R and J - [2003] FMCAfam 11

FEDERAL MAGISTRATES COURT OF AUSTRALIA

R & J

[2003] FMCAfam 11

CHILD SUPPORT – Departure of child support pursuant to s.117 of the Child Support (Assessment) Act.

Child Support (Assessment) Act 1989, ss.117, 117(2)(c)(i), 117(4), 117(5)

Applicant:

Respondent:

File No:

MLM2485 of 2002

Delivered on:

16 January 2003

Delivered at:

Melbourne

Hearing date:

16 January 2003

Judgment of:

Baumann FM

REPRESENTATION

Counsel for the Applicant:

Mr R appeared in person

Solicitors for the Applicant:

Mr R appeared in person

Counsel for the Respondent:

Ms J appeared in person

Solicitors for the Respondent:

Ms J appeared in person

ORDERS

i)That the stay ordered by Federal Magistrate Hartnett on 25 October 2002 be discharged.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
MELBOURNE

MLM 2485 of 2002

Applicant

And

Respondent

REASONS FOR JUDGMENT

This application involves an application for departure of child support brought and amended by the father of three children T, E and S. The application for departure is opposed by the mother of those children.
The history of the matter suggests that the parties have been significantly in dispute in respect of a number of issues since separation occurred in June 2000. It is clear from the proceedings before me today in which the mother and father represented themselves that a high level of conflict, lack of trust and increasing lack of respect exists between these parties. That made the proceedings before me today a little more difficult than they ought to have been.
The father's departure application, by final submissions, sought a departure to a specific amount between $100 and $150 per week for the three children. The mother's cross-claim effectively is that the current administrative assessment be maintained and that in fact it be extended for a period of two years from now. The current administrative assessment was determined for the period from 18 February 2002 to 20 January 2003 by way of a decision made by the Child Support Agency. Prior to that decision Kay J in the Family Court had departed from an earlier assessment by the Child Support Agency for child support and had set an amount, it seems on the record, of $330 per week.
Before turning to the relevant evidence, it is important to say that the process which a court is required to undertake in a child support departure application is well settled by authority. The decision in Gyselman case makes it clear that a distinct three-step process is required: firstly, to determine whether there has been established in the special circumstances of the case a specific ground of departure set out in section 117 of the Child Support (Assessment) Act; secondly, that the court must be satisfied pursuant to section 117(4) of the act that the determination would be just and equitable; thirdly, that pursuant to section 117(5) of the Act that the determination would be otherwise proper.
It was established by discussions with the parties before the commencement of the hearing that effectively the father seeks to rely and establish a ground of departure contained in section 117(2)(c)(i), namely 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 because of the income, earning capacity, property and financial resources of either parent or the child.”
It was not suggested that the children had any particular income, earning capacity, property or financial resources. There was limited evidence of the mother's capacity in that regard. But as I have indicated to the parties, my intention is to set the child support income amount for the father. Any adjustment to the payment of child support relating to the mother's income and/or the extent to which the child's care is shared will be made administratively once I have determined the father's child support income amount.
In this case, in view of the unsatisfactory evidence of the mother's current income and the fact that I do not know with certainty of the arrangements for the children, then that is the more proper approach for me to adopt rather than to set a level of actual child support.
The evidence before the court consisted of the mother and the father who were both the subject of some cross‑examination. They had filed material before the court. I should mention that it seems apparent to me on the evidence that senior case officer Tsiakas had some justification for determining, as he did, on 13 November 2002 that the matter was complex and should be referred to the court pursuant to section 98E of the Act.
The gravamen of this case really relates to the income and earning capacity of the father. I say that because on any test the father's property and financial resources are modest. He has a small equity in a home that he purchased in September 2002. He says he bought that home with the assistance of support from his parents and moneys from his property settlement. The financial resources comprise substantially of preserved superannuation benefits which cannot be collected for many years. There are no other financial resources on the evidence which I need to take into account.
I return to the income. The evidence of the father in that regard is broadly as follows. He produced to the court a calculation of tax and a copy of his 2001-2002 personal income tax return. Those documents have been marked exhibit 1. They are the best evidence of his income for that period. He was cross-examined on those particulars. I do not have a copy of the actual taxation assessment, however, the father says that he has a net tax payable in April of this year of approximately $1362. This amount is in accordance with the tax calculation which he says was conducted by his accountant.
What the 2002 tax return reveals, however, is that for the period from

1 July 2001 to 30 June 2002 the father had the following sources of income: namely, payments from WorkCover as an employee, $15,200; a payment for long service on leaving the industry, gross $4009; a payment from Cbus (unpreserved superannuation contributions) $6700; a payment from the Australian government (Centrelink) for Newstart during a period of unemployment of approximately 12 weeks of $1682; a small amount for interest of $100; income from employment with Austech Engineering of $25,945; and net consulting income of $16,117.
This reflects a gross income of $69,753 and a net income after allowance for claimed work and sundry expenses of approximately $4658, to the net taxable income of $65,208.
In my view, when one looks at those figures, however, one must take into consideration the following factors:
b)that during the year ended 30 June 2002 the father was the recipient of two extraordinary payments for long service and superannuation totalling an aggregate sum of $10,709;
c)that he had a period of unemployment during which he earned by Newstart less than he would otherwise have earned if he was maintaining employment, as seems to have been his position in the past.
It seems to me on the evidence for that tax return that it could be said with some degree of certainty that the father's taxable income for that period, after allowance for the extraordinary of $10,709, was not less than $55,000.
When I make that assessment I also take into account that a number of the claimed motor vehicle and work expenses for telephone in particular were made by the father in his tax and that they also are reflected in a document he filed in this court in the statement of financial circumstances to which I will turn shortly.
The second method of assessment of his current income and/or earning capacity can be gleaned from his evidence that he has made application for a number of jobs. He indicated that his qualifications now are a Diploma in Occupational Health and Safety; indicating he has had some 15 years approximately “on the tools” and upon further investigation this reflected a long history in the building and construction industry. Because of a claimed disability to his elbows, which he was not cross-examined on and which I therefore accept, he is not able to, as he says, go back to “the tools”. There is no suggestion that this has necessarily at this stage reduced his capacity to earn, although it has reduced his capacity to earn in that area.
The father's evidence that the employment he hopes to seek from the job offers he has made offering packages of between $50,000 and $70,000 is not substantially different from the income he earned as I have already indicated.
Thirdly, the father says that at this stage his work has been reduced to approximately 24 hours per week at $45 per hour. This computes to an amount of approximately $56,000 gross per annum. Of course it can be said that he may not work every week. He has responsibilities in respect of contact to his children under the court order, and whether he exercises them or not - and there was no evidence before me of that - it would at least be reasonable to assume that whilst in employment he would have some time off. Nonetheless, the 24 hours per week is a substantial reduction, it would seem, on the hours he was able to work previously for Austech which ranged between 30 to 35 hours per week.
The father's evidence is, that his income could well in the future be a combination, as it has in the past, of employment, probably part-time, as well as consulting income from his position as a safety consultant.
I have considered all this evidence. In particular, I have considered the demeanour of the parties in the witness box, and particularly the father. As I say, regrettably where parties represent themselves in a high conflict situation one must take into account the emotional impact of confronting each other in court. The mother says of course that the father is not meeting an adequate responsibility to the children in respect of his payments of child support. The father says he has had a reduction in income.
Based on the evidence as I have heard it today, and on the documentation produced to the court, I would assess the father's child support income for the period from 18 February 2002 to 20 January 2003 at an annual rate of $57,500.
We now turn to a separate consideration of whether, if that departure is established, which in my view it has been, from the assessed amount of $73,050 it is just and equitable and otherwise proper to do so. The father says that he would not be in a position to pay more than $100 to $150 per week. I do not believe that is supported by the evidence. Based on the income which I propose to assume he should fairly be assessed on for the period in question, this would, subject to any other adjustments which are needed to be made by the Child Support Agency, amount to approximately $280 per week.
Based on the financial statement of the father, it seems to me that he does have the capacity to make that payment. I say that by taking into consideration the following factors:
a)I would allow from his financial statement the mortgage of $194 per week; the Visa card payment of $112 per week, (although I would observe that seems to be slightly more than the minimum payment bearing in mind a level of debt of some $5000); expenses which he relates to the children of $118; and the expenses he claims for himself, (save for expenses which he also claims in his tax return) for which a credit has been given for motor vehicle expenses and the like, of approximately $162 (being $339 less $177).
b)Based on a net income of not less than $850 per week after tax, I would compute that he would have sufficient income with proper management of his expenses to make the child support payment suggested.
I understand that my determination may mean that an amount of arrears need to be recalculated. I do not know on the evidence before me what the arrears are and how they have been calculated before the stay ordered by Federal Magistrate Hartnett. As I say, it will be a matter for the Child Support Agency to assess, based on the determination I have made, the amount of the actual payment which the father is required to make after adjustments for the mother's income as found by it and the sharing of the children as also found by it.
Based on the assessment of the available income, I am satisfied that the departure is just and equitable and otherwise proper to the needs of the mother, the father and the children, and bearing in mind the responsibility of the parents to maintain their children according to law. I made the point to R, and for the purposes of these extempore reasons make it again, that the responsibility for child support rests with the parents not with those partners who the parents might, post-separation, ultimately decide to enter into relationships.
The next question arises as to whether and to what extent any future child support income amount ought be determined. I had the benefit of reading the reasons of Kay J when he also made an administrative departure. He indicated in his reasons that it seemed inevitable that the parties would come back to a court. His words have proved to be correct. It is not in the interests of the children of this relationship for the parents to be embroiled on a regular basis in disputes about child support. Child support is only one area of support which children are entitled to receive from their parents, the others obviously being emotional and physical support.
I think this is a case where a child support amount ought be fixed for some period into the future. I say that because, although there are uncertainties as identified by the Father in his industry, nonetheless his previous record suggests that he has the capacity for employment. In fact in the witness box he seemed to me to be quite an articulate and impressive person who clearly has skills in respect of developing cogent arguments, preparing documents and the like. He needs to devote his energies more to using those skills for employment
Determining what is an appropriate period I form the view that I should set a child support amount for the period to 30 June 2004 being an amount of approximately 18 months from this day. I do so because even though there will most likely be some fluctuations between the parties over that period, I am entitled to expect I think that the father, being a person who has otherwise maintained steady employment and has all the skills to enable employment to be obtained, will be true to his word that he is anxious to obtain employment. His own financial future benefits from him obtaining employment, notwithstanding whatever he might have to pay the Child Support Agency for the proper support of his children. He has a liability in his home which he obviously needs to meet.
In determining what is the appropriate child support amount I need to take into consideration:
a)that the evidence I currently have relates to income based on the tax returns to 30 June 2002;
b)the father's current position where he says there has been a drop but which he says hopefully will improve;
c)any assessment I make will not be the subject of cost of living or inflationary factors for the period of the 18 months but a fixed figure until then. I should infer, in my view, in accordance with normal issues that there will be a slight increase which will occur over that period.
Considering all factors I propose to order that the child support figure that applies from 21 January 2003 will be $60,000. That will be a figure that will apply to 30 June 2004. As a result of the orders which I propose to make it is appropriate that the stay ordered by Federal Magistrate Hartnett be discharged. That will also be the order of this court.

I certify that the preceding thirty (30) paragraphs are a true copy of the reasons for judgment of Baumann FM

Associate:

Date: