MacGrath & MacGrath
[2022] FedCFamC1F 212
•5 April 2022
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
MacGrath & MacGrath [2022] FedCFamC1F 212
File number(s): SYC 4366 of 2020 Judgment of: HENDERSON J Date of judgment: 5 April 2022 Catchwords: FAMILY LAW – PRACTICE AND PROCEDURE – Stay of Proceedings – Where the respondent mother filed a special circumstances application with C Services for a change of assessment requiring the applicant to pay 50% of one of the parties children’s private school fees – Where the father sought an urgent stay of that on the basis that it would be an abuse of process as the mother has filed an application for a departure order under s 116 and 124 of the Child Support (Assessment) Act 1989 (Cth) in this Court as part of her final orders sought –– Finding that the child support proceedings were not an abuse of process – Stay application dismissed.
FAMILY LAW – JURISDICTION – Finding that this Court has jurisdiction to entertain this application – Cirillo & Cirillo (No 4) [2022] FedCFamC1F 208 applied.
Legislation: Child Support (Registration and Collection) Act 1988 (Cth) s 111C(3).
Child Support (Assessment) Act 1989 (Cth) ss 116, 124.
Family Law Act 1975 (Cth) s 79A
Cases cited: Aldridge & Keaton [2009] FamCAFC 106.
Alexander & Cambridge Credit Corp (1985) 2 NSWLR 685; (1985) 10 ACLR 42.
Amery & Kedrina (2021) FLC 94-023.
Cameos v Blizzard [2018] FamCA 811.
Cirillo & Cirillo (No 4) [2022] FedCFamC1F 208
Clemett & Clemett (1981) FLC 91-013; [1980] FamCA 90.
Gallagher v Child Support Registrar [2021] FCCA 462.
In re MAJORY, A Debtor. Ex parte The Debtor V F.A. Dumont Ltd [1995] Ch 600; [1995] 2 WLR 1035.
Jennings Construction Limited v Burgundy Royale Investments Pty Ltd 161 CLR 681; (1986) 61 ALJR 102.
Jones v Child Support Registrar [2007] FCA 1732.
The Commissioner of Taxation of the Commonwealth of Australia v Myer Emporium Ltd (1986) 160 CLR 220; [1986] HCA 13.
Trahn & Long (No.2) [2008] FamCAFC 194.
Division: Division 1 First Instance Number of paragraphs: 45 Date of hearing: 31 March 2022 Place: Sydney Counsel for the Applicant: Mr Gardiner Solicitor for the Applicant: Dorter Family Lawyers & Mediators Counsel for the Respondent: Mr Ahmad Solicitor for the Respondent: Broun Abrahams Burreket ORDERS
SYC 4366 of 2020 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MR MACGRATH
Applicant
AND: MS MACGRATH
Respondent
ORDER MADE BY:
HENDERSON J
DATE OF ORDER:
5 APRIL 2022
THE COURT ORDERS THAT:
1.The Application in a Proceeding filed by the applicant on 23 March 2022 is dismissed.
2.The applicant is granted leave to provide all material he has discovered and subpoenaed in this Court to C Services for prosecution of his response to the respondent’s Application to Change Assessment in Special Circumstances filed 22 December 2021.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under the pseudonym MacGrath & MacGrath is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
This is an application by the applicant, Mr MacGrath born in 1974 (“the husband”), for a stay of an application commenced by his former wife, Ms MacGrath born in 1973 (“the wife”) to change the current child support assessment due to special circumstances. The parties have two children, X born in 2008 and Y born in 2007, collectively referred to as (“the children”).
The application by the wife was lodged with C Services (“the Agency”) on 22 December 2021 and seeks the husband pay 50% of X’s tuition fees at B School.
The application sought by the wife is brought under the Child Support (Registration and Collection) Act 1988 (Cth) (“the CSRCA”). The husband seeks a stay under s 111C (3) of the CSRCA which section is as follows:
111C Stay orders
(1) This section applies if a proceeding has been instituted:
(a) in a court having jurisdiction under this Act; or
(b) before the Registrar under Part VII; or
(c) before the AAT for an AAT first review; or
(d) under Part 6A or 7 of the Assessment Act.
(2) A party to the proceeding may, subject to the Family Law Act 1975:
(a) in the case of a proceeding instituted in a court—apply to that court for an order under this section; or
(b) otherwise—apply to a court having jurisdiction under this Act for an order under this section.
(3) Pending the hearing and final determination of the proceeding, the court may make such orders as the court considers appropriate staying or otherwise affecting the operation or implementation of the Assessment Act and this Act if the court considers that it is desirable to do so, taking into account the interests of the persons who may be affected by the outcome of the proceeding.
(4) The court may, by order, vary or revoke an order made under subsection (3).
(5) An order under subsection (3):
(a) is subject to such terms and conditions as are specified in the order; and
(b) operates for:
(i) such period as is specified in the order; or
(ii) if no period is specified—until a decision of the court, the Registrar or the AAT determining the proceeding becomes final.
The proceedings were transferred to this Court from Division 2 of the Federal Circuit and Family Court of Australia (“FCFCOA”) on 25 March 2022 by the Chief Justice. The husband’s urgent stay application was filed on 23 March 2022 and it was listed for an urgent hearing on 31 March 2022. The urgency related to the husband being notified on 28 March 2022 he had until 6 April 2022 to file his material in response to the wife’s Application to Change Assessment in Special Circumstances (“wife’s Special Circumstances Application”). On these facts, and consistent with Aldridge J’s judgment in Cirillo & Cirillo (No 4) [2022] FedCFamC1F 208, I find I have jurisdiction to hear and determine this urgent application for a stay.
Mr Gardiner of Counsel represented the husband, and Mr Ahmad of Counsel the wife.
I read the following.
For the husband:
(a)Application in a Proceeding filed 28 March 2022;
(b)Affidavit of the husband filed on 28 March 2022, together with annexures;
(c)Financial Statement filed 13 October 2021;
(d)Affidavit of Service filed 30 March 2022;
(e)Counsel's Case Outline;
(f)Proposed Minute of Order; and
(g)Husband’s Tender Bundle.
For the wife:
(a)Response to Application in a Proceeding filed 30 March 2022;
(b)Affidavit of the wife filed 30 March 2022 and 30 April 2021, together with annexures;
(c)Wife’s Tender Bundle; and
(d)Counsel's Case Outline.
The current proceedings now on foot in this Court are the father’s Initiating Application for parenting and property orders filed 2 July 2020, further amended on 8 February 2022, the wife’s Response to an Initiating Application filed 17 July 2020, further amended on 23 March 2022 seeking parenting orders, child support departure orders pursuant to ss 116 and 124 of the Child Support (Assessment) Act 1989 (Cth) (“the CSA”). The departure sought is that the husband pay one half of X’s school fees at B School, 50% of the premiums necessary to maintain private health insurance for both children, 50% of all gap medical expenses for the children, 50% of additional tuition costs for X attending B School, and 50% of extracurricular activities for each child, as agreed in writing between the parents. There are other orders sought such as overseas travel and holding of the children’s passports.
On 28 July 2021 the husband filed a Reply seeking that the departure orders be dismissed.
On 29 September 2021 the father amended his initiating application seeking the property orders the parties entered into by consent on 10 September 2019 be set aside pursuant to
s 79A of the Family Law Act 1975 (Cth)(“the Act”).The husband seeks a stay of the wife’s Special Circumstances Application given there are proceedings on foot for a child support departure order in relation to the issue of the payment by him, 50% of Y’s tuition fees at B School.
The husband asserts that the wife’s Special Circumstances Application in the Agency amounts to an abuse of process, will significantly prejudice him, and that her case is not of any merit as he simply does not have sufficient income to pay 50% of his son school fees and that there is no urgency for the school fees to be paid given they have been paid by the wife’s parents and there are no fees outstanding at this time, and thus no prejudice to the wife in that sense. Further the husband asserts if there was an urgency, the mother could seek an interim hearing in relation to her departure application and she has not done this.
Additionally, the husband argues that he has been significantly prejudiced in meeting the wife’s applications to the Agency in the past, and with this current application he will incur significant and additional legal costs to that which he has already incurred in responding to this new application. He argues that these costs are a significant prejudice to him in the prosecution of his substantive application before this Court and that given there is no prejudice to the wife in the child support proceedings being stayed, it is both in the interest of justice and having regard to the balance of convenience to the parties, the proceedings ought to be stayed.
It is correct that it may be a period of years from the original filing date before the totality of the proceedings before the FCFCOA are dealt with to finality, and that the wife’s standalone application before the Agency will be dealt with in a matter of months. The husband is to file his response to the wife’s Special Circumstances Application by 6 April 2022, hence the urgency.
The wife’s case is that the child support proceedings are not an abuse of process, as the departure application filed by her seeks more than payment of school fees and seeks additional ongoing costs for both children be shared between she and husband. In addition, the assertion that the husband has expended significant costs in his defence of various child support assessment departures is not sustained on the evidence and the costs that he has incurred are in large part due to his gathering evidence to support his application that the current property orders be set aside pursuant to s 79A of the Act rather than child support issues.
There is a long line of authority in relation to the principles surrounding an application for a stay of orders in relation to property and parenting matters as follows Trahn & Long (No.2)[1], Alexander & Cambridge Credit Corp[2], The Commissioner of Taxation of the Commonwealth of Australia v Myer Emporium Ltd[3], Jennings Construction Limited v Burgundy Royale Investments Pty Ltd[4], Clemett & Clemett[5]. This is an area of law well settled and traversed for hundreds of years in a common law country such as ours.
[1][2008] FamCAFC 194.
[2] (1985) 2 NSWLR 685; (1985) 10 ACLR 42.
[3] (1986) 160 CLR 220; [1986] HCA 13.
[4] 161 CLR 681; (1986) 61 ALJR 102.
[5] (1981) FLC 91-013; [1980] FamCA 90.
A leading decision in this jurisdiction on such matters is Aldridge & Keaton (“Aldridge”)[6], a Full Court decision, particularly in relation to parenting matters and where the stay is sought upon a filing of an appeal.
[6] [2009] FamCAFC 106.
In the decision of Aldridge[7], their Honours set out clearly the principles in a stay application. The statement of the principle of the law is set out in paragraph 18, and is as follows:
[7] Above, note 6.
…The authorities stress the discretionary nature of the application which should be determined on its merits. Principles relevant to this matter include the following:
*The onus to establish a proper basis for the stay is on the applicant for the stay. However it is not necessary for the applicant to demonstrate any "special" or "exceptional" circumstances;
*a person who has obtained a judgment is entitled to the benefit of that judgment;
*a person who has obtained a judgment is entitled to presume the judgment is correct;
*the mere filing of an appeal is insufficient to grant a stay;
*the bona fides of the appeal
* a stay may be granted on terms that are fair to all parties — this may involve a court weighing the balance of convenience and the competing rights of the parties;
* a weighing of the risk that an appeal may be rendered nugatory if a stay is not granted — this will be a substantial factor in determining whether it will be appropriate to grant a stay;
* some preliminary assessment of the strength of the proposed appeal — whether the appellant has an arguable case;
* the desirability of limiting the frequency of any change in a child's living arrangements;
* the period of time in which the appeal can be heard and whether existing satisfactory arrangements may support the granting of the stay for a short period of time.
…
In relation to a stay under s 111C(3) of the CSRCA, the exercise is also discretionary, and as Emmett J considered in Jones v Child Support Registrar[8] at paragraph 9, in the context of an application to stay the departure prohibition order, the Court:
…would need to be satisfied there was a serious question to be tried on the appeal, putting it another way, that there is at least someone arguable basis for suggesting that the appeal might succeed. Secondly, it would be necessary for the Court to have regard to the balance of convenience…of the persons who may be affected by the outcome of the proceedings.
[8] [2007] FCA 1732.
There is a long line of authority in relation to matters where it is alleged there is an abuse of process. To that end I was referred to two decisions by Mr Gardiner on behalf of the husband. The first was a Chancery decision of In re MAJORY, A Debtor. Ex parte The Debtor V F.A. Dumont Ltd.[9], and more recently, a decision of the Full Court of the then Family Court of Australia in Amery & Kedrina (“Amery”)[10].
[9][1995] Ch 600; [1995] 2 WLR 1035.
[10] (2021) FLC 94-023.
In relation to the abuse of process argument, this is not a matter where the wife has filed multiple applications seeking relief in this Court as in Amery. In this matter the wife is engaged in an administrative process under the CSA and concomitantly has an application dealing with child support issues on foot in the FCFCOA. The question their Honours posed in Amery was “whether to allow [the wife’s second application] to continue would involve injustice or unfairness to the other party” (at paragraph 124). Their Honours found that
… [the primary judge’s] conclusion “as to the effect of the delay on the husband’s capacity to defend the wife’s case…were entirely open on the evidence. So too, the conclusion that to permit the wife’s application to proceed would amount to an abuse of process in that matter” (at [124])
In that matter the wife’s application to set aside property orders pursuant to s 79A of the Act was filed in 2018 in respect of consent orders entered into in 2005.
Delay is not a relevant factor in this matter, nor is the filing of multiple applications seeking similar relief.
Secondly, as pointed out by Mr Ahmad on behalf of the wife, the wife has commenced a proceeding in a tribunal which has primary jurisdiction and responsibility in relation to child support issues between parents. Consistent with the decision of Cronin J in
Cameos v Blizzard,[11] where his Honour found that:The whole tenor of the legislation is to deal with assessments wherever possible by administrative measures. That can be seen in the objects of the Child Support (Assessment) Act 1989 (Cth) in s 4… However, since 1995, the Child Support (Assessment) Act 1989 (Cth) has removed references to custodial parents and made parents, or more importantly, to use the language of the Family Law Act 1975 (Cth), “eligible carer(s)”, the basis for the assessment system (see s 7B of the Child Support (Assessment) Act 1989 (Cth)). This was to ensure that children were cared for by both parents regardless of any dispute between them (at [21]).
[11] [2018] FamCA 811.
Similarly in the decision of Gallagher v Child Support Registrar[12] the Court reiterated the decision of Gleeson CJ in Luton v Lessels[13]
The principal objects of the Registration and Collection Act (sic) are to ensure that children receive from their parents the financial support that the parents are liable to provide, and that periodic amounts payable by parents towards the maintenance of their children are paid on a regular and timely basis (s 3). Those objects are achieved by a system of registration and enforcement. The scheme is available to a carer who wishes to take advantage of it (at [20]).
[12] [2021] FCCA 462.
[13] [2002] 210 CLR 333; HCA 13, at 340-341.
There is no doubt that it is a thrust of the legislation and intention of the Parliament that parties will exhaust remedies under the child support legislation prior to engaging the jurisdiction of this Court to entertain such applications as departures or appeals. Where there are proceedings on foot in this Court, parties may join child support issues to those proceedings to avoid the determination of issues in matters which have a similar substratum of facts being dealt with in two separate Courts and this is what the husband asserts is the abuse of process and why a stay ought to be granted.
The husband asserts the abuse of process by the wife is seeking a special assessment in 2022 from the Agency when she has a departure application on foot in this Court seeking in part, the same relief.
On the facts in this matter, I do not see that the mother, by engaging the administrative procedures under the child support legislation is engaging in abuse of process of this Court and I reject that submission on behalf of the husband for the following.
It is not known when the wife’s application for final departure orders under the CSA will be heard. The mother seeks final orders and rather than engaging in an interim hearing on this issue in this Court, the mother has chosen in 2022 to engage in the administrative process set up specifically to deal with such matters to ensure certainty for her son’s education.
Whether the mother engaged in seeking an interim hearing or engaged in the administrative process specifically set up to deal with such matters, the father is required to respond, and will incur legal costs in either event, and that argument in support of the stay application was specious.
The mother’s departure application seeks a broader range of issues to be determined than does her special circumstance’s application and for these reasons I reject the submission that the wife’s CSRCA application is an abuse of process.
Dealing now with the principles relating to a stay application. Although many of the principles which are relevant to a stay application of a judgement are not strictly relevant to this stay application, given the stay does not relate to a judgement or an appeal the important principles distilled from the authorities are:
(e)the application before me is discretionary;
(f)the husband has the onus to establish a proper basis to stay the proceedings;
(g)I must make an assessment of his bona fides in bringing his application;
(h)any stay may be granted on terms;
(i)an assessment of the strength of the wife’s case in relation to the child support issues
(j)the time before proceedings in this Court would be dealt with and when those proceedings will be dealt with in the child support under the child support legislation resume; and
(k)balancing the competing rights of the parties including any hardship or prejudice that may be suffered and having regard to the balance of convenience of all parties involved in the proceedings.
I do not see on the facts before me that the husband has established a proper basis to stay the child support proceedings. The proceedings he seeks to stay relates to the payment by him of 50% of his son’s school fees and nothing else. The wife’s departure application in this Court is far broader than this and includes equal payment for both children of private medical costs and agreed extracurricular activities, together with equal payment of X’s school fees and other educational costs. Thus the departure application is far broader than the wife’s Special Circumstances Application filed under the child support legislation.
The prejudice the husband asserts in not staying the wife’s Special Circumstances Application is that he will be required to prepare for a hearing in that jurisdiction forthwith. However, he has known of the application for some time and has chosen only now, when he was required to respond to seek a stay.
The Court will permit him to provide all material he has discovered and subpoenaed in this Court at the tribunal hearing. Thus the costs he has incurred in obtaining this information in answer to the wife’s application for departure under s 116 and 124 of the CSA, and to support his s 79A application, will not be thrown away.
Further, the husband brought an appeal under child support legislation in the Administrative Appeal Tribunal (“the Tribunal”) on this issue. The decision, handed down on 9 December 2020, was marked Annexure C to the husband’s affidavit filed 23 March 2022, and the finding was that the husband was not required to contribute towards the cost of his son’s education. This is a period of less than two years and given the husband was the moving party in that appeal it is anticipated he would only require to update the information that he had available to him at the time in response to the wife’s Special Circumstances Application.
Additionally at paragraph 58 of the Tribunal decision is as follows
It appears that the vexed question of who will pay for their son’s education will come up again at the end of 2022 when the prepayment period expires. The Tribunal understands that [the husband] and [the wife] are discussing this issue in their parenting proceedings and it may be resolved. If not, it will be a matter that the Child Support Registrar will need to turn their mind to for 2023. As this is the case, the Tribunal was satisfied that the decision should run until 31 December 2022, to give the parents some certainty and to allow any further issues in relation to financial resources and private education to be re-examined at the correct time.
The wife alleges the Tribunal made an error in that school fees were prepaid to the end of 2021 not 2022, and thus the Child Support Registrar would need to turn their mind to this vexed issue in 2022 and not 2023 and that this is the course she has adopted. At the date of the decision in the Tribunal, the wife had not filed an application for child support departure orders in this Court.
The wife is seeking a departure order as a final order and the final hearing in this matter is unlikely to be heard within the next 12 months, and it may not be until sometime in 2023 before a final hearing. Thus all the wife is doing is seeking in 2022, is the most expeditious hearing in the most appropriate forum on this issue to give certainty to her and her son of his schooling.
If I stay the wife’s child support application ultimately the husband has to prepare for her departure application at the final hearing. Thus, in this regard there is little prejudice to him in dealing with that issue now in the Tribunal or at a final hearing in this Court. A decision of the Tribunal does not necessarily bind a future decision of a Judge of this Court in any event, particularly if facts and circumstances have changed as they may do by the time this matter is finally heard, although the decision may be persuasive.
If the wife is successful in her application before the Agency, the husband can appeal that decision and/or depending on the outcome of appeal to the Tribunal, seek his own departure application or appeal at the final hearing in this Court.
If the wife is unsuccessful in her application before the Agency she may appeal the decision in the Tribunal however, a negative decision for her may have a significant impact on the success or otherwise of the departure application she is pursuing in this Court and for which the husband has already prepared a large proportion of his case and has the relevant evidence available. This may be a distinct advantage to the husband.
Given the wife has available to her the administrative processes under the child support legislation to seek what she says is a proper level of support by the father of her children, which application will be heard and decided within a matter of months, and for which the husband has already obtained relevant and important information by way of discovery and subpoena processes in this Court which he can use in any tribunal hearing, I do not see that the prejudice to him of not staying the mother’s application outweighs her right to pursue administrative processes available to all parents in Australia in a timely and cost-effective manner.
This is particularly relevant given it is the primary purpose of the Agency to deal with these disputes in the most cost-effective and timely way for children and parties which is an administrative process.
I note that the parties affected by this matter are the wife and husband, the wife’s parents and X. The wife’s parents have thus far provided money to pay for the education of the parties’ son X and daughter Y at private schools. A decision under the child support legislation is relevant to them for if the wife is successful they will no longer be paying 100% of their grandsons’ school fees but 50% of those fees. If unsuccessful, it will be a matter for the mother and her parents to determine into the future. It is in X’s best interests to have this issue determined sooner rather than later given he is in Year 10 and in Year 11 will commence the Higher School Certificate Programme.
Further, I cannot say that the wife’s Special Circumstances Application is without merit.
For all those reasons the stay application filed by the husband is dismissed.
I certify that the preceding forty-five (45) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Henderson. Associate:
Dated: 5 April 2022
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