Marley and Dell and Anor
[2017] FCCA 570
•24 March 2017
FEDERAL CIRCUIT COURT OF AUSTRALIA
| MARLEY & DELL & ANOR | [2017] FCCA 570 |
| Catchwords: CHILD SUPPORT – Interim hearing for summary dismissal – application for orders sought very general – effect to side-step administrative pathway – no merit in proceeding to trial. |
| Legislation: Australian Constitution, s.75(3) Child Support (Assessment) Act 1989 (Cth), ss.4(2)(c), 12(2AA), 74, 75(4), 80, 89, 95(6), 98(2), 107, 116, 117, 141(1)(n) Child Support Registration and Collection Act (Cth), ss.71A, 71C, 71D, 104, 104(9), 111B, 111C, 113, 113A |
| Cases cited: Bagala & Bagala [2009] FMCAfam 953 |
| Applicant: | MR MARLEY |
| First Respondent: | MS DELL |
| Second Respondent: | CHILD SUPPORT REGISTRAR |
| File Number: | MLC 6935 of 2009 |
| Judgment of: | Judge Curtain |
| Hearing date: | 26 July 2016 |
| Date of Last Submission: | 26 July 2016 |
| Delivered at: | Melbourne |
| Delivered on: | 24 March 2017 |
REPRESENTATION
| Solicitor Advocate for the Applicant: | Mr Bacon |
| Solicitors for the Applicant: | Manby and Scott |
| Counsel for the First Respondent: | Ms Devine |
| Solicitors for the First Respondent: | Victoria Legal Aid |
| Solicitor Advocate for the Second Respondent: | Ms Whittemore |
| Solicitors for the Second Respondent: | Mills Oakley |
ORDERS
The application filed 29 October 2015 in the Melbourne Magistrate’s Court and transferred to this Court be dismissed pursuant to:
(a)Section 17A of the Federal Circuit Court of Australia Act 1999 (Cth); and
(b)Rule 13.10(a), (b) and (c) Federal Circuit Court Rules 2001 (Cth)
Should any party seek an Order for costs they have liberty to contact my Associate for an appropriate hearing date.
IT IS NOTED that publication of this judgment under the pseudonym Marley & Dell & Anor is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT MELBOURNE |
MLC 6935 of 2009
| MR MARLEY |
Applicant
And
| MS DELL |
First Respondent
| CHILD SUPPORT REGISTRAR |
Second Respondent
REASONS FOR JUDGMENT
Introduction
This is a Child Support Application filed on the 29th October 2015, in the Melbourne Magistrate’s Court and transferred to this Court.
The Applicant is a Mr Marley (“(Mr Marley”) who was born on (omitted) 1970, and is therefore aged 46 years. He is a self-employed (occupation omitted) by occupation. The Respondent is a Ms Dell who was born on (omitted) 1965, and is aged 51 years. She is a (occupation omitted) by occupation.
They were married on (omitted) 1994, and separated in 2002. They have a child the subject of this application who was born on (omitted) 1998, named X.
The Applicant father seeks the following final orders:
1. That the Applicant be declared to not be properly liable to pay any further child support to the Respondent regarding the child, X born (omitted) 1998 (“the child”);
2. Any further order (whether under the Family Law Act, Child Support Assessment Act or otherwise) required to do justice between the parties; and
3. The Respondent pay the Applicant’s costs of and incidental to these proceedings.
These final orders sought by the Applicant are unusual by any measure, given they are very general and do not particularise the Court’s jurisdiction and power to make such orders.
I also note the Applicant father alleged he owed about $13,000.00 in child support arrears as at October 2015, whilst the Respondent mother says that sum currently is $30,607.00.
The Respondent mother in her response filed 22nd December 2015 in the Melbourne Magistrate’s Court, seeks a summary dismissal of the application.
The Child Support Registrar appears through a Ms Whittemore as Amicus Curiae to assist the court, and also seeks a summary dismissal of the application.
Background
The unchallenged Outline of Case of the Respondent mother detailed that after her separation the Respondent mother sought and obtained a child support assessment against the father for this child, to be collected by the Department of Human Services (Child Support).
In January 2008, a Registrar from the Department of Human Services (Child Support) made a Registrar Initiated Change of Assessment (RICA), stating that… “the child support assessment did not take into account the income, earning capacity, property and financial resources of the Applicant or the Respondent. The child support income amount for Mr Marley was set at $73,060.00 for the period 21st December 2007 to 28th February 2009.
The Applicant, Mr Marley, had been assessed to pay child support on a 2006/2007 taxable income of $34,622.00 with Ms Dell on a provisional 2006/2007 income of $21,718.00. The Registrar of the Department of Human Services (Child Support) then undertook a second RICA and the date of the decision was 29th May 2009. The outcome of this RICA was that Mr Marley’s taxable income for the period 22nd April 2009 to 31st December 2010 was set at $109,898.00.
In both RICA decisions, the Registrar found that Mr Marley’s taxable income did not reflect a true picture of a self-employed parent’s ability to provide child support for his or her child. In both decisions it was found that Mr Marley had more income and financial resources than were being taken into account in the assessments of child support. This was said to be unfair and gave rise to special circumstances to change the assessments.
The Respondent father made an application to change the assessment in special circumstances in 2015. The Notice of Decision was dated 15th April, 2015. The outcome of that application was that there was a special circumstance to change the assessment in that Mr Marley had more income and financial resources than was being taken into consideration for child support purposes. The decision was to change the assessment so that the adjusted taxable income of Mr Marley was to be set at $215,000.00 per annum for the period 10th February 2015 to the happening of a terminating event for X.
The Applicant then lodged an objection on 11th May 2015 to the Notice of Decision, but his objection was disallowed in full by the Department on 30th July 2015, and the earlier decision of 15th April 2015 was affirmed.
The application transferred from the Melbourne Magistrate’s Court came before me on 8th June 2016, when I made procedural orders and set down the hearing of the summary dismissal application before me on 29th July, 2016. I reserved my judgment on that day given the complexity of the matter and the need to read a number of cited authorities.
The delay in handing down this judgment is due to the heavy workload of this Court, the need to prioritise domestic violence and urgent parenting cases and in part, the delay in appointing further Judges.
The Applicant Father’s material:
The Applicant relies upon the following documents:
a)Initiating Application filed 29th October 2015 in the Melbourne Magistrate’s Court;
b)Affidavit in support sworn or affirmed on 28th October 2015; and
c)Financial Statement sworn or affirmed on 28th October 2015.
The Respondent Mother’s material:
The Respondent relies upon the following documents:
a)Response to Initiating Application filed on 22nd December 2015;
b)Affidavit in Support affirmed on 21st December 2015; and
c)Financial Statement affirmed on 21st January 2016.
Material relied upon by the Child Support Registrar
The Child Support Registrar relied upon a Written Outline prepared by Ms Whittemore and filed on 25th July 2016.
The Respondent Mother’s Case
She sought a summary dismissal of the application pursuant to s.17A of the Federal Circuit Court of Australia Act 1999.
She argued that the Court does not have the jurisdiction, or in the alternative if it does, it should not exercise the jurisdiction to grant the relief sought by the Applicant father because:
a)The Applicant has not exhausted his administrative options available to him under Part 6A of the Child Support (Assessment) Act 1989, which he is required to do before he brings proceedings in this Court.
It was argued that before approaching the Court for relief, the Applicant should have lodged and had heard an objection (which Mr Marley did on 11th May 2015), and if that failed (which it did on 30th July 2015), he then had to issue proceedings in the Administrative Appeals Tribunal, which he did not, although he continues to object to the 30th July, 2015 determination.
It was further argued that a matter can only proceed to this Court after the Administrative Appeals Tribunal decision has been determined and there is a question of law to be argued;
b)The Court, if it was to make a declaration, is limited to s. 106A and s.107 of the Child Support (Assessment) Act 1989, and should not consider s.16 of the Federal Circuit Court of Australia Act 1999. Counsel for the Respondent argued that if parliament had intended that a declaration of the style sought by the Applicant should properly be made, then it would have and should have included that in the Child Support (Assessment) Act, and it did not;
c)The child does live with the Respondent mother (unlike the Applicant father’s allegation that she resides elsewhere) and the argument that the Respondent mother does not… “need the funds which I am said to owe…” is no basis for a declaration. Need is not relevant to s.117 of the Child Support (Assessment) Act. Moreover, describing a payment of arrears as a “windfall” is inappropriate and irrelevant;
d)The Applicant father, if he is to seek anything, should seek a departure order and not a declaration. Counsel for the Respondent argued that the application for a declaration is simply a device seeking to get around the provisions of s.117 and an improper use of a declaration to try and avoid the internal review process and appeals process, relevant to the Administrative Appeals Tribunal; and
e)The final argument of the Respondent mother was to refer to public policy considerations. It was argued that to make the Applicant’s declaration would effectively open the floodgates to many such applications instead of using the internal review process and undermine the Child Support scheme. It is not the intention of parliament for a judicial process to be undertaken in these circumstances, but rather it should be an administrative process and the Courts should not be seen to encourage this style of application.
The Child Support Registrar’s Submissions
As well as relying on the filed written submissions, which I shall refer to further, the advocate appearing as amicus referred me to the case of Bagala & Bagala [2009] FMCAfam 953 and submitted the following:
“MS WHITTEMORE:
Your Honour, we say that there are no other proceedings pending to ground the Court’s jurisdiction to entertain departure to the extent one is sought which is not even clear, in our view, on a reading of the application, and, although enforcement proceedings have not yet been filed by the registrar in this case, it’s clear from the affidavit material filed by the applicant that the reasons that these proceedings were brought were in an attempt to circumvent any enforcement proceedings being filed, and I would support my learned friend’s submissions that the proper course would have been for the applicant to seek review of the tribunal in relation to the objection decision. It’s still open for him to seek to do that out of time.”
The relevant written submissions in relation to the application are not challenged directly in any submissions of the Applicant, which commence from paragraph 9. I shall refer to these further in my judgment.
Submissions of the Applicant
The Respondent filed an affidavit on 29th October 2015, sworn or affirmed on 28th October 2015, wherein he detailed the reasons for the orders sought in paragraphs 4 to 11 as follows:
“4. It will be see [sic] from SM2 that I currently have a child support debt. That debt is somewhere around $13,000 at the time of this affidavit’s preparation.
5. The respondent has asked the Agency to collect that debt on her behalf. The Agency has in turn instructed a firm of solicitors in Sydney (Mills Oakley Lawyers) to pursue me for that debt. Those solicitors in Sydney have recently (12 October 2015) written to me and told me that they are about to sue me for those arrears.
6. From my own readings, I understand that a Court exercising child support jurisdiction has discretion as to whether or not it enforces a child support debt.
7. When I recently raised this issue with my lawyers those lawyers confirmed this can be the situation.
8. My lawyers tell me that concept in this context is called “declaratory” relief. I have therefore instructed my lawyers to file this application seeking the orders that I have.
9. The reasons for my seeking those orders are as follows:
i.X no longer resides with the respondent. She moved out in early 2015 and resides with her half-sister and her family. The respondent no longer plays any meaningful role in X’s life, at least from a financial perspective. (As I noted earlier, Mr Bacon said this was a mistake);
ii.The respondent is not in need of the funds which I am said to owe. Not only is it the case that the respondent no longer has any role in caring for X, but her financial circumstances are very sound. I know from the documents sent to me by the Agency that her taxable income is around $35,000 pa. She has no dependants and lives a lifestyle which involves regularly waring out and living in a very comfortable home. Any moneys I now am required to pay to the respondent would be in the nature of a windfall gain to her. I shall file further and better material on this point once the respondent has filed a financial statement and I have been able to use the information in that to subpoena her financial records.
iii.The Agency has calculated my current child support in an entirely unfair way. Annexed hereto and marked M3 is a true copy of a change of assessment decision made in my case dated 15 April 2015. In many ways, my current child support problems arise from that decision (my emphasis). It will be seen from page 4 of that decision that the Agency based my child support on a much higher income than I actually earn due to me “being able to write off personal expenses against the business”. The Agency did not articulate which expenses it was referring to. In any event, it would quite contrary to taxation law and therefore illegal for me to do that and I confirm that I have not behaved in that way. The Agency also says (at page 5) that the depreciation expenses claimed by me on my business assets should partly be added back to my income. I say that is wrong. My business assets wear out and have to be replaced and that some allowance should be made for those costs. On page 5 the Agency also says that bad debts my business has (that is, money I have not received) should be counted as income I have received. I say that is contrary to logic and wrong.
10. To the extent that the Court says I should be liable to pay ongoing child support, I say that I should be allowed to pay part of whatever I have to pay not directly to the respondent, but to third party providers of support for X. For instance, I should be allowed to pay some funds to X’s carer and have that offset against any monies I may otherwise be required to pay to the respondent. It is X who currently needs my support, not the respondent. (Again, this was a factual mistake).
11. As regard the interim orders I seek, I say the material in the body of this affidavit shows a strong prima facie case for a substantial variation in either my child support per se or in the way it is paid. Any monies I now pay in child support would be difficult and costly for me to recover from the respondent if my substantive application were ultimately successful. In this regard I particularly note the attitude the Courts have in relation to ordering payees of child support such as the respondent to repay overpaid child support (that is, the Courts won’t do it).”
His initial argument was that where the Department of Human Services Child Support Agency (‘the Agency’) has written through their lawyers that they are about to “sue me” for the child support debt, his client is entitled then to… “bring declaratory and even injunctive proceedings to clarify the matter.” In my view the Applicant misrepresents the contents of the letter from Mills Oakley Lawyers dated 12th October 2015 addressed to Mr Marley. It was tendered by Mr Bacon and he says it justifies these style of proceedings being brought to this Court.
The relevant parts of that letter are as follows:
“We act for the Child Support Registrar.
Arrears of Child Support
We are instructed by our client that you currently owe the sum of $13,322.57 being $13,071.03 in child support arrears and $251.54 in late payment penalties.
Deadline for Payment
We advise that unless you pay the sum of $13,322.57, or otherwise make arrangements with our client to pay that amount by 26 October 2015, then we MAY (my emphasis) be instructed to commence legal proceedings against you in the Federal Circuit Court of Australia to recover the outstanding amount without further notice.
… …
How to resolve this matter
To resolve your outstanding debt you can make a payment directly to the Department of Human Services – Child Support (the “Department”).
IF YOU DISPUTE THE DEBT OWED, YOU MUST CONTACT THE DEPARTMENT OF HUMAN SERVICES TO DISCUSS THE OPTIONS AVAILABLE TO YOU. (my emphasis)
… …
WE URGE YOU TO FINALISE THIS MATTER WITHOUT THE NEED FOR LEGAL PROCEEDINGS TO BE ISSUED. WE REITERATE THAT FAILURE TO PAY OR TO CONTACT THE DEPARTMENT BEFORE 26 OCTOBER 2015 MAY RESULT IN LEGAL ACTION BEING TAKEN WITHOUT FURTHER NOTICE.” (my emphasis)
In my view this letter did not make a threat to Mr Marley that he WOULD be a Respondent to a recovery application but in fact, it MAY be filed. He was invited to contact the Department before that date if he disputed that he owed that debt, (which he clearly does, and he clearly did not take up that option).
Mr Bacon then referred to section 16 of the Federal Circuit Court of Australia Act 1999 which provides:
Declarations of right
(1) The Federal Circuit Court of Australia may, in relation to a matter in which it has original jurisdiction, make binding declarations of right, whether or not any consequential relief is or could be claimed.
(2) A proceeding is not open to objection on the ground that a declaratory order only is sought.
and he also referred to rule 17.05(b) of the Federal Circuit Court Rules 2001 which also provides:
Disposal of proceeding
The Court may, in relation to a decision of a question under this Part:
…
(b) give judgment, including a declaratory judgment;
…
Mr Bacon also referred to rule 25B.13(a) of the same Rules which provides:
General enforcement powers of Court
The Court may make any of the following orders:
(a) an order declaring the total amount owing under an obligation;
He submitted that this and other Courts have made orders of the type he was seeking in his application and referred to the case of Hewett & Johnston [2012] FMCAfam 1079 where orders were made, (not declarations), because the payer was found to have overpaid child support, (and had not intended these monies to be a gift).
In Hewett’s case, the Child Support Registrar had commenced enforcement proceedings that related to a clear overpayment. This case is distinguishable on its facts and law from this matter and has no relevance to this hearing.
The Respondent then argued that the agency has completely miscalculated his income and attributed to him an income vastly in excess of what his actual income is or was. Now that may or may not be the situation, but that in my view does not allow him to ignore the normal standard administrative steps that are laid out in the Child Support legislation and then come to this place to seek a vague order or declaration. I note that Mr Bacon conceded that his client did not… “go through the entire appeals process”.
I was then referred to the case of MNR & MEA [2004] FMCAfam 619, where a payer pursuant to a Child Support Agreement sought a declaration regarding the meaning of a particular expression in the parties’ Child Support Agreement. His Honour Justice Walters (then Federal Magistrate) said at page 17 of his judgment:
“93. That the core issue in the proceedings now before me is the interpretation of the relevant provisions of the Agreement is apparent when it is understood that the father is, in reality, endeavouring to prevent the CSA from enforcing the terms of the Agreement as it understands them to be. Although the father is the Applicant, he could just as easily have been the respondent to an enforcement application. In my opinion, the form of the application should not be determinative of the jurisdictional issue. The parties disagree as to the interpretation of the relevant clause. It must, therefore, be interpreted (or alternatively, the Court must attempt to interpret it).
94. In my opinion, the combined effect of s.95(6), s.98(2) and s.141(1)(n) of the Assessment Act is to grant to the Court jurisdiction to clarify the meaning of the Agreement -- by declaration, if necessary. Section 95 is relevant because the Agreement has been accepted by the Child Support Registrar, and because it includes provisions as to periodic and non-periodic payments (indeed, the two forms of payment are "alternatives" within the one set of provisions). Section 98 may be relevant because the father has applied to discharge or set aside the Agreement, and because the orders sought by the father can arguably be regarded as having the effect of discharging or varying the relevant provisions of the Agreement. Section 141(1)(n) is relevant because it empowers the Court to "make any other order that the Court considers appropriate" whilst it is exercising its other powers under the Assessment Act.”
The facts are not similar to this case. The parties sought clarification of an agreement. In my view, it does not assist the Respondent in this case, and is quite distinguishable.
Mr Bacon then cited the case of Wilton & Wilton [2016] FCCA 1123 but strangely only provided me with page 10 of that judgment of Her Honour Judge Williams.
I obtained a full copy of that case which was concerned with a costs application. The facts have no relevance to this case save a declaration was made as to adult child maintenance. This is not sought here and it does not support an argument for this Court to turn to section 16 of the Federal Circuit Court of Australia Act 1999.
Mr Bacon submitted his case was brought under… “the enforcement component”… of the Child Support…“universe”. He then cited a House of Lords case of Pharmaceutical Society of Great Britain and Another v Dickson (1970) Appeal Cases 403. At page 433 of the judgment of Lord Upjohn the following was highlighted:
“Then, it was said that in any event the action was premature. The objecting member must wait, apparently, until the council think fit to bring him before the statutory committee…
… …
The law is full of examples to show that a person whose freedom of activity is challenged can in a proper case have the issue determined so that he knows where he stands.
Thus, a trader who is said to require some licence to trade may come to the court and ask for a declaration to the contrary and not wait until he is prosecuted: Rossi v. Edinburgh Corporation [1905] A.C. 21. This principle is not confined to trade. A person whose freedom of action is challenged can always come to the court to have his rights and position clarified…”
I note that the following sentence was not highlighted which is equally relevant: …“subject always, of course, to the right of the Court to exercise its judicial discretion to refuse relief in the circumstances of the case.” Again, this case has little relevance and does not support the Applicant in ignoring the Child Support administrative process.
Mr Bacon then turned to Rule 17.05 of the Federal Circuit Court of Australia Rules 2001 which say:
Disposal of proceeding
The Court may, in relation to a decision of a question under this Part:
(a) dismiss the proceeding or any part of the proceeding; or
(b) give judgment, including a declaratory judgment; or
(c) make another order.
He then submitted that this rule should be read with s. 104(9) of the Child Support (Registration and Collection) Act 1988 and section 111(B)(1)(l) of the same Act:
SECTION 104
Jurisdiction of courts under Act
…
(9) The jurisdiction conferred on or invested in a court by this section is in addition to any jurisdiction conferred on or invested in the court apart from this section.
SECTION 111B
General powers of court
(1) A court's powers under this Act include the power to do all or any of the following:
… …
(l) make any other order (whether or not of the same kind as those referred to in paragraphs (a) to (k)) that the court considers appropriate;
There is no argument that the Court has the ability to make a declaration in the appropriate circumstances of the case. However, the dispute here is whether there is any merit in the orders sought in the application going to a full and final hearing or in fact whether there is no reasonable prospect of success.
The advocate solicitor argued that section 104(9) of the Child Support (Registration and Collection) Act 1988 “…brings in broader doctrines of equity and common law…” The difficulty with that argument is that the advocate should have read all of section 104 and in particular sub-section (1) which says that… “Jurisdiction is conferred on the Federal Circuit Court of Australia in relation to matters arising under this Act”. In my view the whole of s. 104 provides this Court with statutory jurisdiction as detailed under the relevant legislation and I disagree with Mr Bacon’s submission.
The solicitor advocate then returned to section 16 of the Federal Circuit Court of Australia Act 1999 and said that provided me with the power to make a declaration and… “the Act even says there doesn’t have to be further proceedings before the Court.”
I do not agree with that submission. If the Court in its discretion made a declaration for some purpose, then that purpose in my view must be in relation to some application or proceedings before the Court. In the circumstances, section 16 has to be read for this purpose with section 10(1) of the Act where it defines original jurisdiction.
The solicitor advocate referred me to the case of Patterson & Patterson & Anor [2016] FCCA 1555 which is a judgment of the former Judge Scarlett.
It was concerned with an Application in a Case brought by the payer who sought a declaration that…“the total amount by Mr Patterson to Ms Patterson in child support liability for [X] is nil.” The background was that originally there were proceedings before the Court where the payee of child support sought payment of arrears of over $4,000.00. The payer in his Response sought orders that the total amount owing in child support was nil, and sought the dismissal of the payee’s Application in a Case. Subsequently at the hearing these proceedings were resolved by means of consent orders which contained a declaration that the total amount owing by the payer to the payee for the child was nil. However, this order was based on a mistake made by the payee who had received certain advice from the Child Support Registrar that the arrears were nil when in fact the arrears were over $700.00 and the mother then sought to recover that. The father then brought this application arguing that the parties had compromised their proceedings and they were bound by that consent order.
As I said earlier, the dispute is not so much about the ability of the Court to make a declaration in the right circumstances and to exercise its discretion accordingly, but more in terms of whether it should do it in this case or whether it should be dismissed summarily.
In my view, in the matter of Patterson, Mr Bacon cannot rely on that to support his case as the Court found that the father’s claim and argument put forward had some force as the Child Support Registrar did not comply with a term of the consent orders declaring the child support debt at nil and continued not to follow that order. In those circumstances, the Judge did not believe it would be proper to make an order for summary dismissal.
Those circumstances are quite different to these and in my view Mr Bacon cannot rely on the case of Patterson. In fact, I do not agree with Mr Bacon when he said “…it was almost on all fours with this case.” The facts were quite different.
The solicitor advocate then turned to section 75(3) of the Constitution which he says is as follows:… “the original jurisdiction of the High Court in all matters in which the Commonwealth, or a person suing or being sued on behalf of the Commonwealth, is a party, the High Court shall have original jurisdiction”.
This is a very unusual argument and in my view has little merit. For a start, the Applicant is not being sued by the Commonwealth, he merely received a letter of demand and I am surprised that in these circumstances he relies on the Constitution.
Mr Bacon then referred me to the High Court of Luton v Lessels (2002) 210 CLR 333, at page 388 and 389. That case was a constitutional challenge as to whether child support was a tax and whether the regime of child support was constitutional. The High Court found it was constitutional and I see little relevance for this case. In fact, it appears to me that Mr Bacon is missing the point. As I said earlier, the Court does have the power to make a declaration in the appropriate circumstances. The real question is whether this is the appropriate circumstance.
He then referred to section 113 of Child Support (Registration and Collection) Act 1988 regarding the recovery of debts which in my view has no relevance to this case given the Commonwealth has not instituted enforcement proceedings, but merely sent a letter of demand. Finally, he referred to the case of Spencer v Commonwealth (2010) 241 CLR 118 where at page 132 it said …“summary process must not be used to stultify the development of the law.” I generally agree with this proposition but see it having little relevance to this case at this stage as the merits of this case will turn on its own facts.
Conclusion
The following sections of the Federal Circuit Court of Australia Act 1999 and Federal Circuit Court of Australia Rules 2001 apply to the issue of summary dismissal.
The power of this court to summarily dismiss an application is contained in section 17A of the Federal Circuit Court of Australia Act 1999 (Cth) (FCCA Act), which is in the following terms:
(1)The Federal Circuit Court of Australia may give judgment for one
party against another in relation to the whole or any part of a proceeding if:
(a) the first party is prosecuting the proceeding or that part of the proceeding; and
(b) the Court is satisfied that the other party has no reasonable prospect of successfully defending the proceeding or that part of the proceeding.
(2)The Federal Circuit Court of Australia may give judgment for one party against another in relation to the whole or any part of a proceeding if:
(a) the first party is defending the proceeding or that part of the proceeding; and
(b) the Court is satisfied that the other party has no reasonable prospect of successfully prosecuting the proceeding or that part of the proceeding.
(3)For the purposes of this section, a defence or a proceeding or part of a proceeding need not be:
(a) hopeless; or
(b) bound to fail;
for it to have no reasonable prospect of success.
(4)This section does not limit any powers that the Federal Circuit Court of Australia has apart this section.
In addition, Rule 13.10 of the Federal Circuit Court Rules 2001 (Cth) provides that:
The Court may order that a proceeding be stayed, or dismissed generally or in relation to any claim for relief in the proceeding, if the Court is satisfied that:
(a) the party prosecuting the proceeding or claim for relief has no reasonable prospect of successfully prosecuting the proceeding or claim; or
(b) the proceeding or claim for relief is frivolous or vexatious; or
(c) the proceeding or claim for relief is an abuse of the process of the Court.
I note that section 17A(3) of the FCCA Act clearly states that a proceeding does not have to be hopeless or bound to fail for it to have no reasonable prospects of success.
The purpose of s 17A has been discussed in Ejueyitsi v Bond University [2012] FMCA 1262 where Federal Magistrate Jarrett (as he then was) usefully summarised the approach to the provisions, saying:
“The approach taken in cases dealing with s31A of the Federal Court of Australia Act 1976 are generally seen as apposite in cases dealing with s17A of the Federal Magistrate’s Act 1999 [as it then was titled]: George v Fletcher (Trustee) FCAFC 53 and [75] and [105].
The words of s31A mean what they say and there is little point in attempting to formulate other phrases to encapsulate their meaning: Spencer v Commonwealth of Australia [2010] HCA 28; (2010) 241 CLR 118, per Hayne, Crennan, Kiefel and Bell J at [58]-[59]. The Court must embark upon a ‘practical judgment… as to whether the applicant has more than a ‘fanciful’ prospect of success’ per French CJ and Gummow J at [25]. What is required by the section is set out by the Hayne, Crennan, Kiefel and Bell JJ as follows as [60]:
‘…The Federal Court may exercise power under s31A if, and only if, satisfied that there is “no reasonable prospect” of success. Of course, it may readily be accepted that the power to dismiss an action summarily is not to be exercised lightly. But the elucidation of what amounts to “no reasonable prospect” can best proceed in the same way as content has been given, through a succession of decided cases, to other generally expressed statutory phrases, such as the phrase “just and equitable” when it is used to identify a ground for winding up a company. At this point in the development of the understanding of the expression and its application, it is sufficient, but important, to emphasise that the evident legislative purpose revealed by the text of the provision will be defeated if its application is read as confined to cases of a kind which fell within earlier, different, procedural regimes.’
In paragraph nine of his affidavit filed the 29th October 2015, and sworn or affirmed on the 28th October 2015, the Applicant says “…the reasons for seeking those orders (in the application) are as follows (in summary):
i)X no longer resides with the Respondent.
Mr Bacon during his submissions conceded this was a mistake and therefore no longer relevant.
ii)The Respondent is not in need of funds which I am said to owe.
I found this a strange argument given that Child Support is for the benefit of the child and not the payee. The administrative criteria laid down in the legislation is the test, and not simply based on the “needs” of the payee, although obviously her financial circumstances would not be ignored as both parents are expected to contribute financially to the support of their children. The Applicant did not lead any evidence or point to any evidence in support of this ground in support of his application. Overall, there is no merit in this argument.
iii)The agency has calculated my current child support in an entirely unfair way.
He went on to say that the Child Support Agency errors were:
1. They had based the child support on a much higher income than he actually earned;
2. That he was able to write off personal expenses against the business (that were not articulated by the child support agency);
3. Some depreciation expenses were partly added back by the child support agency which was unfair; and
4. The Child Support Agency included bad debts of his business as his income which he said was clearly wrong as he is yet to receive it.
Unfortunately, the Applicant produced no convincing evidence to substantiate these allegations. I read his affidavit and Financial Statements and listened carefully to his solicitor advocate, but I could not be satisfied that there was merit in his arguments. On the evidence produced to me at the hearing, I am satisfied that the Application has no reasonable prospect of success should it continue in this Court pursuant to s 17A of the Federal Circuit Court of Australia Act 1999 (Cth). Moreover, there are further reasons why the Application should be dismissed.
I note in the authority of Bagala & Bagala [2009] FMCAfam 953 (“Begala”). His Honour Judge Riethmuller (then Federal Magistrate) said at page four:
19. The objects of the Child Support (Assessment) Act 1989 are set out in s.4, and in particular, the relevant sections are ss.1 and 4(2)(c):
s.4 Objects of Act
(1) The principal object of this Act is to ensure that children receive a proper level of financial support from their parents.
(2) Particular objects of this Act include ensuring:
…
(c) that persons who provide ongoing daily care for children should be able to have the level of financial support to be provided for the children readily determined without the need to resort to court proceedings…
20. Section 4(2)(c) of the Act seeks to have child support matters settled without recourse to the Courts, thus avoiding needless expense for the parties and using court resources that might otherwise be utilised. There have been two sets of significant amendments to the scheme, each further advancing the object of providing an inexpensive administrative system for review of child support assessments. The first was the introduction of the departure process under part 6A of the Act, allowing for administrative departures from child support assessments. The second change was providing for objection rights following Part 6A decisions, and the third significant change provided for review by the SSAT. All of these changes were driven by considerations of access to justice, and the reality that the costs of legal proceedings are almost invariably greater than the amount of money in dispute in child support cases, placing great hardship on applicants and undue pressure on respondents to settle to avoid the disproportionate costs of litigation. Thus, a well-developed informal administrative system has been developed.
Under the hearing of ‘discretion’, His Honour went on to say the following at paragraph 23:
“The applicant is also circumventing the substance of the legislation scheme which provides for all departure decisions to be administrative and only to be heard in court on appeal from the SSAT or if other proceedings are pending. The legislature would not have expected the payee to be drawn into expensive litigation at this stage….the applicant has placed the payee in the position of facing significant legal costs or compromising her entitlements…”
I note that the Respondent relied on Bagala (above) and I note there is a clear Child Support administrative pathway created by the Federal Parliament that must be followed before anyone resorts to litigation in this place. The Applicant should have exhausted the administrative course before coming to this place. I accept the submission of the Respondent’s Counsel when she said… “the Application for a declaration, Your Honour, is simply seeking to get around the provisions of section 117 and the improper use of a declaration to effectively get out of using the internal review process and the appeals process to the AAT.” She earlier said… “the objection decision gives rise to a right of appeal to the AAT, and he has not exercised that right. That is where the matter should be. It should not be here whether or not it is out of time.”
In my view, this Application should also be dismissed pursuant to Rule 13.10(b) and (c) of the Federal Circuit Court Rules 2001 (Cth) as it would amount to an abuse of process for the Court to entertain this Application at this stage. It also appears to be frivolous or vexatious. I refer to the judgment of His Honour Judge Nicholls in Haque v Jabella Group Pty Ltd & Anor [2016] FCCA 147 where he considers Rule 13.10 and says:
59.The respondents’ rely on Batistatos v Roads and Traffic Authority of New South Wales [2006] HCA 27; (2006) 227 ALR 425; (2006) 80 ALJR 1100 to submit that the possible varieties of abuse of process “are not closed“. Further, as Gaudron J articulated in Ridgeway v R [1995] HCA 66; (1995) 129 ALR 41at [32]:
“The powers to prevent an abuse of process have traditionally been seen as including a power to stay proceedings instituted for an improper purpose (182), as well as proceedings that are ‘frivolous, vexatious or oppressive’ (183). This notwithstanding, there is no very precise notion of what is vexatious or oppressive or what otherwise constitutes an abuse of process. Indeed, the courts have resisted, and even warned against, laying down hard and fast definitions in that regard (184). That is necessarily so. Abuse of process cannot be restricted to ‘defined and closed categories’(185) because notions of justice and injustice, as well as other considerations that bear on public confidence in the administration of justice, must reflect contemporary values and, as well, take account of the circumstances of the case (186). That is not to say that the concept of ‘abuse of process’ is at large or, indeed, without meaning. As already indicated, it extends to proceedings that are instituted for an improper purpose (187) and it is clear that it extends to proceedings that are ‘seriously and unfairly burdensome, prejudicial or damaging’ (188) or ‘productive of serious and unjustified trouble and harassment’ (189).”
60.Further, that although the categories remain open, “abuses of procedure usually fall into three categories“ (Rogers v R (1994) 181 CLR 251 at 286):
“(1) the court’s procedures are invoked for an illegitimate purpose; (2) the use of the court’s procedures is unjustifiably oppressive to one of the parties; or (3) the use of the court’s procedures would bring the administration of justice into disrepute.”
61. Proceedings will be an abuse of process if they can be seen to be “foredoomed to fail or brought without reasonable grounds“ (Batistatos at [10], Walton v Gardiner [1993] HCA 77 ; (1993) 177 CLR 378 at 393 and Moran v Minister for Land & Water Conservation for the State of New South Wales [1999] FCA 1637 at [46]).
And at page 34 of the judgment:
“144. In r 13.10(b) of the FCC Rules, the terms “frivolous“ and “vexatious“ are used in the alternative (“or“), suggesting that either, if made out, is sufficient to grant summary dismissal. Subject of course, to the caution concerning the care to be taken in ordering that a proceeding be summarily dismissed.
145. In Pickering v Centrelink [2008] FCA 561 (“Pickering“), McKerracher J, relevantly explained, at [27]:
“In NBGZ v Minister for Immigration and Multicultural and Indigenous Affairs [2005] FCAFC 119 ; (2005) 143 FCR 434, although the majority (Allsop and Conti JJ) reached a different ultimate conclusion, there is, with respect, a helpful collection of authorities by Gray J on ‘frivolous’ at [16]–[22] from which it may be concluded that if, despite whatever attempts are made to discern a cause of action in a case, it is still not arguable, it is frivolous. A matter is also frivolous when it is without substance or groundless or fanciful: Bullen & Leake Precedents of Pleadings (1975) 12th ed, p 145. However such matters will only be struck out when it is so obviously frivolous that to put it forward, would be an abuse of the process of the court: Young v Holloway [1895] P 87. The words ‘frivolous’ or ‘vexatious’ are used either separately or in conjunction, or interchangeably with the expression ‘abuse of the process of the court’: Young v Holloway [1895] P 87 at 90–91.”
And at page 38 of the judgment:
“152. In relation to vexatious proceedings, Rana v Commonwealth [2013] FCA 189 at [42]–[43] per Mansfield J is of assistance:[42] Proceedings have been held to be ‘vexatious’ in the past if they are instituted with the intention of annoying or embarrassing the person against whom they are brought; they are brought for collateral purposes, and are not for the purpose of having the court adjudicate on the issues to which they give rise; irrespective of the motive of the litigant, they are so obviously untenable or manifestly groundless as to be utterly hopeless; or they are scandalous, disclose no reasonable cause of action, are oppressive, are embarrassing, or are an abuse of the process of the court: see generally Attorney-General v Wentworth(1988) 14 NSWLR 481 .
[43] It has also been pointed out that ‘vexatiousness’ is a quality of the proceeding rather than a litigant’s intention so that the ‘question is not whether they have been instituted vexatiously but whether the legal proceedings are in fact vexatious’: Re Vernazza [1960] 1 QB 197 at 208.”
I also accept the submissions put by the ‘amicus’ appearing for the Child Support Registrar which in summary are as follows:
“9. First, the applicant fails to identify the jurisdictional basis for the relief sought, nor is any source of power identifiable by reference to the orders sought in the application. Those orders are expressed in broad terms and are as follows:
a. The applicant be declared to not be properly liable to pay any further child support to the respondent regarding the child X (born (omitted) 1998);
b. Any further order [whether under the Family Law Act, Child Support Assessment Act or otherwise] required to do justice between the parties.
c. The respondent pay the applicant’s costs of and incidental to these proceedings.
10. Even accepting that the FCCA has a broad power to grant declaratory relief under s 16 of the FCCA Act that power is not unlimited. Here a distinction must be drawn between jurisdiction and power. Jurisdiction refers to the authority of a court to adjudicate on a matter. It does not include the power to make orders and grant relief. In Harris v Caladine, Toohey J explained that:
Jurisdiction is the authority which a court has to decide the range of matters that can be litigated before it; in exercise of that jurisdiction a court has powers expressly or impliedly conferred by the legislation governing the court and “such powers as are incidental and necessary to the exercise of the jurisdiction or the powers so conferred”.
11. A helpful analogy may be drawn with s 23 of the Federal Court of Australia Act 1975 (Cth), which states:
The Court has power, in relation to matters in which it has jurisdiction, to make orders of such kinds, including interlocutory orders….as the Court thinks appropriate.
12. As Deane J said in Jackson v Sterling Industries Ltd (1987) 162 CLR 612 at 622:
Wide though that power is, it is subject to both jurisdictional and other limits. It exists only ‘in relation to matters’ in respect of which jurisdiction has been conferred upon the Federal Court. Even in relation to such matters, the power is restricted to the making of the ‘kinds’ of order, whether final or interlocutory, which are capable of properly being seen as ‘appropriate’ to be made by the Federal Court in the exercise of its jurisdiction.
13. As specifically stated in s 16 of the FCCA Act, the Court may only make a declaration “in relation to a matter in which it has original jurisdiction”. It is uncontroversial that the FCCA’s jurisdiction is conferred by statute: s 10 of the Federal Circuit Court of Australia Act 2001 (Cth). Accordingly, in order to ground the Court’s power to make the declaration sought in order 1, the applicant would need to point to a source of jurisdiction in legislation for the Court to make the order he seeks. The application currently fails to particularise the basis for that jurisdiction.”
She also submitted the following which I accept:
“A court ordered departure application?
19. If by allegation 15(b) the application before the Court is for court ordered departure under s 116 of the Assessment Act, then we again fail to see how the Court’s jurisdiction is enlivened in the circumstances of this case. In order to enliven the court’s jurisdiction under s 116, the applicant must:
a. Be a party to an application pending in a court having jurisdiction under the Assessment Act, and
b. Satisfy the court that it is in the interests of the parents for the court to consider whether the departure order should be made: s 116(1)(b).
20. The applicant has no other proceedings pending before any other court. Accordingly, s 116(1)(b) is not satisfied so as to enliven the FCCA’s jurisdiction.
21. The proper course would have been for the applicant to object to the Registrar’s change of assessment decision dated 15 April 2015 (applicant’s affidavit at annexure M3) and then apply for merits review to the AAT if he remained dissatisfied. The AAT’s decision would then be amenable to judicial review. In short, there were administrative options available to the applicant to challenge the decision that is the subject of the present application before the court but he has failed to pursue them. It is also open to him to attempt to engage those administrative options out of time but it is not open to him to seek relief in the FCCA, which lacks jurisdiction to grant the relief he purportedly seeks pursuant to s 116(1)(b) of the Assessment Act.
… …
Any argument based on a discretion to enforce
24. To the extent that the applicant seeks to claim that the Court has some jurisdiction to make an order declaring he is not properly liable to pay any further child support to the respondent based on a discretion to enforce, that claim cannot be accepted in the circumstances of this case.
25. Section 105 of the Family Law Act 1975 (Cth) (FL Act) provides that a court may enforce “all decrees made under this Act”. A “decree” is defined in s 4 of the FL Act as a “decree, judgment or order”. There is simply no decree in this matter capable of enlivening the Court’s discretion to enforce in s 105 of the FL Act.
26. Nor is rule 25B.13(g) a basis of jurisdiction to order a permanent stay on enforcement. The Registrar again refers to the distinction as between jurisdiction and power. The powers of the court outlined in rule 25B.13 relate to orders that the court may make in the context of the exercise of its jurisdiction in enforcement proceedings, such as under s 113 or s 113A of the Registration and Collection Act. It is not an independent source of jurisdiction for the Court to make the order the applicant seeks.”
Finally, I also dismiss the Application because I accept the argument of the Respondent when it was put that it is not in the public interest to encourage this style of application at this stage of Child Support disputation. Counsel for the Respondent submitted… “If Your Honour was to be satisfied that you had jurisdictional power to make a declaration as sought, which is that he not be properly liable, that effect opens the floodgates to many such applications: when people say they shouldn’t be properly liable, they will come straight to this Court to seek a declaration instead of using the internal review process which is completely against, in my submission, the intentions of Parliament that the internal review process should be an administrative one and should not be subject at first instance to judicial review…” In my view, this argument has substance and I would have to be very careful not to encourage a floodgate of applications arriving at this Court seeking to circumvent the normal and proper procedure.
I referred earlier to the letter from the solicitors Mills Oakley Lawyers dated the 12th October 2015 addressed to the Applicant on behalf of the Child Support Agency. The original was produced by the Applicant and it was clear that he had an opportunity at that time:
a)to contact the Department of Health & Human Services to discuss the arrears and negotiate possible common ground and settlement; and/or
b)to continue along the administrative pathway and appeal the decision of the Child Support Agency, and if out of time, to seek the necessary leave.
This letter was sensible and appropriate in offering to undertake a form of dispute resolution procedure, which the Applicant clearly ignored, and which in my opinion flew in the face of objects (2) and (4) of Rule 1.03 of the Federal Circuit Court Rules 2001 (Cth) which provide:
(2) In accordance with the objects of the Act, the Rules aim to help the Court:
* to operate as informally as possible
* to use streamlined processes
* to encourage the use of appropriate dispute resolution procedures.
(4) To assist the Court, the parties must:
* avoid undue delay, expense and technicality
* consider options for primary dispute resolution as early as possible (my emphasis).
This course should have been followed by the Applicant before he initiated these proceedings. This is another reason to dismiss his Application.
I certify that the preceding seventy (70) paragraphs are a true copy of the reasons for judgment of Judge Curtain
Date: 21 March 2017
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