Aish and Greco
[2014] FCCA 2283
•2 September 2014
FEDERAL CIRCUIT COURT OF AUSTRALIA
| AISH & GRECO | [2014] FCCA 2283 |
| Catchwords: FAMILY LAW – Application for review of child support back to 2006 – objection decision only recently published – SSAT appeal still possible – whether appropriate for mother to proceed in the Court – whether application having reasonable prospects of success – application dismissed. |
| Legislation: Family Law Act 1975, ss.64, 66BA, 66E, 66F, 74, 90SE, 117 |
| Henry v Henry (1996) 135 ALR 564 Love & Henderson (1996) FLC 92-653 Cutler & Lester [2007] FMCAfam 563 JFL v TP (1999) FLC 92-870 |
| Applicant: | MR AISH |
| Respondent: | MS GRECO |
| File Number: | NCC 192 of 2007 |
| Judgment of: | Judge Burchardt |
| Hearing date: | 29 August 2014 |
| Date of Last Submission: | 29 August 2014 |
| Delivered at: | Melbourne |
| Delivered on: | 2 September 2014 |
REPRESENTATION
| Counsel for the Applicant: | Mr Bacon |
| Solicitors for the Applicant: | Manby & Scott Lawyers |
| Counsel for the Respondent: | Ms Devine |
| Solicitors for the Respondent: | Merrick Spicer & Associates |
ORDERS
The Applications filed on 9 October 2013 be dismissed.
Each party is to bear their own costs.
IT IS NOTED that publication of this judgment under the pseudonym Aish & Greco is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT AT MELBOURNE |
NCC 192 of 2007
| MR AISH |
Applicant
And
| MS GRECO |
Respondent
REASONS FOR JUDGMENT
It is appropriate to commence judgment in this matter by starting with the materials that the parties have actually filed. The father’s initiating application filed on 9 October 2013 sought final orders in the following terms:
“1.From the date of these orders and until a child support terminating event occurs in relation to the children [X] (born [omitted] 2001), [Y] (born [omitted] 2003) and [Z] (born [omitted] 2004) (the children) any monies paid by the applicant to third parties for purposes directly related to the children’s dental, healthcare and contact travel costs (up to $100 per week) be credited as an appropriate percentage against any child support otherwise payable by the applicant to the respondent regarding the children.
2.The applicant be declared to have had a lawful duty to maintain Ms A from 30 August 2006 and that that duty be duly quantified.
3.Any leave required to be given in these proceedings for them to proceed (within the Child Support Agency) under s112 Child Support (Assessment) Act (or otherwise) be so given.
4.Any further order [whether under the Family Law Act, Child Support Assessment or otherwise] required to do justice between the parties.
5.The respondent pay the applicant’s costs of and incidental to these proceedings.”
On page 5 of the application, it was noted that there were no ongoing cases about child support, and on page 3 of the application I note that the date of separation was given as 18 September 2005. Terms of prior orders and settlements between the parties were annexed to the application. An application in a case filed on the same day is no longer now relevant.
The father’s affidavit filed contemporaneously with his application is quite extensive and I certainly will not read all of it out. But paragraph 4, however, it was pointed out:
“4. I have brought these proceedings principally to seek a child support substitution order regarding the children.”
The affidavit went on to depose to complaints about non-consultation on the mother’s part about health issues and also complaints about the costs of contact travel also. There was a request in the affidavit to pay third parties directly. At paragraph 12, the applicant deposed:
“12. As part of this case, I am not seeking the respondent completely pay for these medical and travel costs I incur- only that she contribute to them (through a child support substitution order) in accordance with her real financial circumstances (whatever they may be).”
At paragraph 13:
“13. As the Financial Statement I have filed in this case shows, I just cannot afford to pay these type of costs without some notional or other contribution from the respondent, or some other readjustment of the financial relationship between us. I seek that an applicable substitution order be made whereby the payments I make directly to third parties for the children’s medical and travel related issues are off set against the periodic child support otherwise payable from me to the respondent. Alternatively, I would seek a similar order to like overall effect under, inter alia, Part 7 Family Law Act (in favour of either me or to the children themselves directly, if need be.)”
I note what was sought was a substitution order or an order “to like overall effect” under the Family Law Act 1975 (“the Family Law Act”). There are complaints about what is described as the balance of hardship between the parties and as to the extent of the mother’s earnings. The scope of the proceedings is revealed by paragraphs 17 and following. Paragraph 17 reads:
“17. The subpoena and R.4.24 processes will provide me with a full set of documents in this respect and I shall file further affidavit material once I have such discovery. At this early stage of the case though I would estimate the respondent’s “real” incomes at all relevant times to be in the order of $180,000 pa.”
At paragraph 21 and following, the applicant deposed to his re-partnering with his now wife. At paragraph 22, he deposed to the fact that he seeks declaratory orders that he has a legal duty to maintain his wife, and at paragraph 23, he deposes to his desire to achieve the court’s permission to allow a child support agency to go back in time to 30 August 2006 and then to re-examine the respondent’s child support entitlement during that period based on his duty to support his wife. He goes on to concede at paragraph 25 that this process might disadvantage his former partner, but says that the difficulties he faces outweigh those considerations.
At paragraph 28, he deposes:
“28. I have had relatively extensive dealings with the Agency over the years. They have sent me countless letters, we have had numerous phone calls and I have been through various change of assessment decisions. I would from time to time even telephone the Agency and discuss how I might best handle my child support affairs. Never once throughout my dealings with the agency was I advised that I could make a “claim” for the support I provided to Ms A. The first time this was brought to my attention was in mid-2013 when my lawyers discussed this with me. I felt completely duped that the Agency had not specifically brought this matter to my attention. In any event, my lawyers advised me that I did not need to let this issue rest. I was advised that I could still seek permission from the court for the Agency to go back to 2006 and thoroughly investigate my proper obligations to pay child support from 2006 and onwards based upon the support I’ve provided to Ms A. I note I brought these proceedings as quickly as I could thereafter.”
Further material was put on as to the merits of the application and the alleged absence of prejudice to the respondent. There is a schedule to the affidavit. In subsection (i) of it, it sets out numerous sections of both the Child Support (Assessment) Act 1989 (“the Child Support (Assessment) Act”) and the Child Support (Registration and Collection) Act 1988 (“the Child Support (Registration and Collection) Act”), and gives no particulars as to exactly what is said about them. Parts (ii) and (iii), I will read out. Under the heading “The Grounds of the Application”, the words follow:
“(ii) In the circumstances of the case, if any leave is required to bring these proceedings (or part thereof) under Part 7 Child Support (Assessment) Act, Chapter 6 Family Law Rules or otherwise it is in the interests [sic] the parties that such leave be granted.
In the special circumstances of the case and for the reasons already articulated in the body of this affidavit, the ground, or grounds, of departure exist pursuant to, inter alia, s.117(2). Furthermore, it is just and equitable and otherwise proper pursuant to s.117(4) and (5) so as to justify the orders sought.
It is just and equitable under s.123 etc to order the part payment of child support in the manner sought.”
Under the heading “Issues to be determined”, the words follow:
“(iii) Whether i) it is appropriate to grant any leave necessary to bring these proceedings; ii) a ground, or grounds, of departure exists under (inter alia) s.117(2) which would justify the orders sought; and iii) it is just and equitable under s.117(4) and (5) and s.123 etc to order the payment of child support in the manner sought.”
The father had already referred to an assessment dated 15 August 2013 which is exhibit SA1 to his affidavit. Exhibit SA2 is a copy of the transaction history with the Child Support Agency. I note that it appears extremely extensive. The father’s financial statement filed also on 9 October 2013 is not necessary to be dealt with in detail. It does disclose a substantial income and a very substantial mortgage.
The mother filed her response on 9 December 2013. She sought the dismissal of the application. Her affidavit filed contemporaneously is worthy of note. At paragraph 5 and following she deposed:
“5. The Applicant has not made any Application of which I am aware to the Child Support Agency to change the assessment due to special circumstances.
6. The Applicant has not made any approach to the Child Support Agency of which I am aware for it to exercise its powers and discretion administratively in relation to a Departure Order.
7. The Applicant seeks to offset any moneys paid by him, including travel costs to enable time to be spent in accordance with the existing Orders, be credited to him. This matter is something that can be the subject of an application to the Child Support Agency to change the assessment due to special circumstances. The Application could have been made to the Registrar of the Child Support Agency to be dealt with in an administrative way and not brought before the Court without first exhausting all avenues of administrative inquiry.
8. The Applicant seeks in Order 2 a declaration that he has a lawful duty to maintain his wife from 30 August 2006, a date more than seven years prior to the filing of the Application.”
The affidavit goes on to take objection both to that aspect of the application and to refer to the absence of any application in relation to the 18 months immediately preceding the filing of the case. It is clear from the substance of the affidavit and the response that the mother was seeking that the matter not be permitted to proceed in this court. The mother filed a financial statement on 14 April 2014. I note that it shows a substantial income and also attributes a substantial independent income to the mother’s de facto partner.
Four subpoenas have been filed by the father. They are of substantial scope. Subpoenas to the Westpac and Commonwealth Banks require all documents going back to 2006.
On 6 August 2014, an affidavit was filed by Ms A. Relevantly, it deposes to the fact that she has not worked full time since August 2006 and has been a full-time mother since February 2009. The father filed a further affidavit on 6 August 2014. Paragraph 4 deposes to the dental orthodontic treatment required for [Z] and refers to the effects of a substitution order were it to be made, and paragraph 8 asserts that he is prepared to discontinue any aspect of his claim if it is out of time.
They are the matters expressed until 15 August 2014 when the mother filed a further affidavit which relevantly says at paragraph 11:
“11. On or about 1 December 2013, I applied to the Agency for a change to the assessment. The Father cross-applied.”
I point out that one might have expected that application to have been disclosed by the affidavit filed by the mother on 4 December 2013. It was her application and she had already made it. The mother’s affidavit goes on to set out the history of that application and objects to the father’s application again at paragraph 21. The pages to this material are paginated and at pages 24-32 of 40 is the Child Support officer’s decision. At page 24 of 40 are the father’s reasons for his cross-application. I will read those out.
“Reasons in the cross-application made by Mr Aish:
Reason 1: The costs of maintaining the child are significantly affected because of high costs in enabling the parent to spend time with, or communicate with the child.
Reason 8A and B: The child support assessment is unfair because of a parent’s income, property and financial resources or earning capacity.
Reason 9: The parent’s capacity to support the child is significantly reduced by their legal duty to maintain another person.
Reason 10: The parent’s capacity to support the child is significantly reduced by their responsibility to support a resident child.”
I note the net effect of the application, from the father’s point of view, was to raise the mother’s income and decrease the payments he had to make. I further note that at page 25 of 40, there have been seven previous change of assessment applications, that is, since separation in 2005. There has been a lot of litigation about all this. At page 27 of 40, I note that the decision-maker dealt with Reason 1, the cost of spending time, and the father was unsuccessful because his costs were not more than five per cent of his adjusted taxable income. I note further at page 28 of 40 under the heading “Reasons 8A and B”, the mother’s income was substantially increased by the result.
At pages 29-30 of 40, the officer dealt with Reason 9. The requirement to support another person was considered in detail and the father was unsuccessful. The objection decision taken by the mother is at pages 34 and following. No objection was taken by the father. Both parties were continuing tenaciously to criticise each other and the objection decision reviewed all the reasons raised by both parties, including Reason 9 being the support of the applicant’s wife.
I note, further, that it is common cause that the time limit for an appeal to the Social Security Appeals Tribunal is noted at page 40 of 40, and the time limit has not yet expired. In submissions at Court, counsel for the mother raised the objection decision and the availability of the appeal to the Social Security Appeals Tribunal. It was submitted that this application seeks to go behind the objection decision. It was pointed out that the application exceeds the seven years prescribed in s.111 of the Child Support (Assessment) Act, and it was further submitted it was not clear whether the application was pressed under s.117 or s.123.
From that introduction, I turn to submissions, which I will now endeavour to paraphrase. Counsel for the father said that the applicant seeks to go back to 2006 when he re-partnered. It was submitted he has had no credit for the support of his wife since. It was submitted that the Child Support Agency has no power to make a declaration as it is only an administrative body. It was submitted that the father also seeks contributions in respect of travel costs, either under Part 7 of the Assessment Act or Part VII of the Family Law Act which I note is the part of the Act dealing with children.
Reference was made to authority and to the effect that estoppel and res judicata did not apply to child maintenance matters. It was also submitted that the introduction of the seven year limit in s.111, introduced on 1 January 2007, could not operate retrospectively. I would indicate that I reject this argument summarily. The Act would be wholly unworkable if that interpretation was to be adopted.
Counsel for the mother sought to sustain the application for summary dismissal and referred to authority, including the well-known case of Henry v Henry (1996) 135 ALR 564 which, of course, deals with forum conveniens arguments rather than precisely what we have here. Counsel submitted that the applicant’s wife could work and that there was no sufficient explanation for the delay. It was pointed out that this case, ranging as it would, over some seven years of time would involve hardship for the mother.
Counsel for the father referred to further authority, much of it, in my view, at a level of some generality, as to summary dismissal. Considerable debate took place about the Court’s power to make orders under the Family Law Act. Counsel for the father placed particular emphasis on the case of Love & Henderson (1996) FLC 92-653.
It should be noted that in that case Kay J clearly found that the Court could make an order for financial support to an access parent under s.64 of the Act, as it then was, notwithstanding the prohibition of orders for maintenance of a child for whom child support could be sought. Counsel submitted that it was beyond power for the Child Support Agency to rule on the issue of support for the wife as this was an exercise of power under the Family Law Act. That submission rather ignores the fact that that is exactly what the father sought that the agency do in the most recent tranche of litigation before the agency itself, and he did this after receiving legal advice, it seems, in 2013.
Counsel submitted that extensions of time, such as that sought here, to enable the applicant to go back in time should be approached with leniency but, in my view, the extract cited from Cutler & Lester [2007] FMCAfam 563 does not go that far. Counsel for the father submitted that the applicant’s case should be taken at its highest, but, in my view, that submission ignores s.17A of the Federal Circuit Court Act 1999 (“the Federal Circuit Court Act”). The claim was pressed pursuant to s.74 and s.90SE of the Family Law Act.
Counsel for the mother complained that such a claim was not previously indicated and unfairly ambushed the mother. It was sought that the matter be adjourned if the claim is not dismissed summarily.
I note that I have not referred to all the authorities cited but I have had regard to all of them. There are quite a number of sections in the Child Support (Assessment) Act that might be thought relevant. Sections 111, 112, 117 and 123 are well known to the parties. So far as the Family Law Act is concerned, s.74 which is mirrored by the terms of s.90SE is relevantly in the following terms.
“74(1) In proceedings with respect to the maintenance of a party to a marriage, the court may make such order as it considers proper for the provision of maintenance in accordance with this Part.”
Section 66E of the Act is an apparent blanket prohibition. It is in these terms:
“66E(1) A court having jurisdiction under this Part must not, at any time, make, revive or vary a child maintenance order in relation to a child on the application of a person (the applicant) against, or in favour of, a person (the respondent) if an application could properly be made, at that time, by the applicant under the Child Support (Assessment) Act 1989 for the respondent to be assessed in respects of the costs of the child, or vice versa.”
Section 17A of the Federal Circuit Court Act provides that this court may give judgment if there is no reasonable prospect of success, and, further, that a case need not be hopeless or bound to fail to have no reasonable prospects of success. Order 13(10) of the Federal Circuit Court Rules 2001 (“the Rules”) is to similar but not identical effect.
So far as res judicata is concerned, I accept the force of the authorities quoted by counsel for the father. The doctrines of res judicata and Anshun estoppel may have to give way in appropriate parenting cases. But if one goes to one of the authorities that was quoted, namely JFL v TP (1999) FLC 92-870 at [46], what Smithers J said was:
“In my opinion, in this case the applicant is not prevented from proceeding with her current application for child maintenance by way of res judicata or issue estoppel arising out of the 1984 proceedings. It is of great importance that matters such as child maintenance and paternity should be canvassed in the light of the best evidence that can be obtained. It is not fatal in these cases that a court has been asked to come to a different conclusion from that of a previous court on a fundamental finding. Of course, if the evidence to be educed is essentially the same as on the first occasion, then the applicant would be prevented from re-litigating the issue on the basis of public policy, as occurred in Re F referred to above.”
The points I would draw from all of this is that, first, both sides deserve some criticism for the way the case has been run. The father has had a scatter-gun approach, plainly designed to circumvent the prohibition on proceeding back more than seven years, and to try and evade the effects of s.66E. The mother has brought a summary dismissal application only orally and without effective notice.
Nonetheless, in my view, it is appropriate to determine this matter now. I have a clear view of the matter and there will be substantial savings in time and money for the parties. I have come to the clear view that the Family Law Act does not apply in the fashion that the father has urged. The orders made by Kay J in Love & Henderson were made under s.64 of the Family Law Act as it stood at that time. That legislation is not available, but I note what his Honour said at page 82, 689 to 690 as follows:
“The prohibition under s.66BA is that I must not make an order for maintenance of a child for whom child support could be sought, albeit not by the father in this case.
Under s.64, in proceedings in relation to the access to a child, I may make such order as I consider proper and I must regard the welfare of the child as the paramount consideration. In my view this is the dominant section. It gives me almost unbridled powers to make orders which would promote the welfare of the child. Where the legislation does not otherwise allow for the provision of financial support to an access parent, in my view, I can come back to the broad powers contained in s.64 to find the necessary power. In a stage 1 case, that is a case to which s.66BA does not apply, that power could perhaps be found in s.66F which is that:
‘In proceedings in relation to the maintenance of a child, the court may, subject to this division, make such an order in relation to the maintenance of the child as is proper.’
Clearly the provision of financial support to enable access to take place could be categorised as provision for maintenance for the child. At the same time, it can also be categorised as an access order, being an order necessary to facilitate access. It may also be categorised as an order for the welfare of the child.”
Here the applicant seeks orders under s.74 and/or s.90SE. Those are powers allowing the Court to make orders for the maintenance of the parties. The applicant seeks that the Court use this power to circumvent s.66E. But, in my view, this is a totally different situation to that in Love & Henderson which concerned access to the child. Access in that case was impossible because of money problems. That is not the case at all here. The argument is simply over who pays.
In my view, the sections quoted from the Family Law Act by the father simply do not apply. Nonetheless, even if I am wrong in that regard, there is clearly no power to go back beyond seven years. So much is plain from the terms of the Child Support (Assessment) Act. If I am wrong as to that also, it would still, in my view, be inappropriate to go back for seven years in circumstances where the legislation prima facie prevents it, and the issues now sought to be litigated have largely, it not in whole, been recently dealt with through the administrative process to which I have referred.
If one turns to the Child Support (Assessment) Act, the powers under s.112 involving, as they do, mandatory considerations under subsection (4), are discretionary as, indeed, are the other heads of power under ss.117 and 123. They all boil down in the ultimate to an exercise of discretion.
Considering the matters that would be relevant to the exercise of that discretion, I note the question of delay. In paragraph 28 of his first affidavit, the father said he simply did not know he could claim in respect of the moneys he had paid for the support of his wife. He did not, it would appear, seek legal advice until 2013, despite the extensive vicissitudes he has experienced in relation to child support and numerous contra-applications the parties have made. Even if his evidence is accepted, it is not a compelling explanation for so well educated a man.
The next matter to consider is the scope of the proceedings. The father seeks that both parties reveal all their financial affairs back to 2006. That is the period that the banks have been subpoenaed to provide. He then seeks to re-examine the outcomes by reference to the additional expenses he has made in respect of his wife. It would clearly, on any view, be an oppressive and burdensome process, given that it is conceded that any ultimate adjustment would, in fact, be modest.
Finally, the father has just got a result from an objection decision. He still has his rights of appeal to the Social Security Appeals Tribunal. A s.117 application, in my view, is wholly inappropriate. It is clear that the father’s application has no reasonable prospects of success, whether they are retrospective back to seven years or prospective as from now. He will never convince me, even on the most generous view of his case, that he should have leave to go back as he seeks, or to pursue a prospective s.117 application when it has just been dealt with and there is an appeal to the Social Security Appeals Tribunal readily available. Accordingly, the application will be dismissed.
In this matter, the respondent mother seeks costs and seeks them on an indemnity basis at the very least from the date of offers made in April and June of this year. The general rule set out in s.117 of the Family Law Act is that each party bears their own costs, but the Court plainly has a discretion to depart from that rule in appropriate circumstances. In considering whether to make an order, the court is required to have regard to the matters in s.117(2A).
The first of those are the financial circumstances of each of the parties which is a matter I will return to. Second is legal aid, which is not relevant. And third is the conduct of the parties to the proceeding. I pointed out that both sides deserve a measure of criticism for the way this matter has been conducted. Next, subsection (d) is irrelevant. Subsection (e) is plainly relevant. The applicant has been wholly unsuccessful and his application has been summarily dismissed.
The next matter are the offers made. The offers made were walk-away offers. The law in relation to these kind of Calderbank offers, obviously, depends on the circumstances of each particular case but, in a general way, walk-away offers are not thought to be a genuine effort to compromise because they do not actually give the applicant, or the party against whom they are made anything except the absence of the proceeding continuing.
In this particular case, the letters sent to the applicant’s solicitors simply make the walk-away offer. Nothing is said that I can see that turns upon the force of the case, and nothing was foreshadowed as to the making of an application for summary dismissal, notwithstanding that I have ultimately acceded to it. In my view, the critical matter in this case is not the failure of the father whose case, while ultimately unsuccessful, was not, so far as the Child Support (Assessment) Act part of it was concerned, absurd, it is the financial resources of the parties.
The financial statements filed show that the applicant has a non-working, stay at home wife, and the respondent has a partner with an income of well over $150,000 a year. The joint income in the respondent’s household is well in excess of $300,000 a year. It is approximately twice that in the applicant’s. In my view, in these circumstances, both sides should wear their own costs. There will be no order as to costs.
I certify that the preceding forty-three (43) paragraphs are a true copy of the reasons for judgment of Judge Burchardt
Associate:
Date: 7 October 2014
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