Bagala & Bagala
[2009] FMCAfam 953
•9 September 2009
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| BAGALA & BAGALA | [2009] FMCAfam 953 |
| CHILD SUPPORT – Application for Departure filed after Enforcement Summons – Exercise of Discretion under s.116 of the Child Support (Assessment Act) 1989. CHILD SUPPORT – Application for Departure filed after Enforcement Summons – Whether applicant estopped from bringing application for departure order – Anshun Estoppel. |
| Child Support (Assessment) Act 1989, ss.112, 116 Family Law Act 1975, ss.75, 79 |
| Dmitrieff & Shaw and Ors [2008] FamCA 881 Port of Melbourne Authority & Anshun Pty Ltd (1981) 147 CLR 589 Symonds & Raphael [1998] FamCA 165 Williams & Wylie-Williams [2005] FamCA 1043 |
| Applicant: | MR BAGALA |
| Respondent: | MS BAGALA |
| File Number: | DGC 1571 of 2008 |
| Judgment of: | Riethmuller FM |
| Hearing date: | 29 May 2009 |
| Date of Last Submission: | 29 May 2009 |
| Delivered at: | Melbourne |
| Delivered on: | 9 September 2009 |
REPRESENTATION
| Counsel for the Applicant: | Mr Bacon |
| Solicitors for the Applicant: | Manby & Scott |
| Counsel for the Respondent: | Ms Buchanan |
| Solicitors for the Respondent: | Julie Taylor, Solicitor |
ORDERS
That the application of 26 March 2006 be dismissed.
IT IS NOTED that publication of this judgment under the pseudonym Bagala & Bagala is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT MELBOURNE |
DGC 1571 of 2008
| MR BAGALA |
Applicant
And
| MS BAGALA |
Respondent
REASONS FOR JUDGMENT
This matter commenced on 2 March 2009 when the Child Support Registrar filed an enforcement summons seeking to recover a child support debt owing by the Applicant.
On 26 March 2009 the applicant Husband filed an Application for Departure Order seeking to discharge arrears of child support owed by the applicant, together with an order limiting the applicant’s child support obligations for a two year period. This application was listed for hearing on 25 May 2009.
The enforcement summons came before me on 6 April 2009 and
I made the following declaration:
IT IS DECLARED
As at 3 April 2009, the [Applicant] owes the [Child Support Registrar] the sum of $11,526.11 (“the child support debt”) consisting of $10,420.58 in arrears of child support and $1,105.53 in late payment penalties.
On 29 May 2009 both the enforcement application of the Child Support Agency and the Applicant and the father’s departure application were listed for hearing. I must consider whether to allow the Departure Application filed by the Applicant to proceed and to delay the enforcement summons.
Background
The parties separated in 2006 and divorced in 2008. There are 3 children of the marriage, aged 14, 12 and 4. All 3 children live with the respondent wife.
The applicant seeks a ‘re-examination’ of his child support obligations from 1 July 2007 to today’s date. The first change of assessment occurred on 4 July 2007 with the last assessment dated 26 February 2009. The respective assessments are as follows:
a)9 May 2007 to 31 October 2007 - $1,553.17 p/m;
b)1 November 2007 to 30 June 2008 - $1,535.50 p/m;
c)1 July 2008 to 31 January 2009 - $989.50 p/m; and
d)1 February 2009 to 30 April 2010 - $410.50 p/m.
On 23 July 2007 the applicant objected to the assessment of 9 May 2007 to 31 October 2007 at $1,553.17 per month. The objection was disallowed.
The applicant had the option to review the initial objection decision of 24 December 2007 but took no action. I note that the objection decision, annexed to the applicant’s affidavit filed 26 March 2009, referred to his options for review of the decision.
On 2 May 2008 the applicant sought a change of assessment and the application was refused.
Further, the Senior Case Officer notes, in his decision of 18 July 2008:
I note that [the applicant] lodged an objection to the decision made by SCO [S] however, [the applicant’s] objection was not upheld. I further note that [the applicant] did not lodge a further appeal with the Social Securities Appeal Tribunal (SSAT) and therefore, SCO [S]’s decision remains in force.
In respect of [the applicant’s] current application, it is important to note that the Change of Assessment process is not designed to be self reviewing, in the sense that a parent who is not satisfied with a Change of Assessment decision cannot lodge further applications in the hope that a new decision maker, faced with the same material, might reach a more favourable decision. In order for a further application to succeed, such application must establish relevant changes since the last decision, which now renders that decision unfair.
In November 2008 the respondent sought a lump sum child support payment as part of final property orders but the final consent orders did not provide for any child support payment. The applicant had the opportunity to address his concerns about child support, by responding to the respondent’s child support application of 2008, however the applicant took no action.
The applicant took no further action between 2 May 2008 and
26 March 2009, when he filed his Application for Departure, to seek a review of the child support assessment. Moreover, the respondent alleges, at paragraphs 5 and 6 of her affidavit filed 26 May 2009, that the applicant has ignored the assessments and regularly paid $600.00 per month, well below the first 3 assessments.
The Law
Section 116 of the Child Support (Assessment) Act 1989 sets out 3 situations where a party can apply to the court for a departure from their child support assessment.
The first two situations are set out in ss. 116(1)(a) and 116(1)(ab), which provide for the court to have jurisdiction where, respectively, the Child Support Registrar has disallowed an objection or the Social Securities Appeal Tribunal have refused to make the relevant determination under s.98E or 98R. No such decisions were made in this case.
In this matter, the Applicant relies on the third part of the section, s.116(1)(b), which provides:
s.116(1)A liable parent or a carer entitled to child support may, in respect of an administrative assessment of child support for a child, apply to a court having jurisdiction under this Act for an order under this Division in relation to the child in the special circumstances of the case if:
…
(b)both of the following apply:
(i) the liable parent or carer entitled to child support is a party to an application pending in a court having jurisdiction under this Act;
(ii) the court is satisfied that it would be in the interest of the liable parent and the carer entitled to child support for the court to consider whether an order should be made under this Division in relation to the child in the special circumstances of the case. [emphasis added]
The Applicant is currently before the Court as a result of the enforcement application lodged by the Child Support Registrar and therefore satisfies s.116(1)(b)(i).
Section 116(1)(b)(ii) requires the court to be satisfied that it would be in the interest of the liable parent and the carer entitled to child support for a departure order to be made in the special circumstances of the case.
Before exercising the discretion whether to allow the applicant’s departure application, I must consider the objects and purpose of the child support legislation.
The legislation
The objects of the Child Support (Assessment) Act 1989 are set out in s.4, and in particular, the relevant sections are ss. 1 and 4(2)(c):
s.4 Objects of Act
(1) The principal object of this Act is to ensure that children receive a proper level of financial support from their parents.
(2) Particular objects of this Act include ensuring:
…
(c) that persons who provide ongoing daily care for children should be able to have the level of financial support to be provided for the children readily determined without the need to resort to court proceedings…
Section 4(2)(c) of the Act seeks to have child support matters settled without recourse to the Courts, thus avoiding needless expense for the parties and using court resources that might otherwise be utilised. There have been tow sets of significant amendments to the scheme, each further advancing the object of providing an inexpensive administrative system for review of child support assessments. The first was the introduction of the departure process under part 6A of the Act, allowing for administrative departures from child support assessments. The second change was providing for objection rights following Part 6A decisions, and the third significant change provided for review by the SSAT. All of these changes were driven by considerations of access to justice, and the reality that the costs of legal proceedings are almost invariably greater than the amount of money in dispute in child support cases, placing great hardship of applicants and undue pressure on respondents to settle to avoid the disproportionate costs of litigation. Thus, a well developed informal administrative system has been developed.
The objects and purpose of the Child Support Scheme are to provide an informal, inexpensive and timely avenue of review for disputing parties.
The exercise of the discretion
The applicant had real opportunities, prior to the Child Support Registrar filing the enforcement summons, to seek a review of his child support liability. He chose not to do so and has not provided any evidence of a reasonable excuse for not doing so. In his affidavit of
26 March 2009 he states:
6. I have sought to bring this matter directly to court as I understand the Agency’s internal processes do not allow for cases to be brought which cover periods of time more than 18 months in the past.
The evidence does not, however, explain why the applicant failed to pursue a right of review when he was within the Child Support Agency’s time for review. Nor does the applicant explain why he would not simply seek an extension of the 18 months time limit from the court under s.112 of the Child Support (Assessment) Act.
By waiting until the Child Support Agency issued proceedings for enforcement before seeking a departure decision, the applicant is also circumventing the substance of the legislation scheme which provides for all departure decisions to be administrative, and only to be heard in court on appeal from the SSAT or if other proceedings are pending. The legislature would not have expected the payee to be drawn into expensive litigation at this stage. By waiting until now, the applicant has placed the payee in the position of facing significant legal costs or compromising her entitlements of $11,526.11. One has only to look to the FMC scale costs to see the commercial realities of litigation in a case such as this: scale costs for a one day trail with counsel could easily amount to a sum equivalent to the child support arrears (see Items 1, 3, 5, and 6). Despite not availing himself of the earlier opportunities to litigate child support the applicant also seeks a costs order against the respondent for his own costs.
The nature of the decisions of the Child Support Agency were unremarkable. In the first decision the Senior Case Officer looked at the expenditure of the applicant as a plumber running his own company, and concluded that his financial position was equivalent to a person earning around $72,000. The following year a Senior Case Officer refused to alter the assessment, after reviewing the applicant’s Profit and Loss statement for the 2006/07 year which showed he received a wage of $40,000 and that his company made a profit of nearly $32,000. It seems that the profit and Loss statement demonstrated that the first Senior Case officer made a very accurate decision. Whilst the applicant complains about references to depreciation, he does not set out the amount of his companies’ depreciation claims, nor how this affects the company cash flow.
The applicant also makes a generalised claim with respect to the costs of contact, saying that ‘if this matter cannot be settled before being tried I shall bring to court with me and tender into evidence documents evidencing those relevant expenses.’ It is not framed in such a way as to allow the payee to reasonably assess the amount of this claim or its likelihood of succeeding: rather it is framed more like an ambit claim to pressure a settlement.
The payee has no income as she is a parent caring for children, and relies upon social security for her support.
The applicant also argued that if he was not granted leave to bring the departure application now, he would oppose the enforcement of the child support ground, relying upon the Court’s discretion to decline to enforce a child support debt. I do not find this argument persuasive in this case as the Registrar of the Child Support Agency will be the other party, and not under the same costs pressure as the payee. Whether the enquiry on the discretion to enforce is as broad ranging as a departure application is a question best left to that application.
I am not persuaded that this is an appropriate case for the exercise of the discretion to allow the applicant to bring an Application for a Departure Order in these proceedings in the circumstances of this particular case.
The effect of the applicant’s failure to bring this application in previous child support proceedings
Even if I am wrong with respect to s.116 of the Child Support (Assessment) Act1989, it appears that the applicant is estopped from pursuing his application for a departure as a result of the principles discussed in Port of Melbourne Authority & Anshun Pty Ltd (1981) 147 CLR 589 (Anshun’s Case).
The principles of estoppel, as described in Anshun, have been applied in the Family Court (see for example: Symonds & Raphael [1998] FamCA 165; Williams & Wylie-Williams [2005] FamCA 1043 and Dmitrieff & Shaw and Ors [2008] FamCA 881).
The substance of the Anshun estoppel is that a party is required to bring all of that party’s claims in the one proceeding if they can reasonably do so.
In this case the applicant had rights of review following his initial objection in 2007, and with respect to his May 2008 application for a change of assessment. These rights of review are administrative and therefore do not create an Anshun estoppel. However, it is clear he could have sought a change to the assessment at the same time as the property proceedings between the parties in November 2008. Those proceedings required a detailed examination of the assets, financial resources, income and expenses of the parties in order to determine the relevant factors under ss.79 and 75(2) of the Family Law Act 1975. The payee had child support proceedings on foot seeking non-periodic child support at that time. He did not raise the child support issues in those proceedings, despite the fact that there were so many common issues. The applicant would have been able to seek the changes to the assessment he seeks now in those previous child support proceedings.
The applicant did not take any action until faced with enforcement proceedings by the Child Support Registrar. In the circumstances I am persuaded that the applicant should be estopped form pursuing a departure application now on the basis of the principles in Anshun.
I therefore dismiss the applicant’s departure application.
I certify that the preceding thirty-four (34) paragraphs are a true copy of the reasons for judgment of Riethmuller FM
Associate: Tracey Jones
Date: 9 September 2009
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