Johnson & Haddix & Anor - [2011] FMCAfam 880

FEDERAL MAGISTRATES COURT OF AUSTRALIA

JOHNSON & HADDIX & ANOR

[2011] FMCAfam 880

CHILD SUPPORT – Application for leave to make a retrospective application.

PRACTICE & PROCEDURE – Summary Dismissal – application for summary dismissal – whether application frivolous, vexatious or an abuse of process – whether no reasonable prospects of success.

PRACTICE & PROCEDURE – Rule 10.12 of the Family Law Rules 2004 does not apply in the Federal Magistrates Court – Rule 13.10 of the Federal Magistrates Court Rules 2001 applies to disposal by summary dismissal in the Federal Magistrates Court.

Child Support (Assessment) Act 1989 (Cth), ss.98S, 111, 117, 118
Child Support (Registration and Collection) Act 1988 (Cth), ss.111C, 111E
Federal Magistrates Act 1999 (Cth), s.17A
Family Law Rules 2004, r.10.12
Federal Magistrates Court Rules 2001, r.13.10

Lindon v Commonwealth of Australia (No.2) (1996) 136 ALR 251
Munnings v Australian Government Solicitor (1994) 68 ALJR 196
Dey v Victorian Railways Commissioners (1949) 78 CLR 62
Bigg v Suzi (1998) FLC 92-799
Gitane and Velacruz (2007) FLC 309
Jacobs & Vale [2008] FMCAfam 641
Vivid Entertainment LLC & Ors v Digital Sinema Australia Pty Ltd & Ors [2007] FMCA 157

Applicant:

MS JOHNSON

First Respondent:

MR HADDIX

Second Respondent:

CHILD SUPPORT AGENCY

File Number:

SYC 5664 of 2010

Judgment of:

Scarlett FM

Hearing date:

1 August 2011

Date of Last Submission:

12 August 2011

Delivered at:

Sydney

Delivered on:

20 September 2011

REPRESENTATION

Solicitors for the Applicant:

Watkins Tapsell

Counsel for the First Respondents:

Mr Jackson

Solicitors for the First Respondents:

McNeilly Lawyers

Solicitors for the Second Respondents:

Australian Government Solicitor

ORDERS

The Application in a Case filed by the Respondent on 14 April 2011 seeking summary dismissal of the substantive Application is dismissed.

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

FEDERAL MAGISTRATES
COURT OF AUSTRALIA
AT SYDNEY

SYC 5664 of 2010

MS JOHNSON

Applicant

And

MR HADDIX

First Respondent

CHILD SUPPORT AGENCY

Second Respondent

REASONS FOR JUDGMENT

Application

The Respondent, by an Application in a Case filed on 14 April 2011, seeks an order for summary dismissal of the Applicant’s Application on the grounds that it is frivolous, vexatious or an abuse of process.
Erroneously, the Respondent seeks to rely on Rule 10.12 of the Family Law Rules 2001, which does not apply in the Federal Magistrates Court. Rule 13.10 of the Federal Magistrates Court Rules 2001 applies to disposal by summary dismissal in this Court.
The Applicant, in a Response to an Application in a Case filed 27 July 2011, opposes the Application for summary dismissal and seeks that it should be dismissed with costs.
The Application for Summary Dismissal is misconceived to the extent that it seeks summary dismissal of the Applicant’s Initiating Application filed on 8 September 2010. The Applicant filed an Amended Application on 17 December 2010 and is seeking to proceed on that Application.
The Amended Application is listed for final hearing on 7 October 2011. It is rather surprising that the Respondent has left it until this late stage to make this application for summary dismissal.
In her Amended Application, the Applicant seeks the following orders:
·    That pursuant to section 111C of the Child Support (Registration and Collection) Act 1988 the operation of all child support assessments payable by the Applicant (“Ms Johnson”) to Mr Haddix for [X] (d.o.b. [omitted] 1993), [Y] (d.o.b. [omitted] 1990) and [Z] (d.o.b. [omitted] 1987) be stayed pending determination of the application to change child support in special circumstances lodged by Ms Johnson on 16 August 2010 and any further objection lodged by Ms Johnson.
·
That the CSA be restrained from collecting Ms Johnson’s taxation refund pending determination of the application to change child support in special circumstances lodged by

Ms Johnson on 16 August 2010 and any further objection made by Ms Johnson.
·    That such stay remain in force pending finalisation of an objection and Social Security Appeals Tribunal (“SSAT”) review to a Part 6A determination.
·    That pursuant to Section 111 of the Child support (Assessment) Act 1989 leave be granted for the Court to make a retrospective change of assessment decision for a period from the commencement of Ms Johnson’s child support liability in 2001 to date.
·    That the amount of child support paid by Ms Johnson is varied pursuant to Section 117(2)(c)(i) of the Child Support (Assessment) Act on the basis of the income, property and financial resources and/or earning capacity of Mr Haddix.
·    That forthwith child support overpaid by Ms Johnson be applied towards all past and future child support liabilities of Ms Johnson and the balance thereafter be repaid directly to Ms Johnson.
The Applicant has nominated the Child Support Agency as the Second Respondent to her Application. The proper party for the purpose of court proceedings is the Child Support Registrar (Child Support (Registration and Collection) Act 1988, s.111E).

Background

The Applicant and the Respondent have one child, [X], who was born [in] 1994. She is seventeen years old.
The Applicant has two other children by Mr S. They are both adults.
[Y] was born [in] 1990. He is twenty years old.
[Z] was born [in] 1987. He is twenty-three years old.
On 18 December 2000 the Applicant and the Respondent entered into consent orders in the Local Court of New South Wales at [omitted], providing that [Z], [Y] and [X] would all live with the Respondent.

Mr S was not a party to the proceedings.
The Applicant commenced these proceedings by filing an Application and an affidavit in support on 8 September 2010.
On 8 November 2010 the Court stayed the operation of all child support assessments payable by the Applicant under the provisions of s.111C of the Child Support (Registration and Collection) Act 1988.
The Respondent did not file a Response, financial statement and an affidavit until 15 December 2010.
On 17 December 2010 the parties were ordered to attend a Conciliation Conference with a Registrar. The Applicant filed her Amended Application that same day. The conciliation conference took place on 7 March 2011 but no agreement was reached.
On 5 April 2011 the Application was listed for final hearing for one day on 7 October 2011.
The Respondent filed an Application in a Case on 14 April 2011, seeking summary dismissal of the substantive application. The Application was returnable on 1 August 2011. Mr Jackson of counsel appeared for the respondent and Ms Billett, solicitor, appeared for the Applicant. The parties agreed that the application for summary dismissal would be dealt with on the papers by written submissions.

Evidence

The Applicant relies on the following documents:
a)her Response to an Application in a Case filed on 27 July 2011;
b)her affidavit sworn on 26 July 2011; and
c)her originating affidavit sworn on 3 September 2010.
The Respondent relies only on his Application in a Case. As this is an application for summary dismissal, it will be decided on the basis of the evidence led in support of the substantive application.
In her affidavit of 3 September 2010, the Applicant deposes that:
a)She married the Respondent [in] 1993;[1]
[1] Affidavit of Ms Johnson 3.9.2010 at paragraph [5]
b)They separated in November 1999;[2]
[2] Ibid at [6]
c)Their child [X] lives with the Respondent and spends no time with her;[3]
[3] Ibid at [7]
d)The Respondent had considerable assets in Australia and Switzerland at the commencement of the parties’ marriage;[4]
[4] Ibid at [9]
e)She had no assets of significance;[5]
[5] Ibid at 10]
f)The Respondent said to her that he had hidden all his assets from his previous wife;[6]
[6] Affidavit of Ms Johnson 3.9.2010 at [14]
g)During the parties’ relationship the Respondent was receiving significant income from investments in Australia and overseas;[7]
[7] Ibid at [18]-[22]
h)After the parties separated the Applicant moved out of the former matrimonial home at [K] but the three children remained living there with the Respondent;[8]
[8] Ibid at [23]-[24]
i)The Applicant commenced property proceedings under the Family Law Act 1975 in 2000 but was only awarded the sum of $19,000.00, which was entirely consumed by her legal costs;[9]
[9] Ibid at [27]
j)The Applicant obtained employment with various employers;[10]
[10] Ibid at [29]-[31]
k)She was diagnosed with depression and post-traumatic stress disorder in about 2001, which affected her ability to work;[11]
[11] Ibid at [32]
l)There were court proceedings against the Respondent in 2004 or 2004 concerning a recovery order in respect of [X] and an application by the Respondent for an Apprehended Violence Order against her;[12]
[12] Ibid at [33]
m)The applicant was assessed for child support at 10 April 2001;[13]
[13] Ibid Annexure “K”
n)Based on a transaction statement from the Child Support Agency forming Annexure “K” to her affidavit, the Applicant estimates that she has paid the sum of $39,577.95 by way of child support;[14]
[14] Ibid at [35]
o)[Z] has refused to see her since 2006 and [X] has refused to see her since about 2008, which the Applicant attributes to the Respondent’s denigration of her to the children;[15]
[15] Affidavit of Ms Johnson 3.9.2010 at [36]
p)The Applicant is currently in full-time employment at a salary of approximately $65,000.00 per annum;[16]
[16] Ibid at [37]-[38]
q)On 15 December 2009 the Child Support Agency issued in respect of [X], based on the Respondent’s provisional income of $7,801.00 per annum, which she disputes;[17]
[17] Ibid at [42]
r)On or about 22 June 2010 the Applicant lodged an Application to vary her child support assessment in special circumstances on the basis of the Respondent’s “significant income, assets and financial resources”;[18]
[18] Ibid at [45]
s)She withdrew that application on about 9 July 2010 in order to obtain legal advice;[19]
[19] Ibid
t)
On 24 July 2010 the Child Support Agency notified her that her assessment had been changed for the period 1 July 2007 to

2 October 2008 and she still had an outstanding liability of $5,960.98;[20]
u)On 26 July 2010 the Child Support Agency notified her of assessments in relation to [X] and [Y], based on the fact that they spent 100% of the time with the Respondent and no time with her;[21]
v)On 2 August 2010 the Child Support Agency advised her that her income tax refund of $1995.77 would be applied towards her outstanding child support amount of $6650.90;[22]
w)On 5 August 2010 the Child Support Agency notified her of a change of assessment relating to [X];[23]
x)On 16 August 2010 the Applicant lodged an application to change her child support in special circumstances on the basis of the Respondent’s “significant income, assets and financial resources”;[24] and
y)The Applicant believes that the Respondent has not disclosed all his income, assets and the financial resources.[25]
[20] Ibid at [46], Annexure “Q”
[21] Ibid at [47], Annexure “R”
[22] Ibid at [48]; Annexure “S”
[23] Affidavit of Ms Johnson 3.9.2010 at [49], Annexure “T”
[24] Ibid at [50]
[25] Ibid at [53]-[64]
In her affidavit sworn 26 July 2011 the Applicant deposes that:
a)The Respondent has not complied with her solicitor’s request for disclosure of his finances;
b)She has obtained substantial evidence about the Respondent’s finances by way of the issue of subpoenas;[26]
c)
The Respondent received child support payments for the children [Z] and [Y] by way of payments directly into his account at the Commonwealth Bank at [K] NSW from the children’s father

Mr S;[27]
d)The Respondent did not disclose those payments, amounting to approximately $97,600.00 between April 2001 and 3 October 2008, to the Child support Agency;[28]
e)The Respondent received rental income from various sources; and
f)The Respondent did not lodge income tax returns for the financial years ending 30 June 2001 and 30 June 2002 yet his [omitted] Credit Union account showed regular cheque deposits amounting to approximately $35,800.00 for the financial year ending 30 June 2002.
[26] Ibid at [3]-[4]
[27] Ibid at [4.1], Annexure “C”
[28] Ibid
The Applicant also deposes that, although the Respondent denies having bank accounts overseas, he has provided her with statements from [bank omitted] dated 31 October and 30 November 2009.[29]
[29] Affidavit of Ms Johnson 26.7.2011 at [4.9]

Submissions

Counsel for the Respondent submitted that, to secure relief by way of summary dismissal, the party seeking summary dismissal must show that it is clear on the face of the opponent’s documents that the opponent lacks a reasonable cause of action (see Lindon v Commonwealth of Australia (No.2)[30] at 251; Munnings v Australian Government Solicitor[31], Dey v Victorian Railways Commissioners[32]).
[30] (1996) 136 ALR 251
[31] (1994) 68 ALJR 196
[32] (1949) 78 CLR 62
It is submitted that the Applicant’s case is so fundamentally weak that it lacks a reasonable cause of action. The written submission is confusing in its drafting, as it states at paragraph 13:
Arising from the Mother’s Amended Application, this Summary dismissal application essentially seeks to attack paragraphs 3 to 6. Those paragraphs represent the fundamental aspect of the Mother’s substantive case.
The numbering of the orders sought in the Amended Application filed 17 December 2011 is rather idiosyncratic in that the interim or procedural orders sought are numbered from 1 to 5 and the final orders are numbered from 6 to 12. However, Order 3 that is sought relates to a stay, Order 4 has been deleted and order 6 seeks a stay “pending determination of the application to change child support in special circumstances”, which is, by definition, an interim order.
However, the Respondent is essentially attacking those orders sought that relate to s.117(2)(c) of the Child Support (Assessment) Act. The submission is that the applicant must at the very least present prima facie evidence and not rely on:
a)expressions reflecting mere speculation and innuendo; or
b)expressions of emotional concern
Counsel for the Respondent submits that many, and indeed most, of the Applicant’s claims in her affidavits are speculative, expressions of emotional concern or irrelevant to the Applicant’s child support application.
It is submitted that the evidence in the Applicant’s affidavit of 26 July 2011 about the payments of child support for [Z] and [Y], which the Applicant claims were not disclosed, does not go towards establishing an arguable case, for the following reasons:
- There is no evidence as to the quantum suggested
- [Z] turned 18 on [date omitted] 2005, nearly 6 years ago
- [Y] turned 18 on [date omitted] 2008, nearly 3 years ago
- As it turns out, the Respondent did disclose this information to the Child Support Agency, and there is certainly no evidence that he did not.[33]
[33] Written Submissions filed on behalf of the Father at paragraph 62 (4.1)
The Respondent’s assertion that he did disclose this information to the Child Support Agency cannot be taken into account in the determination of this application, which deals with the strength or otherwise of the Applicant’s case.
The Applicant’s written submission states that the Applicant’s case is that she seeks a Departure Order from the administrative assessment of child support going back 7 years to 8 September 2003 pursuant to section 111 of the Child Support (Assessment) Act.[34]
[34] Applicant’s Submission page 3 at paragraph [4]
The Amended Application seeks this order as order 10:
That pursuant to Section 111 of the Child Support (Assessment) Act 1989 leave be granted for the Court to make a retrospective change of assessment decision for a period from the commencement of Ms Johnson’s child support liability in 2001 to date.
The Applicant’s submission, however, acknowledges that subsection 111(1) of the Act only permits a retrospective assessment, either by way of the Registrar making a determination under section 98S or the Court making an order under section 118:
…in respect of a day in a child support period, being a day that is more than 18 months, and less than 7 years, earlier than the day on which the application under this section is made.
The Court file shows that the original Application was filed on 8 September 2010, so the earliest day under s.111(1) would be 9 September 2003, not 8 September.
It is submitted on behalf of the Applicant that it is a serious matter to deprive a person of access to the courts of law, which is why relief by way of summary dismissal is rarely and sparingly provided and to secure such relief the party seeking it must show that it is clear on the face of the opponent’s documents that the opponent lacks a reasonable cause of action or is advancing a claim that is clearly frivolous or vexatious (Lindon v Commonwealth of Australia (No.2)[35]).
[35] supra
The court takes a very cautious approach to applications for summary dismissal (Bigg v Suzi[36]).
[36] (1998) FLC 92-799
Again, it is submitted that it is not enough to attain summary dismissal to show that the applicant has a weak case, and a case should be summarily dismissed of it is clear that the case is doomed to fail (Gitane and Velacruz[37] at [25]).
[37] (2007) FLC 93-309
The Applicant submits that the applicable law is that to be found in section 17A of the Federal Magistrates Act 1999, which provides that the Court may give summary judgment in a matter where it is satisfied that a proceeding, or part of a proceeding, or a defence to a proceeding, has no reasonable prospects of success. The Applicant referred to the decision of Jarrett FM in Jacobs & Vale[38], where his Honour reviewed the Court’s power of summary dismissal contained in s.17A and Rule 13.10 of the Federal Magistrates Court Rules 2001.
[38] [2008] FMCAfam 641
The Applicant submits that that in the special circumstances of the case the administrative assessment should be departed from for the period from September 2003 to date.
The submission is that whether the applicant has a cause of action that will succeed is not the issue. It is not sufficient for the Respondent to attempt to test the Applicant’s evidence or dispute facts alleged by her, as those would be matters for the final hearing. She is able to show some evidence that the Respondent has assets, income and financial resources that have not been taken into account when assessing the Applicant’s historic and current child support liability.
The Applicant relies on the following:
a)The fact that the Respondent received payments in the way of child support for [Z] and [Y] from their biological father Mr S, in an amount totalling $97,600;
b)The recent valuation of the Respondent’s property shows that it is worth $620,000.00, rather than the $400,000.00 claimed by the Respondent in his Financial Statement sworn 11 December 2010; and
c)The Respondent has a greater income than that disclosed to the Child Support Agency, in that a review of his bank accounts shows deposits adding up to more than his claimed taxable income of $22,000.00 to $25,000.00.
The Applicant disputes that her actions in bringing this Application are frivolous or vexatious. She has previously commenced parenting proceedings and property proceedings but has never before brought an action in respect of child support.
The Applicant submits that it is particularly dangerous for a Court to accede to a summary dismissal application in circumstances where there are allegations of non-disclosure:
By their nature, allegations of non-disclosure demand careful consideration and analysis of facts, thorough accumulation of evidence using techniques such as subpoenas and specific questions, and the testing of these facts under cross-examination. That opportunity will typically arise at the final hearing.[39]
[39] Applicant’s Submission page 11 at [17.8]

Conclusions

Clearly, the provisions of s.17A of the Federal Magistrates Act apply. It is important to note that a claim does not have to be doomed to fail for it to have no reasonable prospects of success. Subsection 17A(3) provides that:
For the purposes of this section, a defence or a proceeding or a part of a proceeding need not be:
(a) hopeless; or
(b) bound to fail;
for it to have no prospects of success.
In Vivid Entertainment LLC & Ors v Digital Sinema Australia Pty Ltd & Ors[40] Driver FM considered the operation of s.17A and set out the following principles (referred to with approval by Jarrett FM in Jacobs & Vale[41] at [14]:
·    In assessing whether there are reasonable prospects of success on an application or a response, the Court must be cautious not to do an injustice by summary judgment or summary dismissal.
·    There will be reasonable prospects of success if there is evidence which may be reasonably believed so as to enable the party against whom summary judgment or summary dismissal is sought to succeed at the final hearing.
·    Evidence of an ambivalent character will usually be sufficient to amount to reasonable prospects.
·    Unless only one conclusion can be said to be reasonable, the discretion under s.17A cannot be enlivened.
·    The Court should have regard to the possibility of amendment and additional evidence in considering whether only one conclusion can be said to be reasonable. In that consideration, the conduct of the parties and the other circumstances of the case may be relevant.[42]
[40] [2007] FMCA 157
[41] supra
[42] [2007] FMCA 157 at [30]
In this case, the Applicant is seeking a retrospective departure from the administrative assessment of child support going back to September 2003. There is evidence that from 2003 until 3 October 2008, the Respondent was receiving substantial sums from the father of [Z] and [Y] by way of child support, which the Applicant claims was paid directly and was not the subject of an administrative assessment. [Z] attained the age of 18 on [date omitted] 2005 and [Y] attained the age of 18 on [date omitted] 2008.
In my view, that claim alone would require the matter to proceed to a final hearing.
I am not satisfied that the Respondent has established that the Applicant’s substantive claim is either frivolous or vexatious. I am unable to see how it can be characterised as an abuse of process.
I am not satisfied that the Applicant has no reasonable prospect of successfully prosecuting the proceeding.
It follows that the Respondent’s Application in a Case seeking summary dismissal of the substantive application will be dismissed.

I certify that the preceding fifty (50) paragraphs are a true copy of the reasons for judgment of Scarlett FM

Date: 20 September 2011