Delane & Hageraats

[2000] FamCA 817

[2000] FamCA 817

FAMILY LAW ACT 1975

IN THE FULL COURT       
OF THE FAMILY COURT OF AUSTRALIA                 Appeal No ALE16 of 1999
AT SYDNEY  File No PA 7758 of 1998

BETWEEN:

BRIGITTE DELANE
Appellant Mother
- and -

SEAN RICHARD HAGERAATS
Respondent Father

REASONS FOR JUDGMENT OF THE FULL COURT

CORAM:  KAY, COLEMAN & GUEST JJ
DATE OF HEARING:  8 June 2000
DATE OF JUDGMENT:                  8 June 2000

APPEARANCES:  Mr Hume, Solicitor, Philip K Coster & Co., 623 Military Road, Mosman, NSW 2088, appeared on behalf of the Appellant Mother.

Mr Kearney of Counsel, instructed by Watts McCray, 31 Fennell Street, Parramatta North, NSW  2151, appeared on behalf of the Respondent Father.

DELANE and HAGERAATS

Coram:  Kay, Coleman and Guest JJ
Date of hearing:                 8 June 2000
Date of judgment:             8 June 2000

CHILD SUPPORT (ASSESSMENT) ACT 1989 (CTH)- Application for leave to appeal from Magistrate-Departure order made along with consent property orders - leave to appeal only sought re Child Support - No departmental review of child support sought - whether s115 and Reid’s case (1999) FLC 98-007 prohibit Family Court entertaining appeal from Magistrate - Appellate jurisdiction not affected by s115 - Child Support (Assessment) Act ss 105 and 115.

Flohm J found that the Court had no jurisdiction to hear M’s application for Departure from Administrative Assessment of Child Support.

In June 1997, M lodged an application at the North Sydney Local Court, alleging that F had wrongfully taken a motor vehicle from her. In April 1998, M filed a further two applications, one in relation to property settlement, and the second, for departure from the administrative assessment under the Child Support (Assessment) Act. The parties subsequently came to an agreement regarding the motor vehicle and property disputes, and those proceedings were to be dismissed by consent.

Without seeking a departmental review, M sought a periodic departure order, and at the hearing sought that the F’s child support liability be capitalised at $100,000.

Magistrate Mitchell heard the Child Support proceedings at the same time as he made consent orders in the State property proceedings and the damages action. Each party invited him to do so. He ordered that F pay capitalised child support of  $70,000.

F applied to the Family Court seeking leave to appeal from the Magistrate’s decision.  F contended (inter alia) that the Magistrate failed to require an administrative review of the current assessment before ordering payment of a lump sum.

Flohm J held that the Family Court had no jurisdiction to proceed because of the provisions of s115 and the Full Court’s decision in Reid (1999) FLC 98-007. Her Honour granted F leave to appeal but declined to make any order for costs in the matter.

M applied to the Full Court for leave to appeal that decision, contending that the trial Judge erred in finding there was no jurisdiction to hear M’s departure application.

Held (per curium) in allowing the appeal:

• The trial Judge erred in her view that there was a bar to her exercising her appellate jurisdiction under the Child Support (Assessment) Act. The restrictions that are placed on the Family Court when exercising its original jurisdiction by reason of the provisions of s 115 and Reid's case are not appropriate to be applied when the Court is exercising appellate jurisdiction.

• There would be substantial injustice to M if leave to appeal were not granted.  M holds a judgment for $70,000 and until that judgment is properly set aside, she is entitled to the fruits of that judgment.  M will be denied the opportunity to hold that judgment if leave is not granted.  M should also be entitled to the determination of the trial costs in accordance with the proper result this matter should have had.

Application for leave to appeal allowed
Appeal granted
Matter remitted for rehearing

REPORTABLE

1. KAY J:   Before the Court is an application for leave to appeal, and if leave is granted, an appeal against orders that were made by Flohm J on 21 October 1999.  There may be a some confusion in the judgment that I am about to pronounce because we are dealing with an application for leave to appeal from a single judge and she in turn was dealing with an application for leave to appeal from a magistrate.  I trust that the reader of these reasons for judgment will be able to sort out which leave application I am talking about at any one moment.

1. The applicant before the Full Court is the mother of a child and the respondent before the Full Court, who was the appellant before Flohm J, is the father of that child.  The parties resided in a de facto relationship.  There were existing child support assessments in respect of the child, which required the father to pay moneys to the mother.  The mother brought proceedings in the Local Court at North Sydney seeking damages in respect of a claim for a motor vehicle that she said the father had wrongfully taken from her.  She also brought an application for a property settlement pursuant to provisions of the De Facto Relationships Act 1984 (NSW) and an application seeking a departure from administrative assessment of child support.

1. In the departure application she had sought:

"(1)A direction pursuant to Section 115 (c) of the Child Support (Assessment) Act 1989 ("the Act") that the Court is satisfied that it is in the interest of the Father and the Mother for the Court to consider the Orders sought in paragraph (2), below at the same time as it hears the Applications of the parties for other Orders herein, namely:

(i)Judgment for the Mother as Plaintiff against the Father as Defendant for the value of a Ford Fairlane vehicle which the Mother alleges was owned by her and was taken from her by the Father.

(ii)Orders under Division 3 of Part 3 of the De Facto Relationships Act 1984 to adjust interests in respect of property being the said Ford Fairlaine vehicle.

AND notwithstanding that there has been no application for review of the Child Support Assessments for the relevant years.

(2)An Order in respect of the said child [ID] for each Child Support Year (or period) commencing with the period 17.02.98 to 30.06.98 and extending up to and including the period relevant to the year in which [ID] attains the age of 18 years (or the year in which the Father's liability to pay child support in respect of [ID] otherwise ceases),

THAT the Father's Child Support Liability for each such year be calculated in accordance with the formula set out in Section 42 of the Act upon the basis that the Father's Child Support Income for each relevant year is 1.75 times the relevant Average Weekly Earnings amount for that year."

The effect is that the mother was seeking an increase in the amount of child support payable on a periodic basis.

1. It appears from the record that the parties rapidly resolved the issues in respect of the claim for the motor car and the De Facto Relationships Act but sought to litigate the child support matters. 

1. The matter came on for hearing before Magistrate Mitchell and in his reasons for judgment he said as follows:

"In the event, the parties came to an agreement in relation to the subject matter of the summons and the De Facto Relationships Act application and have settled the same and, in due course, I will dismiss those proceedings by consent. The departure application proceeded to a hearing on 14 October, 1998 when Mr. Hume appeared for the Mother and Mr. Smith appeared for the Father. In the event, the Mother varied her departure application so as to seek a direction pursuant to Section 115[c] of the Child Support [Assessment] Act which would enable the court to hear and determine the matter notwithstanding that the same had not previously been placed before a Child Support Review Officer. Both Mr. Hume and Mr. Smith told me that they agreed that the court should proceed with the matter and, in the prevailing circumstances, I think that the procedure was appropriate and, in due course, I will make the declaration sought."

1. His Worship then set out the reasons why he was going to make particular orders in the child support hearing.  He concluded by making a series of orders the first of which read as follows:

"[1].Declaration pursuant to Section 115[c] of the Child Support [Assessment] Act in accordance with paragraph [1] of the Mother’s application filed at North Sydney Local Court on 22 April, 1998 and numbered 7 of 1998;

[2].By consent, order that the Mother’s applications for orders pursuant to Division 3 Part 3 of the De Facto Relationships Act, 1984, be dismissed."

1. The learned magistrate then went on to order the father to pay a lump sum of $70,000 pursuant to Division 5 Part 7 of the Child Support (Assessment) Act and directed that the payment be credited against the father’s liability under any administrative assessment with regard to the said child for any child support period until 10 March 2008.  He then granted some injunctions pending payment and also reserved liberty to apply.

1. The father was aggrieved of the decision of the magistrate and filed an application in the Family Court at Parramatta by way of a Form 63.  He sought that the Orders 1 to 5 of the Local Court be discharged.  It is clear to me the Family Court would have had no jurisdiction to discharge the second order which related to proceedings under State law.  The father also sought that the mother’s application for departure from administrative assessment be dismissed and that the mother pay the costs of the proceedings.

1. When the matter came before Flohm J on 21 October 1999 a preliminary matter was raised. It appears that argument took place before her Honour as to the jurisdiction of the Family Court to deal with the application because of the provisions of s 115 of the Child Support (Assessment) Act and because of the decision of the Full Court in Reid (1999) FLC 98-007. There is no transcript of argument contained in the appeal book and it is not certain whether on the face of the appeal book the argument was that the Family Court had no jurisdiction or that the Magistrate did not have jurisdiction or had improperly exercised jurisdiction.

1. Her Honour determined that the Family Court had no jurisdiction, and said:

"...It is my view that this Court has no jurisdiction to proceed under s 115(b) of the Act [the Child Support (Assessment) Act] and no jurisdiction to proceed under s 115(c) of the Act. In this regard, I am bound by the Full Court’s decision in Marriage of Reid (1999) 25 Fam LR 1, and in my view there are no relevant distinguishing features between Reid’s case and this case.

10.      It follows that as this Court has no jurisdiction to hear the mother’s Application for Departure from Administrative Assessment of Child Support, that Application should be dismissed."

Her Honour then went on to say:

"11.     As my determination reflects the merits of the father’s case, I also intend to formally grant leave for the appeal."

She then declined to make any order for costs.

1. The proceedings that were before her Honour were proceedings brought pursuant to the provisions of s 105 of the Child Support (Assessment) Act. A judge of the Family Court of Australia can exercise jurisdiction under that Act in a number of ways, one of which is to exercise the original jurisdiction of the Court which is conferred pursuant to the provisions of s 99 or to exercise the appellate jurisdiction of the Court which is conferred under s 101.

1. The proceedings before her Honour were an appeal brought under s 105:

"Appeals from courts of summary jurisdiction

(1)Subject to subsections (2) and (5), an appeal lies from a decree of a court of summary jurisdiction of a State or Territory exercising jurisdiction under this Act to the Family Court…

(2)An appeal lies to a court under subsection (1) only with the leave of the court.

(3)An application for leave to appeal under subsection (1) must be made within the time prescribed by the standard Rules of Court or within such further time as is allowed under the standard Rules of Court.

…

(6)      A court hearing an appeal under subsection (1):

(a)subject to subsection (7), is to proceed by way of a hearing de novo, but may receive as evidence any record of evidence given, including any affidavit filed or exhibit received in the court of summary jurisdiction; and

(b)may make such decrees as it considers appropriate, including a decree affirming, reversing or varying the decree the subject of the appeal.

…"

1. It is conceded by counsel on behalf of the father, in my view correctly, that the restrictions which are placed on the Family Court exercising its original jurisdiction by reason of the provisions of s 115 and the decision in Reid’s case are not appropriate to be applied when the Court is exercising its appellate jurisdiction rather than its original jurisdiction, otherwise a very strange anomaly would occur. 

1. In Reid's case, Nicholson CJ, Ellis and Steele JJ held that the mere existence of a Form 7 application between the same parties was insufficient to overcome the jurisdictional prerequisites of s 115. Unless the pending proceedings were heard at the same time as the departure application it was mandatory to proceed through the administrative review processes before commencing an application in the court.

1. There may be a situation where before a Court of Summary Jurisdiction there can be no question that it would be appropriate for the court to hear and determine an application under s 115. There may be pending before the Local Court a series of interwoven issues which canvass exactly the same facts and circumstances as the child support proceedings. The parties may be more than content that the magistrate exercise jurisdiction which the magistrate does. The only aspect of the decision of the court either party is aggrieved about is the child support matter. In my view, it would be contrary to common sense to suggest that if an appeal is then brought to the Family Court, the Family Court lacks any jurisdiction to hear the appeal because of the provisions of s 115. That would mean that the parties would then of necessity be required to go through the process of having a review officer determine the matter, and then have to lodge an objection to the outcome before they could come to this Court and have it exercise its jurisdiction granted by the statute. As I have indicated, counsel for the father in this case correctly made an appropriate concession about that matter.

1. The proceedings before this Full Court, however, are not an appeal as of right but an application for leave to appeal.  For the Court to entertain an application for leave to appeal under the provisions of the Child Support (Assessment) Act, there are appropriate principles which guide the Court.  Those principles are well known and are conveniently discussed in Rutherford (1991) FLC 92-255. Generally speaking, leave should only be granted if there is an error of principle and/or a substantial injustice if leave is not granted.

1. It is clear that there was an error of principle involved here in that her Honour took the view that there was a bar to her exercising her appellate jurisdiction when in fact no such bar existed.  In my view, it is also clear that there will be substantial injustice to the mother if the leave to appeal is not granted.  She held a judgment for $70,000.  Until that judgment is properly set aside she is entitled to the fruits of the judgment.  She will be denied the opportunity to hold that judgment if the leave is not granted.  Further there are costs ramifications flowing from the orders that were made by the Magistrate and there is an argument as to the costs that were incurred before the trial Judge, which the mother, in my view, ought to be entitled to have determined in accordance with the proper result that this case should have had.

1. It is true that the evidence now discloses by consent that the preliminary steps to enable the mother to invite the Family Court to exercise original jurisdiction for a departure order and for the provision of lump sum have now been taken. There is also an argument available that in light of the remedy that the mother ultimately achieved from the Magistrate and which she now seeks to uphold, namely a lump sum rather than periodic sum, s 115 does not even provide a bar. This depends upon an interpretation of the decisions of this Court in Lightfoot vHanson (1996) FLC 92-663 and Ivanovic (1996) FLC 92-689. Whilst the mother has remedies to obtain the same result without having procedural bars if leave is not granted in this case and the judgment of Flohm J remains, she would lose a judgment for $70,000, a judgment which on the face of it is properly obtained. I say that without prejudice to the rights of the appellant father to argue below that the Magistrate should not have made the order.

1. For these reasons I propose that there be leave to appeal granted, that the appeal be granted, that the orders of Flohm J be set aside and the application of the father for leave to appeal be remitted for re-hearing.

1. COLEMAN J:   I agree with the orders proposed by the presiding judge and with the reasons given by him for those orders.  I have nothing to add.

1. GUEST J:   I too agree with the reasons for judgment advanced by Kay J, and the orders proposed.  I too have nothing to add.

1. KAY J:   The formal orders of the court will be

1.That the applicant mother be granted leave to appeal from the decision of the Honourable Justice Flohm made 21 October 1999.

2.That the appeal be granted.

3.That the orders made 21 October 1999 be set aside.

4.That the Form 63 filed 30 November 1998 which stands as an application for leave to appeal from the orders of the Local Court made 30 October 1998, be remitted for hearing by a single judge at the Sydney Registry.

5.That in addition to the injunction contained in para 2 of the orders of the Local Court made 30 November 1998 until further order the father be and is hereby restrained from dealing with or in any way encumbering an amount not exceeding the sum of $20,000 being part of the monies described in order 2(b) of the orders made on 26 October 1999.

6.That either party be at liberty to apply to a single judge to vary such injunctions as they may be advised.

7.That the Court grants to the appellant wife a costs certificate pursuant to the provisions of s 9 of the Federal Proceedings (Costs) Act 1981 being a certificate that, in the opinion of the Court, it would be appropriate for the Attorney-General to authorise a payment under that Act to the appellant wife in respect of the costs incurred by the appellant wife in relation to the appeal.

8.That the Court grants to the respondent husband a costs certificate pursuant to the provisions of s 6 of the Federal Proceedings (Costs) Act 1981 being a certificate that, in the opinion of the Court, it would be appropriate for the Attorney-General to authorise a payment under that Act to the respondent husband in respect of the costs incurred by the respondent husband in relation to the appeal.

I certify that the preceding
22 paragraphs
are a true copy of the reasons
for judgment delivered by this
Honourable Full Court.

Associate