York and Bradford - [2007] FMCAfam 704

FEDERAL MAGISTRATES COURT OF AUSTRALIA

YORK & BRADFORD

[2007] FMCAfam 704

CHILD SUPPORT – Departure application – capacity to earn – capacity to pay – commingling of business and personal finances.

Child Support (Assessment) Act 1989, s.117

Applicant:

NIGEL MATTHEW YORK

Respondent:

BERNADETTE MARY BRADFORD

File number:

SYM7005/2006

Judgment of:

Altobelli FM

Hearing date:

8 August 2007

Date of last submission:

8 August 2007

Delivered at:

Sydney

Delivered on:

18 September 2007

REPRESENTATION

Solicitor advocate for the Applicant:	Mr Sheather
Solicitors for the Applicant:	Sheathers Lawyers

Respondent:

Self-represented

ORDERS

The departure application filed 13 July 2007 is dismissed.
Any previous order staying enforcement proceedings against the Applicant are hereby vacated.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
SYDNEY

SYM7005/2006

NIGEL MATTHEW YORK

Applicant

And

BERNADETTE MARY BRADFORD

Respondent

REASONS FOR JUDGMENT

I provide these reasons to explain the orders that I have made in this matter. It is a child support departure application that was filed by the applicant, Nigel Matthew York, on 13 July 2007. The respondent is Mr York's former wife, Bernadette Mary Bradford. The assessment for child support relates to their daughter, Jordyn York‑Bradford, born 3 August 1993.

Background

The application has as its genesis proceedings commenced in 2006 by the Child Support Registrar against Mr York to recover arrears of child support. In fact, that application was listed for hearing on 9 July 2007, but the solicitor for Mr York indicated to the Court on that date that his client had filed a departure application. The child support enforcement proceedings were stayed to enable the departure application to proceed. The applicant's departure application was heard on 8 August 2007. Mr York was, again, represented by Mr Sheather. The respondent, Mrs Bradford, represented herself in the proceedings. The applicant's evidence consisted of his application for departure order, two affidavits (filed 13 July 2007 and 8 August 2007), and a financial statement filed 13 July 2007. In addition, the applicant's father, John Charles York, a certified practicing accountant, also filed an affidavit to which was annexed a substantial quantity of financial material. Furthermore, exhibited to the affidavit was a very substantial bundle of documents, primarily financial in nature, and consisting of literally hundreds of pages. Also in support of the applicant's case there were affidavits filed by John Reginald Lamble, Mark Sequerira, Joachim Hensch and Geoffrey Weule. These last four witnesses were not required for cross‑examination, so their affidavits were simply read as part of the applicant's case.
The respondent's material consisted of the response filed 31 July 2007 and a short affidavit of Mrs Bradford, also filed on that date.
The applicant, his father, and the respondent gave evidence. As the respondent was representing herself, and with no opposition from Mr Sheather, I had the benefit of asking both the applicant, and his father, several questions.

Issues

Mr Sheather was able to explain the substance of his client's case as follows. The application seeks a departure from a series of administrative assessments of child support covering the period 21 September 2004 to 7 May 2007. He submitted that the evidence would indicate that, throughout this period, his client was unable to pay child support as assessed having regard to his actual income, and also having regard to his earning capacity. The factual basis of this arises out of a period of unemployment, an unsuccessful attempt to establish a business, failure to obtain alternative employment, a period of illness as a result of depression, and a period of time when the applicant was on Centrelink benefits.

Applicable Law

From a legal perspective, Mr Sheather framed his client's case as a departure application based on s.117(2)(c)(ia) and s.117(2)(c)(ib) of the Child Support (Assessment) Act 1989.
Having regard to the two sub‑paragraphs of s.117(2)(c) relied on by Mr Sheather, the issues in this case revolve around what was the applicant's income, property and resources during the relevant period, and what was his earning capacity during the relevant period. It is, therefore, both a capacity to earn case and a capacity to pay case. A capacity to earn case is one where the Court might decide, for example, that the applicant's income is as stated by him or her, but that, nonetheless, the applicant has a capacity to earn greater than that which is, in fact, being earned. A capacity to pay case usually involves an examination by the Court as to whether an applicant's reported taxable income in fact reflect their real income.
In order for the application for departure to be successful, the grounds referred to by Mr Sheather not only need to be established, but there must also be demonstrated special circumstances, that the determination has been unjust and inequitable, and that it is otherwise proper to depart from the administrative assessment. Sub‑paragraph (ia) of s.117(2)(c) invites a consideration of the income, property and resources of a parent (s.117(4)(d)), and also requires me to take into account s.117(7A). Sub‑paragraph (ib) of s.117(2)(c) requires an inquiry into the applicant's earning capacity as a parent (s.117(d)(a)), and requires me to take into account s.117(7B) with its test of whether an earning capacity is found to be greater than the actual income, for the reasons set out therein.

The Administrative Assessments

I did not have in evidence before me each of the assessments for the period 13 November 2004 through to 7 May 2007. I also did not have the decisions on the objections to those decisions. The only evidence I had about the history of this matter in the Child Support Agency was a letter dated 9 February 2007 addressed to the applicant containing what appears to be the latest notice of decision on objection dated 9 February 2007 which stated that the objection is disallowed. The document known as "Details of objection decision" does set out some of the relevant history. This document became exhibit A1. There are five relevant assessments as follows: ‑
a)For the period 13 November 2004 to 20 December 2004: $260.00 per annum, based on the decision of Senior Case Officer Bournazos dated 3 January 2005
b)For the period 21 December 2004 to 31 May 2005: $10,000.00 per annum, based on the decision of Senior Case Officer Bournazos dated 3 January 2005 which set Mr York's annual rate based on his earning capacity.
c)For the period 1 June 2005 to 31 August 2006. $10,000.00 per annum, based upon the decision of Senior Case Officer Bournazos dated 3 January 2005 which set Mr York's annual rate based on his earning capacity.
d)For the period 1 September 2006 to 31 October 2006: $10,000.00 per annum based upon the decision of senior case officer Bournazos dated 3 January 2005 which set Mr York's annual rate based on his earning capacity.
e)For the period 1 November 2006 to 30 November 2007: $320.00 per annum based on Mr York's 2006 child support income of $2,356.00 and Ms Bradford's child support income of $23,597.00.
I do not intend to deal with the first and fifth assessments, as the levels of child support were so low that, in my opinion, none of the evidence demonstrated that there were special circumstances, or that these determinations were unjust and inequitable or that it would be just and equitable or otherwise proper to interfere with these assessments.
In relation to the three remaining assessments, it is clear that the senior case officer made a determination based on the applicant's earning capacity.
The one copy notice of decision that was available to me in evidence was attached to the child support application for departure order filed 13 July 2007. It is the notice of decision dated 26 October 2006 by Senior Case Officer Bournazos. The decision made was that for the period 1 November 2006 to 31 October 2008 the annual rate payable by Mr York be set at $8,523.00.
The notice of decision explains that Mr York had originally applied under reason 7, i.e that his capacity to provide financial support for Jordyn was significantly reduced because of his necessary expenses for self‑support. This was rejected by the senior case officer as Mr York was claiming every day living expenses, none of which were out of the norm. However, Mr York also proceeded under reason 8 and needed to show that the assessment was not fair because of his income, earning capacity, property and financial resources. The notice of decision explains that Mr York had previously sought a review on this ground, and had been unsuccessful. Accordingly, it was not possible to appeal from the previous decision made about his earning capacity and capacity to contribute to meet Jordyn's day‑to‑day needs. That, of course, was the role of a departure application such as the present one. The notice of decision records, however, in quite some detail the applicant's personal and financial history, including his experience in the music industry, his establishment and carrying on of two businesses and his assets and liabilities, income and expenses. The notice of decision is too long to reproduce in these reasons, but I make the observation that there appears a striking resemblance between the evidence that the applicant placed before the senior case officer, and the evidence that was advanced on his behalf in this hearing. The learned senior case officer concluded, after taking into account everything that was said and the documents produced before her, that Mr York's 2006 taxable income did not reflect his income, benefits from his two businesses, and the resultant financial resources of Mr York from his corporate structure.
In discussing whether it would be just and equitable to change the assessment, the senior case officer noted that Mr York's decision to commence his own business when he ceased being an employee in 2004 was justified in the circumstances, but it was difficult to justify a person working in their own business for an extended period of time without an income that would support their general living expenses. Having regard to the priority that needs to be accorded to meeting his obligations to provide for his daughter, and having regard to the difficulty in accurately assessing Mr York's real current income and benefits, the senior case officer felt it was appropriate to adjust Mr York's child support liability by using the Lee tables, and apportioning Jordyn's expenses as to one half to Mr York.

Evidence of Unemployment and Medical Disability

There are two aspects of the applicant's case that can be dealt with very shortly. Firstly, in so far as the applicant is relying on a period of four to five months during which he was on Centrelink benefits as a reason for establishing his lack of capacity to pay, or to earn, there was no evidence advanced to support this and to the extent that the applicant's case was based on this fact, it is unsuccessful. Moreover, to the extent that the applicant's case is based upon suffering from depression, the only evidence was a bundle of copied medical certificates which comprised exhibit A3. The first document in that bundle purports to be a medical certificate dated 21 September 2004, on a doctor's letterhead, which states that the applicant was suffering from major depression which necessitated him leaving work, and stating that he was unfit for work for the period 21 September 2004 to 20 December 2004. There is subsequent documentation, to similar effect, which seems to cover the period 9 January 2007 to 9 March 2007. The last document in the bundle is a handwritten note from a clinical psychologist dated 8 April 2007 and which consists of a statement regarding her assessment of the applicant during a short period of counselling that he undertook with her between 1 September 2005 and 26 October 2005, during which time he attended six sessions. This note is dated 8 April 2007 and appears to have all the hallmarks of a document prepared for the purposes of the child support proceedings. I place no weight on this evidence. It would have been objected to if the respondent had been legally represented. It is hearsay. In any event, it covers such a small period that it does not advance the applicant's case in any material way.
What the applicant's evidence does establish, however, is that during the relevant period he was primarily involved in establishing and running two businesses, York Entertainment Solutions Pty Ltd and Bonza Entertainment Pty Ltd. It was obvious that the applicant's personal financial circumstances were inextricably interwoven with the financial circumstances of these two companies.

Current Financial Circumstances

The applicant's financial statement sworn 11 July 2007, filed 13 July 2007, reflects, according to the applicant, his current financial circumstances. He is presently employed by Australian Radio Network as an account manager and earns $865.39 per week inclusive of a car allowance. He claims total personal expenditure of $742.00 per week, though I note that Part N, on page 7, lists total weekly expenses of $785.00. However, the information listed under Part N is almost impossible to reconcile with the information about personal expenditure at Part G. The financial statement is not a very helpful document. For example, at item 27 the applicant claims motor vehicle registration at $400.00 per week. When I asked him about this figure, he explained that the $400.00 per week was an average weekly figure, and covers all of the expenses relating to his car. It is what he described as a 1995 Commodore motor vehicle having a value of between $1,000.00 and $2,000.00 and having travelled 200,000 kilometres. The applicant asserted that he owed no money on the vehicle. I reject his claim to this expense as being simply improbable. His gross income is declared to be $865.00 per week out of which he declares payment of tax of $152.00 per week leaving a net income of $713.00 per week. I do not accept the applicant's evidence that he spends 56 per cent of his take‑home pay on the expenses relating to a 12‑year‑old motor vehicle in respect of which he owes no money. It is more likely than not that he spends about $200.00 per week, assuming I accept his evidence of having to fill the tank with petrol two to three times a week, spending $150.00 on petrol.
In his financial statement he declares that he has an interest in superannuation to the value of $130,411.00. His liabilities total in excess of $113,000.00, including child support arrears. The largest amount is owing to various credit card providers ‑ American Express and Citibank and totals nearly $60,000.00. He also refers to a loan from his parents, John and Lyn York, of just under $29,000.00.
He was briefly cross‑examined by the respondent. The applicant denied that he had said to the respondent that she would get nothing at all by way of child support. He insisted that he would be in the same financial predicament even if he were married still today. He agreed that he had not seen his daughter for four years, but stated that that had nothing to do with child support.
I was able to ask him some questions. He told me that he was confident that within 12 months he should be able to earn about $80,000.00 in his new job. Between his redundancy in September 2004 and 7 May this year he told me he has had two paid jobs ‑ one doing consulting work for an electrical company, and the other one doing some cleaning for his father's company. For the rest of the period he was working in the businesses. I asked him about the credit card debts appearing on his financial statement. He explained that he does not make payments and that the cards had been used for living expenses. He informed me that most of the expenses on the cards are attributable to his business. When I asked him what those expenses might be, he explained that they included the cost of manufacturing CDs, DVDs, film clips, and motor vehicle expenses. Whilst these expenses would be incurred on his credit card personally, the businesses would reimburse him. In relation to York Entertainment he explained that he would pay the expenses relating to the business, the client would then pay the invoice issued by the company, to the company, and then the company would pay for the credit card expenses. York Entertainment does not trade currently but does receive the occasional order. Bonza entertainment is still trading though with losses. The applicant told me that he was living off his credit cards with his parents lending him some money, as well as his current wife who he describes as having a good job at Avis. She supported him whilst he was trying to set up the companies and he emphasised to me that his aim in so doing was to increase his earning capacity. He kept going because he thought there was a light at the end of the tunnel.
In re‑examination he gave evidence that his income prior to separation was about $45,000.00 per annum.

Capacity to Earn and Pay

The respondent's case was very simple. She asserted that the applicant had during the relevant period a lifestyle which was completely inconsistent with the position he presented to her, and to the Child Support Agency. It was a life full of entertainment, going out and travel. As the respondent said to me:
He loves to travel, he loves nice clothes.
In short, it was a lifestyle that was completely out of sync with the picture he sought to portray both to the Child Support Agency and to the Court.
The evidence of the four deponents of affidavits filed in support of the applicant's case, who were not required to give evidence, confirms the establishment of the business Bonza Entertainment, and the business York Entertainment Services, the downturn in the market and business condition, but otherwise did not go into a level of financial detail that really assists me in determining the questions of capacity I need to determine in this case. Nonetheless, if the only issue I had to decide was whether the unsuccessful attempt to establish the businesses were attributable, at least in part, to market conditions, then that is probably the case.
The most substantial evidence was provided by the applicant's father, John Charles York. As indicated above, his affidavit filed 8 August 2007 had extensive annexures and exhibits. He is a certified practicing accountant who deposes to having examined financial documents covering the period commencing September 2004 and ending June 2007 including bank statements for the applicant, for York Entertainment Solutions, American Express and Citibank statements, the financial statements of the businesses, including interim profit and loss statements for the businesses to 31 March 2007. In the bundles of documents exhibited to Mr York at the time of swearing the affidavit there are summaries of bank deposits, reconciliation of bank deposits, transaction summaries, BAS statements, tax returns and various summary documents. As a result of his examination of all of these financial statements, Mr York deposes in paragraph 8 as follows:
From my examination of the above documents, I have concluded that during the period 1 July 2004 to 1 May 2007, Nigel's taxable income totalled $25,956. The difference between Nigel's expenses and his income comprised loans from his family, gifts and increased indebtedness on his credit cards.
Despite being the applicant's father, Mr York gave his evidence candidly. He was very helpful in explaining the summaries and the extensive schedules he had prepared. When I asked him questions I formed the impression that he was being truthful. He agreed, however, that he had been instructed to substantiate the assertion that the applicant's income demonstrated he did not have the capacity to pay child support. He admitted to me that when he was unable to identify the precise nature of an expense, or the source of a payment, he accepted the applicant's instructions about this. It was quite clear that Mr York did not act as an auditor. I accept that he did attempt to distinguish between personal and business expenses. He did not attempt to hide the fact, for example, that bank deposits during this period, which totalled just under $196,000.00, included two payments of $6,500.00 and $804.50 representing winnings from poker machines and from Keno, respectively. He told me that he could not substantiate the source of these payments, but that is what his son had told him. He told me that he knew that his son played poker machines over a period of time.

In relation to withdrawals from business accounts, he told me that sometimes the withdrawals were by way of cash cheques from time to time. He was able to identify how the cash was used by cross‑referencing to payments on credit cards and other expenses. He was able to explain to me some of the detailed spreadsheets he had prepared which explained the source of payments made to both the Amex and the Visa card accounts, to which I will shortly refer. It is apparent that not only did the applicant's parents provide financial assistance, but so did Mary York, his current wife, as well as the business York Entertainment Solutions.
It is interesting to identify some of the transactions referred to by Mr York in his evidence. For example, the annexure C to his affidavit summarises transfers from the York Entertainment Solutions cheque account. On 16 March 2005 the schedule refers to a withdrawal of $4,000.00. Mr York told me in evidence that this was a cash withdrawal. Indeed, the bank statement shows that on 16 March 2005 $4,000.00 was withdrawn. The schedule indicates that $1,100.00 was paid into the Visa card account in the name of the applicant personally. Indeed, the Visa card statement shows this payment on 16 March, by way of cash. The schedule refers to a payment of $2,500.00 to Amex. The Amex statement for the period shows a payment of $2,500.00, but does not identify the precise date of the payment.
Accordingly, the summary of payments out of the business cheque account does appear, prima facie, to be correct.
It is also interesting, however, to examine the other transactions that appear on the three statements that have been referred to above.
For example, the cheque account statement on the York Entertainment Solutions Commonwealth Bank account for the relevant period, ie, 24 February 2005 ‑ 23 March 2005 shows total credits of $8,584.49 and debits of $7,766.40. It is possible to establish from reading the statement that most of the withdrawals were in cash. For example, on 3 March 2005 $100.00 was withdrawn at the Exchange Hotel Balmain. On 10 March $200.00 was withdrawn from the Kensington War Memorial Club. On 14 March 2005 there were five separate withdrawals from the Evening Star Hotel at Surrey Hills, totalling $560.00. Given that this is clearly a business account, it seems hard to reconcile these withdrawals as being for a business purpose.
When one has regard to the Visa account statement covering the payment on 16 March, there are a number of transactions that can easily be explained as being business ones (eg, M5 South West Motorway Moorebank $100.00, and Summit Technology Aust Pty Ltd Waterloo $1699.82) but there are obviously personal charges (eg Marine Cafe Maroubra $34.60, Maroubra Mall Fish Maroubra $26.35).
When one looks at the American Express statement, one is immediately struck by the volume of transaction conducted by the applicant on his Amex card. During the relevant period covered by this statement, the applicant incurred debits to the value of $3,126.55. The expenditure covers the period 20 February‑20 March 2005. Examples of expenditure at restaurants and hotels include: Delicious Satay Restaurant Kingsford, Royal Hotel Paddington, Regent Hotel Kingsford, The Point Hotel Pyrmont, Golden Unicorn Chinese Restaurant, Maroubra, Engedine Hotel Engedine, Renatos Pizza House and Italian Restaurant Coogee, The Mill Hill Hotel Bondi Junction, The Art House Hotel Sydney, City Tattersalls Sydney, Silver Spring Chinese Restaurant Sydney. Several of these establishments were frequented by the applicant on more than one occasion during the relevant period. On 24 February 2005 the Amex card was used both at the Royal Hotel Paddington and the Clovelly Hotel Clovelly. On 4 March the applicant used the card at the Point Hotel Pyrmont and the Mill Hill Hotel Bondi Junction. On 5 March the card was used at the Art House Hotel Sydney and City Tattersalls Sydney.
According to Mr York Snr, all of the payments from the business cheque account were for business purposes and so I infer that, in general terms, of the debits on the Amex card of $3,126.55 for that period, $2,500.00 were deemed for business purposes, and the rest personal. The applicant gave evidence, indeed the respondent confirmed, that entertaining was part of his business. Notwithstanding that, on my calculations, the total of the expenditure referred to above, on restaurants and hotels, was under $650.00. The number of transactions that appear to be for personal purposes significantly exceeds the entertainment related ones. This is only an impression, and not a definitive analysis of expenditure.
Thus, even though the material presented by Mr York Snr, appears to be accurate on its face, when one refers back to the actual source documents, they actually raise far more questions than Mr York Snr, is able to answer. A preliminary view that could be formed after analysing simply one line of the summary contained at annexure C to the affidavit of Mr York Snr, is that the applicant seems to have paid scant regard to the difference between personal and business expenditure.
If one takes another example from annexure C, Mr York Snr explains that on 15 November 2005 the sum of $19,010.80 was withdrawn from the business cheque account and used to pay Visa in the sum of $6,500.00 and $12,500.00 to Amex. The business cheque account statement confirms that on 15 November $19,010.80 was withdrawn. During the period covered by this statement, the total credits in the account were $29,320.98 and total debits $26,039.60. During the relevant period there are a number of cash withdrawals that are worth noting. For example, on 27 October 2005 $300.00 was withdrawn from the Woolloomooloo Bay Hotel Woolloomooloo and $300.00 from the Maroubra Bay Hotel Maroubra. On 28 October there were six separate cash withdrawals, on the same day, from the same location, described on the statement as Maroubra Junction Maroubra Two. The withdrawals, in order, were for $300.00, $300.00, $200.00, $100.00, $100.00 and $100.00.
The Amex statement for the relevant period confirms that on 15 November there was a credit of $12,500.00. That statement indicates very minimal use of the card during this period, but it included Optus TV/net cable of $29.95 and HCF Sydney of $64.50.
The Visa account statement for the relevant period also confirms that $6,500 was paid, by cheque, on 15 November. During this month, the Visa card appears to have been used extensively between 21 October and 21 November for transactions and charges totalling $6,454.00. A close examination of the transaction details creates the impression of both business and personal expenditure, of substantial proportions. On 7 November the card was used to draw a total of $900.00, in five separate transactions, at a location that is described as Main Foyer Souths Kingsford.
During the one period covered by the transactions referred to above, the applicant used the visa card for expenditure totalling $6,454.00, the Amex card for debits totalling $279.14 and the York Entertainment Solutions cheque account for debits totalling $26,039.60. If one were to loosely describe these payments as the applicant's cash flow during a one‑month period in 2005, that is a cash flow exceeding $32,000.00.
Out of caution, I further examined one other transaction referred to in annexure C, this time on 7 July 2006. In his affidavit, Mr York deposes that on 7 July 2006 $13,000.00 was withdrawn from the business cheque account and used to pay the Visa account as to $1,000.00, and the Amex account as to $12,000.00.
The relevant cheque account statement for the period confirms that $13,000.00 was withdrawn on 7 July 2006. During the period covered by this statement, 24 June‑21 July 2006, there were total credits on this account of $14,144.92, and debits of $16,876.00. Some of the transactions on the cheque account include the following. On 26 June 2006 withdrawals were made from Sydney Kings $200.00 and the Sandringham Hotel Newtown $300.00. On 29 June $400.00 was withdrawn from the Royal Hotel at Paddington, $400.00 from the Slip Inn Sydney, a further $300.00 from the Slip Inn Sydney, and, indeed, a further $100.00 from the same place. In other words, on 29 June 2006 the applicant used the business cheque account to withdraw $1,200.00 at various hotels. On 5 July 2006 $200.00 was withdrawn from the Pennant Hills Inn, and there were two separate withdrawals of $200.00 from the Great Northern Hotel at Chatswood.
The Amex statements for the period confirm that on 7 July 2006 $12,000.00 was paid into the Amex card. During this month the debits totalled $20,103.92, but this seems to have included a transaction on 17 July 2006 when the balance of the Visa card, $18,000.00, was debited to the Amex card. In other words, the Amex card was used to pay $18,000.00 off the Visa card. The transactions for this period once again include restaurants, wine cellars, hotels, as well as other expenses, both personal and business.
The Visa card statement for this period confirms that on 7 July 2006 $1,000.00 was paid by way of cash. The transaction details record the payment of $18,000.00 on 19 July 2006 from the Amex card. The other transaction details refer to restaurants at Pennant Hills, transactions at the Vintage Golf Club Rothbury, a meal at a Japanese restaurant at Leura as well as further alcohol purchases.
While annexure C deals with a summary of payments and transfers, it is annexure A that deals with the payments into the business cheque account. There Mr York Snr records that between 24 December 2004 and 13 June 2007, total deposits into this account amounted to $195,891.00. If one rounds that off to $196,000.00, and divides it by 32 months, that is an average monthly inward cash flow of $6,125.00. One would have thought that is a reasonable cash flow for a small business. The impression formed from the evidence referred to above is that a considerable amount of this cash flow was used for personal, rather than business purposes. The impression formed is that the applicant, through his expenditure, lived a high lifestyle. He did not have the money to pay child support for his daughter, but there seems to have been money to fund all of the transactions that are described in his credit card statements.
The financial position presented by the applicant to the Child Support Agency as demonstrated in exhibit A1, is consistent with the financial position that he presents to the Court in this matter. The conclusion that I have reached, however, based on all the detailed financial evidence that was made available to me, particularly by the applicant's father, is that the applicant at all times had the capacity to pay child support as assessed. I am not satisfied that his reported taxable income reflects the actual income available to the applicant particularly having regard to how he structured his business and the obvious reality from the financial documents that only lip service was paid to the distinction between personal and business expenses. It is patently obvious that the business paid very significant sums of personal expenses including funding a lavish lifestyle of dining out, entertainment and probably gambling activities. The expenditure on the credit cards is, at times, truly extraordinary. Having regard to the priority that the Child Support Assessment Act accords to paying child support, it is impossible to accord priority to the expenses that the applicant incurred in maintaining a lifestyle of profligacy.

Conclusion

In any event, even if I am wrong in concluding that he had, at all times, the capacity to pay, I also find that he had, at all times, the capacity to earn. Even if I am wrong and his actual income is as stated, he had a capacity to earn far greater than that which he was exercising. After he had been made redundant, there was a period of time in which it would have been reasonable to allow him to establish his business. That seems to be reflect in the decisions of the child support review officer. However, it shortly became a case of a payer who does not work but could, or a payer who has reduced his hours of work, or a payer who has changed his occupation. None of the evidence before me indicates that the changes to which I have just referred could be justified on the basis of caring responsibilities or health. Moreover, the applicant has failed to demonstrate that it was not a major purpose of the decisions he made in relation to his work, to affect the administrative assessment of child support. Accordingly, an examination of the matters referred to in s.117(7B) confirm in my mind that the applicant has had, at all relevant times, the earning capacity that would enabled him to meet his child support obligations as assessed.
There is evidence from which a reasonable inference could be drawn that the applicant was, during the relevant period, quite heavily involved in gambling. For example, the annexure B to his father's affidavit contains a statement attempting to reconcile bank deposits to invoices. As indicated above, the financial information prepared by the applicant's father indicates that there was a poker machine winning of $6,500.00, and a Keno winning of $804.50 that was deposited into the business accounts. The applicant's father agreed that the actual source of the payment could not be substantiated and that he had acted on the description given to him by his son. When the evidence of these winnings is combined with the evidence from the credit card statements and bank statements demonstrating multiple cash withdrawals on the same day from the same clubs and hotels, one is left with a disturbing picture of a payer who is involved in gambling, and establishes his finances in a manner that makes it very difficult to establish whether or not business income was being used to finance gambling. All of this seems to occur at a time when he is not meeting his clear social and legal obligation of maintaining his daughter.
The applicant has failed to make out his case. There are no special circumstances. It would not be just and equitable or otherwise proper to depart from the administrative assessment of child support.
I dismiss the application.

I certify that the preceding forty-nine (49) paragraphs are a true copy of the reasons for judgment of Altobelli FM

Deputy Associate: Monique Robb

Date: 18 September 2007