BAKER and DARZI
[2017] FCWA 41
•28 MARCH 2017
JURISDICTION : FAMILY COURT OF WESTERN AUSTRALIA
ACT: FAMILY LAW ACT 1975
CHILD SUPPORT (ASSESSMENT) ACT 1989
LOCATION: PERTH
CITATION: BAKER and DARZI [2017] FCWA 41
CORAM: WALTERS J
HEARD: 19 JANUARY 2016 & 19 APRIL 2016
DELIVERED : 28 MARCH 2017
FILE NO/S: PTW 5453 of 2008
BETWEEN: KELLY BAKER
Applicant
AND
SALVADOR DARZI
First RespondentAND
ADRIANA DARZI
Second Respondent
Catchwords:
FAMILY LAW – CHILD SUPPORT – application for departure order – where wife argues special circumstances exist – where leave granted under s 113 of Child Support (Registration and Collection) Act 1988 for wife to sue to recover an outstanding child support debt –consideration of s 117 of Child Support (Assessment) Act 1989 – where wife sought lump sum payment pursuant to ss 123 and 124 of Assessment Act – where husband received significant funds from his mother – extensive orders sought against husband's mother – where husband failed to provide full and frank disclosure of his financial position – where husband failed to participate in proceedings in a constructive manner – where husband has abandoned his financial responsibilities to his children – discussion in relation to child support legislation and Courts' jurisdiction to hear appeals – inadequate evidence in support of an order for lump sum payment – application dismissed
FAMILY LAW – COSTS – where wife sought costs on an indemnity basis – discussion of principles relating to award of costs on an indemnity basis – consideration of s 117(2A) Family Law Act 1975 (Cth) factors – consideration of Full Court decision in Redmond & Redmond (Costs) [2014] FamCAFC 55 and Prantage & Prantage [2013] FamCAFC 105 – no order for costs
Legislation:
Child Support (Assessment) Act 1989 (Cth)
Child Support (Registration and Collection) Act 1988 (Cth)
Family Law Act 1975 (Cth)
Interpretation Act 1984 (WA)
Category: Not Reportable
Representation:
Counsel:
Applicant: Ms N. Watts (19 January 2016)
First Respondent : Self-Represented Litigant
Second Respondent : Ms E. Carlean
Solicitors:
Applicant: [Law Firm A] (19 January 2016)
First Respondent : Self-Represented Litigant
Second Respondent : Tolcon Legal
Case(s) referred to in judgment(s):
Baker & Darzi [2013] FCWA 16
Baker & Darzi [2013] FCWA 84
Baker & Darzi and Anor [2014] FamCAFC 17
Bele & Vaughan (Costs) [2012] FamCAFC 198
Bendeich (1993) FLC 92-355
Colgate-Palmolive Co & Another v Cussons Pty Ltd (1993) 46 FCR 225
Eades & Wrensted [2014] FCWA 64
Gyselman (1992) FLC 92-279
Kohan and Kohan (1993) FLC 92-340
Munday v Bowman (1997) FLC 92-784
NMFM Property Pty Ltd v Citibank Ltd (No 2) (2001) 109 FCR 77
Prantage & Prantage [2013] FamCAFC 105
Prpic v Prpic (1995) FLC 92-574
R & R (No.1) (2002) FMCAfam 153
Redmond & Redmond (Costs) [2014] FamCAFC 55
Ross v McDermott (1998) 23 Fam LR 613
Wales & Falls & Anor (SSAT Appeal) [2010] FMCAfam 116
Yunghanns v Yunghanns (2000) FLC 93-029
WORDS IN SQUARE BRACKETS REPLACE WORDS USED IN THE ORIGINAL JUDGMENT - PARTIES’ NAMES AND IDENTIFYING DETAILS HAVE BEEN CHANGED
Introduction
1The parties to the current proceedings comprise the wife, the husband and the husband's mother, [Adriana Darzi]("[Mrs Darzi]"). They were born in 1971, 1960 and 1942 respectively. Obviously, Mrs Darzi is now an elderly woman.
2The wife and the husband began living together in mid-2001. They married [in] 2002 and separated in 2008. They are now divorced. There are three children of their marriage: [Mark] (born [in] 2003), [Angela] (born [in] 2005) and [Luke] (born [in] 2008). The children have lived with the wife at all relevant times. They spend no, or almost no, time with the husband.
3A detailed history of the relationship between the wife and the husband, and of other matters, is contained in my judgment in the substantive proceedings involving the parties. The judgment, which has been anonymised as Baker & Darzi [2013] FCWA 16, was delivered on 20 February 2013 ("the primary judgment"). It was the subject of an appeal (see Baker & Darzi and Anor [2014] FamCAFC 17), which succeeded on a comparatively limited – but financially significant – ground. There was no challenge to any of the findings or conclusions contained in the primary judgment, and the Full Court accepted my assessments of the value of the parties' assets and their respective contributions.
4On 22 August 2013, I delivered a judgment dealing with the issue of costs in the substantive proceedings: see Baker & Darzi [2013] FCWA 84 ("the costs judgment"). The costs orders made pursuant to the costs judgment were never appealed, and the wife's costs (as assessed pursuant to those orders) have been paid in full.
5Currently before the Court is the wife's amended application in a case filed 14 April 2016 ("the amended application"). Her initial application in a case was filed on 24 August 2015 ("the 2015 application"). In support of the amended application, the wife relies upon her affidavit sworn 20 August 2015.
6The 2015 application came on for hearing on 19 January 2016 ("the January hearing"). At that time, the wife was represented by Ms N Watts. Ms E Carlean of counsel appeared for Mrs Darzi, and the husband appeared without legal representation.
7The hearing was not concluded on 19 January 2016. It was adjourned to 19 April 2016, on a part-heard basis ("the April hearing").
8The wife originally sought extensive orders against Mrs Darzi, as reflected in the 2015 application. Between the January hearing and the April hearing, however, the wife and Mrs Darzi reached agreement regarding the matters in dispute between them – which agreement was incorporated in a minute of consent orders ("the Minute"). The Minute was signed in early April 2016 and received by the Court on 14 April 2016. The full terms of the Minute are recorded later in these Reasons.
9Mrs Darzi originally relied upon her response to the 2015 application – which response was filed on 17 December 2015). She also relied upon her affidavits sworn 17 December 2015 and 13 January 2016, and her financial statement sworn 17 December 2015. After the execution of the Minute and the making of orders pursuant to it, however, Mrs Darzi took no further part in the proceedings. It follows that the April hearing primarily involved the wife and the husband only.
10The husband did not file any material – whether in response to the 2015 application or the amended application.
11The wife represented herself at the April hearing. The husband appeared without legal representation on that day, as he had at the January hearing.
12Shortly before the April hearing, the wife filed written submissions ("the Submissions") in support of the amended application.
Abbreviations and other terms used
13In these Reasons, and unless otherwise indicated:
(a)all statements of fact comprise findings of fact;
(b)I have referred to Ms Baker and Mr Darzi as the wife and the husband (and I mean them no disrespect by doing so) – because it is less confusing than referring to them as the applicant and the first respondent;
(c)I have referred to the second respondent, Angela Darzi (the husband's mother ) as Mrs Darzi;
(d)I have referred to the Child Support Registrar as the Registrar and the Child Support Agency as CSA;
(e)I have referred to all affidavits filed by or on behalf of the parties as being "sworn", even if they were affirmed by their deponents (and I note that, in a slightly different context, s 5 of the Interpretation Act 1984 (WA) provides among other things that "to swear" includes "to affirm");
(f)I have referred to the Child Support (Assessment) Act 1989 (Cth) as the Assessment Act and to the Child Support (Registration and Collection) Act 1988 (Cth) as the Registration Act; and
(g)I have referred to the Family Law Act 1975 (Cth) as the FLA.
Background
14As explained above, a detailed history of the relationship between the wife and the husband, and of other matters, is contained in the primary judgment. The findings and conclusions contained in the primary judgment were not challenged on appeal. I refer to and rely upon those findings and conclusions, and upon the findings and conclusions contained in the costs judgment.
Orders sought
15The orders sought by the wife in the amended application are to the following effect:
Outstanding Child Support
(a)a declaration that, as at 1 April 2016, the husband owed $51,193 to the wife in respect of child support ("the outstanding child support");
Departure Order
(b)the administrative assessment of child support dated 22 February 2016 be departed from so that the annual amount of child support payable by the husband be set at $29,616 until 31 March 2020;
Lump Sum Child Support
(c)the husband pay lump sum child support in the total amount of $115,368 ("the lump sum"), comprising –
Relevant period
Amount
1 April 2016 to 5 November 2016
$14,764
6 November 2016 to 31 March 2017
$11,756
1 April 2017 to 31 March 2018
$29,616
1 April 2018 to 31 March 2019
$29,616
1 April 2019 to 31 March 2020
$29,616
Total
$115,368
(d)the lump sum be paid to the Registrar for disbursement to the wife;
(e)a declaration that the lump sum is owed by the husband to the wife;
(f)the lump sum be "100% credited against the husband's future child support liability for the period 19 April 2016 to 31 March 2020";
Interest and costs
(g)in the event that the husband fails to pay the lump sum to the Registrar within 28 days, the outstanding amount incur interest at the rate determined under the relevant Rules; and
(h)the husband pay "the balance of the wife's costs in this application on an indemnity basis" – comprising $7521.
Notice to the Registrar
16Section 113A of the Registration Act provides that a payee of a registered maintenance liability may sue for and recover a debt due in relation to the liability if he/she notifies the Registrar (in writing) of his or her intention to commence proceedings to recover the debt –
(a) at least 14 days before commencing the proceedings; or
(b) in exceptional circumstances, within such shorter period as the Court allows.
17The wife notified the Registrar of the current proceedings on 20 August 2015, four days before filing the 2015 application: see annexure L to the wife's affidavit. It follows that the wife requires the Court's leave to dispense with the requirement set out in s 113A(a) of the Registration Act. In this regard, Ms Watts submitted that the Registrar had made no attempt to intervene in the proceedings for some four or five months and that no injustice would be suffered by the husband or Mrs Darzi if leave were to be granted. Given that neither the husband nor Ms Carlean (on behalf of Mrs Darzi) opposed the granting of leave, I am prepared to accept that exceptional circumstances exist and that the wife should be permitted to sue for the outstanding child support (and to seek the payment of the lump sum) notwithstanding her failure to comply with s 113A(a). Put another way, I am satisfied that it is appropriate to reduce the relevant notice period from 14 days to the actual period of the notice given by the wife.
Child Support details
18As is apparent from the primary judgment at [177], the wife sought significant child support at trial. Relevantly, she sought orders to the following effect:
(a)The husband pay child support for the children at the rate of $250 per week per child.
(b)In the alternative to (a) above, there be an order for lump sum (capitalised) child support in the amount of $500,000.
(c)In addition to (a) or (b) above, the husband pay all of the school fees and other expenses payable for the children to attend nominated private schools for the whole of their secondary education.
19The earlier child support proceedings were summarised in the primary judgment at [210] to [220]. For various reasons, the child support orders sought by the wife were not made. When referring to possible future proceedings in relation to child support, however, I made the following comments at [230]-[231]:
The child support aspect of the current proceedings was poorly prepared and inadequately defined. Although Martin J made child support orders with which the parties appear to have no discomfort, it was clearly very difficult for her Honour to review the huge volume of material provided by both parties in an attempt to separate the wheat from the chaff (as it were).
Both parties should understand that, having regard to the convoluted and disturbingly disinhibited way in which their cases were presented to the Court, it will not be an easy matter for them to persuade a judicial officer within this Court to embark, once again, on an analysis of their financial circumstances such as would be necessary to do justice to a further application for a departure order. It follows that the parties will be required to exhaust the processes available to them through [CSA] before returning to this Court.…
20On 16 April 2012, Martin J made orders which, among other things, provided for the wife to receive lump sum child support for the period until 30 June 2013 ("the April 2012 orders"). Since that time, child support has been assessed through CSA.
21It is difficult to follow the wife's evidence regarding the payment of child support. For example, she asserted in her affidavit at [42] that, since separation, the husband had "made [only] one voluntary child support payment of $3000". The wife received this payment in December 2011. She added at [44] that "other than this one payment, [the husband] has not made any voluntary child support payments in six and a half years".
22In June 2010, the husband conceded (during the course of the trial before Martin J) that he had paid nothing "in almost two years": see annexure K to the wife's affidavit.
23It is apparent from annexure J to the wife's affidavit, however, that a large number of payments were "credited to the case" between 11 December 2009 and 14 December 2011. The annexure comprises a Child Support Payee Transaction Statement for the period 18 November 2008 to 7 April 2015, addressed to the wife. According to the summary at the commencement of the Statement, total credits of $25,274 were received during the relevant period. The first of these was a payment of $4871 received on 11 December 2009; the last was a payment of $3000 received on 14 December 2011.
24I accept that many, if not all, of the payments made between December 2009 and December 2011 may not have been made "voluntarily", or may have been garnisheed from the husband's income or income tax refunds, but there appears to be no doubt that the payments were received by the wife.
25In her affidavit at [61], the wife spoke of the 2012 orders requiring the husband to pay the following:
(a)$20,899, being outstanding child support as at 1 October 2011;
(b)$24,375, being lump sum child support for the period 1 October 2011 to 31 December 2012; and
(c)$9750, being lump sum child support for the period 1 January 2013 to 30 June 2013.
26The above payments total $55,024. Although this sum was due in mid-May 2012, the wife did not receive it until 20 November 2012: see annexure Q to the wife's affidavit. It is clear, however, that it has been paid.
27It follows from the above that the wife received child support payments totalling $80,298 (being $25,274 plus $55,024) between 18 November 2008 and 30 June 2013 and that, as at 30 June 2013, the husband's liability for child support was zero.
28The primary judgment and the costs judgment contain a number of findings regarding the husband's credibility, conduct as a litigant and behaviour generally. Among other things, I concluded that the husband set out to confuse and obfuscate, failed or refused to comply with orders of the Court and effectively abandoned his financial responsibilities to his children: see, for example, the primary judgment at [266].
29The wife's case is that the husband has continued to behave in the manner described in the primary judgment and the costs judgment. She asserts that he has failed to disclose his true financial position and that he has misrepresented his income and earning capacity to avoid paying child support. He has not lodged personal tax returns since the 2010/11 financial year. Due to the husband's actions, CSA has been unable to assess his obligation for child support in the usual manner.
30It is apparent that the husband has paid no, or almost no, child support since 30 June 2013.
31As at 10 March 2015, he owed $21,458 in respect of child support: see annexure U to the wife's affidavit.
32Annexure B to the wife's affidavit comprises a Change of Assessment Decision dated 7 January 2015 ("the COA decision"). The COA decision was prepared by a Delegate of the Registrar, following an application made by the wife in November 2014. The Delegate deemed the husband's adjusted taxable income for child support purposes – for the period 7 November 2014 to 31 March 2016 – to be $129,494 per annum. The wife's adjusted taxable income was found to be $67,000 for the same period. The wife is an employed solicitor. According to Ms Watts at the January hearing, the wife's salary was then $88,000 per annum, which is significantly greater than the figure adopted for her adjusted taxable income in the COA decision. Ms Watts advised the Court that the wife had informed the Registrar of her increased income.
33Although the COA decision speaks for itself, I note the following:
(a)On 2 December 2014, the husband advised the Delegate that he was "no longer a Director of any company and as such [had] no income".
(b)The husband informed the Delegate on a number of occasions that he would reply, in writing, to the wife's application. He did not do so and the Delegate proceeded to prepare her decision without his written reply.
(c)The husband advised the Delegate that he had "a number of health issues which [were] impacting on his ability to earn an income" and that he wanted "to take some time to get well". Although medical evidence was requested to support the husband's assertion, he did not provide it.
(d)The husband told the Delegate that he was living with his mother and that he had "caring responsibilities" for her and for "his partner". Again, no evidence was presented to support these assertions.
(e)The Delegate was of the view that the husband's child support "payment record" was "not reflective of one committed to meeting their child support responsibilities".
(f)The Delegate concluded that the husband had "an unfulfilled earning capacity" equivalent to his taxable income in 2010/11, being the last financial year for which he filed an income tax return. The husband's taxable income in that year was $129,494.
34Annexure V to the wife's affidavit comprises a child support assessment for the period 1 March 2015 to 31 March 2016 ("the first assessment"). It is dated 30 July 2015. The annual amount of child support payable by the husband for the relevant period was $26,595 (equating to a monthly rate of $2216). The husband's adjusted taxable income used in the assessment was $129,494; the wife's was $67,000. Otherwise, the first assessment speaks for itself.
35On 22 February 2016 (in other words, between the January hearing and the April hearing), CSA issued three further assessments.
36The three assessments comprise annexure A to the wife's Submissions. I shall refer to them as "the second assessment", "the third assessment" and "the fourth assessment". Relevant details are as follows:
Second assessment
Third assessment
Fourth assessment
Assessment period
1/3/2016 to 5/11/2016
6/11/2016 to 31/3/2017
1/4/2017 to 31/5/2017
Annual child support payable
$26,970
$29,616
$4,119
Monthly child support payable
$2,247.50
$2,468
$343.25
Husband's adjusted taxable income
$129,494
$129,494
$13,575
Wife's adjusted taxable income
$59,993
$59,993
$59,993
Husband's income percentage
74.48%
74.48%
0%
Wife's income percentage
25.52%
25.52%
100%
Wife's care percentage
100%
100%
100%
Husband's care percentage
0%
0%
0%
37According to the wife, "on 20 March and 6 April 2016, $47.61 was credited" to the husband's child support liability.
38As at 14 December 2015, the husband's child support debt was $41,404: see exhibit W1. This was the figure used at the January hearing. As at 7 April 2016, the debt was $51,193 – which was the figure used at the April hearing: see exhibit W2.
The Minute
39As explained above, the wife and Mrs Darzi signed a minute of consent orders in early April 2016. Thereafter, and save for the purpose of instructing Ms Carlean to attend the April hearing for the purpose of seeking orders in the terms of the Minute, Mrs Darzi took no further part in the proceedings.
40The Minute is as follows:
Upon [the 2015 application] and [Mrs Darzi's response filed 17 December 2015], the [wife] and [Mrs Darzi] agree that the following consent orders are made without admission of liability by [Mrs Darzi]:
Settlement Moneys
1.Within 14 days, [Mrs Darzi] pay the total sum of $53,800 ("Settlement Moneys") to [the Registrar]:
(a)whether in part or in full satisfaction of outstanding child support in Case Number 6630643 as at the date of payment; and
(b)the balance as lump sum child support, whether in part or in full satisfaction thereof.
Costs
2.Within 14 days, [Mrs Darzi] pay towards the [wife's] costs of this application, by way of payment of $3000 ("Costs") to the trust account of the [wife's] solicitors, being the trust account of [Law Firm A]…
Future Proceedings
3.Upon payment of the total Settlement Moneys and Costs to the respective parties referred to in Order 2 and 3 (sic) of these Orders:
(a)there be a declaration that [Mrs Darzi] holds nil ($0) on trust for the [husband];
(b)the proceedings in [this Court] against [Mrs Darzi] be discontinued on the condition that the [wife] provide an undertaking not to commence any subsequent proceedings against [Mrs Darzi], other than pursuant to these Orders, seeking payment of further moneys from [Mrs Darzi] on account of the [husband];
(c)the [wife] provide an undertaking in accordance with [(b) above];
(d)[Mrs Darzi] be dismissed from this application and any future proceedings in [this Court relating to the substantive dispute between the [wife] and the [husband]; and
(e)orders against [Mrs Darzi] in this matter be hereby discharged.
4.The [wife] have liberty to apply at short notice regarding the implementation of these orders.
41I made orders in the terms of the Minute at the commencement of the April hearing. Ms Carlean was present for the making of the orders, but was then given leave to withdraw.
42It follows from the above, and from the orders made at the commencement of the April hearing, that the outstanding child support sought by the wife in the amended application (totalling $51,193) has been paid by Mrs Darzi. Indeed, para 1 of the Minute reveals that Mrs Darzi paid slightly in excess of the outstanding child support (as defined in the amended application and exhibit W2). The amount paid by Mrs Darzi was $53,800, plus costs of $3000. In these circumstances, I need not consider any further the wife's claim for the outstanding child support.
The husband's involvement in the proceedings
43I refer to and rely upon the findings contained in the primary judgment regarding the history of the relationship between the wife and the husband, and regarding all other relevant matters, including the parties' behaviour and credibility. Similarly, I refer to and rely upon the findings contained in the primary judgment regarding Mrs Darzi's actions and her credibility.
44The husband is a chartered accountant, although he has not practised in that role for many years. He has held senior positions in various publicly listed companies and has a very significant business background. As I have said, he filed no material in response to the amended application.
45In spite of the fact that he had filed no documents in response to the amended application (or, indeed, in response to the 2015 application), the husband elected to give evidence at the April hearing.
46His evidence-in-chief was brief. He said that –
(a) he is an unemployed accountant;
(b) his financial position is "precarious", and it has been for "a long time";
(c) his health "hasn't helped";
(d) he applied for unemployment benefits in February 2016, "to survive";
(e) he is continuing to try to obtain employment, but is finding it difficult to do so;
(f) he has no assets, and no liabilities; and
(g)he has embarked upon "a few projects… in the capital markets", but market conditions have been adverse and his projects (it seems) have been unsuccessful.
47The husband was cross-examined by the wife. Among other things, he said that –
(a)he filed a notice of objection with CSA on 4 April 2016: see exhibit H2;
(b)he is on unemployment benefits and has health issues, but he does not have documents (with him) supporting those assertions;
(c)he was in hospital for 20 days with "a serious lung problem";
(d)his unemployment benefits are paid into an ANZ account in his name;
(e)he does not use Internet banking;
(f)he "hasn't had a salary" and has "had no income" since 2005;
(g)he has lodged all his tax returns since the 2014 financial year and has received "a notice of assessment from the tax department", but he does not have documents (with him) supporting those assertions; and
(h)he has no superannuation entitlements and "never got paid" any superannuation entitlements to which he may have been entitled since separation.
48In response to questions from the Bench, the husband said he receives $551 per fortnight in respect of his unemployment benefits. He added that CSA deducts a small amount for child support.
49The husband submitted that, from his point of view, the "paramount issue" is his capacity to pay. He denied having the capacity to pay the amount of child support sought by the wife – adding that, if he could pay, he would. He asserted that he would face bankruptcy if he were required to pay the child support sought by the wife.
50According to the husband, "the major reason" why he is unable to obtain or maintain positions in publicly listed companies is because "CSA put a prohibition on travel on [his] passport". Because he could not travel to Singapore or Indonesia, he had to "leave the Board".
The wife's evidence
51The wife's primary evidence was contained in her affidavit. At the April hearing, she tendered (among other things) copies of her income tax assessments for the 2014 and 2015 financial years (exhibit W4) and a schedule of average weekly expenses for herself and the children (exhibit W3).
52The husband cross-examined the wife at the April hearing. Any relevant evidence given by the wife at that time has been incorporated in these Reasons.
The wife's closing submissions
53In closing, the wife submitted that (among other things) –
(a)the husband's income should be deemed to be $129,000 per annum (in accordance with the COA decision);
(b)previous judgments of this Court emphasise the husband's lack of credibility;
(c)the husband filed no documents and provided no evidence confirming his assertions to the effect that he is unemployed and has health issues;
(d)similarly, he provided no evidence regarding the fate of the moneys he received from his mother (as described in Mrs Darzi's affidavits), or regarding the fate of the funds he received from the property settlement; and
(e)the husband's concerns regarding bankruptcy are illogical if he is "unable to resume Board positions", and an inference should be drawn that it is "his intention to resume roles that he has had in the past".
Child support – the law1
54The process involved in the consideration of an application for departure from an administrative assessment of child support was explained by the Full Court in Gyselman (1992) FLC 92-279 at 79,064-5. The Full Court said (inter alia):
Section 117 is the critical provision.
The structure of that section is that section 117(1)(b) identifies concisely the matters about which the Court must be satisfied and those components are then expanded in sub-sections (2) to (9). Section 117(1)(b) identifies a clear three-step process:
•Whether one or more grounds of departure in section 117(2) is established.
If so
•Whether it is 'just and equitable' within the meaning of section 117(4) to make a particular order.
•Whether it is 'otherwise proper' within the meaning of section 117(5) to make a particular order.
It is clear from the careful way in which section 117 has been structured that the Court must address each of those three separate issues...
… Each of those grounds [in section 117(2)] is prefaced by the words, 'in the special circumstances of the case'. Whilst it is not possible to define with precision the meaning of that term, as a generality it is intended to emphasize that the facts of the case must establish something which is special or out of the ordinary. That is, the intention of the Legislature is that the Court will not interfere with the administrative formula result in the ordinary run of cases. [It has been held] that 'special circumstances' were 'facts peculiar to the particular case which set it apart from other cases'. The approach to the interpretation and application of the particular grounds in section 117(2) must be guided by that qualification.
55It is clear from the decision in Gyselman that the Court is not obliged to "slavishly go through" each of the considerations in section 117(4). Nor is it necessary to adopt such an approach in relation to the matters referred to in section 117(5). In essence, the Court is obliged to adopt "a practical and flexible approach" to the consideration of the matters referred to in sections 117(4) and (5).2
56Although it is not necessary to "slavishly go through" each of the considerations in section 117(4), those considerations cannot simply be ignored. Thus, and without intending to provide a comprehensive summary of the subsection, the Court should (at the very least) direct its attention to the following questions:
(a)What is a fair allowance for the total, overall costs incurred by both parents in maintaining the children, and do those costs represent the children's proper needs? If not, what is a fair allowance for the children's proper needs?
(b)What is the overall financial position of the children themselves? In other words, do the children or any of them earn income, have an earning capacity or have property or financial resources?
(c)What is the overall financial position of each of the parents of the children? What is the income of each parent, what property do they have and what are their financial resources?
(d)Irrespective of a party's actual income, what is each party's earning capacity (bearing in mind that the approach to assessing a party's earning capacity is further refined in other provisions within section 117(4))?
(e)What are the commitments of each of the parents that are necessary to enable them to support themselves and anyone else that they have a duty to maintain?
57Assuming the questions posed in the previous paragraph – and any other relevant questions raised as a result of the proper application of section 117(4) – have been answered to the best of the Court's ability and in accordance with the evidence before it, the Court can assess how the responsibility for meeting the children's proper needs should be allocated between the parents. This allocation ultimately defines the quantum of child support payable by the liable parent.
58A helpful summary of the approach which should be adopted (by the SSAT – now the AAT – and, if appropriate, by a judicial officer) is contained in the decision of Riethmuller FM (as his Honour then was) in Wales & Falls & Anor (SSAT Appeal) [2010] FMCAfam 116.
Special Circumstances – Assessment Act, s 117
59The wife argues in the Submissions at [12] that "special circumstances" are to be found in the following:
(a)the husband's "attitude to the maintenance of the children";
(b)the husband's "ongoing attempts to mislead the court and CSA regarding his capacity to work and financial position"; and
(c)the matters deposed to by Mrs Darzi in her affidavits.
60In my opinion, it is abundantly clear from the primary judgment and the costs judgment that the factual scenario forming the backdrop to the amended application is special or out of the ordinary. To the matters discussed in those judgments should be added the husband's failure to file any documents in response to the 2015 application or the amended application and the extraordinary assertions made by Mrs Darzi in her affidavits. These include the following:
(a)After her husband's death, Mrs Darzi relied heavily upon advice given and representations made by her son (the husband). She found it difficult to ask questions of him (as this was not and never had been her role in what was a very traditional immigrant family).
(b)From time to time, the husband would ask Mrs Darzi to sign documents – and she did so (without understanding their meaning and effect).
(c)She had great difficulty understanding the proceedings in this Court, and the implications of orders made in the proceedings.
(d)In relation to [Property C] (which is described in the primary judgment as "Property C"):
(i)Mrs Darzi received approximately $396,500 ("the sale proceeds") upon settlement of the sale of Property C.
(ii)She arranged for the sale proceeds to be paid into a term deposit account.
(iii)The husband later asked her for money (saying that he needed it for legal expenses and "for his children"). As a result, Mrs Darzi gave him the sale proceeds (or such of them that remained in the term deposit), on the basis that the moneys were to comprise "an early inheritance".
(iv)Thus, in September 2013, approximately $370,000 was transferred to an entity known as "[Account A]", which was controlled by the husband.
(v)In early 2015, and after the husband had told her that she had been ordered to pay costs to the wife, she spoke with her daughter (the husband's sister) about her involvement in the proceedings between the wife and the husband. Her daughter took her to see a lawyer.
(vi)After seeing the lawyer and becoming aware of the precise terms of the substantive costs order, she arranged to pay the wife the total costs ordered – being approximately $91,500. This amount was paid from Mrs Darzi's "retirement savings". According to her second affidavit at [40]:
On 18 February 2015, I paid $91,493 to [the wife] in payment of costs orders. Of the $91,493, I paid $59,781 on [the husband's] behalf, in payment of a costs order made against him personally. I further paid $25,621 in payment of a costs order for which [the husband] and I were found jointly and severally liable, together with interest on both those [amounts] in a total sum of $6091…
(e)In relation to the property described in the primary judgment as "Property A":
(i)Around the time of the sale of Property A, Mrs Darzi and her late husband opened an account in their joint names. Shortly afterwards, approximately $400,000 was deposited in the account, which Mrs Darzi understood "was [the husband's]" from the sale of Property A.
(ii)After her husband's death, the husband told Mrs Darzi that he needed these moneys, that they were his and that she was to provide them to him. Mrs Darzi did so over a period of approximately three years. The husband arranged the various withdrawals, although Mrs Darzi signed the relevant documents. The sums withdrawn were either retained by the husband in cash or transferred to accounts nominated by him.
(iii)By September 2013, all the moneys in the account had been withdrawn. Save for comparatively modest amounts, the funds were provided (directly or indirectly) to the husband.
(iv)In excess of $250,000 from the account was transferred to Account A.
(f)The husband's claim that the amount of approximately $400,000 paid to his parents from the proceeds of sale of Property A comprised the repayment of a loan is false. The husband did not owe them any moneys in 2009.
(g)Mrs Darzi's relationship with the husband has soured, as is apparent from the matters deposed to in her first affidavit at [76]:
At this time I would describe my relationship with [the husband] to be fractured and estranged. I am very angry with [the husband] for what he has done. At the same time he is my son. I realise that [the husband] is troubled and I continue to hope that he will turn his life around.
61At no stage during the substantive proceedings did the husband (or his mother) disclose the transfer of significant funds to Account A over an extended period of time.
62Similarly, and as reflected in the primary judgment, a great deal of time was spent analysing the alleged loan between the husband and his parents (which was "repaid" upon the sale of Property A). It goes without saying that the husband's case at the substantive trial was that the loan was genuine. The Court found that it was not. Mrs Darzi's evidence reinforces the Court's conclusion in that regard.
63In summary, I am satisfied that special circumstances exist in the current proceedings. To the extent that the existence of special circumstances comprises a precondition for the making of the orders sought in the amended application, I find that the precondition has been met.
Grounds for departure – Assessment Act, section 117(2)
The wife's argument
64Section 117(2) of the Assessment Act sets out the grounds for a departure order. The Court must be satisfied that at least one of these grounds exists before proceeding to consider whether it would be both just and equitable and otherwise proper to make a departure order.
65The Submissions at [15] reveal that the wife relies upon the ground contained in s 117(2)(c). That sub-section is as follows (save for formatting):
that, in the special circumstances of the case, application in relation to the child of the provisions of this Act relating to administrative assessment of child support would result in an unjust and inequitable determination of the level of financial support to be provided by the liable parent for the child:
•because of the income, earning capacity, property and financial resources of the child; or
•because of the income, property and financial resources of either parent; or
•because of the earning capacity of either parent; or
•because of any payments, and any transfer or settlement of property, made or to be made (whether under this Act, the Family Law Act 1975 or otherwise) by the liable parent to the child, to the carer entitled to child support or to any other person for the benefit of the child.
66The wife does not specify which of the four reasons she asserts is/are relevant. The Submissions at [15(a)] simply record:
The annual amount of the child support payable by [the husband] to [the wife] under the assessment from 1 April 2016 of $4119 would result in an unjust and inequitable determination of the level of financial support to be provided by [the husband] for the children.
67It is immediately apparent that the date referred to in the Submissions at [15(a)] should be 1 April 2017 and not 1 April 2016: see the assessments comprising annexure A to the Submissions.
68I deduce from the Submissions and from the documents relied upon by the wife that, in effect, she is arguing that the administrative assessments of child support should be departed from because of the husband's earning capacity and financial resources. For example, she submits that the husband is likely to be in control of funds in excess of $827,000 – which (the wife submits) follows from the matters deposed to by Mrs Darzi in her two affidavits. According to the wife, Mrs Darzi deposes to giving the husband an early inheritance of close to $370,000 and additional funds of close to $458,000. Even if the wife is incorrect in this regard, I accept that the effect of Mrs Darzi's evidence is that the husband has received well over $700,000 or $800,000 from his mother. Some of these moneys were paid in a substantial lump sum; others were paid over a period of approximately three years (in cash or via transfers to an account controlled by the husband).
69In relation to the husband's earning capacity, the wife argues that "it has been established by CSA that [the husband's] adjusted taxable income is $129,494". In this regard, it would appear that the wife is relying upon the COA decision. The fact of the matter is, though, that the COA decision is now out of date, and the fourth assessment records the husband's adjusted taxable income as $13,575.
70I accept, of course, that the wife has 100% care of the children, that the husband has no commitments to anyone other than himself and that his "track record" in relation to the voluntary payment of child support is deplorable. However, none of these factors – individually or cumulatively – justifies or justify the making of the orders sought by the wife.
71Section 117(4) of the Assessment Act provides as follows:
In determining whether it would be just and equitable as regards the child, the carer entitled to child support and the liable parent to make a particular order under this Division, the court must have regard to:
(a)the nature of the duty of a parent to maintain a child…; and
(b)the proper needs of the child; and
(c)the income, earning capacity, property and financial resources of the child; and
(d)the income, property and financial resources of each parent who is a party to the proceeding; and
(da)the earning capacity of each parent who is a party to the proceeding; and
(e)the commitments of each parent who is a party to the proceeding that are necessary to enable the parent to support:
(i)himself or herself; or
(ii)any other child or another person that the person has a duty to maintain; and
(f)the direct and indirect costs incurred by the carer entitled to child support in providing care for the child; and
(g)any hardship that would be caused:
(i)to:
(A)the child; or
(B)the carer entitled to child support;
by the making of, or the refusal to make, the order; and
(ii)to:
(A)the liable parent; or
(B)any other child or another person that the liable parent has a duty to support;
by the making of, or the refusal to make, the order; and
(iii)to any resident child of the parent (see subsection (10)) by the making of, or the refusal to make, the order.
72Section 117(6) of the Assessment Act provides as follows:
In having regard to the proper needs of the child, the court must have regard to:
(a)the manner in which the child is being, and in which the parents expected the child to be, cared for, educated or trained; and
(b)any special needs of the child.
73I accept that a number of factors referred to in s 117(4) and (6) were dealt with in the wife's documents. Regrettably, others were not. These include:
(a)the proper needs of the children – including the factors referred to in s 117(6);
(b)the commitments of each parent that are necessary to enable the parent to support himself or herself;
(c)the direct and indirect costs incurred by the carer entitled to child support in providing care for the child; and
(d)the wife's income, earning capacity, property and financial resources.
74Some of these matters were remedied at the April hearing. For example, exhibit W4 reveals that the wife's taxable income for the 2014 financial year was approximately $36,000. In 2015, it was just under $60,000. Exhibit W3 lists (among other things) the wife's average weekly expenses as they relate to the children. The expenses (which include $550 per week in respect of "education expenses, including fees and levies" and $600 per week relating to "rent") total $2283. The husband did not seek to challenge any of these figures.
75Given that the Court must have regard to all the factors in s 117(4) and (6), the absence of evidence in relation to these matters is fatal to the wife's application. In particular, the absence of evidence in relation to the wife's property and financial resources was unexplained.
76It is apparent that there is a dearth of evidence in relation to other important matters as well. For example, s 117(7B) of the Assessment Act provides as follows:
In having regard to the earning capacity of a parent of the child, the court may determine that the parent's earning capacity is greater than is reflected in his or her income for the purposes of this Act only if the court is satisfied that:
(a)one or more of the following applies:
(i)the parent does not work despite ample opportunity to do so;
(ii)the parent has reduced the number of hours per week of his or her employment or other work below the normal number of hours per week that constitutes full‑time work for the occupation or industry in which the parent is employed or otherwise engaged;
(iii)the parent has changed his or her occupation, industry or working pattern; and
(b)the parent's decision not to work, to reduce the number of hours, or to change his or her occupation, industry or working pattern, is not justified on the basis of:
(i)the parent's caring responsibilities; or
(ii)the parent's state of health; and
(c)the parent has not demonstrated that it was not a major purpose of that decision to affect the administrative assessment of child support in relation to the child.
Can the level of financial support that the husband would be providing pursuant to the current child support assessments be considered unjust and inequitable when regard is had to his and the wife's income and overall financial position?
77The answer to this question lies in a consideration of the overall costs of maintaining the children, and a general comparison of the respective financial positions of the wife and the husband.
Overall costs of maintaining the children
78As indicated above, there was no challenge to the figures contained in exhibit W3. I find, therefore, that an appropriate allowance for the costs incurred by the wife in maintaining the children is $2283 per week. I also find that this represents their proper needs when they are with her.
Costs incurred by the husband
79The husband spends no time with the children. There is no evidence that he incurs any costs in relation to their maintenance.
Conclusion regarding costs incurred by both the wife and the husband
80It follows from the above that, in my opinion, a fair allowance for the total, overall costs incurred by both the wife and the husband in maintaining the children – which costs represent the children's proper needs on an average weekly basis – is $2283 per week.
The financial position of the children
81No evidence was presented to the Court regarding the financial position of the children. I am satisfied, however, that they do not have the capacity to contribute to their own maintenance. In other words, the children's income, earning capacity, property and financial resources do not amount to a relevant consideration in the context of this case.
The wife's financial position
82As indicated above, Ms Watts advised the Court – at the January hearing – that the wife's salary was then $88,000 per annum, which is significantly greater than the figure adopted for her adjusted taxable income in the COA decision. It is also significantly higher than the figures referred to in exhibit W4.
83The wife did not file a financial statement, and provided no evidence regarding her assets, liabilities and financial resources.
84In the circumstances, I am unable to make any finding regarding the wife's overall financial position.
The husband's financial position
85As explained above:
(a)The husband did not file any documents in response to the 2015 application or the amended application.
(b)The husband made no attempt to respond to the matters deposed to in his mother's affidavits, and he was not cross-examined about those matters.
(c)The husband did not produce any documents to support his assertions as to his financial position. Nevertheless, he gave evidence in relation to the subject and was cross-examined by the wife.
(d)Exhibit H2 comprises an application for change of assessment signed by the husband on 4 April 2016. The husband said that the application had been lodged with CSA.
86In exhibit H2, the husband says that –
(a) he is currently unemployed;
(b) his taxable income for the 2014 financial year was $27,460;
(c) his taxable income for the 2015 financial year was $13,575;
(d) he was unable to lodge the application sooner because of –
bad health, stress and trauma, partner was ill and passed away; records lost in a house move
(e) his only income comprises "Government payments" of $275 per week;
(f) his personal expenses total $265 per week;
(g)his only assets comprise an ANZ account with a balance of $20 and household contents and personal effects with a current market value of $2,000; and
(h) he has no liabilities.
87I have summarised the husband's evidence elsewhere in these Reasons. In spite of the findings made in previous judgments in these proceedings, and notwithstanding the wife's forceful submissions, I am not prepared to conclude that the husband's evidence in relation to his financial position should be rejected. Exhibits H1 and H2, and the fourth assessment, support the husband's evidence, and he was not cross-examined, or not cross-examined in any depth, about his financial position. I paid careful attention to the husband, and observed his demeanour, as he gave his evidence. Put simply, I am not prepared to disbelieve him on his affirmation.
88It follows that I am not satisfied that he has the financial capacity to meet the orders sought by the wife. Further, I am not satisfied that his earning capacity is greater than is reflected in his evidence regarding his income; nor am I satisfied that:
(a) he is not working despite ample opportunity to do so;
(b) he has voluntarily reduced his working hours;
(c) he has voluntarily changed his occupation or working pattern;
(d) his present state of unemployment is unjustified; and
(e)his child support liabilities had or have anything to do with his present financial position and state of unemployment.
Commitments of the wife and the husband to enable them to support themselves and others
89The evidence in relation to this subject was very limited – although I note the contents of exhibits W3 (as it relates to the wife's expenses) and H2.
90The husband's present commitments appear to be very modest indeed, and he seems to be keeping his head above water in a financial sense. The wife's financial commitments (as they relate to herself and the children) substantially exceed her current income.
Quantum of child support for the children
91In all the circumstances, and although I am persuaded that the wife has demonstrated that special circumstances exist (in a general sense), I am not persuaded that she has established a ground for departure in relation to the period covered in the fourth assessment (or, indeed, in relation to the periods covered in the second assessment and the third assessment). At the same time, I am not persuaded that I should "tinker" with any of the three assessments. I am not satisfied that adherence to the provisions of the child support formulae would result in an unjust and inequitable determination of the level of financial support to be provided by the husband for the children for any of the relevant periods.
92Although a fair allowance for the overall costs incurred by the wife in maintaining the children (which allowance represents the children's proper needs) is a total of $2283 per week, I am not satisfied that the husband is able to pay any more by way of child support than he is presently paying.
Lump sum child support
93The wife seeks a lump sum payment of child support pursuant to ss 123 and 124 of the Assessment Act. She seeks orders that the husband pay a total of $115,368 — to cover the whole of the period until 31 March 2020. At that time, Mark will be 16 (turning 17 [in] 2020), Angela will be 15 and Luke will be 11.
94In R & R (No.1) (2002) FMCAfam 153, Bryant CFM (as her Honour, the Chief Justice then was) explained the law relating to lump sum child support as follows:
68.Section 123(1)… provides that application may be made to a Court exercising jurisdiction under the Act for an order that the liable parent provide child support otherwise than in the form of periodic amounts paid to the carer.
69.Before the Court can make an order for substituted support, the Court is required by s 124(1)(b) to be satisfied that it would be just and equitable as regards the child, the carer entitled to child support and the liable parent, and otherwise proper to make such an order. The Court is required to have regard to the matters contained in s 124(2) and in determining whether it is "just and equitable" or "otherwise proper" the Court must have regard to the matters contained in subsections 117(4), (5), (6), (7) and (8) of the Act. The Court is not limited by those factors alone (see section 124(5)) which suggests that the Court has a wide discretion in determining the application.
70.The Full Court of the Family Court of Australia in Prpic v Prpic (1995) FLC 92-574 at 81,688 said:
Capitilisation orders may well be appropriate where there are difficulties in enforcement or where it is proper to sever the financial link between the parties. However, as a general rule, given that payments of child support depend upon circumstances prevailing from time to time, which circumstances cannot be predicted with any significant degree of certainty, it seems to us that the provision of child support by way of lump sum should not be considered to be a readily available alternative but one that is only exercised where there are circumstances that make it appropriate to do so. We would endorse the observations of Mushin J in Bendeich (1993) FLC 92-355 at 79,954 where His Honour said:
The rationale underlying the general approach of the court was that the longer a lump sum order operates the greater chance of change in circumstances necessitating a variation of that order, thereby making the order unjust. Those changed circumstances might be in relation to the liable parent, custodial parent or the children. Incomes may increase or decrease and the children may change their living arrangements from one parent to another.
71.It is clear that I have discretion to order a lump sum subject to being satisfied as to the matters which I have identified in the Act, but it is also clear that I must exercise that discretion only when there are circumstances which make it appropriate to do so and that normally it is preferable for periodic support to be paid.
95In my opinion, the following matters are relevant to the exercise of my discretion:
(a)I have made findings in the primary judgment regarding the husband's credibility and his failure to make full and frank disclosure of all relevant aspects of his financial position from time to time.
(b)The husband failed to participate in the present proceedings in a constructive manner, and failed to make full and frank disclosure of his financial position.
(c)Mrs Darzi's evidence is to the effect that the husband received very significant moneys from her over an extended period.
(d)The husband did not disclose the receipt of these moneys either at all or until he had no option but to do so.
(e)The husband retained significant moneys as a consequence of the orders made pursuant to the primary judgment.
(f)Notwithstanding all of the above, I find that the husband's financial position is indeed as I have described it elsewhere in these Reasons and, relevantly, when discussing the grounds for departure.
96I am more than satisfied that – until relatively recently – the husband has failed or refused to voluntarily discharge his duty to maintain the children, and voluntarily prioritise that duty over his other commitments (apart from commitments necessary to enable him to support himself). I am also satisfied that the children would not have received a proper level of financial support from their father after the parties separated if the wife had not pursued the issue with determination. I accept that this has placed a very substantial, but unnecessary and unfair, burden on the wife – both financially and emotionally. I also accept that any decision on the part of the Court to leave future child support assessments in the hands of CSA will lead – as night follows day – to further disputes between the wife and the husband. It may also lead to further objections, reviews and (ultimately) litigation.
97Notwithstanding these matters, the Court is hamstrung by the absence of the type of evidence referred to when discussing the effects of s 117(4), (6) and (7B) above. In addition, and in spite of the wife's energetic submissions and the matters deposed to by Mrs Darzi in her two affidavits, I am not persuaded that the husband's financial position is other than he described it to be during the course of his evidence.
98I do not propose to reproduce the provisions of ss 121 to 126 of the Assessment Act (which sections are in Division 5 – Orders for provision of child support otherwise than in form of periodic amounts paid to carer). I am aware of them and have taken them into account. Relevantly, before making an order for lump sum child support (however calculated), the Court must be satisfied that, among other things, it would be just and equitable as regards the children, the wife and the husband, and otherwise proper, to make such an order. In determining whether it would be just and equitable as regards the children, the wife and the husband to make an order for lump sum child support, the court must have regard to (among other things) the matters mentioned in s 117(4), (6) and (7B). In determining whether it would be otherwise proper to make such an order, the Court must have regard to the matters mentioned in s 117(5).
99For the reasons already given, and as explained above, I am unable to make findings in relation to all these matters (although it is possible to make findings in relation to some of them). Again, and in particular, I am not satisfied that the husband presently has the capacity to meet an order for lump sum child support in any form.
100In all the circumstances, and notwithstanding the strong findings I have made in the past regarding the husband's attitude and behaviour, I am not persuaded that the wife has established that it is just and equitable as regards the children, the wife and the husband to make the order for lump sum child support that she has sought.
101I would add that, in any event, I am not satisfied that the manner in which the wife calculated the proposed lump sum child support has been adequately explained or justified.
Conclusion
102The Minute reveals that the outstanding child support (being the arrears of child support as at the date of the April hearing) has been paid.
103I am not satisfied that any of the other orders sought by the wife in relation to child support should be made. Put simply, and having regard to the husband's evidence relating to his financial position, the evidence presented by or on behalf of the wife is insufficient to justify the making of the orders or to persuade the Court that, if made, they would be just and equitable. I well understand the wife's frustration with the husband's irresponsibility and inaction, and with his failure to voluntarily discharge his duty to maintain his children. I accept that he has acted in a deceitful and reprehensible manner – as described in the primary judgment and as reflected in the evidence of his mother in these proceedings – but it is not the Court's role to punish the husband. It must approach and consider the wife's application in a principled manner, and in accordance with settled law.
104Finally, it is pertinent to observe that the role of the Family Law Courts in relation to child support proceedings is now very different from that which they performed in the past. Judicial officers are no longer required to laboriously reassess a party's child support obligations unless it is clearly sensible and appropriate for them to do so. The Government now envisages a very different role for courts (relevantly, the Federal Court of Australia and the Federal Circuit Court of Australia): namely, to deal with appeals from the AAT. Such appeals involve the application of administrative law, and not the direct application of provisions such as s 117 of the Assessment Act. Put another way, in many respects the remedies of parties involved in child support disputes have changed. Leaving aside (for the moment) applications for lump sum child support and similar relief, where once parties could require a judicial officer to hear and consider evidence relating to, for example, the plethora of factors or considerations set out in s 117, they must now demonstrate an error of law on the part of the AAT.
105I refer to the Federal Court of Australia ("FCA") and the Federal Circuit Court of Australia ("FCCA") (as opposed to this Court), because the Family Court of Australia ("FCoA") and the Family Court of Western Australia no longer have jurisdiction to hear appeals from the AAT in relation to child support. Such appeals must be directed to the FCCA (or, in some cases, the FCA).
106This Court, the FCoA and the FCCA still retain original jurisdiction in child support matters: see, for example, s 99 of the Assessment Act. Similarly, the FCoA also retains appellate jurisdiction in relation to substantive child support issues: see, for example, ss 101, 102 and 102A of the Assessment Act. As well, this Court, the FCoA and the FCCA have power to deal with applications for orders for departure from administrative assessments of child support – but s 116(1) of the Assessment Act provides that the exercise of the power is conditional upon the following (both of which must apply):
(a)the liable parent or carer entitled to child support must be a party to an application pending in the relevant court; and
(b)the relevant court must be 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 [Division 4 of Part 7 of the Assessment Act] in relation to the child in the special circumstances of the case".
107It is important to note that this Court, the FCoA and the FCCA also have power to deal – at first instance – with applications for the provision of child support otherwise than in the form of periodic payments made to the child's carer. This power is not subject to the conditions set out in s 116(1) of the Assessment Act. Thus, and by way of example, s 123 of the Assessment Act is as follows:
Application for order under Division (being Division 5 of Part 7 of the Assessment Act)
1.An application may be made to a court having jurisdiction under this Act for:
(a)an order that a liable parent provide child support otherwise than in the form of periodic amounts paid to the carer entitled to child support; or
(b)an order that a liable parent provide child support in the form of a lump sum payment to be credited against the amount payable under the liability under the relevant administrative assessment.
2.An application under subsection (1):
(a)may only be made if an administrative assessment is in force in relation to the child, the carer entitled to child support and the liable parent; and
(b)may be made by the carer entitled to child support or the liable parent.
3.Before hearing the application, the court must hear and determine any pending application made to the court for an order under Division 3 (administrative assessments more than 18 months old) or Division 4 (departure orders) in relation to the child, the carer entitled to child support and the liable parent.
4.…
108It is, of course, this power upon which the wife relies when applying to this Court for the orders contained in the amended application.
109Now is not the time to analyse the history of the various amendments to the child support legislation which have given rise to the current jurisdictional peculiarities. Suffice it to say that this Court previously had jurisdiction to hear appeals in child support matters when those appeals were from the SSAT – in other words, prior to 1 July 2015. This Court's jurisdiction in that regard was to be found in s 110B of the Registration Act, which section was repealed in July 2015 upon the commencement of the Tribunals Amalgamation Act 2015 (Cth) ("the Amalgamation Act"). The Amalgamation Act folded the SSAT, the Migration Review Tribunals and the Refugee Review Tribunals into the AAT. Thereafter, child support review matters were to be dealt with by the Social Services and Child Support Division of the AAT. The Amalgamation Act also inserted s 44AAA into the Administrative Appeals Tribunal Act 1975 (Cth) ("the AAT Act"). This section provides that, ordinarily, appeals from the AAT in child support matters are to the FCCA – on a question of law only. Any other appeals from the AAT in child support matters are to the FCA – again, on a question of law only: see s 44 of the AAT Act.
110The transfer of jurisdiction in matters of this nature from the FCoA and this Court to the FCA and the FCCA was deliberate. For example, the Explanatory Memorandum relating to the Child Support (Adoption of Laws) Amendment Bill 2015 (Cth) includes the following:
[The Amalgamation Act] impacts on the Commonwealth Child Support Scheme by changing the avenues of appeal for child support matters.
The former SSAT had jurisdiction to review on the merits certain administrative child support decisions to which objection had been taken and the internal review unsuccessful. An appeal from SSAT to the AAT was available on some matters for a review on the merits. The Family Court had jurisdiction to hear an appeal against a decision of SSAT on a question of law. [The Amalgamation Act] transfers that jurisdiction of the Family Court to [the FCCA and the FCA].
…
… [New] specialist divisions added to the AAT… Include the Social Services and Child Support Division…
Prior to its abolition, applications for a merits review of certain child support decisions were made to SSAT. Some decisions of SSAT could be reviewed by the AAT. Appeal to the Family Court was available from the decision of SSAT but restricted to a question of law.
[The Amalgamation Act] transfers the merits review jurisdiction from the SSAT to the AAT and the appeal jurisdiction of [the FCoA] in respect to child support matters to [the FCCA and the FCA] under the [AAT Act].
Matters previously determined by SSAT will now come under the jurisdiction of the Social Services and Child Support Division of the AAT…
The two tier review provided for in certain child support matters – first to SSAT and from SSAT to the AAT – has been retained. Both reviews which correspond with existing SSAT reviews and AAT reviews now come under the jurisdiction of the AAT and will be known as "AAT first review" and AAT second review" respectively.
The AAT first review retains for the most part the same jurisdiction, powers and procedures as the former SSAT. However, unlike the SSAT, the AAT first review will include the jurisdiction to review a decision of [the Registrar] to refuse to make a determination because the issues are too complicated.
Previously, jurisdiction for review of this decision was with the Family Court and the [FCCA]. The Commonwealth Explanatory Memorandum to the Tribunals Amalgamation Bill 2014 explained the reason for this change of policy was that the SSAT had developed a level of expertise such that review by a Court is no longer necessary.
The Commonwealth Explanatory Memorandum explains that to streamline pathways of judicial review, jurisdiction in respect to child support matters will no longer lie with the Family Court but with [the FCCA and the FCA".
111I need say nothing further regarding this subject. As I have said, I accept that this Court has original jurisdiction in relation to applications for lump sum child support.
Costs
112I discussed the law relating to costs in family law matters in Eades & Wrensted [2014] FCWA 64 at [12] to [58]. I need not repeat the entirety of that discussion in these Reasons.
The trial judge's discretion in relation to costs
113The question of costs in family law proceedings is dealt with in s 117 of the FLA. Pursuant to s 100 of the Assessment Act, similar rules apply in child support proceedings.
114A trial judge has a very broad discretion in costs matters.
115A finding of justifying circumstances is an essential preliminary to the making of a costs order, but there is no additional or special onus on an applicant for an order for costs. Although the general rule is that each party shall bear his or her own costs, this rule is expressed to be subject to s 117(2), and it must yield whenever a judicial officer finds that there are circumstances which justify the making of a costs order.
116FLA s 117(2) provides as follows:
If, in proceedings under this Act, the court is of opinion that there are circumstances that justify it in doing so, the court may, subject to subsections (2A)…and the applicable Rules of Court, make such order as to costs…as the court considers just.
117FLA s 117(2A) provides as follows:
In considering what order (if any) should be made under subsection (2), the court shall have regard to:
(a)the financial circumstances of each of the parties to the proceedings;
(b)whether any party to the proceedings is in receipt of assistance by way of legal aid and, if so, the terms of the grant of that assistance to that party;
(c)the conduct of the parties to the proceedings in relation to the proceedings including, without limiting the generality of the foregoing, the conduct of the parties in relation to pleadings, particulars, discovery, inspection, directions to answer questions, admissions of facts, production of documents and similar matters;
(d)whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the court;
(e)whether any party to the proceedings has been wholly unsuccessful in the proceedings;
(f)whether either party to the proceedings has made an offer in writing to the other party to the proceedings to settle the proceedings and the terms of any such offer; and
(g)such other matters as the court considers relevant.
118The weight to be given to the various factors referred to in s 117(2A) is a matter for the trial judge. All the factors must be taken into account and balanced when considering whether the overall circumstances justify the making of a costs order. On the other hand, there is nothing to prevent any one of the factors being the sole foundation for an order for costs.
119The law relating to indemnity costs was reviewed by the Full Court in Prantage & Prantage [2013] FamCAFC 105 ("Prantage"). After observing that there is nothing in the FLA which inhibits the making of an order for indemnity costs and confirming that the law relating to such costs has been "well established in this jurisdiction for many years", the Full Court confirmed that the "usual rule" is that costs are awarded on a party/party basis and that an order for indemnity costs is "a very great departure from the normal standard": see Kohan and Kohan (1993) FLC 92-340 at p 79,605.
120In Redmond & Redmond (Costs) [2014] FamCAFC 55, the Full Court cited (with approval) the following extract from the decision of Strickland J in Bele & Vaughan (Costs) [2012] FamCAFC 198 (references omitted):
27.The ordinary rule is that an order for costs is calculated on a party/party basis, and it emerges from the authorities … that to depart from that rule exceptional circumstances need to be demonstrated.
28.As to what might constitute an exceptional circumstance, reference can be made to the oft-cited decision of Sheppard J in Colgate-Palmolive Co & Another v Cussons Pty Ltd (1993) 46 FCR 225, where his Honour detailed circumstances that might qualify. Usefully, Holden J in Munday v Bowman (1997) FLC 92-784 … drew from the decision of Sheppard J the following examples:
(a)Where it appears that an action has been commenced or continued in circumstances where a party properly advised should have known that he had no chance of success. In such cases the action must be presumed to have been commenced or continued for some ulterior motive or because of some wilful disregard of the known facts.
(b)Making allegations of fraud, knowing them to be false, and the making of irrelevant allegations of fraud.
(c)Evidence of particular misconduct causing loss of time to the court and to other parties.
(d)The making of allegations which ought never to have been made or the undue prolongation of a case by groundless contentions.
(e)An imprudent refusal of an offer to compromise.
121The approach described by Holden CJ in Munday & Bowman (supra) remains good law. In Prantage, however, the Full Court emphasised that, in Colgate-Palmolive Co & Another v Cussons Pty Ltd, Sheppard J referred to an "imprudent refusal of an offer to compromise", and not to imprudence by a party in his or her general approach to the proceedings. The former may be sufficient to enliven the power to award indemnity costs; the latter is not.
122The Full Court in Prantage also emphasised that there is no rule to the effect that indemnity costs will be ordered "where the losing party was guilty of ethical or moral delinquency in the antecedent facts which have given rise to the litigation" (see NMFM Property Pty Ltd v Citibank Ltd (No 2) (2001) 109 FCR 77 at [56]). The conduct of a party that is relevant to the issue of indemnity costs is that party's conduct as a litigant.
123I would add that it is, of course, the relevant party's conduct as a litigant to which the reference to conduct in s 117(2A)(c) is directed, and not his or her conduct in other respects.
124Notwithstanding the matters discussed above, "the categories of circumstances which enliven the discretion to award indemnity costs are not closed…": see Yunghanns v Yunghanns (2000) FLC 93-029 at [31]. That said, I remain conscious of the Full Court's observation in Madin & Palis (Costs) [2016] FamCAFC 25 at [23], to the effect that an application for indemnity costs should only be made, and such costs should only be ordered, "in the most extreme cases".
Section 117(2A) considerations
125I turn now to consider the various factors in s 117(2A).
126The first of the matters to which the Court must have regard comprises the financial circumstances of each of the parties to the proceedings. These have been dealt with above. Although the wife can ill afford to meet the legal costs associated with the current proceedings, I am not satisfied that the husband has the capacity to meet a costs order (in any form).
127Neither party is in receipt of legal aid, and this factor is therefore not a relevant consideration.
128The next factor requires the Court to have regard to the conduct of the parties to the proceedings in relation to the proceedings. In other words, the Court is obliged to have regard to the parties' conduct as litigants. No complaint can be directed at the wife in this regard. I have made findings regarding the husband's behaviour as it relates to the non-filing of responding material and his failure to make full and frank disclosure of his financial position in a timely fashion. In all the circumstances, I accept that this factor supports the making of an order for costs against the husband.
129The next factor is whether the proceedings were necessitated by the failure of a party to comply with previous orders of the Court. In my opinion, this is not a relevant consideration in the circumstances of this case.
130The next factor is whether any party to the proceedings has been wholly unsuccessful in the proceedings. In this regard, there can be no sugar-coating the fact that the wife has been wholly unsuccessful in obtaining the orders she sought.
131Neither party appears to have made any offers to settle the proceedings – whether in writing or otherwise. If offers were made, I am unaware of them.
132There are no other circumstances that I consider relevant to the issue of costs.
133In all the circumstances, I am not persuaded that an order for costs is justified. A fortiori, I am not persuaded that an order for indemnity costs is warranted.
Orders
134For the reasons set out above, the amended application (including the wife's application for costs) will be dismissed.
I certify that the preceding [134] paragraphs are a true copy of the reasons for
judgment delivered by this Honourable Court
Associate
28 March 2017
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1 the following summary is based on the summary appearing in Mathieson & Hamilton (2006) FLC 98-032
2 see Ross v McDermott (1998) 23 Fam LR 613 at 623-4.
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