Garth and Hope
[2011] FMCAfam 41
•25 January 2011
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| GARTH & HOPE | [2011] FMCAfam 41 |
| CHILD SUPPORT – FAMILY LAW – Application filed in February 2007 seeking orders relating to children’s matters and child support – proceeding concluded in December 2008 by way of published decision following five day final hearing – order made dismissing all outstanding applications – orders made significantly altered previous arrangements for care of children – following mother’s successful application to Child Support Agency to depart from administrative assessment of child support from April 2009 onwards father seeks reinstatement of child support departure application relating to child support years from 2005 onwards – child support regime significantly amended from start of 2007 – slip rule – application to disqualify presiding federal magistrate for ostensible bias – matters to be considered – application to stay collection of arrears of child support – matters to be considered. |
| Child Support (Assessment) Act 1989 (Cth), ss.111; 112; 117; 118 Federal Magistrates Court Rules, Rule 16.05 Cairns BC: Australian Civil Procedure Eighth Edition (Law Book Company 2009) |
| Garth & Hope [2007] FMCAfam 677 Garth & Hope [2008] FMCAfam 104 Garth & Hope (No.2) [2008] FMCAfam 1304 Rice & Asplund (1979) FLC 90-725 Johnson v Johnson (2000) 26 Fam LR 627 |
| Applicant: | MR GARTH |
| Respondent: | MS HOPE |
| File Number: | ADC 2382 of 2010 |
| Judgment of: | Brown FM |
| Hearing date: | 26 November 2010 |
| Date of Last Submission: | 26 November 2010 |
| Delivered at: | Adelaide |
| Delivered on: | 25 January 2011 |
REPRESENTATION
| Counsel for the Applicant: | Mr Baston |
| Solicitors for the Applicant: | Scales & Partners |
| Counsel for the Respondent: | In person |
ORDERS
The application filed on 23 June 2010 and the response filed on 27 August 2010 be dismissed.
Pursuant to section of 111C of the Child Support (Registration & Collection) Act 1988 pending and until the outcome of the appeal herein to the Social Security Appeals Tribunal is despatched the Registrar of the Child Support Agency be stayed from disbursing $5,000.00 of the monies received by it by way of interception from the taxation return of the applicant herein but otherwise the Registrar is authorised to release the remainder of such sum to the respondent in satisfaction of arrears of child support as currently calculated by the Registrar of the Child Support Agency.
Following the despatch of the decision of the Social Security Appeals Tribunal regarding the child support issues which are the subject of the appeal between the parties herein and in the event that either party institutes an appeal to this court or the Family Court of Australia pursuant to the provisions of section 89 of the Child Support (Registration and Collection) Act 1988 (Cth) each party has liberty to relist this matter at short notice before the court to make application for the continuation of order (2) hereof pending the disposal of such appeal.
IT IS NOTED that publication of this judgment under the pseudonym Garth & Hope is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT ADELAIDE |
ADC 2382 of 2010
| MR GARTH |
Applicant
And
| MS HOPE |
Respondent
REASONS FOR JUDGMENT
Introduction
The parties to these proceedings are Mr Garth “the father” and Ms Hope “the mother”. They are the parents of [X] born in 1996 and [Y] born in 1998.
On 9 December 2008, following a hearing which occupied five days and which began in August of 2007, I made final parenting orders in respect of the two children. I also made the following order:
“The application and response herein be otherwise dismissed.”[1]
[1] See order 15 of the orders made on 9 December 2008
One aspect of the parenting orders, made on 9 December 2008, which dealt with school holiday arrangements, was amended on 22 December 2008, with the consent of each of the parties concerned. No appeal was lodged in respect of the various orders made on 9 December 2008 and no other application was made to the court in respect of those parenting orders.
On 23 June 2010, the father filed a further application in this court. The application deals with child support issues relating to [X] and [Y]. At Mr Garth’s request, the application was given an urgent hearing. It was listed on 13 July 2010.
The need for urgency, from Mr Garth’s perspective, related to the fact that he had lodged an income tax return for the financial year ending 30 June 2009, with the Australian Taxation Office (“the ATO”), in November of 2009. He was anticipating a refund of tax paid of around $10,000.00. His refund was not processed for some months due to computer malfunction in the ATO.
In the meantime, on 26 February 2010, Ms Hope applied to the Registrar of the Child Support Agency (“the CSA”) for a departure from the administratively calculated level of child support for the children pursuant to the provisions of Part 6A of the Child Support (Assessment) Act 1989 (“the Assessment Act”). The relevant period to which Ms Hope’s application seems to have related was from 7 April 2009 to 30 June 2011.
SCO M (SCO M) dealt with Ms Hope’s application on 9 April 2010. Mr Garth did not take part in the case conference concerned. SCO M made her decision on 20 April 2010. She determined as follows:
“That the administrative assessment of child support be varied.
That for the period 7 April 2009 to 8 April 2010 the child support payable by Mr Garth be fixed by reference to an adjusted taxable income if $189,501.
That for the period 9 April 2010 to 30 June 2011 child support payable by Mr Garth be fixed by reference to an adjusted taxable income of $98,000.”
This resulted in there being an increase in child support, payable by Mr Garth to Ms Hope, in a sum of approximately $8,200.00.
In May of 2010, the ATO processed Mr Garth’s 2008/2009 tax return and calculated that he was due a refund of tax in the sum of $9,949.28 plus $62.82 representing interest on the overpayment of this tax. He had an existing credit with the ATO of $711.27.
The CSA applied to the ATO to have this refund applied to Mr Garth’s arrears of child support, which had arisen following SCO M decision of 29 April 2010. Mr Garth was advised of the CSA’s intention, in this regard, by means of a letter dated 24 May 2010.
Mr Garth objected to the decision of SCO M, which he believes is wrong in both fact and law. He also complains that he was not given a proper opportunity to take part in the case conference, with SCO M, which has in effect rendered the subsequent decision procedurally unfair.
Accordingly, Mr Garth was aggrieved at the decision of the CSA to apply to the ATO to divert his tax return refund to what he considered to be erroneously calculated arrears of child support. It was on this basis that he applied to the court for a stay, pursuant to section 111C of the Child Support (Registration & Collection) Act 1988 (“the Collection Act”) in the following terms:
“The Child Support Agency be restrained and an injunction granted against dispersing moneys collected from the Australian Taxation Office and held by the Child Support Agency in the sum of $10,723.37 collected on 22 May 2010, other than in accordance with orders contained herein.”
Concurrently with this application, the father sought the following order:
“The application for departure of child support assessment filed in the Family Court of Australia and transferred to the Federal Magistrates Court on 26 November 2006, be listed for trial directions.”
This application is at the centre of the current controversy between the parties. Although Ms Hope’s response, filed on 27 August 2010 does not specifically state it, it is her position that this application was dismissed by the court on 9 December 2008, without apparent demur from Mr Garth, and it would be unfair to her for it to be reinstated now.
On the other hand, it is Mr Garth’s position that his application, in respect of a departure from various child support assessments, has never been dealt with by the court and accordingly it was an oversight that this aspect of the proceedings was removed from the list of matters awaiting hearing by the court. He submits that this error can be either corrected administratively or by application of the slip rule.
To understand the application, it is necessary to provide some history of the litigation between the parties.
The history of the proceedings
I have previously provided three written judgments, in respect of proceedings between the parties.[2] In each of the proceedings, which led up the respective judgment, Mr Garth was represented by his counsel Mr Baston. In the first judgment, I wrote as follows:
[2] See Garth & Hope [2007] FMCAfam 677; Garth & Hope [2008] FMCAfam 104; and Garth & Hope(No.2) [2008] FMCAfam 1304
“The parties have been in almost constant litigation since early 1999 – in the Family Court; the State Magistrates’ Court; the Supreme Court of South Australia; and more recently this court. They have been in dispute about the division of their property; the payment of child support; above all about arrangements for the care of [X] and [Y]. The litigation has consumed them, both financially and emotionally.”
…
The history of litigation between the parties is complex. I provide its bare bones only. The parties finally separated in January 1999. In August 2000, following a lengthy trial before Burr J, they agreed to share the care of [X] on a week about basis and that such an arrangement would commence for [Y], when she was five. At this stage, it was the parties’ intention, ostensibly at least, that both would be closely involved in caring for [X] and [Y].
This arrangement broke down soon after and other proceedings began, culminating in a six day trial before Dawe J in 2003. This trial resulted in the discharge of the shared parenting regime and orders for the children to live predominantly with their mother and have contact with their father on weekends and school holidays.
The father was disappointed at this result, particularly as he had been closely involved in [X]’s care and believed that he wished to live mainly with him. Arrangements had been a little different for [Y] because she had been very young, when the parties separated and had spent more time in her mother’s care.
The father’s disappointment with the result was one factor in his decision to pursue employment opportunities in Queensland. He did not tell the mother of his plans and Dawe J’s orders did not envisage how the children would maintain their relationship with their father, if he moved interstate. This period was one of instability, for both the parties themselves and the children. It led to more litigation.
The father says the mother withheld the children from him. He was concerned that [X] had reacted badly to the decision of the Family Court and was running away from school. In such circumstances, he wanted to spend more rather than less time with the children. The mother says that she could not provide the children for contact because she did not know where the father was living and what he proposed for contact in his now changed circumstances.
Dawe J’s final orders were made in August 2003. By March of 2004, following his move to Brisbane, Mr Garth began more proceedings. He wanted the children to live with him in Queensland. The mother opposed such a radical change for the children, particularly so soon after the long trial. On 20 July 2004, Strickland J dismissed the father’s application, regarding a change in the children’s place of residence, ruling it would not be in the children’s interest for the court to entertain it.
Difficulties remained as to how the father would maintain his relationship with the children. Proceedings continued. Interim orders were made in March 2005, which provided for the children to spend eight weeks of school holidays in Brisbane and two weekends during each school term in Adelaide with their father. At the mother’s instigation, the children were to be accompanied in their travel to and from Brisbane. The arrangements were expensive.
On 15 August 2005, Murray J made some orders dealing with the payment of child support and school fees by Mr Garth for the period of the next twelve months. On 22 November 2006, a registrar of the Family Court transferred what remained of the proceedings to this court.
At this stage, her note on the court file suggested that the matter concerned “really only contact issues”. This turned out not to be the case. By this time, the various documents filed by the parties, over the past seven years, filled three large storage boxes. The documents transferred to this court occupied three large files.
In recounting the parties’ litigation history, I have ignored the many contravention applications and appeals. I have ignored the parties’ property proceedings, which went to the Full Court of the Supreme Court of South Australia. I have not dealt with the proceedings between the parties in the Child Support Agency. It would be an understatement that these various proceedings have engendered considerable bitterness between the parties.”[3]
[3] See Garth & Hope [2007] FMCAfam 677 at paragraphs 11, 13-22
This history is provided not only to give some background to the current matter but also to indicate that Mr Garth cannot be regarded as a neophyte, so far as litigation is concerned pursuant to the Family Law Act1975. In addition, since August of 2007 at the very least, he has been represented by skilled and experienced counsel.
It is now a somewhat cumbersome forensic task for me to trace the various twists and turns in the parties’ litigation history with one another, certainly before my involvement with the case. However, it would seem to be the father’s position that the proceedings which he commenced in the Family Court of Australia on 5 March 2004 remain extant, in some form or other.
In this application, he sought what was then characterised as a residence order in respect of [X] and [Y] and a number of injunctions regarding the mother’s interaction with the children. The application is silent so far as child support issues are concerned.
In the jargon of the times, this application was referred to as a form 3 application. The mother responded to it on 14 April 2004. She sought the dismissal of the father’s form 3 application. She amended this response on 25 June 2004.
In this response, she sought a number of specific final orders, which related to what were then referred to as contact arrangements, particularly how the children’s airfares were to be paid for and whether they needed to be accompanied on aeroplane flights between Adelaide and Brisbane, as by this stage Mr Garth had gone to live in Queensland.
As previously mentioned, the lengthy hearing before Dawe J and the orders which Her Honour made had not been directed to such an outcome. It seems to be the case that Mr Garth did not allude to the court the possibility he might relocate to Brisbane. In the light of what had happened both before the final orders of August 2003 were made and afterwards, it is axiomatic that the parties had little facility to negotiate the now very different parenting and logistical environment which existed between them.
This was the background to a hearing before Strickland J, which took place on 8 July 2004, with judgment being delivered on 20 July 2004. His Honour was of the view that the best interests of [X] and [Y] would not be well served by further litigation, between their parents, regarding their place of residence. Accordingly, on the basis of the principal formulated in the case of Rice & Asplund[4] and refined in other cases decided afterwards, Strickland J dismissed the father’s application filed on 5 March 2004.
[4] See Rice & Asplund (1979) FLC 90-725
This decision left on foot the mother’s response (then known as a Form 1A), which dealt with school holiday arrangements, particularly the cost of travel for the children between Adelaide and Brisbane. The dismissal of Mr Garth’s application for final orders did not stem the flow of ligation between the parties.
On 26 August 2004, the mother commenced contravention proceedings against the father, which related to an allegation that the father had failed to contribute his half of the children’s school fees, which was a component of the orders made by Dawe J on 29 August 2003.
On 28 October 2004, Judicial Registrar F, in the absence of the father, granted the mother leave to amend her Form 1A by inclusion, within its terms, an earlier interim application, which she had made. This set the framework for a raft of orders, which were made in the Family Court of Australia between late 2004 and the transfer of the proceedings to this court on 22 November 2006.
On 2 December 2004, Registrar K (as she then was) made interim orders dealing with the father spending time with the children during the end of year school holiday in 2004/2005. She also made orders dealing with handover arrangements and the payment of their airfares. She said as follows:
“On a procedural level, the mother has filed her amended form 1A as directed by the Judicial Registrar on 28 October 2004. The father needs to indicate whether he is disputing the mother’s Form 1A Response seeking final orders and I will direct that he file a form 1B accordingly.”
My examination of the relevant portions of the Family Court file indicates that the father did not file the form 1B referred to in the Registrar’s reasons.
Rather, what followed were further interlocutory applications from the mother, which dealt with refinements to the school holiday arrangements. Orders made by Registrar K on 13 December 2004 made arrangements for the collection of the children at the start of the Christmas school holiday period and for the children to contact their mother, whilst they were in Brisbane.
On 15 February 2005, interim applications filed by both the mother and father were dealt with by Strickland J, who made orders in respect of arrangements for the father to spend time with the children, mid term, in Adelaide. These applications arose because the mother had sought to review the orders of Registrar K made in December.
In the mean time, on 11 January 2005, the mother made an application in a case that the father sign the necessary enrolment forms to enable [X] and [Y] to attend at [omitted] School and for Mr Garth to pay 50% of the children’s school expenses for the 2005 academic year. Mr Garth’s response to this application was simply that it should be dismissed. It was his position that the mother’s application was misconceived and should take the form of a departure from child support application.
In March of 2005, the various applications, the majority of which had been instituted by the mother came before Registrar K once again. At this stage, it seems to be the case that the parties had reached substantial agreement about the matters in dispute between them. It was agreed that the children would continue to attend [omitted] School. The father agreed he would contact the school and settle all outstanding fees for which he was responsible.
Most importantly, in the context of the current proceedings, the Family Court file indicates that:
“… the mother and father have agreed to a Child Support Departure order in the terms of the memorandum of understanding attached to these orders and to be signed by both parties (to bring to the hearing before Justice Strickland on 13th April 2005 for filing with the Court).”
The memorandum of understanding indicated that it had been agreed that Mr Garth would pay $500.00 per child per month by way of child support to Ms Hope, which would be collected by the CSA. This payment would continue notwithstanding the father becoming either unemployed or self-employed. In addition Mr Garth was to be responsible for 50% of the children’s school fees and other educational expenses and for the expenses related to him having contact with the children in Adelaide. However the parties were to be jointly responsible for the costs of the children travelling to Brisbane to see their father on two occasions each year.
Part of the background to this agreement was that the mother had herself sought a departure from the administrative assessment of child support by way of the internal review process available to her within the CSA. The basis of her application was that the then assessment did not properly take into account the father’s income, earning capacity, property and financial resources. This application was dealt with by SCO P on 29 September 2004. Mr Garth did not take part in the review process.
SCO P had sought information from Mr Garth’s employer, the [omitted Party], which indicated that he had been employed as the [omitted] of the [omitted Party] in Queensland since January of 2004 at a salary of $65,000.00 per annum. On this basis, SCO P increased Mr Garth’s child support income to $65,000.00, commencing 1 April 2004, which created a liability of around $10,000.00 per annum by way of child support owed by him to Ms Hope.
Mr Garth objected to this decision, as he was entitled to do. The bases of his objection being that the decision did not take into account the high costs involved in him having contact with the children and his own necessary expenses for self support. His objection was disallowed on 23 December 2004. Each party was advised by the Objections Officer concerned of his or her right to apply to the court if either was dissatisfied with the decision.
The mother’s contravention application and her and the father’s other applications relating to finalising the arrangements for the children to spend time with Mr Garth in Brisbane came before Strickland J in mid April of 2005. His Honour noted that there appeared to be some confusion about the listing of the matter. However both parties apparently indicated to the court their confidence that the outstanding issues in dispute between them could be resolved by early May.
On 5 May 2005 Strickland J dismissed the mother’s outstanding contravention application and granted her leave to file a further amended Form 1A, which would be allocated to a directions hearing on 7 June 2005. This led Ms Hope to file a comprehensive document setting out the file orders which she sought in respect of both children’s and child support issues on 23 May 2005. She sought thirty one specific orders in respect of the children.
In addition she sought that the early memorandum of agreement in respect of child support matters be ratified by way of a formal child support departure order, which would reflect the fact that the parties had apparently agreed that the father was to see the children on more than two occasions each year and it was recognised that as Mr Garth lived in Brisbane, he would have increased contact costs.
Concurrently with this application, the mother commenced a further set of urgent interim applications which dealt with issues arising from the fact that the children were due to travel to Brisbane to spend time with their father in the mid year school holidays. She sought orders dealing with the booking of the necessary flights and collection arrangements for the children.
On 7 June 2005, a registrar of the Family Court ordered that the father file a reply (form 1B) to the mother’s various applications within 28 days and the matter was referred to what was known as the trial notice list. It is unclear from the record whether Mr Garth was present during this hearing.
However, by 28 June 2005, Mr Garth had responded to the mother’s various interim applications (but not the final applications order). He sought an injunction restraining the CSA from collecting child support from him until Ms Hope’s departure application had been dealt with and further that the amount of child support due from him be reduced to an amount in line with the memorandum of understanding which the parties had earlier reached and which the mother had provided to the court.
On 25 July 2005, the matter came before Judicial Registrar F once again. The father did not appear. On this basis the Judicial Registrar dismissed Mr Garth’s various outstanding interim applications and adjourned the mother’s outstanding interim applications to 29 August 2005 and, as the father had not filed the reply required of him, he vacated the trial listing notice and gave the mother leave to apply for final orders on an undefended basis on the adjourned date.
Mr Garth took objection to this decision of the Judicial Registrar. As a result he sought to review the decision by way of an application which he personally filed on 3 August 2005 and which was made returnable on 15 August 2005. To my mind this is important because it indicates that Mr Garth is not the type of person who is liable to sit on his rights. To the contrary, it is my experience of him that he is an accomplished and sophisticated litigator, who is more than capable of pursing his interests in any court.
This was the background to the orders made by Murray J on 15 August 2005, in which Her Honour ratified the earlier memorandum of agreement reached between the parties but only for a period of twelve months which was to commence from 15 August 2005. The relevant order read as follows:
“The current Child Support Agency Assessment of $1,171.17 per month be varied from 15 August 2005 to $500.00 per month and that the Child Support Agency be responsible for collection.
The new assessment of $500.00 per month continue for twelve (12) months from 15 August 2005.”
Mr Garth was also to pay the sum of $1,795.00 to [omitted] School on or before 30 September 2005, being the figure calculated to be on half of the children’s school fees and other expenses. The proceedings were then adjourned until 29 August 2005.
On this date, Judicial Registrar F again ordered that the father file a formal response in Form 1B. Once again, he referred the mother’s application for final orders to the trial notice list. Mr Garth was present when this ordered was made, Ms Hope was not.
The application was called on, before Registrar T, on 22 November 2006. Ms Hope appeared, Mr Garth did not. He had not complied with the order to file a response to the mother’s application by this stage. It was on this occasion that the Registrar transferred “all issues to the FMC [noting] long history…2 x previous trial but matter now really only contact issues.”
Accordingly, from my analysis of the various applications in the Family Court, when the matter came to this court, Mr Garth did not have on foot any application for final orders, either in respect of child support or contact issues.
The mother’s application came before Mead FM on 25 January 2007. I assume she did not have an opportunity to peruse the file in any detail. She directed that Mr Garth file and serve an application setting out the orders which he then sought together with an affidavit in support by 23 February 2007. Ms Hope was to respond to this application, with a response and affidavit by 23 March 2007.
Mead FM also directed that the parties attend a family dispute resolution conference. This took place on 18 February 2007. The memorandum produced following the conference recommended that a long form family report be prepared.
Mr Garth filed what was entitled an amended application on 28 February 2007. It would appear to be this application which the father now seeks be listed for trial directions and for which the mother seeks to be dismissed, if it has not already been done so.
In this application, Mr Garth sought that all existing orders in respect of [X] and [Y] be dismissed and that the two children should live with him and spend time with and communicate with their mother as the parties agreed or as the court otherwise determined. In the alternative to these orders, he proposed a comprehensive regime for the children to spend time with him, whilst he lived in Brisbane and they lived in Adelaide.
There is no dispute between the parties that the children’s aspects of the case have been thoroughly canvassed before the court. Concurrently with this application, Mr Garth sought the following orders.
“That pursuant to Section 117 of the Child Support (Assessment) Act, there be a departure from the administrative assessment made in respect of the children [X] born in 1996 and [Y] born in 1998 for the child support year commencing 1 October 2005 and each year thereafter such that the applicant MR GARTH pay to the respondent MS HOPE, be varied by:
a. setting the monthly rate of periodic child support at the rate of $500.00 per month ($250.00 per child); and
b. providing for the support of the said children other than by way of periodic in that MR GARTH pay all school fees and associated costs including school books, uniforms and other school levies in respect of the children [X] born in 1996 and [Y] born in 1998 within (14) days of the production of invoices in respect thereof.
That the annual rate of periodic support payable by the applicant MR GARTH pay to the respondent MS HOPE in respect of the said children, commencing with the child support year ending 30 September 2005 be indexed by the inflation factor prescribed under the Child Support (Assessment) Regulations each 12 months on and from 30 June 2006.
That any payments of child support previously made by MR GARTH in respect of the child support year commencing 1 October 2006 to the date of any departure order under administrative assessments for child support then in place and payments made towards education expenses and extra-curricular and/or medical expenses made on behalf of the children, be credited against MR GARTH’s liability for child support under this departure order for that said same or any subsequent period.”[5]
[5] See father’s application filed 28 February 2007
In the affidavit, which he filed in support of his application, the father deposed as follows:
“In November 2004 I was appointed [occupation omitted] and since that time I have resided in Queensland. The children spend time with me in Adelaide and Queensland in accordance with orders made in the Family Court of Australia in Adelaide on 8 March 2005 and 15 August 2005. My costs of such contact, as agreed between Ms Hope and I, is not less than TWENTY TWO THOUSAND DOLLARS ($22,000.00) for airfares, rental car and accommodation. I undertake to file in this Court copies of all relevant extant orders of the Family Court of Australia at Adelaide.
In early 2005 and at about the time me [sic] agreed to the orders of 8 March 2005 I understood that Ms Hope and I had agreed to a child support arrangement to reflect my high costs of contact and us sharing school costs with my paying $500.00 per month for periodic support of the children. This arrangement was reflected in Ms Hope’s affidavit filed in the Family Court at Adelaide (ADF1514 of 1999). Subject to minor alterations I seek Final Orders for a child support departure order in similar terms. I understand from emails and/or passing between Ms Hope and I that she will only support such departure orders if I agreed to orders further limiting my contact with the children and giving her sole responsibility for their long term care and development.”[6]
[6] See father’s affidavit filed 28 February 2007 at paragraphs 3 and 4
Accordingly, it is clear to me that the child support departure aspect of Mr Garth’s application related to the high costs incurred by him in taking contact with the children, whilst both lived in Adelaide and the fact that he was providing other financial support to Ms Hope, in the form of half of the children’s school fees. In his affidavit, Mr Garth also indicated his agreement to the preparation of a long form family report.
Ms Hope filed a lengthy affidavit on 20 March 2007. She did not file a formal response, as had been directed by Mead FM. In her affidavit, Ms Hope deposed that she found it very difficult to negotiate with the father and to share responsibility for making decisions with him regarding long term issues to do with [X] and [Y]. For this reason, she indicated that she sought an order that she alone should be responsible for these matters.
It was also the tenor of her affidavit that both children were well settled in her care and it would be retrograde to their ongoing emotional stability if any extensive changes were made to the existing orders. Ms Hope was supportive of a family report being prepared. She deposed as follows:
“I believe a Family Report that sought input from the children’s school teachers and Parish Priest would better reflect the stable, secure, safe family life that I provide for the children. I would be more than happy to abide by the recommendations of such a report and would be happy for the court to make orders based on the recommendations of the Court Counsellor.”[7]
[7] See mother’s affidavit filed
The matter first became before me on 18 April 2007. I have dealt with the parties various matters, in this court, in the period since. In the jargon of court case management systems, the case has been “my docket”.
Given the consensus between the parties, on 18 April 2007, I ordered that a family report be prepared and fixed the matter before final hearing on 23 and 24 August 2007. The parties were to file any additional affidavits for the trial, prior to 26 July 2007.
Mr Garth filed a further affidavit of himself on 6 August 2007. This affidavit was accompanied by an affidavit of his wife Mrs Garth. In his affidavit material, Mr Garth expressed concern about [X]’s progress at school. He deposed that he believed that the children had a “mature desire” to live with him in Brisbane and his household would be better placed to develop [X] and [Y]’s full potential. Mrs Garth supported her husband’s position. Accordingly, the trial affidavit material was focussed solely on children’s issues rather than child support matters.
Ms Hope filed an affidavit on 9 August 2007. The purpose of this affidavit was to provide the children’s recent school reports to the court. She did not agitate any other issues in her affidavit material.
The family report ordered earlier was released to the parties on or around 16 August 2007. It was prepared by Dr S. She recommended that the court consider a trial of the children living in Brisbane with their father. The issue of whether there should or should not be such a trial was the primary issue dealt with by the court on 23 and 24 August 2007.
Mr Garth was in favour of the trial. Ms Hope was strongly opposed. She strongly relied on the so-called rule in the case of Rice & Asplund, particularly that there had already been two bitterly contested final hearings, before the Family Court and many other proceedings between the parties themselves following their acrimonious and difficult separation.
I delivered judgment, following the two day trial, on 28 September 2007. Mr Baston, the father’s current counsel appeared on Mr Garth’s behalf, during the trial. The mother represented herself. I decided to accept Dr S’s recommendation that there be a trial for the remainder of the 2007 school year, of [X] and [Y] living in Brisbane with their father. Following this trial, Dr S was to revisit the children and ascertain what their views were.
Clearly, the trial had financial implications for both Mr Garth and Ms Hope. At the time, I was also well aware of the child support aspects of Mr Garth’s case. I said as follows in the judgment:
“The central issue in the case is how the children can be protected from the worst excesses of the litigation between their parents and maintain a meaningful relationship with them both. In such an environment, the expression of any views by the children, as to what they would prefer, is likely to be fraught with difficulty.
The case turns on the purported views of [X] and [Y]. Is it safer to leave things as they are or should an experiment based on what the children have said to Dr S be undertaken? Will such an experiment unleash a further storm of litigation around the children, to their ultimate detriment?
The transfer of the proceedings to this court precipitated an amended application by Mr Garth.[8] Mr Garth’s application had two facets. Firstly, he sought a departure from the current child support assessment, which requires him to pay Ms Hope a monthly amount of just under $2,000.00 for [X] and [Y]’s financial support. In lieu, he proposed that the court make an order he pay $500.00 per month and pay all the children’s school fees.
The rationale for the departure is the high cost of travel between Brisbane and Adelaide, not only for the children but also for himself. In theory Mr Garth has no difficulty with paying for all the children’s education expenses, as from his perspective, an arrangement whereby the parties share these costs is a constant area of contention between them.
The other facet of his application, dealing with arrangements for [X] and [Y], was presented in the alternative. The first alternative was not well developed. Mr Garth simply sought that all existing orders be discharged and that the children should live with him and spend time with their mother, as the parties agreed or as was ordered by the court. It has the features of an ambit claim.
The other alternative sought to maintain the existing arrangements for [X] and [Y]’s care, with some modest additions. Mr Garth wanted to be able to communicate with the children, via the internet, when they were in Adelaide and he was in Brisbane. Something the mother had previously vetoed, as she found the presence of a video camera in her home intrusive.
In addition, Mr Garth wished the children to be able to travel unaccompanied between Adelaide and Brisbane. He also sought orders which would allow him to have make-up time with the children, if he was unable to come to Adelaide during school terms on the specified weekends. Finally, he wanted the court to examine the issue of the children travelling overseas.
Ms Hope has not formally responded to this application. She did however set out her position in her answering affidavit.[9] Ms Hope believes that it will be in the children’s best interests if she alone has responsibility for making all significant decisions regarding [Y] and [X]. She characterises the father as being dismissive and undermining of her and the “stable, secure, and safe family life” which she provides for them.
Ms Hope does not state specifically what orders she proposes for the children to spend time with their father, other than she wants orders that are more flexible and have “more input from the children into what they would like.” She indicates her requirement that the children should still be accompanied by an adult whilst travelling by air and her continued opposition to the children using video conferencing to remain in touch with their father. She wishes to defer the issue of the children having passports, until Mr Garth has some concrete proposal for the children to travel overseas.
I glean from Ms Hope’s affidavit that it would be her preference that the children spend less rather than more time with their father. She does not seem to be enthusiastic about the current school term arrangement, particularly because the father has changed them from time to time. This seems to be the basis of Mr Garth’s application for makeup time.”[10]
[8] Amended application filed 28 February 2007
[9] Affidavit of Ms Hope filed 20 March 2007 at paragraph 12
[10] See Garth & Hope [2007] FMCAfam 677 at paragraphs 29-35
Given the way the case proceeded, particularly in the light of Dr S’s recommendations, it was not possible for the court to deal with both a change of the children’s living arrangements, either permanently or on a trial basis, as Mr Garth primarily wished and with his departure application, which was predicated on the basis that both children would be continuing to live in Adelaide, with their mother and Mr Garth would continue to have high costs relating to spending time with them regularly. In this situation, Mr Garth also preferred to pay the children’s school expenses, rather than making direct child support payments to Ms Hope.
As I recall, neither party took exception to this approach, which was essentially dictated by considerations of practicality. For obvious reasons, Mr Garth was heartened by Dr S’s recommendations and anxious to give effect to the trial, no matter what its financial implications might be. In the reasons for judgment, I said as follows:
“Mr Garth has indicated his willingness not to seek child support from Ms Hope, if the court embarks upon on the proposed trial. He has also indicated his willingness to pay all the costs involved in it, including flying Ms Hope between Adelaide and Brisbane to spend two weekends with the children. Ms Hope is not without family support in South East Queensland, where she has close family members living.”[11]
[11] Ibid at paragraph 144
On 28 September 2007, I accepted Mr Garth’s undertaking that, in the event the trial recommended by Dr S took place, he would not seek an assessment of child support from Ms Hope and made the necessary orders giving effect to such a trial. I also ordered that Dr S update her family report and fixed the further hearing of the case for 21 January 2008. In addition, given the complexity of the issues before the court, I also ordered that the children be independently represented.
The hearing resumed on 21 January 2008, by which time Dr S had provided an updated family report. This report recommended that it was likely to be in the children’s best interests if the “trial” of living with their father be extended for a further period of nine months.
Once again, I determined to accept Dr S’s recommendations. I provided reasons in respect of this decision.[12] Given my decision to proceed further with the trial process, as recommended by Dr S, the trial between the parties was adjourned for further hearing on 8 and 9 October 2008. Again, it was ordered that a further family report be prepared to update the court regarding the views of the children and any other relevant factors.
[12] See Garth & Hope [2008] FMCAfam 104
Given that the trial was proceeding for a period of at least nine months I discharged the father’s undertaking that he would not apply for child support, from Ms Hope, whilst the trial proceeded. I also made orders in respect of the payment of the children’s airfares between Brisbane and Adelaide, during school holidays, so that the children could maintain their relationship with their mother. Mr Garth was to pay these expenses.
In addition, I made orders which provided for the children to spend time with their mother during school terms, both in Brisbane and Adelaide. The costs of these visits were to be shared between the parties, but Mr Garth was to pay the majority of the costs involved. These orders were not subject to any challenge by Mr Garth.
Accordingly, the case had moved on considerably from a situation where the children were living in Adelaide and tending a private school there, an arrangement which had precipitated controversy between the parties so far as the assessment of child support was concerned. In essence, Mr Garth’s departure application had become otiose, at least so far as the trial period was concerned.
The hearing resumed, as foreshadowed, in October 2008. For the reasons provided following the trial,[13] I decided upon different arrangements for the two children concerned. [X] remained living with his father in Brisbane, whilst [Y] returned to live in Adelaide with her mother. At the time, I was well aware of the dilemmas, both financial and otherwise, such an outcome would create.
[13] Garth & Hope (No.2) [2008] FMCAfam 1304
In particular, I was aware of the significant logistical difficulties of the children having to travel between Adelaide and Brisbane, so that they could maintain their existing relationships with both their parents and with each other.
I said as follows, in the final judgment:
“This case has become one about the children’s personal preferences. As a result of their different ages, their different past experiences of being parented and to some extent the differences in their sex, the children now have different preferences and different emotional needs. [X] wants to be with his dad, whom he seeks to emulate. [Y], a self described “little girl” yearns to be with her mummy.
In addition, the lack of alignment between the Queensland and South Australian school years will impose many problems and potentially much expense for the parties themselves. However, on balance, I have come to the conclusion that these matters, although highly significant, should not countervail the strong and unequivocal wishes of the children concerned.
Mr Garth is more financially secure than Ms Hope. It was he who initially moved away from Adelaide and the children, although no doubt he had valid and considered reasons for his move. It is also Mr Garth, who has been the main instigator for change, so far as the children’s living arrangements are concerned.
In these circumstances, I think he should bear the majority of the costs of the children travelling between Adelaide and Brisbane, which will come about as a result of the outcome which I envisage in this case. All things considered, I assess that Mr Garth should pay 75% of the children’s costs of travelling between Adelaide and Brisbane, during school holidays.
In my assessment, it is no longer necessary that the children should be accompanied by an adult during any of this travel. They are well accustomed to the practices of the airlines concerned and the travel involved.”[14]
[14] Ibid at paragraphs 224 to 228
As previously indicated, these orders, which have significant financial implications, so far as the parties are concerned, have not been subject to challenge. In addition, no demur was made by Mr Garth in respect of the ostensible dismissal of his child support departure application, which had not been argued before the court because of the emphasis on arrangements for the care of the children, which then resolved diametrically altered the circumstances which had given rise to the departure application in the first place.
What has happened since 9 December 2008
On 7 August 2008, Mr Garth deposes that he lost his position as the [occupation omitted]. Thereafter, he commenced his own business, in partnership with his wife.
From 3 January 2009 onwards, the mother applied for a child support assessment for [Y], from Mr Garth, as she was entitled to do. As a result, Mr Garth provided an estimate of his income to the CSA for the period from April 2009 to April 2010. He estimated his salary for this period to be $40,000 per annum. On 4 November 2009, he gave a further and revised estimate of his income of $30,000.00 per annum.
In February 2010, Ms Hope applied for a change of assessment to the CSA pursuant to the provisions of Part 6A of the Child Support (Assessment) Act 1989 “the Assessment Act”. These provisions entitle the carer of a child to apply administratively to the Registrar of the CSA to depart from any existing child support assessment. The matters the Registrar is required to consider are set out in section 98C of the Assessment Act.
Essentially the Registrar is required to be satisfied that one of the grounds for departure set out in section 117(2) of the Assessment Act has been established and it is both just and equitable and otherwise proper to depart from the applicable child support assessment.
The ground on which Ms Hope applied to the Registrar to depart from the administrative assessment was that it did not properly take into account Mr Garth’s income, earning capacity, property and financial circumstances. Her application was determined by a delegate of the Registrar SCO M “SCO M” on 29 April 2010 following a conference which took place on 9 April 2010.
Mr Garth did not attend the conference before SCO M. He complains that the CSA misled him about what would happen at the conference. It being his understanding that material provided to SCO M by his accountant had resolved any ambiguity regarding his true financial position and so there was no necessity for him to attend to explain it.
SCO M set out the history of the parties recent child support assessments, as she understood them, at the commencement of her decision. She noted that [X] resided with Mr Garth for 324 days per year and [Y] resided with Ms Hope for the same period of time. She also noted that Mr Garth had another dependant child, who was relevant to the assessment process. The history was as follows:
Period
Mr Garth’s income
Ms Hope’s income
Annual rate of child support
4/11/2009 to 30/11/2010
$30,165.00
$21,561.00
$884
1/9/2009 to 3/11/2009
$138,600
$11,376
1/6/2009 to 31/8/2009
$40,216
$2,151
18/3/2009 to 31/5/2009
$40,216
$1,1947
30/1/2009 to 17/3/2009
$132,000
$10,453
In her decision, SCO M indicated that the CSA had issued a notice to Mr Garth’s accountants requiring the firm to provide information about Mr Garth’s financial circumstances and those of corporate entities related to him. The information disclosed included Mr Garth’s 2009 payment summaries for PAYG tax and details of his employment termination payments.
SCO M found as follows:
“In the 2009 year his income was made up of wages, a lump sum and eligible termination payment of approximately $149,000. His gross inc9ome was $196,658. His income net of expenses was $189,501. For the 2009 year Mr Garth was assessed on estimates which are significantly lower than the net income as provided by his accountant. Mr Garth’s accountant stated that he lodged his 2008/2009 Income Tax Return in December 2009.”
As a result of this finding SCO M found that Mr Garth’s taxable income for the 2008/2009 financial year was $189,501.00. She was satisfied that this amount had not been brought to account in the applicable child support assessment. Following his termination of employment with the liberal party, SCO M found that Mr Garth had been able to commence two companies and one family trust with a corporate trustee. Mr Garth’s accountant indicated that one of the companies concerned purchased a motor vehicle.
The senior case officer went on to find as follows:
“Doing the best I can with the information available to me I am satisfied that Mr Garth’s estimate of his income does not fairly reflect his demonstrated record of taxable income or his current professional circumstances. I propose to set an adjusted taxable income amount of $98,000 from the date of the conference, namely 9 April 2010 until the 30 June 2011. This will have the effect of increasing the annual rate to approximately $8,200.”
Accordingly, SCO M decided that there should be a departure from the applicable administrative assessment of child support for [Y] as follows:
·For the period 7 April 2009 to 8 April 2010 the child support payable by Mr Garth be fixed by reference to an adjusted taxable income of $189,501.00;
·For the period 9 April 2010 to 30 June 2011 child support payable by Mr Garth be fixed by reference to an adjusted taxable income of $98,000.00
This decision resulted in the creation of an amount of arrears of child support owed by Mr Garth to Ms Hope.
Mr Garth objected to this decision. He provided a lengthy submission in support of his objection. The objection was considered by objections officer Ms L on 29 July 2010. Mr Garth objected on the basis that the income attributed to him by SCO M had not been accurately determined and he did not have the financial resources to pay child support at the rate calculated by her.
Mr Garth’s objection was allowed in part. His adjusted taxable income was set at the sum of $130,000.00 for the period 4 November 2009 to 31 October 2010. Ms Hope is apparently dissatisfied with this decision and has applied to the Social Securities Appeal Tribunal “the SSAT” to review this decision.
It is Mr Garth’s preference that the various child support issues, between the parties, be determined in this court. In addition, he would want this court to deal with administrative assessments of child support, which pre-date the administrative application for departure made by Ms Hope in February of 2010, to which he subsequently objected and which apparently remains subject to an appeal to the SSAT.
He asserts that the court could entertain such applications as a result of its failure to deal comprehensively with the child support aspects of his application filed in February 2007. For reasons which I will set out in detail later, it would not be possible for the CSA to deal with these previous assessments of child support administratively pursuant to Part 6A of the Assessment Act.
I have been told by Ms Hope that the SSAT has not dealt with her appeal, as yet, because of the uncertainty surrounding these proceedings. She is vehemently opposed to the court entertaining any application from Mr Garth to depart from any administrative assessment of child support, which pre-dates her administrative application for departure made in February 2010.
It is her case that she sought the administrative departure, which she did, as a result of her view regarding the inappropriateness of Mr Garth’s estimates of his level of income following him taking up self employment. She argues that her application has no nexus to the situation between the parties in the period between 2007 and the conclusion of the proceedings before me in December 2008. As such she asserts that it would be unfair to her to allow Mr Garth to re-examine long concluded child support assessments, particularly as Mr Garth did not agitate to do so following the publication of my judgment and the orders relating to it on 9 December 2008.
In my view, it is clear that the factual situation, which currently confronts the court and necessarily the SSAT is vastly different to the one envisaged in Mr Garth’s so-called “amended application” to the court made in February of 2007. At that stage, the issue resolved around the high cost of the children travelling between Brisbane and Adelaide. At the time, Mr Garth was a PAYG tax payer.
The controversy currently between the parties concerns Mr Garth’s level of income now that his employment as a PAYG tax payer has come to an end and he has commenced employment on his own behalf, through corporate entities and a trust, which he controls. In addition, the arrangements for the care of the two children concerned are now very different to what was the situation in 2007. In addition, Mr Garth did not choose to agitate the child support issue following the ostensible dismissal of all applications in late 2008.
As previously indicated, the catalyst for Mr Garth’s application to the court, ostensibly at least, relates to the actions of the CSA to apply to the ATO to divert the tax refund entitlements of Mr Garth to arrears of child support. Certainly this can be the only motivation for the urgent listing of his application.
The arrears remain outstanding as a result of the objections hearing of July 2010, which has not as yet been dealt with by the SSAT. Mr Garth was aggrieved at the potential for his tax return to be diverted to these arrears. He brought his application to this court promptly to avoid this occurring in the short to medium term.
The application first came before the court on 13 July 2010. Ms Hope had been served a few days earlier. Initially she did not object to a stay in collection of arrears of child support being made pursuant to the provisions of section 111C of the Child Support (Registration and Collection) Act 1988 “the Collection Act”. Mr Garth’s objection had not as yet been dealt with by the CSA. The application was adjourned until 6 August 2010.
On 6 August the application was again adjourned and the stay order continued. At this stage, as I recall, I was told that the parties were considering their respective positions following the recently delivered objection decision. The application was adjourned until 5 September 2010.
On 27 August 2010 Ms Hope filed her formal response to Mr Garth’s application. Pending final determination her position was that the stay order should be dismissed or in the alternative the sum of $5,000.00 released to her so she could pay for some urgent repairs required for her car. On a final basis she also sought the discharge of the stay order or in the alternative, it remain pending the outcome of the appeal hearing to the SSAT.
Ms Hope filed an affidavit in support of her position. She deposed that she was currently under a deal of financial stress. She said as follows:
“The findings of the Child Support Agency in relation to my application for a change of assessment and the father’s appeal against that decision, have both resulted in a finding that considerable arrears are payable by the father to me. The father has now had two opportunities to put his case to the CSA, but has not succeeded in obtaining a judgment for arrears less than the sum of the funds held by the court order. I do not believe it is in the interests of fairness and justice that the injunction remain in place.”
The application was again adjourned. The date allocated was 5 September 2010. Regrettably this proved to be a very busy day. I had a long list of matters, many of them of an urgent nature involving arrangements for children. It was also the day prior to me being away from my duties for a period of five weeks, whilst I was on leave. I was not able to deal with the application. I allocated 26 November 2010 as the occasion on which all the issues raised would be substantially argued.
On 3 November, Ms Hope filed a further application. In it she sought that I disqualify myself from further hearing the application. She also reiterated her application that the stay order be discharged and Mr Garth’s application be dismissed.
In support of her application, Ms Hope filed an affidavit. She complained about the delay in the proceedings, particularly in terms of her having to deal with proceedings both before this court and the SSAT. She also asserted that I had used the expression, in respect of the extension of the stay order until 26 November “preserve the fruits of his labour” in reference to Mr Garth. In so doing she asserted that I appeared to be protecting Mr Garth’s interests.
She also complained that I had said words to the effect “I am not surprised Ms Hope wants to get her hands on this money. $10,000,00 is a lot of money.” She complains that the implication of the expression “get her hands on” contains a connotation that she is attempting to obtain something to which she is not entitled. She also complained that I appeared “agitated” during the hearing on 5 September. Ms Hope did not produce a transcript of these proceedings.
Ms Hope submitted that a fair minded lay observer of the proceedings was likely to perceive that I would not be able to bring an impartial mind to the hearing of the proceedings.
On 26 November, Mr Garth was represented by Mr Baston, who had previously appeared on his behalf in the proceedings. Ms Hope appeared on her own behalf. Mr Baston did not support the application that I disqualify myself from the further hearing of the proceedings. I declined the application and provided oral reasons for so doing.
The legislative framework and other legal considerations
The law relating to child support, particularly in respect of applications to courts of appropriate jurisdiction to depart from administrative assessments of child support, has been subject to wide ranging legislative reform. In particular, the legislature has attempted to restrict the ambit of such applications and has introduced an independent review mechanism in respect of child support decisions made by the Registrar of the Child Support Agency, in the form of appeals to the SSAT.
These amendments are contained in the Families, Community Services and Indigenous Affairs Legislation Amendment (Child Support Reform Consolidation and Other Measures) Act 2007 “the Other Measures Act” and the Child Support Legislation Amendment (Reform of the Child Support Scheme – New Formula and Other Measures) Act 2006 “the New Formula Act”.
Division 4 of Part 7 of the Assessment Act deals with departure orders from administrative assessments in special circumstances. Pursuant to section 118, the court is empowered to vary, amongst other things, the annual rate of child support payable by a parent; make an order varying a parent’s child support income; or otherwise vary the various components of the child support formula to the particulars of any given case.
However, as a result of amendments brought about by both the New Formula Act and the Other Measures Act, the entitlement to make an application for departure pursuant to section 118 has been limited. Pursuant to section 111(1) a party to a child support assessment may only apply to the court for an order under section 118 of the Act in respect of any day in a child support period, which is more than eighteen months and less than seven years earlier than the day on which the application is made, with the leave of the court.
Pursuant to section 112 of the Assessment Act, the court has a discretion to grant such leave and then proceed with any dependant application pursuant to section 118. It also has the authority to grant leave to the Registrar of the CSA to make a departure determination pursuant to section 98S of the Assessment Act notwithstanding that such a departure would otherwise be out of time.
The matters which are to inform the discretion are set out in subsections (4) & (5) of section 112. The court must have regard to the responsibility and reasons for the delay, any hardship which may be occasioned to the applicant and any other party and any other matters, which the court considers relevant.
The legislative provisions, which relate to the amendment of any administrative assessment of child support that is more than eighteen months old were inaugurated following the recommendations of the Ministerial Taskforce on Child Support, chaired by Professor Parkinson. The Taskforce was concerned to limit retrospective applications in respect of child support and the government accepted its recommendations in this regard.
The Taskforce reported as follows:
“An application for change of assessment may currently be made for a virtually unlimited time. This is highly undesirable, as it may open periods to re-examination which have long past, to the detriment of the other parent who finds past child support obligations being retrospectively reviewed. Particularly where a parent wishes to avoid complying with large outstanding child support debts, a belated application to reduce the assessment may be available, undermining the CSA’s ability to enforce debt. In practice, most decisions are not retrospective. However, the currently open discretion to make an application to vary past periods should generally be limited to the immediately preceding child support period.
However, there may be some exceptional circumstances where a parent has a legitimate reason for delaying their application for a change to a past assessment. One such reason is because information has only recently come to light about a payer’s hidden income. In such cases, a process should exist to enable this general limit on retrospective applications to be eased. A court is in the best position to consider the past ‘rights’ of the parties, and determine whether making an exception is appropriate. For this reason the Taskforce proposes that an application should be made to a court (in practice this would be the Federal Magistrates Court), to grant leave to apply out of time. This would be similar to the existing process under s.44 of the Family Law Act 1975 in relation to property and spousal maintenance applications.
Where such application has been made to a court, and the court is inclined to grant it, the court may have before it much of the necessary information and evidence from the parents to consider making a departure order. It may be inefficient to require the parents to return to the CSA to seek administrative determination of the application. In such cases, the court should have a discretion on application by a parent to proceed to determine the substantive departure application itself.”[15]
[15] see: In the Best Interests of Children – Reforming the Child Support Scheme: Report of the Ministerial Taskforce on Child Support published May 2005 at page 195
Part VIIA and Part VIII of the Collection Act deal respectively with SSAT reviews of child support decisions made by the Registrar and the jurisdiction of courts to review such decisions of the SSAT.
Pursuant to section 89 of the Collection Act, a person may apply to the SSAT to review specified decisions of the Registrar of the CSA. In carrying out its functions under the Act, the SSAT is required to provide a mechanism for review that is fair, just, economical, informal and quick.
The applicable Explanatory Memorandum, released in conjunction with the relevant bill which became the New Formula Act, described the legislation as introducing:
“…review by an independent external body, the Social Security Appeals Tribunal (SSAT), of child support decisions which have been reviewed under the Child Support Agency’s internal review procedure. The purpose of introducing this is to provide external review mechanism which is faster, less formal and less expensive than court action, while still providing just and fair outcomes. The Registrar is the primary respondent to an application for appeal, although the other parent is also a party (with the exception of limited circumstances in which the outcome cannot affect the other parent). It is an inquisitorial, rather than an adversarial, process, which may assist in reducing tensions between separated parents when resolving child support issues. Most of the current limited AAT appeals, relating to decisions primarily affecting only one parent, will now be performed by the SSAT.”[16]
[16] see: Explanatory Memorandum to Child Support Legislation Amendment (Reform of the Child Support Scheme – New Formula and Other Measures) Bill 2006 at page 89
As indicated above, the extent of an appeal to this court from a decision of the SSAT is limited. The appeal is not a hearing de novo. Rather such an appeal is governed by the provisions of Division 3 of Part VIII of the Collection Act, in particular section 110B, which reads as follows:
“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 commencement date for the provisions contained in section 112 of the Assessment Act is 1 January 2007.[17] The commencement date for the provisions relating to SSAT appeals is also 1 January 2007.[18]
[17] See: Schedule 4 Part 1 of the New Formula Act. It should however be noted that section 112(3A) commenced on 22 June 2007 as it was introduced by the Other Measures Act.
[18] See Schedule 3 to the New Formula Act.
Accordingly, if Mr Garth’s application relating to the issue of child support departure from 1 October 2005 onwards is not reinstated before the court, any future application, in such terms, would fall to be determined pursuant to a very different legislative regime.
Firstly, given that it is now well over eighteen months since the assessment of 1 October 2005 issued, Mr Garth would require the leave of the court to proceed with his application. Secondly, he would have to address issue of hardship arising to Ms Hope from such application.
In addition, since this application was filed, but prior to its ostensible dismissal, the legislature has inaugurated a fundamentally different system to deal with the review of internal child support decisions of the CSA in the form of SSAT reviews, which are intended to be cheaper and simpler than applications previously brought before courts such as this one.
As she is entitled to, Ms Hope has instituted such a review to the SSAT in respect of the decision of the objections officer made on 29 July 2010. Mr Garth has a similar entitlement. However, since the various amendments brought about by the New Formula Act, the right of further hearing before this court, in respect of decisions of the SSAT, is limited to an appeal arising from an issue of law only.
It is clear from the terms of section 111C(3) of the Collection Act that the court has a broad discretion in respect of granting a stay in the collection and disbursement of child support gathered by the CSA. The court is directed to make whatever stay order it considers appropriate, after taking into account the interests of any person who may be affected by such an order.
The pre-conditions for the granting of such a stay are set out in section 111C(1). They include the following:
·proceedings are on foot in a court having jurisdiction under the Collection Act;
·there is an internal application for the review of a decision of the CSA;
·there is a review application before the SSAT;
·there is a departure application, pursuant to the provisions of the Assessment Act, before either the Registrar of the CSA or a court having appropriate jurisdiction.
In general terms, in my view, in granting any stay, the court should consider the following matters:
·whether refusing to grant such a stay will make any subsequent proceedings regarding the applicable child support assessment or agreement nugatory or of no consequence;
·the balance of convenience to the parties concerned, particularly where financial hardship will fall if the stay is or is not granted;
·the financial needs of any child affected and how those needs should be properly supplied;
·any delay in bringing an application for the stay in question;
·the bona fides of the stay;
·the merits of the substantive application.
In addition, pursuant to section 111B of the Child Support (Registration & Collection) Act 1988 the court has a wide range of general powers in discharging its functions under the Act. These include an order for the payment of a weekly, monthly, yearly or other periodic amount of child support and the power to make any orders, which it considers appropriate.[19]
[19] See Child Support (Registration & Collection) Act 1988 at section 111B(1)(b) and (l)
Section 111B was inserted as a result of the Child Support Legislation Amendment (Reform of the Child Support Scheme – New Formula and Other Measures) Act 2006. Its operation commenced on 1 January 2007. The relevant explanatory memorandum indicates that the purpose of the legislation was to simplify the relationship between the courts and the new child support scheme.
It was pursuant to the provisions in section 111C of the Collection Act that the stay order was initially made on 13 July 2010. At that stage, Mr Garth’s objection to the Registrar’s decision had not been dealt with internally by the CSA. Accordingly, I had jurisdiction to make the order pursuant to the provisions of section 111C(1) as an application was on foot pursuant to Part 6A of the Assessment Act.
At later stages, in the proceedings, there were incomplete proceedings before the SSAT. As previously indicated, one of the central controversies in this case is whether Mr Garth still has on foot proceedings for departure pursuant to Part 7 of the Assessment Act [see Collection Act at section 111C(1)(d)]. In my view, such a state of affairs provided the required statutory pre-conditions to continue the stay.
I cannot recall saying words to the effect that the purpose of granting such a stay was so that “the fruits of Mr Garth’s labour” may be preserved for him. It is more likely, I think, that I said words to the effect that the purpose of the stay was to ensure that Mr Garth was not deprived of “the fruits of any successful judgment” or some such. As previously indicated, the purpose of such a stay is to preserve the applicable status quo pending the final resolution of proceedings between the parties concerned. One aspect of these proceedings is the reinstatement of Mr Garth’s child support application of February 2007.
The test to be applied in determining whether a judicial officer is to be disqualified, by reason of appearance of bias, from proceeding to hear a matter, was most recently stated by the majority of the High Court in Johnson v Johnson[20] as follows:
“…the test to be applied in Australia in determining whether a judge is disqualified by reasons of the appearance of bias (which in the present case, was said to take the form or prejudgment) is whether a fair-minded lay observer might reasonable apprehend that the judge might not bring an impartial and unprejudiced mind to the resolution of the question the judge is required to decide.”
[20] See Johnson v Johnson (2000) 26 Fam LR 627 at 630
The test is based on the fundamental principle that justice must both be done and seen to be done. If fair-minded people either perceive or suspect that a court has a preconceived notion of the appropriate outcome for a case, it will inevitably lead to the erosion of public confidence in the judicial process.
I do not think the use by me of the expression, in respect of Ms Hope, that she “would like to get her hands” on the $10,000.00 in question is either pejorative of Ms Hope herself or likely to cause a dispassionate observer to think I had prejudged the case. I consider most would agree that such a sum is a significant amount of money. In her affidavit filed with her application, Ms Hope had delineated why she had a pressing need for the sum. She argued strongly that the stay should be dismissed. My words, I think, acknowledged the significance of the on-going imposition of the stay to her circumstances.
Finally, I do not think that it is possible for any person to reach the conclusion that I had determined what the outcome of the case would be because I appeared “agitated”. Any person, judicial officers included, may appear agitated for all sorts of reasons. Agitation, of itself, is not indicative of pre-judgment.
Pursuant to section 42 of the Federal Magistrates Act 1999 the court is directed to proceed “without undue formality and must endeavour to ensure that proceedings are not protracted”. The court is also empowered to make rules to govern the operation of its practices and procedures pursuant to section 81 of this Act. Section 87 sets out the scope of the court’s rule making power.
Rule 16.05(2) of the Federal Magistrates Court Rules deals with the variation or setting aside of judgments or orders made by the court after their entry. It provides specific criteria for such variation or setting aside as follows:
·the order is made in the absence of a party;
·the order is obtained by fraud;
·the order is interlocutory;
·the order is injunctive;
·the order does not reflect the intention of the court;
·the party in favour of whom the order is made consents.
Rule 16.05(2) is a rule of the type which is commonly referred to as “the slip rule”. It confers authority on the court to correct its orders in a number of specific circumstances. It does not give the court authority to re-open matters which have been finalised by the entry of an order. The rule is to be utilised sparingly and carefully.
The judgment of a court is entered when a formal order document is sealed. This becomes the formal record of the court’s decision. The circumstances in which such judgments can be set aside is limited as the public has an interest in the finality of judgment and the conclusion of litigation other than through appeal.
The learned author of Australian Civil Procedure describes the application of the slip rule as follows:
“There is no jurisdiction under the slip rule to amend a judgment that was given intentionally. The scope of the amending power is limited to judgments that do not, as entered, correctly express the intention the judge had when the judgment was pronounced. Any party who invokes the jurisdiction under the slip rule must show that the intention is not properly expressed…Once a judgment is perfected, it can be recalled by that court only if its intention is not properly expressed… A slip or omission is not necessarily accidental if a party fails to bring a relevant matter to the court’s attention because of carelessness or ignorance rather than through inadvertence.”[21]
[21] Cairns BC: Australian Civil Procedure Eighth Edition (Law Book Company 2009) at page 583. Citations have been removed from the extract quoted.
Conclusions
Mr Baston submits that I should approach the dispute between the parties, in respect of child support issues, in “a holistic manner” focusing on the best interests of [X] and [Y]. He argues that it is preferable, given the parties’ long history of litigation with one another, that one court provide a single forum to deal with all the child support issues between the parties from 2005 to the current time.
The underpinning of his position is that, if this court does not allow Mr Garth’s child support departure application to be reinstated, it will mean that there is likely to be a multiplicity of applications – to this court seeking leave to proceed with departure applications outside the eighteen month period; to the SSAT; appeals from decisions of the SSAT; not to mention departure applications themselves.
In order to spare the children the potentially corrosive consequences of this litigation, he argues that it is preferable there be one court dealing with a global departure application brought pursuant to Part 7 of the Assessment Act. Essentially, he argues that to dismiss his client’s application for reinstatement would not resolve the complex and long standing issues child support between the parties.
It is position that the court heard no evidence or argument about the child support aspect of the case in the proceedings of 2007 and 2008. Therefore, it can only be a matter of oversight that all outstanding applications were dismissed in December of 2008. As such the matter can be remedies either by application of the slip rule or administratively.
Ms Hope’s position is that there can be no doubt about the court’s intention, in December of 2008, when the final orders were made. Its intention was to finalise all outstanding applications between the parties and end the litigation between them in the court. She argues that the only logical catalyst for Mr Garth’s current application for reinstatement is her application to the Registrar of the CSA for an administrative departure from child support, which ultimately led to the CSA applying to garnish his tax refund.
Both these eventualities occurred long after the orders of 9 December 2008 were made and have no direct connection to the subject matter of the litigation which was clearly and unambiguously concluded by those orders. By necessary implication, she contends that the various criteria, provided by the slip rule, can have no application to this situation.
It is also her position that the situation is not one which can be correct “administratively”, as Mr Baston contends, particularly so long after the event. Once a judgment is entered, the only method to challenge it is by appeal or by application of the slip rule, given the public interest that judgment should finalise litigation.
Again, impliedly, she argues that it would be prejudicial to her if Mr Garth is permitted to reinstate complex child support applications, which were not in any event contemplated in his original application, particularly as she has chosen to take the newly available and less expensive and adversarial avenue of independent appeal in respect of child support matters provided by the SSAT.
It is Ms Hope’s position that, throughout the 2007 and 2008 proceedings, Mr Garth was represented by experienced counsel. He himself cannot be regarded as a neophyte in terms of litigation involving both children and child support issues, particularly as he himself drafted the 28 February 2007 application. As such, the failure to raise any child support issue, in the immediate aftermath of the 9 December 2008 orders, cannot be described as a matter of inadvertence on either his or Mr Baston’s part.
Rather, the change in the children’s circumstances, brought about by both the interim and final orders, made by the court, rendered the earlier application otiose and accordingly he was content not to ventilate it or raise demur when it was formally dismissed.
I prefer Ms Hope’s position. I reach this conclusion for the following reasons. Firstly, the legislatively prescribed ethos of the court is that it is to ensure that litigation is not unduly protracted. In my view, for the court to accede to Mr Garth’s application would undoubtedly have the effect of prolonging litigation between the parties.
I am not persuaded that there is any merit in Mr Baston’s submission that, to reinstate his client’s child support application, necessarily will spare [X] and [Y] from the possible excesses of parental litigation. In the past, Mr Garth has shown little reluctance in commencing litigation. To the contrary, Mr Garth’s preferred position seems likely to have the consequence of exposing the children to more rather than less litigation and for that litigation to be more wide ranging.
Secondly, such an outcome is not in keeping with the simplified external appeal mechanism, to the SSAT, in respect of child support matters, inaugurated by the New Measures Act, which Ms Hope is currently pursuing. The legislature’s professed desire is to simplify and confine litigation between separated parents in respect of child support issues.
Thirdly, I do not consider that Mr Garth’s application is amenable to the slip rule. The case before me in 2007 and 2008 was concerned with children’s issues primarily. No evidence or submissions were made in respect of child support matters. The judgment I delivered was intended to finalise the litigation, before me, between the parties. Mr Garth did not promptly inform me that I was mistaken, in this regard, so far as any child support issue was concerned. In contrast, an error in the manner in which the orders were expressed regarding school holidays was corrected consensually pursuant to the slip rule [see: Rule 16.05(2) (f)].
As such, I cannot see that the failure to raise the issue of what is now characterised to be the premature dismissal of the child support matter can be said to be the result of inadvertence on either the part of the court or of the parties themselves. Rather it seems incontrovertible, as Ms Hope contends that the application arises as a result of her successful application for a registrar directed departure from administrative assessment of child support and the collection initiative which followed it. Matters to which Mr Garth has now taken exception but which have no connection to his earlier application other than both relate to child support in a generic sense.
In this regard, in my view, it is significant that Ms Hope’s application to the registrar concerned a child support scenario not in contemplation when Mr Garth filed his application in response to the order of Mead FM. In short, there seems no logical nexus between the application which Mr Garth wishes to see reinstated and the application which Ms Hope has more recently made and which is progressing through the appeal channels provided by the New Measures Act.
Finally, I am concerned that to reinstate Mr Garth’s application would be to create a proceeding which is hydra headed as it would not be subject to the leave requirements of section 112 of the Assessment Act. Mr Garth’s main complaint is referable to the decision of SCO M and his subsequent disallowed objection, which resulted in him being found to have a higher child support income for the 2008/2009 and subsequent tax year periods.
Mr Garth has avenues of review open to him in respect of this decision, which is amenable to the independent appeal mechanisms provided by the New Measures Act. These avenues do not depend on him pursuing departure applications relating to earlier child support periods, which occurred prior to the radical change in arrangements for [X] and [Y], following the December 2008 orders. The same avenues are available to Ms Hope and she is currently utilising them.
It seems to me that it would be highly prejudicial to Ms Hope to allow Mr Garth to be able to re-examine earlier child support periods, on the basis of as yet unclearly specified grounds of departure and without any examination of the potential hardship to her which will flow from such an application being successful. This is particularly so given that the current arrangements for the care of [X] and [Y] were clearly unanticipated by all concerned when Mr Garth filed the application with the court in February 2007.
It seems to me to be preferable and more in keeping with the child support regime inaugurated by the New Measures Act and related legislation that the parties follow the appeal mechanisms mandated by this legislation. Certainly this seems to me to be the fairer option for Ms Hope and one which does not prejudice Mr Garth.
For these reasons, I have decided to dismiss order one of the interim orders sought by Mr Garth in his application filed on 23 June 2010. The question which remains concerns the appropriateness of the stay order made on 13 July 2010 and which has been subsequently continued.
The Stay Order
Mr Garth’s position is that he has a pressing need for the funds due to him as a result of his income tax return for the ending 30 June 2009. He has a liability for [X]’s school fees; mortgage payments; and child care expenses for his daughter [Z] born in 2007; as well as other expenses. It is his case that he has managed his financial affairs on the basis that he will receive the tax refund calculated for him in full.
Ms Hope’s position is similar. She has delineated a number of her own pressing financial commitments, particularly in relation to the repairs to her motor vehicle; travel expenses relating to the children; and her utilities bills. She complains that Mr Garth has taken a number of overseas holidays in the period when his pressing liabilities have apparently arisen.
Ms Hope was entitled to apply to the registrar for a departure from the applicable administrative assessment on the basis that it did not reflect Mr Garth’s true financial circumstances. Her application was successful and a new assessment issued in respect of the child support period from 7 April 2009 onwards.
Mr Garth was entitled to object to this assessment and he did so. He was partially successful in his objection but arrears of child support remain outstanding to Ms Hope, given Mr Garth’s child support income has been found to be higher than the estimate he provided to the CSA.
Both parties have a right of appeal to an independent review body in the form of the SSAT in respect of this decision. Ms Hope is pursuing such a review. I am unclear whether Mr Garth is exercising his right to do so currently. At present, I am unable to assess the potential merits of either Ms Hope’s actual or Mr Garth’s possible appeal to the SSAT other than, up to this stage, Ms Hope has been the more successful party in the CSA’s internal processes of review.
On the basis of the evidence currently available to me, I am satisfied that the issue of financial hardship is fairly evenly poised between the parties. Both have pressing financial needs. As such, the balance of convenience falls evenly.
Given my dismissal of Mr Garth’s application to reinstate his departure application relating to child support issues from October 2005 onwards, the sole basis for the stay continuing is the review application before the SSAT. The difficulty with this is that Ms Hope wishes the stay discharged, whilst it is unclear whether Mr Garth, who wishes the stay to continue, will pursue any application before the SSAT.
Mr Garth has filed two affidavits before the court.[22] To these affidavits he has attached documents which relate to his financial affairs. These documents attest to the complexity of those affairs stemming chiefly from the fact of his self employment following his retrenchment from the [occupation omitted] and the establishment of his current business. He prepared a lengthy objection to the decision of SCO M.
[22] Affidavits of 23 June 2010 and 3 September 2010.
I am not in a position to evaluate that objection or determine what chances of success Mr Garth is likely to have if he pursues an appeal to the SSAT, if he has not already done so. However, it does not seem to me that the basis of his objection to SCO M’s decision is clearly spurious.
If Mr Garth has not as yet sought to appeal the decision of the objections officer, he can seek such an extension of time pursuant to section 91 of the Collection Act. Although, this discretion resides in the hands of the Principal Member of the SSAT, in all the circumstances of this case, it seems unlikely that such an extension will not be granted, particularly as Ms Hope’s application for review has not as yet been dealt with pending the outcome of these proceedings.
If the monies which are currently subject to the stay are released to Ms Hope and subsequently Mr Garth is successful in a review application to the SSAT, it is likely to be difficult for him to recoup the sum concerned directly from Ms Hope as she is likely to have disbursed the funds to cover her liabilities. However, the sum could be off set against any future child support Mr Garth was assessed to pay Ms Hope in respect of [Y].
The discretion to grant a stay pursuant to section 111C(3) of the Collection Act is a wide one. The court is empowered to make the stay order which it considers to be appropriate, after taking into consideration the interests of the various persons who will be affected by the outcome of proceedings concerned. The court is directed to make the order which it considers to be desirable, after taking into account those interests.
In the circumstances of this case I think it appropriate that a significant portion of Mr Garth’s tax return be released to Ms Hope to satisfy the decision of SCO M which was largely ratified following the objection hearing process. However, I also consider it desirable, bearing in mind Mr Garth’s interest that a significant portion be also subject to injunction so that any appeal he has already instigated or is likely to instigate pending the release of these reasons for judgment is not rendered nugatory.
For these reasons, I propose pending the finalisation of the appeal to the SSAT that all but the sum of $5,000.00 currently subject to the stay be released from the operation of the order made on 13 July 2010.
Originally I had scheduled 10 December 2010 as the date for the publication of these reasons for judgment. Regrettably I was unable to meet this date. I apologise to each of the parties for the delay in providing these reasons.
For all these reasons, the orders of the court will be as set out at the commencement of these reasons for judgment.
I certify that the preceding one hundred and eighty-one (181) paragraphs are a true copy of the reasons for judgment of Brown FM
Date: 25 January 2011
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