CHILD SUPPORT REGISTRAR & AUSTEN
[2012] FMCAfam 331
•15 May 2012
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| CHILD SUPPORT REGISTRAR & AUSTEN | [2012] FMCAfam 331 |
| CHILD SUPPORT – Enforcement – child support debt – application in a case – where application for determination filed after enforcement proceedings commenced – exercise of discretion. COSTS – Whether a costs order should be made – considerations. |
| Child Support (Assessment) Act 1989, ss.98S, 112, 118 Child Support (Registration and Collection) Act 1988, s.116 Family Law Act 1975, s.117 Federal Magistrates Court Rules 2001, r.25B |
| Bagala & Bagala [2009] FMCAfam 953 Hendy v Deputy Child Support Registrar [2001] FamCA 632; (2001) 27 Fam LR 641 |
| Applicant: | CHILD SUPPORT REGISTRAR |
| Respondent: | MR AUSTEN |
| File Number: | SYC 5417 of 2011 |
| Judgment of: | Scarlett FM |
| Hearing date: | 10 April 2012 |
| Date of Last Submission: | 10 April 2012 |
| Delivered at: | Sydney |
| Delivered on: | 15 May 2012 |
REPRESENTATION
| Solicitor for the Applicant: | Mr Nguyen |
| Solicitors for the Applicant: | Australian Government Solicitor |
| Solicitor for the Respondent: | Mr Bye (appeared pro bono) |
| Solicitors for the Respondent: | BIC Legal |
ORDERS
THE COURT DECLARES THAT
As at 10 April 2012 the Respondent owes the Applicant the sum of $13,563.71 (‘child support debt’) consisting of $10,984.90 in arrears of child support and $2,578.81 in late payment penalties.
THE COURT ORDERS THAT
The Respondent is to pay to the Applicant the child support debt of $13,563.71 within three (3) months of the date of these Orders.
The Respondent is to pay to the Applicant the sum of $2,250.00 toward the Applicant’s legal costs within six (6) months of the date of these Orders.
On or before 15 June 2012 the Respondent is to lodge with the Australian Taxation Office all outstanding personal income tax returns.
Until further order of the Court or payment in full of the total debt including costs the following provisions apply:
(a)The Respondent is restrained from selling, assigning, transferring, further encumbering or dealing in any way with his interest in the real property at Property T in the State of New South Wales described in Certificate of Title Folio [omitted] (‘real property’) without the prior written consent of the Applicant.
(b)The Respondent’s interest in the real property is to be charged in favour of the Applicant for the total debt and the Applicant is to be at liberty to lodge a caveat over the real property to secure the interest created by this charge.
(c)The Respondent is restrained from selling, assigning, transferring or dealing in any way with all shares in which he holds a legal or beneficial interest including but not limited to the shares held by the Respondent in [A] and [I] ([I]) (‘personal property’) without the prior written consent of the Applicant.
(d)The Respondent’s interest in his personal property is to be charged in favour of the Applicant for the total debt and the Applicant is to be at liberty to lodge an encumbrance over the personal property to secure the interest created by this charge.
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 then the following Orders shall take effect:
(a)The total debt consisting of the child support debt and the legal costs shall be immediately due and payable.
(b)The Official Receiver, the Sheriff of the Federal Magistrates Court and their servants and agents shall be appointed as Enforcement Officers.
(c)As provided by 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.
The Application is removed from the list of cases awaiting finalisation.
IT IS NOTED that publication of this judgment under the pseudonym Child Support Registrar & Austen is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT SYDNEY |
SYC 5417 of 2011
| CHILD SUPPORT REGISTRAR |
Applicant
And
| MR AUSTEN |
Respondent
REASONS FOR JUDGMENT
Application
This is an Application by the Child Support Registrar for orders that the Respondent should pay to the Child Support Registrar arrears of child support and late payment penalties, together with a contribution towards the Child Support Registrar’s costs.
The solicitor for the Child Support Registrar has handed up a Certificate under subsection 116(2) of the Child Support (Registration and Collection) Act 1988 stating that as at the date of the hearing the Respondent owed a total amount of $13,563.71 made up of:
a)A Child Support debt of $10,984.90; and
b)Late payment penalties of $2,578.81.
The Respondent has filed an Application in a Case, supported by an affidavit and a Financial Statement, seeking the following orders:
1. That the Court grant leave under section 112 of the Child Support (Assessment) Act 1989 for:
(a)the Registrar to make a determination under section 98S; or
(b) the court to make an order under section 118
to amend the administrative decision made by an officer of the Respondent.
2. That the Court dismiss any and all penalties attributed to child support case number [omitted].
3. Such other orders as the court sees fit.
Background
The Application was filed by the Child Support Registrar on 5th September 2011. It was returnable on 8 November 2011.
The Application in a Case seeking leave under s.112 of the Child Support (Assessment) Act 1989 was filed on 13 March 2012.
The Relevant Law
Section 98S of the Child Support (Assessment) Act 1989 empowers the Registrar to make various determinations by way of departure orders, in similar terms to those determinations which may be made by a Court under s.118 of the Act. However, the Registrar can only make a determination for a period up to 18 months earlier unless a Court has granted leave under s.112 of the Act. Subsection 98S(3B) provides:
The Registrar may only make a determination under this Part in respect of a day in a child support period, being a day that is more than 18 months earlier than:
(a)the day on which the application for the determination is made under section 98B; or
(b)the day on which the Registrar notifies the relevant parties under subsection 98M(1);
if a court has granted leave under section 112 for the determination to be made.
It has been held by this Court in Bagala & Bagala[1] that a court should not exercise its discretion to permit a party to apply for a review of his child support liability through the Court, rather than following the procedure for administrative departure provided by Part 6A of the Act, after enforcement proceedings have already commenced. As Riethmuller FM said in Bagala at [22]:
The applicant had real opportunities, prior to the Child Support Registrar filing the enforcement summons, to seek a review of his child support liability. He chose not to do so and has not provided any evidence of a reasonable excuse for not doing so.[2]
[1] [2009] FMCAfam 953
[2] [2009] FMCAfam 953 at [22]
Evidence
The Child Support Registrar relied on an affidavit affirmed on 2nd September 2011 by Ms N, a Litigation Officer with the Child Support Agency. Ms N was not required for cross-examination.
The solicitor appearing for the Child Support Agency also tendered the following documents without objection:
a)A certificate under s.116(2) of the Child Support (Registration and Collection) Act 1988 showing an amount of $13,563.71 owing as at the date of the hearing, made up of:
i)Child Support debt $10,984.90; and
ii)Penalties $2,578.81
b)Proposed Minutes of Orders;
c)Schedule of costs;
d)ASX Listed Company Information Fact Sheet relating to [A]; and
e)ASX Listed Company Information Fact Sheet relating to [I] ([I]).
The Respondent relied on:
a)his affidavit sworn 12th March 2012; and
b)his Financial Statement sworn 12th March 2012.
The Respondent was not required for cross-examination.
Submissions
Mr Bye, who appeared for the Respondent, submitted that his client was in an unfortunate situation. He had recently submitted his income tax returns and had made arrangements to pay his accountant for that work. However, because he is not in an advantageous financial position he is concerned about how he can satisfy the child support debt. The Respondent holds shares in [A] and [I] but wishes to keep those shares for his daughter [X], the child for whose support the child support is payable.
It was submitted that the imposition of late payment penalties and an order for costs would only exacerbate the Respondent’s dire financial position. Mr Bye submitted that either the Court should make no order for costs or should reduce the costs from the amount of $4,649.80 claimed by the Child Support Registrar.
Mr Nguyen, for the Child Support Registrar, submitted that the respondent’s [A] shares were valued at $9,265.00 and his [I] shares were valued at $4,552.47, a total of $13,817.47. This amount exceeds the child support debt and late payment penalties set out in the s.116(2) Certificate, totalling $13,563.71. The Respondent also had an equity in his land at Property T an interest in his business. The business had a credit balance of $12,808.25 in his business cheque account as at 27th May 2011.[3]
[3] Affidavit of Ms N 2.9.2011 Annexure “N”
Thus, it was submitted, the Respondent had the capacity to pay the child support debt outstanding.
As to the costs claimed, Mr Nguyen submitted that the costs claimed were according to the scale provided in Schedule 1 to the Federal Magistrates Court Rules 2001 and were justified by the Respondent’s conduct of the proceedings.
Conclusions
It is clear that this is a case where the Respondent did not seek to vary or review his child support assessments until well after the Child Support Registrar had commenced enforcement proceedings. The only reason that he gives is that he was delayed in submitting his income tax returns. This is not, to my mind, a reasonable excuse and I propose to follow the decision in Bagala & Bagala[4] and decline to exercise the Court’s discretion to grant leave under s.112 or proceed under s.118. It is still open to the Respondent to apply to the Registrar under Part 6A in respect of a child support period in the last 18 months, now that his income tax returns have been lodged.
[4] supra
An examination of the Respondent’s Financial Statement shows that he holds 1,297 [I] shares, worth approximately $4,552.00, and 2125 [A] shares, worth approximately $9,265.00. The Respondent has stated that he wishes to keep these shares for his daughter, but it seems clear that her need is a current one, and the shares could well be sold to meet the outstanding child support.
I am satisfied that the Respondent has the capacity to pay the child support debt, including late payment penalties.
The Respondent states that he has had difficulty in meeting his ongoing liability for child support. Now that his income tax returns have been lodged, he is in a position to seek an administrative variation of ongoing child support payments.
The Child Support Registrar seeks an order for costs. It is open to the Child Support Registrar to do so, and the power to award costs and the circumstances in which costs orders may be made are governed by section 117 of the Family Law Act 1975 (see Hendy v Deputy Child Support Registrar[5].
[5] [2001] FamCA 632; (2001) 27 Fam LR 641
Costs do not follow the event in these matters. The Court must follow the provisions of s.117. Subsection 117(2) states that:
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.
The court is required to have regard to the matters contained in paragraphs (a) to (g) of subsection 117(2A) in considering what if any order should be made. Subsections (4) and (5) do not apply.
The Respondent’s financial circumstances have been described as “dire”. His average weekly income is less than his ongoing child support liability.
Neither the Applicant nor the Respondent is in receipt of assistance b y way of a legal aid. The Respondent is represented by his solicitor, Mr Bye, on a pro bono basis, which is to the solicitor’s credit.
The proceedings were commenced in November 2011. There have been three mentions prior to the final hearing. The final hearing itself was conducted by way of submissions without the need for cross-examination, which shortened the hearing considerably.
The proceedings were not necessitated by the failure of the Respondent to comply with a Court Order. They were proceedings to recover arrears of child support arising from an administrative assessment.
The Child Support Registrar will be successful in obtaining an order for payment of the outstanding child support debt.
There is no evidence of any written offer of settlement.
Costs are discretionary. I take into account that the Respondent will be required to pay the outstanding child support debt including late payment penalties, amounting to $13,563.71. I will allow three months for that sum to be paid.
The payment of costs will be an additional burden on the Respondent. It is a matter where some order for costs should be made, as the Child Support Registrar has had to commence proceedings to recover the outstanding child support. However, I am of the view that a significant lesser amount than the $4,649.80 claimed by the Child Support Registrar should be met by the Respondent.
The Respondent will be ordered to pay a sum of $2,250.00 towards the Applicant’s costs. He will be allowed six months to pay.
I certify that the preceding thirty-two (32) paragraphs are a true copy of the reasons for judgment of Scarlett FM
Date: 15 May 2012
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