Hooch and Hooch
[2011] FMCAfam 588
•3 June 2011
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| HOOCH & HOOCH | [2011] FMCAfam 588 |
| FAMILY LAW – Financial – enforcement of child maintenance and child support arrears – summary dismissal– father now resident in Vanuatu. |
| Child Support (Assessment) Act 1989 Family Law Act 1975, s.66C Federal Magistrates Act 1999, s.17A Federal Magistrates Court Rules 2001, reg.13.10 |
| General Steel Industries Incorporated v Commissioner for Railways (New South Wales) [1964] HCA 69; (1964) 112 CLR 125 |
| Applicant: | MS HOOCH |
| Respondent: | MR HOOCH |
| File Number: | NCC 1736 of 2007 |
| Judgment of: | Monahan FM |
| Hearing date: | 19 May 2011 |
| Date of Last Submission: | 19 May 2011 |
| Delivered at: | Sydney |
| Delivered on: | 3 June 2011 |
REPRESENTATION
| Counsel for the Applicant: | Mr Dura |
| Solicitors for the Applicant: | Penmans Solicitors |
| Counsel for the Respondent: | Mr Johnston |
| Solicitors for the Respondent: | Conditsis & Associates |
ORDERS
The Respondent’s application for summary dismissal of the Applicant’s Initiating Application be dismissed.
Costs be reserved.
All extant applications be adjourned to this Court on 31 August 2011 at 9:30am for mention (“the mention hearing”).
The parties attend a Conciliation Conference with a Registrar of the Family Court of Australia at the Sydney Registry on 18 July 2011 at 9:30am AND the solicitors for each party send to the other and the Registrar at least seven (7) days before the Conciliation Conference copies of:
(a)a completed Conciliation Conference document (as appropriate for a child maintenance dispute);
(b)the actual terms of orders required to give effect to their settlement proposal;
(c)if applicable, a copy of any apprehended violence order or restraining order that is currently in force; and
(d)a written confirmation by each party or their solicitor that all relevant documents have been exchanged between the parties
AND IN THE EVENT that the matter does not settle at the Conciliation Conference, further directions be given at the mention hearing and, in addition, where a party has not complied with subparagraphs (a) to (d) herein the Court may consider submissions with respect to costs.
The Respondent be granted leave to appear by telephone at the Conciliation Conference, provided that he is legally represented.
The parties be excused from appearing at the mention hearing, provided that they are legally represented
AND THE COURT NOTES THAT:
(A)The purpose of the mention hearing is to consider further directions in the event that the parties remain in dispute following the Conciliation Conference.
IT IS NOTED that publication of this judgment under the pseudonym Hooch & Hooch is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT SYDNEY |
NCC 1736 of 2007
| MS HOOCH |
Applicant
And
| MR HOOCH |
Respondent
REASONS FOR JUDGMENT
Introduction
The substantive proceedings in this matter relate to the initiating application filed on 16 November 2010 by MS HOOCH (“the mother”) against MR HOOCH (“the father”).
The mother seeks various child maintenance orders in relation to the child of their relationship, [X], born [in] 1997 (“[X]”) in her application. More specifically, the mother seeks the following orders:
·that the father pay the mother the sum of $2176.00 per month by way of child maintenance; or in lieu
·that the father pay to he mother the sum of $260,000.00 as a lump sum by way of child maintenance; and
·that the father pay 80 per cent of [X]’s ongoing orthodontic treatment.
The mother’s initiating application is supported her affidavit sworn on 12 November 2010 and filed on 16 November 2010 (“the mother’s affidavit”) and her financial statement also sworn on 12 November 2010 and filed on 16 November 2010.
The father opposes the orders sought by the mother and filed his response on 27 April 2011. In his response the father seeks the following:
·an order dismissing the mother’s initiating application; and
·an order for costs on an indemnity basis.
The father’s response is supported by his affidavit sworn on 26 April 2011 and filed on 27 April 2011 (“the father’s affidavit”) and his financial statement also sworn on 26 April 2011 and filed on 27 April 2011 (“the father’s financial statement”).
The matter first came before me in my duty list on 1 March 2011 and orders were made requiring the father to file responding material. I adjourned the matter to 19 May 2011 and my orders contained the following notations:
“A. The Court will determine at the mention hearing whether the matter may benefit from an interim hearing on that day.
B. The Respondent, through his Counsel, has flagged that an argument against the enforceability of any child maintenance order may be raised at any future hearing of the matter.
C. The parties are encouraged to have discussions in an attempt to resolve their dispute in respect of the maintenance of the child of the relationship, namely [X] born [in] 1997.”
The matter duly returned before me on 19 May 2011. On that occasion I agreed to entertain submissions from the parties’ Counsel in respect to the father’s request that I summarily dismiss the mother’s application at this point of the proceedings on the basis that the orders sought therein, as submitted by the father, could not be enforced against the father. The summary dismissal was opposed, not surprisingly, by the mother. I will summarise their respective arguments shortly.
Background
The mother is aged 44 years and is a [occupation omitted] who resides on the Gold Coast in Queensland. The father is aged 39 years and is a [occupation omitted]. The father does not disclose his residential address in his documents but there was agreement between the parties that he is now residing in Vanuatu and, indeed, is a resident of Vanuatu. The parties also agree that they commenced cohabitation in 1992 and married [in] 1995. They also agree that they separated on 5 April 2007 and divorced on 8 July 2008. As stated, there is one child of their marriage, namely, [X] who is now aged thirteen and a half.
Final parenting orders were made in the Family Court of Australia at Newcastle on 9 September 2008 (“the final parenting orders”) and it appears the parties were assisted by an Independent Children’s Lawyer. The mother asserts that the final parenting orders provide for [X] to live with the mother and spend time with the father during times that he is not absent from Australia for the purpose of his employment.[1]
[1] The mother’s affidavit, paragraph 7
The father asserts that final property orders were also made in the Family Court of Australia at Newcastle on 19 December 2008 (“the final property orders”). The father asserts that the effect of the final property orders was that the mother received 85 per cent of the net property pool.[2] The father further asserts that “…after paying legal costs, I was left with $2500 to live with”.[3]
[2] The father’s affidavit, paragraph 10
[3] Ibid
Indeed, from my brief perusal of the four files the parties have managed to establish since 31 May 2007[4] the parties, it would appear, have had a long and protracted property and parenting dispute over the period between 2007 and 2008. That said, the parties were ultimately able to conclude both property and parenting matters with orders made by consent.
[4] This is the date the father filed his Initiating Application in the Family Court of Australia at Newcastle.
The mother asserts in her affidavit that the father has spent little time with [X] since the final parenting orders were made. The father asserts that he has spent time with [X] but that the mother has made it difficult for that time to occur. The father asserts he last spent time with [X] in Australia “for a short period around Christmas 2010”.[5]
[5] The father’s affidavit, paragraph 26
As to child support or child maintenance matters, which is the subject of the mother’s application, there is evidence before the Court that the Child Support Agency, by their letter to the mother dated 17 June 2010 (“the mother’s CSA letter”), determined that the father “ceased to be a resident of Australia and/or a reciprocating country for child support purposes on 11/11/2009”.
Interestingly, the mother’s CSA letter advised the mother as to the following:
“If you [the mother] wish to continue to pursue ongoing child maintenance from Mr Hooch you may have the option of seeking a maintenance order through the Courts. You should seek legal advice in relation to that option.”
The father’s affidavit also reveals that he received a similar letter from the Child Support Agency but that letter did not refer to the potential of a parent pursuing child maintenance proceedings in this Court against the other parent.
There is also evidence before this Court that prior to the Child Support Agency’s determination in respect of the non-collection of the child support liability, the father would have been required to pay child support in the sum of $1866.58 per month up until 31 August 2010.
The mother’s affidavit also attaches a notice of decision on objection to change of assessment decision made by the Child Support Agency on 13 January 2009.[6] It would appear that the father filed an objection in relation to the administrative assessment of child support on
20 October 2008.
[6] Appendix C to the mother’s affidavit
The objections stem from an application being made by the mother on 29 August 2008 to increase the amount of child support being paid. The grounds raised by the mother were, to use the Child Support Agency’s language “Reason 3” as follows:
“The costs of maintaining the child are significantly affected by high costs of caring for, educating or training the child in a way both parents expected.”
and also “Reason 8” as follows:
“The child support assessment is unfair because of a parent’s income, property, financial resources or earning capacity.”
In other words, these are some of the reasons the Child Support Agency uses to reflect “section 98C/section 117 considerations” arising under the Child Support (Assessment) Act 1989.
The objection was duly considered by the Child Support Agency and it was disallowed. It is noteworthy that in the context of the current application the Child Support Agency determined:
·that [X]’s education costs are significant and that she is being educated in a manner intended by both parents, that is, “Reason 3” was established; and
·that the father should be assessed on his earning capacity, that is, that “Reason 8” was established.
Following separation, the father formed a relationship with his now wife, Ms H, formerly known as [name omitted] (“the wife”). Both the father and the wife lived on the Central Coast in New South Wales until they moved to Vanuatu. The father also asserts that he is the guarantor of two loans secured by mortgage on two pieces of real estate owned by his wife, those properties being located at [A] and [T] on the New South Wales Central Coast (“the [A] and [T] properties”).
Submissions
Submissions for the mother
Mr Dura of Counsel, for the mother, acknowledged that as the father is now a resident of Vanuatu that would create some challenges in respect of the enforcement of any order should such be forthcoming. I note that Vanuatu is not a reciprocating jurisdiction for child support enforcement purposes.
The mother’s affidavit sets out her evidence in respect of [X]’s needs. The father acknowledges that since the Child Support Agency accepted that he is a non-resident for Child Support Agency purposes, he had unilaterally reduced the child support payments made to the mother for [X] to just $466.00 per month. This is confirmed in the father’s affidavit.
Mr Dura also referred to the father’s financial statement where the father confirms earning a weekly salary of $2662.00 and expenditure which includes payments to two financial institutions, namely, Westpac at $1028.00 per week and the National Australia Bank at $786.00 per week for the [A] and [T] properties apparently owned by the wife. It appears that the father has chosen to guarantee the [A] and [T] properties in terms of the wife’s performance under the relevant mortgage loans. Whist the mother acknowledged there was no available evidence that the father has equity in the wife’s [A] and [T] properties, his decision to meet these liabilities is otherwise noteworthy.
The mother also conceded that it would appear at this stage that the father has no assets remaining in Australia. That said, the mother asserted the father was a regular visitor to Australia and there was some prospect that any liability could be enforced.
Mr Dura asked the Court to accept that should the mother’s application be summarily dismissed at this point of the proceedings for the reasons proffered by the father then there was a real risk that the father would discontinue paying any child support or any child maintenance for [X] and, more specifically, stop making the voluntary payments that he currently makes of $466.00 per month.
Submissions for the father
Mr Johnston of Counsel, for the father, referred the Court to the decision of the High Court in General Steel Industries Incorporated v Commissioner for Railways (New South Wales) [1964] HCA 69; (1964) 112 CLR 125. In this case, Barwick CJ outlined the principles applicable for the summary power to terminate an action. Mr Johnston described the current proceedings by the mother, as “vexatious”. The father refers to what he describes as the mother’s “...ongoing campaign of harassment and abuse”.[7]
[7] The father’s affidavit at paragraph 57
Mr Johnston submitted that the father was a man who had “never missed a child support payment” and that it was nonsense to suggest that he left Australia to avoid his child support obligations to the mother.
Mr Johnston further submitted that the voluntary payment of $466.00 a month was made following information he received from the Child Support Agency itself. That said, there appears to be no independent documentary evidence of this advice or information before the Court in relation to this.
Mr Johnston submitted that the father left Australia to “escape the mother’s harassment”. Mr Johnston confirmed that the father has no property in Australia but acknowledged that the father is the guarantor of two pieces of real estate, that is, the [A] and [T] properties. Given the lack of any assets in Australia and the fact that the father is no longer a resident of Australia, Mr Johnston submitted that there were no prospects of the mother succeeding in her application and, consequently, the application should be summarily dismissed.
In his brief response, Mr Dura submitted that in determining the issue of summary dismissal the Court should only have regard to the mother’s material and reiterated his submission that should the proceedings be terminated at this point because of a possible enforcement issue, that may act as an incentive for the father to cease making the voluntary payments he currently makes.
Law
The Court has the necessary inherent power to dismiss or permanently stay particular proceedings. Generally speaking, the power to summarily dismiss proceedings is only exercised with caution. Its usual application is where the proceedings are considered to be an abuse of the processes of the Court in that they do not disclose a reasonable cause of action. That is to say, where the Court is satisfied that the application is doomed to file as distinct from weak or unlikely to succeed. However, it is not a preliminary trial of the action. The general power to dismiss or stay proceedings is different from the power in s.119 of the Family Law Act 1975 (“the Act”) to otherwise dismiss proceedings as frivolous or vexatious.
That said, s.17A of Federal Magistrates Act 1999 (“the Federal Magistrates Act”) makes specific provision for summary judgment. Of particular relevance are the following subsections of s.17A of the Federal Magistrates Act:
“…
(2) The Federal Magistrates Court may give judgment for one party against another in relation to the whole or any part of a proceeding if:
(a) the first party is defending the proceeding or that part of the proceeding; and
(b) the Court is satisfied that the other party has no reasonable prospect of successfully prosecuting the proceeding or that part of the proceeding.
(3) For the purposes of this section, a defence or a proceeding or part of a proceeding need not be:
(a) hopeless; or
(b) bound to fail;
for it to have no reasonable prospect of success.
(4) This section does not limit any powers that the Federal Magistrates Court has apart from this section.”
The Federal Magistrates Court Rules 2001 (“the FMC Rules”) also deal with the issue of summary dismissal. Regulation 13.10 of the FMC Rules deals with what it describes as disposal by summary dismissal. It states:
“The Court may order that a proceeding be stayed, or dismissed generally or in relation to any claim for relief in the proceeding, if the Court is satisfied that:
(a) the party prosecuting the proceeding or claim for relief has no reasonable prospect of successfully prosecuting the proceeding or claim; or
(b) the proceeding or claim for relief is frivolous or vexatious; or
(c) the proceeding or claim for relief is an abuse of the process of the Court.”
The proper form of order is to dismiss or permanently stay the proceedings and not to strike the proceedings out. The latter order may have no effect other than to remove the proceeding from any relevant Court list.
There may be some overlap between the power to stay proceedings and the power to do so on the ground that they are frivolous or vexatious but, essentially, the former relates to cases which have no real prospect of success and the latter relates to the continuous use of the Court to re-agitate issues which are beyond further consideration.
In a stay application the matter is usually determined by an examination of the application itself. The evidence in relation to that would generally not be permitted, save in exceptional circumstances where the evidence is decisive on a particular issue.
Discussion
Mr Johnston is correct in his submissions that the Court has an inherent jurisdiction restriction to summarily dismiss an action that is an abusive process, frivolous, vexatious or otherwise doomed to fail. In this respect, I would disagree with Mr Dura that any examination of this issue should be limited to the mother’s material alone.
That all said, as stated previously, it is the Federal Magistrates Act and FMC Rules that provides the framework for a summary dismissal determination. According to s.17A of the Federal Magistrates Act, I must be satisfied that the mother has no reasonable prospect of successfully prosecuting the proceeding. Section 17A of the Federal Magistrates Act does not require that I be satisfied that the proceeding be hopeless or bound to fail for it to have no reasonable prospect of success.
Regulation 13.10 of the FMC Rules also makes it clear that I may dismiss a proceeding that is frivolous or vexatious or otherwise an abuse of the process of the Court.
If I accept the father’s argument, the mother would have no reasonable prospect of success because he has no assets in this jurisdiction upon which she could levy judgment. While this argument appears somewhat logical, it may be putting the cart before the horse. The application itself seeks child maintenance, either in a periodic form or by way of a lump sum. The application also seeks that the father pay 80 per cent of [X]’s orthodontic treatment.
Pursuant to s.66C(1) of the Act parents have a primary duty to maintain their child. Futhermore, s.66C(2) of the Act states:
“(2) Without limiting the generality of subsection (1), the duty of a parent to maintain a child:
(a) is not of lower priority than the duty of the parent to maintain any other child or another person; and
(b) has priority over all commitments of the parent other than commitments necessary to enable the parent to support:
(i) himself or herself; or
(ii) any other child or another person that the parent has a duty to maintain; and
(c) is not affected by:
(i) the duty of any other person to maintain the child; or
(ii) any entitlement of the child or another person to an income tested pension, allowance or benefit.”
Clearly, the father has a legal obligation in respect of both [X] and now also his new wife. In this respect, it is noteworthy that the father asserts that he has “a legal obligation under the guarantee to pay the loan instalments, insurances, and the like”.[8] The father’s financial statement discloses an average weekly income of $2662.00 and expenses of $2881.00. His expenses include the loans relating to the mortgage guarantee, in other words, $1028.00 a week going to Westpac and $786.00 a week going to the National Australia Bank.
[8] The father’s financial Statement at Part O
If one assumes that the new wife cannot work, or otherwise earn an income, that may raise a necessity for the husband to support her. What is not clear from the father’s evidence, however, is whether the properties he refers to, that is the [A] and [T] properties on the Central Coast in New South Wales owned by the new wife, are investment properties that generate income for the new wife. Presumably, this is the case as it would not make particular sense to leave the [A] and [T] properties idle and then pay significant mortgages towards them.
The father’s financial statement also discloses that he is the joint owner of another property with the new wife which he asserts is valued at $201,000.00. He does not disclose its whereabouts.
He also discloses that he has mortgage debts totalling $889,000.00. It is not clear whether these are for the loans associated with other properties or represent what he asserts he may owe, if he is required to honour the guarantee in respect of the new wife’s loans for the [A] and [T] properties.
The mother asserts that she needs increased child maintenance to meet the costs of [X]’s education and her ongoing orthodontic treatment. I note there is evidence before the Court in terms of [X]’s education, namely, the Child Support Agency determination, where they accepted that [X]’s education costs are significant. Whilst that Child Support Agency determination is not binding on this Court, it would tend to assist the mother’s argument that her case is arguable and refute a suggestion that she has no reasonable prospects of success in gaining a child maintenance order.
The question of enforcement of a child maintenance order is a separate question. Had the mother been seeking the enforcement of such an order in her application then the argument that she would have no reasonable prospects of success may have more merit. In any event that is not the application currently before the Court.
Decision
The father’s request to summarily dismiss the mother’s application is refused.
I am satisfied that the matter is suitable now for a conciliation conference on 18 July 2011 at 9:30am. The father may appear by phone at the conciliation conference provided he is legally represented.
Following the conciliation conference the matter will return to me for further directions in the event that the parties remain in dispute on
31 August 2011 at 9:30am (“the mention hearing”). I will excuse the parties’ attendance at the mention hearing, provided they are legally represented, as the purpose of the mention will simply be to consider if the parties in dispute whether I should fix the matter for final hearing.
I will reserve the question of costs.
I reserve the right to settle the reasons for this decision.
I certify that the preceding fifty-three (53) paragraphs are a true copy of the reasons for judgment of Monahan FM
Date: 23 June 2011
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