Wingrove and Wyatt
[2007] FMCAfam 449
•17 May 2007
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| WINGROVE & WYATT | [2007] FMCAfam 449 |
| CHILD SUPPORT – Enforcement of arrears. |
| Applicant: | MS WINGROVE |
| Respondent: | MR WYATT |
| File number: | PAM 1985 of 2006 |
| Judgment of: | Henderson FM |
| Hearing date: | 17 May 2007 |
| Date of last submission: | 17 May 2007 |
| Delivered at: | Sydney |
| Delivered on: | 17 May 2007 |
REPRESENTATION
| Counsel for the Applicant: | Mr Cumming |
| Solicitors for the Applicant: | Hamish Cumming Family Lawyers |
| Counsel for the Respondent: | Mr Foster |
| Solicitors for the Respondent: | Delaney Lawyers |
ORDERS
The husband pay by way of arrears of child support to the wife the sum of $10,440.00. Such sum to be paid directly or through the agency at his election, by paying the sum of $200.00 per week, with first such payment to be made on 25 May 2007 until the amount is paid in full.
I discharge all arrears of child support owing as at today's date in the sum of $11,325 determined in the Review Determination dated 5 April 2007 by the Agency.
IT IS NOTED that publication of this judgment under the pseudonym Wingrove & Wyatt is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT SYDNEY |
PAM 1985 of 2006
| MS WINGROVE |
Applicant
And
| MR WYATT |
Respondent
REASONS FOR JUDGMENT
The matter of Wyatt & Wingrove is an application brought by the wife seeking enforcement of child support arrears accrued since 7 November 2005 to date.
Mr Cumming, solicitor, represented the applicant wife and Mr Foster of counsel represented the respondent husband.
The evidence
The parties tendered to me Court Exhibit 1, being:
(a)an agreed case summary and chronology setting out the arrears from 7 November 2005 to date in the sum of $21,725
(b)a chronology and case summary
(c)and a schedule of payments of child support made since 8 August 2002 by the father which show a substantial overpayment of that which he had been assessed under the Act to pay . The overpayment is in the vicinity of $37,000.
Two other exhibits were tendered to me, being the husband's bank account records of his various businesses and himself.
The parties each filed an affidavit and a financial statement which I read.
Both the husband and wife were examined and cross-examined.
I was unable to ascertain either from the Court file or the parties when the wife brought her application for enforcement. The wife said it was in March 2006. The husband had filed a stay application in the Parramatta Family Court in April 2006 seeking a stay of orders of the then current assessment of child support of $521 a week. The husband was paying $350 per week at that time.
The matter was transferred to the Sydney Registry. FM Housego made orders in June 2006 granting the husband a stay of the assessed child support and orders for ongoing payments of support of $350 per week pending the final hearing. The husband has continued to meet the order of $350 per week since that time.
The husband agrees he has arrears of child support calculated from
7 November 2005to date of $21,725 being the difference between what he was assessed to pay and what he has paid. Of significance is the fact that the husband did not pay any child support from February 2006 to June 2006 and only commenced to pay support when ordered to pay by FM Housego. This is in circumstances where previously he had paid $300 child support and $200 per week spouse maintenance.
In cross examination the husband conceded he believed the payment of $300 per week was reasonable for the support of his children. I find the husband’s conduct to be somewhat inconsistent and difficult to reconcile with this evidence as he has demonstrated on the one hand a supportive and generous parent up to November 2005 and now a parent who has only commenced to pay child support when the Court ordered him to do so in June 2006.
Short chronology
The relevant chronology set out in Court Exhibit 1 is as follows.
The parties have three children, [W], aged 9, [X], aged 8 in August and [Y] aged 7 in July.
The husband was and continues to be a self employed [omitted].
In September 2001 the parties sold their home and moved to rental accommodation.
The parties separated in February 2002. The separation was stressful and difficult and a degree of unhappiness and acrimony resulted from the marriage break down. The husband rented a property at [omitted] and the wife and children obtained new rental accommodation.
The wife received the rental refund from the former matrimonial home of $9000 which she retained.
The husband’s child support liability commenced in 2002. The husband was assessed to pay $439 per week from 18 March 2002. This assessment was later reduced to $5 per week.
On 7 June 2002 at the request of the wife, the Agency commenced to collect the husband’s child support liability, which was backdated. The husband had arrears at that time of $985.00.
There were some non-agency payments credited to the husband in June 2002.
In August 2002 the husband obtained an employment contract and commenced to pay the wife voluntarily $300 per week child support in addition to paying for the wife's car costs and health insurance for the family. The husband continues to pay this sum of $300 per week despite the Assessments of child support issued by the Agency.
The wife elected to cease the Agency collecting child support on
12 August 2002at which time the husband’s liability for child support increased. The husband asserts he paid back rent of $2,500 for the wife and purchased, a TV, video and DVD player for the family at this time.
The husband’s child support decreased to $131 per week on 30 January 2003.
In May 2003 the husband and wife agreed he will pay the wife's car loan payment of $50 per week as part of his child support.
In June 2003 the husband’s liability for child support decreased to $11 a week.
In September 2003 the husband’s liability for child support increased to $58 a week.
Parenting orders were made by consent in December 2003.
In August 2004 the wife obtained an order for interim spouse maintenance of $200 per week.
Orders are made by consent on 5 November 2004 in relation to property proceedings and spouse maintenance. The husband takes on marital debt and there is a super splitting order to the wife of 95% of husband’s superannuation otherwise there is little other property to divide. Part of the property orders provide the wife will receive maintenance of $200 per week until [Y] commences school when the amount will reduce to $100 per week. The father's child support liability increased to $166 per week at this time.
In February 2005 the wife moves in with Mr Halley who I accept was just a friend at that time. The wife and Mr Halley are now married.
The husband commences employment for the first time as an employee with [omitted] in April 2005.
Upon learning of the relationship with the wife and Mr Halley the husband applied to have the spousal maintenance order discharged in July 2005.
The Court orders that the amount of spouse maintenance be reduced by any sum obliged to be paid by the husband for child support over $300 per week.
On 1 September 2005 the husband’s child support liability increases to $287 per week.
On 5 September 2005 the parties undergo their first child support review. The parties’ relationship takes a marked turn for the worst from this time. Hitherto their relationship was focused on the needs of their children.
On 7 November 2005 the father's liability for child support increased to quite an extraordinary sum of $721 per week following the Review.
On 17 November 2005 the wife re-registers child support for collection by the Agency. The mother acknowledges on 8 December 2005 that the father has been paying $300 per week and on 13 January 2006 the Agency credits the father with those payments totalling $50,700 for 169 weeks.
On 13 January 2006 Agency credits father with a payment of $1200
On 16 January 2006 husband’s child support income is capped by Agency at $130,767 until 30 November 2006.
On 20 January 2006 husband pays $500 to the agency.
On 30 January 2006 letter sent to father by the Agency advising of assessment at $721 weekly and that fathers’ salary will be garnisheed fortnightly.
On 31 January 2006 husband resigns from his employment.
On 7 February 2006 the Agency deducts the sum of $1,130 from husband’s resignation salary.
On 2 March 2006 the husband applies for an administrative departure and an amended assessment is issued by the agency.
On 18 April 2006 the Agency declines or refuses the husband‘s application and the arrears are noted at $9,656 plus penalties.
On 27 April 2006 the husband lodges his objection to that decision
28 June 2006 the husband seeks a stay of the Agency’s decision and wife’s enforcement which is granted.
The father's liability for child support is reduced to $521 per week on
1 July 2006.
The wife elects for the Agency to collect arrears.
On 1 December 2006 penalties are remitted and the husband’s child support liability is confirmed at $522 per week until 30 June 2008. This was as a result of the Review determination of 5 April 2007.
The parties’ financial statements update me in relation to their present position. Neither of them owns a property nor are they in a strong financial position.
Mr Halley the wife’s husband owns a property. The wife and children live in that home with him. The wife has some debts. The husband is almost now debt‑free. The husband has his income earning capacity and has re-partnered.
The husband has no pool of assets from which the wife’s application can be satisfied other than his income earning capacity.
The Courts discretion.
This is an enforcement summons and as such is a discretionary matter. I am under no obligation to agree with the wife's application or the husband's application. It is a matter where in the exercise of my discretion I must have regard to all the relevant facts surrounding the matter as well as the parties' evidence and my assessment of their evidence.
The exercise of the discretion encompasses a wide field. I must determine whether the orders contended for by each of the parties are a just and equitable, proper, appropriate, in accordance with law, and reasonably able to be enforced.
The parties applications.
The husband says I have overpaid the wife on the Agency assessments in the past, I do not seek to recover such overpayments and thus any arrears of support now accrued ought not to be enforced as the overpayments I have made are greater than the arrears now sought.
The wife on the other hand seeks the arrears of support be enforced as she has expended monies paid to her in the past in the support of the children.
At first blush it would appear that if the husband has, in one sense overpaid some $37,000 since August 2002 in child support, then I ought not to exercise my discretion to enforce arrears of $21,725 which exist as at today’s date.
However, the exercise of my discretion is not so simply discharged. The first matter is that the overpayment was made in the support of children. It was made in circumstances where the husband had a capacity to pay $300 a week and he regarded this as a proper amount for the support of his children. Additionally the husband was paying for at that time $200 a week spousal maintenance to the wife which he also considered to be appropriate and proper.
Now, this was a consensual arrangement. There is little doubt the arrangement was in the children's best interests. The consensual arrangement became undone in three ways on the evidence before me.
The first factor was the husband quite properly sought to cease spouse maintenance payments when he discovered the wife had re-partnered and was in a de facto relationship in June 2005.
The second factor was that the wife sought an assessment from the Agency, which was also quite proper when she realised the husband was no longer self-employed having obtained a position with [omitted] at an income of $127,000 in April 2005. Prior to April 2005 the husband was self‑employed. He again became self-employed in early 2006.
The third factor was that the husband voluntarily resigned from his position on 31 January 2006 which was almost at the same time the Agency had notified him by letter on 30 January 2006 of their assessment and collection by way of garnishee of $731 per week from his salary of child support. There is a question whether the husband had received the Agency’s letter of 30 January when he tendered his resignation on 31 January which I was unable to decide.
From the time of the Review in November 2005 resulting in an assessment of $721 per week child support the parties' relationship has seriously deteriorated.
It is clear that in January 2006 the husband was not seeing his children and that the wife was in difficult financial circumstances. The wife’s difficult financial circumstances were compounded in December 2005 and continued until orders were made in June 2006 as she did not receive any meaningful level of child support from the husband for that period of time. This is in stark contrast to the prior years when child support and spouse maintenance had had been regularly paid.
From 29 June 2006 to 7 September 2006 the husband paid child support of $350 per week by way of orders of this Court. The assessment was $521 per week. In September 2006 the parties enter into consent orders that the husband will pay child support as assessed, which at that time was $531.00 per week. The husband paid this sum from 14 September 2006 to 30 November 2006.
Payment of child support at that level ceases in October 2006 consequent upon the husband filing review or an objection to his assessed income. The husband’s assessed income was $85,000 he believed the correct figure should have been $70,000. Mr Cummings submitted this was a self-assessed income which it was and on that self-assessed income, his child support would reduce to $343.53 or so a week and that is what the husband commenced to pay in December 2006 and has continued to pay.
The parties evidence
It is clear the wife obtained a benefit from Centrelink which she was not entitled to obtain due to the child support and spousal maintenance being paid by the husband directly to her and not collected by the agency. The wife has had to repay this money. The wife and her husband have their own young child to support as well as her 3 children and themselves on her husband's income.
The parties have resolved parenting issues before me. However, as at January 2006 the husband was seeing virtually nothing of his children.
The wife caused a tax audit to be carried out of the husband's various activities and businesses. I think her words were "he was laundering money" or some such other phrase. There have been no consequences from that audit against the husband other than the distress and negative impact such an event had on the husband and he and the wife’s relationship. This audit was being carried out when he was employed with [omitted] and was one of the reasons he gave for his resignation. When pressed by Mr Cummings, "Why did you resign?" he really could give no good reason and said it was sort of a spur of the moment thing.
Despite Mr Cummings submissions to the contrary it is relevant what occurred in the property settlement. In the property settlement the husband took over matrimonial debt. He still has not repaid all the debt. The husband was required to have the wife's car repossessed so that he could sell it to repay the debt. The wife did not co-operate and wanted to retain the car when it was clear this was not possible. There was little cooperation at this time. This behaviour did the wife no credit. The wife retained $9,000 bond when the party’s rental property was vacated at separation.
The wife continued to receive spousal maintenance from the husband at a time where she had entered into a de facto relationship, a period of about four months. This behaviour did her little credit.
The wife did not seek any reassessment of child support during the time the husband was paying much greater amounts of money than assessed and she sought to have that voluntary payment made directly to her. The wife was questioned why she did not seek a reassessment of the husband's child support liability during the time of overpayment and she said, "I only now know he has earned much more money than he ever disclosed and he left me without support in January 2006 to June 2006 and Mr Halley and I got into a lot of debt because of him", and that seems to be her position. There was a great deal of bitterness and acrimony by the wife towards the husband. I did not see the same level in the husband's evidence towards the wife and at the end of the day that observation may go nowhere.
The wife asserts in her affidavit, and I accept her evidence, that the husband did not assist her with additional payments for the child [X] in March 2006 when she was hospitalised with her adenoids and attendance at ongoing speech therapy. This was at a time when the husband was not paying any child support, having prior to that time been really quite generous and very child-focused in the payments he made to his children. This behaviour did the husband no credit.
As to the husband's evidence, the husband's resignation from his well‑paid secure job at the same time as his wages were to be garnisheed in January 2006 is not just a coincidence. The husband said he did this on the spur of the moment due to his mental health. I accept he was under significant financial pressure at this time. In part due to the taxation audits the wife caused to be carried out, he was paying off significant matrimonial debt; he was not seeing his children. I do not minimise this pressure. The parties were undergoing numbers of reviews, frequent varying decisions were being made, the Agency was sending out letters on an almost daily basis daily to the parties. The husband’s evidence was he received three assessments in the one day for three different amounts covering three different time periods. One can imagine the pressure.
However, the husband said he resigned his well paid position for mental health reasons. The medical evidence he tendered to me to support this contention is not compelling. He was examined by a doctor a year after the resignation and no evidence of his mental state at the time of the resignation was tendered to me. Further I find that the husband saying he resigned for health issues is somewhat inconsistent with his conduct after he resigned.
His conduct after he left [workplace omitted] is commensurate with his past work ethic. He immediately obtained work with [omitted] for which he was paid. He is clearly a skilled and valued practitioner of his craft.
In March 2006 he received $7,430 from [workplace omitted]. At $990 a day, that is around 7.5 days' work.
In April 2006 he received $4,950. At $990 a day, that is five days' work.
In May 2006 he received $3,465 being three and a half days' work, at $990 a day.
In May 2006 the husband entered into a contract with [workplace omitted] and work flowed to him from that time on a more regular basis.
Now, it is fairly clear to me, despite the father's best efforts to assert that he only remembers signing a contract in May 2006 with [workplace omitted] that he had some contractual arrangement with [workplace omitted] from February 2006. A public company such as [workplace omitted] is government audited, and would not be paying anybody any sums of money without a contract or agreement of some kind in place and would only pay upon invoices being received from which a payment would be generated.
I accept that after his resignation in January 2006 the husband was working much less hours than when employed. I accept that when employed with [workplace omitted] he may have worked five or six long days a week. However he was still working after his resignation earning a reduced income and yet he chose not to pay any money to the wife for child support.
The wife had clearly spent all the money that the husband had generously paid her in the past for the support of her children. Perhaps she wasted it, I do not know, no assertions are made. The money has been spent for the benefit of the children. Of some concern is that at the time [X] was having an operation in March 2006 the husband had earned $7,430 in March and $4,950 in April but did not assist the wife with any associated costs for his child when asked to do so.
The husband had no explanation for this poor behaviour and failure to pay any child support. He admitted in cross-examination that in hindsight his conduct was not appropriate and he did not really have an explanation.
Findings made
Now, the present position is that the husband's business is progressing, which is consistent with his prior work record. He is a talented person who has a good work ethic. He is working in this business and is again self employed. There is an assessment of $523 per week child support which he has not sought be departed from. He is just not paying the assessed amount. He has only paid this amount from September to November 2005 when he was working with [workplace omitted].
I was not impressed by the husband's evidence of his reasons for resigning, nor was I impressed with his lack of any payment for his children from January 2006 despite the evidence of his earning some income. Payments of child support only came about because the wife sought to enforce her arrears of child support in the Courts.
The husband admitted he gave misleading evidence to the Court in June 2006 when he said he was not employed. He was self-employed at the time. In May 2006 he had signed a contract with [workplace omitted] for regular work and had been earning an income from work done with [workplace omitted] since February 2006. That admission was irresistible and demonstrated the husband capacity to obfuscate his past conduct.
I do not find today that this is a case where a husband has failed to disclose his income or tried to hide his financial records from the Court. That would be the last thing I would be saying. He has been audited by the Tax Department. Rather, he has taken steps to avoid an unpleasant event occurring, which would have been garnisheeing his wages for a significant sum and again going through what would have been the third or fourth review process. However the consequences of the husband's resignation should not rebound on his children. It was something he chose to do.
Now, similarly, the wife has not been truthful to Centrelink or the husband in not disclosing her de facto relationship and she obtained some financial benefit from her conduct as well in the past.
Neither party have any assets. I do not today in the exercise of my discretion propose to accept the husband’s submission that I should extinguish the entirety of the arrears debt due to the voluntary payments made by the husband in the past.
There is some force in Mr Cummings' submission that despite the Agency’s assessments the money was properly paid, the father thought it was a proper amount to pay and it has been appropriately spent on the children. If I accept the father’s submission I will rebounding on the children the consequences of decisions made by the parents not to dispute the Agency’s assessments in the past, because neither parent sought to do so until July 2005.
Each party had the opportunity to seek a reassessment or a change, enter into a child support agreement or whatever they wished to do in the past. Neither chose to do so as in essence I find today they each believed the consensual arrangement was appropriate. However, the husband should be given some credit for the fact that he has paid a significant sum to the wife over and above that which was assessed to be paid and this cannot be entirely ignored in the exercise of my discretion.
I find that the husband not paying the child support for five months in the first part of 2006 when he was working is a significant factor in the exercise of my discretion as to the enforcement of arrears. I will exercise my discretion and order arrears to be paid to the wife for that period being from 1 February 2006 to 28 June 2006, a total of
20 weeks, at the assessed child support sum of $521.96 per week. This makes a total payment to the wife of $10,440 rounded up. I will further order this sum to be paid by the husband to the wife directly or at his election to the Agency at the rate of $200 per week with the first payment to be paid on 25 May 2006 and weekly thereafter.
Otherwise I discharge arrears of maintenance owing as at today's date in the sum of $11,325 on the basis of the substantial payments made by the husband for child support voluntarily and over and above the assessed period from August 2002 to November 2005, his significant payment of matrimonial debt, failure of the wife to disclose her de facto relationship to the husband and continuing to receive spouse maintenance payments for 4 months into that relationship and obtaining a benefit from Centrelink that she was not entitled to consequent upon her choice not to have the agency collect the voluntary child support payment .
I am today satisfied on the evidence that the husband has a capacity to pay the total amount I have ordered he pay being child support as well as the arrears at $200 per week, and that the orders are proper in all the circumstances.
I certify that the preceding ninety-five (95) paragraphs are a true copy of the reasons for judgment of Henderson FM
Date: 5 July 2007
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