MAV & NTV
[2005] FMCAfam 261
•31 May 2005
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| MAV & NTV | [2005] FMCAfam 261 |
| CHILD SUPPORT – Administrative assessment – departure application – high costs to enable contact – section 117(2)(b)(i)(A). |
| Child Support (Assessment) Act 1989 Family Law Act 1975 |
| B v S [2003] FMCAfam 248 Phillipe and Philippe (1978) FLC 90-433 |
| Applicant: | MAV |
| Respondent: | NTV |
| File Number: | PAM 6014 of 2004 |
| Judgment of: | Sexton FM |
| Hearing date: | 18 May 2005 |
| Delivered at: | Parramatta |
| Delivered on: | 31 May 2005 |
REPRESENTATION
| Counsel for the Applicant: | Mr G Thistleton |
| Solicitors for the Applicant: | Watts McCray |
| Counsel for the Respondent: | Ms M De Vere |
| Solicitors for the Respondent: | Coleman & Greig |
ORDERS
That the application for departure from child support assessments filed by the father on 2 December 2004 be dismissed.
All outstanding applications otherwise be dismissed and the matter be removed from the Pending Cases List awaiting finalisation.
The solicitor who issued any subpoena collect that subpoenaed material and return it to the owner within seven (7) days.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT PARRAMATTA |
PAM 6014 of 2004
| MAV |
Applicant
And
| NTV |
Respondent
REASONS FOR JUDGMENT
Introduction
These are proceedings for a child support departure order.
The applicant father sought the following orders in his application filed 2 December 2004:
a)That there be a departure from the Child Support Assessment for the period from 1 July 2001 to 30 September 2002 from $26,199 to nil;
b)That there be a departure from the Child Support Assessment for the period from 1 October 2002 to 16 July 2003 from $30,542 to nil;
c)That there be a departure from the Child Support Assessment for the period 17 July 2003 to 30 September 2003 from $17,569 to nil;
d)That there be a departure from the Child Support Assessment for the period from 1 October 2003 to 31 December 2003 to nil;
e)That any penalties and other amounts including any adjustments for the period 1 July 2001 to 31 December 2003 be adjusted to nil balance.
f)That upon re-assessment as sought in paragraphs 1-5 above, that the Child Support Agency issue a statement showing the Husband to be in credit for such amounts that he has paid pursuant to above mentioned assessments and that such credit be offset against the Husband’s future child support liability.
g)As an alternative to paragraphs 1 to 6 above that the Child Support Agency issue a nil assessment for all children to remain in force until the youngest child turns 18 years of age.
h)All other orders as this Honourable Court deems met.
In her Response filed 10 February 2005 the mother sought an order that the father’s application is dismissed and that he pay her costs.
Both parties were represented by Counsel at hearing.
Background
The mother was born on 8 February 1960 and is 45 years of age.
The father was born on 27 February 1959 and is 46 years of age.
The parties married on 14 March 1987.
There are three children of the marriage: NPV, born 31 May 1988 [almost 17 years], EAV born 16 November 1990 [now 14 years] and DGV born 7 November 1993 [now 11 years].
The parties separated on 9 August 1994 and were divorced in or about 1995. Since separation, the children have lived with the mother.
On 1 July 1996 interim orders were made for the children to have supervised contact with the father. On 28 November 1997 orders were made by His Honour, Justice Purdy of the Family Court for the children to have supervised contact until January 2000 and then unsupervised contact with the father. On 1 June 1998 the Full Court allowed the mother’s appeal and ordered supervised contact. On 26 May 2000, after a contested hearing, His Honour, Justice Rourke ordered the children to have contact with the father, initially supervised, and then unsupervised.
Costs orders were made in favour of the father in July 2000 and in February 2001.
The children live with the mother. The children have had no contact with the father since August 2001.
The father has been unemployed since approximately July 2004 and has a present child support liability of $21.67 per month. The father owes child support arrears. The mother is in full time employment.
The relevant law in proceedings for child support
Jurisdiction is conferred on this court by section 99(1) Child Support (Assessment) Act1989. Division 4 of Part 7 of that Act governs departure proceedings. Section 3 contains the obligation that parents maintain their children. Section 4 sets out the objects of the Act. Each of the objects needs to be borne in mind when deciding an application under the Act. Section 4(3) of the Act recognises the desirability of parents reaching agreement for the financial support of their children.
Section 4 provides:
4(1) The principal object of this Act is to ensure that children receive a proper level of financial support from their parents.
4(2) Particular objects of this Act include ensuring:
(a)that the level of financial support to be provided by parents for their children is determined according to their capacity to provide financial support and, in particular, that parents with a like capacity to provide financial support for their children should provide like amounts of financial support; and
1.that the level of financial support to be provided by parents for their children should be determined in accordance with the legislatively fixed standards; and
2.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; and
3.that children share in changes in the standard of living of both their parents, whether or not they are living with both or either of them; and
4.(not relevant)
Sections 114 and 121 identify that the further objects of Divisions 4 and 5 of Part VII include:
a)that the children have their proper needs met from reasonable and adequate shares in the income, earning capacity, property and financial resources of both of their parents and
b)that parents share equitably in the support of their children.
The Full Court of the Family Court in In the Marriage ofGyselman (1992) FLC 92-279 set out a three step process that courts must follow in determining an application for a departure order under s.117. The first step is whether one or more of the threshold grounds in s.117(2) is established. If a ground is established, the next step is whether it is just and equitable within the meaning of s.117(4) to make a particular order. The final consideration is whether it is otherwise proper within the meaning of s.117(5) to make a particular order.
Each of the grounds in section 117(2) is prefaced by the words, “in the special circumstances of the case”. In Gyselman at 79,065 the Full Court said:
Whilst it is not possible to define with precision the meaning of that term, as a generality it is intended to emphasise that the facts of the case must establish something which is special or out of the ordinary. That is, the intention of the Legislature is that the Court will not interfere with the administrative formula result in the ordinary run of cases. In Savery’s case (p77-897), Kay J adopting the view in Phillipe and Philippe (1978) FLC 90-433 in a different context, said that “special circumstances” were “facts peculiar to the particular case which set it apart from other cases”. The approach to the interpretation and application of the particular grounds in s.117(2) must be guided by that qualification.
In In the Marriage of Hides and Hatton (1997) FLC 92-759 the Full Court held that it is necessary for the Court to undertake the three stage process described in Gyselman for each child support year in respect of which departure is sought. Further, the Full Court also said that regard may be had to the current circumstances of the parties:
By this we mean that not only must the Judge apply the three stage process under section 117(2), (4) and (5) in relation to the circumstances of the parties as they existed in the child support year in question, but also in relation to the present circumstances of the parties (if at all relevant). For example, it may well be necessary in a particular case in addition to considering the circumstances of the parties in the past child support year in question, also to consider the present capacity of the payer to meet a new assessment, and/or the impact on a payee of any credit in the payer’s favour which might be created by a departure from an assessment for an earlier child support year.
Section 115 provides for applications for departure from administrative assessments in relation to periods beginning on or after 1 July 1992 to be made after an application is made to the Child Support Registrar under Part 6A of the Act. An application under Part 6A is an application to the Registrar for a departure from the assessment. Section 116 creates a further requirement in relation to any decision made under Part 6A on or after 15 December 1998 in relation to child support payable on or after 1 July 1999 whereby no application may be made to a Court for departure unless an objection under Part 6B to that decision has been lodged by the applicant and determined. An objection must be lodged within 28 days of service of notice of the decision under part 6A. If out of time a person may lodge an objection together with an application to the Registrar for an extension of time.
In this matter, on 1 August 2003 the applicant father applied for a departure from the administrative assessment of child support for the period 26 May 2000 to “present” and sought a decrease in his child support liability to nil. This resulted in the father’s child support income being increased to $73,000.00 for the period 1 October 2003 to 30 September 2004. The notice of decision is dated 3 October 2003.
On 20 October 2003 the father lodged an objection to the decision of 3 October 2003. The objection was disallowed by decision of 11 December 2003.
The father’s child support assessments from the Child Support Agency for the assessment periods in respect of which he sought departure orders were:
i)1 July 2001 to 30 September 2002: $26,199.00 annually or $2,183.25 per month. This was based on an adjusted child support income for the father of $81,872.00, or child support income amount of $99,285.00.
ii)1 October 2002 to 16 July 2003: $17,569.00 annually or $1,464.08 per month. This was based on an adjusted child support income for the father of $54,903.00 or child support income amount of $73,000.00 (set by departure).
iii)17 July 2003 to 30 September 2003: $17,569.00 annually or $1,464.08 per month. This was based on an adjusted child support income for the father of $54,903.00 or child support income amount of $73,000.00 (set by departure).
iv)17 July 2003 to 31 December 2003: $13,409.00 annually or $1,117.42 per month. This was based on an adjusted child support income for the father of $41,902.00 or child support income amount of $59,999.
The father’s evidence
The father relied on:
·His Application filed 2 December 2004.
·A Financial Statement filed 2 December 2004 [the statement was not witnessed or dated].
·His affidavit sworn 20 September 2004 and filed 2 December 2004.
The question of summary dismissal
At the start of the hearing, I invited the applicant’s counsel to explain the basis of his client’s departure application. I raised my concerns which were, in summary:
a)That the ‘costs’ he relied on pursuant to section 117(2)(b)(i)(A) were incurred and paid in periods prior to the child support periods and could not be applied to the periods in respect of which his client was seeking departure orders;
b)That, in any event, I would need evidence of his client’s financial circumstances in the child support periods in respect of which he sought to depart, to enable me to undertake the three step process set out in Gyselman to determine his client’s application. There was no such evidence before me.
c)That the legal costs his client wanted taken into account pursuant to section 117(2)(b)(i)(A) should have been and in fact, had been addressed in the parenting proceedings in which they were incurred pursuant to Section 117 of the Family Law Act. It was not appropriate for this Court to go behind the costs orders of the Trial Judge who heard the parenting applications, or to assess the merits of each party’s case in those proceedings.
The mother’s counsel submitted the father’s application was misconceived and must fail. I was invited to summarily dismiss the father’s application.
Summary dismissal – the relevant law
The principles governing summary dismissal were enunciated by the High Court in General Steel Industries Inc v Commissioner for Railways (N.S.W.) and Others [1964] 112 C.L.R. 125. Barwick C.J said at p 129:
The test to be applied has been variously expressed; “so obviously untenable that it cannot possibly succeed”; “manifestly groundless”;…“discloses a case which the Court is satisfied cannot succeed”;…
The Full Court of the Family Court in Marriage of Beck (2004) FLC 93-181, approving the decision of Bigg v Suzi (1998) FLC 92-799 said at [20]:
An application for summary judgment must be determined on the basis only of the material put forward by the respondent (to that application).
The Full Court found support for its position in the judgment of Kirby J in Lindon v Commonwealth (No 2)(1996) 136 ALR 251 at 256 (which was quoted by the Full Court in its judgment in Bigg v Suzi where His Honour said:
“To secure such relief, the party seeking it must show that it is clear, on the face of the opponent’s documents, that the opponent lacks a reasonable cause of action [Munnings v Australian Government Solicitor (1994) 118 ALR 385 at 388f;…or in advancing a claim that is clearly frivolous or vexatious [Dey v Victorian Railways Commissioners (1949) 78 CLR 62 at 91].”
In the matter of Bigg v Suzi the Full Court, in relation to summary dismissal, said at P 84,984:
[the] application could not as a matter of law possibly succeed.
The power for summary dismissal is inherent. Ultimately it is discretionary.
The father’s Case
The applicant father’s case was pressed pursuant to section 117(2)(b)(i)(A) of the Child Support (Assessment) Act 1989 for each of the child support periods in respect of which he sought an order for departure. He relied solely on that ground.
Section 117(2)(b)(i)(A) provides:
(b)that in the special circumstances of the case, the costs of maintaining the child are significantly affected:
5.because of:
(A)high costs involved in enabling a parent to have contact with the child.
Section 117 (3) provides [my emphasis]:
A parent’s costs involved in enabling the parent to have contact with a child can only be high for the purposes of subparagraph …(2)(b)(i)(A) if, during a child support period, they total more than 5% of the amount worked out by:
a)dividing the parent’s child support income amount for the period by 365; and
b) multiplying the quotient by the number of days in the period.
“Child support period” is defined in Section 7A of the Act.
In summary, it was the father’s case that he had met legal costs between early 1996 and February 2001 of over $100,000.00, such costs being necessarily incurred to enable him to have contact with the children. He submitted that legal costs were in this case, relevant costs to be considered pursuant to section 117(2)(b)(i)(A). He submitted the mother had taken an entirely unreasonable position in the contact proceedings causing him to incur high legal costs. Counsel submitted the amounts paid in legal costs by the father were amounts greater than 5% of the amounts calculated by reference to section 117(3) of the Act. He referred to the period 1 July 1997 and 1 April 1998 when he submitted the father’s child support income was $76,981 and the father spent $26,400 on legal fees, an amount well in excess of 5%. He said that in the special circumstances of this case, the father’s costs of maintaining the children was compromised because of the high legal costs involved in enabling contact to occur.
Child support periods
Counsel for the father submitted that legal costs incurred by the father between early 1996 and early 2001 were costs properly to be considered for the purpose of deciding a departure application pursuant to section 117(2)(b)(i)(A) for the child support periods between 1 July 2001 and 31 December 2003. The father sought to have the whole of his legal costs taken into account. This was despite costs orders having been made in his favour twice during the contact proceedings and despite the first contact order being made by His Honour Justice Purdy in July 1996, a few months after the father’s contact proceedings were commenced.
The father conceded he had not met these legal costs during the child support periods in respect of which he sought departure orders. The costs had been incurred and paid prior to the subject child support periods. Counsel for the father submitted it was not necessary for the father to establish that the costs were incurred during the child support periods in respect of which he sought the departure orders. Counsel submitted that child support calculations were necessarily based on figures for earlier periods, because the Child Support Agency itself used income figures for an earlier tax year than the one for which a formula assessment was calculated. Counsel did not refer to any authorities in support of this submission.
It was necessary for the applicant to establish the ground for departure pursuant to section 117(2) in relation to each of the child support periods for which he sought a departure order. In Hides v Hatton (1997) FLC 92-759, the Full Court said [at 84,355] that it is necessary for the court to consider and determine whether there should be a departure from the assessment for each of the child support years for which a departure order is sought. Therefore, it is necessary for the court to apply the three step process contained in section 117(2), (4) and (5) to each of the assessments for each of the years in question. This necessarily involves an examination of the parties’ financial positions in each of those periods. There was no evidence before me as to the father’s financial position in any of the child support periods in respect of which he sought a departure order. Counsel asserted that it is not necessary for the court to look beyond the child support assessment itself in relation to the father’s financial position. The Full Court of the Family Court in In the marriage of JM and PJ Bryant (1996) FLC 92-690 said that microscopic examination is neither required nor desirable in most cases of this kind, but that is not to say an assessment of each party’s financial circumstances must not be undertaken pursuant to Section 117(4). Even if the father was able to establish a threshold ground for departure, without evidence of his financial position, there would be no basis upon which the court could determine whether to make such an order was just and equitable.
Section 117(3) requires the ‘costs’ calculation to be made “during a child support period”. This requires the calculation to be made for the child support period in respect of which the liable parent seeks a departure order. The father must have paid the costs or expect to have to pay them in the child support period for which he is seeking a departure order. The high costs of contact must have a direct bearing on the financial position of the liable parent in the particular child support period for which the departure order is sought. The authorities on section 117(2)(b)(i)(A) all refer to the costs involved in the child support periods in respect of which the departure orders have been sought. See Hall v Rushton (1991) FLC 92-249, Houlihan v Houlihan (1991) FLC 92-248, Gyselman, (supra), B v S [2003] FMCAfam 248. For it to be otherwise defies logic.
Costs involved in enabling contact to occur
Counsel for the father submitted that legal costs incurred by the father between January 1996 and early 2001 were costs to be considered pursuant to section 117(2)(b)(i)(A). The father’s counsel said there are no authorities in which legal costs had been considered in child support departure proceedings based on this ground.
Counsel submitted however, that the category of costs was not closed. He relied on the authority of In the Marriage ofGyselman (1992) FLC 92-279 in which the Full Court examined the meaning of “high costs of access [contact]” in section 117(2)(b)(i)(A) of the Act. In particular, counsel relied on this passage at 79,068:
Although this is the most common case the provision is not confined to that and it will in an appropriate case include other costs which it is necessary for the non-custodian to incur for access to take place. This may include accommodation if it satisfies those criteria and there may be other costs such as additional expenses caused by the medical condition of the child. Provided that the distinction referred to above is recognized, namely that it does not include the ordinary costs involved in the actual access itself, it is a matter for the Trial Judge to determine whether the facts fall within this ground, whether they amount to “high costs” within sub-section (3), whether they constitute “special circumstances” and whether the requirements of sub-sections (4) and (5) and the objects of the legislation are satisfied.
Counsel submitted the whole of the father’s legal costs in this case should be taken into account, given the attitude of the mother in the contact proceedings. Counsel submitted that a resident parent must be brought to account for imposing high costs on the other parent if the resident parent has taken an unreasonable position in relation to enabling the other parent to have contact.
Kay J in the decisions of Hall v Rushton (1991) FLC 92-249 and Houlihan (1991) FLC 92-248 cited with approval by the Full Court in Gyselman interpreted the term “costs” narrowly to mean the costs of making it possible for access to take place, not the ordinary costs involved in the actual contact period. In Hall v Rushton, Kay J referred at 78,680 to the costs being:
the costs of physically making the access available.
In Gyselman, the Full Court said at 79,068:
it will in an appropriate case include other costs which it is necessary for the non-custodian to incur for access to take place. This may include accommodation if it satisfies those criteria and there may be other costs such as additional expenses caused by the medical condition of the child.
Section 117 of the Family Law Act gives the court power to make an order for costs. The matters that the court must consider on an application for costs are contained in section 117. The normal rule is that each party will pay their own costs. However, the court may make an order for costs if it is satisfied that in the particular circumstances of the case it should do so. The father deposed to costs orders being made in his favour during the course of the contact proceedings. The father’s counsel said costs pursuant to section 117 concerned quantum only and were generally only party/party costs. Costs ordered pursuant to section 117 could not, he said, be compared to the actual costs involved in enabling contact to occur, which were the whole of the actual legal costs incurred in those proceedings.
I agree with the mother’s counsel that it was not open to the father to seek a further costs order via a child support departure application.
I also agree with counsel for the mother that it would be untenable for a court hearing a child support departure application to be required to make an assessment of the reasonableness or otherwise of the legal costs incurred in contact proceedings.
An assessment of the father’s contact legal costs during child support proceedings would involve an inquiry into the reasonableness or otherwise of the costs orders already made by the Family Court in the contact proceedings. It would require this court to go behind an order of the Trial Judge who conducted the proceedings. This in turn, would require an assessment of the merits of each party’s case in the contact proceedings conducted in the Family Court, which is plainly inappropriate. It is an erroneous interpretation of the section to include legal costs in contact proceedings as costs to be taken into account pursuant to section 117(2)(b)(i)(A).
Counsel for the father submitted that the Child Support Agency’s internal Guide refers to legal costs as a possible category of costs to be taken into account in an application such as the present one. I have not seen a copy of the guide. It was conceded by counsel for the father that there is no reference to the guide in the child support legislation or regulations. The existence or otherwise of such a guide cannot assist the father’s case.
The father sought an order in the alternative [at paragraph 7 of his application] that the Child Support Agency issue a nil assessment for all children to remain in force until the youngest child turns 18 years of age. There was no evidence as to the likelihood or otherwise of the father returning to the workforce. I asked counsel for the father to address me on any evidence in the father’s material which, if accepted by me, would enable me to make such an order. Counsel was unable to do so.
As I was satisfied that the father’s case could not possibly succeed, I dismissed the father’s application.
I certify that the preceding forty-seven (47) paragraphs are a true copy of the reasons for judgment of Sexton FM
Associate: Collette McFawn
Date: 31 May 2005
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