W and H
[2003] FMCAfam 316
•19 August 2003
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| W & H | [2003] FMCAfam 316 |
| CHILD SUPPORT – Application to set aside child support agreement – application to vary child support agreement – applicant has additional child to support since agreement signed – consideration of special circumstances. |
Child Support (Assessment) Act 1989, ss.98, 117
Gyselman v Gyselman (1992) FLC92-279
Savery v Savery (1990) FLC92-131
| Applicant: | J PW |
| Respondent: | TAH |
| File No: | ADM2945 of 2002 |
| Delivered on: | 19 August 2003 |
| Delivered at: | Adelaide |
| Hearing Date | 26 July 2002 |
| Judgment of: | Mead FM |
REPRESENTATION
| Counsel for the Applicant: | Mr Hazelbrook |
| Solicitors for the Applicant: | Williams Oates Lawyers |
| Counsel for the Respondent: | Ms Horvat |
| Solicitors for the Respondent: | Southern Community Justice Centre |
ORDERS
That the Child Support Agreement made between JPW and TAH on 28th March 2000, accepted by the Child Support Agency on 3rd May 2000 and registered in this Court be discharged as and from the date of this order.
That the application filed herein by the father on 11th October 2001 do otherwise stand dismissed.
That the amended application filed herein by the mother on 3rd December 2001 do stand dismissed.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT ADELAIDE |
(P)ADM2945/2002
| JPW |
Applicant
And
| TAH |
Respondent
REASONS FOR JUDGMENT
Introduction
This matter commenced by way of an application filed in the Magistrates Court of Victoria at Wodonga on 11th October 2001 by the applicant father.
Mr W sought orders on that occasion that the collection of child support by the Child Support Agency be stayed pending the outcome of the application, that the Child Support Agreement made between the applicant and TAH on 28th March 2000 and accepted by the Child Support Agency on 3rd May 2000 be discharged and that the date of discharge be 12th April 2000 or such date as the Court deems fit.
On 15th November 2001, the respondent mother filed an application in the Magistrates Court of Victoria at Wodonga seeking orders transferring the proceedings to the Federal Magistrates Service in Adelaide, South Australia, and further seeking orders that the father’s Form 63 Application be dismissed, that the Child Support Agreement made between the parties on 28th March 2000 and accepted by the Child Support Agency on 3rd May 2000 be discharged, that the father pay the sum of TWO HUNDRED DOLLARS ($200) per week in child support for the children of the marriage DCH born 9th September 1992 and AKH born 9th September 1992 with the first of such payments to commence on 11th October 2001, and that all child support payments be indexed to the consumer price index, the first increase to be made on 1st July 2002 and at the commencement of each financial year thereafter. She further sought that all payments of child support be made to the Child Support Agency for transmission to the mother and such other orders as the Court deemed appropriate.
On 23rd November 2001 the applicant father filed a further Form 63 Application in the Magistrates Court of Victoria at Wodonga seeking an order that with the exception of proposed Order 3, the Form 63 Application filed by the respondent mother on 15th November 2001 be struck out or dismissed. Paragraph 3 of that application sought an order that the Child Support Agreement referred to in both applications be discharged.
On 3rd December 2001 the respondent mother filed an Amended Form 63 Application in the Magistrates Court of Victoria at Wodonga wherein she sought, in place of the previous order sought for a discharge of the Child Support Agreement, a variation of that agreement. In all other aspects her Amended Form 63 Application mirrored the application filed in the Court on 15th November 2001.
Affidavits in support of their various applications were filed by each of the parties in the Magistrates Court of Victoria at Wodonga and on the 25th March 2002 both applications were transferred by the Magistrates Court of Victoria at Wodonga to the Federal Magistrates Court in Adelaide.
On 3rd June 2002 Federal Magistrate Brown ordered the matter be listed for final hearing on 26th July 2002 and made various other procedural orders.
On 5th June 2002 the applicant father filed a further application in the Federal Magistrates Court of Australia at Adelaide seeking an order that the respondent pay 10% of his costs and 25% of any Court costs. That application was returnable for 26th July 2002 at the time of the substantive hearing.
The matter proceeded for hearing before me on 26th July 2002 with Mr Hazelbrook appearing as counsel for the applicant father and Ms Horvat appearing for the respondent mother and proceeded by way of Mr Hazelbrook and his client attending by telephone. The matter was adjourned for addresses to 1pm on 1st August 2002 by telephone.
The effect of the order being sought by the husband, namely a discharge of the Child Support Agreement, was to have his future liability for child support assessed by the Child Support Agency in accordance with the formula.
The effect of the mother’s application would be to fix child support in the sum of TWO HUNDRED DOLLARS ($200) per week for the two children to be varied in accordance with fluctuations in the consumer price index on an annual basis.
Background
The father was born on 3rd November 1972 and at the time of the hearing was aged 29 years.
The mother was born on 14th February 1974 and at the time of the hearing was aged 28 years.
The children, the subject of the Child Support Agreement, are twin girls born on 9th September 1992.
It was common ground between the parties that their relationship was short and occurred between approximately November 1991 and February 1992. The parties were at odds as to their respective levels of commitment to that relationship, with the mother alleging that the relationship terminated as a result of threats of violence by the father towards her when he learned of the pregnancy and her refusal to terminate the pregnancy. The father alleged that the first he knew of the suggestion that he was the father of the two girls was in mid-1999 when he was informed by mail via his parents’ address of a residence hearing in the Family Court of Australia at Sydney. It would appear that these proceedings also involved an application for a declaration of paternity, as parenting testing procedures were ordered by the Family Court of Australia at Sydney on 3rd September 1999. A Child Support Assessment was then raised against the applicant father which resulted in an arrears component of approximately ONE THOUSAND EIGHT HUNDRED DOLLARS ($1,800). Those arrears were discharged as part of the consent order made in the Family Court of Australia at Sydney on 20th January 2000 in relation to children’s issues.
The parties entered into negotiations in relation to a Child Support Agreement in or about November 1999, but it was not until 28th March 2000 that the Child Support Agreement was finalised and entered into by both parties and the agreement was registered with the Child Support Agency on 3rd May 2000. There is some dispute between the parties as to the actual process that was involved in them each signing the various forms in relation to the Child Support Agreement and whether any alterations were made without the knowledge of the other of them and in particular without the knowledge of the father, but ultimately these were not matters that were germane to the final determination in these proceedings which was based on an acceptance by both parties that the agreement was entered into on the 28th March 2000 and registered on the 3rd May 2000.
The Child Support Agreement required the father to pay the sum of SIXTY FIVE DOLLARS ($65) per week per child for each of the two children of the relationship, a total of FIVE HUNDRED AND SIXTY THREE DOLLARS AND THIRTY THREE CENTS ($563.33) per month.
In the father’s opening, his counsel submitted to the Court that the father did not know that the agreement was to be registered or that payments were to be indexed in accordance with consumer price index. He said however that notwithstanding those matters it was essentially the father’s case that circumstances have changed justifying a discharge of the Child Support Agreement and the replacing of that agreement with a Child Support Assessment in accordance with the formula. He was relying on the fact that since the making of the agreement his income was reduced, his wife who was working at the time has been invalided out of the Army and he and his wife are also responsible to support their son born in September 2001.
It was the mother’s case that notwithstanding these facts, the father has an earning capacity, income and financial resources sufficient to increase the amount of child support from ONE HUNDRED AND THIRTY DOLLARS ($130) to TWO HUNDRED DOLLARS ($200) per week and the father’s reduced income should not be to the detriment of the children. The mother submitted that although the orders she sought would have the effect of fixing child support at TWO HUNDRED DOLLARS ($200) per week subject to consumer price index increases and that the children would therefore not obtain the benefit of an increase in a child support assessment in the event of an increase in the father’s wages, she was of the view that the security of a fixed amount that was not subject to change would better assist her in providing for the children in that she would be able to budget on a fixed amount.
The Law
When parties want to depart from the provisions of a Child Support Agreement (which both parties sought in this case although the orders they were seeking were different), such departure can only be effected by way of an order of a Court exercising jurisdiction under the Child Support Act, unless the parties reach agreement to vary or discharge the Child Support Agreement.
The Child Support (Assessment) Act creates in Section 3 an obligation on parents to maintain their children and in Section 4 sets out the objects of the Act to be born in mind when determining an application.
Section 4 (3) of the Act refers to the desirability of parents reaching agreement for the financial support of their children and Part 6, Division 3 of the Act contains provisions relating to applications to the Child Support Registrar for acceptance of a Child Support Agreement. Once the Child Support Agency accepts the agreement, the liability to pay child support arises under the agreement rather than under an Administrative Assessment and the agreement for periodic payments have effect for the purposes of Part 5 as if they were an order made by consent by a Court under Division 4 of Part 7 (See Section 95 (2)).
When a Court deals with an application to vary a Child Support Agreement the determination must be made in accordance with the provisions of Section 117 of the Child Support (Assessment) Act, and in considering an application for departure pursuant to that section, the Court must engage in a three step process described in Gyselman (1992) Family Law Cases 92-279. The steps as set out in that case are as follows:
a)The requirement of the Court to be satisfied that in the special circumstances of the Case one of the grounds for departure in Section 117 has been established;
b)When determining whether to make an order under this Division the Court is required to consider whether it would be just and equitable as regards the child, the carer entitled to child support and the liable parent to make a particular order (see section 117 (4));
c)In determining to make an order, whether it would be otherwise proper to make a particular order under this Division (see section 117 (5)) the Court must have regard to the fact that it is a primary duty of the parents to maintain their children and the effect that the making of an order would have upon any entitlement of the child or carer to an income tested pension, allowance or benefit.
In considering whether it is just and equitable to make an order the Court must have regard to:-
a)The nature and duty of the parent to maintain a child;
b)The proper needs of the child;
c)The income earning capacity, property and financial resources of the child and each of the parents;
d)The commitments of each parent necessary to support themselves and any other person to whom they have a duty;
e)Any hardship that would be caused to the child, the carer or the liable person or any person the liable parent is due to support by the making or refusal to make the order.
Proper needs of D and A
The Financial Circumstances Statement relied on by the mother was filed in the Court on 4th June 2002. The mother deposed therein to the average weekly expenses for the children as being $345, which amount did not include any housing expenses or any amount for school fees or flute and clarinet lessons. The school fees and flute and clarinet lessons amounted to a further $11 per week and the mother’s mortgage commitment is $170 per week, although no submission was made to the amount to be attributed to the children’s housing expenses. I find that a reasonable amount would be half, namely $85.
The alleged costs of maintaining the children were not disputed by the father and I am of the view that the amounts claimed were reasonable and when added to the housing cost of $85 per week and the additional costs of school fees and levies and flute and clarinet lessons of $11 per week, result in the proper needs of the children on a weekly basis being $441, which I fix at $440.
The mother’s financial position
The mother’s income is by way of parenting payment, family payment, disability support and child support for her child JTH. The mother’s household consists of herself, her 21 year old sister, the children the subject of this application, her son JTH aged 9 years and her son MSEH who was born in December 2001. The mother’s income inclusive of child support pursuant to the existing agreement and the sum of $7 per week child support for her son JTH, totals $605 per week.
The mother deposed in her evidence as to completing some certificates in welfare and completing an accredited diploma in professional counselling, which courses she was undertaking by correspondence lessons as her parenting duties precluded her from attending at an educational institution on a daily basis.
There is no evidence before the Court indicating that the mother will be in receipt of income other than social security and child support for the foreseeable future and certainly, no evidence that she would be earning income of a level sufficient to effect the amount the father would have to pay by way of child support.
The father’s financial position
As I have stated previously, the parties began negotiations in relation to the Child Support Agreement in late 1999, signed parts of the agreement at that time, apparently finished signing the completed agreement on 28th March 2000 and the agreement was accepted for registration by the Child Support Agency on 3rd May 2000. The negotiations between the parties to enter into a Child Support Agreement followed upon the issuing by the mother of proceedings in relation to paternity and residence in the Family Court of Australia at Sydney in mid 1999, which proceedings were resolved by way of consent orders on 20th January 2000.
At all relevant times the applicant father has been a soldier in the Australian Defence Force. At the time the parties negotiated the Child Support Agreement he was employed as a Field Engineer and earlier that year, namely on 25th January 1999, he had married his wife R having cohabited since 1996. Until Easter of 2001, the father’s wife was also employed in the Australian Defence Force. At that time she was medically discharged from the Defence Force and began to receive a disability pension as a result of suffering from muscular skeletal fibro myalgia. On 19th September 2001 the father and his wife had a son.
In April 2000, shortly after having completed signing all necessary documentation for the Child Support Agreement, but prior to the agreement being accepted for registration with the Child Support Agency, the father was posted with the Australian Defence Force to East Timor. He remained there until approximately October of 2000.
There is no evidence before me as to his income at the time he entered into the Child Support Agreement and the first evidence as to his financial circumstances is contained in the Form 17 filed in support of his initial application and sworn on the 10th October 2001. At that time he deposed to having a gross weekly income of $1,053 consisting of $825 by way of salary from the Australian Defence Forces and $228 by way of income from rental properties. He also deposed to his wife having an income of $188 per week by way of a disability pension.
It is common ground that shortly prior to the father being deployed to East Timor, he advised the Child Support Agency of his deployment and the significant reduction in his taxable income. The father deposed in paragraph 8 of his affidavit sworn on the 10th October 2001 in support of his original application, that the posting to East Timor provided financial and tax benefits, which alleviated the financial circumstances for his wife and himself at that time.
The effect of his advice to the Child Support Agency, who at that stage at the request of the mother were not collecting child support on her behalf, was that the mother began to receive the sum of $40 per month by way of child support in place of the $565 per month she had been receiving pursuant to the agreement reached between the parties and ultimately registered on 3rd May 2000. On the 27th April 2000 the mother again requested that the Child Support Agency collect child support at the monthly rate of $565.25, which monies were thereafter collected from the father’s wages. Once that collection commenced the mother notified the Child Support Agency of the additional payments of $20 per fortnight that the father made directly to her for the following few months.
There is no evidence before me to suggest that the father’s actual income decreased during his deployment to East Timor and on the evidence before me I find that during that period of time his disposable income at least increased due to the taxation benefits of his deployment.
The father gave evidence that whilst in East Timor he began to think about his future due to limited employment opportunities outside of the Defence Force for Field Engineers where his essential qualification was to clear mines. At that time his wife was still employed in the Australian Defence Forces and their son had not been conceived.
The father gave oral evidence that he decided during his time in East Timor that he needed a civilian qualification and began to make inquiries as to what courses he could do in the Army to qualify to be a builder. It was his intention to obtain those qualifications whilst employed by the Defence Force and then after he had served 20 years in the Defence Force, to leave and take up employment in the private sector.
At the time of commencing his course when he returned to Australia, his rank reduced from Corporal to Sapper and his evidence was that it would take some 4 to 5 years to regain his previous rank of Corporal as a result of undertaking his building training course.
In cross examination the father said that whilst considering his position on deployment in East Timor he had not been aware that in undertaking his course his income would reduce and that in fact he didn’t ascertain that information until he commenced the course. He said in cross examination that he knew that he would have to go backwards in rank to do the course, but he was not aware that the pay reduction would be significant and thought the effect on his child support payments and his abilities to support his family would be minimal. He subsequently ascertained at the commencement of the course in Wodonga that his salary would reduce by approximately $9,000 during his training period.
An updated Form 17 Statement of Financial Circumstances was relied upon by the applicant father at the hearing, which statement was sworn on 16th July 2002. He deposed in that financial statement to having gross income of $947 per week consisting of $719 wages from the Australian Defence Force and $228 rental income. His wife’s income remained $188 per week by way of disability pension. He deposed to fixed expenditure in the sum of $798.90 per week and average weekly expenses for himself, his wife and his son in a total of $442.50 being a total of $1,241.40. The fixed expenditure included an amount of $139.90 per week by way of child support payments for D and A. He also deposed to $108 by way of rental payments to the Defence Department, $261 by way of mortgage payments and $50 per week by way of outgoings on his investment properties.
In the father’s evidence in chief he said that he owns two investment properties, one purchased in September 1995 and the second purchased in July 1999. It was submitted by the father’s counsel in closing addresses that both properties were purchased prior to the father becoming aware of being father of the two children to which the Child Support Agreement relates. In my view nothing turns on that point and there is no requirement for a finding in that regard. The father’s evidence, which was somewhat vague both in evidence in chief and cross examination was that he did not think he had made a profit in relation to the properties in the financial year ending June 2000. There was no documentary evidence to support that contention and I make no finding in that regard.
The husband’s taxation return for the year ending 30th June 2001 was referred to during the proceedings and ultimately tendered after the proceedings had been completed. In the husband’s examination in chief and cross examination he was again vague as regards the outcome of the rental property enterprise during the 2001 financial year but it is clear from the taxation return that there was a net profit in that enterprise in the sum of $1358. Although the father was cross examined at some length in relation to the rental properties, I find that for the financial year ended 30th June 2001 the husband made a profit in relation to the rental properties of $1358 which amounts to $26.12 per week. The father in cross examination said in 2002 the rental amount for the properties had not increased and that neither of the properties had been fully tenanted in the 2002 year, although he thought they were in the 2001 financial year. He was anticipating a slight loss on the properties in the 2002 financial year.
The father was cross examined about various expenses in the July 2002 financial statement and in particular the expenses claimed for medical and dental and chemist and pharmaceutical expenses. He had claimed the sum of $60 per week for medical and dental expenses apportioned as $40 per week for his child and $20 for his wife and the sum of $40 for chemist/pharmaceutical expenses apportioned as $30 for his child and $10 for his wife.
The father said that the wife receives a pension from the Commonwealth but that the Commonwealth does not cover any of her medical expenses and that the private health benefits do not cover her medical expenses because her condition was pre-existing. He conceded that some of the amounts claimed in relation to medical and dental expenses and chemist and pharmaceutical expenses were covered by his health benefits but there was no detail as to the exact amount. His evidence was that his wife or son had at least one visit per week to the doctor and he said that as his wife was on pain killers, there was approximately $100 per week outlayed on medical and pharmaceutical expenses being approximately $30 for his wife and $70 for his son. He conceded that some of the doctor’s visits and other expenses were rebated, but was unsure as to the amount of the rebate.
The father was unsure as to why the cost of household supplies had increased from $20 to $50 per week between October 2001 and July 2002, but thought that it may be attributable to he, his wife and son having recently relocated, and he explained the increased in petrol expenses from $25 per week to $50 per week by saying that when he lived and worked in the Wodonga area he only had to travel approximately 50 kilometres per day but that since moving to Sydney to undertake his new course he now had to travel some 130 to 140 kilometres per day.
The father was also cross examined about an increase in savings from $5,000 in the October 2001 statement to $6,300 in the July 2002 financial statement.
He was also questioned about a joint ANZ One account referred to as document number 6 in his list of documents, which copy of account was not tendered. However, it did not seem to be in dispute that as at the 22nd May 2002 there was a balance of $21.522.04 in that account and as at 29th May 2002 a balance of $10,016.42, with the balance as at the date of Financial Circumstances Statement sworn on 16th July 2002 having decreased to $6,300. The father’s explanation was that the account referred to was a offset saver account and had included not only savings, but a moving allowance he had received in 2002 of some $2,500 and payments the wife had received from the Commonwealth in relation to her disability. He explained the reduction from $21,522.04 to $10,016.42 as the setting up of a superannuation account for the wife with an opening balance of approximately $10,000 and the reduction from $10,016.42 to $6,300 being the result of a visa card account payment he and his wife had made between May and July 2002.
He was also cross examined as to the issue of deposing to having a Ford motor vehicle in the October 2001 financial statement with a value of $18,500 and a different Ford motor vehicle as deposed to in the July 2002 financial statement with a value of only $3,200. He was again somewhat vague in relation to his explanation, but it appeared that he had received some $13,000 by way of a “back trade” when he had sold the first Ford motor vehicle, but the utility he then purchased for work purposes was in his wife’s name and there was no loan referred to in the Form 17 Statement of Financial Circumstances because the money for that vehicle came under the umbrella of the housing loan. He deposed to having used the monies received from the first Ford motor vehicle to repay a loan and some lawyers debts.
The father’s explanation for the discrepancy in the superannuation figures on the first and second Form 17 Statements of Financial Circumstance was the difference between contributions and current value. His evidence was that there was no voluntary component to his superannuation.
It was not part of the mother’s case that the father’s expenses were unreasonable, save and except an argument that the husband should not be able to lessen his child support liability by taking advantage of any negative gearing provisions, although it was conceded by counsel for the mother that any such “negative gearing” taxation benefits did not have the effect of reducing his child support obligations by virtue of Section 38A of the Child Support (Assessment) Act. The mother’s counsel also argued that the father had the capacity to manipulate his taxable income due to the fact that much of his Army income is classed as allowances rather than as salary.
I find that the father was genuine in his efforts to present a clear picture of his financial circumstances to the Court at the time of the hearing.
I find that his weekly income deposed to in his July 2002 Form 17 Statement of Financial Circumstances, namely $719, was his correct income in accordance with the pay slip dated 4th July 2002 tendered to the Court and that such income included not only the amount attributed to salary but also the amount attributed to service allowance and uniform maintenance allowance. There is no evidence that the father attempted to mislead the Court in any way by merely relying on the matters set out in his taxation return for the year ended 30th June 2001 which would appear on face to relate only to salary and not to include service and uniform allowances.
I find that the most accurate information available to the Court at the time of hearing in relation to the husband’s rental properties was the information contained in the June 2001 taxation return in the husband’s name and I find that he had a net profit on the rental properties in that year of $26.12 per week. I find that his weekly income at the time of the hearing therefore was $745.12 per week or $38, 746.24 per year.
I find that he has a taxation liability of $145 per week, a superannuation liability of $39 per week, that he pays $108 per week by way of rent to the Defence Force, $19 per week by way of motor vehicle/house contents insurance and $37 per week by way of private medical cover. I have excluded from his fixed expenditure the amount he claims as outgoings on real estate and the amounts claimed in relation to mortgage instalments in respect of the two negatively geared rental properties as I have included in his income amount the net profit on that investment. Accordingly, I find that his fixed expenditure totals $348 per week exclusive of any child support liability. That leaves the father with $397.12.
I find that the average weekly expenses for the father’s current household are in accordance with his Form 17 sworn 16th July 2002, namely $442.50, of which his current wife’s share is $139.50. She receives the sum of $188 per week by way of disability pension.
I find therefore that it is reasonable to attribute to the applicant father weekly expenses of $303.
Has a ground been established?
Turning to section 117 of the Child Support (Assessment) Act and in particular to section 117 (2) of that Act, I must determine whether there are grounds for a departure, either in terms of a discharge of the Child Support Agreement as sought by the husband or for a variation of the terms of the Child Support Agreement as sought by the wife.
The father relies on section 117 (2) (a) (i) and section 117 (2) (a) (ii) and Section 117 (2) (c) (i).
The mother relies on section 117 (2) (c) (i).
Counsel for the mother submits that the father has made a deliberate choice to undertake a course of training in the Australian Defence Force that has had the effect of reducing his income and that such a reduction of income should not be taken into account as it is a voluntary step on the part of the father and should not affect the level of child support which should be paid for the children. She argues that the father made his decision to retrain at a time when he knew of his wife’s illness, notwithstanding that at that stage she was still employed by the Australian Defence Force. In addition she submitted that as a result of the father actions he is earning less than he has the capacity to earn in the Australian Defence Force and accordingly there is a ground for departure, namely, an increase in the amount set by the Child Support Agreement.
I am satisfied that the father’s income has decreased since the time that he commenced his training course in the Australian Defence Force, although there is no evidence before me as to his actual income at the time he entered into the Child Support Agreement. I am satisfied that the decrease in income came about as a result of a conscious decision on the part of the father to retrain to improve his qualifications and maximise his chances of gainful employment outside the Australian Defence Force. I find that the father’s decision was made with the genuine aim and intention of being a productive member of the work force for as long as possible and am satisfied that the tasks for which he was qualified in the Australian Defence Force were unlikely to provide him with employment outside of that Service. I find that his decision to retrain was made at a time when he had not adequately considered the effect on his income of such a course of action, but that nevertheless it was a reasonable decision and not a decision made with the intention of reducing his capacity to pay child support. Indeed, in the event that he satisfactorily completes his qualification it is likely that his income will increase significantly in at least 4 or 5 years time and in the event that he gains employment as a builder outside of the Australian Defence Force thereafter, there is further potential for increase in income.
I am satisfied that when he made the decision he was aware of his wife’s illness and her likely incapacity as regards contributing to family finances in the future and that subsequent to making that decision, he and his wife have had a child. I find that he now has the duty to maintain that child, that his wife has special needs notwithstanding that she at least currently receives an income which in part covers those special needs and that a continuation of a level of child support in accordance with the Child Support Agreement would result in an unjust and inequitable determination of the level of child support to be provided by the father.
I find that after taking into account his current income, fixed expenses and reasonable weekly expenses, exclusive of child support, he currently has an excess of income over expenses of approximately $94 per week.
I am satisfied that the applicant father has made out grounds for departure.
The mother for her part submits that there is a ground for departure from the terms of the Child Support Agreement such that the terms of the said Agreement should be varied to provide for an increase in child support from the current amount to $200 per week. She submits that the Child Support Agreement dated 28th March 2000 does not equitably reflect the father’s income, and that the father has the income, assets, earning capacity and financial resources to pay child support as sought in her application to vary the terms of the agreement. She submits that the father has voluntarily reduced his income and that he has the capacity to earn approximately $55,000 per annum although there was no independent evidence in that regard. It was submitted that the amount in the husband and wife’s joint savings account indicates a capacity to save money in their current circumstances and further, that the father has the capacity to cover a shortfall in relation to the income and outgoings pertaining to the investment properties. It was further submitted on the mother’s part that the cost of private medical benefits was not a necessary medical expense for the father. It was also submitted that the father is not fully responsible for supporting his wife due to the disability income she receives.
As in the father’s case, for the Court to make the order as sought by the mother the Court must first be satisfied that in the special circumstances of the case before the Court, one or more of the grounds of departure outlined in Section 117 (2) are found to exist. In Savery and Savery 1990 FLC92-131, Kay J said that special circumstances were “facts peculiar to the particular case which set it apart from other cases”. Although the father has voluntarily reduced his income subsequent to entering into the Child Support Agreement, I am satisfied that such reduction was not undertaken with any intention to reduce his liability for child support, or that it could be said on any basis to have been other than an entirely appropriate course of action with the express purpose of increasing his income earning potential in the future, which would accordingly increase his capacity to financially support those people for whom he has such a responsibility including the children the subject of this Child Support Agreement.
Accordingly, I reject the argument of the mother that he has the capacity to earn greater income as I accept the husband’s skills previously acquired in the Australian Defence Forces were inadequate for his long term future and to acquire skills to better equip himself to provide for all persons for whom he has the responsibility to provide in the future necessitates in the short term a voluntary reduction of his income. I find that contrary to his own understanding of his financial circumstances relating to his investment properties, that there is little if any shortfall being borne by the father at this stage and indeed, at least in the 2001 financial year, a small profit. I further find that in the event that the father’s child support liability was assessed by way of administrative formula, that any “loss” sustained as a result of his investment properties would be taken into account in that assessment.
Although the evidence was somewhat unclear as regards the husband and his current wife’s joint savings account, I accept in principle his evidence that the majority of those monies were acquired by way of payments received by his wife upon her leaving the Australian Defence Force and moving allowances and a somewhat higher disposable income during his term of deployment to East Timor which had taxation advantages. I have already discounted from the father’s expenses the amount of weekly expenses attributable to his current wife due to the income she is currently receiving by way of disability pension.
Taking those matters into account I am not satisfied that the mother has satisfied the requirements of section 117 (2) (c) (i) and accordingly must dismiss her application for variation of the Child Support Agreement.
Having been satisfied that the father had established the necessary ground for departure pursuant to section 117 (2) (a) (i) and section 117 (2) (c) (i), I must now turn my mind to the further requirements of section 117 of the Act, namely, whether it would be just and equitable as regards the child, the carer entitled to child support and the liable parent to make the order sought by the father and further, whether it would be otherwise proper to make a particular order under this Division.
In considering whether it would be just and equitable as regards the child, the carer entitled to child support and the liable parent to make an order for departure, I have regard to the objects of the Act which provide that each of the parties are responsible for the provision of support for their children.
The husband is in receipt of regular and fixed income from the Australian Defence Forces. It is his application to the Court that the Child Support Agreement should be discharged and his liability for child support should be assessed in accordance with the administrative provisions of the Child Support (Assessment) Act. He submits that the application of such an assessment formula to his income would provide a proper level of child support for the children the subject of the Child Support Agreement, and that indeed they would gain the benefit from any increases in his income during those years when he is liable to pay child support.
The mother is in receipt of Centrelink benefits and is entitled to payments of child support from the father. The father is not suggesting that his liability should be otherwise than properly assessed in accordance with the provisions of the Child Support (Assessment)Act.
Taking those matters into account I find that it would be just and equitable as regards the child and the carer entitled to child to child support and the liable parent to depart from the Child Support Agreement.
I must also be satisfied that it is otherwise proper in terms of section 117 (5) of the Act, having regard to:-
a)the nature and duty of a parent to maintain a child (as stated in Section 3) and, in particular, the fact that it is the parents of the child themselves who have the primary duty to maintain the child and;
b)the effect that the making of the order would have on:-
i)any entitlement of the child, or the carer entitled to child support, to an income tested pension, allowance or benefit or;
ii)the rate of any income tested pension, allowance or benefit payable to the child or the carer entitled to child support.
The mother is already in receipt of a Centrelink pension based on the current rate of child support, namely $130 per week. It is likely that if the Court discharged the Child Support Agreement and the father’s child support liability is then assessed in accordance with the Child Support (Assessment) Act, that the father’s liability for child support at least in the short term will decrease.
I am satisfied however that such an Administrative Assessment of child support will still have the effect of the parents bearing the primary responsibility for the financial support of the children who are the subject of the Child Support Agreement and that there will be no adverse affect on the mother in relation to her entitlement to a Centrelink benefit and that the rate of such benefit will almost certainly increase in the event of the amount of child support being received by her reducing.
Taking all of those matters into account I am satisfied that the requirements of section 117 have been met and that it is proper in all of the circumstances to make the order sought by the father, namely that the Child Support Agreement dated 28th March 2000, accepted by the Child Support Agency on 3rd May 2000 and registered in this Court be discharged, which order will have the effect of the father’s liability for child support being assessed by the Child Support Agency pursuant to the formula in the Child Support (Assessment) Act.
The father sought a further order that the date of departure be 12th April 2000 or such date as the Court deems fit.
I have found that the father’s excess of income over expenses is $94 per week and as I have stated previously the effect of this order will be to have the father’s liability for child support assessed in accordance with a formula which will almost certainly have the effect of a slight reduction, at least in the short term, or his child support liability.
Taking into account that the father did have a slight capacity for savings, all be it that it was perhaps affected by particular circumstances at the time, and the overall household income in relation to fixed expenses, I am satisfied that the appropriate time for the departure to be effective is the date of this order.
I certify that the preceding eighty-one (81) paragraphs are a true copy of the reasons for judgment of Mead FM
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