In 2001 orders were made for the children of the parties to live with the mother and that the mother, as part of the division of property, receive an additional 20% of the property pool on account of her future care of the children. Subsequent to the orders being made, the children commenced living with the father.
The husband submitted in support of his application and appeal that the trial judge erred in his application of s 117(2)(ii) of the Child Support (Assessment) Act 1989, in finding that the wife was exercising a reasonable earning capacity and in adjusting the child support income amount.
The majority concluded that where there has been a payment or transfer or settlement of property made by the liable parent for the benefit of the child, that is a factor that may be taken into account in determining under s 117(2)(ii) whether or not it is appropriate to adjust the child support that that parent would otherwise be liable to pay. The majority considered that the section is designed to alleviate the burden of a parent having to effectively pay twice for the child, once by the means of a transfer of property and then again by payment of periodic child support. Their Honours found that the trial judge was in error to the extent that he sought to rely upon s 117(2)(ii) to notionally adjust the wife's child support income to account for the capital imbalance between the parties and that the appropriate place for the consideration of a capital imbalance was under s 117(2)(i). They thus granted leave to appeal and allowed the appeal and went on to re-exercise the discretion.
The third member of the bench concluded that leave should not be granted. In her Honour's view, while the trial judge may have erred in his interpretation of s 117(2)(ii) and while the correct place to consider any capital imbalance was in s 117(2)(i), even if the correct approach was employed, it was not clear that would be just to require a wife in modest circumstances to have recourse to her capital to pay child support. Thus, her Honour found no useful purpose would be served in granting leave.
Reference source: Web link to Austlii reference