Child Support Registrar and Stewart
[2010] FMCAfam 38
•25 January 2010
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| CHILD SUPPORT REGISTRAR & STEWART | [2010] FMCAfam 38 |
| CHILD SUPPORT – Costs – whether making of a costs order is a matter affecting substantive rights or one of practice and procedure – whether an order for costs may be made retrospectively – whether an order for costs ought to be made – whether it would be a proper exercise of discretion to apply the current schedule of costs to costs incurred in the past – proper scale of costs to be applied on the facts of this matter. |
| Child Support (Registration and Collection) Act 1988, sub-s.116(2) Federal Magistrates Court 1999, s.43(2)(a) |
| Laurie & Child Support Registrar & Filho (No.2) [2009] FMCAfam 971 Woodcrest Homes Pty Ltd v Fair Trading Tribunal [2002] NSWSC 552 Australian and International Pilots Association v Qantas Airways Ltd (No 3) [2007] FCA 879; 162 at 392 Maurici v Chief Commissioner of State Revenue (No 8) [2007] NSWLEC 37 Sykes v Queensland Gas Co & Anor [2009] QCA 163 Galvin v Forests Commission of Victoria [1939] VLR 284 Jackman v Dandenong Sewerage Authority (No 2) (1967) 20 LGRA 413 |
| Applicant: | CHILD SUPPORT REGISTRAR |
| Respondent: | MR STEWART |
| File Number: | PAM 1441 of 2006 |
| Judgment of: | Henderson FM |
| Hearing date: | 19 November 2009 |
| Date of Last Submission: | 19 November 2009 |
| Delivered at: | Parramatta |
| Delivered on: | 25 January 2010 |
REPRESENTATION
| Advocate for the Applicant: | Mr Gouliaditis |
| Solicitors for the Applicant: | Australian Government Solicitors |
| Advocate for the Respondent: | Mr Gonzalez |
| Solicitors for the Respondent: | Levy Partners |
ORDERS
That the Applicant’s costs to be paid at the scale then current for all the appearances set out in Applicant’s Exhibit 2 from the monies held in trust with the balance to be released to Mr Stewart.
IT IS NOTED that publication of this judgment under the pseudonym Child Support Registrar & Stewart is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT PARRAMATTA |
PAM 1441 of 2006
| CHILD SUPPORT REGISTRAR |
Applicant
And
| MR STEWART |
Respondent
REASONS FOR JUDGMENT
This is an application by the Child Support Registrar for their costs at the current Federal Magistrates Court scale backdated to 10 January 2005 in relation to an Enforcement Summons issued by the Agency in early 2005.
Mr Gouliaditis appeared for the Applicant, the Child Support Registrar, and Mr Gonzalez appeared for the Respondent, Mr Stewart, at the hearing before me on 19 November 2009.
Exhibits
The following exhibits were tendered by the Applicant:
a)Applicant’s Exhibit 1: Written submissions in relation to the issue of costs.
b)Applicant’s Exhibit 2: Schedule of costs.
c)Applicant’s Exhibit 3: Certificate under sub-section 116(2) of the Child Support (Registration and Collection) Act 1988. This Certificate is as at 19 November 2009.
d)Applicant’s Exhibit 4: A Minute of Orders sought by the Applicant.
The Respondent tendered the following exhibit:
a)Respondent’s Exhibit 1: A letter to the father, dated 16 November 2009, in relation to his Newstart Allowance.
Chronology
The matter has had a long and troubled history.
Mr Stewart commenced proceedings for a departure order in the Local Court Family Matters on 14 April 2005. This was in response to an Enforcement Application filed by the Child Support Registrar in the Local Court Family Matters which was heard on 13 April 2005.
That Enforcement Application was stayed upon the filing of
Mr Stewart’s Departure Application.
Mr Stewart went through the processes in the Administrative Appeals Tribunal in 2005 and 2006 as part of his objection to the Child Support Assessments issued by the Agency in 2000, 2001 and 2002. The wife also filed Departure Applications for part of the years 2001 through to 2008.
The Departure Applications and Enforcement Summons were transferred to the Family Court on 16 March 2006 and subsequently to the Federal Magistrates Court.
The matter came before the Federal Magistrates Court on 18 April 2006 when Federal Magistrate Donald listed the matter for hearing and trial directions were made for the filing of material and the like. The Departure Application matters were listed for Final Hearing for two days commencing 17 October 2006. The Enforcement Summons was merely running along with the Departure Applications at this time.
On 17 October 2006 the Final Hearing was vacated and listed for a one day hearing on 24 July 2007.
On 23 January 2007 the Final Hearing date was vacated again due to the unavailability of Federal Magistrate Donald and the matter listed for hearing on 27 July 2007.
The Final Hearing listed on 27 July 2007 did not take place due to the unavailability of a party and the matter was listed for Final Hearing on 3 August 2007.
On 3 August 2007 the Departure Applications were commenced to be heard and were stood over part heard to 3 September 2007.
The Child Support Registrar appeared at the part heard hearing on
3 September 2007. The Child Support Registrar was excused from further attendance pending judgement being delivered and the Enforcement Summons was stood over to a date to be fixed.
The hearing was completed on 3 September 2007 and Judgement was reserved.
Judgment was delivered on 2 July 2008.
The Enforcement proceedings between the Child Support Registrar and Mr Stewart were mentioned on 14 August 2008 and the proceedings were adjourned to an Enforcement List on 9 October 2008.
The Departure Application between the husband and wife were listed for a costs hearing on 16 September 2008. On 16 September 2008 the costs hearing between the husband and wife was stood over to
1 December 2008.
On 11 September 2008 Mr Stewart filed a notice of Appeal from Federal Magistrate Donald’s decision of 2 July 2008.
On 9 October 2008 the matter between the husband and the Child Support Registrar came before me in the Enforcement List. I refused the husband’s oral application for an adjournment pending the appeal process. I listed the Enforcement Summons for hearing on 26 February 2009.
The husband and wife’s costs application came before Federal Magistrate Donald on 1 December 2008 and he stood the matter over to 20 February 2009.
On 20 February 2009 the husband and wife’s costs application came before Federal Magistrate Dunkley who stood it over for hearing to
26 June 2009.
The Enforcement Summons came before me on 26 February 2009 for hearing. The Appeal had been filed but not finalised and interim orders were made pending the outcome of the Appeal. The matter was listed for mention on 27 August 2009 to await the outcome of the Appeal.
By the Orders of 26 February 2009, Mr Stewart was ordered to place the home at [suburb omitted] on the market for sale, provide a copy of the first page of the contract for sale of the property to the Child Support Registrar, and provide a copy of the mortgage documents to the Child Support Registrar. Mr Stewart was otherwise injuncted and restrained from dealing with the home or the proceeds of sale. The Child Support Registrar was given liberty to re-list the matter on fourteen days notice in the event Mr Stewart did not comply with these orders.
The matter was relisted by the Child Support Registrar on 3 April 2009 due to Mr Stewart’s failure to provide mortgage documents to them. Further orders were made on that occasion by me to protect the net proceeds of sale of the home pending the outcome of the Appeal and the hearing of the Enforcement Summons.
On 13 May 2009 the Appeal from Federal Magistrate Donald’s decision was delivered. The Appeal was allowed. Mr Stewart’s home had been sold by that time and he and the wife entered into consent orders resolving their matter which provided for the release of monies held by the Applicant’s solicitor to the wife in discharge of the husband’s child support arrears with the balance to be paid to the husband subject to the Child Support Registrar costs application.
On 26 June 2009 the husband and wife’s costs application was withdrawn as that issue had been finalised by the consent orders made on 13 May 2009.
The Enforcement Summons came before me for hearing on 27 August 2009 when the only issue was costs and late payment penalties as the arrears had been discharged in May 2009.
The matter was stood over to 19 November 2009 to allow Mr Stewart to make his representation regarding penalties and the like and to answer the Child Support Registrar costs application.
On 19 November I heard the costs application and ordered the monies held in an interest bearing account on trust be released to Mr Stewart save for the sum of $14,000, a sum sufficient to satisfy the Child Support Registrar costs.
I reserved judgement in relation to the payment of those costs.
The legislation
The Child Support Registrar seeks an order that the Respondent pay their costs in the sum of $8,077.85. These costs have been calculated in accordance with the current scale set out in Part 1 of Schedule 1 of the Federal Magistrates Court Rules 2001 which came into effect on
7 April 2009. The Child Support Registrar have included costs incurred from 10 January 2005.
Pursuant to section 100(1) of the Child Support (Assessment) Act 1989 (“CSA Act”) proceedings commenced under the CSA Act are dealt with as if they had been commenced under Part VII of the Family Law Act and the standard rules of the Family Court and the Federal Magistrates Court apply to such proceedings. This includes matters in relation to costs.
The power to make a costs order is found in the Federal Magistrates Court Rules at Part 21, Rule 21.02.
Section 43(2)(a) of the Federal Magistrates Court Act provides:
the Rules of Court made under the Family Law Act 1975 apply, with necessary modifications, so far as they are capable of application and subject to any directions of the Federal Magistrates Court or a Federal Magistrate, to the practice and procedure of the Federal Magistrates Court in relation to the jurisdiction of the Federal Magistrates Court under:
(i) the Family Law Act 1975 ; or
(ii) the Child Support (Assessment) Act 1989 ; or
(iii) the Child Support (Registration and Collection) Act 1988 ;
Section 100(1) of the CSA Act makes it clear that proceedings under that Act are to be dealt with as if instituted under Part VII of the Family Law Act. Thus section 117(2A) of the Family Law Act dealing with the matters the Court must take into account in making a costs order applies to these applications when an Federal Magistrate is exercising the power under Part 21 of the Federal Magistrate Court Rules to make a costs order.
Although child support proceedings which concern the proper support of children by each parent in accordance with the law are not Family Law proceedings dealing with proper arrangements for the parenting of children in the strict sense, section 100(1) of the CSA Act has deemed they are to be dealt with as if they were parenting proceedings instituted under Part VII of the Family Law Act.
Applying the scale of costs retrospectively
The Registrar seeks costs at scale but seeks that the scale to be applied to the costs incurred from 2005 be that as applied from 7 April 2009.
In his written submissions Mr Gouliaditis asserted that the making of a costs order is a matter of practice and procedure and not a matter affecting substantive rights and that, as such, statutes affecting court procedure or costs can be applied retrospectively.
If I accept this submission the consequence is that when exercising its discretion to make an order for costs, a Court may apply a scale of costs promulgated later in time than that which applied when the costs were incurred.
Mr Gouliaditis asserts I am at liberty to apply the most recent scale, namely that of 7 April 2009, to the costs sought by the Applicant which were incurred in part as long ago as 2005.
Mr Gouliaditis drew my attention to a decision of Federal Magistrate Sexton on this issue in Laurie & Child Support Registrar & Filho (No.2) [2009] FMCAfam 971. In that decision her Honour did not accept that the schedule could be applied retrospectively:
Mr Gouliaditis submits that the latest change to Schedule 1 should be applied retrospectively. I do not accept this submission. Unless the amending rules make specific provision for retrospective application, the amending rule applies as stated in the amending rule.
Mr Gouliaditis asserted her Honour’s decision is inconsistent with the case law and that the statutory principle is that unless the amending rule specifically prohibits retrospectivity then costs can be applied retrospectively.
In support of his submissions, Mr Gouliaditis relied on the cases of:
a)Woodcrest Homes Pty Ltd v Fair Trading Tribunal [2002] NSWSC 552;
b)Australian and International Pilots Association v Qantas Airways Ltd (No 3) [2007] FCA 879; 162 at 392;
c)Maurici v Chief Commissioner of State Revenue (No 8) [2007] NSWLEC 37;
d)Sykes v Queensland Gas Co & Anor [2009] QCA 163; and
e)Jackman v Dandenong Sewerage Authority (No 2) (1967) 20 LGRA 413.
In Sykes v Queensland Gas Co & Anor [2009] QCA 163, Muir and Chesterman JJA and Wilson J say at paragraph 78:
The categorisation of the subject matter of legislation as affecting substantive rights or questions of procedure only is not always easy. However, changes to the power of a Court to award costs have consistently been held to be changes in procedure and to operate retrospectively.
They go on to discuss Galvin v Forests Commission of Victoria [1939] VLR 284 where the Full Court held at 297 - 298:
Unless (the amendment) be held not to be retrospective and, therefore, not to affect pending proceedings, it plainly gives the Board power to award costs. Two cases of high authority decide that legislation giving or regulating a power to award costs is retrospective, in that it affects not substantive rights but merely procedure ... . The distinction is well-established (see Maxwell on The Interpretation of Statutes).
In Australia and International Pilots Association v Qantas Airways Ltd (No 3) [2007] FCA 879, Tracey J said at paragraph 16:
…the common law rule that statutory provisions dealing with the power to award costs are procedural in nature and, in the absence of contrary legislative intention, will operate retrospectively at least to the extent of applying to cases commenced before the amendment: see eg Galvin v Forests Commission of Victoria [1939] VR 284 at 297-8; Jackman v Dandenong Sewerage Authority (No 2) (1967) 20 LGRA 413 at 415.
In Jackman v Dandenong Sewerage Authority (No 2) (1967) 20 LGRA 413 the claim was one for compensation on a resumption of land. The relevant Act was changed after the claim was started but before adjudication. The change introduced a formula which removed “from the Tribunal any discretion” as to costs and directed what order should be made in defined circumstances. Barber J said at paragraph 415:
where the general rule is that a statute changing the law will not be given retrospective effect in the absence of the clearest language demanding such an interpretation, there is a well recognised exception in regard to statutes affecting procedure or costs merely, which are always retrospective unless the opposite effect is clearly stated. There is no vested right in procedure or costs…The weight of authority is so great that it is impossible at this date to question the rule…
On the basis of the above authorities I am satisfied that in the absence of clear legislative intention to the contrary, statutory provisions dealing with the power to award costs are procedural in nature, not a matter of substantive right, and a Court has the power to apply an amended costs scale or schedule or costs generally and retrospectively.
There is a long line of authority which supports this principle.
I am satisfied I must depart from the decision of Federal Magistrate Sexton on the issue of whether an order for costs can be made retrospective in terms of the scale of costs to be used and I find I can apply costs retrospectively .
I must now consider carefully the amending costs rule to determine if there is a legislative intention contrary to the common law statuary interpretation of retrospectivity of the power to order costs.
The amending Rule is found in Federal Magistrates Court Amendment Rules 2009 (No 1), Select Legislative Instrument 2009 No 55.
Paragraph 2 of the amending rule states:
These rules commence on the day after they are registered.
There is no wording of intent in the rules that states they are not to be applied retrospectively.
Following the decision of Australia and International Pilots Association v Qantas Airways Ltd (No 3) [2007] FCA 879, as the rules do not specify that they do not operate retrospectively and as there is no other contrary intention expressed or clearly implied in the statute, they can operate retrospectively.
Accordingly I am satisfied that I may, in the exercise of my discretion, apply the current schedule of costs to costs incurred prior to its enactment and commencement date.
Discretion to order costs
The power to make an order for costs is found in Division 21 of the Federal Magistrates Court Rules. Rule 21.02(2) says:
In making an order for costs in a proceeding, the Court may:
(a) set the amount of the costs; or
(b) set the method by which the costs are to be calculated; or
(c) refer the costs for taxation under Order 62 of the Federal Court Rules or under Chapter 19 of the Family Law Rules; or
(d) set a time for payment of the costs, which may be before the proceeding is concluded.
I am bound to consider the matters under section 117(2A) in determining such an application: They are:
In considering what order (if any) should be made under subsection (2), the court shall have regard to:
(a) the financial circumstances of each of the parties to the proceedings;
(b) 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;
(c) the conduct of the parties to the proceedings in relation to the proceedings including, without limiting the generality of the foregoing, the conduct of the parties in relation to pleadings, particulars, discovery, inspection, directions to answer questions, admissions of facts, production of documents and similar matters;
(d) whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the court;
(e) whether any party to the proceedings has been wholly unsuccessful in the proceedings;
(f) whether either party to the proceedings has made an offer in writing to the other party to the proceedings to settle the proceedings and the terms of any such offer; and
(g) such other matters as the court considers relevant.
The first issue is whether I will exercise my discretion to make an order for costs.
The history of this matter is long and complex. Mr Stewart has not always complied with orders of the Court and as such I will exercise my discretion and consider the issue of costs as sought by the Applicant.
The Applicant seeks costs from 10 January 2005 when the matter was first in the Local Court Family Matters. From a perusal of that file the first Court event was in April 2005 and related to the husband and wife’s competing applications for departure orders.
I have been unable to find the Enforcement Summons or any matters relating to the enforcement issue from a perusal of the Local Court Family Matters file let alone any Court appearances dating back as early as January 2005.
However I accept that an Enforcement Application/Summons seeking arrears of child support against Mr Stewart in the amount of $18,000 was filed by the Applicant in the Local Court and heard on 13 April 2005 and that Mr Stewart’s departure application was filed in response to that Enforcement hearing.
I accept these are the facts as they were recited in a case outline prepared by the husband’s legal representatives in the hearing before Federal Magistrate Donald on 3 August 2008 and 3 September 2008.
I accept a hearing on the Enforcement Application was held in the local court on 13 April 2005 as Mr Stewart filed an application the next day, on 14 April 2005, seeking a stay of the execution of the recovery of the current assessed balance of unpaid child support pending a determination of his Departure Application. Thus there had been a determination of his arrears of child support as at 13 April 2005.
Further in the costs hearing before me on 19 November 2009
Mr Gonzalez, who has always represented Mr Stewart in this matter, did not submit that the costs sought by the Applicant from 10 January 2005 had not been incurred, merely that his client should not have to pay them.
Applicant’s Exhibit 4 which was tendered by consent at the hearing set out that as at 19 November 2009 Mr Stewart owed $3,968.43 in child support being $49.63 in arrears and $3918.80 in late payment penalties.
The initial issue before the Court was, at the end of the day, what was the amount of child support Mr Stewart was liable to pay for the support of his children.
Mr Stewart’s position was that he had paid all the child support he was liable to pay and that the assessments issued by the Child Support Agency were incorrect. Mr Stewart was successful in that the assessments were varied however he was not successful on the issue of having fulfilled his child support obligations.
Mr Stewart’s successful appeal was resolved by his paying to the wife the sum of $41,550 by way of a discharge of all child support arrears outstanding and $21,000 by way of costs.
Thus although his appeal was successful his position in 13 April 2005 that he was not liable to pay child support over and above that which he had paid was not ultimately made out.
Quantum of costs
As to the costs the Applicant is pursuing on the Enforcement Summons.
Mr Stewart took no action to seek a departure order or have what he regarded as unfair assessments re-assessed through the available administrative processes until such time as the Child Support Registrar took a step and issued an Enforcement Summons against him.
In those circumstances I find the Applicant is entitled to their costs at scale incurred in the Local Court from January 2005.
The Applicant would have been entitled to appear at the first return date after the transfer of the matter to the Federal Magistrates Court to participate in the determination of what steps the Court would take. In the usual course the Court determined to deal with the Departure Applications first and then the Enforcement would follow. The Applicant has not sought those costs.
The next event at which the Applicant needed to appear was the finalisation of the departure hearing before Federal Magistrate Donald on 3 September 2008 when he stood over the Enforcement Summons to a date to be fixed.
The date fixed was 14 August 2008 and for that appearance and each appearance since that time, which were before me, it has been necessary for the Child Support Registrar who is the Applicant to appear.
Therefore, I find the appearances claimed as necessary by the Applicant in the claim for costs which was tendered at in the hearing on 19 November 2009, marked Applicant’s Exhibit 2, and were necessary.
Findings
The issue now is a consideration of the factors under section 117(2A) and secondly whether I will apply the current scale costs to all the costs sought by the Agency.
Mr Stewart is not in a good financial position. His home has been sold which was necessary to pay the arrears of child support he had incurred. He has an ongoing obligation to support his children. He delayed paying money to his former wife for the support of his children for as long as he could. He must bear the consequence of the decisions he took.
There are funds sufficient to pay the Applicant’s costs held in trust and I have formed the view that those costs ought to be paid to the Applicant by Mr Stewart.
I am not persuaded, however, that I should apply to costs incurred in 2005, 2007, and 2008 the current scale which was brought into existence in April 2009.
Mr Stewart delayed paying child support to his children. However, I do not see that he has delayed the proceedings.
If anyone has been tardy it has been this Court in taking over
18 months from transfer to finally hearing the departure matter and then nearly another 12 months to deliver Judgement.Mr Stewart ought not to suffer in monetary terms for the effects of that delay on the matter being finalised. Once he had his decision he lodged an appeal which was upheld.
Thus, I will make an order for the Applicant’s costs to be paid at the scale then current for all the appearances set out in Applicant’s Exhibit 2 from the monies held in trust with the balance to be released to
Mr Stewart.Therefore, I make the Orders as set out at the commencement of this decision.
I certify that the preceding eighty-nine (89) paragraphs are a true copy of the reasons for judgment of Henderson FM
Associate: A. Morris
Date: 25 January 2010
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