GORTON & GORTON

[2014] FCCA 1528

FEDERAL CIRCUIT COURT OF AUSTRALIA

GORTON & GORTON [2014] FCCA 1528

Catchwords:
CHILD SUPPORT – Departure Application – costs – where Application incompetent – where no jurisdiction to make a Departure Order.

COSTS – Application for costs – where Application discontinued after the first return date – costs according to scale.

Legislation:

Child Support (Assessment) Act 1989 (Cth), ss.98E, 116

Family Law Act 1975 (Cth), ss.116, 117
Federal Circuit Court Rules 2001, r.4.03, Sch. 1, Part 2, Div.1

Cases cited:
Kness & Kness [2000] FamCA 1032; (2000) FLC 98-013
Prantage & Prantage [2013] FamCAFC 105; 49 Fam LR 197

Applicant: MS GORTON

Respondent: MR GORTON

File Number: PAC 2271 of 2012

Judgment of: Judge Scarlett

Hearing date: Decided in Chambers

Date of Last Submission: 11 February 2014

Delivered at: Sydney

Delivered on: 17 July 2014

REPRESENTATION

Counsel for the Applicant: Mr Johnston

Solicitors for the Applicant: Santone Lawyers

Counsel for the Respondent: Mr Sansom

Solicitors for the Respondent: Slater & Gordon Lawyers

ORDERS

1. The Applicant is to pay the Respondent’s costs of the Application for a departure from administrative assessment of child support and the application for costs in the fixed sum of $3,755.00.

2. The Applicant is allowed three (3) months to pay the costs.

IT IS NOTED that publication of this judgment under the pseudonym Gorton & Gorton is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT SYDNEY

PAC 2271 of 2012

MS GORTON

Applicant

And

MR GORTON

Respondent

REASONS FOR JUDGMENT

Application

1. This is an Application for costs by the Respondent Husband. The Application arises from an Application for departure from administrative assessment of child support under s.116 of the Child Support (Assessment) Act 1989 (Cth) filed on 20^th September 2013 and discontinued on 4^th December 2013.  

Background

1. The Applicant filed an Initiating application in this Court on 20^th September 2013. The Application was returnable on 12^th November 2013. The Application was accompanied by an affidavit and a Financial Statement.

2. On 8^th November 2013 the Respondent filed a Response, seeking dismissal of the Application with costs, accompanied by an affidavit and a Financial Statement.

3. On the return date of 12^th November, the Applicant was represented by her solicitor, Ms Santone, and Mr Sansom of Counsel appeared for the Respondent. Mr Sansom told the Court that the Application was opposed because of a lack of jurisdiction. The Application was adjourned to 10^th December for mention and the Respondent’s costs were reserved.

4. The Application was discontinued by a Notice of Discontinuance filed on 4^th December 2013.

5. The Respondent filed a written submission as to costs on 30^th January 2014. The Applicant filed a submission on 11^th February 2014.   

Submissions

1. The Respondent claims costs in the sum of $8,800.00, including counsel’s fees of $5,500.00.

2. The basis of the Respondent’s submission, by Mr Sansom of counsel, is that there was no jurisdiction for the Court to make the Departure Order sought. It was submitted that:

   7. The wife’s Application to this Court was flawed. Whilst a payer or payee of Child Support can make an Application to a Court for an order under s. 117 of the Child Support (Assessment) Act 1989 they must first meet the requirement set out in s.116.

   8.  None of the subsections of s.116(1) are met in this case.

   9. The Applicant had not lodged an objection against the decision of the Registrar or proceeded with a Review or Appeal with the SSAT. Further there was no other proceeding on foot in a Court which would permit the joinder of the Departure application to existing proceedings.

   10.In this regard however it is noted that the parties underwent proceedings in the Family Court of Australia at Parramatta which were heard and determined over some period of time in January 2013 at which time there would have been for the wife an ability to join a Departure Application to those property and parenting proceedings. In those proceedings the wife was represented by Mr Lloyd SC. Orders as to property were made by consent on 15 January 2013.[1]

   [1] Costs Submissions of the Respondent  Husband 21 January 2014 paragraphs [7]-[10]

3. Mr Sansom referred the Court to the introduction to the topic Alteration to Administrative Assessment – objection rights  in the CCH Australian Family Law Practice at 12-100:

   Importantly the failure to utilise the objection process will usually result in a Court having no jurisdiction to hear and determine an Appeal or Application.

4. Mr Sansom also referred the Court to the decision of Kay J in Kness & Kness[2], where it was held that the Court had no jurisdiction to entertain an application for departure from administrative assessment because the objection process had not been exhausted.

   [2] [2000] FamCA 1032; (2000) FLC 98-013

5. Noting that costs in child Support proceedings are governed by the provisions of s.117 of the Family Law Act 1975 (Cth), Mr Sansom submitted that the following factors under s.117(2A) were relevant:

   a)The financial circumstances of the parties (s.117(2A)(a)) – both parties have substantial assets;

   b)The wife has been wholly unsuccessful in the proceedings (s.117(2A)(e)); and

   c)The wife’s income as set out in her Financial Statement is $4,433.00 (s.117(2A)(g).

6. It was further submitted that the costs sought would have been more significant “had the husband chosen to allow the wife to proceed and not raise the issue of lack of jurisdiction on the first return date.”[3]

   [3] Costs Submissions of the Respondent Husband  at [14]

7. Counsel for the Wife, Mr Johnston, submitted that the Wife’s solicitor had made a genuine mistake as a result of a decision of a Senior Case Officer as a delegate of the Child Support Registrar to refuse the Husband’s Application for Departure and the Wife’s Cross Application. The decision was to refuse both Applications under s.98E of the Child Support (Assessment) Act 1989 because the issues raised were too complex.

8. The submission quotes the Senior Case Officer’s Reasons for Decision as saying:

   I consider the matter of the children’s school fees is too complex for determination by the department. In order to progress the matter, either parent will need to object to my decision in writing within 28 days. If the objection is that the matters are too complex, then either party may lodge a departure application before a court with jurisdiction over [a] child support matter such as the Federal Magistrates Service[4] [The Federal Circuit Court of Australia].[5]

   [4] This obsolete term was an alternative title for the Federal Magistrates Court, which changed its name to the Federal Circuit Court of Australia in April 2013

   [5] Wife’s Submissions in Reply to Husband’s Costs Application paragraph [4]

9. Mr Johnston submitted that the above paragraph is ambiguous and led the Applicant’s solicitors into error:

   …(U)ltimately a decision was made under S 98E because the issues are too complex. That being the case, and having been armed with the advice from the wife that a Departure Application could be made to the court immediately, those advising the wife fell into error and made a genuine mistake.[6]

   [6] Ibid at [8]

10. Ms Johnston went on to submit that:

    a)the Application was served on 20^th September 2013;

    b)the Respondent’s solicitors wrote to the Wife’s solicitors on 23^rd September, inviting the Applicant to withdraw her application for a reason other than lack of jurisdiction;

    c)the Respondent did not raise the jurisdictional objection at any time prior to the first Court date;

    d)the Respondent filed and served a Response and supporting documents  one day prior to the first return date;

    e)the Respondent need not have gone to the expense of preparing, filing and serving his Response documents “given the strength of conviction of his counsel…”;

    f)A simple letter from the Respondent’s solicitors to the Applicant’s solicitors referring them to the decision in Kness & Kness[7]could have been written prior to 11^th  November when the Respondent’s documents were filed; and

    g)Those advising the Applicant would then have been able to consider the Respondent’s objection to jurisdiction and they would then have been able to file a Notice of Discontinuance at an earlier date.

    [7] supra

11. It was further submitted that:

    a)the Respondent’s conduct in not raising the jurisdictional point prior to filing his material is conduct militating against a costs order in his favour;

    b)the Applicant’s conduct in discontinuing her application is conduct consistent with a genuine mistake on her part in respect of which the Respondent could have put her on notice;

    c)the Respondent filed unnecessary documentation;

    d)each party should pay their own costs; and

    e)if a costs order is made there is no basis for departing from an order on a party and party basis.

Conclusions

1. The Application for departure from administrative assessment was incompetent. The Court had no jurisdiction to entertain the Application.

2. A person may bring an Application to the Court for departure from an administrative assessment of child support if certain conditions under subsection 116(1) of the Child Support (Assessment) Act 1989 apply:

   (a)   all of the following apply:

   (i)the Registrar has, under section 98E or 98R, refused to make a determination under Part 6A in respect of the administrative assessment;

   (ii)    an objection to the refusal has been lodged;

   (iii)   the Registrar has disallowed the objection; or

   (aa)  all of the following apply:

   (i)a decision has been made in respect of the administrative assessment;

   (ii)    an objection to the decision has been lodged;

   (iii)in making a decision on the objection, the Registrar has, under section 98E or 98R, refused to make a determination under Part 6A in respect of the administrative assessment; or

   (ab)the SSAT has, under section 98E or 98R, refused to make a determination under Part 6A in respect of the administrative assessment; or

   (b)    both of the following apply:

   (i)the liable parent or carer entitled to child support is a party to an application pending in a court having jurisdiction under this Act;

   (ii)the court is satisfied that it would be in the interest of the liable parent and the carer entitled to child support for the court to consider whether an order should be made under this Division in relation to the child in the special circumstances of the case; or

   (c)in the case of a liable parent – the administrative assessment of child support payable by the liable parent for the child is made under subsection 66(1).

3. The Application filed in this matter did not meet the requirements of subsection 116(1). It was never going to succeed.

4. Whilst there was a genuine mistake by the Applicant’s solicitor, it is hardly the case that there was an obligation on the solicitor for the Respondent to raise that error with the Applicant’s solicitor any earlier than the return date of the Application.  

5. The Respondent was obliged to file a Response and supporting documents when he did. Rule 4.03 requires that a Response must be filed and served within 14 days of service of the Application to which it relates, although that is, regrettably, a rule that is more honoured in the breach than the observance in the Sydney Registry of this Court.

6. In my view, this is a matter for costs. The Applicant was wholly unsuccessful. The Application should not have been brought. I have considered the parties’ financial circumstances and I note that neither party appears to have been in receipt of a grant of legal aid.

7. It is to the Applicant’s credit that the Application was discontinued when it was.

8. The Respondent seeks costs in the sum of $8,800.00, which includes Counsel’s fees in the sum of $5,500.00. This appears to be an optimistic figure, as there does not appear to be any reason why costs should be awarded on any other basis than the scale provided by the Rules. The usual basis for an award of costs is on a party and party basis (see Prantage & Prantage[8]).

   [8] [2013] FamCAFC 105; (2013) 49 Fam LR 197

9. Division 1 of Part 2 of Schedule 1 of the Rules applies to child support proceedings. Item 1 provides for an amount of $2,100.00 plus the daily hearing fee mentioned in Item 6 for initiating or opposing an application up to the completion of the first court date. Item 6 provides for a daily hearing fee of $262.00 for a short mention. Under Item 5 there is an advocacy loading of 50% of the daily hearing fee. I note that Mr Sansom of Counsel appeared for the Respondent on the first return date.

10. I will allow the sum of $1,262.00 for the application for costs, including attendance to take judgment.

11. The Notice of discontinuance was filed prior to the adjourned date.

12. Accordingly, the amount of costs payable is $3,755.00. Counsel’s fees may not be charged as a disbursement.

13. The Applicant will be allowed three months to pay the costs.  

I certify that the preceding thirty (30) paragraphs are a true copy of the reasons for judgment of Judge Scarlett

Associate: 

Date:  17 July 2014