Family Law
Departure from the Administrative Child Support Assessment
In December 2006, the Federal Magistrate's Court once again ruled that child support need not necessarily be assessed on the payers income or earning capacity alone, but that a payer's property and financial resources can be taken into account as well.
Background
STT and MA have one child; a son aged six at the time of the hearing. The child lived in the sole care of MA, the mother.
In September 2005, the Child Support Registrar decided that with effect 1 June 2005, STT's assessable child support income would be $78,254 per annum to be indexed in line with inflation. STT disagreed with the Registrar's decision to depart from the administrative assessment and filed an objection, which was disallowed on 3 February 2006. STT was informed of his right to appeal this decision to court but failed to do so.
On 24 August 2005 an enforcement summons was issued against STT. In an affidavit filed by the Child Support Agency, it was alleged that STT had child support arrears of $15,000 and a child support liability of $1,000 per month. The summons prevented STT from disposing of his residential property until the matter had been resolved in court.
Evidence presented by STT at the hearing was found to be contradictory.
STT claimed that although he had previously operated as an insurance or financial products adviser through his company, E Pty Ltd, he did not obtain a license for such activity when it became necessary for such advisers to obtain a license. STT claimed that without such a license, neither he nor his company had the ability to earn an income.
The financial statement presented by STT said that his average weekly salary was $198 and that he received a weekly rental of $153 from a property that he owned. According to STT, his weekly expenses amounted to $351 as well as a weekly repayment of $147 to his company for a 2001 BMW that was owned by the company, but for his use.
The applicant also had other investment properties that were registered to STT's company. STT presented contradictory evidence as to the value and outstanding debt of the properties and the BMW owned by his company. In his financial statement, STT listed the value of the assets as $452,000 with liabilities of $67,000.
Although the court voiced its doubts about STT's actual income, it was not prepared to make a finding to the contrary without further evidence, which was not available. Thus STT's income was considered to be $198 as he had alleged.
The court did however find that STT's assets and the assets of this company, E Pty Ltd, should not be distinguished between for the purpose of this matter as STT is the sole director and secretary of the company. Further, the court was satisfied that STT himself had previously not distinguished between the assets and fruits of the company and his own and thus found the assets of the company to belong to STT.
The court found that STT's disposable assets were valued at $758,000. This included his home of $450,000, the investment unit owned by his company which had equity of $253,000 and the BMW, also owned by the company and valued at $55,000.
The court conceded that STT's assets were not sufficient to produce an annual income of $78,000 but found that STT those assets could be liquidated to provide for the adequate support of his child.
Orders
STT's application was dismissed. His child support debt of $15,000 will remain, as will his child support liabilities of $1,000 per month, as assessed under the departure order. The court also refused to dissolve the injunction restraining STT from disposing of his residential property until such time as his outstanding child support debt had been taken care of.