Child support – SSAT appeal – Double counting of income

In Agrippa & Horton (SSAT Appeal) [2010] FMCAfam 1144 (11 October 2010) Halligan FM set aside an SSAT decision due to double counting of the payer’s credit card expenditure imputed as income, saying this at paras 55-56:

“The father asserted that his credit card expenses were paid from the mortgage offset account, and thus, by adding both his credit card expenditure and all deposits to his mortgage offset account, the SSAT had counted the credit card expenditure twice. The mother made no submission in contradiction of the father’s submission on this point.

It is clear from the evidence in the Court book … that payments were regularly made from the mortgage offset account to the father’s credit card. The total of credit card purchases that the SSAT imputed as indicative of income in the 12 months from October 2008 was $15,011.94. The total of deposits to the mortgage offset account imputed as income over the same period was $18,833. It appears the latter figure includes the former, and to that extent the method of calculation of the father’s income has counted the same figure in the amount of a little over $15,000 twice.”

Child support – SSAT appeal – Principles to be applied for a stay pending appeal against Tribunal’s decision

In Ahern & Anor (SSAT Appeal) [2012] FMCAfam 1299 (23 November 2012) Scarlett FM stated the law and principles relevant to a stay pending an SSAT appeal at paras 19-26:

“Section 111C of the Child Support (Registration and Collection) Act provides that a party to a proceeding may apply for a stay of the operation of a process of either or both the Child Support (Assessment) Act and the Child Support (Registration and Collection) Act. Subsection 111C(3) provides:

‘Pending the hearing and final determination of the proceeding, the court may make such orders as the court considers appropriate staying or otherwise affecting the operation or implementation of the Assessment Act and this Act if the court considers that it is desirable to do so, taking into account the interests of the persons who may be affected by the outcome of the proceeding.’

Subsection 111C(5) provides:

‘An order under subsection (3):

a)      is subject to such terms and conditions as are specified in the order; and

b)      operates for:

I.       such period as is specified in the order; or

II.       if no period is specified – until a decision of the court, the Registrar or the SSAT determining the proceeding becomes final.’

As mentioned in Jones v Child Support Registrar [[2007] FCA 1732], the Court should consider:

a)      whether there is an arguable basis for suggesting that the appeal might succeed; and

b)      the interests of the parties who may be affected by the outcome of the proceeding, i.e. the balance of convenience.

Conclusions

In order to show an arguable case, a party does not need to demonstrate that he or she has a strong case, let alone one that is bound to succeed. Whether the Applicant’s case does raise a question of law, as the Applicant submits, or whether the claim is no more than a factual issue, as the Child Support Registrar submits, is a matter to be decided on the hearing of the Appeal. It is for the Applicant to establish that the Tribunal’s finding that he managed to repay an overdraft of $70,000 is a finding made without evidence, which would take the matter beyond a mere questioning of the factual merits of the Tribunal’s decision. Whilst the claim does not appear to be overwhelmingly persuasive, it is far from a hopeless case.

Thus, I am satisfied that the Applicant has shown that he has an arguable case, a serious question to be tried on appeal.

The Applicant has also provided evidence that he is suffering financial hardship and would be financially strained if the Child Support Registrar were to take further enforcement action before the Appeal is determined.

The Court must also consider the interests of the First Respondent, the payee entitled to child support. She would suffer hardship if she were not to receive any payments of child support at all in the intervening period. The Applicant has committed himself to pay $150.00 per month towards his child support obligation. In view of the First Respondent’s complaints about his erratic payments in recent year, if the Applicant were to pay $150.00 per month promptly it would provide the First Respondent with some certainty, at least.

I am satisfied that the case for a stay has been made out. The stay will be conditional on the Applicant paying to the Child Support Registrar for payment out to the First Respondent the sum of $150.00 per month towards his child support obligation. However, the Applicant will need to start paying promptly. The first payment is to be made on 30 November and monthly thereafter.”

Children – 16 year old child granted leave to be present in court when judgment handed down

In Aiken [2011] FMCAfam 910 (5 August 2011) Harman FM granted leave for a 16 year old child, the eldest of three children, to attend court with his parents in the following terms:

“Before the Court at the time of judgment are each of the parents and their Counsel and with the consent and agreement of each parent their eldest child [X] who is 16 years of age. Leave has been granted for him to be present and arising not only from his age but his statement to the Family Consultant, who these young people have seen this morning, that he ‘wants to have the reasons for the decision explained’ to him. That would appear entirely appropriate having regard to both his age and level of understanding and consistent with the obligation created by Article 12 of the International Convention on the Rights of the Child ( … ) [which includes the provision that a] child shall in particular be provided the opportunity to be heard in any judicial and administrative proceedings affecting the child, either directly, or through a representative or an appropriate body, in a manner consistent with the procedural rules of national law.”

De facto relationship – Found that the relationship had broken down before commencement of Part VIIIAB – Case dismissed  

In Aitken & Deakin [2010] FMCAfam 35 (21 January 2010) McGuire FM, after considering the law and the evidence in the case, dismissed property proceedings brought under Part VIIIAB of the Family Law Act, finding that the parties’ de facto relationship had broken down (in that case, under the one roof) prior to the commencement of Part VIIIAB on 1 March 2009.

Discovery – Party granted certificate against self-incrimination under s 128 Evidence Act 1995 (Cth)

In Aitken & Murphy [2011] FamCA 785 (12 October 2011) the applicant filed an affidavit deposing that he had made partial discovery of documents in accordance with an order made for discovery, he expressed his willingness to produce all other relevant documents and give evidence as to all relevant issues, but objected to produce certain documents relating to undisclosed income between 2004 and 2010 on the ground that their production may tend to prove that he had committed an offence or was liable to a civil penalty. The applicant applied to Young J and was granted a certificate under s 128 of the Evidence Act 1995 (Cth) that such evidence could not be used against him in proceedings under the Taxation Administration Act, Crimes Act and Criminal Code (all Cth).

Young J reviewed the case law relevant to s 128 at paras 90-130 and whether there were “reasonable grounds” for the applicant’s objection within the meaning of s 128(2), saying at para 126-127:

“I am not persuaded that there is no real risk [of danger] to the applicant in the manner discussed in Saffron v Federal Commissioner of Taxation [(1992) 109 ALR 695]. Further, in relation to the applicant’s bona fides in bringing the application for a certificate, even in view of his limited compliance with the consent orders … , the court must be cautious in concluding that a claim of privilege is not made bona fide. As stated by Kirby J in Accident Insurance Mutual Holdings Ltd v McFadden (1993) 31 NSWLR 412 at 421 to 422:

‘The test traditionally applied is whether the person claiming the privilege genuinely and reasonably apprehends a danger from being compelled to answer the question objected to: R v Boyes (1861) 1 B & S 310; 121 ER 730. ( … )

Where a question arises as to whether the claimed privilege is not claimed bona fide or whether the danger apprehended is without substance, it is clear law that ‘great latitude should be allowed to [the witness] in judging for himself the effect of any particular question’: see R v Boyes (at 311; 730).’

However, the court must also protect the privilege and ensure that it is not abused (see Triplex Safety Glass Co Ltd v Lancegaye Safety Glass (1934) Ltd [1939] 2 KB 395 at 403).

In my opinion, based on the offences detailed at paragraphs 67 to 74 above, in addition to the evidence provided in the accountant’s affidavit as to the substantial business income received by the applicant in the relevant years, in the context of the selective disclosure of material relating to the Bank of Cyprus accounts, the material relating to the applicant’s employer R Pty Ltd, the entity known as A Pty Ltd, documents relating to the applicant’s involvement with M Pty Ltd, and the curious reference in paragraph 14 of the applicant’s affidavit of 25 August 2011 deposing that “[a] convention will render me liable to a criminal penalty”, the applicant has reasonable grounds for the objection on the basis that the particular evidence surrounding the circumstances in which he obtained the additional income disclosed in the amended tax returns and BAS statements may tend to prove the commission of a criminal offence or offences arising under Division 2 of the Taxation Administration Act 1953 (Cth), s 6 of the Crimes Act 1914 (Cth) or ss 11.1,11.4 or 11.5 of the Criminal Code 1995 (Cth).”

 

Lump sum order made in an asset rich/income poor case  

In Aitken & Porteus [2009] FMCAfam 783 (31 July 2009) in an asset rich/income poor case Lindsay FM made a lump sum order, saying at paras 109-114:

“I have considered the earning capacities of the parties (passim). In the case of the father and because of his unexplained failure to produce relevant and fundamental financial information, my findings have been based, to some extent, on the drawing of inferences, as I have sought to explain.

The father’s commitment to [Z] must be recognised. They are voluntarily assumed by him of a magnitude in excess of the assumption of responsibility that he has made for his two other children.

I note the payment of school fees and the holiday expenses and the meeting of mortgage instalments on the land, which is now in the daughter’s name, in addition to his meeting her orthodox weekly expenditure.

I find that if the amount of child support payable is not capitalised in a lump sum, it is unlikely to be paid at all. That would cause significant hardship to the two children and the mother.

I find that, in addition, the duty of the father to maintain these children was such that it is just and equitable and otherwise proper to make a lump sum order.

It would be unjust and inequitable of the court to fail to order a lump sum against the background of the facts before the court in relation to the father’s conduct in:

a)    ‘staging’ a departure from employment;

b)    during such period of ostensible unemployment, purchasing land for his   daughter at significant cost;

c)    during his period of ostensible unemployment, travelling overseas at significant expense;

d)    failing to provide to the court taxation returns or financial returns for any relevant period; and

e)    failing to make any proper contribution to the support of the children until in the shadow of the trial.”

The Court continued at paras 118-122:

“How will the father find the lump sum to meet the order I make? I cannot be certain. He might arrange with [Z] to sell the Property D land and create a capacity on his part to borrow and service a loan much smaller than that which he presently is servicing in respect of that land (that is if [Z] retains any equity arising from the sale, estimated to be $100,000). He might sell one of his other properties. He has had a significant capacity to borrow money in the recent past and an extension of his current loan liability with the St George Bank is certainly something he should pursue if so minded.

I am satisfied that it will be just and equitable as regards the children, the mother and the father and otherwise proper to make an order that the father provide child support in the form of a lump sum.

I propose to fix the sum upon the basis of the father having an annual taxable income of $100,000.

I propose to calculate the lump sum payable by him by factoring that annual income into the ordinary operation of administrative assessment of child support under the Act.

Based upon an income of $100,000 and an administrative assessment relating to two children under the age of twelve; and upon the basis of further assumption on my part that the mother will continue to earn an income which is less than that which will affect the calculation of the assessment; and upon the further basis of acknowledging the father’s continuing full-time care of a child over the age of thirteen years; and, further, on the basis of a cost percentage of 65% and a care percentage of 60% for the mother and a cost percentage of 35% and a care percentage of 40% for the father, I find that the annual rate of child support payable by the father should be fixed at $9,866 per annum or $189.73 per week.”

It was ordered under s 124 of the Child Support (Assessment) Act 1989 that the father provide child support for the children other than in the form of periodic payments, being a lump sum of $48,000. The father’s assessed annual rate of child support was reduced by 100% and an order made in default of payment for sale of real estate.

Wife wins appeals against order striking out her late and improperly sworn affidavit and ensuing property order made at an undefended hearing – Relief under FLR 11.02 (failure to comply with an order) and 11.03 (relief from orders) considered 

In Akbar & Mali and Anor [2015] FamCAFC 244 (21 December 2015) the Full Court (Strickland, Ryan and Austin JJ) set aside orders made at first instance by Foster J which struck out the appellant wife’s only affidavit for not having been filed within the time directed nor sworn in accordance with s 98AB(2) of the Act ([20]). (It was sworn overseas before an overseas lawyer but lacked certification as to the lawyer’s ability to take an oath in that jurisdiction so as to comply with s 98AB(2).) The Court at first instance also dismissed the wife’s application for an adjournment, dismissed the wife’s application “for want of evidence” and proceeded to hear and make orders in accordance with the husband’s response on an undefended basis ([19]). The wife argued on appeal that the Court did not apply Rule 11.03 of the Family Law Rules.

The Full Court said (from [27]):

“Rules 11.02 and 11.03 are set out below.

11.02          Failure to comply with a legislative provision or order

1)      If a step is taken after the time specified for taking the step by these Rules, the Regulations or a procedural order, the step is of no effect.

Note: A defaulter may apply to the court for relief from this rule (see rule 11.03).

2)      If a party does not comply with these Rules, the Regulations or a procedural order, the court may:

a)      dismiss all or part of the case;

b)      set aside a step taken or an order made;

c)      determine the case as if it were undefended;

d)      make any of the orders mentioned in rule 11.01;

e)      order costs;

f)     prohibit the party from taking a further step in the case until the occurrence of a specified event; or

g)    make any other order the court considers necessary, having regard to the main purpose of these Rules (see rule 1.04).

Note: This list does not limit the powers of the court. It is an expectation that a non-defaulting party will minimise any loss.

11.03 Relief from orders

1)      A party may apply for relief from:

a)    the effect of subrule 11.02(1); or

b)    an order under subrule 11.02(2).

2)      In determining an application under subrule (1), the court may consider:

a)    whether there is a good reason for the non-compliance;

b)    the extent to which the party has complied with orders, legislative provisions and the pre-action procedures;

c)    whether the non-compliance was caused by the party or the party’s lawyer;

d)    the impact of the non-compliance on the management of the case;

e)    the effect of non-compliance on each other party;

f)     costs;

g)    whether the applicant should be stayed from taking any further steps in the case until the costs are paid; and

h)    if the application is for relief from the effect of subrule 11.02(1)—whether all parties consent to the step being taken after the specified time.

Note 1: This list does not limit the powers of the court. See also subrule 1.12(3).

Note 2: A party may make an application under this rule by filing an Application in a Case or, with the court’s permission, orally at a court event.

[28]    It can be seen that the effect of r 11.02(1) is that if a step is taken after the time specified by the rules, the regulations or a procedural order, the step is of no effect. The step thus deemed not to have been taken, the effect of r 11.02(2) is that the court can next determine the consequences of that non-compliance in accordance with r 11.02(2) which comprises a non-exhaustive list of the court’s case management powers.

[29]    Of course, when determining the consequences of non-compliance regard must also be had to the main purpose of the rules, which is to be found at r 1.04. That rule provides:

‘The main purpose of these Rules is to ensure that each case is resolved in a just and timely manner at a cost to the parties and the court that is reasonable in the circumstances of the case.’ (Note omitted)

[30]    It follows that the just resolution of proceedings is pivotal to the application of the rules. What is ‘just’ includes considerations of timeliness and cost and takes into account the interests of the parties as well as those of the court and other litigants who may be affected by delay.

[31]    Thus, the combined effect of rr 1.04 and 11.02(2) is that the consequence of non-compliance imposed pursuant to r 11.02(2) must be:

1. responsive to the particular breach;

2. proportionate to the seriousness of the breach; and

3. may take into account the wider interests of case management and other litigants.

[32]    Self-evidently, before the court determines which, if any, of the r 11.02(2) consequences should be imposed, the affected parties must be given the opportunity to address the issue. Not only did his Honour determine the issue without effectively hearing from the solicitor for the wife, as counsel for the husband wryly observed, he did so without giving either counsel for the husband or counsel for the Second Respondent an opportunity to speak to the issue. Notwithstanding that this specific denial of procedural fairness is not captured by the grounds of appeal, we are sufficiently concerned about the approach which was adopted that we could not allow it to pass without reminding his Honour of his obligation to afford parties procedural fairness.

[33]    The third aspect of these rules arises from r 11.03 which enables a party to apply for an order relieving him or her from the consequences of r 11.02(1) or an order under r 11.02(2). The factors which the court in the exercise of its discretion, may consider in determining whether or not to grant relief pursuant to r 11.03(1) are set out in r 11.03(2). As Note 2 to this rule makes plain, an application for relief pursuant to r 11.03(2) may be made by filing an application in a case or, with the court’s permission, orally at a court event. Irrespective of how the application is made, the court is obliged to afford the affected parties procedural fairness.

[34]    Inter alia, the factors set out in r 11.03(2) are designed to ensure that a party would not suffer unfair consequences of non-compliance with a procedural obligation if the non-compliance was caused by that party’s lawyer, where there is a good explanation for the breach, or the other parties agree the party should be excused. In other words, the scheme of this sub rule is to ensure that these rules do not operate as instruments of injustice and there is a just and proportionate response to any breach.

[35]    The wife did not file an application for relief pursuant to r 11.03(1). However, the transcript demonstrates that notwithstanding her difficulty being heard, the solicitor for the wife attempted to make an oral application for relief of the type available under r 11.03(1). In so doing, the solicitor demonstrated she was unaware of the provisions of s 98AB(2) of the Act and that in relation to the failure to comply with the provision, the wife was not at fault. Otherwise, attempts were made to explain that because of the wife’s responsibility for her mother’s care, there was a good reason why she filed her affidavit late. These were all relevant matters. It needs to be remembered that the wife is resident overseas and prosecuted her case with all the difficulties inherent in that circumstance. In addition, although the proceedings had been underway for some time they had only recently moved into the trial management phase and, albeit she was late, the wife had filed her affidavit. This was not a case of persistent non-compliance, and thus it was incumbent on his Honour to consider whether by the application of r 11.03 the court could facilitate a just and timely hearing. It is tolerably clear that his Honour’s refusal to even consider r 11.03 was influenced by the fact that s 98AB(2) rendered the wife’s affidavit inadmissible. Yet, that difficulty was easily addressed, for example, by the wife re-swearing the affidavit so that it complied with the provision or adopting the contents of the affidavit in chief. These simple steps ought to have been considered in the context of the wife’s attempt to obtain relief under r 11.03.”

The appeal was allowed, the orders set aside and the matter remitted for rehearing by another judge. 

 

Children – Equal time set aside – “Unacceptable risk” to child – Father’s drug use

In Akston & Boyle [2010] FamCAFC 56 (26 March 2010) the Full Court set aside an order of the FMC for a child to spend equal time with both parents despite what O’Ryan J of the Full Court at para 41 called “a very harrowing history of abuse of the child”.

The Court held that the FMC erred in its consideration of “unacceptable risk” by failing to assess the risk in the light of the father’s use of methadone and/or marijuana and the prospect of his return to other drug use; and erred in finding, as a significant relevant matter in determining that risk, the conclusion that because the mother had allowed the child to spend block school holiday time with the father she did not believe there was a risk of harm to the child.

Warnick J at paras 8-10 added: “The federal magistrate was likely to have been much assisted had there been expert evidence going to matters such as links between marijuana use and use of harder drugs, the effects of marijuana use as the father had described, the risk of recidivism, whether remaining on or off the methadone program, and of the consequences of, and availability of, continued use of the methadone program.

However, the learned magistrate was left without that assistance… [and] thus may have been in the position where he could make few findings about the risk to the child from the father’s drug use or from a return to using other drugs.”

Child unaware of his father – No order in father’s favour

In Albert & Edell [2010] FMCAfam 1487 (26 November 2010) a five year old child did not know his father, believing his half-sibling’s father to be his father. Since unsuccessfully seeking asylum in Australia for many years, the father travelled from Lebanon to Australia with a false passport. Once in this country he subjected the mother to extreme violence. Halligan FM found that the father’s deportation was likely and dismissed the father’s application to spend time and communicate with the child, saying this at para 51:

“I am prepared to proceed upon the basis that he may have access to mail, but to start the process for this child to develop the relationship only then to have it pulled out from under him, in my view, does not advance the interests of this child and it does not provide a benefit to the child, and that is what the first of the primary considerations speak of. It is for these reasons that I am not satisfied that the orders that the father seeks are in the child’s best interest and I am not prepared to make them. It is also for these reasons that I am not satisfied that the orders proposed by the Independent Children’s Lawyer and supported by the mother for written communications are in the child’s best interests.”

Children – Parties had equal shared parental responsibility – Mother’s application for child to attend school trips (where father had already agreed) dismissed

In Albertinni & Podopoulos [2010] FamCA 405 (14 May 2010) Dawe J dismissed a mother’s application for an order that a child attend school and other trips despite the father’s agreement to them. The parties had equal shared parental responsibility under a prior order. The court noted at para 9 that the mother had disobeyed that order requiring the parties to attend upon a mediator or family consultant before filing any further application. 

Dawe J at paras 24-25 said:

“It is not appropriate to encourage litigation nor in the best interests of the child to relieve the parents of their obligations and responsibilities to interact with each other on a sensible and practicable basis.

Making an order in these circumstances is only likely to encourage further bickering between the parents rather than further sensible negotiations between the parents. It may run the risk of encouraging the child being used in disputes between the parents in future and encourage the child to play one parent off against the other for her own purposes. This may not have occurred, but bringing such a matter before the Court and seeking a final order from the Court in the circumstances which existed following the correspondence from the husband’s solicitors to the wife’s solicitors…is not something that the Court should encourage, nor is it in the child’s best interests.”