C.S.R. and Sisley
[2007] FMCAfam 724
•13 July 2007
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| C.S.R. & SISLEY | [2007] FMCAfam 724 |
| CHILD SUPPORT – Enforcement – arrears – late payment penalties – costs. |
| Child Support (Registration and Collection) Act 1988 (Cth), ss.68, 104 Family Law Act 1975 (Cth), s.117 Federal Magistrates Court Rules 2001, Schedule 1 |
| Hendy v Deputy Child Support Registrar (2001) 27 Fam LR 641; (2001) 164 FLR 236 |
| Applicant: | CHILD SUPPORT REGISTRAR |
| Respondent: | MR SISLEY |
| File number: | HBC 493 of 2007 |
| Judgment of: | Roberts FM |
| Hearing dates: | 16 May & 13 July 2007 |
| Date of last submission: | 13 July 2007 |
| Delivered at: | Launceston |
| Delivered on: | 13 July 2007 (Ex tempore) |
REPRESENTATION
| Counsel for the Applicant: | Mr J Shears |
| Solicitors for the Applicant: | Australian Government Solicitor |
| Counsel for the Respondent: | Mr T McGuire |
| Solicitors for the Respondent: | Temple-Smith Partners |
ORDERS
That within seven days the Respondent MR SISLEY pay to the Child Support Agency at Hobart the sum of $8,555.35 such to be credited towards his liability to pay child support for the child R born in 1989 up to 4 July 2007.
That the Respondent pay the costs of the Applicant fixed in the sum of $3,075 within six months of today.
That the Enforcement Summons issued 16 April 2007 is dismissed in so far as it relates to any arrears of child support.
That the said Enforcement Summons in so far as it relates to late payment penalties is adjourned sine die with liberty to either party to restore the Application to the list upon application to the Registry.
IT IS NOTED that publication of this judgment under the pseudonym C.S.R. & Sisley is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT LAUNCESTON |
HBC 493 of 2007
| CHILD SUPPORT REGISTRAR |
Applicant
And
| MR SISLEY |
Respondent
REASONS FOR JUDGMENT
Applications
An Enforcement Summons was lodged with the court by the Child Support Registrar on 13 April 2007. The respondent is Mr Sisley. That Enforcement Summons was issued by the Registrar of the court on 16 April 2007, with a first return date in Devonport on 14 May 2007. On that day it was set down for hearing in that Devonport sitting on 16 May 2007.
On 16 May 2007 the matter was adjourned for further hearing in July. It is not necessary for me to detail all of what transpired on 16 May 2007, but in essence the respondent challenged the delegation of an employee of the Child Support Agency. It now appears to be clearly accepted that that employee had the appropriate delegations to do what she did.
The Enforcement Summons alleged that the respondent was indebted to the Commonwealth for $7,964.11 by way of child support and $759.31 by way of late payment penalties as at 12 April 2007. It is now said that the respondent owes child support in the sum of $8,555.35 and late payment penalties of $1,032.10 as at 4 July 2007.
The applicant is seeking enforcement of the child support debt, late payment penalties and costs. The respondent is prepared to pay $8,555.35 by way of child support, that being a figure greater than that shown in the enforcement summons. He also asks that I remit late payment penalties and also seeks an order for costs.
Background
By way of history, a letter of demand was written by the Australian Government Solicitor on 13 March 2007 in which it was stated:
We advise that unless you pay the amount of $8,439.80, or otherwise make arrangements with our client to pay that amount by 27 March, we expect to receive instructions to issue an enforcement summons in the Federal Magistrates Court of Australia in Launceston without further notice.
It is clear that the respondent tried to make arrangements with the Australian Government Solicitor's client (the Child Support Agency) in accordance with the request in that letter because the Child Support Agency wrote to the respondent on 22 March 2007 (i.e. before the deadline of 27 March expired). That letter said:
Dear [Mr Sisley],
In response to our conversation on 22 March 2007 with M [the respondent's wife] in which we discussed the matter of your outstanding child support arrears.
M informed me that you were considering obtaining finance to pay out the arrears you owe as well as future year child support until the end of your case. I explained to M that it's not possible to guarantee you an exact figure. There are many administrative processes that can affect your assessment, some of these are care changes, objection decisions, estimates of income, change of assessment outcomes, an application by C for an extension of child support assessment whilst C finishes secondary education are all processes that may have an impact.
I will not read out the whole of the letter, but the author of the letter then attempted to calculate the child support payable until the day before the relevant child turns 18 and arrived at a figure of $9,408.42. The author, who is the manager of the Hobart Office of the Child Support Agency, said:
You also owe $759.31 in late payment penalties but I have agreed to wipe these penalties as soon as full payment of child support arrears is received.
It went on to say, further down in the letter:
I will monitor your case to ensure this payment is received. Please contact me if you are not able to guarantee full payment of your child support or arrears by 5 April 2007.
It seems clear that the respondent was not able to guarantee full payment by 5 April 2007 because the child support is still owing and the Australian Government Solicitor issued proceedings on 13 April 2007.
On 19 April 2007 the Child Support Agency wrote again to the respondent:
Dear [Mr Sisley],
Thank you for your discussing your outstanding child support debt with us. Following from that conversation, we have sent you the enclosed Assets and Liabilities form.
Please complete the form and return it to us by 3 May 2007. This will allow us to consider your current financial circumstances. If we do not hear from you by this date, we will act on the information we have.
It is clear that the respondent completed that form and forwarded it to the Agency because it is attached to a recent affidavit filed on behalf of the Child Support Registrar.
As mentioned, the matter was part-heard 16 May 2007. On 22 May 2007 an offer was made by the respondent to pay $5000 in partial payment of the child support arrears and to allow a caveat to be placed over one or other of the properties in which the respondent has an interest. I will come back to that shortly.
There was no response to that offer of 22 May 2007 for six weeks. At the end of that six weeks the Australian Government Solicitor wrote:
I refer to your letter of 22 May and advise that my client cannot accept your client's offer. Accordingly the Child Support Agency intends to proceed with the examination of your client in the Federal Magistrates Court in Launceston on Friday 13 July 2007.
Yesterday (12 July 2007) the Australian Government Solicitor's office sent an email letter to the respondent's solicitors which made it clear that child support, late payment penalties and costs were all live issues.
It now appears that there is no argument at least in relation to the payment of outstanding child support.
Late Payment Penalties
In relation to late payment penalties, it is my view that I do not have the power to remit those. Section 68 of the Child Support (Registration and Collection) Act 1988 (Cth) gives that power to the Child Support Registrar and presumably by delegation to others within the Child Support Agency.
Section 104 of that Act gives the Federal Magistrates Court power to deal with applications in relation to that Act. However, it is my view that section 104 does not simply give me carte blanche authority to put myself in the shoes of the Child Support Registrar.
It is my view that if there are late payment penalties then the respondent needs to approach the Child Support Agency to have them remitted. If they are not remitted, he has a right of objection and then it goes through a process that could end up before me on a point of law only.
However, as I indicated earlier, it is still my view that in relation to an Enforcement Summons, I have discretion whether or not to enforce, and that includes enforcing the late payment penalties.
In this particular matter I decline to enforce the late payment penalties. That is because:
·the State Manager of the Child Support Agency has said that he is prepared to “wipe” those late payment penalties upon payment of the arrears; and
·the respondent has said that he will consent to an order today that arrears be paid within seven days.
It will become apparent from what I have to say later that the respondent has always been prepared to pay the arrears, although not necessarily in one lump sum as he is now prepared to do. He has put a number of offers, which included payment on particular terms.
In view of the Child Support Agency letter of 22 March 2007, it would be unfair to enforce the late payment penalties when it is clearly the practice of the Child Support Registrar or his delegates to regularly remit late payment penalties upon payment of arrears. Therefore, as I have said, I decline to enforce the late payment penalties at this stage.
What I propose to do in relation to the late payment penalties is to adjourn that part of the Enforcement Summons sine die because there will be an order that the arrears be paid within seven days as suggested by the respondent. Clearly, if he does not pay the arrears, the question of late payment penalties might then become an issue.
Costs
It is my view that costs in this jurisdiction are determined in accordance with section 117 of the Family Law Act 1975 (Cth) and I am pleased to see that their Honours in the Full Court in Hendy v Deputy Child Support Registrar[1] confirmed that view.
[1] (2001) 27 Fam LR 641; (2001) 164 FLR 236
Essentially, section 117 says that in family law matters each party should pay his or her own costs unless the court considers that there should be an order otherwise. Subsection (2A) sets out a number of matters that the court must consider in determining the question of costs.
The financial circumstances of the parties
It is not really necessary for me to refer to the financial circumstances of the Child Support Agency, other than to say that it has the financial weight of the Federal Government behind it.
The financial circumstances of the respondent need to be looked at. He has interests in two lots of real estate. On his estimate one of those is worth $400,000. According to the material attached to a recent affidavit, there is a loan balance in relation to that property in the approximate sum of $175,000. Consequently, ignoring costs of sale, there would be a rough equity of $225,000. However, he is not the sole owner of that property. In effect, he only has a half interest in it, so his equity would be around $112,500.
In relation to the other property in Property D, his estimate of the value of that was $230,000. It is in his sole name. The loan records attached to an affidavit show a rough balance of $120,000, so the approximate equity in that is $110,000.
He is self employed with an income that does not appear very high for a self-employed tradesman. However, I have been told about his health difficulties and I assume therefore that those health difficulties impact upon his ability to earn income.
He has remarried. His wife earns only $50 per week and she receives a further $50 per week by way of child support for her four children that are still in her household. That works out to be $12.50 per week per child, and to quote what State Magistrate Wilson once said, “that should pay for the icy poles.”
Although the respondent in this matter is not legally liable in the Child Support sense to support those four children, the reality of the matter is that he must be contributing to their support because $12.50 each would clearly not support them.
The respondent has what I understand is an ultra-light type aeroplane that he could sell, and in his negotiations he indicated a willingness to do that. However, his estimate of its value is $10,000 but he owes $10,000 to the Tax Office. So effectively those two cancel each other out.
Legal aid
It is quite clear that the Child Support Agency is not in receipt of legal aid and I am told that the respondent is not receiving legal aid either.
The conduct of the parties in relation to the proceedings
The respondent chose to challenge the delegations within the Child Support Agency, and in particularly the delegation of the author of the affidavits that have been filed. He had a right to do that. However, in my view, that carries with it possible cost consequences. It did not result in the enforcement summons being dismissed. Instead, it put the Child Support Agency to further trouble and cost to have those delegations proved, and as they have not been challenged further, I am assuming that the respondent now accepts that the correct delegations were in place. I repeat that such action carries with it possible cost consequences.
On the other hand, in the material before me the respondent has given the appearance of being willing to pay his liability for child support, although I do not have all of the correspondence that has gone back and forth. However, he obviously needed to be pushed because he must have accumulated the amount that he now owes over a few years.
Initially his willingness was to pay some and secure the rest by a possible caveat over real estate
He has said that he was unable to borrow money from Bass and Equitable or ANZ, being the two financial organisations that he normally deals with, and I suspect that given his current borrowings, that relates particularly to his ability to repay and his relatively low income for a self-employed tradesman.
Were the proceedings necessitated by the failure of a party to comply with an order
This is not strictly applicable because it is not an order of the court; it is a child support assessment that the respondent has not complied with.
As I have said, it is clear that the child support debt has accrued over a period and he has allowed it to accrue over that period. Further, it is clear that he would have received reminders from time to time about the level of that debt. In the normal course of events, the Child Support Agency would have issued letters and statements setting out how much he owed. So while these proceedings have not been necessitated by a failure to comply with an order, they have been a result of the respondent’s failure to meet his child support obligations pursuant to the relevant legislation.
Whether any party has been wholly unsuccessful in the proceedings
In my view, in relation to the strict liability to pay child support, the respondent has been unsuccessful because he has disclosed a willingness to pay the entirety that is owed. However, the Child Support Registrar has been unsuccessful in relation to the enforcement of late payment penalties, at least between now and when (and if) the child support is paid.
So, on the one hand the respondent has been unsuccessful in relation to a fairly large sum of money but the applicant has been unsuccessful in relation to a small sum of money.
Offers made in writing
It is clear that there have been offers.
In general, I get the impression that the Child Support Agency has been less willing to negotiate, at least since the partial hearing in Devonport. Whether or not that is because the respondent put them to the trouble and expense of proving their delegations is only something that one can speculate about.
Conclusions – costs
When I weigh up all these factors, it is my view that the respondent is not entitled to any award of costs. The proceedings were necessitated because he failed to pay his child support obligations. His delegation arguments on 16 May 2007 only resulted in delay in the proceedings, and not success on his part.
On the other hand, the Child Support Agency should be compensated in relation to the costs. However, that is most certainly not to the extent of the $10,000 which the Australian Government Solicitor may or may not charge the Child Support Agency, and not even to the extent of the $5,916.60 that Mr Shears described as an “ambit claim”.
In my view the costs should be as follows in accordance with the Schedule 1 of the Federal Magistrates Court Rules 2001:
Stage 7: Application
$635
Preparation for a half-day hearing
$625
Short mention on 14 May 2007
$205
Half-day hearing on 16 May 2007
$750
Half-day hearing today
$750
Total
$2,965
In relation to the disbursements:
·I will not allow a clerk's fee for filing the enforcement summons;
·I will allow the process serving fee of $30;
·I will allow the claimed photocopying, $86.60; and
·I will not allow the claimed charge for travel, because the Child Support Registrar chose to file proceedings for hearing in Devonport. Had they filed them for hearing in Hobart and the proceedings had been transferred to Devonport, it might have been different.
Consequently, I allow $2,965.00 for the professional costs shown above (at paragraph 46), and $111.60 for disbursements. That makes a total of $3,076.60, or in round figures, a total of $3,075.00 for costs.
Time to pay
I note that the respondent is attempting to sell a property and I would have thought that in the normal course of events, if the price is right, the property should sell within six months. If it does not sell within six months, then the price is not right. In my view six months is an appropriate period of time.
I certify that the preceding forty-nine (49) paragraphs are a true copy of the reasons for judgment of Roberts FM
Associate:
Date:
NOTE: When the orders were taken out by the court on 13 July 2007, Order No. 2 contained a typographical error which incorrectly stated that costs of $3,975 were to be paid by the respondent. Those orders have been amended under the slip rule so that Order No. 2 now reads $3,075.