Keri and Wilfred and Anor
[2012] FamCA 1114
FAMILY COURT OF AUSTRALIA
| KERI & WILFRED AND ANOR | [2012] FamCA 1114 |
| FAMILY LAW – CHILD MAINTENANCE – challenge to validity of assessment of child support – Henry VIII provision in delegated legislation gave rise to liability – significant arrears – assessment held to be valid |
| APPLICANT: | Mr Keri |
| 1st RESPONDENT: | Ms Wilfred |
| 2nd RESPONDENT: | Child Support Registrar |
| FILE NUMBER: | MLC | 2255 | of | 2009 |
| DATE DELIVERED: | 14 December 2012 |
| PLACE DELIVERED: | Melbourne |
| PLACE HEARD: | Melbourne |
| JUDGMENT OF: | Bennett J |
| HEARING DATE: | 7 December 2010, 13 October 2011, 16 November 2011 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Skerlj and Mr Borsky |
| SOLICITOR FOR THE APPLICANT: | MK Steele & Giammario |
| COUNSEL FOR THE 1ST RESPONDENT: | No appearance |
| SOLICITOR FOR THE 1ST RESPONDENT: | No appearance |
| COUNSEL FOR THE 2ND RESPONDENT: | Mr Gray, Mr Castan and Ms Tulloch |
| SOLICITOR FOR THE 2ND RESPONDENT: | Australian Government Solicitor |
Orders
The father’s application filed on 18 March 2009 be and is hereby dismissed.
Any party wishing to make an application for costs file and serve by not later than 12 noon on Monday 4 February 2013 a written submission to that effect, such submission to be of not more than 6 pages in length and include (but not be limited to) details of:-
(a) the sum at which such costs could be fixed on a party/party basis;
(b)an itemisation of professional fees for solicitors, counsels’ fees to prepare and counsels’ fees to appear, and
(c)a statement as to whether that party wishes, at this stage, for the matter to be listed for oral argument as to costs.
Any party against whom an application for costs is made file and serve by not later than Monday 25 February 2013 a written submission in response, such submission to be of not more than 6 pages in length and include (but not be limited to) details of:-
(a)the sum at which the costs claimed should be fixed on a party/party basis in the event that a costs order is to be made;
(b)a statement as to whether that party wishes, at this stage, for the matter to be listed for oral argument as to costs.
Any party who is served with a response pursuant to the preceding paragraph of this Order may, within 14 days of service upon them of that response, file and serve a written submission in reply, of not more than 3 pages, confined to alleged errors of fact and law and say, finally, whether that party wants the matter to be listed for oral argument.
If no party seeks to have the matter listed for oral argument on the issue of costs, the Court may proceed to determine the applications for costs based on written submissions.
If any party does seek to have the matter listed for oral argument on the issue of costs, counsel for that party confer with counsel who will be briefed to appear for the other party(s) to ascertain mutually convenient dates on which the matter can be listed before me at 9 a.m. estimated to take not more than one hour.
Subject to further order of the court, the times for filing and service of submissions as to costs may be varied by agreement between the applicant for costs and the party against whom costs are sought and any such agreement should be referred to in the submissions or evidenced by correspondence attached to any submission which is filed and served.
That pursuant to Rule 19.50 of the Family Law Rules 2004 (Cth) I certify that it was reasonable to engage counsel to attend.
IT IS NOTED that publication of this judgment under the pseudonym Keri & Wilfred is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)
| FAMILY COURT OF AUSTRALIA AT MELBOURNE |
FILE NUMBER: MLC 2255 of 2009
| Mr Keri |
Applicant
And
| Ms Wilfred |
1st Respondent
And
| Child Support Registrar |
2nd Respondent
REASONS FOR JUDGMENT
Introduction
This is a proceeding between Mr Keri (the father) and Ms Wilfred (the mother), and the Child Support Agency. The mother did not participate in the proceedings and was aware that they would proceed to determination in her absence. It concerns the validity of an outstanding child support liability of the father of $124,201.58 (including interest and penalties) as at 8 December 2010, for the period 16 November 2001 to 8 February 2007. The father seeks orders that the father’s child support liability be discharged and contends that the Child Support Registrar had no power to make the child support assessments which created the father’s liability.
By way of brief background, prior to 1 July 2001, a person who was not resident in Australia such as the father could not be subject to an administrative child support assessment. This case is somewhat unusual because changes to delegated legislation made by the Executive branch of government, pursuant to an enabling provision of the Child Support (Assessment) Act 1989 (Cth) (“the Assessment Act”), purported to bring the father under the administrative child support scheme, which altered his previous rights and obligations. This dispute was primarily focused on whether the delegated legislation was within power and therefore valid.
Facts
The facts which have given rise to this application are relatively straightforward and are not in dispute. They are set out in the affidavit of the father sworn 23 February 2009 and can be summarised as follows:
· The father was born Mr G (having subsequently changed his name by deed poll) in Country B in 1948 and is 63 years old. He has remarried and has one child of that marriage. He is a citizen of Country A and has never been resident in Australia.
· The mother was born in Country A in or around 1958. She is also a citizen of Country A.
· The father and mother married in 1986, physically separated in March 1994 and subsequently divorced. There are two now adult children of the marriage. The eldest, Mr C, was born in 1986 and is now 25 years old. Mr D was born in 1989 and is 22 years old.
· In 2001 the mother and the children relocated to Australia with her husband, Mr Wilfred, who was an Australian citizen.
· On 16 November 2001, the Child Support Registrar made an administrative assessment of child support against the father upon application from the mother for the benefit of the two children.
· Since 31 January 2003 the father has made a number of largely unsuccessful attempts to have his Child Support assessments reduced. The father is currently contesting enforcement proceedings brought in Country E, which have been stayed until this matter is determined.
· As at the first day of the hearing, 8 December 2010, the child maintenance liability of the father totalled $124,201.58, comprised of the principal liability in the sum of $67,273.60 and late payment penalties which totalled $57,927.98. Interest on the father’s debt is accruing at $780 per month. In total, the father has paid $7,518 of his child support liability.
The Legislation and Delegated Legislation
Before I set out the history of these proceedings and the submissions raised by the parties, I will set out the relevant legislation and delegated legislation as it appeared for the period that the father was assessed as being liable to pay child support.
Section 25 of the Assessment Act provided who could make a carer application for an administrative assessment of child support (in this case the mother):
25 Persons who may apply—eligible carers
(1) An application made under this section is a carer application.
(2) A person may apply to the Registrar under this section for administrative assessment of child support for a child if:(a) the person is an eligible carer of the child; and
(b) the person is seeking payment of child support for the child from a person who is:
(i) a parent of the child; and
(ii) a resident of Australia on the day the application is made; and
(c) the person is not living with the person from whom payment of child support is sought as the partner of that person on a genuine domestic basis (whether or not legally married to that person); and
(d) the person complies with any applicable requirements of section 26 (dealing with joint care situations) and section 26A (dealing with children cared for under child welfare laws).Section 25(2)(b)(ii) has never been satisfied as the father was not resident in Australia at the time of the assessments. However, that is not the end of the matter.
The Child Support Legislation Amendment Act 2000 (Cth), which commenced on 3 May 2000 inserted s 163B into the Assessment Act. Section 163B purported to confer power onto the Executive to make regulations in relation to overseas-related maintenance obligations which may be inconsistent with the Act, and prevail over the Assessment Act to the extent of any inconsistency. Specifically, s 163B provided:
163B Regulations in relation to overseas‑related maintenance obligations etc.
(1) The regulations may make provision for, and in relation to, the following matters:
(a) giving effect to an international agreement that relates to maintenance obligations arising from family relationship, parentage or marriage;
(b) maintenance obligations arising from family relationship, parentage or marriage, where:(i) the maintenance is claimed by or on behalf of a person who is in a reciprocating jurisdiction; or
(ii) the person from whom the maintenance is claimed is in a reciprocating jurisdiction.(2) Regulations made for the purposes of this section may:
(a) confer jurisdiction on a federal court (other than the High Court) or a court of a Territory; or
(b) invest a court of a State with federal jurisdiction.(3) Regulations made for the purposes of this section:
(a) may be inconsistent with this Act; and
(b) prevail over this Act (including any other regulations or other instruments made under this Act), to the extent of any inconsistency.(4) In this section:
international agreement means an agreement whose parties are:(a) Australia and a foreign country; or
(b) Australia and 2 or more foreign countries.reciprocating jurisdiction means:
(a) a foreign country; or
(b) a part of a foreign country;
that is prescribed by the regulations to be a reciprocating jurisdiction for the purposes of this section.The Child Support (Assessment) (Overseas-Related Maintenance Obligations) Regulations 2000 (Cth) (“the Assessment (Overseas-Related Maintenance Obligations) Regulations”) commenced on 1 July 2000. Regulation 3(2) echoed s 163B(3)(b) of the Assessment Act, insofar as it stated that, “[t]he Act and these Regulations are intended to be construed and administered consistently with the purpose of these Regulations but, to the extent of any inconsistency, these Regulations prevail.”
Regulation 14 purported to expand the class of people who could apply to make a carer application, in accordance with s 163B of the Assessment Act. It read as follows:
14 Persons from whom payment may be sought
For section 25 of the Act, a person may seek payment of child support from a person who is:
(a) a parent of the child; and
(b) a resident of a reciprocating jurisdiction on the day when the application is made.Pursuant to reg 8 of the Assessment (Overseas-related Maintenance Obligations) Regulations, each jurisdiction specified in Schedule 2 was a reciprocating jurisdiction and included Country A.
The purported cumulative effect of the Act and Regulations was to subject the father to the administrative child support assessment scheme, as set out in s 25 of the Act.
The father contended that properly construed, reg 14 did not bring him within the administrative child support assessment scheme as reg 14 was a means of recognising, enforcing and possibly quantifying child support obligations arising from an assessment made under s 25 of the Assessment Act. In the alternative, the father contended that if reg 14 did bring him within the scheme, it was ultra vires s 163B and therefore void, as s 163B did not empower the Executive to extend the reach of the scheme in that way. The Child Support Registrar argued against both of these propositions.
The consequences of finding in the father’s favour would be that the father’s child support liability must be discharged as the Child Support Registrar had no power to make the assessments which created his liability.
History of proceedings
This matter has had a protracted history.
It commenced by way of the father filing an application for final orders in the Federal Magistrates Court with his affidavit sworn 23 February 2009 on 18 March 2009.
After a number of mentions in the Federal Magistrates Court, the matter was transferred to the Family Court of Australia by Federal Magistrate Connolly on 14 September 2009.
On 5 May 2010 the matter came before Registrar Field who listed the matter before me on 12 July 2010. The order notes that the mother had not filed a response in these proceedings but had taken enforcement proceedings in the Country E Courts, which had been stayed pending determination of the current proceedings. On 12 July 2010 I delivered reasons for my decision, in case neutral citation [2010] FamCA 954. I incorporate those reasons into these reasons.
After a number of mentions of the matter which related to the involvement of the mother (who resides in City F) in the current proceedings, the hearing commenced on 7 December 2010. On that day, Mr Skerlj of Counsel appeared on behalf of the father and Ms Tulloch appeared on behalf of the Child Support Agency. There was no appearance by or on behalf of the mother and none was anticipated. Mr Skerlj ran and closed the father’s case. During the course of Ms Tulloch’s submissions she sought an adjournment to obtain specific evidence as to why the Government amended the Assessment Act using regulations rather than legislation and an opportunity to file a further outline of submissions to respond to the oral submissions raised by Mr Skerlj. That adjournment was opposed by Mr Skerlj.
I granted the adjournment part-heard until May 2012 and made orders which set out a timeline for the Child Support Registrar to file and serve an outline of case or summary of argument and the father to file and serve a reply to that document.
Due to judicial unavailability the matter was unable to proceed in May 2012 and was adjourned until June 2012. Mr Skerlj was unavailable on that date and the matter was again adjourned until 13 October 2011.
On that date, Mr Skerlj again appeared on behalf of the father. Ms Tulloch did not appear on behalf of the Child Support Registrar, nor did she advise the Court that she was no longer retained in the matter. Mr Gray and Mr Castan of Counsel appeared on the Child Support Registrar’s behalf and their submissions departed significantly from that of previous counsel Ms Tulloch. At the conclusion of the hearing on 13 October 2011 I made orders that the proceedings of that day be transcribed and made available for inspection by all of the parties and the matter was again adjourned part-heard until 16 November 2011.
On 16 November 2011 date Mr Skerlj appeared with Mr Borsky of Counsel for the father. Mr Gray appeared on behalf of the Child Support Registrar. Mr Borsky made the bulk of the submissions on the father’s behalf. Mr Borsky was given a chance to address the new submissions put forward on the Child Support Registrar’s behalf at the previous hearing date. In recognition of the fact that the Child Support Registrar’s case had been completely recast by Mr Gray and Mr Borski, the Child Support Registrar was required to contribute to the costs thrown away by the applicant in the sum of $3,680. He also developed the submissions made by Mr Skerlj on 7 December 2010 and put forward a new line of argument.
Mr Gray was given an opportunity to respond to those submissions, which he did later that day.
Neither party submitted that they were not afforded procedural fairness.
Material relied upon
The father relied on the following material to support the orders that he sought, as well as the oral submissions made on his behalf:
a)His affidavit sworn 23 February 2009 and filed 18 March 2009;
b)Outline of preliminary argument dated and filed 6 July 2009; and
c)Summary of argument in reply filed 1 April 2011.
In seeking that the father’s application be dismissed, the Child Support Registrar relied on the following material, as well as the oral submissions made on her behalf:
a)Submissions filed 27 July 2009; and
b)Further submissions dated 25 February 2011 (including the chronology of amendments annexed);
Both parties also referred me to a number of common law authorities, legislation and extrinsic material during the course of the hearing which I have considered. As mentioned above, in the running both cases changed course.
What is a Henry VIII clause?
While labelling a particular legislative provision a “Henry VIII clause” is not determinative of any element of this case, it is nevertheless helpful to consider, by way of background, what is meant by the term Henry VIII clause before turning to the parties’ submissions in which the term is frequently used. In this case, s 163B(3) of the Assessment Act is what was characterised as a Henry VIII clause, and I accept that it does fall within the ambit of what the term encapsulates.
In Vanstone v Clark [2005] FCAFC 189, Weinberg J set out the meaning, purpose and history of this statutory device:
Subject to one qualification, to which I shall return shortly, courts have always accepted that subordinate legislation will be invalid if it contradicts, or is repugnant to, the statute under which it is made.
…
The one qualification to the principle of repugnancy is that the inconsistency may be authorised by an empowering Act. Such provisions were formerly known as "Henry VIII clauses", since they were supposed to reflect that monarch’s autocratic tendencies. See F Bennion, Statutory Interpretation (4th ed, 2002) at 200.
Provisions of this type began to appear in the second half of the 19th century. Bennion asserts that they are often used in England in relation to local Acts. See for example, s 303 of the Public Health Act 1875, c 303, which confers power to "repeal, alter or amend" by provisional order, any local Act "which relates to the same subject matter as this Act". Indeed, Bennion makes the point that it is not unknown for modern Acts to give power to amend, or even repeal, public general enactments by delegated legislation. In addition, sweeping general powers to increase, using delegated legislation, the amounts of fines imposed by Act, are widely conferred. This trend, in England, led Lord Scarman to describe as "startling" the power conferred by the Social Security Act 1975 (UK) to limit the scope of the Act by delegated legislation: see Lees v Secretary of State for Social Services [1985] AC 930 at 933.[1]
[1] Vanstone v Clark [2005] FCAFC 189, [120] – [123] (Weinberg J).
The father’s case
The father’s case is comprised of three grounds, put in the alternative, as to why the assessment of his child support liability was invalid and his liability ought to be discharged. The Child Support Registrar argued against each of these submissions.
The first ground was pressed on the first day of the hearing by Mr Skerlj. It was that s 163B of the Assessment Act was ultra vires or void for a number of reasons which essentially related to its Henry VIII clause character. It would follow that if I made a finding to that effect, reg 14 of the Assessment (Overseas Related Maintenance Obligations) Regulations would be repugnant to the Act and therefore invalid. Mr Borsky indicated to the Court on 16 November 2011 that those submissions continued to be pressed.[2]
The second ground was that the assessment of the father was invalid because it was not authorised by s 25 of the Child Support (Assessment) Act 1989, even as that section was purportedly modified by reg 14 of the Assessment (Overseas Related Maintenance Obligations) Regulations.[3] It was said that reg 14 did not establish the validity of the father’s assessment because its words did not speak of an application to establish a child support obligation, but instead only of the recognition, enforcement and perhaps quantification of existing child support obligations. That proposition was not raised until the final day of trial on 16 November 2011 by Mr Borsky.
[3] Transcript in confidence 16.11.11, Mr Borsky, 6.
The third proposition, which was the focus of both parties’ submissions, was that if reg 14 properly construed did purport to enable the Child Support Agency to make a new child support assessment without any underlying foreign assessment or adjudication in existence, then reg 14 was made ultra vires as such an assessment was not authorised by s 163B.[4]
[4] Transcript in confidence 16.11.11, Mr Borsky, 8.
I will address each of the father’s submissions in turn.
The validity of s 163 of the Assessment Act
A useful starting point for the examination of the father’s attack on the validity of s 163B is the general statement of principle of the High Court in Baxter v Ah Way,[5] that “the Federal Parliament has, within its ambit, full power to frame its laws in any fashion, using any agent, any agency, and machinery that in its wisdom it thinks fit, for the peace, order, and good government”.
[5] Baxter v Ah Way (1909) 8 CLR 646
In the High Court decision of The Victorian Stevedoring and General Contracting Company Proprietary Limited v Dignan (1931) 46 CLR 73, Dixon J observed that while Parliament can validly delegate legislative power to the Executive, the scope of the subject matter must have limits to be valid. Dixon J stated:[6]
I, therefore, retain the opinion which I expressed in the earlier case [Huddart Parker Ltd v Commonwealth (1931) 44 C.L.R. 492] that Roche v Kronheimer (1921) 29 C.L.R. 329 did decide that a statute conferring upon the Executive a power to legislate upon some matter contained within one of the subjects of the legislative power of the Parliament is a law with respect to that subject, and that the distribution of legislative, executive and judicial powers in the Constitution does not operate to restrain the power of the Parliament to make such a law. This does not mean that a law confiding authority to the Executive will be valid, however extensive or vague the subject matter may be, if it does not fall outside the boundaries of Federal power. (emphasis added)
[6] Victorian Stevedoring & General Contracting Company Pty Ltd v Dignan (1931) 46 CLR 73.
The above proposition has subsequently been approved by Mason CJ and Dawson, McHugh JJ in Capital Duplicators Pty Ltd v Australian Capital Territory 177 CLR 248 at 265 and Mr Gray submitted that the validity of s 163B of the Assessment Act could only be properly determined in accordance with Dixon J’s statement in Dignan. Mr Borsky did not argue against the applicability of the above proposition.
Also in Dignan, Evatt J elaborated on possible circumstances where the scope of the subject matter conferred on the Executive might fall outside the boundaries of Parliament’s power. Evatt J observed[7] that while the legislative power of Parliament is plenary, a provision would be ultra vires if it was so broad as to empower the Executive Government to make regulations, for example, “upon the subject of trade and commerce with other countries or among the States”, because such a provision would in substance and operation, not be a law with respect to “trade and commerce with other countries or among the States”, but a law with respect to the legislative power to deal with that subject matter.
[7]Victorian Stevedoring & General Contracting Company Pty Ltd v Dignan (931) 46 CLR 73, 117-8 (Evatt J).
Mr Gray submitted that the subject matter which s 163B encompasses and which is contained in ss 163(1) valid because it was a limited grant of delegated legislative power within the bounds of Federal power and not so “extensive or vague” that it infringed the test of Dixon J in Dignan.[8] To support that position he considered the language used in s 163B, specifically the phrases “for and in relation to” and “maintenance obligations”.
[8] Whether the grant of power extended to the creation of child maintenance liability is considered in detail under the heading on the third ground of the husband below.
The phrase “in relation to” was considered by the High Court in O’Grady v The Northern Queensland Company Ltd (1990) 169 CLR 356.[9] There the High Court was concerned with the scope of conferral of power to determine disputes conferred by a Queensland legislation on a Warden’s Court, which was set up to determine disputes concerning mining tenements. The relevant section of the legislation conferred exclusive jurisdiction on a Warden’s Court in all actions “arising in relation to mining or to any mining tenement”. The question was whether there was a dispute and, to the extent that there was not a dispute, did it fall within the conferral of decision-making power on the Warden’s Court. Dawson J, who was a part of the majority but delivered a separate judgement, said:
The words, “in relation to”, read out of context, are wide enough to cover every conceivable connection. But those words should not be read out of context, which in this case is provided by the Mining Act 1968 (Q). What is required is a relevant relationship, having regard to the scope of the Act. Where jurisdiction is dependent upon a relation with some matter or thing, something more than a coincidental or mere connection – something in the nature of a relevant relationship – is necessary: see Reg v Ross-Jones; Ex parte Green (1984) 156 CLR 185, at 196-197, 210.[10]
[9] Waller Standish O’Grady v The Northern Queensland Company Ltd (1990) 169 CLR 356.
[10] Waller Standish O’Grady v The Northern Queensland Company Ltd (1990) 169 CLR 356, 367.
Before me Mr Gray conceded that, while the phrase “for, and in relation to” in subsection 163B(1) uses the broadest possible words of connection that could be used by the legislature, there are nevertheless limits on the conferral of power contained in subsections (1)(a) and (1)(b) so that it does not offend Dixon J’s test. I accept that submission.
Mr Gray submitted that while the scope of “maintenance obligations” in subsection 163B(1)(b) overlaps with its scope in subsection 163B(1)(a), it also goes beyond subsection (a), as it does not require the regulations in question to give effect to an international agreement. It only requires the maintenance obligation to be claimed by or on behalf of a person who is in a reciprocating jurisdiction, or is claimed from a person who is in a reciprocating jurisdiction. Despite this, Mr Gray submitted that the extension in (b) is not so broad so as to invalidate s 163B on the test of Dixon J in Dignan. I also accept that submission.
Mr Skerlj’s submissions made on behalf of the father in relation to the ground that s 163B of the Assessment Act was ultra vires or void did not directly address the approach articulated by Dixon J. Nevertheless, he raised a number of reasons as to why I should find that s 163B was ultra vires or void. [11] The way that I understood the argument was that even if each reason taken on its own could not justify a finding of invalidity, the cumulative effect of those reasons still could.
[11] This summary is derived from the Further Submissions prepared on behalf of the Child Support Registrar. Mr Borsky agreed that this constituted a fair summary of the submissions made by Mr Skerlj at page 38 of the transcript in confidence 16 November 2011.
First, Mr Skerlj submitted that the proper use of a Henry VIII clause is confined to:
a)facilitating immediate executive action;
b)facilitating the effective application of innovative legislation;
c)facilitating transitional arrangements;
d)facilitating the application of a national scheme of legislation;
e)circumstances where the enactment of such a provision is compelling; and
f)instances where such a clause is transitional in nature and has a sunset clause of less than 2 years (and does not remain operative for 7 years as s 163B did).
The first four circumstances were derived from a Legislative Assembly of Queensland, Scrutiny of Legislation Committee document titled “The Use of Henry VIII Clauses in Queensland Legislation”. That Committee ultimately made recommendations that while Henry VIII clauses are generally not appropriate, their use “may be acceptable” and “possibly justifiable” in those four circumstances. No authorities were relied upon to support that contention.[12] The requirement that a Henry VIII clause be transitional in nature was said to be supported by Queensland Law Reform Committee Report number 39, tabled 29 June 1990[13] which had words to that effect. It was put by Mr Skerlj that none of the justifiable circumstances which he identified existed in this case.
[12] Legislative Assembly of Queensland, Scrutiny of Legislation Committee, “The Use of Henry VIII Clauses in Queensland Legislation” January 1997, para 5.9.
[13] Queensland Law Reform Committee Report number 39, tabled 29 June 1990, 3.
Mr Gray accepted that there are policy arguments against Parliament enacting a Henry VIII clause. However, it was submitted that once s 163B was enacted counter to any policy objections, those policy objections are not grounds for invalidity in law. I accept that submission.
Mr Skerlj also submitted that s 163B offended the separation of powers doctrine, despite conceding that not every Henry VIII clause automatically does so. In making that somewhat difficult submission he relied on obiter comments of Faulks J (as his Honour then was) of this Court in Wetzell v Wetzell, CA 1963 of 1994, unreported (14 November 2001). That case concerned child maintenance sought from a non-resident father who lived in Western Samoa, a country not defined as a reciprocating jurisdiction. Justice Faulks quoted s163B of the Assessment Act and expressed a prima facie view (also obiter) that:
In my opinion, without determining the matter, such a section of the Act is almost certainly invalid in that it purports to vest in the Executive, powers which are by the Constitution of Australia, vested exclusively with the legislature. However, the determination of that constitutional point and what would appear to be some peculiar form of attack upon the Separation of Powers predicated by out Constitution, is rendered unnecessary by the fact that the regulations have been amended yet again to provide that one of the reciprocating countries is not Western Samoa.
Mr Gray respectfully submitted that Faulks J’s preliminary view as to the validity of s 163B based on separation of powers objections was incorrect. I accept that submission for reasons which will are elaborated on below.
Mr Skerlj also referred me to the New South Wales Supreme Court decision of John Abernathy v Mina Ruth Deitz [1996] NSWSC 251 (3 July 1996), in which Mahoney P (Gleeson CJ and Meagher JA agreeing) said:
The validity of the exercise of a statutory power is prima facie open to review by a competent court… There are special cases in which no review is possible. In the past, there has been legislation forbidding such review. Clauses such as those described as "Henry VIII clauses" have been used: de Smith on Judicial Review of Administrative Action (5th ed, 1995) at 231 et seq. In a modern democratic state it is, in my opinion, to be expected that, at least in times of peace, such provisions will not now be enacted.
Mr Skerlj submitted that Mahoney P’s comments demonstrate the judicial concern that exists towards delegated legislation. On the other hand, Mr Gray submitted that Mahoney P’s comments are obiter and concerned the exercise of prerogative relief in relation to an exercise of administrative power. He submitted that the case was of no assistance in the current case. I accept that submission. Furthermore, a judicial expectation that such a provision will not be enacted does not render it invalid, unless there are is a legal basis upon which its invalidity can be established. As Beaumont J said in the Federal Court of Australia decision of Isman Ismail v Minister of Immigration and Ethnic Affairs, Margaret JM Korn and the Commonwealth of Australia [1996] FCA 1346 (25 March 1996):
As I have indicated in the course of argument, whilst it may be true to say that the courts have indicated their dislike of the use of Henry VIII clauses (see the discussion in Pearce on Delegated Legislation (1977) pp.7-8), a finding of invalidity is another matter.[14]
[14] Isman Ismail v Minister of Immigration and Ethnic Affairs, Margaret JM Korn and the Commonwealth of Australia [1996] FCA 1346 (25 March 1996), at [16].
Mr Skerlj also submitted that s 163B was ultra vires or void because it enabled the Regulations to effect a dramatic change in the father’s rights. The basis for that assertion is that if reg 14 had not come into effect, the father’s obligation to support his child would have continued to fall under the child maintenance provisions of the Family Law Act 1975 (Cth). Reg 14 expanded the jurisdiction of the Assessment Act, and by virtue of s 66E of the Family Law Act which provided that the court could not make a child maintenance order if the parties fell within the jurisdiction of the Assessment Act, the Family Law Act’s jurisdiction contracted. Under the Assessment Act, the father lost the right to a judicial consideration by way of a hearing by a court at first instance. The early written submissions filed on behalf of the father further submitted that the amending act failed to provide the following mechanisms to otherwise enable the proper functioning of an extended “overseas” administrative child support scheme:
a)parentage testing (I note here that at the time of the enactment of the amending act, it s107 of the Assessment Act actually did allow challenges to assertions of parentage[15]);
b)isolating what component of overseas income was assessable;
c)limiting judicial review, where it had previously been available.
[15] Transcript in confidence 13 October 2011, 46 (Mr Gray).
Mr Skerlj submitted that it was inappropriate to make such serious changes through delegated legislation, particularly in circumstances where it could easily have been done by legislation and was done by legislation in 2007.[16]
[16] Transcript in confidence 7 December 2010, 18; 27-28.
In response, Mr Gray argued that the fact that s 163B enabled regulations to effect a dramatic change in rights is not a ground for a finding that the section is invalid. That is correct. In any event and on reflection, I am not satisfied that there was such a dramatic change in the father’s status. The practical difference is that the mother and father no longer had to negotiate the court system or retain lawyers to be able to obtain an assessment or a substantive review on the merits which was, after all, the underlying purpose of the change.
Conclusions as to the validity of s 163 of the Assessment Act
In relation to the first ground of the father’s case, I am not satisfied that s 163B of the Assessment Act is ultra vires or void. Despite the general disinclination to Henry VIII clauses identified by Mr Skerlj, those objections are not grounds for a finding of invalidity. Nor is the fact that s 163B enabled the Executive to make delegated legislation which altered the father’s rights and responsibilities very significantly.
Furthermore, I am satisfied that s 163B does not offend the principles set out in Digan, as considered above. It follows that the first ground raised by the father must fail.
The second proposition of the father
The father’s second proposition is that reg 14 does not purport to go far enough to establish the validity of the father’s assessment because its language only extends the reach of s 25 of the Assessment Act in relation to the recognition, enforcement and possibly quantification of existing child support obligations and does not allow for the initial establishment of a child support liability. This submission was based on the construction of the words “seek payment” in reg 14, which for ease of reference I repeat (emphasis added):
For section 25 of the Act, a person may seek payment of child support from a person who is:
(a) a parent of the child; and
(b) a resident of a reciprocating jurisdiction on the day when the application is made.It is important to note that the words “seeking payment” also appear in the context of the provision that reg 14 purports to modify, s 25(2) of the Assessment Act:
(2) A person may apply to the Registrar under this section for administrative assessment of child support for a child if:
…
(b) the person is seeking payment of child support for the child from a person who is:
(i) a parent of the child; and
(ii) a resident of Australia on the day the application is made; and
…
There is a clear parallel between the words “seek payment” and “seeking payment” and the context in which they appear in reg 14 and s 25. Certainly from a preliminary reading of the provisions it seems clear that the purpose of the regulation is to extend the class of parents who an eligible carer can seek payment from to include those that are resident in a reciprocating jurisdiction at the time of the application, which, assuming all of the other requirements in s25 are satisfied, would allow a person to apply for an administrative assessment of child support. Regulation 14 specifically states that what it is purporting to modify is s 25 of the Assessment Act, subsection (2) of which is concerned with who may apply under that section for administrative assessment of child support.
Despite that, Mr Borsky submitted that the modification effected by reg 14 might be directed at s 25(2)(b), but not allow applications in such a broad a set of circumstances when the payer is in a reciprocating jurisdiction compared to where the payer is resident in Australia. That is, reg 14 only allows for an assessment in circumstances where there is a pre-existing assessment which had been made previously in a reciprocating jurisdiction. It was said that because there was doubt or ambiguity as to the scope of reg 14, it should be construed in that narrow way because it was purportedly created pursuant to a Henry VIII clause and because the extrinsic material supported that interpretation. I will now consider those two arguments.
Should reg 14 be subjected to a restrictive and narrow construction because of its Henry VIII genesis?
Mr Borsky submitted that where there is doubt or ambiguity in the words of a regulation, they ought to be resolved in the most restrictive and narrow reading of that regulation because it is delegated legislation pursuant made to a Henry VIII clause. Mr Borsky primarily pointed to the text Delegated Legislation in Australia 3rd Edition[17] to support that proposition, which reads:
The amendment of Acts by delegated legislation pursuant to so-called “Henry VIII clauses” is discussed in [1.20]. The questionable nature of this practice leads one to think that legislation that affects the operation of an Act will be interpreted narrowly to achieve the least change in the Act that the language permits. However, there appears to be no authority for this principle. The closest one comes to it are observations in the House of Lords decisions of R v Secretary of State for Social Security; Ex parte Britnell [1991] 1 WLR 198 at 204 and R v Environment Secretary; Ex parte Spath Holmes Ltd [2001] 2 AC 349 at 382. They suggest that a power permitting the making of delegated legislation that will amend an Act should be restrictively interpreted if there is any doubt about the scope of the power. It would seem that the same approach would be applicable to the interpretation of the delegated legislation made under such a power. (emphasis added)
[17] Professor Dennis Pearce AO and Stephen Argument, LexisNexis Butterworths Australia 2005.
Mr Borsky also submitted that the empowering legislation should also be interpreted in a strict and narrow way, which formed the substance of the third proposition of the father which is dealt with below.
Mr Gray cautioned against adopting the principle relied upon by Mr Borsky to the effect that there’s some special law of construction that applies to either the empowering provision or the instrument itself.
Both sides made submissions about the two House of Lords decisions referred to in the Delegated Legislation text and an Federal Court of Australia Full Court decision of Isman Ismail v Minister of Immigration and Ethnic Affairs, Margaret JM Korn and the Commonwealth of Australia [1996] FCA 1346 (25 March 1996). I will now address those submissions.
The House of Lords decision of R v Secretary of State for Social Security; Ex parte Britnell [1991] 1 WLR 198 concerned an overpayment of social security benefits. A series of legislation and transitional provisions enabled part of the overpayments to be recovered under the legislation. Regulation 20(2) expanded the scope of s 53 of the Social Security Act, by providing that recovery of overpayments under s 53 apply to any amount recoverable under any enactment or regulations that had subsequently been repealed. Regulation 20(2) was purportedly made pursuant to the Henry VIII provision in that Act, s 89, which stated that:
Regulations may make such transitional and consequential provisions (including provision modifying any enactment contained in this or any other Act)…
The overpayment in question was an amount repayable under an enactment which had been repealed, but reg 20 provided for it to be recovered in accordance with s 53 of the Act.
Lord Keith of Kinkel (with the other Lords agreeing), found that reg 20(2) was transitional in character, and insofar as it modified s 53 of the Act, the modification was not so radical as to be an excess of power, even on the strictest construction of s 89(1) (i.e. the Henry VIII clause).
Mr Borsky submitted that the case supported the proposition that a legislative provision which empowers regulations to modify that Act should be strictly construed. I was specifically referred to Lord Keith’s reference to the unreported decision of McKiernon v Secretary of State for Social Security,[18] of which the Law Lord said:
The judgments [in McKiernon] contain passages to the effect that a power to modify the provisions of a statute should be narrowly and strictly construed, and that view is indeed a correct one.[19]
[18] McKiernon v Secretary of State for Social Security (unreported), 26 October 1989; Court of Appeal (Civil Division) Transcript No. 1017 of 1989.
[19] McKiernon v Secretary of State for Social Security (unreported), 26 October 1989; Court of Appeal (Civil Division) Transcript No. 1017 of 1989, 204.
Mr Gray’s response was three-pronged. He submitted that House of Lords authority is not binding on this Court, but is only persuasive. That is correct. He further submitted that Lord Keith’s decision only dealt with the construction of empowering legislative provisions and not the construction of the delegated legislation, made pursuant to that empowering provision. That is also clear from the face of the judgment in that it refers to the “power to modify the provisions of a statute” and not the modifications made pursuant to that power. The third was that the Court needs to look at what Lord Keith actually did in order to understand what he meant by “narrowly and strictly construed”. In relation to that I was taken through the specific circumstances of the decision in McKiernan.
The decision of McKiernon concerned a claim to a disablement benefit on the ground of occupational deafness, which was a prescribed disease for purposes of the relevant provisions of the Social Security Act 1975 (UK). Section 165A(2) of that Act required the Executive to have regulations in force for extending the time that a claim could be made outside of a prescribed timeframe. It read:
Regulations shall provide for extending … the time within which a claim may be made in cases where it’s not made within the prescribed time but good cause is shown for the delay.
Section 77(2), which had a Henry VIII character, provided:
In relation to prescribed diseases … regulations may provide (a) for modifying provisions of this Act relating to … disablement benefit, and the administration of such benefit; …
The regulation which provided for an extension of time in certain circumstances disappeared when a further regulation was made and no subsequent regulation was put in its place. The further regulation was held to be ultra vires. In discussing McKiernan, Lord Keith observed that:
The principal ground for the decision was that it did not purport to modify section 165A(2), but simply ignored it. It would, in any event, have been strange if a power to modify had been construed as authorising the annulment of a mandatory provision.
Mr Gray submitted that what their Lordships in McKiernon were saying, and what Lord Keith adopted, was that a modifying regulation should not trump a mandatory provision in the Act which requires regulations to deal with a particular subject matter. A Henry VIII clause should not be given some overriding construction so that a power to modify provisions of the Act could allow the regulations to remove a mandatory provision of the Act. Mr Gray did not dispute that proposition, but submitted that Britnall and McKiernon do not support the contention for which Mr Borsky argued for, that is, that a regulation should be strictly and narrowly construed by virtue of its Henry VIII clause genesis. I accept that Mr Gray’s submission is correct.
In R v Environment Secretary; Ex parte Spath Holmes Ltd [2001] 2 AC 349, a statutory framework controlled rents by reference to a concept described as “fair rents”. The executive made an order pursuant to a Henry VIII provision, s 31 of the Landlord and Tenant Act 1985, which imposed a ceiling on rent increases, purportedly pursuant to these fair rent controls. The issue in dispute was whether such a modification by the executive was valid. Lord Bingham, giving the leading judgment, referred to the earlier decisions of Britnell and McKiernon and said:
Mr. Bonney submitted that, faced with language of this breadth, the courts should apply certain presumptions. The first of these is that, since Parliament does not lightly delegate to the executive the power to amend primary legislation, such a provision should be narrowly and strictly construed and any doubt resolved in favour of the narrower rather than the broader interpretation. He placed reliance on McKiernon v. Secretary of State for Social Security (Court of Appeal, unreported, 26 October 1989, CAT No.1017) where Lord Donaldson of Lymington MR said (at page 10B of the transcript):
Subordinate legislation, at any rate when subject to the negative resolution procedure, represents the will of the Executive exercised within limits fixed by primary legislation. Whether subject to the negative or affirmative resolution procedure, it is subject to much briefer, if any, examination by Parliament and cannot be amended. The duty of the courts being to give effect to the will of Parliament, it is, in my judgment, legitimate to take account of the fact that a delegation to the Executive of power to modify primary legislation must be an exceptional course and that, if there is any doubt about the scope of the power conferred upon the Executive or upon whether it has been exercised, it should be resolved by a restrictive approach.
This principle was endorsed by this House in Reg. v. Secretary of State for Social Security, Ex parte Britnell [1991] 1 WLR 198 at 204. Recognition of Parliament's primary law-making role in my view requires such an approach. But it is an approach which is only appropriate where there is a genuine doubt about the effect of the statutory provision in question. Here, the language used seems on its face to leave little room for doubt about the scope of the power in section 31(2).[20]
[20] R v Environment Secretary; Ex parte Spath Holmes Ltd [2001] 2 AC 349, 282.
Mr Borsky submitted that Spath Holmes Ltd was further persuasive authority to support his contention that if there is any doubt as to the scope of the power conferred on the Executive it is to be resolved by the strictest, narrowest construction that the language will permit.
Mr Gray again submitted that this decision is not authority for the proposition that a regulation made pursuant to a Henry VIII clause should be interpreted narrowly for similar reasons to those given in relation to Britnell. I accept that that is correct.
Mr Gray further emphasised Lord Bingham’s view that a narrow or restrictive approach is only appropriate where there is “genuine doubt”. That is presumably a higher bar than the requirement that there merely be “any doubt” as the requirement was put in McKiernon, however I am not convinced that any doubt that is not genuine could properly be considered to be doubt at all in this context. In any event, I accept Mr Gray’s submission that there is no doubt, genuine or otherwise, that reg 14 does purport to extend the scope of s 25 of the Assessment Act to include persons in the position of the father.
Mr Borsky also referred to a Federal Court of Australia decision of Isman Ismail v Minister of Immigration and Ethnic Affairs, Margaret JM Korn and the Commonwealth of Australia [1996] FCA 1346 (25 March 1996), in which Beaumont J said:
19. It follows that the real question in this application is one of substantive repugnancy or inconsistency of the kind discussed by the House of Lords in Regina v The Secretary of the State for Social Security; Ex parte Britnell (1991) 1 WLR 198.
20. … It was concluded by the House that accordingly, even on the strictest construction of s.89(1), the modification of s.53 was not "so radical as to be an excess of power" (to borrow the language of Lord Keith (at 205)).
Mr Borsky submitted that Isman Ismail implicitly approved the “strictly construed” approach to regulations made pursuant to a Henry VIII clause by the House of Lords in Britnell, as is apparent from the words “the strictest construction”.
Mr Gray did not make any submissions specifically in relation to this aspect of this decision, however, his general position on these cases was clear. That is, there are no authorities which suggest that the House of Lords’ approach has been followed in Australia, or that there is even any authorities from Country A which support the proposition that regulations should be subjected to a strict or narrow construction.
I accept the submissions of Mr Gray in relation to the above case law. The authorities referred to concern the interpretation of provisions in an Act which empower the Executive to make delegated legislation which modifies the Act (and is relevant to the third proposition of the father). They do not address how the delegated legislation itself should be interpreted. It is only the comment in the text “Delegated Legislation in Australia”, that “[i]t would seem that the same approach would be applicable to the interpretation of the delegated legislation made under such a power” which would support that proposition advanced on behalf of the father. It follows that I do not accept that there is some special mode of statutory construction for regulations made pursuant to a Henry VIII clause which could be relied upon to justify an interpretation of reg 14 which does not extend the scope of the child support assessment regime to include people in the position of the father, even if there was doubt as to the meaning of the regulation.
Consideration of extrinsic material because of ambiguity of obscurity
Mr Borsky further submitted that because reg 14 is susceptible to ambiguity or obscurity, it is permissible to resort to the extrinsic materials pursuant to s 13 of the Legislative Instruments Act 2003 (Cth) when read with s 15AB of the Acts Interpretation Act 1901 (Cth). That material was said to support the father’s case that reg 14 only extended the recognition and enforcement of pre-existing child support assessments made in a reciprocating jurisdiction.
Mr Gray submitted that it was not necessary to consider extrinsic materials when determining the meaning of reg 14 as there was not sufficient ambiguity in the words of the regulation. He submitted that while it is appropriate to identify doubt or ambiguity in the words of a statute or regulation, it is not appropriate to look towards extrinsic material to cast doubt on a provision that is plain on its ordinary meaning. He submitted that while Mr Borsky argued that reg 14 only extended the recognition and enforcement of pre-existing child support assessments, those aspects of the regime were actually done at that time under the regime of the Registration and Collection Act as modified by its regulations. Therefore, it was said that reg 14 as construed by Mr Borsky would not have added anything to the child support regime, a position which would not have been the intention of parliament. I will now turn to those relevant provisions.
The regulations made under the Registration and Collection Act, namely, the Child Support (Registration and Collection) (Overseas-related Maintenance Obligations) Regulations 2000 (the “(Registration and Collection) (Overseas-related Maintenance Obligations) Regulations”), made at the same time as the impugned reg 14 of the Assessment Regulations. The (Registration and Collection) (Overseas-related Maintenance Obligations) Regulations provided for “additional registrable maintenance liabilities” at reg 11, and the registration of such liabilities upon receipt of an application for registration of a “registrable maintenance liability” at reg 12. Regulation 11(2) stated that:
A liability is a registrable maintenance liability if:
(a) it is a liability of a party to a marriage to pay a periodic amount for the maintenance of the other party to the marriage; and
(b) it is an overseas maintenance liability.
The phrase “overseas maintenance liability” was defined in the regulations as “a liability that arises under … (c) a maintenance assessment issued by an administrative authority of a reciprocating jurisdiction.” Therefore, at the relevant time, a child maintenance assessment in force issued in a reciprocating jurisdiction would be treated as a “registrable maintenance liability” under the Registration and Collection Act, and could have been enforced in Australia pursuant to that Act. The Registration and Collection Act does not also cover circumstances where the assessment was instead issued by the Australian Child Support Registrar without a pre-existing assessment in a reciprocating jurisdiction, which is what happened in this case. Therefore, I accept Mr Gray’s contention that the Registration and Collection Act and its regulations fulfilled the role that Mr Borsky argued was the outer limit of the role to be played by reg 14.
Based on the above, I am not convinced that the regulations are sufficiently ambiguous to warrant the consideration of the extrinsic material in relation to this aspect of the father’s case. The clear purpose of reg 14 was to expand the class of people who could “seek payment” from a parent. Assuming that the other requirements of s 25(2) of the Assessment Act were satisfied, it follows that that person could apply to the Registrar under this section for administrative assessment of child support for a child.
I further note here that in the two House of Lords’ decisions previously discussed, Britnall and Spath Holmes Ltd, the House of Lords was not prepared to consider the extrinsic material to read any ambiguity into the words of the regulations or empowering act.
It follows that the second proposition of the father must also fail.
The third proposition of the father
I have found that both s 163B is valid and reg 14 properly construed does purport to enable administrative child support assessments to be made without any underlying foreign assessment. Given that those propositions of the father have not succeeded, the third and final proposition of the father is that reg 14 is invalid as it is ultra vires s 163B.
Counsel for both sides conceded, and I agree, that this was the ground on which the case was most likely to be determined. That is, it is the most arguable of the father’s propositions.
In Vanstone v Clark,[21] the Full Court of the Federal Court of Australia clearly outlined the approach to determining the validity of delegated legislation:
The court must first determine the meaning of the words used in the Act conferring power upon the body authorised to make subordinate legislation. It must next determine the meaning of the subordinate legislation, and finally, it must decide whether the subordinate legislation falls within the power so conferred.[22]
[21] Vanstone v Clark [2005] FCAFC 189.
[22]
The Court then went on to say that:
[T]he scope of the Act itself controlled the purpose for which regulations could be made. This may give wider scope for review, based on a lack of proportionality, in cases where purpose is more directly stated. In other words, the power to make delegated legislation can only be exercised having regard to the purpose that underlies the empowering provision. Where that purpose is expressly stated, the task of the court in determining validity is to some extent made easier.[23]
[23] Vanstone v Clark [2005] FCAFC 189, 103 and 112.
In Morton v The Union Steamship Company of New Zealand Limited,[24] the High Court said that:
The ambit of the power must be ascertained by the character of the statute and the nature of the provisions it contains. An important consideration is the degree to which the legislature has disclosed an intention of dealing with the subject with which the statue is concerned. In an Act of Parliament which lays down only the main outlines of policy and indicates an intention of leaving it to the Governor-General to work out that policy by specific regulation, a power to make regulations may have a wide ambit. Its ambit may be very different in an Act of Parliament which deals specifically and in detail with the subject matter to which the statute is addressed.[25]
[24] Morton v The Union Steamship Company of New Zealand Limited (1951) 83 CLR 402.
[25] Morton v The Union Steamship Company of New Zealand Limited (1951) 83 CLR 402, 410.
Mr Borsky relied on the two House of Lords decisions, Isman Ismail and the text Delegated Legislation in Australia, previously discussed, to contend that where doubt exists as to the scope of a provision empowering the making of delegated legislation that can have the effect of being inconsistent with a statute, the scope of the empowering provision should be narrowly construed. Mr Gray relied upon his response to that argument, which he made in the context of the father’s second proposition, and further submitted that Weinberg J’s decision in Vanstone v Clark does not give any indication of a special approach to statutory construction which requires a Henry VIII-like provision to be narrowly construed, as was submitted on behalf of the father.
The facts of Vanstone v Clark can be summarised as follows. The Aboriginal and Torres Strait Islander Commission Act 1989 (Cth) allowed the Minister for Immigration and Multicultural and Indigenous Affairs to specify conduct as constituting “misbehaviour” for the purposes of the Act, but did not expressly say that the instrument could be inconsistent with the Act. Weinberg J accepted the submission made on behalf of the Minister in that the empowering provision did have the properties, as a matter of statutory construction, of being able to modify the meaning of misbehaviour in the Act.[26] Black CJ did not decide the issue.[27] Weinberg J’s ratio considered whether the instrument in question had adopted a definition of “misbehaviour” that was so broad that it was not reasonably proportionate to the conferral of that instrument-making power, that is, that it had been expanded the meaning of “misbehaviour” beyond the confines of the Act.[28] His Honour found that it was too broad and therefore not reasonably proportionate because it brought in any criminal offence within the definition of “misbehaviour”, regardless of its connection with the performance of the duties of the Chairman of ATSIC. Accordingly, the instrument was invalid.
[26] paragraph 131
[27] Para 19
[28] Para 162.
It is convenient to again extract the parts of s 163B which set the limits of the subject matter which the regulations can properly address:
163B Regulations in relation to overseas‑related maintenance obligations etc.
(1) The regulations may make provision for, and in relation to, the following matters:
(a) giving effect to an international agreement that relates to maintenance obligations arising from family relationship, parentage or marriage;
(b) maintenance obligations arising from family relationship, parentage or marriage, where:(i) the maintenance is claimed by or on behalf of a person who is in a reciprocating jurisdiction; or
(ii) the person from whom the maintenance is claimed is in a reciprocating jurisdiction.…
At the 7 December 2010 hearing, Mr Skerlj for the father made a number of submissions to support the father’s case that reg 14 was ultra vires s 163B. Those submissions can be summarised as follows:
a)The proper use of regulations created under a Henry VIII clause is to be restricted to extrapolating the matters dealt with in their enabling Act and cannot be properly used to amend the application of Acts of Parliament. That is exactly what reg 14 purported to do in relation to the Assessment Act.
b)Regulation 14 purported to remove the application of the Family Law Act, and could not validly do so because s 163B, if valid, only allowed inconsistency with the Assessment Act. Related to this is the fact that reg 14 effected a dramatic change in the father’s rights, because he was brought under the administrative regime of the Assessment Act from the Family Law Act;
c)Section 163B of the Assessment Act provided that regulations may make provision in relation to maintenance obligations arising from a family relationship, parentage or marriage. The term “maintenance obligations” is not defined and s 163B may only enable the creation of regulations that apply to maintenance obligations already in existence at the time that the section was enacted, and may not be used to create new liabilities or assessments.
In relation to point (a), that submission has already been rejected in relation to the father’s first proposition. I draw the same conclusion in this context.
In relation to point (b), Mr Gray agreed that the Child Support Assessment Regulations were relevant to the restriction of the Family Court’s jurisdiction, but he submitted that the most direct operative cause for this restriction in jurisdiction was the Family Law Regulations, a pathway which was explicitly permitted by the Family Law Act. That position was supported by the following analysis.
In the grant of original jurisdiction of the Family Court it was intended that the Family Court Regulations were able to restrict the exercise of that jurisdiction in relation to persons or things outside Australia and the Territories. Specifically, s 31(2) of the Family Law Act stated that:
Subject to such restrictions and conditions (if any) as are contained in the regulations or the standard Rules of Court, the jurisdiction of the Family Court may be exercised in relation to persons or things outside Australia and the Territories.
Regulation 29(4) the Family Law Amendment Regulations 2000 (No. 2) imposed one such restriction on the Family Court’s jurisdiction. It read as follows:
A court must not make an order under subregulation (1) if an application could properly be made, at that time, under the Child Support (Assessment) Act 1989, read with the Child Support (Assessment) (Overseas-related Maintenance Obligations) Regulations 2000, for administrative assessment of child support (within the meaning of that Act) by a person seeking payment of child support for the child from the respondent.
Mr Gray submitted that reg 29(4), which came into operation contemporaneously with a raft of other legislative and regulatory amendments relevant to this decision, effectively incorporated the Child Support (Assessment) Act and Child Support (Assessment) (Overseas-related Maintenance Obligations) Regulations into the Family Law Act and Family Law Regulations. This restricted the jurisdiction conferred on the Family Court in a way which was permitted by s 31(2) of the Family Law Act. Therefore, it was submitted that the challenge to reg 14 of the Child Support (Assessment) Regulations could not succeed on a ground concerned with an unlawful contraction or restriction of Family Court jurisdiction. The Family Law Act permitted it.
Mr Gray further referred to the Supreme Court of Victoria Court of Appeal decision of Something Better v Pyramid Building Society (in liq) (1996) 135 ALR 297, to support the Child Support Registrar’s case in relation to this point. In that case, s 243 of the Commonwealth Bankruptcy Act 1966 allowed for modifications of certain sections of the Act to be made by regulation. Relevantly, s 243(1) stated:
Sections 82 to 107 (inclusive) … apply, with the prescribed modifications (if any)…
Section 82 was modified by rules 82, 83 and 84 of the Bankruptcy Rules. The modifications omitted subsections (1) and (8) of s 82 and substituted a new subsection in each case. Brooking JA made the following comments about the modifications to the Act pursuant to the rules:
The argument about invalidity has only to be stated for its weakness to be seen. The rule which modifies s 243 is not inconsistent with the Act, since s 243 itself expressly contemplates that the Act may be modified by rule. A rule modifying a section is not inconsistent with an Act which provides for the making of such a rule.[29]
Mr Gray contented that there was a close analogy with the terms of s 31(2) of the Family Law Act, which expressly contemplated the possibility of modification of the Act by regulation in limited extra-territorial circumstances, and s 243(1) of the Commonwealth Bankruptcy Act 1966. Something Better was also relied on to demonstrate the validity of Henry VIII type clauses generally. I accept that the effect of reg 14 on the Family Law Act is permitted by that Act. While I am not bound by the Supreme Court of Victoria Court of Appeal authority referred to, I accept that the issue in that case was analogous to the current dispute and I adopt that approach in this instance.
Point (c) above, is the key question that must be decided in this case. Section 163B of the Assessment Act provided that regulations may make provision in relation to “maintenance obligations”, a phrase which is not defined in the Act. The dispute is to whether those words only include child support obligations already in existence, or whether it also extends to the establishment of such obligations.
Mr Borsky submitted that there is sufficient ambiguity in the words “maintenance obligations” to warrant consideration of extrinsic material per s 15AB of the Acts Interpretation Act 1901 (Cth).
Mr Gray did not concede that there was such ambiguity for a number of reasons. He submitted that the phrase “maintenance obligations” must include assessment and not just registration, enforcement and possibly quantification because it appears in the Assessment Act; not the Registration and Collection Act. That was said to be a powerful indication that “maintenance obligations” were intended to encompass the making of assessments, including claims not yet adjudicated but arising because of the parental relationship. Mr Gray also submitted[30] that the fact that both s 163(1)(a) and s 163(1)(b) refer to maintenance obligations “arising from”, as opposed to maintenance obligations that already exist, or that are due, showed that s 163B was broad enough to include putative entitlements where claims were made for child maintenance.
[30] Transcript in confidence 13 October 2011, 51-52.
In response, Mr Borsky contended that s 163B only authorises regulations to be made allowing applications against respondents in reciprocating jurisdictions in respect of whom there is, at that time, pre-existing obligations and nothing in the words “arising from” tells against that. The words “arising from” are completely neutral as to tense and on their face do not support the proposition that reg 14 can validly deal with a pre-existing or yet to be assessed maintenance obligation. They merely describe the provenance of the underlying obligations in that the obligations, irrespective of if they have arisen, were to have been from a family relationship, parentage or marriage. While I accept Mr Borsky’s submission that the words “arising from” are neutral as to tense and do not distinguish between pre-existing and yet to be recognised maintenance obligations, that conclusion does not support Mr Borsky’s proposition that only pre-existing obligations from reciprocating jurisdictions will be recognised. If anything, the broadness of the words indicates that the section is not attempting to distinguish between obligations which already exist and those which have not already been recognised in a reciprocating jurisdiction.
Mr Borsky also submitted that the words “is claimed” in 163B(1)(b)(ii) suggest that the legislature was purporting to authorise regulations to be made which relate to existing claims of maintenance obligations.
I am not satisfied that the words “is claimed” are intended to be read in such a restrictive way. My reading of the provision is that those words are merely used identify the person from whom the maintenance is being sought from and does not attempt to distinguish between whether the maintenance obligation has previously been established or not.
It follows that I am not satisfied that it is necessary to consider the extrinsic material, as was urged by the father. However, I will now consider the father’s argument in case I am wrong in reaching that conclusion.
The extrinsic material
The parties made submissions in relation to the extrinsic materials in the eventuality that I am satisfied that there is doubt as to the meaning for the provision pursuant to s 15AB. Mr Borsky referred to a number of propositions in the Child Support Legislation Amendment Bill 2000 Explanatory Memorandum, which he submitted support his contention that s 163B was not concerned with the establishment of child support obligations, but with the recognition and enforcement of pre-existing obligations, which, as I have already indicated, would have the effect of rendering reg 14 ultra vires.
The crux of Mr Borsky’s submission was that where Australia has entered into these international agreements and assumed obligations, where the then-legislative scheme did not enable implementation of those obligations, the scheme was to be amended so that any gaps or loopholes in the recognition and enforcement of foreign assessments and adjudications could be overcome.
I will now turn to the propositions in the Explanatory Memorandum which Mr Borsky referred me to a number of propositions in the Explanatory Memorandum he said consistently refer to enforcement of existing child maintenance liabilities. By way of providing some examples, the Outline and Financial Impact Statement in the Explanatory Memorandum, for instance, reads as follows:
A regulation making power is inserted into the Child Support (Registration and Collection) Act1988, the Child Support (Assessment) Act 1989 and the Family Law Act 1975 to allow regulations to be made prescribing, in relation to countries with which Australia has maintenance enforcement arrangements, all matters relevant to the recognition and enforcement of child support and spousal maintenance liabilities. (emphasis added)
Similarly, under the heading Schedule 1 – Amendments, Background, the Explanatory Memorandum says:
Australia currently has arrangements with a variety of countries in respect of the recognition and enforcement of maintenance liabilities. However, in relation to certain issues, those arrangements are no longer appropriate. For example, Australia’s existing arrangements with New Zealand and the United States were devised on the basis that all liabilities were in the form of orders made, or agreements registered by, a court. They are unsuited to the current situation in those countries as court ordered maintenance is gradually being replaced by administrative assessments of child support issued by Child Support Agencies. Further, other international arrangements are of limited value to the recipients of child support and spousal maintenance as they are largely dependent on slow and cumbersome procedures for the initiation and pursuit of proceedings in foreign courts to obtain orders for maintenance.
Mr Borsky also referred me to the following text under the subheading “Explanation of the changes”, which he submitted also demonstrated that the provisions concerned enforcement:
Australia’s international maintenance arrangements provide for the enforcement of maintenance obligations owed by parents to children and maintenance obligations owed by one party to the other party to a marriage…
…
Implementation of Australia’s international maintenance arrangements will require action by both the Australian Child Support Agency and by Australian courts. For example, lump sum maintenance orders made by overseas courts will continue to be enforced by Australian courts. In addition, proceedings may need to be taken in Australian courts to establish maintenance orders for the benefit of a child in a reciprocating jurisdiction who, by reason of full time education or physical disability, needs support from a parent in Australia. The Bill provides that in implementing Australia’s international maintenance arrangements, the regulations may confer jurisdiction on courts. New subsection 163B(2) provides for regulations to be made which confer jurisdiction on a federal court or a Court of a Territory. The amendments also provide for regulations that invest a court of a State with federal jurisdiction.
…In the situations sought to be covered by these amendments, it will always be the case that one of the parties will be resident in a reciprocating jurisdiction and, while he or she may have income according to the laws of that jurisdiction, there may be no taxable income according to Australian taxation laws. In meeting Australia’s international maintenance obligations, a wider range of income sources may be considered in determining the amount of a child support liability.
New subsection 163B(3) provides that where regulations are made, they may be inconsistent with the provisions of the Assessment Act and, to the extent of any inconsistency, would prevail over the provisions of the Assessment Act. The purpose of this approach is to allow the regulations to vary the operation of the Assessment Act where the existing provisions are not appropriate for the purposes of meeting Australia’s international maintenance obligations.
While I agree with Mr Borsky that there is evidence of a Parliamentary intention to allow for the recognitions and enforcement of maintenance obligations determined by reciprocating jurisdictions, I do not agree with Mr Borsky’s proposition that this is as far as the Explanatory Memorandum contemplates. For example, the Explanatory Memorandum also appears to envisage situations where the Child Support Agency can make an assessment, even where the payer is not resident in Australia. Inter alia, it reads:
The proposed amendments provide for regulations to be made which prescribe for matters relevant to the recognition and enforcement of child support and spousal maintenance liabilities. The following are some of the matters for which the regulations may prescribe:
…
- allowing the Child Support Agency to make an administrative assessment even though the payer is not resident in Australia and does not have an Australian taxable income;
Mr Borsky’s submission was that all the above demonstrates is that the amendments empower the Child Support Agency to make administrative assessments which have regard to a payer’s income which is not recognised as Australian taxable income (in contrast to the position prior to the amendments) and nothing more. The statement of purpose in a later paragraph of the Explanatory Memorandum was said to show that the mischief that Parliament was attempting to ameliorate was payers leaving the jurisdiction to avoid child maintenance obligations. It was not concerned with allowing the payee to make a new application in Australia because that was not within the scope of Australia’s international maintenance obligations. That statements is as follows:
The purpose of this approach is to allow the regulations to vary the operation of the Assessment Act where the existing provisions are not appropriate for the purposes of meeting Australia’s international maintenance obligations.
In response to Mr Borsky’s submission on that point, Mr Gray submitted that Mr Borsky had misconceived the regime by conflating the registration and collection functions and the assessment functions of the Child Support Registrar. It was submitted by Mr Gray that the regime does not provide for the Child Support Registrar to take into account overseas taxable income in the context of enforcing an overseas decision. It only admits the possibility of the Registrar taking into account overseas income when the Registrar is making an assessment in Australia based on an application made in Australia. Specifically, s 31(2) of the Assessment Act provides for the Registrar to assess the annual rate of child support payable by the liable parent. Part 5 of the Assessment provides details as to how that assessment is to proceed. That exercise does not occur in the context of enforcing an overseas maintenance liability, but is instead covered by the Registration and Collection Act; it only arises in the context of an application for an assessment in Australia. Furthermore, Mr Gray submitted that the Registrar does not have power to amend an overseas assessment. Part 6A of the Assessment Act contains the relevant provisions concerning departure, and they only relate to administrative assessments made in Australia. Accordingly, it was said that the dot point above, “allowing the Child Support Agency to make an administrative assessment even though the payer is not resident in Australia and does not have an Australian taxable income”, must not be limited to recognition and enforcement and could not relate to the quantification of a maintenance obligation determined by an authority in a reciprocating jurisdiction. The Parliament must have envisaged the Child Support Agency making assessments whether no other maintenance obligation was already in place. I accept Mr Gray’s submissions on that point.
I was also referred to another passage in the explanatory memorandum, which stated that s 163B(1)(b)(ii) of the Assessment Act is to ensure that “regulations can be made in relation to maintenance obligations where the person from whom maintenance is being claimed is in a reciprocating jurisdiction”, which further supports that conclusion.
In his consideration of the extrinsic materials, Mr Borsky also referred me to the Joint Select Committee on Certain Family Law Issues report entitled “Child Support Scheme: An examination of the operation and effectiveness of the scheme”, which was referenced in the Explanatory Memorandum. Mr Borsky submitted that chapter 14, titled “International enforcement of child support liability”, of that document, at paragraph 14.1, supported how he construed the legislation’s purpose. It reads as follows:
The Joint Committee is concerned about the possibility of liable non custodial parents under the Child Support Scheme leaving Australia and thereby avoiding their responsibility to pay child support. Assistance should also be available to custodial parents who may reside in an overseas jurisdiction and require the continued payment of child support from the non custodial parent residing in Australia. International enforcement of child support also applies to liable parents from overseas who have a responsibility towards children in other countries as well as a custodial parent from overseas now residing in Australia.
Furthermore, paragraph 14.7 reads:
… the registration in, and enforcement by, courts having jurisdiction under the Family Law Act 1975 for maintenance orders made by courts or authorities of reciprocating jurisdictions.
The report then makes the point that increasingly in foreign jurisdictions there are administrative assessments which need to be recognised, enforced and given effect to as opposed to court orders. At paragraph 14.14, the context is reiterated, that is, that:
Australia will accept orders for the recognition and enforcement of maintenance orders from a country or part of a country with which reciprocity has been established.
At paragraph 14.20, the United Nations Convention on the Recovery Abroad of Maintenance (UNCRAM) is referred to. The purpose of the Convention is described as being:
… to enable a person living in one convention country to institute proceedings for the recovery of maintenance against a person living in another convention country.
The report then considers and addresses various deficiencies in the mechanics of that Convention. The chapter concludes with a number of recommendations, all of which go solely to enforcement of obligations, not the creation of obligations.
The Court was then referred to the Convention on the Recognition and Enforcement of Decisions Relating to Maintenance Obligations (The Hague, 2 October 1973), which entered into force in Australia on 1 February 2002. Although it had not been incorporated into Australian domestic law in at the time of the amendments, it was submitted (and I accept) that it can be relevant for the purpose of construing the intention of Parliament in enacting s 163B. Article 1 of that Convention reads as follows:
This Convention shall apply to a decision rendered by a judicial or administrative authority in a Contracting State in respect of a maintenance obligation arising from a family relationship, parentage, marriage or affinity…
Article 4:
A decision rendered in a Contracting State shall be recognised or enforced in another Contracting State if [a number of enumerated circumstances are satisfied].
Mr Borsky submitted that the Convention was consistent with the father’s argument that absent any such assessment or adjudication in the foreign jurisdiction, the Registrar’s assessment in Australia is not authorised.[31] Despite that, the position in the New Zealand Convention,[32] compliance with which was part of the impetus for implementing the legislative amendments, is that the assessment should take place where the carer is, not where the payer is (see Articles 5(2) and 5(3)). That is consistent with the interpretation urged by the Child Support Registrar.
[31] Transcript in confidence 16.11.11, Mr Borsky, 27.
[32] which is scheduled to the Child Support (Registration and Collection) (Overseas-related Maintenance Obligations) Regulations 2000
In relation to the Joint Select Committee on Certain Family Law Issues report, Mr Gray conceded that those recommendations did not make reference to expanding the scope of the Assessment Act in the way that the Child Support Registrar is now contending. However, he submitted that that was not determinative of the matter as that report was released in 1994 and it was open to Parliament to have in mind different subject matter by the time the Regulations were made in 2000. I agree with that submission, particularly, in light of my previous conclusion as to the intention of Parliament was as manifest in the Explanatory Memorandum.
Accordingly, although I have already concluded that it is not necessary to consider the extrinsic material in this case, in the event that I had concluded that it was, I would not accept the husband’s submissions that the extrinsic material demonstrated that the scope of s 163B is as he would have it construed.
Once that conclusion has been reached, it follows that reg 14 must be within the power of s 163B. Furthermore, as I have already concluded, reg 14 empowered the Child Support Registrar to make the assessment that it did against the father in this particular case.
Conclusion overall
For the above reasons, I conclude that the father’s child support liability assessment was validly made.
This determination means that the debt is recoverable at least to the extent that it comprises penalties which it is within the power of the Registrar to waive and the Registrar decides to do so. There are currently enforcement proceedings in Country E which are stayed but which will likely be reactivated. There have over the years been merits based reviews of the liability. It is unfortunate that the children did not receive the benefit of the monies on a periodic basis. However, I am not attracted to a scenario whereby non-payment is a basis for discharging a liability which is lawfully and regularly imposed as, I am satisfied, is the case here.
I certify that the preceding one hundred and thirty three (133) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Bennett delivered on 14 December 2012.
Associate:
Date: 14 December2012
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