Y and T

[2006] FamCA 1210

FAMILY COURT OF AUSTRALIA

Y & T [2006] FamCA 1210

FAMILY LAW – APPEAL – CHILD SUPPORT –  Appeal from Federal Magistrate – Lack of procedural fairness – Appeal against an exercise of discretion - Incorrect assessment of father’s taxable income by Federal Magistrate – Further evidence on appeal - Appeal allowed - Costs certificate awarded

Child Support (Assessment) Act 1989

APPELLANT:  Y

RESPONDENT:  T

FILE NUMBER:  BRM 8636 of 2002

APPEAL NUMBER:  NA 34L of 2004
DATE DELIVERED:  28 August 2006
HEARING DATE:  28 August 2006
JUDGMENT OF:  May J

LOWER COURT JURISDICTION:  Federal Magistrates Court

LOWER COURT JUDGMENT DATE:                7 April 2006

COUNSEL FOR THE APPELLANT: Mr Westbrook

SOLICITOR FOR THE APPELLANT: Gallagher Legal

COUNSEL FOR THE RESPONDENT: No Appearance

SOLICITORS FOR THE RESPONDENT: No Appearance

ORDERS

1. That permission be granted for the appellant to appeal from the decision of Federal Magistrate Jarrett of 7 April 2006.

1. That the appellant have leave to adduce further evidence on the appeal.

1. That the order made by the Federal Magistrate on 7 April 2006 be set aside and that the appellant be assessed for child support for the financial year from 1 July 2002 by application of the prescribed formula to his taxable income.

1. That the Court grant to the appellant a costs certificate, pursuant to s. 9 of the Federal Proceedings (Costs) Act 1981, being a certificate stating 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 in respect of the costs incurred by the appellant in relation to the appeal.

FAMILY COURT OF AUSTRALIA  AT BRISBANE

APPEAL NUMBER:          NA 34L of 2006

FILE NUMBER:                  BRM 8636 of 2002

Y

Appellant Father

And

T

Respondent   Mother

EX TEMPORE REASONS FOR JUDGMENT

Introduction

1. In an application, filed on 5 May 2006, it is asked that permission be granted for the applicant to appeal from a decision of Jarrett FM, made on 7 April 2006.  The application with which his Honour dealt was an amended application, filed by leave on 31 March 2006 asking that the applicant be assessed for child support for the period from 1 January 2002 up to and including the end of 2006 child support year by the application of the prescribed formula to his taxable income, also that all arrears be discharged. 

2. By order of the Federal Magistrate on 7 April 2006, that application was dismissed. I indicated during the argument that I will allow the application for permission to appeal from that decision. 

   An application was filed on 16 August 2006 for leave to adduce further evidence on the appeal. The evidence includes an affidavit filed on 5 May 2006 by Margaret Nester Gallagher, the solicitor for the appellant. The proposed Notice of Appeal was annexed to the affidavit. In addition, there are two affidavits of the appellant, filed on 5 May 2006 and 18 August 2006. 

   I should explain at the outset that the respondent has not appeared at this hearing, nor did she appear before the Federal Magistrate for reasons which he explained in his judgment. I have the letter that was provided to the Federal Magistrate, it seems, from the appellant’s solicitors Gallagher Legal, dated 27 March 2006, which made it quite clear to the respondent the orders that were being sought before the Federal Magistrate. 

3. In addition, I now have an affidavit from Ms Gallagher, where she explains that she has provided to the respondent copies of the Summary of Argument and the application to which I have referred, and that she also sent copies of the affidavits. The solicitor received from the respondent an email, which is attached to her affidavit, where the respondent explains that she had told the Appeals Registrar that she has some serious medical conditions and that, as she had no longer any legal representation, she could not attend the Court herself by reason of health and financial reasons. Therefore, it can be said that although there was certainly no assumption that could be made that the respondent is conceding or agreeing with the any grounds of the Notice of Appeal or the orders that are sought, there was no opposition. 

4. The background to this matter appears to commence with circumstances, now some time ago, being a decision of a Child Support Registrar, dated 13 March, 2002. The mother lodged an application on 24 December 2001 for Administrative Determination. In March 2002 the Agency issued an assessment increasing the payments from $8, 898 to $19,200 per annum. The appellant father filed an Objection on 18 June 2002. He explains in his lengthy affidavit, filed on 1 March 2006 that he received a Notice from the Registrar that the mother had also lodged an objection to the change of assessment and that the mother's objection had been disallowed.

5. In October 2002, he received a Notice of Decision on Objection disallowing his objection. On 11 November 2002, the appellant filed a Child Support Departure application. The matter was first heard before Rimmer FM in March 2004, some very considerable time after the original application was filed.  The Federal Magistrate gave her decision on 24 March 2005 and the appellant successfully appealed from that decision. On 9 November 2005, Warnick J allowed the appeal and the matter was returned to the Federal Magistrates Court for rehearing. Thus, the matter, ultimately, was heard by Jarrett FM. 

6. In essence, in the affidavit of the appellant he explained that he, other than for the first year the parties separated, had been paying child support as assessed under the statutory formula, which had been based on his taxable income.  There was only one year that he did not do so and he paid a greater amount on a voluntary basis because he thought that he ought to do so. The difficulty, as I have mentioned, is that the Notice of Assessment received in March 2002 assessed his child support liability at some $19,200 per annum, which was considerably different from the sum he had previously been paying and from his taxable income.

7. One difficulty to which the Federal Magistrate referred, is that there had not been made available the basis on which that assessment was made, and nor do I have it now. However, there have been a number of other facts and circumstances that have emerged since the hearing before the Federal Magistrate and the affidavits of the husband to which I have referred explain this including as follows from the affidavit of the husband filed 5 May 2006:

   8.12.                 “The assumption that underpinned some of the argument before Federal Magistrate Jarrett was that notwithstanding any appeal, the assessments then in place by the Child Support Agency would continue. Since the decision of Federal Magistrate Jarrett my solicitor has been advised by the Agency that apart from the decision of the Child Support Agency which related to the 2002 year, all other years would be assessed according to my income tax assessment for each year. It is only the assessment for 2002 which needs to be the subject of reconsideration.”

8. The affidavit of the appellant filed 18 August 2006 annexes the Summary of Account Details received by him from the agency and further documents have been tendered before me by Mr Westbrook of counsel, that document being marked exhibit 2. 

9. The balance as at 17 June 2006 had been some $65,000, that being the subject sum about which the appellant wished to appeal. The balance, as assessed now, 21 July 2006, is $19,000 approximately. This reflects the fact that, for some reason the Child Support Agency has determined that the only year upon which the assessment will be based other than the amount based on his taxable income, will be the year after the assessment was made, that is beginning on 1 July 2002. 

10. The Grounds of Appeal are in two parts. The first is, in essence, a lack of procedural fairness due to what can neutrally be described as a misunderstanding by counsel of what the Federal Magistrate was saying to him in relation to the evidence he placed before the Court; and the second is an appeal against an exercise of discretion in terms of Ground 3 of the Notice of Appeal. For that ground to be properly understood and to do justice to the appellant, it has been necessary to allow the further evidence.

11. I have considered, having allowed the further evidence, whether the matter should be remitted to a Federal Magistrate, but in the circumstances, as submitted by Mr Westbrook, that would seem to be a gross unfairness to the appellant, who has been going through this system now for a very long time and has, at least, been partly successful through the Child Support Agency changing their position. Therefore, I have determined that I should re-exercise the discretion.

12. As I have said, the result of the reassessment by the Child Support Agency is that the only period with which I am concerned is from 1 July 2002, the year immediately following the decision of the Child Support Registrar, dated 13 March 2002. The effect, as has been explained both in the written submissions and by Mr Westbrook orally, is that the child support assessed for the appellant, both in the past, and as I understand it currently, is based on his actual taxable income in respect of each year and, fortunately, the Child Support debt has been reduced considerably. It was argued by Mr Westbrook that there has never been any basis for the assessment being other than on the appellant's taxable income. 

13. I should mention the ground relating to procedural fairness. I have read the judgment of Jarrett FM and the transcript. I can see counsel and the Federal Magistrate were, ultimately, at cross purposes, and it was understandable that the Federal Magistrate was concerned about the absence of some documents.  In the written submissions counsel has provided to me, reference is made to paragraph 11 of the judgment and various parts of the transcript. No doubt, this happened because of the absence of the wife and the considerable pressure placed on Federal Magistrates to hear matters quickly and provide judgment.  However, it is unfortunate that the effect of the exchange between his Honour and counsel was that Mr Westbrook had the impression that there was no need to argue the matter any further, or place any further evidence before the Federal Magistrate. 

14. Looking at the transcript, perhaps, towards the end of the hearing, one could see that there may have been some doubt on page 7 where  Mr Westbrook said:

    “I’m simply observing upon the fact that in the absence of the respondent it’s not clear to me that I need to do so.”

15. This is a reference to the child support decision. On the previous page, on page 6, the Federal Magistrate said:

    “If I don’t have the decisions of the child support review officers before me, how do I, how can I make a finding that the current assessments are beyond a simple application of the formula?”

16. It can, perhaps, be seen that that was not really the argument being placed by
    Mr Westbrook before the Federal Magistrate, it being a different one, and that is that it related more to the history of the appellant's tax returns, which were annexed to his affidavit. This was, indeed, unfortunate, however, that argument, to some extent is overtaken by other matters to which I will refer later. 

17. The lack of procedural fairness, as I mentioned earlier, might be a proper ground to allow the appeal and cause the matter to be remitted, but in the financial circumstances of the husband, in this case, that would be an unfortunate result. I have, therefore, determined that I should allow the appeal and re-exercise my discretion. 

18. There is no suggestion at all that the Federal Magistrate applied wrong principles or misunderstood the law in relation to applications for departure.  He set out correctly and concisely the appropriate sections and the very well known authorities on this topic. 

19. As Mr Westbrook submitted, the essence is the question of special circumstances in this case; reference is made to section 117(2)(c)(i) of the Child Support (Assessment) Act 1989, being:

    21.    “(c) 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:

    (i)because of the income, earning capacity, property, and financial resources of either parent or the child.

20. It is submitted that the Federal Magistrate should have found those special circumstances, based on the uncontested evidence of the appellant that he was, in the relevant period, required to pay child support considerably in excess of that which his taxable income would attract. It was submitted that it was not simply a matter of considering how a Child Support Registrar came to a different determination.

21. Mr Westbrook submitted that the requirement to show special circumstances is satisfied in this case.  I must say that there are some unusual features about this appeal. The first is the position taken by the Child Support Agency itself; the second is that the wife does not seek to oppose these orders actively; and the third is that it could not be regarded as just and equitable that the assessment creates an obligation in the absence of evidence that the husband has a capacity to meet such sums of moneys to be paid.

22. The appeal should be allowed and in the circumstances to which I have referred I should re-exercise my discretion and grant the orders in a now much more limited form.