Tribunal on 30 July 2018.
The law
Section 111C of the Child Support (Registration and Collection) Act 1989 (Cth) provides:
(1) This section applies if a proceeding has been instituted:
(a) in a court having jurisdiction under this Act; or
(b) before the Registrar under Part VII; or
(c) before the AAT for an AAT first review; or
(d) under Part 6A or 7 of the Assessment Act.
(2) A party to the proceeding may, subject to the Family Law Act 1975:
(a) in the case of a proceeding instituted in a court--apply to that court for an order under this section; or
(b) otherwise--apply to a court having jurisdiction under this Act for an order under this section.
(3) Pending the hearing and final determination of the proceeding, the court may make such orders as the court considers appropriate staying or otherwise affecting the operation or implementation of the Assessment Act and this Act if the court considers that it is desirable to do so, taking into account the interests of the persons who may be affected by the outcome of the proceeding.
(4) The court may, by order, vary or revoke an order made under subsection (3).
(5) An order under subsection (3):
(a) is subject to such terms and conditions as are specified in the order; and
(b) operates for:
(i) such period as is specified in the order; or
(ii) if no period is specified--until a decision of the court, the Registrar or the AAT determining the proceeding becomes final.
In Jones v Child Support Registrar[2007] FCA 1732 at [10], Emmett J summarised the relevant considerations set out in that provision in the following terms:
It appears to me that, before a stay could be granted, I would have to be satisfied that there is a serious question to be tried on the appeal or, putting it another way, that there is at least some arguable basis for suggesting that the appeal might succeed. Secondly, it would be necessary for the Court to have regard to the balance of convenience. Section 111C(3) of the Act requires the Court to take into account the interests of the persons who may be affected by the outcome of the proceeding. That, I suspect, does not go much beyond the balance of convenience. …
I have summarised above my broad understanding of the decision made by the reviewing officer of the Child Support Agency on 30 July 2018. For the purpose of this decision, I am prepared to accept, on the basis of submissions by Counsel for the father, in her capacity as an officer of the Court, that there is “at least some arguable basis for suggesting that the appeal might succeed”. The issue, therefore, becomes whether it is “desirable” to exercise my discretion to grant a stay of the revised assessment “taking into account the interests of the persons who may be affected by the outcome of the proceeding”.
The persons who would be affected by the outcome of the proceedings are the parties and their children. In his Affidavit, the father states that a refusal to grant the stay he seeks would have the following impact:
10. I receive a weekly income when I am working. I have a $150,000 salary package which includes superannuation with four weeks annual leave. When I have additional time off and I have no annual leave, I take leave without pay.
11. If I am required to pay the assessed amount now, it will cause me hardship as I have very little, if any, money left over on a weekly basis. I have presently legal proceedings in this court for parenting and property and legal fees associated with this.
12. I have loaned $6,000 from my mother which I will have to repay as soon as I am able.
The mother contends that she would be adversely impacted by the granting of a stay for reasons which are set out in her Affidavit. The mother asserts that the father owes $9,531.84 in respect to child support arrears and that he has not contributed to the children’s private school fees, which has meant that she has had to rely upon monies from her 2005 compensation payment to meet those fees. The mother contends that the Bowden Family Trust, into which that compensation payment was deposited, has a current balance of $281,931.88.
The mother further contends that she “was required to retain $300,000” of that compensation payment “for future medical purposes”. There is no information before the Court regarding the stated purpose of that compensation payment, however, it is entirely plausible that such a significant figure would have included a component in respect to the future medical needs of the mother as result of sustaining the injury which gave rise to the claim.
The mother further asserts that one of the parties’ children has recently been diagnosed with dyslexia, which has led to her incurring further expenses, which she meets without assistance from the father.
I find that it is unreasonable to require the mother to further deplete her assets, if it is the case that the father has the capacity to meet his obligations under the Child Support Assessment dated 30 July 2018.
In that respect, the father’s Financial Statement states that his total average weekly income is $2,622. That Financial Statement did not include details of the husband’s “other” weekly expenditure, in accordance with the items listed in Part N. In those circumstances, at the hearing, Counsel for the father tendered a signed document certified as being the true and correct estimate of the father’s other weekly expenditure (Exhibit “H-2”), which was set out as follows:
a)Mortgage repayment at $300;
b)Personal loan at $16;
c)Rates at $100;
d)Food at $150;
e)Clothing at $75;
f)Personal/kids activities at $241;
g)Medical insurance/bill at $67.30;
h)Education expenses at $64;
i)Electricity at $30;
j)Phone at $7.50;
k)Internet at $30;
l)Fuel at $19;
m)Vehicle registration at $25.90;
n)Vehicle insurance at $26.90;
o)Vehicle expenses at $28.80;
p)Child support at $254; and
q)Legal fees at $961.
This calculates to a total amount of $2,396.40.
In that document, the father states that his estimate of legal fees of $961 is “based on $50,000 per annum which is what has been spent in the last twelve months”. There is, however, no evidence before the Court as to any estimate of legal fees having been provided to the father in respect to future proceedings. Further, there is no evidence before the Court as to any outstanding legal fees over and above the amount that the husband states he has “spent”. In those circumstances, even assuming that it is appropriate for legal expenses to be included in the father’s list of weekly expenses, there is no evidentiary basis upon which I can conclude that it is likely that the husband will incur legal fees in the sum of $961 per week into the future. It is merely speculative as to whether or not that will be the case.
Accordingly, in considering the respective hardships faced by the parties or, what Emmett J referred to as “essentially considering the balance of convenience”, I do not intend to include in the calculation of the father’s weekly expenses the amount he has claimed in respect to legal fees.
By removing that item from the schedule of the father’s weekly expenses, the total amount is reduced to the sum of $1,435.40. After that amount is deducted from the amount of income declared by the father in his Financial Statement, he has surplus funds each week of $1,186.60.
That surplus is in circumstances where the husband has included the child support amount of $254, representing his obligation pursuant to the Child Support Assessment dated 20 April 2018. As noted, the 30 July 2018 review of that assessment requires the father to pay an additional $212.40 per week. I am satisfied that the father has the capacity to comfortably pay that higher amount.
In those circumstances, the balance of convenience favours the mother who, in the absence of receipt of the higher amount of child support from the father, would be required to further deplete funds that have been set aside to meet her medical needs arising from the injury she sustained that gave rise to the compensation settlement she received in 2005.
For those reasons, I dismiss the father’s application.
I certify that the preceding thirty-eight (38) paragraphs are a true copy of the reasons for judgment of the Honourable Justice McClelland delivered on 23 November 2018.
Associate:
Date: 23 November 2018
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