Bancroft and Child Support Registrar
[2012] FMCAfam 76
•31 January 2012
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| BANCROFT & CHILD SUPPORT REGISTRAR | [2012] FMCAfam 76 |
| CHILD SUPPORT – Costs after proceedings discontinued. |
| Child Support (Registration and Collection) Act 1988, s.72A Evidence Act 1995 (Cth), s.131(2) (a) – (c) & (h) Family Law Act 1975, ss.117(1) & (2), 117(2A)(a) – (g), 117AA Federal Magistrates Court Rules 2001, Part 21 Family Law Regulations, reg 36 |
| Re Minister for Immigration and Ethnic Affairs; Ex Parte Lai Qin (1997) 186 CLR 622 O’Neill v Mann [2000] FCA 1680 Oshlack v Richmond River Council (1998) 193 CLR 72 Smith v Airservices Australia (2005) 146 FCR 37 |
| Applicant: | MR BANCROFT |
| Respondent: | CHILD SUPPORT REGISTRAR |
| File Number: | CAC 901 of 2010 |
| Judgment of: | Neville FM |
| Hearing date: | 11 October 2011 |
| Date of Last Submission: | 25 October 2011 |
| Delivered at: | Canberra |
| Delivered on: | 31 January 2012 |
REPRESENTATION
| Solicitors for the Applicant: | Self Represented |
| Solicitors for the Respondent: | Clayton Utz, Canberra |
ORDERS
The Applicant is to pay to the Respondent costs in the sum of $6,000.
In the absence of any other agreement made between the parties, payment should be made within 60 days of the date of this order.
IT IS NOTED that publication of this judgment under the pseudonym Bancroft & Child Support Registrar is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT CANBERRA |
CAC 901 of 2010
| MR BANCROFT |
Applicant
And
| CHILD SUPPORT REGISTRAR |
Respondent
REASONS FOR JUDGMENT
Introduction
This matter was commenced as an Initiating Application filed on 16th June 2010 for various Declarations to be made in respect of outstanding child support under the Child Support (Registration and Collection) Act 1988. Further orders sought included that arrears in respect of the child support liability be discharged, suspended or varied, or in the alternative, that the liability be satisfied by monthly instalments of $200. An order for costs against the Respondent was also sought.
By way of Response filed on 20th August 2010 the Respondent sought to have the Application dismissed and for the Applicant to pay the Respondent’s costs.
A Notice of Discontinuance was subsequently filed by the Applicant on 8th September 2011. The only issue remaining for determination is the question of the costs of the Respondent. The Applicant opposes such an order.
Properly so, the Respondent does not seek any costs order in relation to enforcement of overseas orders, pursuant to s.117AA of the Family Law Act 1975 (the Act).
For the reasons that follow, in my view, notwithstanding delays and other obstructions of one kind or another on the part of both parties, as the moving party to the proceedings, there is a degree of responsibility on the part of the Applicant that should have been exercised more diligently than occurred. Having regard to all the circumstances of the matter, and the criteria set out in s.117(2A) of the Act, in my view an order for costs is appropriate, but not of the kind sought by the Respondent. A rather more modest sum should be paid, namely $6000.
Submissions
Both parties provided copies of correspondence that, each said, supported their respective, competing contentions. Further, the Applicant, Mr Bancroft, provided a further affidavit, which was filed in Court on 11th October 2011, in relation to his difficult financial circumstances.
Although some of the correspondence provided to the Court is stated to be “without prejudice”, given that both parties have relied on it, the Court may take it that there has been a relevant waiver of privilege.[1] Moreover, as Mr Bancroft submitted, s.131(2)(h) of the Evidence Act 1995 provides for the consideration of such communication where it is relevant in relation to determining liability for costs.
[1] See, for example, the exceptions in the Evidence Act 1995, s.131(2)(a) – (c).
It is from reading the chain of correspondence provided to the Court that led to my earlier comments about neither side being completely blameless. This is to say that, for example, on a number of occasions, Mr Bancroft made an offer to settle the proceedings, but it took a not insignificant amount of time for the Registrar to provide instructions and respond. Such matters are dealt with in a little more detail below.
At the same time, and not completely related to the correspondence, Mr Bancroft had been on notice from an early point in time that there were significant “issues” in relation to the detail and sustainability of his application. This was not only the Respondent’s view, but also that of his Honour, Federal Magistrate Halligan, who (by orders made on 10th August 2011) required Mr Bancroft to file an amended Application to clarify and properly particularise his claim against the Respondent.
Respondent’s Costs Submissions: The factual background for much of the Respondent’s submissions is set out in an affidavit filed by Ms I on 13th December 2010. Ms I. is a senior adviser with the Respondent.
Among other things, that affidavit confirmed (and provided copies annexed to it) of Notices that were issued by the Respondent in relation to the Applicant’s child support liability, pursuant to s.72A of the Child Support (Registration & Collection) Act 1988, and the dates upon which each of them were withdrawn. Those dates were, respectively, 3rd October 2006, 21st February 2009, and 14th June 2010.
The last date noted is of some significance because it clearly shows that the claim for relief in relation to the s.72A Notices was made after the last such Notice had been withdrawn. In the correspondence relied on by the parties to which I have earlier referred, the Respondent made clear the patent difficulties the Applicant would have in successfully prosecuting the s.72A claim for relief.[2]
[2] See, for example, the letter from Clayton Utz to Mr Bancroft, dated 28th October 2010.
Ms I.’s affidavit also confirmed that the Applicant’s child support liability had been recalculated after the s.72A Notices had been withdrawn, the Child Support Register had been amended to reflect the orders of the Family Court (noted below), and that the Respondent had remitted late payment penalties that had been imposed, in the sum of $21,098.76.
In relation to ‘background facts’, I should also mention that the original affidavit of Mr Bancroft (filed 16th June 2010), and the affidavit of Ms I., both refer to various orders of the Family Court in relation to the child support liability of Mr Bancroft. Of particular significance is the decision of the Full Court of the Family Court, delivered on 20th December 2006, which (among other things) granted a permanent stay of part of an earlier child support debt because Mr Bancroft had made a payment directly to the Mother. The Full Court also made orders varying the child support liability of the Applicant (Mr Bancroft) and provided for it to be paid by instalments. A copy of the Full Court’s judgment is annexure G to Mr Bancroft’s affidavit of 16th June 2010.
The Respondent submitted that Mr Bancroft’s letter to Clayton Utz of 1st November 2010, in my words, all but conceded that there was little utility in the declaratory relief he sought in relation to the s.72A Notices.
It will also be recalled that on 10th August 2011 this Court ordered the Applicant to file an amended Application to particularise with greater clarity the relief he sought.
The Respondent further submitted that the principles in relation to costs outlined in, among other cases, Oshlack v Richmond River Council, should apply.[3]
[3] Oshlack v Richmond River Council (1998) 193 CLR 72.
Properly, the Respondent conceded that it could not pursue any costs that related to the Regulation 36 application because of the operation of s.117AA of the Family Law Act 1975.
The Respondent also points to the fact that proposals to settle the matter, particularly through conciliation, were promoted regularly. That said, it is not possible to make any formal finding in relation to these proposals because both parties made various offers to settle the matter at various times.
Applicant’s Costs Submissions: In opposing the costs order sought, the Applicant submitted that it was appropriate pursuant to section 117(1) of the Family Law Act 1975 (‘the Act’),[4] for each party to bear their own costs.
[4] Family Law Act 1975 s.117(1)
The Applicant submitted that he is of limited financial means and a costs orders would be prohibitive on his capacity to pay the child support arrears;[5] the parties had considered conciliation, offers of settlement were made and the matter did not reach hearing;[6] the further Applicant contends that it was in part the Respondent’s failure to comply with a stay order of the Full Court that led to the commencement of proceedings.[7]
[5] s.117(2A)(a)
[6] s.117(2A)(c)
[7] s.117(2A)(d)
Further, the Applicant said that the authorities relied upon by the Respondent, such as Oshlack, were common law authorities, which (he said) had no application to the present matter because s.117 effectively covered the situation before the Court.
Legal Principle
The parties accept, as do I, that s.117 of the Act governs the determination of the application for costs in the current matter.
This being the case, the first requirement under s.117(2) is that the Court be satisfied that there exist circumstances that justify an order for costs. In my view, on the facts and circumstances outlined earlier in these reasons, that thresh-hold has been established.
In my view, a fair reading of the correspondence provided to the Court confirms that there was not just doubt, but significant and serious doubt, about the prospects of success in Mr Bancroft’s claim in relation to the s.72A Notices, and that, in any event, the utility of such relief was also problematic. Both such matters seem to have been acknowledged, rather grudgingly and a tad opaquely, by Mr Bancroft in his correspondence at least as long ago as November 2010.
In my view, the so-called common law authorities remain helpful and important discussions of principle in relation to applications for costs. The two cases that are most relevant to the current matter are the decision of McHugh J in Re Minister for Immigration and Ethnic Affairs; Ex Parte Lai Qin, and of Stone J in Smith v Airservices Australia.[8]
[8] Re Minister for Immigration and Ethnic Affairs; Ex Parte Lai Qin (1997) 186 CLR 622, and Smith v Airservices Australia (2005) 146 FCR 37.
In Lai Qin, Mc Hugh J said, at pp.624-625 (internal citations omitted; emphasis added):
In most jurisdictions today, the power to order costs is a discretionary power. Ordinarily, the power is exercised after a hearing on the merits and as a general rule the successful party is entitled to his or her costs. Success in the action or on particular issues is the fact that usually controls the exercise of the discretion. A successful party is prima facie entitled to a costs order. When there has been no hearing on the merits, however, a court is necessarily deprived of the factor that usually determines whether or how it will make a costs order.
In an appropriate case, a court will make an order for costs even when there has been no hearing on the merits and the moving party no longer wishes to proceed with the action. The court cannot try a hypothetical action between the parties. To do so would burden the parties with the costs of a litigated action which by settlement or extra-curial action they had avoided. In some cases, however, the court may be able to conclude that one of the parties has acted so unreasonably that the other party should obtain the costs of the action. In administrative law matters, for example, it may appear that the defendant has acted unreasonably in exercising or refusing to exercise a power and that the plaintiff had no reasonable alternative but to commence a litigation.
… in some cases a judge may feel confident that, although both parties have acted reasonably, one party was almost certain to have succeeded if the matter had been fully tried. …But such cases are likely to be rare.
If it appears that both parties have acted reasonably in commencing and defending the proceedings and the conduct of the parties continued to be reasonable until the litigation was settled or its further prosecution became futile, the proper exercise of the cost discretion will usually mean that the court will make no order as to the cost of the proceedings.
These same paragraphs (with the exception of the last paragraph) from his Honour’s judgment were cited and relied upon by Stone J in Smith v Airservices Australia.[9] Like here, the case before her Honour in Smith related to circumstances where proceedings were discontinued.
[9] See 146 FCR at pp.49-50 [46].
Stone J also referred, at [52] and [53], to the comments of Finn J in O’Neill v Mann, where his Honour said, at [13]:[10]
… where the discontinuance can be said to be an acknowledgment by an applicant of likely defeat or where no objective circumstances provides reason for the discontinuance, a costs order in favour of the other party will ordinarily be made.
[10] O’Neill v Mann [2000] FCA 1680.
In my view, as I have said, the cases and the principles from them are relevant considerations that come within the terms of s.117(2A)(g), as well as considerations relevant to the exercise of the Court’s discretion under Part 21 of this Court’s Rules.
Having regard to the factual circumstances outlined by Mr Bancroft, not least in relation to his capacity to pay, as well as the facts as I read them from the correspondence provided to the Court, in my view, it is reasonable that a costs order be made against the Applicant. At least as long ago as November 2010, the utility of continuing the proceedings should have been properly questioned by Mr Bancroft. As a lawyer, he cannot claim ignorance of the importance of the proper presentation of applications. The difficulties in the application were further sheeted home to him by his Honour Federal Magistrate Halligan in August 2011. It was almost a further month after that mention before his Honour that a Notice of Discontinuance was finally filed.
However, the award of costs should be of a modest amount. In my view, it cannot be anywhere near the prodigious figures mentioned in the correspondence between the parties. The amount of costs the Applicant should pay is $6000. In the absence of any other agreement between the parties in relation to its payment, it should be paid within 60 days of the date of this order. The Court so orders.
I certify that the preceding thirty-two (32) paragraphs are a true copy of the reasons for judgment of Neville FM
Date: 31 January 2012
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