Child Support Registrar and Foster
[2012] FMCAfam 408
•10 April 2012
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| CHILD SUPPORT REGISTRAR & FOSTER | [2012] FMCAfam 408 |
| CHILD SUPPORT – Costs – where respondent had consented to Orders – where respondent’s financial circumstances considered. |
| Family Law Act 1975 (Cth), s.117 |
| Hendy & Deputy Child Support Registrar & Another [2001] FamCA 632; (2001) 27 Fam LR 641 |
| Applicant: | CHILD SUPPORT REGISTRAR |
| Respondent: | MR FOSTER |
| File Number: | SYC 6472 of 2011 |
| Judgment of: | Scarlett FM |
| Hearing date: | 10 April 2012 |
| Date of Last Submission: | 10 April 2012 |
| Delivered at: | Sydney |
| Delivered on: | 10 April 2012 |
REPRESENTATION
| Solicitor for the Applicant: | Mr Nguyen |
| Solicitors for the Applicant: | Australian Government Solicitor |
| Duty Solicitor for the Respondent: | Ms Cole |
| Respondent: | Appeared in person |
DECLARES
As at 10 April 2012 the Respondent owes the Applicant the sum of $7,277.78 ('child support debt') consisting of $6,221.09 in arrears of child support and $1,056.69 in late payment penalties.
ORDERS
The Respondent pay to the Applicant the child support debt of $7,277.78 (‘total debt’) within 150 days of the date of these orders.
Security
Until further order of the Court or payment in full of the total debt the following provisions apply:
Real property
(2.1)The Respondent is restrained from selling, assigning, transferring, encumbering or dealing in any way with his interest in the real property at Property C in the State of New South Wales, described in Certificate of Title Volume Folio Identifier [omitted] ('real property'), without the prior written consent of the Applicant.
(2.2)The Respondent’s interest in the real property be charged in favour of the Applicant for the total debt (and the Applicant be at liberty to lodge a caveat over the real property to secure the interest created by this charge).
Personal property
(2.3)The Respondent is hereby restrained from assigning, transferring, further encumbering or dealing in any way with his interest in the following personal property:
(2.3.1)the 2008 Harley Davidson motorcycle, registration [omitted] (‘the Harley Davidson’) and
(2.3.2)the 2003 Husaberg motorcycle, registration [omitted] (‘the Husaberg’)
(‘personal property’) without the prior written consent of the Applicant.
Enforcement Orders
If the Respondent defaults in making any of the payments under these orders or deals with any of the personal property or real property in breach of these orders the following orders shall take effect:
(3.1) The total debt shall be immediately due and payable.
(3.2)The Official Receiver, the Sheriff of the Federal Magistrates Court, and their servants and agents shall be appointed as Enforcement Officers.
(3.3)Pursuant to rule 25B.11(a) of the Rules an Enforcement Officer shall seize and sell under an Enforcement Warrant such of the Respondent’s real property and personal property, not being prescribed personal property, as the Enforcement Officer may consider sufficient to meet the reasonable costs of the Enforcement Officer and to discharge in full all amounts owed by the Respondent under the orders of this Court.
AND/OR(3.4) An order for the attachment of earnings and debts, including under a Third Party Debt Notice.
The Respondent is to pay the sum of $1,500 towards the Applicant’s costs.
I allow nine months to pay.
The Application to be removed from the active pending cases list.
NOTES
A.Any monies payable by the Respondent pursuant to these orders are in addition to his ongoing liability to pay child support as assessed or varied from time to time.
IT IS NOTED that publication of this judgment under the pseudonym Child Support Registrar & Foster is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT SYDNEY |
SYC 6472 of 2011
| CHILD SUPPORT REGISTRAR |
Applicant
And
| MR FOSTER |
Respondent
REASONS FOR JUDGMENT
This is an application for costs. The application for costs arises out of enforcement proceedings commenced by the Child Support Registrar against the Respondent. The circumstances are that the parties have entered into consent orders which have been made by the Court dealing with arrears of child support and late payment penalties. An order has been made that the Respondent should pay to the Applicant the child support debt of $7,277.78 within 150 days of the date of these orders. There are other orders which have been agreed to.
What is not agreed to is the application by the Applicant for an order that the Respondent should pay the Applicant’s costs which are sought by the Applicant in the figure of $3,079.74. That amount has been calculated in accordance with Schedule 1 of the Federal MagistratesCourt Rules representing a lump sum of $2,723.50 together with disbursements being filing fee; process serving; server’s fees and photocopying and printing. The total disbursements are estimated at $356.24, bringing a total of $3,079.74.
The Respondent, through the Duty Solicitor, Ms Cole, has submitted without objection, a document indicating that the Respondent has no obligation to lodge an income tax return for the financial years ending 2010 and 2011. That gives some indication of the Respondent’s financial circumstances. Notwithstanding the fact, as Ms Cole has submitted, that he has not filed a financial statement. Indeed, the Respondent has not filed any documents – although it is relevant that service was only affected on 23rd March this year as a result of orders for substituted service made by the Court.
It is submitted by Mr Nguyen, for the Applicant, that the Respondent should be the subject of a costs order and that the amount sought is reasonable in all the circumstances.
Ms Cole, for the Respondent, has submitted that the Court should consider the matters under subsection 117(2A) of the Family Law Act noting the Respondent’s financial circumstances including the fact that he has been unable to work since 2009. The Applicant relies on the decision of the Full Court of the Family Court of Australia in Hendy & Deputy Child Support Registrar & Another[1].
[1] [2001] FamCA 632; 27 Fam LR 641
In particular, the Court is referred to paragraphs [114], [115] and [117] of the decision. In paragraph [114], their Honours pointed out that the power to award costs in proceedings under the Family Law Act is governed by section 117 of that Act.
Paragraph [115], their Honours enunciated a set of factors which he saw as relevant to the exercise of his discretion on the issue of costs. Their Honours went on to say at paragraph [117]:
The limited circumstances in which an appellate court may interfere with the exercise of a judicial discretion are well settled (see House v. The King (1936) 55 CLR 499). It is well established that a trial judge has a wide discretion to make an order for costs (see Penfold v Penfold (1980) FLC 90-800 at 75,054.
Their Honours went on to say that they detected no error in the manner in which his Honour dealt with the costs issue. The factors enunciated by Jordan J in the decision in Hendy included, and I will set out in bullet point form:
·Mr Hendy was unsuccessful in his form 63 application.
·There was a debt owing to the Commonwealth. The Commonwealth was entitled to bring enforcement proceedings.
·The Agency was only party successful in securing the remedies sought.
·The form 63 application was entirely unsuccessful.
·Mr Hendy was currently in very poor financial circumstances.
·It could well be argued the proceedings were necessitated by the failure of the respondent to comply with previous requirements relating to administrative assessments “although I note that subparagraph (d) refers to previous orders of this Court”;
·These proceedings should be more properly perceived as being civil proceedings between the Commonwealth as a third party, and the respondent as a citizen, rather than as between parties to a marriage or parties to a relationship covered by the general philosophy of the Family Law Act, which is to the effect that each party should bear their own costs.
·These are enforcement proceedings.
·Costs orders are frequently made in the civil arena when there is no apparent immediate capacity to meet the orders for costs and the parties.
·It would be inappropriate if the taxpayer was required to bear the entire burden of this exercise.
At paragraph [116] their Honours noted that Jordan J had concluded in the first instance:
Finding a balance between all of these competing considerations, I have determined that I should further order that the respondent pay 40 per cent of the applicant’s costs of and incidental to these proceedings. Such costs as agreed and failing agreement, as taxed.
The Child Support Registrar relies on this decision in support of its claim that there should be a costs order against the Respondent. It is well established that costs are discretionary. In fact, their Honours in Hendy at paragraph [117] endorsed that proposition and their Honours said:
It is well established that a Trial Judge has a wide discretion to make an order for costs.
and their Honours found no error in his Honour’s method of dealing with the costs issue. It should not be thought, however, that the list of considerations which Jordan J enunciated in the case before his Honour, represents a set of considerations of general application.
Quite clearly, a number of those considerations related specifically to the case before his Honour. It was not the decision of the Full Court in Hendy’s case that those factors enunciated by Jordan J should act as a guide to all courts dealing with the question of making an order for costs. It is not the ratio decidendi of this case. What their Honours have pointed out is that the power to award costs in proceedings of this nature is governed by section 117 of the Family Law Act and that the Trial Judge has a wide discretion.
Indeed, one could look with perhaps a critical eye at some of the factors which his Honour enunciated. His Honour said:
It could well be argued that the proceedings were necessitated by the failure of the respondent to comply with previous requirements relating to administrative assessments.
Although I note that subparagraph (b) refers to previous orders of this Court.
Indeed, if one looks at subsection 117 (2A) of the Act, paragraph (d):
whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the Court.
That is what the Act said. It is perhaps curious, that his Honour should have gone on to say:
these proceedings should be more properly perceived as being civil proceedings between the Commonwealth as a third party and the respondent as a citizen, rather than as between parties to a marriage or parties to a relationship covered by the general philosophy of the Family Law Act, which is the effect that each party should bear their own costs.
Costs in proceedings in the Child Support jurisdiction are dealt with under section 117 of the Family Law Act. There may well be a general philosophy in the Family Law Act that each party to the proceedings shall bear his or her own costs. It is a principal set out in subsection 117 (1) of the Act and the Court is obliged to follow it. Subsection 117(1) says:
Subject to subsection (2) subsection 70NFB(1) and sections 117AA, 117AB, 117AC and 118, each party to proceedings under this Act shall bear his or her own costs.
It is fair to say that section 117AA, 117AB, 117AC and 118 bear no relation to the proceedings before this Court. Subsection 117(2) provides:
If, in proceedings under this Act, the Court is of opinion that there are circumstances that justify it in doing so, the Court may, subject to subsections (2A), (4) and (5) and the applicable Rules of Court, make such order as to costs and security for costs, whether by way of interlocutory order or otherwise, as the Court considers just.
That is a requirement of the legislation and this Court is bound to follow it. Subsection 117(2A) sets out in paragraphs (a) to (g) the matters to which the Court shall have regard in considering what order if any should be made under subsection (2) of section 117. As in all matters of costs, the Court first of all decides whether or not it is just to make an order for costs and under subsection (2A) the Court considers the various matters set out in paragraphs (a) to (g). The Court shall have regard to the financial circumstances of each of the parties to the proceedings. The Court shall have regard to whether any party to the proceedings is in receipt of assistance by way of legal aid and if so, the terms of the grant of that assistance to that party.
It has been conceded that the Respondent is not in receipt of a grant of legal aid albeit that he has had the valuable assistance of the duty lawyer today who is a lawyer employed by Legal Aid New South Wales. The Court, under paragraph (c) does consider the conduct of the parties to the proceedings in relation to the proceedings. The Court does, under paragraph (d) consider whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the Court. The Court does consider whether any party to the proceedings has been wholly unsuccessful in the proceedings.
The Court considers whether either party to the proceedings has made an offer in writing to the other party to settle the proceedings and the Court considers such other matters as the Court considers relevant. In my view the financial circumstances of the Respondent are relevant and should be considered – notwithstanding the fact that there is relatively sparse part challenged evidence. The Court does consider the conduct of the parties to the proceedings. It is certainly a fact that because of some difficulty in serving the Respondent, the Applicant was required to obtain an order for substituted service.
It is not a fact that the proceedings were necessitated by the failure of the Respondent to comply with previous orders of the Court. The proceedings were necessitated by failure to comply with an administrative assessment of child support, but that is not what the Act said. It can be said that the Applicant has been successful in the proceedings, in that the Respondent has consented to the orders sought in respect of the substantive proceedings. There is no evidence of any offer in writing to settle the matter.
The Court does consider such other matters as the Court considers relevant. It is relevant and it goes to the conduct of the parties to the proceedings that the Applicant attended Court on the first return date and consented to the substantive orders made. The application did not have to be adjourned; he did not file material disputing his liability to meet the amount sought; he consented to it on the first court date. True, it is, that he could have, in some circumstances have consented prior to the first court date as does happen in proceedings in this jurisdiction, but he had an issue of costs which needed the determination of the Court.
Those are all of the matters that the Court must consider. In my view, this is a matter where the Court considers by reference to the relevant matters under subsection 117(2A), that it is just to make an order for costs. That said, it does not follow that the Court would then automatically make an order for costs in terms of the amount sought by the Applicant. And indeed, there is no better example than in Hendy & Deputy Child Support Registrar to which the Court has been referred, where Jordan J at first instance made an order that the appellant in the case should be responsible for 40 per cent of the Deputy Child Support Registrar’s costs and his Honour did so after considering those factors which his Honour enunciated.
That approach was one to which the Full Court found no error in the manner in which his Honour dealt with the costs issue.
I have given consideration to the Respondent’s financial circumstances. I have given consideration to the Respondent’s conduct of the proceedings noting that he has attended on the first day and consented to these substantive matters. It is relevant to consider his financial circumstances and his capacity to pay. These proceedings must be dealt with under the provisions of the Family Law Act 1975 because there is no other way in which they can be dealt with. The legislation makes that quite clear.
In my view, an amount of slightly less than half of the $3,079.74 sought by the Applicant would be appropriate and, in my discretion I propose to make an order allowing a significant amount of time to pay. One reason why I do that is that I consider it relevant that the Respondent has a responsibility by means of the consent orders to pay amount of $7,277.78 within 150 days or slightly less five months from the date of this order.
I certify that the preceding twenty-four (24) paragraphs are a true copy of the reasons for judgment of Scarlett FM
Date: 4 May 2012
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