FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1) APPELLATE JURISDICTION
Cao & Trong [2023] FedCFamC1A 40
Appeal from: Cao & Trong [2022] FedCFamC1F 754 Appeal number(s): NAA 252 of 2022 File number(s): MLC 2555 of 2016 Judgment of: AUSTIN, WILLIAMS & HOWARD JJ Date of judgment: 30 March 2023 Catchwords: FAMILY LAW – APPEAL – CHILD SUPPORT – Majority judgment – Setting aside a binding child support agreement – Appeal against orders providing for a portion of funds held in trust to be paid to the Child Support Registrar – Where the appellant sought to set aside a binding child support agreement, pursuant to s 136 of the Child Support (Assessment) Act 1989 (Cth) (“the Assessment Act”), or a declaration the agreement was not binding because of non-compliance with s 80C(2)(c) of the Assessment Act – Where the primary judge fell into error in not hearing the totality of the appellant’s case – Inconsistency within the reasons – Lack of reasons given for findings – Errors of law – Errors of fact – Leave to appeal granted – Appeal allowed – Matter remitted for rehearing – Costs certificates ordered for the appeal and rehearing. Legislation: Child Support (Assessment) Act 1989 (Cth) Pt VII, Div 4, ss 80C, 92, 118, 136
Child Support (Registration and Collection) Act 1988 (Cth) s 116
Family Law Act 1975 (Cth) s 79
Federal Circuit and Family Court of Australia Act 2021 (Cth) ss 28, 35
Federal Proceedings (Costs) Act 1981 (Cth) ss 6, 8, 9
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) rr 1.31, 13.39
Cases cited: Allesch v Maunz (2000) 203 CLR 172; [2000] HCA 40
Australia Competition and Consumer Commission v Lux Distributors Pty Ltd [2013] FCAFC 90
Australian Competition and Consumer Commission v Quantum Housing Group Pty Ltd (2021) 285 FCR 133; [2021] FCAFC 40
Australian Securities and Investment Commission v Kobelt (2019) 267 CLR 1; [2019] HCA 18
Balenzuela v De Gail (1959) 101 CLR 226; [1959] HCA 1
Bhatt & Acharya (Costs) [2017] FamCAFC 71
Blomley v Ryan (1954) 99 CLR 362; [1956] HCA 81.
CDJ v VAJ (1998) 197 CLR 172; [1998] HCA 76
Child Support Registrar v AFS19 (2021) 287 FCR 52; [2021] FCAFC 207
Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447; [1983] HCA 14
Commissioner for Railways (NSW) v Agalianos (1955) 92 CLR 390; [1955] HCA 27
Conway v The Queen (2002) 209 CLR 203; [2002] HCA 2
Coroneo v Kurri Kurri (1934) 51 CLR 328; [1934] HCA 21
Dakhyl v Labouchere [1908] 2 K.B. 325
Eames & Eames (2018) FLC 93-866; [2018] FamCAFC 204
Fox v Percy (2003) 214 CLR 118; [2003] HCA 22
Hughes & Hughes [2018] FamCA 1079
Lane & Nichols (2016) FLC 93-750; [2016] FamCAFC 234
Medlow & Medlow (2016) FLC 93-692; [2016] FamCAFC 34
Piper & Talbot & Anor [2021] FCCA 511
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- Cao & Trong [2023] FedCFamC1A 40
- Case
- [2023] FedCFamC1A 40
- Decision Date
CaseChat Overview and Summary
In Cao & Trong, the appellant and respondent, who were married and subsequently divorced, had a complex dispute involving parenting arrangements, property settlement, child support agreements, and taxation liabilities. The appellant operated a successful business during the marriage, which resulted in substantial family assets. However, significant liabilities, including taxation debts, remained at the time of separation. The appellant filed for parenting orders, while the respondent sought both parenting orders and property adjustment. Child support agreements were entered into, but the appellant challenged their validity on legal grounds.
The legal issues before the court included the validity of the child support agreements under the relevant legislation, the disposition of the remaining family assets, and the enforcement of the child support debt. The court was also required to address the applications for spousal maintenance and an injunction against the appellant leaving Australia. The Commissioner of Taxation intervened to claim outstanding tax and penalties. The Child Support Registrar sought enforcement of the appellant's child support liability.
The court found that the primary judge did not properly determine the appellant's application to set aside the child support agreements, leading to a substantial injustice. The court concluded that leave to appeal should be granted, and the appeal allowed. The matter was to be remitted for rehearing to properly determine the application under s 136 of the Assessment Act, along with the other unresolved applications. The court decided that remitting all outstanding applications for rehearing together at first instance was the better course, given the complexity and interconnectivity of the issues.
The final orders included granting leave to appeal, allowing the appeal, and remitting the matter for rehearing. The appeal in a case was dismissed, and costs were awarded to the appellant. The court directed that the respondent pay party/party costs of $36,747 due to the respondent's failure to concede the appeal earlier.
The legal issues before the court included the validity of the child support agreements under the relevant legislation, the disposition of the remaining family assets, and the enforcement of the child support debt. The court was also required to address the applications for spousal maintenance and an injunction against the appellant leaving Australia. The Commissioner of Taxation intervened to claim outstanding tax and penalties. The Child Support Registrar sought enforcement of the appellant's child support liability.
The court found that the primary judge did not properly determine the appellant's application to set aside the child support agreements, leading to a substantial injustice. The court concluded that leave to appeal should be granted, and the appeal allowed. The matter was to be remitted for rehearing to properly determine the application under s 136 of the Assessment Act, along with the other unresolved applications. The court decided that remitting all outstanding applications for rehearing together at first instance was the better course, given the complexity and interconnectivity of the issues.
The final orders included granting leave to appeal, allowing the appeal, and remitting the matter for rehearing. The appeal in a case was dismissed, and costs were awarded to the appellant. The court directed that the respondent pay party/party costs of $36,747 due to the respondent's failure to concede the appeal earlier.
Orders
Orders of the court
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Background
Background to the litigation
For the reasons that follow, leave to appeal will be granted and the appeal must be allowed.BACKGROUND The appellant and the respondent cohabited from 2003, married in 2010, separated in March 2016 and divorced in August 2017. Their three children were born in 2004, 2010 and 2013. The appellant during the marriage operated a business in Australia and internationally. He also engaged in extensive share trading and was a managing director of an ASIC listed company. As a result of the appellants’ business acumen the family enjoyed an opulent lifestyle with substantial assets. However, during the marriage the appellant accrued taxation liabilities arising from his commercial activities which remained outstanding at separation. On 24 March 2016, shortly after separation, the appellant filed an Initiating Application seeking parenting orders. On 5 August 2016, the respondent filed an Amended Response seeking both parenting orders and an adjustment of property pursuant to s 79 of the Family Law Act 1975 (Cth) (“the Act”). As from 21 November 2016, the appellant was assessed as liable to pay child support in relation to the three children, with the liability registered for collection as a registrable maintenance liability by the Child Support Registrar. Concurrently with the court proceedings, the appellant and the respondent entered into three child support agreements. The first version was executed on 15 November 2017, it was later amended by a second version executed on 12 February 2018. There was no copy of the second version in evidence, but the trial proceeded on the basis the second version was the same as the third version, minus the handwritten amendments. The third version of the child support agreement was the same typed text as the second version and dated 12 February 2018, with handwritten amendments to it made on 1 March 2018 (Transcript 27 May 2021, p.256 lines 1–37). The first agreement dated 15 November 2017 was sent to the Child Support Registrar on 16 November 2017, but was not accepted as it was not accompanied by the requisite application. On 3 April 2018, the third agreement was accepted for registration by the Child Support Registrar as a binding child support agreement. The consequence of acceptance of the agreement was that the appellant became liable to pay child support from:(a)3 April 2018 to 31 December 2018 at a monthly rate of $15,000; and(b)1 January 2019 to 2 October 2020 at a monthly rate of $15,309. At the date of the commencement of the trial in March 2020, the family assets had been significantly depleted. The only remaining asset was $3,099,868 held in a controlled monies account from the balance of proceeds of sale of a property (at [89]). The applications before the primary judge at trial were as follows:(a)an Application under s 79 of the Act by the appellant seeking the funds in the controlled monies account be paid to discharge his taxation liability, with any surplus to be equally divided between the parties;(b)a Response by the respondent seeking various orders pursuant to s 79 of the Act, including the funds in the controlled monies account be paid to her lawyer for legal costs and the balance to be paid to the respondent;(c)the appellant’s application for a declaration that the three child support agreements were not binding because of non-compliance with s 80C(2)(c) of the Assessment Act and in the alternative, to set aside the three agreements pursuant to s 136(2) of the Assessment Act;(d)the applications by the respondent for departure orders under Pt VII, Div 4 of the Assessment Act in the event the binding child support agreement was set aside, spousal maintenance and an injunction restraining the appellant from leaving Australia;(e)the claim by the Commissioner of Taxation for outstanding tax and penalties of approximately $7,000,000. The Commissioner of Taxation intervened in the proceedings on 8 August 2016; and(f)an Application in a Case filed by the Child Support Registrar on 20 December 2019, seeking orders for payment of the appellant’s outstanding registered maintenance liability out of the matrimonial assets. The child support debt then due was $240,248 arrears of child support and $14,570 in late payment penalties.
Evidence
Evidence Before The Court
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Decision
Reasons for decision
For the reasons that follow, we intend to remit the matter for rehearing and the Application in an Appeal will be dismissed.CONCLUSION Given the merit in grounds 1–4, we are satisfied that substantial injustice would be suffered by the appellant if he were denied an opportunity to have his applications pursuant to s 136 of the Assessment Act properly determined. Leave to appeal will be granted and the appeal allowed.DISPOSITION In the event the appeal succeeded, the appellant primarily sought for his application to be reheard by this Court and for orders to set aside the binding child support agreements pursuant to s 136 of the Assessment Act. Counsel for the appellant contended the weight of evidence in support of his allegations as to unconscionable or other conduct is so overwhelming, this Court can and should make the orders sought. As to the respondent’s application for departure from an administrative assessment of child support (application pursuant to s 118 of the Assessment Act), which the primary judge did not determine, the respondent could avail herself of the administrative assessment, review and appeal process. The primary judge did not address the disposition of the Child Support Registrar’s enforcement application. Counsel’s secondary submission was this Court should determine the application pursuant to s 136 of the Assessment Act and remit any residual applications. As the respondent was not represented in the appeal, she relied on her Summary of Argument filed 27 February 2023 and did not wish to be further heard. Her Summary of Argument contends an order setting aside the agreements requires a review of the evidence, which could be undertaken with the assistance of the outlines of submissions of both the appellant and respondent, which were before the primary judge. The Child Support Registrar did not take a substantive position about whether this Court should determine the appellant’s application to set aside the agreements. The appellant and respondent both made comprehensive submissions to the primary judge about determination of the discrete application brought under s 136(2) of the Assessment Act, but it was only one aspect of the overall dispute concerning the former spouses, the Child Support Registrar and the Commissioner of Taxation. When it is necessary to remit all of the remaining applications for rehearing, comprising the Child Support Registrar’s child support enforcement application, the respondent’s contingent application for child support departure orders, and the respondent’s unresolved applications for spousal maintenance and an injunction restraining the appellant’s departure from Australia, we see no advantage in separately rehearing the appellant’s application for relief under s 136(2) of the Assessment Act. We are persuaded that remitter of all outstanding applications for rehearing together at first instance is the better course.COSTS If the appeal succeeded, counsel for the appellant initially sought the respondent pay indemnity costs of $52,308. Indemnity costs were not pressed and party/party costs of $36,747 were subsequently sought. It was submitted an order for costs was justified because the legal and factual errors identified in the reasons for judgment were so obvious, the respondent should have conceded the appeal at a much earlier point in time.
Ratio Decidendi
Legal Principle Established
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