Kendrick and Child Support Registrar and Anor (SSAT Appeal)(No.2)
[2016] FCCA 1757
•13 July 2016
FEDERAL CIRCUIT COURT OF AUSTRALIA
| KENDRICK & CHILD SUPPORT REGISTRAR & ANOR (SSAT APPEAL)(No.2) | [2016] FCCA 1757 |
| Catchwords: COSTS – Application for costs by Child Support Registrar – financial circumstances of Appellant – where financial circumstances relevant to consideration under Family Law Act 1975 (Cth), s.117(2A) – impecuniosity of a party not necessarily a bar to costs order – where financial circumstances of party relevant to order for time to pay. |
| Legislation: Child Support (Registration and Collection) Act 1988 (Cth), ss.105, 110B Family Law Act 1975 (Cth), s. 117 Federal Circuit Court Rules 2001, rr. 21.02, 21.10 |
| Cases cited: Child Support Registrar & Kanavos (2011) 44 Fam LR 422; 2010 FamCAFC 244 Friswell & Child Support Registrar (No.3) [2016] FCCA 1609 Hendy v Deputy Child Support Registrar (2001) 164 FLR 236; 27 Fam LR 641; [2001] FamCA 632 Kendrick & Child Support Registrar & Anor (SSAT Appeal) [2015] FCCA 3615 Laurie & Child Support Registrar [2009] FamCAFC 183 Mulholland v Australian Electoral Commission [2014] FCA 136 Penfold v Penfold (1980) 144 CLR 322 Penman & Child Support Registrar & Anor (SSAT Appeal) (No.2) [2013] FCCA 1045 Pratt v Latta (No.2) [2002] FMCA 43 |
| Appellant: | MR KENDRICK |
| First Respondent: | CHILD SUPPORT REGISTRAR |
| Second Respondent: | MS WALSH |
| File Number: | SYC 5371 of 2013 |
| Judgment of: | Judge Scarlett |
| Hearing date: | 21 March 2016 |
| Date of Last Submission: | 10 July 2016 |
| Delivered at: | Sydney |
| Delivered on: | 13 July 2016 |
REPRESENTATION
| Appellant: | In person |
| Solicitor for the First Respondent: | Ms Buchanan |
| Solicitors for the First Respondent: | Australian Government Solicitor |
| Second Respondent: | No appearance |
ORDERS
The Appellant is to pay the costs of the First Respondent fixed in the sum of $5,200.00.
The Appellant is allowed six (6) months to pay the costs.
IT IS NOTED that publication of this judgment under the pseudonym Kendrick & Child Support Registrar & Anor (SSAT Appeal) (No.2) is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT SYDNEY |
SYC 5371 of 2013
| MR KENDRICK |
Appellant
And
| CHILD SUPPORT REGISTRAR |
First Respondent
| MS WALSH |
Second Respondent
REASONS FOR JUDGMENT
Application in a Case
This is an Application for Costs by the Child Support Registrar, arising out of the dismissal of the Appellant’s Appeal on 24th June 2015 (Kendrick & Child Support Registrar & Anor[1]). No costs are sought by or against the Second Respondent.
[1] [2015] FCCA 3615
When dismissing the Appeal, I made the following Orders:
3. Written submissions in support of any application for costs and any affidavits setting out the way in which the costs sought are quantified are to be filed and served within 28 days of the date of these Orders.
4. Any written submissions in opposition to any application for costs are to be filed and served within a further period of 14 days.
On 22nd July 2015 the Child Support Registrar filed an Application in a Case supported by an affidavit seeking the following Order:
The Appellant pay the First Respondent’s costs fixed in the amount of $5,200.
The Child Support Registrar also filed a written submission on costs on 22nd July 2015.
The Appellant did not file or serve any submission in opposition to that Application until the Application came to Court.
The Application in a Case was given a return date of 21st March 2016. The Appellant appeared and complained that he had not received any reasons for the dismissal of his Appeal. He told the Court that he opposed the costs order.
I made the following Order:
1. The Appellant is granted leave within 21 days to forward to my Associate with a copy to the First Respondent’s solicitors a written submission as to why the Order sought should not be made.
2. The Application is otherwise stood out of the list with liberty to restore on seven (7) days’ notice.
Some weeks later the Appellant forwarded by email an undated document headed “SUBMISSION FOR FM SCARLETT”.
Evidence and Submissions
The Registrar relies on an affidavit affirmed by Louise Bernadette Buchanan, a solicitor, on 22nd July 2015. In her affidavit Ms Buchanan deposes that the professional fees incurred by the First Respondent amounted to $6,106.00 along with disbursements of $13.93, a total of $6,119.93.
However, Ms Buchanan acknowledged that this figure would not be fully allowable on a party and party basis and stated that the Registrar sought party and party costs in the sum of $5,200.00.
The Registrar also relies on a written submission filed on 22nd July 2015. In that submission, Ms Buchanan states that by the operation of s.105 of the Child Support (Registration and Collection) Act 1988 (Cth), costs in proceedings under s. 110B of that Act are governed by s.117 of the Family Law Act 1975 (Cth) (see Hendy v. Deputy Child Support Registrar[2] at [112]-[117]; Penman & Child Support Registrar & Anor (No.2)[3].
[2] (2001) 164 FLR 236
[3] [2013] FCCA 1045
It was further submitted that the general principles that govern the Court’s discretion to award costs under s.117 of the Family Law Act 1975 were explained by the High Court of Australia in Penfold v Penfold[4] at 315 (see also Child Support Registrar & Kanavos[5] at [65]).
[4] (1980) 144 CLR 311
[5] (2011) 44 Fam LR 422
The weight to be attached to the considerations in s.117(2A) of the Family Law Act is wholly discretionary and, while no single factor out-ranks any other, there is nothing to prevent one or other of them from being the sole foundation for a costs order (PBF & TRF[6] at [41]). In the absence of any countervailing consideration, the fact that a party was “wholly unsuccessful” will ordinarily justify the making of a costs order against that party (Laurie & Child Support Registrar[7]at [123]-[126]).
[6] [2005]FamCA 158, also reported as Fitzgerald (as child representative for A (Legal Aid Commission of Tasmania) v Fish & Anor (2005) 33 Fam LR 123
[7] [2009] FamCAFC 183
It was further submitted that several features of the case warrant the making of a costs order against the Appellant under s.117(2) of the Act, being:
a)With respect to the financial circumstances of the Appellant, the SSAT found that he had an adjusted taxable income for child support purposes of $67,724.00 for the period 24 May 2012 to 31 October 2014;
b)the SSAT decision was affirmed by the judgment of the Court made on 24th June 2015;
c)the Appellant’s grounds of appeal were weak;
d)the Appellant was wholly unsuccessful in the proceedings.
Ms Buchanan referred to Rule 21.02(2) which permits the Court to set the amount of costs, or the method by which the costs are to be calculated and set a time for payment of the costs.
Further, Rule 21.10 provides that a party entitled to costs in a proceeding is entitled to costs in accordance Parts 1 and 2 of Schedule 1 to the Rules. Ms Buchanan points out in her submission that the scale of costs in Schedule 1 to the Rules is a fixed event based scale and the usual form of such an order for costs would be for costs to be paid in a specified amount (Pratt v Latta (No.2[8] at [5]-[6]; Piersons Pro-Health Pty Ltd v Silvex Nominees Pty Ltd (No.3) [9]at [38]-[43]).
[8] [2002] FMCA 43
[9] [2010] FMCA 250
It was further submitted that the prescribed amount of costs according to the scale unless the Court otherwise orders is $6,581.00. However, as the Registrar has not incurred that amount of costs on a party and party basis, the Registrar only seeks the lower amount of $5,200.00.
The Appellant’s submission is curious in that it does not address the question of costs at all. Rather, it appears as if the Appellant is seeking not only to re-open the proceedings but to go back to the situation prior to the review by the Social Security Appeals Tribunal which was the subject of the Appeal.
The Appellant in his submission complains about “poor decision-making on the part of the CSA[10]” since he has been on the books of the Agency since 1989. He submits that “there are many flaws in the way that CSA operates”.[11]He refers to a “flaw in the legislation”[12] (presumably the Child Support (Assessment) Act 1989 (Cth)) and complains that the system is not only open to abuse but is frequently abused.
[10] i.e. the Child Support Agency
[11] Appellant’s Submission page 1
[12] ibid
The Appellant then refers to his history of employment with the company Solaray Pty Ltd, which he left after a dispute over remuneration. He complains that when he left the company he was owed “in the vicinity of $16,000”.[13]
[13]Ibid page 2
The Appellant’s Submission then goes on to a discussion of the way the Child Support Agency dealt with his earning capacity. The Appellant submitted that:
However, when my ex-wife initiated a Change of Assessment (CoA), the process was taken out of the hands of the case officer and other - more ignorant – officers demanded I provide accurate forecasts for the year ahead, which was impossible.[14]
[14] Appellant’s Submission page 2
The Submission continues on page 3 with further complaints about his dealings with the Child Support Agency going back to 2011, which was not the subject of the Appeal proceedings at all, or even the review that led to the Appellant’s application to the SSAT.
The Appellant’s Submission then proceeds to ask the Court to make these orders:
1. An Order that CSA engage in a Change of Assessment dating back five years using my actual income and not any fabricated/speculated/notional amounts. Add to this my retirement from full-time work on 30 June 2015. All tax records are available to CSA from the ATO as all my income tax returns are up-to=-date.
2. An Order that CSA factor the changed circumstances of my children (e.g. that my son X, who is resident with me full-time, is now 18 years old and no longer a student) into any Change of Assessment conducted. At time of this submission X is unemployed and fully dependent upon me.
3. An Order that CSA suspend any further application of fines and/or late payment penalties pending the outcome of said Change of Assessment and not engage in any collection/enforcement action. Further that if the Change of Assessment determines that fines and penalties had been incorrectly applied, those fines/penalties be remitted.
4. An Order that, if the outcome of the Change of Assessment is that I have overpaid child support, a credit be shown in my child support “account”.
5. Any other Order deemed fit by Your Honour.[15]
[15] Ibid page 4
Conclusions
The Appellant’s submission is misconceived and almost entirely irrelevant. It appears that the Appellant has misunderstood not only the purpose of the submission which he was to provide but the entire Appeal proceedings before the Court.
The Appellant was given leave on 21st March 2016 to provide a written submission as to why an order for costs should not be made against him as a result of a decision by this Court dismissing his Appeal against a decision of the Social Security Appeals Tribunal. Instead, he has provided a submission about his dealings with the Child Support Agency prior to the review conducted by the Social Security Appeals Tribunal.
The relevant history of this matter is that on 16th August 2012 a senior case officer of the Child Support Agency considered a departure application made by the Second Respondent, the appellant’s former wife and decided to depart from the assessment of child support by setting the Appellant’s adjusted taxable income at $62,007.00 for the period 2nd July 2012 to 31st October 2013.
The Appellant lodged an objection and on 27th March 2013 an Agency objections officer allowed the objection in part and set the Appellant’s adjusted taxable income at $67,724.00 for the period 2nd July 2012 to 30th April 2013.
The Appellant lodged an application for review by the Social Security Appeals Tribunal on 9th April 2013. The Appellant attended the hearing which took place on 8th August 2013 and a decision was made by the Tribunal that same day.
The Appellant then lodged an Appeal to this Court on 16th September 2013. The Appeal was heard by this Court on 10th June 2014. The Appellant submitted three affidavits in support of his case and attended the hearing. He made oral submissions at the hearing, as did his former wife and a solicitor appearing for the Child Support Registrar.
The Court made Orders on 24th June 2015, dismissing the Appeal. Orders were made about the filing of submissions relating to costs within 28 days and submissions in reply within a further 14 days.
The Child Support Registrar filed an Application in a Case and supporting documents on 22nd July 2015. The Appellant did not file any documents, but he attended Court on 21st March 2016.
On that day he was given a further period of 21 days to file the necessary submission on the subject of costs.
However, the Appellant has filed a submission that does not address the question of costs at all. Rather, he has made submissions and sought orders relating to the conduct of the Child Support Registrar both at the time of and prior to the decision by the Agency Objections Officer on 27th March 2013.
The Appellant in his submission seeks orders that are entirely without jurisdiction. They were not and could not have been the subject of the Appeal proceedings before this Court. As was held in Mulholland v Australian Electoral Commission[16] at [36]:
It would be absurd to allow a judicial review of the [Registrar’s] decision as if the [SSAT] decision had not been made.
[16] [2014] FCA 136
Subsection 117(2) of the Family Law Act 1975 provides that if the Court is of opinion that there are circumstances that justify it in doing so, the Court may, subject to subsection 117(2A) of the Act, make such order as to costs as the Court considers just.
Subsection 117(2A) provides:
In considering what order (if any) should be made under subsection (2),the court shall have regard to:
(a) the financial circumstances of the parties;
(b)whether any party is in receipt of assistance by way of legal aid and, if so, the terms of the grant of that assistance to that party;
(c)the conduct of the parties to the proceedings in relation to the proceedings including, without limiting the generality of the foregoing, the conduct of the parties in relation to pleadings, particulars, discovery, inspection, directions to answer questions, admissions of facts, production of documents and similar matters;
(d)whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the court;
(e)whether any party to the proceedings has been wholly unsuccessful in the proceedings;
(f)whether either party to the proceedings has made an offer in writing to the other party to the proceedings to settle the proceedings and the terms of such offer; and
(g) such other matters as the court considers relevant.
I consider that the following matters are relevant:
a)the Appellant’s financial circumstances;
b)the weakness of the Appellant’s case on Appeal; and
c)the fact that the Appellant was quite clearly wholly unsuccessful in the proceedings.
The Appellant says in his submission that:
a)He retired from full-time work on 30th June 2015; and
b)The parties’ son X began living with him “on a 50/50 basis”.
The Appellant said in his submission that X has now commenced residing with him on a full-time basis. X, he said, is unemployed and fully dependent on him.
The Appellant’s case on the Appeal was not a strong one. He had two grounds of appeal, one of which was not a proper ground at all. There was no jurisdiction for the Court to review the decision by the Child Support Agency Objections Officer made on 27th March 2013.
The Appellant’s only other ground was unsuccessful.
The Appeal was dismissed and the decision of the SSAT was affirmed. It is an accurate statement to say that the Appellant was wholly unsuccessful.
In my view, these reasons of themselves are sufficient for the Court to form the opinion that the circumstances justify an Order for costs against the Appellant.
The lump sum fee provided by the Court in Division 2 of Part 2 of Schedule 1 to the Rules is $6,581.00. However, the Child Support Registrar seeks a lesser amount, namely $5,200.00. It was submitted that the Registrar’s solicitor/client costs only amount to $6,119.93. Accordingly, the Registrar is only seeking the sum of $5,200.00 on a party and party basis.
Bearing in mind that it would have been open to the Child Support Registrar just to seek the scale fee of $6,581.00, the lesser sum of $5,200.00 appears to be more than reasonable in the circumstances. This appears to be an occasion where the Commonwealth is acting as a model litigant.
The Appellant’s financial circumstances, whilst not sufficient to act as a bar to the imposition of a costs order, can certainly be taken into account when allowing time to pay. As I recently held in Friswell & Child Support Registrar (No.3)[17]:
…I have taken into account the Applicant’s financial circumstances but I have not taken the view …that impecuniosity should of itself be a ground not to make an order for costs.[18]
[17] [2016] FCCA 1609
[18] [2016] FCCA 1609 at [28]
Orders
I propose to grant the Application. I will order that the Appellant is to pay the Child Support Registrar’s costs, fixed in the sum of $5,200.00. I will allow six months to pay.
I certify that the preceding forty-seven (47) paragraphs are a true copy of the reasons for judgment of Judge Scarlett
Date: 13 July 2016
9
4