Child Support Registrar and Bagala

[2010] FMCAfam 363

FEDERAL MAGISTRATES COURT OF AUSTRALIA

CHILD SUPPORT REGISTRAR & BAGALA [2010] FMCAfam 363

CHILD SUPPORT – Enforcement – practice and procedure – right of the child support agency to continue to enforce.

Child Support (Registration and Collection) Act 1988
Family Law Rules1984, O.33 r.2(4B)
Federal Magistrate Court Rules 2001, r.13.03A, 16.05A

Bagala & Bagala [2009] FMCAfam 953
Chamberlain v the Deputy Commissioner for Taxation [1988] HCA 21; (1988) 164 CLR 502; (1988) 78 ALR 271; (1988) 62 ALJR 324; (1988) 88 ATC 4323; (1988) 19 ATR 1060
Child Support Registrar & Gillies [2009] FMCAfam 34
Deputy Child Support Registrar & Harrison [1995] FamCA 137; (1996) FLC ¶92-656; (1995) 128 FLR 349; (1995) 20 Fam LR 101
Deputy Child Support Registrar & Willemse [1993] FamCA 34; (1994) FLC ¶92-510; (1993) 121 FLR 377
General Credits Limited v Beattie [1982] VR 551
International General Electric Co of New York v Commissioner of Customs and Excise [1962] Ch 784
R v IRC:  ex parte Rossminster Limited [1980] AC 952; [1980] 1 All ER 80
Re A Debtor; ex parte Smith [1902] 2 KB 260
Re Broughton (1917) 17 SR (NSW) 29
Rogers v Legal Services Commissioner (1995) 64 SASR 572
Walton v Gardiner[1993] HCA 77; (1993) 177 CLR 378; (1993) 112 ALR 289; (1993) 67 ALJR 485

Applicant: CHILD SUPPORT REGISTRAR

Respondent: MR BAGALA

File Number: MLC 1732 of 2009

Judgment of: Riethmuller FM

Hearing date: 16 March 2010

Date of Last Submission: 16 March 2010

Delivered at: Melbourne

Delivered on: 16 March 2010

REPRESENTATION

Counsel for the Applicant: Ms Tulloch of Counsel

Solicitors for the Applicant: Australian Government Solicitors

Counsel for the Respondent: Mr Bacon of Counsel

Solicitors for the Respondent: Manby and Scott

ORDERS

1. The Orders of 9 September 2009 dismissing the enforcement application be set aside.

IT IS NOTED that publication of this judgment under the pseudonym Child Support Registrar & Bagala is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
MELBOURNE

MLC 1732 of 2009

CHILD SUPPORT REGISTRAR

Applicant

And

MR BAGALA

Respondent

REASONS FOR JUDGMENT

(As Revised from Transcript)

1. This is an application by the Child Support Registrar to discharge orders made on 9 September 2009 dismissing the Child Support Registrar’s application for the enforcement of a child support debt and removing the matter from the pending cases list.

2. That order was made following the handing down of judgment in this matter in Bagala & Bagala [2009] FMCAfam 953, with respect to a departure application. At the conclusion of handing down judgment it was apparent that none of the parties other than the payer were present and therefore no further orders could be made. The application was therefore dismissed in accordance with r.13.03A(c).

3. On 6 April 2009 orders were made including a declaration declaring that the payer owed the Child Support Registrar the sum of $11,526.11 as at 3 April 2009.  Further hearing of the enforcement summons was adjourned and various interim orders were made to preserve property and require monthly payments with respect to the debt.  The payer’s interests in a real property was charged in favour of the Child Support Registrar pursuant to a charging order.

4. Further enforcement was not proceeded with at that time to allow the payer the opportunity to bring proceedings to attempt to vary the child support assessment which was the underlying basis of the debt.  It was those proceedings that were dismissed in Bagala & Bagala [2009] FMCAfam 953.

5. It transpires that the Child Support Registrar, through administrative error, was not given notice of the listing of the matter for judgment on the departure application and further determination of the enforcement summons on 9 September 2009.  The Registrar therefore seeks to reinstate the enforcement application.  The payer opposes those orders on two bases:

   a)Arguing that there is a res judicata or issue estoppel;  and

   b)Arguing that, in the event that there is not res judicata or issue estoppel, it would be an abuse of process.

6. The court has power to set aside an order pursuant to r.16.05(a).  In this case, there is no question that the order was made without the Child Support Registrar being accorded procedural fairness, through no fault of the Registrar.  Prima facie, it is appropriate to set aside that order unless the payer has suffered prejudice or would suffer prejudice.  The payer argues that the prejudice suffered is that the appeal period, for the purposes of appealing Bagala & Bagala [2009] FMCAfam 953, has since expired, and that he relied upon the dismissal order as indicating that the Child Support Registrar would not be able to further pursue the debt.

7. The payer set out in an affidavit that he spoke with the solicitor who appeared for him in the departure case who advised him that he did not know with any certainty what the result of the orders would be.  He says that he was advised to wait and see if the Child Support Registrar appealed the enforcement order and if so, that he could lodge an appeal with respect to the departure order application at that time.

8. The applicant was also advised that if the Child Support Registrar did not appeal the enforcement order then the matter would be at an end.  If the payer’s advice in this regard were correct, that would be a matter which would result in him potentially suffering some prejudice. 

9. It is therefore appropriate to consider whether or not the Child Support Registrar would be entitled to bring a fresh enforcement summons with respect to the child support debt.  If the Registrar is entitled to bring a fresh enforcement summons then there appears to be little prejudice in setting aside the order of 9 September 2009.  If the Registrar is not entitled to bring a fresh enforcement summons then the applicant has arguably suffered the prejudice of losing the right to appeal without obtaining leave to extend time.

10. The orders made under r.13.03A to dismiss the enforcement summons were not determinations of the matter on its merits.  Rather, they were in the nature of striking out an application for want of prosecution, or where a party discontinues a matter.  This issue is discussed in some detail by Lander J in Rogers v Legal Services Commissioner (1995) 64 SASR 572 at 594, 596. His Honour outlines a number of authorities which confirm the proposition that a dismissal order of this type is not an order made on the merits of the case, and therefore does not amount to a res judicata.

11. As there was no specific finding of fact involved in the order, save the non-appearance of the Child Support Registrar on that date (which was not through fault of the Registrar) it could not be argued that there was any issue estoppel as the court had not made any findings with respect to a specific issue between the Registrar and the respondent.

12. It was argued by the payer that the earlier orders, because they had a cover sheet which described them as “interim orders”, were entirely interim orders.  A perusal of the terms of the orders shows that that was not the case.  First, they contain an order that was a declaration.  The declaration made earlier in the proceedings was clearly a final order, as a declaration must by its very nature be final:  see International General Electric Co of New York v Commissioner of Customs and Excise [1962] Ch 784 and R v IRC: Ex parte Rossminster Limited [1980] 1 All ER 80; [1980] AC 952 at 976 per Denning, LJ, 1007 per Viscount Dilhorne, and 1014 per Diplock LJ.

13. It must also be borne in mind that the nature of the process issued by the Child Support Registrar is of a ‘double-barrelled’ kind: see Deputy Child Support Registrar & Harrison (1996) FLC ¶92-656; (1995) 128 FLR 349; (1995) 20 Fam LR 101 at 82,752. That is, it is a proceeding seeking enforcement of the debt, analogous to a writ claiming a debt, coupled with proceedings for enforcement of the judgment or orders obtained on the primary process. This is why it is essential that a declaration as to the debt be made and an order for payment (the orders analogous to a verdict and judgment in this jurisdiction as a result of O.33 r.2(4B) of the Family Law Rules1984) prior to any consequential orders for enforcement. That is: judgment first, enforcement or execution of the terms of the judgment second. 

14. The order analogous to a verdict had been obtained by the Child Support Registrar when obtaining the declaration of the debt that was owing to the Child Support Registrar.  The issues then had turned solely to question of enforcement.  Some orders for enforcement had been made, such as orders for payment and the charging order enabling the Registrar to obtain a charge over the payer’s property.  Further enforcement orders, such as an order for sale of property or orders analogous to the common law writ of fieri facias (fi. fa.) were not made at that time, pending the payer bringing alternative proceedings in an attempt to alter the underlying debt through a departure application with the Child Support Registrar. 

15. The nature of the proceedings that were formally dismissed was then an application solely for execution, not a claim for principle relief.  There is no question that execution can be brought on multiple occasions in an attempt to enforce a judgment: if a debt is partially paid subsequent writs of fi. fa. could only be issued for the balance outstanding:  Re A Debtor; ex parte Smith [1902] 2 KB 260.

16. In cases where subsequent execution processes are issued they take priority according to the date of issue: see Re Broughton (1917) 17 SR (NSW) 29 and General Credits Limited v Beattie [1982] VR 551.

17. There is no res judicata that arises with respect to any execution process: a range of mechanisms are available under the court rules to enforce a judgment.  Processes of execution are available to a judgment creditor until such time as the judgment is paid.  It is not uncommon for a judgment creditor to need to resort to a variety of methods of enforcing a judgment or, ultimately, achieve recovery of the judgment debt.

18. These issues have previously been the subject of judgment by Sexton FM in Child Support Registrar & Gillies [2009] FMCAfam 34 where the Child Support Registrar brought enforcement proceedings in circumstances where enforcement proceedings had been brought some years before but had not resulted in the recovery of the outstanding debt. Her Honour concluded that the Child Support Registrar could bring further enforcement proceedings.

19. The payer in the present case attempted to rely upon Chamberlain v the Deputy Commissioner for Taxation [1988] HCA 21; (1988) 164 CLR 502; (1988) 78 ALR 271; (1988) 62 ALJR 324; (1988) 88 ATC 4323; (1988) 19 ATR 1060 to argue that res judicata or estoppel arose. As Sexton FM pointed out in Gillies’ case, Chamberlain’s case concerned a claim brought by the Deputy Commissioner of Taxation for a sum less than the amount that was owing.  The claim was brought by way of writ, for the outstanding taxation assessments.  Judgment was entered, together with costs.  When the Commissioner of Taxation realised the error, proceedings issued seeking to recover the balance of the claim, based upon the same taxation assessments.  It was found that the cause of action, that is the claim based upon the particular taxation assessment, had merged in judgment.  This was not an enforcement case, but a case with respect to a primary claim for a judgment on the tax liability alleged by the Commissioner of Taxation, not enforcement of a judgment debt.  In this respect it is clearly distinguishable as it relates to a different stage in the litigation process.

20. I also note that in Deputy Child Support Registrar & Harrison [1995] FamCA 137; (1996) FLC ¶92-656; (1995) 128 FLR 349; (1995) 20 Fam LR 101 the Full Court of the Family Court had cause to consider a situation where the Child Support Registrar had brought enforcement proceedings in the state courts, and then sought to bring enforcement proceedings in the Family Court.  In that case the Full Court said:

    [27] The scheme of the legislation is designed to provide the maximum capacity to the Agency to ensure thatchild support or maintenance due and payable is in fact collected where possible. Subject to the usual law applicable to abuse of process, the legislature has provided a scheme enabling proceedings for the recovery of a debt to be taken in either a court exercising civil jurisdiction or in the Family Court, or both. So long as the debt remains unrecovered steps may be taken for its enforcement in either court irrespective of the fact that the debt, which was originally recoverable simply as a debt by operation of s.30 of the Collection Act, had become a judgment debt by reason of a judgment having been obtained for it in a court exercising civil jurisdiction. The provisions of Order 33 sub-rules 2 (11) and (12) alert the court to a possibility of abuse of process and guard against the risk of collecting the same debt twice.

21. In Deputy Child Support Registrar & Willemse [1993] FamCA 34; (1994) FLC ¶92-510; (1993) 121 FLR 377 McGrath R concluded that the Registrar could be prevented, in situations where a judgement had been obtained in a state court, from having “two bites of the cherry”. However, the Full Court in Deputy Child Support Registrar & Harrison [1995] FamCA 137; (1996) FLC ¶92-656; (1995) 128 FLR 349; (1995) 20 Fam LR 101 said:

    [30] In our view theRegistrar is (subject to abuse of process principles) entitled to continue chewing on the fruit until it has been devoured. The liable parent is obliged to pay the child support as ordered or assessed. The courts may act in aid of each other in ensuring the monies are paid rather than seeking to place procedural barriers in the path of the person attempting to collect same.

22. I therefore find that it is presently open to the Registrar to commence fresh enforcement proceedings against the respondent.

23. This leaves the argument that there may be an abuse of process if the Child Support Registrar were to again proceed to attempt to recover the debt from the payer.  It is difficult to understand how an abuse of process can be said to have arisen.  The debt remains due and owing.  The payee could independently bring proceedings to recover the debt.  The Registrar has not brought a suit to recover the debt in more than one court at the same time. 

24. This attempt to enforce is not brought in the face of a finding that the Registrar is not entitled to enforce, nor a finding that it would be inappropriate for the Registrar to enforce.  This is not a claim that is brought after so long that the payer would be disadvantaged in placing his case before the court. I need not consider all of the possible circumstances that may found an argument that there is an abuse of process.

25. The question of whether or not to stay a case on the basis that it is an abuse of process is a matter of weighing the fairness of the proceedings to the parties, as discussed in Walton v Gardiner[1993] HCA 77; (1993) 112 ALR 289; (1993) 67 ALJR 485; (1993) 177 CLR 378 at 398. I am not persuaded that there is any basis upon which it could be said that it is appropriate to stay any further enforcement by the Child Support Registrar of the debt due to the Child Support Agency for the child support and penalties, the subject of the declaration earlier made in this case. I note that whilst the debt is due to the Registrar it is money that is only for child support that will be paid by the Agency once the respondent pays the Agency.

26. As it remains open to the Child Support Registrar to issue further enforcement proceedings, relying on the declaration that was made, it is difficult to see the basis upon which the respondent could be said to be prejudiced by reinstating the enforcement application.  Indeed, it even remains open to the Child Support Agency to bring administrative enforcement proceedings pursuant to their various powers under the Child Support (Registration and Collection) Act 1988.

27. It is for these reasons that I made the orders setting aside the dismissal order to reinstate the enforcement application, in exercise of the court’s powers under r.16.05.

    [Following determination of this question the parties negotiated consent minutes for appropriate enforcement orders]

I certify that the preceding twenty-seven (27) paragraphs are a true copy of the reasons for judgment of Riethmuller FM

Associate:  Katherine Sudholz

Date:  13 April 2010