Child Support Registrar and Farley & Anor
[2011] FamCAFC 207
•24 October 2011
FAMILY COURT OF AUSTRALIA
| CHILD SUPPORT REGISTRAR & FARLEY AND ANOR | [2011] FamCAFC 207 |
| FAMILY LAW – APPEAL – APPLICATION FOR LEAVE TO APPEAL – Application for leave to appeal under s 107A of the Child Support (Registration and Collection) Act 1988 (Cth) – where leave should be granted because of the importance of the issues raised in the proposed appeal. FAMILY LAW – APPEAL – CHILD SUPPORT – appeal by Child Support Registrar against orders of a Federal Magistrate setting aside a decision of the Social Security Appeals Tribunal – where the second respondent payer father was paying child support for two children but subsequently found not to be the biological father of one of the children – where the first respondent mother was not entitled to administrative assessment of child support for that child – where the first respondent and second respondent had entered into consent orders providing that there be no recovery of amounts paid under s 143 of the Child Support (Assessment) Act 1989 (Cth) – where the Child Support Registrar amended the Register by crediting the amount by which the liability of the second respondent father was reduced as a result of the assessment only being for one child – where the Federal Magistrate found that the Child Support Registrar had not given effect to a declaration pursuant to s 107 of the Child Support (Assessment) Act 1989 (Cth) – where the Federal Magistrate found the Child Support Registrar erred in crediting the child support payments made by the second respondent father for the child for whom he did not have obligations to his liability for the child for whom he had obligations – no appealable error established – appeal dismissed. |
| Acts Interpretation Act 1901 (Cth) |
| DRP & AJL [2004] FMCAfam 440 Malak & Mairie [2011] FamCAFC 134 Mercer & Child Support Agency (2004) 137 FCR 125 |
| APPELLANT: | Child Support Registrar |
| FIRST RESPONDENT: | Ms Farley |
| SECOND RESPONDENT: | Mr Haley |
| FILE NUMBER: | SYC | 2028 | of | 2009 |
| APPEAL NUMBER: | EA | 146 | of | 2009 |
| DATE DELIVERED: | 24 October 2011 |
| PLACE DELIVERED: | Melbourne |
| PLACE HEARD: | Sydney |
| JUDGMENT OF: | Bryant CJ, Finn & Strickland JJ |
| HEARING DATE: | 3 February 2011 |
| DATE OF LAST SUBMISSIONS: | 28 February 2011 |
| LOWER COURT JURISDICTION: | Federal Magistrates Court |
| LOWER COURT JUDGMENT DATE: | 3 November 2009 |
| LOWER COURT MNC: | [2009] FMCAfam 1151 |
REPRESENTATION
| COUNSEL FOR THE APPELLANT: | Ms Graycar |
| SOLICITOR FOR THE APPELLANT: | Australian Government Solicitor |
| COUNSEL FOR THE FIRST RESPONDENT: | Mr Kennett SC |
| SOLICITOR FOR THE FIRST RESPONDENT: | Legal Aid NSW |
| SOLICITOR FOR THE SECOND RESPONDENT: | Self represented |
Orders
The application for leave to appeal is granted.
The appeal is dismissed.
The Child Support Registrar pay the costs of the mother of and incidental to the appeal such costs to be as assessed in default of agreement.
IT IS NOTED that publication of this judgment under the pseudonym Child Support Registrar & Farley & Haley is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
| THE FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT SYDNEY |
Appeal Number: EA 146 of 2009
File Number: SYC 2028 of 2009
| Child Support Registrar |
Appellant
And
| Ms Farley |
First Respondent
And
| Mr Haley |
Second Respondent
REASONS FOR JUDGMENT
Bryant CJ
Introduction
This is an appeal from a decision of Sexton FM setting aside a decision of the Social Security Appeals Tribunal (“SSAT”). The decision of the SSAT supported the manner in which the Child Support Registrar (“the Registrar”) had amended the Child Support Register (“the Register”) to give effect to a declaration under s 107 of the Child Support (Assessment) Act 1989 (Cth) (“the Assessment Act”) made by the Federal Magistrates Court. The declaration declared that the First Respondent (“the mother”) was not entitled to administrative assessment of child support for the child H as a consequence of the Second Respondent (“the father”) not being a parent of that child. There has previously been an assessment in place for H as well as another child, T.
Sexton FM found the Registrar by her actions had not given effect to s 107 of the Assessment Act as required.
Jurisdiction
The jurisdiction of the Full Court or of a single judge of the Family Court exercising appellate jurisdiction to hear appeals from a Federal Magistrates Court appeal from the SSAT is not as clear as it might be and warrants clarification.
Section 110B of the Child Support (Registration and Collection) Act 1988 (Cth) (“the Registration and Collection Act”) provides:
A party to a proceeding before the SSAT under Part VIIA may appeal to a court having jurisdiction under this Act, on a question of law, from any decision of the SSAT in that proceeding.
The Courts which have jurisdiction under the Registration and Collection Act are earlier defined in s 104 which is in the following terms:
Jurisdiction is conferred on the Family Court and the Federal Magistrates Court and, subject to subsection (7), the Supreme Court of the Northern Territory, and each Family Court of a State is invested with federal jurisdiction in relation to matters arising under this Act.
Section 110E then somewhat curiously provides:
The jurisdiction of a court to hear and determine appeals instituted in that court in accordance with this Subdivision may be exercised by the court constituted:
(a) as a Full Court (if the court can be constituted as a Full Court); or
(b)by a single judge (including a Federal Magistrate) or by a single magistrate.
The question then arises as to whether an appeal lies from a Federal Magistrate who has determined an appeal from an SSAT decision.
The appellate jurisdiction of the Family Court under the Registration and Collection Act is defined in s 106(1) which is in the following terms:
The Family Court has jurisdiction with respect to matters arising under this Act in relation to which:
(a)applications for leave to appeal referred to in section 107, 107A or 110 are made; and
(b)appeals referred to in section 107, 107A or 110 are instituted.
Of the various sections mentioned in s 106(1), the relevant section is 107A. Subsection 107A(1) provides:
An appeal lies, with the leave of the Family Court, to the Family Court from:
(a)a decree of the Federal Magistrates Court exercising original jurisdiction under this Act; or
(b)a decree or decision of a Federal Magistrate exercising original jurisdiction under this Act rejecting an application that he or she disqualify himself or herself from further hearing a matter.
However, an appeal does not lie to the Family Court from a decree of the Federal Magistrates Court exercising jurisdiction under section 72Q.
Section 107A(2) then provides that the jurisdiction of the Family Court in relation to an appeal under subsection (1) is to be exercised by a Full Court unless the Chief Justice considers it appropriate for the jurisdiction in relation to the appeal to be exercised by a single judge.
The “original jurisdiction” of the Federal Magistrates Court is defined in s 10(2) of the Federal Magistrates Act 1999 (Cth) to include jurisdiction to determine appeals from tribunals, and is as follows:
The original jurisdiction of the Federal Magistrates Court includes any jurisdiction vested in it to hear and determine appeals from decisions of persons, authorities or tribunals other than courts.
It therefore appears by this complex route that the Full Court of this Court or a single judge of the Family Court exercising appellate jurisdiction can hear an appeal from a decision of a Federal Magistrate exercising jurisdiction to hear and determine an appeal on a question of law from the SSAT.
Because this jurisdiction in the Full Court of the Family Court or in a single judge of the Family Court exercising appellate jurisdiction has to be sourced in
s 107A(1) (rather than in any provisions about SSAT appeals in s 110A to
s 110K), the better view must be that leave to appeal is required.
Short background
The mother had five children with the father being named as the parent of two of them, T and H. On 22 August 2000 the Child Support Agency accepted the mother’s application for a child support assessment in respect of T and H and proceeded to assess and collect child support for them from the father.
In 2007 DNA testing revealed that H was not the father’s biological child.
On 24 October 2007 the Federal Magistrates Court made declarations and orders by consent to the effect that:
· The father was not the father of H (order 1);
· That pursuant to s 107(1) of the Assessment Act, the mother was not a person entitled to administrative assessment of child support for H payable by the father (order 2).
Order 3 of the October 2007 consent orders provided that there be no order under s 143 of the Assessment Act (which provides for recovery of amounts between the parties, paid where there was no liability to make that payment). A notation on the orders indicated “that the parties intend these orders to extinguish all matters under the [Assessment Act] in relation to the child [H]… and the [father] cannot pursue reimbursement for any child support paid to the [mother] for the child.”
On 8 November 2007 the Registrar varied the Register to give effect to the
s 107 declaration made on 24 October 2007. The father was significantly in arrears of child support for T, as well as H when that liability was extant. The Registrar’s action had the effect of reducing child support arrears for T, a child for whom the father had obligations, by crediting to those arrears all payments made by the father for T and H.
On 14 April 2008 the mother lodged an objection and contended that the Registrar was wrong to credit payments made by the father for both T and H against child support arrears owed for T.
On 13 June 2008 an Objections Officer decided there had been an error in the calculation but decided that the Registrar had applied the correct principles in giving effect to s 107(5) of the Assessment Act and disallowed the objection. In particular, the Objections Officer stated:
The effect of the court order was that all payments that have been collected by the CSA are applicable to the registrable maintenance liability for [T] as no s 143 order was made to repay any money collected in relation to [H].
On 3 September 2008 the mother lodged an appeal with the SSAT seeking a review of the Objection Officer’s decision.
On 26 February 2009 the SSAT affirmed the Objection Officer’s decision.
On 7 April 2009 the mother filed a Notice of Appeal in the Federal Magistrates Court in relation to the SSAT’s decision.
On 3 November 2009 Sexton FM handed down her decision and made the following orders:
(1)The decision of the Social Security Appeals Tribunal dated
26 February 2009 be set aside.(2)The [mother’s] objection against the Child Support Registrar crediting payments made for the child [H] be allowed.
(3)The Child Support Registrar re-calculate the [father’s] child support liability according to law.
(4)Liberty to apply for a period of 3 months in relation to the implementation of these orders.
Sexton FM determined that the only means by which the Registrar could have recovered child support with respect to the child H for whom the father had no liability was through s 143 of the Assessment Act. This was specifically excluded in the orders made by consent and her Honour thus found that the father had no child support liability for H at any time and by crediting child support paid for H to arrears payable for T the Registrar recovered the father’s overpayment for H which was not permissible under the legislation.
The Registrar seeks leave to appeal against the decision of Sexton FM on the grounds set out in the amended Notice of Appeal filed on 7 October 2010.
The mother took part in the appeal, was represented by Counsel and filed submissions. The father indicated in a letter to the Court dated 25 March 2010 that he did not intend to take part in the appeal and was content to rely upon the arguments put by the Registrar which coincided with his interests.
At the outset of the appeal the Court accepted, without objection, the following documents to be treated as being part of the Appeal Book:
(a)A letter dated 9 September 2007 from Bishops Barristers and Solicitors, then acting for the father, to the Child Support Registrar, such document being annexed to an affidavit of Ms F, a solicitor from Australian Government Solicitor acting for the Child Support Registrar, filed on 28 October 2010;
(b)A letter dated 25 September 2007 from the Child Support Agency to the Child Support Service representing the mother.
It was agreed that both of these documents had been before the Federal Magistrate but in the end nothing turned on them.
Relevant legislation
In order to deal with the submissions of Counsel for the Registrar it is necessary to understand the legislative scheme under which the relevant child support sections operate.
Sections 36 and 37 of the Assessment Act provide a formula by which to work out the amount of child support payable based on the number of children for whom the payer is responsible. Since the original decision, the provisions of both the Registration and Collection Act and the Assessment Act have been amended but at the relevant time (13 June 2008, the date of the decision of the Objection Officer), s 36(1) of the Assessment Act provided:
The annual rate of the child support payable, in relation to a day in a child support period, by a liable parent for the child, or all of the children, for whom child support is payable by the liable parent is the amount calculated, in relation to the liable parent in relation to that day, using the formula [set out in the Act]. (My emphasis)
Section 67(1) of the Assessment Act at the same time provided:
If, in relation to a day in a child support period, child support is payable by a liable parent to a carer entitled to child support for 2 or more children, any administrative assessment of the child support payable by the liable parent to the carer entitled to child support in relation to the day is to relate to all of the children and not to any of the children separately. (My emphasis)
Section 107 of the Assessment Act relevantly provided:
(1)Where the Registrar accepts a carer application for administrative assessment of child support for a child, the person from whom the application sought payment of child support may, subject to subsection (1A), apply to a court having jurisdiction under this Act for a declaration that the applicant was not entitled to administrative assessment of child support for the child payable by the person because the person is not a parent of the child concerned.
…
(4)The court may grant the declaration if the court is satisfied that the applicant was not entitled to administrative assessment of child support for the child because the person from whom the application sought payment is not a parent of the child.
(5)If the court grants the declaration, the application for administrative assessment of child support is to be taken never to have been accepted by the Registrar.
(6)If the court grants the declaration, the court must, as soon as practicable, consider making an order under section 143. (My emphasis)
If an amount of child support has been paid by a payer to a payee and the payer is not liable or subsequently becomes not liable to pay the amount to the payee, the amount may be recovered from the payee in a Court having jurisdiction under the Act (s 143(1) Assessment Act). The Court has a discretion when exercising its powers under this section to make such orders in relation to the payee as it considers just and equitable for the purposes of adjusting or giving effect to the rights of the parties and the child concerned (s 143(3) Assessment Act).
In considering whether to make an order under s 143 the Court must have regard to the following matters (s 143(3B) Assessment Act):
(a)whether the payee or the payer knew, or should reasonably have known, that the payer was not the parent of the child;
(b)whether the payee or the payer engaged in any conduct (by act or omission) that directly or indirectly resulted in the application for administrative assessment of child support for the child being accepted by the Registrar;
(c)whether there was any delay by the payer in applying under section 107 for a declaration once he or she knew, or should reasonably have known, that he or she was not a parent of the child;
(d)whether there is any other child support that is, or may become, payable to the payee for the child by the person who is the parent of the child;
(e)the relationship between the payer and the child;
(f)the financial circumstances of the payee and the payer.
A Child Support Registrar is appointed to administer the Act (s 10 Registration and Collection Act). The Registrar must keep a Register known as the Child Support Register. The Register can be kept in a form that the Registrar considers appropriate whether or not it is in a documentary form (s 13 Registration and Collection Act).
Where a child support assessment is made under the Assessment Act, it will be registered under the Registration and Collection Act as a registered maintenance liability unless the payee otherwise elects. The Registrar fulfils that requirement by entering particulars of the liability in the Register (s 25(2) Registration and Collection Act).
When registering the liability in the Register, s 26(1) of the Registration and Collection Act requires the following particulars from the child support assessment to be included:
(a)the name of the payer;
(b)the name of the payee;
(c)particulars of the child support assessment, court order or maintenance agreement under which the liability arose and each assessment, court order and maintenance agreement varying or otherwise affecting the first-mentioned assessment, order or agreement, being particulars that are, in the opinion of the Registrar, sufficient to adequately identify the basis of the liability;
(d)the name and date of birth of each child to whose maintenance the entry relates;
(e)the name of any other person to whose maintenance the entry relates;
(f)the periodic amount, or the aggregate of the periodic amounts that are:
(i)stipulated in the child support assessment, court order or maintenance agreement under which the liability arose; and
(ii)payable by the payer in relation to the entry;
(g)if the entry relates to the maintenance of 2 or more persons–the periodic amount attributable to each of them;
(h)the period specified in the child support assessment, court order or maintenance agreement as the period at which amounts are payable under the liability;
(i)particulars of any terms and conditions of the court order or agreement that the Registrar considers necessary or desirable to include in the entry to ensure that all the terms and conditions of the order or agreement relating to the liability are fully given effect to under this Act.
The Register must also include particulars relating to the payment rate or payment period in respect of the liability (s 26(2) Registration and Collection Act) and include particulars relating to the enforceability of the liability (s 26(3) Registration and Collection Act). Those particulars are as follows:
(a)the day on which the liability first becomes enforceable under [the Registration and Collection Act];
(b)if the liability ceases to become enforceable under [the Registration and Collection Act] (whether on one occasion or more than one occasion)–each day on which the liability ceases to be so enforceable;
(c)if the liability ceases to be enforceable under [the Registration and Collection Act] (whether on one occasion or more than one occasion)–each day on which the liability again becomes enforceable under [the Registration and Collection Act];
(d)particulars of any suspension of the liability.
Where the payer and the payee of a registrable maintenance liability are the same as the payer and payee of another registrable maintenance liability whether or not the liabilities arise under the same child support assessment (and whether or not they are in relation to the maintenance of the same person), the Registrar may include particulars of the liabilities in the same entry in the Child Support Register (s 27 Registration and Collection Act). (My emphasis)
In summary, where a child support liability is to be entered in the Register the details required by s 26 of the Registration and Collection Act must be included. In recording the registered maintenance liability in the Child Support Register the Registrar may include particulars of the liabilities for two different children where the payer and payee are the same in the same entry.
Section 37 of the Registration and Collection Act provides:
Where the Registrar is of the opinion (otherwise than because of the receipt of an application or notice (as the case may be) under subsection 33(1), 34(1) or 35(1) or (2)):
(a)that, under [the Assessment Act], the Family Law Act 1975 or the law of a State or Territory:
(i) an order has been made by, or registered in, a court; or
(ii)a maintenance agreement has been registered in, or approved by, a court;
and the order or agreement varies or otherwise affects a registered maintenance liability; or
(b)that an affecting event in relation to an enforceable maintenance liability has happened;
the Registrar shall make such variations (if any) to the particulars entered in the Child Support Register in relation to the liability as the Registrar considers necessary or desirable to enable the order or agreement to be given effect to under this Act or to take account of the happening of the event, as the case may be.
Section 37A of the Registration and Collection Act provides:
Where the Registrar amends a child support assessment under which a registrable maintenance liability arose, the Registrar must immediately make such variations (if any) to the particulars entered in the Child Support Register in relation to the liability as the Registrar considers necessary or desirable to enable the amendment to be given effect to under this Act. (My emphasis)
The payer of an enforceable maintenance liability may apply to the Registrar for variation of particulars entered in the Child Support Register to take account of the happening of an affecting event in relation to the liability. An affecting event includes a terminating event (s 35(2) and s 4(1) Registration and Collection Act).
Reasons of the Federal Magistrate
Her Honour noted that the SSAT had stated in its reasons, “there is no dispute between the parties as to the material facts; the question is one of legal interpretation.” A summary of the reasons of her Honour is to be found in paragraph 9 where she said:
9.… I find the father abandoned any claim to any money he had paid in child support for [H], when, on 24 October 2007, the Court ordered there be no order pursuant to section 143. I find the [father] has since attempted to avoid the effect of that order by relying on a technical interpretation by the Child Support Registrar as how the orders should be implemented. I find the Child Support Registrar was in error in crediting the amount paid by [the father] for both children to [the father’s] child support liability for the child for whom [the father] always had a child support liability.
Her Honour reached this decision by concluding that as the father had no child support liability for H at any time, the child support payments made by him for H were an “overpayment”. Thus when the Registrar credited all the child support payments made by the father for both children to his liability for T, the Registrar “recovered” the father’s “overpayment” for H (Reasons for Judgment, paragraph 56).
Her Honour concluded that the Registrar could not recover monies paid when there was no registrable maintenance liability for the child to whom the overpayment related and that as the legislation intended that s 143 of the Assessment Act alone provided for the recovery of any overpayment by the payer from the payee, the Registrar had no power to recover that overpayment as the Registrar had done (Reasons for Judgment, paragraph 58).
Her Honour accepted that it was true that the mother was not being asked to repay any funds that she received from the Child Support Agency as a result of payments made by the father but that the Registrar had recovered the “overpayment” by crediting the whole of the amount paid in child support to his liability for T.
Her Honour concluded that the Registrar should have calculated the amount overpaid, being a third of the total amount paid, and excluded that one third overpayment from the Registrar’s calculations. From the date which the father had paid for both children he should have been assessed to pay for one child and no payments for the other child, for whom he had no liability, could be credited by the Registrar at all as the father “cannot recover because he abandoned that right when the court ordered there be no section 143 order. The Child Support Registrar has no power to recover this overpayment on [the father’s] behalf” (Reasons for Judgment, paragraph 61).
Her Honour concluded that when the Registrar calculated the original amount assessed for both children from the child support liability start date and deducted the correct assessment for T alone the Registrar was in error because the Registrar failed to recognise that monies paid by the father related to two children. This, she concluded, caused the Registrar to incorrectly include the amount overpaid for H.
Leave to appeal
The Registrar seeks leave to appeal and, if leave is granted, to appeal the orders made by Sexton FM on 3 November 2009. The facts relied upon by the Registrar in support of the application for leave are described as follows:
1.The grounds of appeal listed in Part E of this Amended Notice of Appeal disclose errors of principle warranting the granting of leave to appeal (insofar as leave is necessary).
The grounds of appeal are as follows:
1.Her Honour held erroneously that, in the absence of an application/order under s 143 of the Child Support (Assessment) Act 1989 (Assessment Act), the Child Support Registrar was unable to vary the Child Support Register to take account of a declaration under s 107 of the Assessment Act.
2.Her Honour should have held that the Child Support Registrar properly varied the particulars of the Child Support Register to take account of the declaration made under s 107 of the Assessment Act, by virtue of ss 37 and 37A of the Child Support (Registration and Collection) Act 1988.
3.Her Honour held erroneously that there was an “overpayment” of child support …
4.Her Honour should have held that there was no overpayment given that [the father] remained in debit at all relevant times.
The principles applicable to applications for leave to appeal are set out in Malak & Mairie [2011] FamCAFC 134 where Strickland J said:
27.In Rutherford and Rutherford (1991) FLC 92-255 the Full Court (Ellis, Nygh and Wilczek JJ) held that to obtain leave the applicant must show an error of principle and/or the fact that the decision caused him a substantial injustice.
28.In Gilmour and Gilmour (1995) FLC 92-591, the Full Court (Ellis, Finn and Maxwell JJ), after reviewing the authorities addressing leave to appeal in child support matters, said at 81,843:
However, in granting leave for the reasons which we have in this case, we would not want to be taken as saying that the grounds upon which leave to appeal an order made under either of the Child Support Acts are necessarily the same as the limited grounds upon which leave will be granted in respect of an interlocutory decree under Section 94AA of the Family Law Act. Indeed, we would endorse the suggestions made in Bassingthwaite and Best that a less restrictive approach may be necessary where the order sought to be appealed involves substantive rights or liabilities in relation to child support. In so doing we would, however, draw attention to the unreported decision of Conn v. Martusevicius (delivered in Melbourne on 9 June 1992) in which, in dismissing an application for leave to appeal pursuant to Section 102 of the Assessment Act, both Barblett D.C.J. and Nygh J. in separate judgments expressed the view that the same principles which apply to applications for leave to appeal under Section 94AA of the Family Law Act (being the principles stated in Rutherford) should apply to applications for leave to appeal under Section 102 of the Assessment Act.
29.In Hendy v Deputy Child Support Registrar and Anor (2001) 27 Fam LR 641, the Full Court (Ellis, Kay and Mullane JJ), with reference to the authorities including Gilmour, reiterated that the Court should not be too restrictive in relation to granting leave to appeal if it is perceived that there has been any error of principle which has affected the applicant’s substantive rights.
30.More recently in Forbes & Bream [2010] FamCAFC 6 the Full Court (Bryant CJ, Boland and Stevenson JJ) recognised, at paragraph 39, that while generally there must be demonstrated that there has been “an error of principle in the making of the order sought to be appealed or that the order will result in substantial injustice” before permission to appeal is granted, in child support matters it is “inevitable” that the orders will affect the financial position of the parties. This may therefore be a relevant matter to take into account in determining whether to grant permission.
Here, as the grounds of appeal comprise the basis for the application for leave to appeal I will address these grounds both in the context of the leave sought and whether, if leave is granted, the appeal should be allowed or dismissed.
Discussion
Counsel for the Registrar informed the Court that although there were references in the written submissions to common law notions of money having been received and unjust enrichment, those submissions were not relied upon.
The four grounds of appeal were essentially addressed under one rubric which can be summarised as follows:
(a)The relevant sections of the Assessment Act in combination make it clear that there is only one child support assessment regardless of the number of children who are the subject of that assessment.
(b)In particular there is no warrant in the legislation for identifying and quarantining a particular amount paid in relation to a particular child.
Faced with s 107(5) the Registrar submits the effect of this section is not to render the administrative assessment void ab initio but to render it voidable. The Registrar seems to accept that if it is treated as void ab initio (as opposed to voidable) a consequence is that no valid payments have been made, and in reading the provision this way, a number of the provisions that have been relied upon by the Registrar would be inapplicable.
The Registrar argues that because s 67 of the Assessment Act makes it clear that the amounts relate to all children and “not to any of the children separately” that the effect is that s 107 does not render the assessment void. It treats the application in relation to H as not having been made.
The Registrar submits that a reading that the “assessment” should not have been made (where there was more than one child) will lead to an absurd position where no child support liability would exist even for the child T who was at all times an eligible child. The Registrar contends that s 107(5) should be read in a way that gives effect to it and in accordance with s 15AA of the Acts Interpretation Act 1901 (Cth).
The Registrar concedes there is no binding authority which would direct the outcome of this appeal and no express statutory provision as to how the particulars of the Register must be varied in a situation like this. It is submitted that in giving effect to the legislation in a way that would not render it meaningless or absurd, the Registrar did nothing inconsistent with the legislation.
Consequently it is submitted that the application in respect of H is treated as not having being made. The Register still shows the assessment (it remains in force in relation to T and still shows the father as the liable parent), therefore the Registrar must adjust the assessment. Having done that there remained an outstanding liability and the amount of that liability was adjusted by reference to the amount that had been paid by the father in relation to the assessment.
In argument Counsel for the Registrar contended that while an order under s 143 of the Assessment Act could be determinative vis-a-vis any dispute between the parties, the consent order was not determinative of the Registrar’s powers or duties to adjust the Register.
During the course of oral argument the question arose as to whether s 26(1)(g) of the Registration and Collection Act which says “if the entry relates to the maintenance of 2 or more persons—the periodic amount attributable to each of them” required the Registrar to keep separate entries where the entries related to two or more children. The Registrar contended that the section applied to maintenance liabilities in relation to children and another person; for example, a parent. The Court allowed the Registrar and the mother to provide written submissions subsequent to the hearing of the appeal on this point. Both did so.
To a large extent the submissions on behalf of the Registrar rely upon her interpretation of s 26(1)(g) of the Registration and Collection Act. That section, as I previously noted, provides that the entry in the Register in relation to a Registered maintenance liability shall include:
(g)if the entry relates to the maintenance of 2 or more persons – the periodic amount attributable to each of them. (My emphasis)
However the submission on behalf of the Registrar, which I accept, is that subparagraph (g) does not relate to the maintenance of two or more children or the legislation would have said so, but rather to two or more persons. The submission is supported by the Explanatory Memorandum to the Child Support Bill 1987 which provided that:
… There is certain information that must be entered in the Child Support Register in relation to each registered maintenance liability. That information is described in subclause 26(1) in detail as follows –
…
· if the entry covers more than 1 person, the periodic amounts payable in respect of each e.g., $50 spousal and $75 for the child (paragraph (g)); (original emphasis)
This, it is submitted, makes it clear that the references are not to two or more children but rather to a spouse and a child and does not support a construction of the registered maintenance liability being divisible or parts of it being divisible for two or more children.
I agree with that submission and the construction placed on s 26(1)(g) of the Registration and Collection Act by the Registrar.
This section is the cornerstone of the argument on behalf of the Registrar that as ss 36, 37 and 67 of the Assessment Act make clear, there is only one child support assessment, regardless of the number of children who are the subject of that assessment. I agree with this submission. In particular, s 36(1) provided (at the relevant time) for an amount to be calculated in respect of “all of the children” and s 67(1) of the Assessment Act provided that, in making an administrative assessment where child support is payable in respect of two or more children, the administrative assessment is to relate to “all of the children and not to any of the children separately”.
By virtue of these provisions the Register, where it relates to child support for more than one child, provides a running balance which includes the calculation of child support in respect of all of the children who are the subject of the assessment, adjusted from time to time, with payments from the liable parent being credited against that balance from time to time as they are paid. If there are overdue payments which attract a penalty then those penalties are also debited against the account, increasing the balance payable.
Thus, in practical terms, when the Registrar came to give effect to the declaration under s 107 that the application in respect of the child H should be treated as not having been made, the Registrar calculated the amount of child support that would have been payable for the child T and credited all payments made by the father to the amended assessment. This occurred on 28 October 2007.
As at 6 November 2007 there was $28,773.94 owing on the assessment which at that time was for two children. Following the father’s liability being recalculated so that it related only to the child T, an amount of $11,396.89 was credited to the Register. This occurred on 8 November 2007. The balance remaining overdue was then $17,377.05. The Registrar contends that having amended the assessment and having credited the amount paid, effect to s 107 had been given.
In doing so the Registrar had followed the provisions of the Assessment Act and the Registration and Collection Act in crediting the Register with the amount calculated as being the total amount by which the liability should be reduced if the formula applied to only one child.
Her Honour in coming to the conclusion that she did, found that because the father had no child support liability for H at any time, any child support payments made by him for H were therefore an “overpayment”. She found that when the Registrar credited the child support payments made by the father to the father’s liability for T, the Registrar effectively recovered the father’s overpayment for H. Her Honour concluded that the Registrar could not recover monies and in fact had no power to receive the overpayment in the way the Registrar had done without an order under s 143 for the recovery of the overpayment by the payer from the payee.
There are two propositions contained in her Honour’s reasoning. The first of those propositions asserts an “overpayment” for H. However, as there was always only one assessment (first for two children then for one) there could only be an “overpayment” if the account was in credit, which it was not, or alternatively, if there was a separate assessment for H and T. But as the legislation requires payments in respect of a single assessment, in my view there was no legislative provision by which the Registrar could treat payments made as being in respect of individual children, rather than to one assessment. The legislation makes this clear (s 67(1) Assessment Act). The effect is that there is one indivisible annual rate of child support payable and no provision in the legislation for separate identifiable amounts to be calculated for an assessment involving more than one child.
In respect of the second proposition, namely that the Registrar could not recover monies without an order under s 143 of the Assessment Act, this in my view misunderstands the effect of s 143. This section vests a discretion in the Court to be exercised as between the parties and is not relevant to, nor mandates, the actions of the Registrar.
Neither the Assessment Act nor the Registration and Collection Act provide as to how the particulars of the Register must be varied in situations such as this. The Registrar did nothing inconsistent with the legislation and acted, in my view, consistently with it. The Registrar gave effect to the declaration by treating the application in respect of H as not having been made and amending the assessment to reflect a liability only for T and crediting all payments against the remaining liability on the assessment as it then stood.
I consider that treating the assessment as including separate payments for H, and thus introducing the concept of an “overpayment”, is not the manner in which the legislation operates. There is one assessment creating an obligation to pay and there are payments to the assessment (not to individual children) which are credits against that obligation. In this case the balance owed also reflected significant penalties for late payment from time to time.
Counsel for the Registrar further submitted that there was no binding authority that compelled the decision of the court below and would therefore direct the outcome of this appeal. The Registrar submitted that the two decisions relied upon by the Federal Magistrate, namely Mercer & Child Support Agency (2004) 137 FCR 125 and DRP & AJL [2004] FMCAfam 440, do not assist the mother.
I agree that these two decisions do not deal squarely with the issue in this case. The first dealt with the correctness of the decision of the Registrar to repay child support to the payer and the issue of whether the amount so paid represented an overpayment to the payee entitling the Registrar to recover it from the payee as a debt owed to the Commonwealth. It appears to have been cited because Spender J rejected an argument by the Registrar that although the Registrar could not recover overpayments that occurred when there was no registerable maintenance liability, an overpayment could be recovered by the Registrar if there remained a child for whom the payer was liable. Spender J, in rejecting any obligation on the payee to repay money to the Registrar, said that whether payments were debts due to the Commonwealth did not depend on whether there was a registered maintenance liability which covered children not included in the assessment.
The second was concerned with s 143 and concerned what moneys the father should be entitled to recover from the mother pursuant to s 143 in circumstances in which the father was subsequently found not to be the biological father of the child for whom child support payments had been made. It appears to have been cited because it in turn cited Mercer. Without doubting the correctness of Mercer, the issue in this case is not about debts due to the Commonwealth but about amendment of the Register.
Counsel for the mother submitted that the result in this case was “capricious”.I do not agree. The mother is not being asked to pay funds she has actually received from the Child Support Agency as a result of payments made by the father and the Registrar has not, despite what her Honour said at paragraph 59, recovered the “overpayment” made by the father for H. The fact is that there was one assessment and the father was in arrears. This it is submitted leads to an unfair result because the father is in debt, whereas a different outcome would have occurred had he been up to date in his payments. That may be so, but the case falls to be decided on the particular provisions of legislation that dictates the obligations of the Registrar.
The issue falls to be determined on whether the actions of the Registrar gave effect to the declaration and took account of the amended assessment as required by s 37 and s 37A of the Registration and Collection Act. I note that the Registrar has wide discretion to do so in a way that the Registrar considered necessary or desirable, and I would add, having regard to the structure of the legislation.
In my view the submission by Counsel for the Registrar that the Registrar has complied with obligations under the Assessment Act and the Registration and Collection Act is correct. I do not consider the legislation required the Registrar to artificially calculate and split all payments received from the father into individual amounts payable for each child where there was at all times one indivisible assessment. And if that was done, how would the Registrar reflect the amounts so calculated for H in the Register? The only way would be to excise from the Register in some artificial way a record of payments that had been made. Nothing in the legislation warrants such a result.
However, I observe that the legislation does not specify the manner in which the Registrar is to give effect to a declaration under s 107. In my view it would be preferable to spell out in the legislation precisely what the Registrar is required to do to give effect to s 107. The parties would then be able to negotiate an agreement or seek orders pursuant to s 143 knowing what the consequences on the Register would be.
Conclusion
I am satisfied that the Registrar has established error of principle by
her Honour. In accordance with established authority, leave to appeal should be granted.Thus, in my view, the appeal must succeed. However, in view of the joint judgment of Finn and Strickland JJ the appeal will be dismissed. In those circumstances I support the order for costs proposed.
Finn and Strickland JJ
We agree with what the Chief Justice says about the jurisdiction of the
Full Courtto hear this appeal, and that leave to appeal is required.
Leave should be granted given the importance of the issues raised in the proposed appeal. However, we would then dismiss the appeal.
The unfortunate problems arise in this case because of the absence of legislative direction to the Child Support Registrar as to what changes the Registrar should make in the Child Support Register when an administrative assessment of child support, which originally applied to two children, is amended to apply to one child only because the payer under the assessment has been declared not to be a parent of the child removed from the assessment. There is a clear need for legislative amendment to rectify this deficiency.
There is no need for us to repeat any of the background facts, the summary of the reasons of the Federal Magistrate, or the relevant legislation.
The issue for us is a narrow one. We have no difficulty with the approach of the Child Support Registrar to the point of there being a recalculation of the liability of the father such that the only child that is the subject of the assessment is the child T. However, we say that there is still a further step to be undertaken. The effect of the declaration pursuant to s 107 of the Child Support (Assessment) Act 1989 (Cth) (“the Assessment Act”) is that the application for administrative assessment for the child H is taken never to have been accepted by the Registrar. Thus we consider that not only is it necessary to recast the liability for child support such that there is no liability for the child H, but it is also necessary to calculate the amount that the father has paid for H pursuant to the assessment and to remove that amount from the Register, so that the Register only relates to the child T, both in terms of liability and amounts paid.
The argument put against this outcome is that the assessment covers both children and is not divisible. Section 67 of the Assessment Act is said to be the basis for this submission. However, s 67 says nothing about the unravelling of the assessment and the variation of the Register where there is a s 107 declaration. Section 67 simply says that the administrative assessment relates to all of the children and not to any of them separately. Once s 107(5) of the Assessment Act came into operation and caused the original application so far as it covered the child H “to be taken never to have been accepted by the Registrar”, s 67 (and its provisions in relation to child support payable for two or more children) must have become irrelevant and cannot be relied upon to justify what the Registrar has purported to do. The terminology of s 107(5) must mean that from its commencement the assessment should only be for one child and not two.
The more relevant sections we suggest are s 37 and s 37A of the Child Support (Registration and Collection) Act 1988 (Cth) (“the Registration and Collection Act”). Under these sections and particularly the latter, the Child Support Registrar is required to make such variation to the Register as will enable the declaration under s 107 of the Assessment Act and the amended assessment to be given effect to. The effect, to repeat, is to limit the assessment to the child T and then change the Register to reflect that. In our view that must entail not only recalculating the liability of the father and limiting it to one child, namely T, but excluding from the Register all payments made by the father in relation to the child H for whom there has never been any liability. The mother put it this way in her written submissions:
20.As to the amounts which [the father] did pay, for the purpose of calculating his arrears of child support in relation to [child T], the figure to be used is the amount which he paid in relation to [child T]. That figure is properly ascertained by deducting, from the amounts which [the father] actually paid in the relevant period, the portion that was attributable to [child H] (prima facie, one third of the total). That portion is irrelevant to the present calculation because, in light of the s 107 declaration, it was not paid by way of child support. To treat payments made in respect of [child H] as going towards satisfaction of [the father’s] child support obligations (which, correctly understood, related only to [child T]) would be inconsistent with the legal position of the parties that emerges from the consent orders. The Registrar’s inclusion of those payments in the calculation was erroneous.
It is said that because there is one assessment and not individual assessments for each child it is not possible for the Child Support Registrar to calculate the amount of child support which has been paid for the child H. However, we do not accept that.
For our part, the Register cannot determine the liability or entitlement of the parties; it just records the detail of such matters presumably in the most efficient way possible. The calculations still have to be made to ensure that the assessment, and thus the Register, only records the liability of the father for the child T and the payments he has made for that child.
Although there was one assessment of child support, and not two separate assessments for each child, that one assessment was for two children, in respect of one of whom there has never been any liability. Therefore it must be possible to calculate the amount paid for the child H.
That conclusion is supported by two further arguments, namely:
1)Section 143 of the Assessment Act, which provides for the payer to apply to a Court to recover from the payee child support paid for a child when it turns out there is no liability to pay that child support, clearly contemplates that the amount to be recovered can be calculated, albeit by the Court and not by the Child Support Registrar. However, the important issue is that the legislation envisages that amount can be calculated.
2)
Pursuant to s 26(1)(g) of the Registration and Collection Act the Register must include the periodic amount attributable to each person the subject of the assessment. Thus this detail would assist the
Child Support Registrar in making the calculation that we say is necessary. We observe though that there is a dispute as to the correct interpretation of this paragraph.
Counsel for the Child Support Registrar suggests that s 26(1)(g) does not apply to where there are two or more children the subject of an assessment, and it only applies where for example there is an assessment for a child and a maintenance order for a person such as a parent. Thus, it is said, there is no requirement for the Register to record the periodic amounts attributable to say each of two or more children, and therefore presumably it is not possible to calculate in this case the amount paid for the child H (or for T for that matter) from the total amount paid for T and H and then deduct from the recast liability for T only the amount paid for T.
The interpretation promoted by the Child Support Registrar relies on two bases:
i)If paragraph (g) relates to two or more children it would have said so rather than referring to “persons”;
ii)The explanatory memorandum to the Child Support Bill 1987 provided that:
…
There is certain information which must be entered in the Child Support Register in relation to each registered maintenance liability. That information is described in sub-clause 26(1) in detail as follows –
…
·if the entry covers more than 1 person, the periodic amounts payable in respect of each e.g., $50 spousal and $75 for the child (paragraph (g));
However, we are persuaded by the submission of the mother to the contrary. In summary, that submission is as follows:
a)It is plain that paragraph (g) does not only apply where there is a child support assessment and a maintenance liability for a parent. In referring to this the explanatory memorandum is doing no more than giving an example of to what paragraph (g) relates. In other words it does not follow that paragraph (g) only relates to those circumstances.
b)A child is a “person” in ordinary language and that is apparent from the example that is included in the explanatory memorandum. In other words, one of the “persons” in the example is of course a child. Thus, logically “persons” can refer just to children.
c)This interpretation is consistent with paragraph (d) which provides that the Register should contain:
(d)The name and date of birth of each child to whose maintenance the entry relates;
Thus, where an assessment covers two or more children, in our view, the Register must include the name and date of birth of each child the subject of the assessment, and the periodic amounts attributable to each of them. Such detail, to repeat, would then permit the Child Support Registrar to calculate the respective amounts paid in this case for T and for H.
We note that the Federal Magistrate found that the amount to be deducted as being the child support paid by the father for the child H was one third of the total payments made. Her Honour arrived at that result by simply recording that the father “paid at the rate of 27% whereas with one child he was only liable to pay at the rate of 18%”. We do not necessarily endorse that approach but it exemplifies that there are methods for making the calculation.
There is also the issue of what to do with penalties. Because the father has always been in arrears, penalties have been added to his liability for child support. Given our approach to s 107(5) and s 37 and s 37A it would also be necessary to recalculate the penalties so that they only relate to the liability for the child T taking into account the payments made for that child. Again we say that is a calculation that the Child Support Registrar should be able to make once the Registrar recasts the liability to only relate to the child T and excludes the amount of child support paid for the child H.
In summary then, in this case there was an assessment covering two children, and that assessment needs to be recast from its inception to only cover one child. That, we say, is the effect of s 107(5) of the Assessment Act, and there appears to be no dispute about that. The issue is what is required to achieve that. Again there is no dispute that the liability needs to be recast as a liability only for the child T. The dispute relates to what must be done in relation to the payments made by the father to the date of the consent order. Given that the father only has a liability for the child T, it is logical in our view that only the payments for the child T should be credited against that liability. Thus the payments made for the child H must be excluded, and the Register amended to give effect to the amended assessment as required by s 37 and s 37A of the Registration and Collection Act.
How does all this relate to the grounds of appeal?
With ground 1, we must confess that we do not accept that the Federal Magistrate did what it is alleged she did. The Federal Magistrate did not find that absent a s 143 application/order the Child Support Registrar was unable to vary the Child Support Register to take account of a s 107 declaration. Her Honour in effect held that the Child Support Registrar was wrong to deduct from the arrears struck by recasting the liability to only relate to the child T the amount of child support paid for the child H. Her Honour reached that conclusion by finding that that amount was an overpayment which could not be recovered by the Child Support Registrar without a s 143 application/order. Whether or not her Honour was correct in describing the amount paid as an overpayment, given that she did not make the finding suggested there can be no merit in this ground of appeal.
As to ground 2, this pointedly raises the issue that we have addressed above, and it is our view that the Child Support Registrar did not properly vary the particulars of the Register to take into account the s 107 declaration by virtue of s 37 and s 37A. Thus, there is also no merit in this challenge.
With ground 3, there is no doubt that her Honour found that there was an “overpayment” which could not be recovered absent a s 143 application/order. We accept the appellant’s submission that where there is no liability there cannot be an overpayment, and to this extent her Honour was in error. However, this is not an error that should lead to the appeal being allowed. This finding was the method by which her Honour approached what to do with the money paid by the father for the child H. However, her Honour was nevertheless correct in her finding that the amount paid by the father for the child H should have been excluded from the calculations. Her Honour, in justifying that, need not have looked any further than the provisions of s 107, and in particular 107(5) of the Assessment Act, and s 37 and s 37A of the Registration and Collection Act.
Thus, in simple terms, her Honour reached the right result for the wrong reason.
As to ground 4, this challenge presumably relies on the argument that the assessment is not divisible while it operated. We have already explained that we do not accept that proposition. However, we also agree with the submission of the mother that the fact that in this case the father was in debit at all times, even with the recasting of his liability to only cover the child T, demonstrates the capriciousness of the result argued for by the Child Support Registrar. In other words, if the father had been up to date with his payments for both children, the legislation would have operated in a different way.
In any event, there is again no merit in this ground of appeal.
Conclusion
Having found no merit in any of the grounds of appeal, the appeal must be dismissed.
Costs
At the conclusion of the hearing we received submissions as to costs.
In the event that the appeal was unsuccessful the mother’s senior counsel indicated that the mother sought costs. In response counsel for the Child Support Registrar conceded that the Registrar could not resist an order for costs. Thus we propose to order that the Child Support Registrar pay the costs of the mother of and incidental to the appeal.
I certify that the preceding one hundred and twelve (112) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court (Bryant CJ, Finn & Strickland JJ) delivered on 24 October 2011.
Legal Associate:
Date: 24 October 2011
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