Ryder & Lee
[2008] FamCAFC 17
•28 February 2008
FAMILY COURT OF AUSTRALIA
| RYDER & LEE | [2008] FamCAFC 17 |
| FAMILY LAW - LEAVE TO APPEAL AND APPEAL – CHILD SUPPORT – Where the trial Judge made declarations as to each parent’s income and then referred the applications for departure orders to the Child Support Agency – Whether the trial Judge erred at law or in the proper exercise of his discretion pursuant to s 117 of the Child Support (Assessment) Act 1989 – Trial Judge failed to address in a structured way the matters specified in ss 117(2), (4) and (5) as required by Gyselman & Gyselman – Trial Judge failed to separately address each year for which a departure order was sought – Leave to appeal granted – Appeal upheld – New trial ordered. FAMILY LAW - APPLICATION TO ADDUCE FURTHER EVIDENCE – Dismissed. FAMILY LAW - COSTS – Each party granted a costs certificate in relation to the appeal and the new trial under the Federal Proceedings (Costs) Act 1981. |
| Child Support (Assessment) Act 1989 (Cth) – s 117 Federal Proceedings (Costs) Act 1981 (Cth) |
Gyselman and Gyselman (1992) FLC 92-279
Bassingthwaite and Leane (1993) FLC 92-410
Gilmour and Gilmour (1995) FLC 92-591
Liesert and Nutsch (1996) FLC 92-665
Bryant and Bryant (1996) FLC 92-690
Hides and Hatton (1997) FLC 92-759
Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc. (1981) 148 CLR 170
Wild and Ballard (1997) FLC 92-771
Hendy and Deputy Child Support Registrar and Webb (2001) 27 Fam LR 641
CDJ v VAJ (1998) 197 CLR 172; (1998) FLC 92-828
| APPELLANT: | Ms Ryder |
| RESPONDENT: | Mr Lee |
| FILE NUMBER: | ADF | 5495 | of | 1989 |
| APPEAL NUMBER: | SA | 46 | of | 2007 |
| DATE DELIVERED: | 28 February 2008 |
| PLACE DELIVERED: | Canberra |
| JUDGMENT OF: | Finn, Thackray and Strickland JJ |
| HEARING DATE: | 14 February 2008 |
| LOWER COURT JURISDICTION: | Family Court of Australia |
| LOWER COURT JUDGMENT DATE: | 8 May 2007 |
| LOWER COURT MNC: | [2007] FamCA 519 |
REPRESENTATION
| COUNSEL FOR THE APPELLANT: | Mr McQuade |
| SOLICITOR FOR THE APPELLANT: | David Fidler & Co |
| COUNSEL FOR THE RESPONDENT: | Mr Childs |
| SOLICITOR FOR THE RESPONDENT: | Georgiadis Lawyers |
Orders
That the application for leave to appeal the orders made by the Honourable Justice Bell on 8 May 2007 be allowed.
That the appeal be allowed.
That the orders made by the Honourable Justice Bell on 8 May 2007 be set aside.
That the competing applications of the parties for departure orders under the Child Support (Assessment) Act 1989 be remitted for hearing by a Judge other than the Honourable Justice Bell.
That the application to adduce further evidence in support of the appeal be dismissed.
That the Court grants to the appellant mother a costs certificate pursuant to the provisions of s 9 of the Federal Proceedings (Costs) Act1981 being a certificate that, in the opinion of the Court, it would be appropriate for the Attorney-General to authorise a payment under that Act to the appellant mother in respect of the costs incurred by the appellant mother in relation to the appeal.
That the Court grants to the respondent father a costs certificate pursuant to the provisions of s 6 of the Federal Proceedings (Costs) Act1981 being a certificate that, in the opinion of the Court, it would be appropriate for the Attorney-General to authorise a payment under that Act to the respondent father in respect of the costs incurred by the respondent father in relation to the appeal.
That the Court grants to each party a costs certificate pursuant to the provisions of s 8 of the Federal Proceedings (Costs) Act1981 being a certificate that, in the opinion of the Court, it would be appropriate for the Attorney-General to authorise a payment under that Act to each party in respect of such part as the Attorney-General considers appropriate of any costs incurred by each party in relation to the new trial granted by these orders.
IT IS NOTED that publication of this judgment under the pseudonym Ryder & Lee is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
| FAMILY COURT OF AUSTRALIA AT ADELAIDE |
Appeal Number: SA 46 of 2007
File Number: ADF 5495 of 1989
| Ms Ryder |
Appellant
And
| Mr Lee |
Respondent
REASONS FOR JUDGMENT
This is an application for leave to appeal and if leave is granted, an appeal by Ms Ryder, the mother, against orders made by Bell J on 8 May 2007 in proceedings between the mother and Mr Lee, the father, in which both parties sought departure orders with respect to various administrative assessments of child support payable by the father for the two children of the parties’ relationship.
On 27 September 2007 Kay J made orders granting the mother an extension of time until that date, to file her application for leave to appeal, and consolidating the hearings of the application for leave to appeal and of the appeal.
The orders made by Bell J, which are the subject of the application for leave to appeal, will be most conveniently explained after we provide the background history to the applications which were before his Honour and after we set out those applications.
Background history
A useful background history of this case was provided by counsel for the appellant mother in his written outline of argument before us. Counsel for the respondent father did not take issue with any matter in that history, and thus it is convenient for us to rely on that history, which we summarise as follows.
The appellant mother and respondent father lived in a de facto relationship for the period October 1988 to May 1993, and then for the period October 1993 to October 1994. They had two children, a daughter, J, born in 1989 and a son, S, born in 1991.
Following the parties’ separations, the father was assessed by the Registrar of Child Support to pay child support as follows:
· For the child support year ending 30th of June 1993 at an annual rate of $7,430.00;
· For the child support year ending 30th of June 1994 at an annual rate of $6,770.00;
· For the period 1st July 1994 to 19th of March 1995 at the annual rate of $10,400.00;
· From the period 20th March 1995 to the 30th of June 1995 at the annual rate of $8,040.00;
· For the child support year ending the 30th of June 1996 at an annual rate of $8,002.00;
· For the child support year ending 30th of June 1997 at the rate of $7,902.00;
· For the child support year ending 30th of June 1998 at the rate of $7,828.00.
On 15 August 1997 the father filed an application in the Family Court seeking orders for departure from the administrative assessments for the period 18 May 1993 to 30 June 1998. That application was heard by Forbes JR who made orders on 23 December 1997 varying the father’s child support liability for the child support year ending 30 June 1993 to $971.00 and for the child support year ending 30 June 1995 to $7,087, but otherwise dismissing the father’s applications.
On 28 August 1998 Murray J dismissed the father’s application for a review of the Judicial Registrar’s decision save that in respect of the period 7 October 1994 to 19 March 1995 the father’s income was set at $38,000 per annum.
On 24 November 1998 consent orders were made in proceedings between the father and A.L. who was at that time and remains at the present time his wife, whereby A.L. retained a property at [C] in South Australia transferred to her by the father in or about January 1998. The preamble to the consent orders referred to an “initial separation” of the father and A.L. at that time.
Thereafter the Child Support Agency continued to make assessments of child support from time to time.
During 2004 – 2005 the mother made a number of applications both successful and unsuccessful for internal administrative review of administrative assessments relevant to that period and to some future periods.
On 31 March 2006 the mother filed an application for departure orders in the Federal Magistrates Court. That application was subsequently transferred to the Family Court, and was subject to further amendment on 6 October 2006 to seek the following orders:
1.Order for departure from the previous assessments for the period from 1/7/1998 – 31/12/2003. That the child support income amount be set at maximum cap of $126,000.00.
2.Order for departure from the current assessment. That the child support income amount be set at maximum cap for the periods 1/1/2004 – 30/6/2006 assessed at $126,000.00.
3.Order for departure from assessment 1/7/2006 – 31/12/2007. That the child support income amount be set at maximum cap of $103,000.00.
4.Order for assessment during the dates 1/1/08 – 3/4/08 be set at a maximum cap.
5.Order that in the event, [the younger child] is enrolled in Secondary Education in 2009, the assessment as above do continue until the final day of school in 2009.
Meanwhile the father had on 11 August 2006 also filed in the Family Court an application for the following departure orders:
1. That pursuant to Section 117 of the Child Support (Assessment) Act, 1989 the following Child Support Assessments:
1.1.Child Support Registrar’s Decision dated 13 April 2004 and 11 August 2004; and
1.2.Review of Child Support Registrar’s Decision dated 25 June 2004 and 21 September 2005;
for the children … payable by [the father] be departed from as follows:
1.3.for the period of 1 June 2004 to 30 June 2005, to be fixed at the rate at the annual rate [sic] of $7,303.00; and
1.4.for period of 1 July 2005 to 31 December 2007, to be fixed at the annual rate of $11,193.00.
2.That the Respondent … pay the Applicant’s costs; and
3.Any further Order that this Honourable Court deems just and equitable.
The parties’ competing applications for departure orders were heard by Bell J on 2 and 3 May 2007. At the hearing both the mother, the father, and the father’s wife, A.L., gave oral evidence and were cross-examined.
On 8 May 2007 his Honour delivered his reserved judgment and made the following orders:
1.IT IS DECLARED THAT for the purpose of assessment of the correct amount of Child Support to be paid for the last six (6) years the husband’s income is the amount of $80,000.00 per annum and the wife’s income is the amount of $17,000.00 for the past twelve (12) months. It is otherwise just and equitable to vary the assessment if necessary in accordance with Child Support practice and procedure.
2.The matter is referred to the Child Support Agency for the purpose of assessment.
The trial judge’s reasons for judgment
At the commencement of his reasons, his Honour observed that as far as he was concerned, the applications before him were “confusing in the extreme”.
He then provided an outline of the background facts, and in so doing placed emphasis on the transfer by the father to his wife of his interest in the property at [C] in South Australia and on the father’s transfer of his shareholding in a company known as [S.R.B.] Co Pty Ltd to his wife and/ or another relative.
In relation to these transfers, his Honour stated that there was no evidence before him which he accepted, that the father had any “legal interest” in the land or the company.
His Honour then went on to refer to the evidence concerning the wage of some $40,000 which the company had been paying the father “basically to enable him to comply with his child support indebtedness”.
In relation to the father’s child support obligations, his Honour made brief reference to certain of the past assessments, and he noted that while there had been a debt of $38,000 at some time, the father was no longer in arrears, save possibly for $800.
His Honour then also noted that the eldest child was no longer entitled to child support and that the younger child’s entitlement would cease in about two years’ time.
Next his Honour stated that the mother was “receiving $17,000 take-home per year”, and he went on to refer to her claim that the father has the capacity “to be able to, either by way of income and/ or financial resources, be declared to have an income of about $126,000 per year for at least the years for which he has been assessed at $100,000”.
However, his Honour then stated that there was no evidence before him to support the conclusion that the father had an income in excess of $100,000. He went on to state that there was evidence to support “at least $40,000 per year” and that “in all probability the father has access to the financial resource of the company” which, a little later he described is “in effect, his present wife”.
After again referring to the fact that for the mother’s case to succeed, she had to provide evidence that the father had an income or a financial resource, his Honour stated that he was satisfied that the father had an income, but he emphasised that he was satisfied that that income came from no source other than the company. His Honour also repeated that he was satisfied that the father could access a resource being “either his wife’s largesse or the company itself”.
His Honour then turned to the question of “what figure” he could place on that resource which he considered must be “reasonably substantial”. His Honour speculated that the father’s use of a free car must be worth some $15,000 to $20,000 per year and that he must have the use of a phone. In this context his Honour made reference – the only reference in his reasons – to the father’s application for a reduction in certain assessments.
Then referring again to the free car and phone and also to “other things” such as food, his Honour concluded that the father had a financial resource of “some $30,000 per year”, and that consequently he was more than satisfied that the father’s income and access to a financial resource “would be in the vicinity of $80,000 per year”.
His Honour then, in concluding, determined that he should declare that the father’s income and financial resources are $80,000 per year and that the mother’s income is $17,000 per year, and that he should “return the matter to the Child Support Agency with a request that they do ascertain the proper assessment to be made in favour of [the younger child] on the materials which [his Honour had] found: that is (1) [the father’s] income and financial resources are $80,000 per year, (2) that [the mother’s] income is $17,000 per year”.
His Honour’s orders were then as we set out in paragraph 15 above.
The application for leave to appeal and the appeal
We are satisfied that we should both grant the mother leave to appeal and also allow her appeal on the basis of the following ground of the proposed grounds of appeal (on which she was given leave to rely at the hearing before us), being:
5.That the learned trial Judge erred at law or in the proper exercise of his discretion pursuant to s 117 of the Child Support Assessment Act.
It is unnecessary that we here set out the somewhat lengthy terms of s 117 of the Child Support (Assessment) Act 1989 (the “Assessment Act”). It sufficient to say that that section identifies the matters about which a court must be satisfied when it is asked to make a departure order from an administrative assessment (as his Honour was asked by both parties in their applications which we earlier set out). In summary those matters are:
(1)whether one or more of the grounds for departure in s 117(2) is established;
(2)whether it is “just and equitable” within the meaning of s 117(4) to make a particular order; and
(3)whether it is “otherwise proper” within the meaning of s 117(5) to make a particular order.
A long line of Full Court authority commencing with the decision in Gyselman and Gyselman (1992) FLC 92-279 has established that in determining and granting an order for departure from an administrative assessment each of those three matters must be addressed and that they must be addressed in a structured way. (See also, for example, Bassingthwaite and Leane (1993) FLC 92-410; Gilmour and Gilmour (1995) FLC 92-591; Liesert and Nutsch (1996) FLC 92-665; Bryant and Bryant (1996) FLC 92-690; Hides and Hatton (1997) 92-759).
Full Court authorities also establish that when a court is asked to make departure orders for a number of assessments relating to various child support years, the court must address the position for each year. (Liesert and Nutsch (supra); Hides and Hatton (supra)).
It will be seen from our earlier analysis of his Honour’s reasons for judgment that he did not in reaching his decision, follow the three stage approach indicated by the legislation and required by authority. Nor did he address separately the position in relation to each of the various years which were the subject of the parties’ applications.
These were errors of principle on his Honour’s part which at least from the mother’s point of view would work a substantial injustice. Thus these errors warrant the grant of leave to appeal. (Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc. (1981) 148 CLR 170; Bassingthwaite and Leane (supra); Gilmour and Gilmour (supra); Wild and Ballard (1997) FLC 92-771; Hendy and Deputy Child Support Registrar and Webb (2001) 27 Fam LR 641).
Moreover these errors establish that there is substance in Ground 5. On the basis of that ground the appeal must be allowed and a new trial ordered.
In our view, his Honour was not excused from following the structure of s 117 and from addressing other matters in that section which would clearly have had relevance in the case, simply because the focus of the argument before him was on the father’s income and resources, as counsel for the father endeavoured to submit.
Further to the extent that his Honour was unable to address the position in the earlier years which were the subject of the mother’s application because of a lack of evidence about those years, his Honour should have made that clear. It is true that his Honour’s reasons reveal that he was critical of the preparation of the mother’s case, and that he considered that there was a lack of evidence to support her claims. But he needed to explore the evidence much more thoroughly than he did, and to explain more thoroughly his exercise of the very structured discretion conferred on the court by s 117 of the Assessment Act.
The other grounds of appeal and the mother’s application to adduce further evidence
Given the decision we have reached in relation to the ground of appeal which challenged his Honour’s approach to the s 117 discretion, it is unnecessary that we consider the other grounds of appeal raised by the mother.
It is however necessary to refer to the fact that certain of those other grounds would have been dependent for success on an application before us by the mother to be permitted to adduce further evidence. In summary that application essentially concerned evidence given by the father in proceedings in another court, which would appear to be in conflict with evidence given before the trial Judge in the present case. The application for us to receive the further evidence was opposed on behalf of the father.
Given that the discretion to admit further evidence should (as the High Court made clear in CDJ v VAJ (1998) 197 CLR 172; (1998) FLC 92-828) be exercised sparingly, and given that this appeal must succeed on another ground which is not dependent on the further evidence, we do not propose to consider the application in relation to the further evidence, and it will be formally dismissed. This will not, of course, mean that the mother cannot seek to rely on the further evidence at the re-hearing of the departure applications which were before his Honour.
It will also be necessary as a consequence of the appeal being allowed, for us to set aside the orders made by his Honour on 8 May 2007 – orders which in any event would appear, in our view, to have been very difficult for the Child Support Agency to understand, and thus implement. Pending and ultimately subject to any further departure order or orders being made, the latest administrative assessment will apply.
Costs of the application for leave to appeal and appeal
Having regard to the submissions made in relation to costs, and having regard also to the fact that the success of the appeal, at least on the basis determined by us, and the need for a new trial, cannot be said to be the fault of either party, we consider that the appropriate course is to grant each party a costs certificate in relation to the appeal and to the new trial under the relevant sections of the Federal Proceedings (Costs) Act 1981.
I certify that the preceding forty-two (42) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court
Associate:
Date: 28 February 2008
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