Steyr and Steyr

[2019] FamCA 55

FAMILY COURT OF AUSTRALIA

STEYR & STEYR [2019] FamCA 55

FAMILY LAW – PRACTICE AND PROCEDURE – Discharge of previous orders

Child Support (Assessment) Act 1989 (Cth) ss 116 & 117(2)(c)(ia)(ib)(ii)
Child Support (Registration and Collection) Act 1988 (Cth) ss 80A, 104, 111C
Family Law Act 1975 (Cth) ss 75(2) and 79

APPLICANT: Mr Steyr

RESPONDENT: Ms Steyr

FILE NUMBER: CAC 583 of 2016

DATE DELIVERED: 6 February 2019

PLACE DELIVERED: Canberra

PLACE HEARD: Canberra

JUDGMENT OF: Gill J

HEARING DATE: 5 February 2019

REPRESENTATION

SOLICITOR FOR THE APPLICANT: Farrar Gesini Dunn

COUNSEL FOR THE RESPONDENT: Mr Masters

SOLICITOR FOR THE RESPONDENT: Marjason & Marjason

Orders

1. That order 2 of the orders of 12 November 2018 staying the implementation of the Child Support (Registration and Collection) Act 1988 as it relates to collection and enforcement of any current child support liability from the Father and any other extant order to the same effect is discharged.

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  Steyr & Steyr 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 CANBERRA

FILE NUMBER: CAC 583 of 2016

Mr Steyr

Applicant

And

Ms Steyr

Respondent

REASONS FOR JUDGMENT

1. This matter involves a dispute regarding past and ongoing child support payments that are currently being paid pending final hearing. The parties agreed that in the special circumstances of the case pursuant to s 116 of the Child Support (Assessment) Act 1989 the liable parent and the carer are both parties and it is in the interest of both for the Court to consider whether an order should be made.  What is at stake at present is an application for a stay and an interim departure in relation to the enforcement of the Child Support Assessment pending the final proceedings. 

2. The Father is currently significantly in arrears for his payment of child support but the collection of those arrears is currently stayed.  The Father puts forward two factual bases to support either a stay or an interim departure order being made. 

3. The first is what could be described as an agreed factual error that has been made by the Child Support Agency (“the CSA”).  That is, the parties agree that there has been a misdescription or miscalculation by the CSA of the care percentage that the father has had with the children.  Currently from exhibit H4 the CSA says that it is 15 per cent from 29 September 2016 through to 10 April 2017, and 38 per cent from 11 April 2017 until now, but has said that it will only apply those percentages from 6 September 2018.  Against that the Father says it has been a 60/40 split since 29 September 2016. 

4. The Mother accepts the description given in exhibit H4 and says that from April 2017 the father has had 38 per cent. 

5. What that means is that the care percentages applied by the CSA are agreed by the parties to be wrong, even if the parties do not agree as to the precise percentages that should be applied.

6. The second matter raised by the Father is what he says is an underlying unfairness or injustice in the application of the formula regarding his income.  The CSA has assessed his income at $326,000 per year (per exhibit H4).  The Father says it should be of the order of $175,000.  As to this second matter the Father says that by virtue of exhibits H2 and exhibits H3, which are a report and then a joint statement by accountants regarding the value of his business interest from which his income is made, that it is not right to accept the CSA’s figure.  He says that to do so will involve a double counting as the valuation of his business relied upon the future maintainable earnings of that business and so it would involve a counting of the value of the business for s 79 while the basis for that value, being the earnings expected, are also to be reckoned for the Child Support Assessment. 

7. He says that there should be a departure from the formula justified by grounds from s 117(2)(c)(ia), (ib) and (ii) of the Child Support (Assessment) Act 1989.  He says that it should be taken rather, as his income, the replacement value that the accountants have calculated for him within the business flowing from the tasks that he performs in the business, which would see him being remunerated at $175,000 per year as he undertakes two particular roles within that business. 

8. The fundamental problem with that argument is that there is no evidence to suggest that this amount of $175,000 reflects the actual income taken by the Father as wages or as otherwise from the business.  There is no indication to suggest that the CSA assessment creates an injustice or unfairness by the application of the formula at the present time, as opposed to following the s 79 adjustment.  If the double counting argument has merit it falls to be determined in the light of s 75(2) and s 117(c)(ii) of the Child Support (Assessment) Act 1989 at the time of the exercise of the s 79 discretion.  It is not demonstrated that there is something about the current position, in the light of a possible future disposition that means that it is in the interests of justice to call for a stay of the current assessment or for the modification of the formula in the interim. 

9. If a remedy is called for, ultimately it is not identified why a stay now, as opposed to adjustment being made in the light of the concrete evidence of the Father's income and the concrete evidence as to what a s 79 adjustment might mean, is not the time for dealing with the matter rather than attempting to impose a stay at this time.

10. Returning then to the first of the issues raised by the Father.  That matter attracts some other questions.  There is no doubt that the current assessment and the limited backdating which the CSA has engaged in is wrong as to the care percentage for the Father with the two children.  However, error as to care percentage does not constitute a ground under s 117 to depart from the formula.

11. To counter this, the Father argues that if departure is warranted ultimately on his income argument then the Court would then take into account the true care percentage position. 

12. This appears to be likely to be correct.  What detracts from this as a ground for a stay or modification to the formula in the interim, its true character appears to be a factual challenge to a determination made by the CSA.  Such challenges are not in their general nature matters for departure but are subject to statutory processes for the determination by the Administrative Appeals Tribunal (“the AAT”) and then appeal on a question of law before the Federal Circuit Court or Federal Court of Australia.  That is, if there is a complaint about a factual determination by the CSA then generally it is not a matter for this Court.

13. To combat this notion the Father turned to the Child Support (Registration and Collection) Act 1988.  Section 111C empowers the court having jurisdiction under that Act (which is this Court by virtue of s 104 and is again by reason of there being an application for a departure order under Part 7 of the Child Support (Assessment) Act 1989, also this Court) gives a power to this Court pending the disposition of these proceedings to make such order as to the operation or implementation as it considers desirable taking into account the interests of the persons who may be affected.

14. While the Father also pointed to s 80A of the Child Support (Registration and Collection) Act 1988, pointed to that provision as giving the court a specific jurisdiction regarding care percentage, that section does not do so.  It makes it the province of the Registrar of the CSA or the Secretary.

15. Turning back to s 111C it may be acknowledged that provision gives broad powers to the Court.  However, those powers appear to be connected to the Court otherwise exercising powers given by the Child Support (Registration and Collection) Act 1988 which do not include review of the care percentage. They also provide powers pending the determination of a departure order as here. Then it turns back to the question of whether the basis for the application, that is the misdescription of the care percentage falls within the ultimate application for departure and is thereby amenable to a stay pursuant to s 111C. The misdescription of the care percentage cannot form a ground for departure itself. Its best case arises from whether a consideration of that matter is subsumed into the consideration of the applicability of the formula in the special circumstances of the case pursuant to s 117 being consideration arising from ss 117(2)(c)(ia), (ib) or (ii) but it appears most likely to flow from s 117(2)(c)(ii) . Should the Court then determine that there is to be a departure it may be assumed that the true amount of time the children spend with each parent will be pivotal to determining the proper order. In looking at s 117 this issue is not one about the property, income or financial resources or the earning capacity of the parties and it does not become a factor in relation to s 117(2)(c)(ii) until or unless there is a disposition of property pursuant to s 79.

16. If this is a matter that is connected to the disposition of the property and how that impacts on departure, then it is a matter that will be looking forward from that point in time rather than looking back.  The stay that is sought does not relate to such a looking forward period but relates to the period of time looking backwards from now and only looking forwards to the time of that disposition.

17. Under those circumstances it is difficult to construe this otherwise than as an attempt to correct an accepted error by the CSA rather than as a part of the exercise of a discretion pursuant to s 117(2).

18. Under those circumstances there is no jurisdiction to continue the stay. 

19. That result however works a continuing injustice to the Father and should the Mother collect the full arrears works a potential problem for her should there be an amendment of the child care percentage by the AAT, if an application is made, or by the Federal Circuit Court or the Federal Court of Australia to correct what appears to be an error by the CSA.  It forces the Father to seek remedies elsewhere which is clumsy, difficult and time-consuming and no doubt expensive.  However, it may be accepted that given the Mother’s concessions that a review by the AAT should turn out to be straightforward in its resolution. 

20. The result, however, in these proceedings is that a stay of the child support order must be discharged immediately.

I certify that the preceding twenty (20) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Gill delivered on 6 February 2019

Associate: 

Date:  11 February 2019