T and T
[2002] FMCAfam 135
•30 May 2002
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| T & T | [2002] FMCAfam 135 |
CHILD SUPPORT – Departure application assessment based on notional assets of husband from Mother’s estate – no income of husband taken into account in assessment – husband has substantial income – special circumstances shown.
| Applicant: | P J T |
| Respondent: | G J T |
| File No: | ZM 8560 of 2001 |
| Delivered on: | 30 May 2002 |
| Delivered at: | Melbourne |
| Hearing Date: | 6 March 2002 |
| Judgment of: | Phipps FM |
REPRESENTATION
| Applicant in person. |
| Respondent in person. |
ORDERS
That there be a departure from the administrative assessment of child support payable by the Respondent for the children C J T born 8 May 1986 and E J T born 8 April 1988 for the period commencing 1 May 2001 and finishing 1 April 2003 (the period) that the child support income amount for the Respondent as liable parent for the period be set at $45,000.00 per annum and that the Registrar make the administrative assessment accordingly.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT MELBOURNE |
ZM 8560 of 2001
| P J T |
Applicant
And
| G J T |
Respondent
REASONS FOR JUDGMENT
The Applicant seeks an order that there be a departure from the administrative assessment of child support payable by the Applicant for two children of the marriage born 8 May 1986 and 8 April 1988 for the period 1 October 2000 until 30 June 2002 and that the child support income for the payer be set at $45,000.00 per annum.
The parties were married on 15 October 1983 and separated on
15 January 1994.
The application is made pursuant to s.116 of the Child Support (Assessment) Act 1989. The notice of decision of the assessment is dated 30 April 2001. The decision was that for the period of 1 October 2000 until 30 June 2002 the child support income for the payer, the Applicant, be set at $27,500.00.
Prior to that decision, which came about as a consequence of an application made on 9 March 2001 by the Applicant, child support was assessed at $2,644.00 yearly based on child support income for the Respondent of $20,274.00.
Previous applications had been made, the most recent prior to that of March 2001, was decided on 18 June 1999 which set child support at an annual rate of $9.600.00 yearly for the 1998/1999 and 1999/2000 until 30 September 2000.
The basis of that assessment was that the Father, in his statement of financial circumstances in 1996, disclosed that he received a one-quarter share of his Father’s estate, which totalled in excess of
$1.3 million. His share was nearly $400,000.00 and in his statement of financial circumstances he disclosed significant superannuation holdings.
The Respondent disputed that he had assets to that extent. The decision-maker stated a satisfaction that the Respondent had assets well in excess of $500,000.00 which he had chosen to invest or otherwise dispose of. Based on the requirement of the law that a person is not free to avoid responsibilities towards children by divesting himself of income, an assessment was made based on a 5 per cent return so that he could have enjoyed an income of at least $25,000.00–$30,000.00 a year; hence the assessment based on $27,500.00 per year.
The Applicant lodged an objection pursuant to s.98X of the Act and that was dealt with on 27 June 2001 and rejected.
To obtain a departure from administrative assessment, a three-step process as explained in Gyselman & Gyselman (1992) FLC 92-279 at 79, 064 must be followed:
i)Whether one or more of grounds of departure in s.117(2) is established.
If so,
ii)Whether it is “just and equitable” within the meaning of s.117(4) to make a particular order.
iii)Whether it is otherwise proper within the meaning of s.117(5) to make a particular order.
In terms of the first step, the relevant paragraph is 117(2)(e) which provides:
“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:
(i)the income, earning capacity, property and financial resources of either parent or the child; or
(ii)any payments, and any transfer or settlement of property made or to be made (whether under this Act, the Family Law Act 1975 or otherwise) by the liable parent to the child, to the carer entitled to child support or to any other person for the benefit of the child.”
The Mother’s circumstances in this case are that she is employed as a legal administrator on a salary of $550.00 before tax. She has a home which she values at $350,000.00 with a mortgage of $48,300.00 and pays $101.00 per week in mortgage instalments. She has a 1990 motor vehicle which she values at $7,00.00 and about $16,00.00 in the bank. Otherwise her commitments are normal commitments for herself and the two children.
The Respondent’s position is that he puts his income earning ability as being limited because he suffers from multiple sclerosis and chronic fatigue syndrome. He is a computer programmer and works as a sub-contractor but uses a company for the purposes of his contracts.
His financial assets were a matter of dispute. The substantial inheritance was not, but he put it that his only financial resources are approximately $91,000.00 in a trust fund, 600 Telstra shares and 581 Coles-Myer shares and the house in R Street, N.
I do not consider it necessary to make a determination about his current assets beyond what he says. What is of significance is that the administrative assessment was made on the basis that he had no income. In fact, his evidence was that since September of last year he had a contract which his bank statements showed was resulting in a gross payment of $4,400.00–$4,500.00 each fortnight. In his affidavit the Respondent said that since August of 2001 he had an average income of $3,000.00 per month. In fact, the bank statement showed that it was higher. His expenses are not great. His contracting work is done at the office of the person to whom he contracts. Otherwise he works from home and has expenses relating to his own computer, his home office and similar. He must, of course, pay goods and services tax on what he earns. If a figure of $4,400.00 per fortnight is taken, goods and services tax reduces that to $4,000.00. If another 10 per cent is allowed for various expenses, that reduces it to $3,600.00 per fortnight which, if translated into a yearly figure is $93,600.00.
The Respondent’s evidence was that he could work while not fatigued from his illnesses but there were periods when he could not work. He has been working since August 2001. A reasonable assessment of his ability to work is half-time, that is, a period of full time work followed by a period of being unable to work. In those circumstances a yearly income before tax of $45,000.00 is a reasonable assessment. It does not take into account any income from investments – real or notional.
Since none of this income of $45,000.00 was taken into account in the administrative assessment, there are special circumstances. This is not “the ordinary run of cases” to quote from the Full Court of the Family Court in Gyselman & Gyselman (1992) FLC 92-279 at 79, 065. In the ordinary run of cases the administrative assessment process is able to ascertain and take into account a parent’s income. Here, the administrative decision-makers had no information about the Respondent’s ability to earn income from working. The court has and so it is not the ordinary run of case.
Section 117(4) sets out the matters to which the court must have regard to in determining whether it is just and equitable to make a departure order. In this case it is not necessary to analyse each of the paragraphs in s.117(4) other than paragraph (d), the income, earning capacity, property and financial resources of each parent who is a party to the proceeding, and (g) any hardship that would be caused to the child or the carer entitled to child support by the making of or the refusal to make the order.
In this case, the earning capacity of the Respondent is higher than that upon which the administrative assessment was based and it would be a hardship to the children and to the carer entitled to child support not to have child support based on the Respondent’s actual income.
Section 117(5) sets out the matters to be taken into account in determining whether it is otherwise proper to make a departure order.
Paragraph (a) is the nature of the duty of the parent to maintain a child. Here, both parties have a duty to maintain the children. Without an increase in the child support assessment, the Respondent would not be meeting the requirements of section 3.
Paragraph (b) of s.117(5) is not relevant.
In the circumstances an order for departure from the administrative assessment in terms of the application is appropriate.
The Respondent’s current employment commenced in August 2001. The finding that he can work half time and earn $45000.00 per year is that for any given period, for child support purposes, he can work for a period full time and for another period not at all. Periodic child support must be for the same amount each period and cannot follow the pattern of the Respondent’s work. It cannot be for an amount per period when the Respondent is working and nothing when he is not. Thus, the Respondent had the means to pay child support appropriate to earnings of $45,000.00 before August 2001. For the purpose of this departure application it is both proper and just and equitable to order that the departure assessment commence three months prior to August, that is
1 May 2001. A reasonable assessment is that the Respondent will be able to work half time as described for the next 12 months. It is therefore just and reasonable to order that the departure conclude on
1 May 2003.
I certify that the preceding twenty-three (23) paragraphs are a true copy of the reasons for judgment of Phipps FM
Associate:
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