McGuiness & Cowie
[2002] FamCA 461
•4 July 2002
[2002] FamCA 461
FAMILY LAW ACT 1975
IN THE FAMILY COURT OF AUSTRALIA
AT MELBOURNE Appeal No. SA31L of 2002
File No. ZH2720 of 2001
BETWEEN:
SHARON LEE MCGUINESS
(Applicant/Appellant Wife)
and
SHANE ANDREW COWIE
(Respondent Husband)
CORAM: THE HONOURABLE JUSTICE KAY
DATE OF HEARING: 25 June 2002
DATE OF JUDGMENT: 4 July 2002
REASONS FOR JUDGMENT
APPEARANCES:
Mr Fitzgerald, Director of Legal Aid, 123 Collins Street, Hobart, Tas 7000, appeared on behalf of the Appellant Wife.
The Respondent Husband in person.
McGUINESS and COWIE
SA 31L of 2002
Coram: Kay J
Date of hearing: 25 June 2002
Date of judgment: 4 July 2002
CHILD SUPPORT – departure – application for lump sum – jurisdiction to hear an application for departure without administrative review where the only other application pending before the court is an application for lump sum child support.
CHILD SUPPORT – procedure – whether application for lump sum contained in same document as departure application is “application pending” – Child Support (Assessment Act) s116(1B).
The father of three children paid periodic child support to their mother pursuant to an administrative assessment. In July 2001 he indicated to the mother his intention to leave his job. The mother applied to the Federal Magistrates Court for a departure order and a lump sum order and interlocutory injunctions preventing him from dealing with his retrenchment and superannuation payout.
Roberts FM refused the mother’s application on the grounds that he did not have jurisdiction to grant it. The Magistrate held that an application for a departure order made simultaneously with a lump sum application could not rely on the lump sum application as being “pending” for the purposes of section 116(c).
The learned Magistrate also refused to sever the lump sum application, stating that it was dependent upon the departure application.
The mother appealed.
Held: in allowing the appeal and remitting the matter for re-hearing
The lump sum application was capable of standing on its own. The legislation provides no jurisdictional barrier to a Court entertaining an application for the payment of child support by way of lump sum.
There is no requirement to first approach the Registrar via Part 6A for relief that the Registrar cannot give.
There is no requirement to then object to the failure of the Registrar to grant the relief as a necessary precursor to asking the Court for such relief.
A court may entertain both a lump sum application and a departure application that are filed within the one document if it chooses to exercise its discretion so to do under s 116.
APPEAL ALLOWED AND RE-HEARING ORDERED
COSTS CERTIFICATES GRANTED
REPORTABLE
This is an application for leave to appeal, and if such leave is granted then it is the hearing of the appeal, against orders made by Roberts FM on 6 February 2002. Those orders dismissed a child support application filed by the mother of the parties’ three children. They also discharged some interim injunctions restraining the father from dealing with monies he was to receive by way of retrenchment and superannuation.
An appeal from a decision of the Federal Magistrates Court in the exercise of jurisdiction under the Child Support (Assessment) Act 1989 lies only with the leave of the Family Court.
I heard this application and appeal sitting as a single Judge of the Family Court pursuant to arrangements made under s 102A(2) of the Child Support (Assessment) Act 1989.
The issues raised in this application raise significant matters of principle. There is also no doubt in my mind that if the Federal Magistrate has erred that error could significantly affect the substantive rights of the mother.
In Wild v Ballard (1997) FLC 92-771; 22 Fam LR 291 the Full Court said at FLC 84,488; Fam LR 297 (citations omitted):
"As already indicated s 102 of the Child Support (Assessment) Act provides that an appeal from a single judge of the court exercising jurisdiction under that Act lies only with the leave of the Full Court. In Gilmour and Gilmour the Full Court (Ellis, Finn and Maxwell JJ) endorsed suggestions made in both Bassingthwaite v Leane and Best and Best that leave applications under this legislation ought be approached less restrictively than were this an application from an interlocutory order. The court said that if a party’s substantive rights have been significantly affected by an error at first instance, then it would be appropriate to grant leave to appeal under the section. It is appropriate then to examine whether the appellant has had his substantive rights significantly affected by any error of principle made by the trial judge."
I approach my task of determining whether to grant leave bearing in mind that I should not be too restrictive if I perceive there has been any error of principle which has affected the applicant's substantive rights. To my mind, it is abundantly clear that the issues to be dealt with in this case demand that leave to appeal be granted.
At the commencement of the hearing I granted leave to counsel who had previously represented the respondent father to withdraw from the proceedings. I had made directions for the filing of material and summaries of argument on behalf of the respondent but they were not complied with. The respondent appeared in person at the hearing of the matter before me but was unable to advance any argument, other than to say that he relied upon the outcome before the Federal Magistrate.
Background
The appellant is the mother of three children, [A], [B] and [C] Cowie. They were born between February 1992 and March 1996. The respondent is their father.
The material discloses that the parties were married in July 1989 and separated in September 2000.
A child support assessment issued on 22 September 2000 requiring the father to pay child support at an annual rate of $10,165 to the mother in relation to the three children. The assessment was for the period from 21 September 2000 to 20 December 2001 and was calculated upon the basis that the father’s child support income amount was $42,249. A second assessment issued on 15 November 2001 for the period from 1 December 2001 until 28 February 2003. It required the payment of child support at an annual rate of $10,740 based on a child support income amount of $44,832.
On 25 July 2001, during the currency of the first assessment, the mother filed an application in accordance with Form 63 of the Family Law Rules in which she sought the following orders:
“a)That pursuant to Division 4 Part 7 of the Child Support (Assessment) Act 1989, there be a departure from the administrative assessment of child support relating to the children [A], born 23rd February 1992, [B] born 8th October 1993 and [C] born 28th March 1996
(b)That the annual rate of child support payable by the Respondent to the Applicant in respect of the children be set at $10,500 per annum commencing on 26th July 2001 until the 23rd February 2010, being the date when [A] turns 18 years of age or at such other annual rate and/or for such other period as determined by this Honourable Court.
(c)That pursuant to Division 5 part 7 of the Child Support (Assessment) Act 1989 the Respondent provide child support for the children otherwise than in the form of periodic amounts paid to the Applicant.
(d)That the child support payable by the Respondent determined pursuant to paragraph b) herein be capitalised and paid by the Respondent to the Applicant as a lump sum within twenty-eight days of the making of Final Orders.
(e)Such further or other Orders and determination as the Court considers appropriate including statements under Section 125 of the Child Support (Assessment) Act 1989.
(f)That a sealed copy of the Order herein be served on the Deputy Registrar of Child Support in Hobart.
(g)The Respondent pay the Applicant's costs of these proceedings.”
The application also sought some interim procedural orders and injunctions. Connolly FM made interlocutory orders on 27 July 2001.
In accordance with the form prescribed in the Family Law Rules the application also stated:
“This application is brought under sections 117, 123, 125 and 141 of the *Child Support (Assessment) Act1989”
The grounds upon which the application was made were said to be:
“The Applicant relies upon her Affidavit filed contemporaneously with this Application.”
In that affidavit the applicant mother stated that the father had been employed with the ANZ Bank for 17 years. He had been diagnosed with bipolar disorder. He had informed her that he was leaving his position with the bank on 26 July 2001, stating that he is physically worn out and cannot work at the moment. She asserted that he was unlikely to go back to work. She asserted that he was entitled to monies for payment in lieu of long service leave, annual leave, and superannuation benefits. She further asserted that the husband had told her that he intended to apply to the Child Support Agency for a nil assessment after he had received his termination payment.
It was on the basis of those facts that she went on to assert in her affidavit that there were grounds for a departure from administrative assessment and that a nil assessment would be unjust and inequitable. She said that she contended that it would be just and equitable and otherwise proper for the respondent to pay child support by way of lump sum payment and that that should be calculated at the rate of $10,500 per year until the eldest child turned 18.
In his Response filed on 9 January 2002 the father sought a dismissal of the mother’s application and a discharge of interlocutory orders. Those interlocutory orders were:
a) orders made on 27 July 2001 by Connolly FM restraining the husband from dealing with any monies received from his employer by way of redundancy or termination payment or superannuation payment; and
b) orders made by consent on 23 November 2001 by Roberts FM restraining the husband from selling, assigning, encumbering or dealing with some ANZ shares and otherwise requiring the husband to deal with monies held by him by placing them in a certain specified bank account.
The judgment
Roberts FM dismissed the wife’s application on the basis that there was a lack of jurisdiction to deal with it.
He made reference to ss 115 and 116 of the Child Support (Assessment) Act and to the decisions of Lightfoot and Hampson (1996) FLC 92-663; 20 Fam LR 69 and Reid and Reid (1999) FLC 98-007; 25 Fam LR 1. He dismissed Lightfoot and Hampson as being irrelevant on the basis that it was distinguishable from the facts before him. He cited the following passage from Reid and Reid at FLC 95,307; Fam LR 6, starting at paragraph 45:
“It is quite clear, in my view, that the intention of the Legislature was that this Part was to provide a summary and inexpensive procedure to enable child support departure orders to be made, without the necessity for protracted Court proceedings.
The wife, in this case, chose by the filing of a Form 63 to effectively ignore the provisions of Part 6A, and to proceed to make a departure application to the Court. The husband, in my view, was perfectly entitled to take the view that this measure had been inserted into the Act to enable these matters to be resolved without the necessity for expensive litigation. It is also quite clear that that was the view also taken by the legislature, when it enacted section 115, which was also substituted by Act No. 151 of 1992, and subsequently amended in 1995.
The intention of the legislature was that the departure order would normally only be dealt with in circumstances described under section 115(b) - where there had been either the making or refusal of a determination by the Registrar under part 6A. Section 115(c) was, however, introduced with the very sensible object of enabling the Court, in special circumstances, to deal with a departure application at the same time as other litigation already before the Court.
In this case, as at 30 January 1998, it is quite clear that there was no other matter before the Court, other than the Form 7, which certainly would not have been dealt with together with this application. His Honour therefore, at that stage, had no jurisdiction to entertain the matter.”
He then said:
“11.I draw counsels’ attention to the words ‘at the same time as other litigation already before the Court’ in the Chief Justice’s judgment and stress the word ‘already’.
12.In my view, it is ludicrous to say that an application for orders under Division 5, filed as part and parcel of the same application for orders under Division 4, creates a ‘pending’ application for the purposes of S115(c).
13.To say otherwise would negate the intentions of the Federal Parliament. It should never be forgotten that Parliament enacts the laws of this country and the Courts simply apply or interpret them.
14.In this particular case, it is quite clear that there were no proceedings whatsoever ‘pending’ at the time that the applicant filed her application on 25th July 2001.
15.It should also be remembered that S115(c) provides that the Court must be satisfied that it would be in the interest of both the children’s carer and the liable parent for the Court to consider the current application at the same time as it hears any pending application. But, as I have said, there is no pending application in this matter.
16.Counsel for the Wife asked me to allow him to sever his client’s application pursuant to Division 5, so that the Wife could simply abandon the claim under Division 4. I cannot do that.
17.It is quite obvious that the Wife’s claim under Div 5 is entirely dependent upon her claim under Div 4. Her application reads in paragraph (d) ‘that the Child Support payable …… pursuant to paragraph (b) herein be capitalised’ and it is quite clear that the application in para (b) is an application for a departure under Division 4. It follows that I find that paragraphs (c), (d) and (e) of her application do not stand alone, and consequently, they must stand or fall with paragraphs (a) and (b).
18.I find that the Court does not have jurisdiction in this matter. That is because the applicant was unable to comply with the provisions of Section 116 of the Child Support (Assessment) Act 1989.
19.In this regard, I refer also to the decision in Kness v Kness (2000) FLC 98-013. In that case, Kay J said at paragraph 8: ‘In summary, an application can only be made by an aggrieved person if there has already been an administrative departure application dealt with and an objection to that administrative departure application has also been internally dealt with by the Child Support Agency. The minimum requirements of the objection appear in s 98X and in s 98ZA, namely there has to be an objection in writing and it must state fully and in detail the grounds of objection relied on.’
20.In the circumstances of this case the only order that I can make in this matter is to dismiss the application file on 25 July 2001 in its entirety, because it is conceded that no departure application was made to the Child Support Agency, and no objection has been lodged. It follows also that I must discharge the interim orders made on 27 July 2001.”
The choice of the adjective “ludicrous” is curious, and in the circumstances, unfortunate. It is defined by Macquarie Dictionary, Second Revised Edition as:
“Such as to cause laughter or derision; ridiculous; amusingly absurd.”
The humour in the submission that a proper interpretation of the legislation would enable the wife’s application to proceed escapes me.
Section 100 of the Child Support (Assessment) Act provides that the Family Law Act 1975, the standard rules of court and the related Federal Magistrates Rules apply to proceedings under the Child Support (Assessment) Act. Section 116 of the Act provides that an application may be made to a court having jurisdiction under the Act for an order under Division 4 of Part 7 of the Act (a departure order), and s 123 provides that an application may be made to a court having jurisdiction under the Act for an order that a liable parent provide child support for a child otherwise than in the form of periodic amounts payable to the carer entitled to child support.
Order 31B of the Family Law Rules, rule 4 provides:
“(1) An application or appeal to which this Division applies must be made by filing the appropriate form as specified in subrule (2) or (3) in a court having jurisdiction under the Assessment Act or the Registration Act.”
The form specified is Form 63. That form envisages that an applicant may seek more than one order from a court. The form begins under the heading “Application” by stating:
“(Full name of applicant) applies for the following orders:
(1)
(2)”
There is nothing in any of the requirements of Order 31B that would require an applicant seeking various forms of relief under the Child Support (Assessment) Act, or indeed the Child Support (Registration and Collection) Act 1988, to have to file more than one Form 63 encompassing all the relief sought by the applicant.
The Child Support (Assessment) Act came into operation in 1989. It provided for an administrative assessment of child support to be made by reference to the taxable incomes of each of the parties. If either party was dissatisfied with the assessment the Act made provision for an application to be made to a court of competent jurisdiction seeking a departure order. The Child Support Legislation Amendment Act (No. 2) 1992 amended the legislation to introduce Part 6A reviews. Instead of going directly to the court to seek a change in the assessment, parties were generally obliged to seek an administrative review of the assessment. The Registrar was given power to alter the assessment to take into account the types of matters that a court would need to consider on the hearing of a departure application. The Registrar was however only given limited powers as to the manner in which he/she could alter the assessment.
The accompanying explanatory Memorandum to the 1992 amendment bill clearly indicated that the Court’s jurisdiction to deal with departure applications was not being removed, but was being curtailed in certain circumstances.
The relevant text of the memorandum reads at page 37 (emphasis changed):
“(7) Repeal the existing section 115 and replace it with a new section 115. The new section ensures that there are three distinct types of cases that can go directly to court or be considered by a court under the departure provisions [Clause 25].
The intention is that all pre Part 6A cases are eligible to be considered by a court, that cases where the Registrar has made, or refused to make, a determination under Part 6A may go to court and any other case at all where another matter is pending before the court (including pre Part 6A cases and Part 6A cases already decided by the Registrar) and the court is of the view that an assessment for a year starting on and after 1 July 1992 should be departed from, may be considered at the same time as the other matter, notwithstanding that it should otherwise go before the Registrar under Part 6A. This avoids the situation of having to apply to different places when the one place, the court, can consider and decide all the matters together.”
The memorandum explained that there remained three paths to the court. The legislation sensibly sought to avoid the requirement of parties having to fight the one battle on several fronts.
In 1998 the Act was further amended to introduce an administrative review mechanism. The prohibition on the direct path to the court was further extended to encompass this review mechanism. Nothing in this process in any way impinged on the third path identified in the explanatory memorandum. One stop shopping remained available if appropriate.
The key requirement of both ss 115 and 116 of the Child Support (Assessment) Act is that, subject to certain exceptions, a party seeking a departure order may not do so unless there has first been a determination under Part 6A of the Child Support (Assessment) Act by the Registrar and in relation to such a determination the applicant has objected under s 98X of the Act to the making of or refusal to make the departure determination and that the objection has either been disallowed wholly or in part.
There is no such prohibition in respect to relief that is sought under Division 5 (Provision of child support other than in the form of periodic payment).
The exceptions to those requirements are set out in s 116(1B) which reads as follows:
“Subsection (1A) does not apply if:
(a)the person is a party to an application pending in a court having jurisdiction under this Act; and
(b)the court is satisfied that it would be in the interest of the carer entitled to child support and the liable parent for the court to consider, at the same time as it hears that application, whether an order should be made under this Division in relation to the child in the special circumstances of the case.”
The Child Support (Assessment) Act carries no definition as to when an application can be said to be “pending in a court having jurisdiction under this Act”. The term “pending” is defined in the Macquarie Dictionary as “remaining undecided, awaiting decision”. In Dunn v Bevan; Brodie v Bevan [1922] 1 Ch 276 Sargant J quoted Oswald on Contempt of Court, 2nd ed, p62: “Proceedings are pending immediately the writ is issued, and as long as any proceedings can be taken”, agreed with that statement, and cited in support Metzler v Gounod 30 LT 264 and Dallas v Ledger 4 Times LR 432.
Once instituted therefore, until dealt with, any application may properly be described as “pending”.
The rationale behind the insertion into the Act of initially a requirement after 1992 for there to be an administrative review of an administrative assessment via Part 6A of the Child Support (Assessment) Act and then subsequently the additional requirement of an administrative objection to the administrative assessment inserted by the requirements of s 98X in 1998, was said to be an attempt to make the process of departure far less expensive and to avoid recourse to the courts.
The Child Support Evaluation Group, under the chairmanship of Justice John Fogarty, evaluated the child support scheme some two years after the full implementation of the Child Support (Assessment) Act. In the Group’s report to the Minister for Social Security delivered 11 December 1991, the Group discussed the possibility of introducing a more informal “first tier review”:
“12.5 Options for changing the appeal procedures
Submissions were received by the Advisory Group that some non-custodians were deterred from appealing under the present procedures because of the high costs of legal representation. In October 1990 the Minister for Social Security raised this issue with the Advisory Group together with the question of whether there should be a more informal first tier review procedure. That request related to appeals against an assessment under stage two and also to objections by non-custodians if their stage one cases had been transferred to stage two.
These concerns related to two aspects:
· First, that non-custodians may be deterred from appealing or objecting. This might be because of the perception of high cost of obtaining legal representation together with the belief that it was necessary or desirable to have legal representation in such cases. If a more informal and expedited review procedure could be devised it might overcome this problem.
· Second, in any event, it might be useful to provide a conciliation or negotiation process by which parties would have the opportunity to negotiate the outcome of these matters without the necessity of court proceedings.
…
In its 1990-91 Budget, the Government announced the establishment of a child support review and appeals system to commence from 1 July 1992. Under this proposal custodial and non-custodial parents would be able to apply for a departure from the assessment. The grounds would continue to be those set out in s. 117 of the Child Support (Assessment) Act.
This system involves the establishment of new positions called ‘Child Support Review Officers’ in the Child Support Agency. These officers are to be given the power to review assessments within the context of s. 117. The Budget announcement stated that this process would be free of charge and would not involve legal representation.”
When this first tier review scheme was eventually implemented in the 1992 amendment Act it was still thought appropriate to leave the court with a discretion to deal with a departure application where it was obvious that the parties were already before the court for other purposes. The concept of minimising expense and enabling a holistic approach to the problems of the parties was clearly seen as attractive to the legislature. Indeed, if anything could be said to be ludicrous it would be the proposition that the one family would have to fight two battles arising out of exactly the same factual situation before two different tribunals at the same time. It would be even more ludicrous if they would have to fight the battle before a tribunal that had no power to grant the relief sought, as a necessary precondition to being able to seek relief from a tribunal that could actually grant it.
It is clear that the Registrar exercising Part 6A power could not grant the wife the relief she sought, namely the payment to her of a lump sum for child support. The Registrar has no such power. The Registrar’s powers are defined in s 98S which provides:
“Subject to section 98A, the determinations that the Registrar may make under this Part are as follows:
(a)a determination varying the rate of child support payable by the liable parent concerned; a determination varying the child support percentage, adjusted income amount, child support income amount or exempted income amount of the liable parent;
(b)a determination making provision of a kind permitted under the regulations with respect to the calculation of any such amount in relation to the liable parent;
(c)a determination varying the child support income amount or disregarded income amount of the carer entitled to child support concerned;
(d)a determination making provision of a kind permitted under the regulations with respect to the calculation of any such amount in relation to the carer entitled to child support;
(e)a determination directing that one or more of the following provisions is not to apply: (i)section 42 (Cap on child support if child support income amount exceeds 2.5 times yearly equivalent of relevant AWE amount); (ii)section 52 (Cap on combined child support liabilities of 2 liable parents);
(f)a determination varying a factor ascertained under paragraph 54(1)(b).”
The power in a court to make a lump sum order has two potential sources: under Part 4 of Division 7 by virtue of the general powers contained in s 141 of the Child Support (Assessment) Act, or under Part 5 of Division 7 which enables the court to make orders that are other than periodic sums.
It would be a pointless exercise to require a party to go to a tribunal that could not make an order sought by the party and then to require that party to file an objection with an officer who could not grant the objection before being allowed to come to a court. Yet that seems to be the interpretation being placed upon s 116 by the Magistrate. He was concerned to say that you could not have a pending proceeding, ie an application that remained undecided, to be heard at the same time as the application for increase of child support if the two applications were contained within the one document. In my view, there is nothing in the Act or the Family Law Rules that ought to lead to that conclusion.
Order 4 rule 4 of the Rules reminds the court that in exercising jurisdiction under the Rules the court should have regard to the need to provide a prompt and inexpensive resolution of the matters in issue between the parties.
The principal object of the Child Support (Assessment) Act is set out in s 4(1) to be “ensuring that children receive a proper level of financial support from their parents”.
Sections 114 (contained in Division 4 of Part VII) and 121 (contained in Division 5 of Part VII) provide as additional objects “ensuring that children have their proper needs met from reasonable and adequate shares in the income, earning capacity, property and financial resources of both their parents and that parents share equitably in the support of their children”. These particular objects clearly distinguish the procedures to be adopted by a court under Divisions 4 and 5 of Part 7 from the object stated in Part 6A as set out in s 98A which is:
“…to give power to the Registrar to make a determination having the effect that the provisions of this Act relating to administrative assessment of child support will be departed from in relation to a child”
and the object set out in Part 6B as stated in s 98W(1) which is:
“(a) to provide for internal reconsideration of decisions of the Registrar that are reviewable by a court having jurisdiction under this Act”.
Section 15AA of the Acts Interpretation Act 1901 provides that:
“In the interpretation of a provision of an Act, a construction that would promote the purpose or object underlying the Act (whether that purpose or object is expressly stated in the Act or not) shall be preferred to a construction that would not promote that purpose or object.”
As already stated the principal object of the Act is to ensure that a child receives a proper level of financial support from its parents. In circumstances where a parent is about to leave employment from which they would normally generate recurring periodic income, and to receive a capital sum which they propose to live off in lieu of income, then surely the objects of the Act are properly met if orders can be made for the provision of part of that capital sum to be applied in the support of the child. Any interpretation of the Act that would lead to placing bars in a procedural way to relief being speedily obtained in such circumstances would, in my view, not be an interpretation which would promote the purpose or object underlying the Act.
If the learned Magistrate is concerned that parties might take the opportunity to short-circuit the s 98X procedure by attaching a spurious Division 5 application to a genuine Division 4 application, it would be open to a court to strike out the Division 5 application and then refuse to deal with the Division 4 application. However in this case there is no suggestion that the Division 5 application is anything other than the articulation of a genuine dispute arising from new facts.
It is probably sufficient to deal with this appeal by simply determining that the Magistrate was wrong in saying that there were no proceedings pending when the application was filed on 27 July 2001. The order in which documents are in fact filed cannot be conclusive of the problem.
Take the example of a genuine dispute inter partes on issue of spousal maintenance. That dispute would be brought to the attention of the Court by the filing of an application in accordance with the appropriate prescribed form. That is a form other than the form used for child support applications. The jurisdiction of the court to hear an application concerning child support at the same time as it heard the application concerning spousal support ought not to depend upon the order in which the two documents are handed to the counter clerk. In my view, where applications are made contemporaneously then at the time they are made it can be properly said that there is then an application pending when the other application is made.
The mischief for which the legislation is designed to cure must be borne in mind. That mischief has already been described. In the example I have just cited the same factual matrix needs to be determined, namely what are the financial resources of the parties. The legislation relevant to both spousal maintenance and child support then requires that the commitments of the parties necessary to support themselves have to be determined and then issues of priority as between competing claimants, ie children and spouse, have to be determined. The thought that they must be determined in separate hearings when they are so intimately interwoven is one which in my mind runs contrary to the whole purpose and spirit of the legislation.
The second basis upon which the Magistrate ruled against the mother was a basis upon which he would not allow severance of the claim under Division 4. He said that her Division 5 claim was entirely dependent upon her Division 4 claim. But the relief sought in para (c) of her application in my view could stand entirely independent of the relief otherwise sought. That relief was “that pursuant to Division 5 Part VII of the Child Support (Assessment) Act 1989 the respondent provide child support for the children otherwise than in the form of periodic amounts paid to the applicant”. It was not dependent at all upon a reassessment of the then existing child support.
At the date of the hearing there existed an obligation for the father to pay periodic child support at an annual rate of $10,740 until 28 February 2003. The hearing took place initially on 5 February 2002. It was clear on the evidence as at that date that the father was no longer in receipt of periodic income by way of salary or wages nor was he likely to return to employment in the immediate future. In those circumstances, whilst he was possessed of a lump sum termination pay there would, in my view, exist the basis for proper consideration being given to the exercise of s 123 jurisdiction, whatever the limits of that jurisdiction might be.
That brings me to the confusion and dilemma raised by the decisions of Lightfoot and Hampson and Ivanovic (1996) FLC 92-689; Fam LR 445.
In Lightfoot the Full Court was divided on the issue of the circumstances in which Part 5 of the Act could be seen as a separate head of power from Part 4. Fogarty J, with whom Purvis J agreed on this issue, was of the view that the appropriate way for increasing the quantum of child support to be paid was via the exercise of s 117 power. He conceded, however, that in special circumstances the effect of s 125(3) could be to increase the amount of child support otherwise payable.
Fogarty J did not have to deal with the simple issue facing the court in this case, namely, where can be found the power to convert a determination of periodic child support into an order for a lump sum payment, absent any variation in the amount of periodic child support deemed appropriate. The power clearly does not exist in the Registrar, whose powers are limited by the provisions of Division 6A. The power exists in a judge either in the exercise of s 117 power combined with the general provisions of s 141, or in the specific exercise of power under Division 5.
The problem is common. People lose their employment all the time and are compensated frequently with lump sum payments. There is no doubt an anxiety on behalf of the parent entitled to receive child support to ensure that funds are not dissipated and are readily available for the provision and support of the children. Only a court can make an appropriate order.
Although not germane to the decision in Lightfoot, Fogarty J discussed the inter-relationship between s 115 and the provisions of Division 5, saying at FLC 82,858; Fam LR 85:
“[Section 115] provides that Div 4 applies to administrative assessments of the types set out in paras (a), (b) and (c) of that section, namely:
a)where the child support is for a period up to and including the period ending 30 June 1992;
b)where the child support relates to a period thereafter and the Registrar has made or refused to make a determination under Pt 6A; or
c)where the child support is for a period beginning on or after 1 July 1992; and
(i)a parent is a party to ‘an application pending in a court having jurisdiction under this Act’ ; and
(ii)the court is satisfied that it would be in the interests of the parties to consider the departure application at the same time as the pending application.
[Counsel for the liable payer] submitted that, absent compliance with s 115, the court lacked jurisdiction under Div 4 to hear a departure application. In addition, he submitted that it is generally inappropriate for a court to treat as an ‘application pending’ an application under Div 5 as that would mean that the requirements of s 115 could be bypassed simply by the filing of such an application. He submitted that the court should not encourage a procedure which was directed to undermining the structure of the legislation.
It is unnecessary to consider this aspect in any detail in this case because Pt 6A only came into operation in Western Australia at the end of 1994. Departure applications relating to assessments prior to that time represented ‘an application pending’ before his Honour and it was obviously appropriate for his Honour to hear all of those applications together (subject to s 123(3) referred to hereafter).
In any event, but subject to the discussion about s 123(3), the application under Div 5 was an ‘application pending’. There was no suggestion that it was not bona fide. I am not conscious of misuse in other cases of Div 5 applications to circumvent s 115. No doubt if a judge concluded that another application was not bona fide or had little relevant connection with the Div 4 application, the judge would indicate that he or she was not satisfied within the terms of s 115(c).”
In my view, there is nothing in the reasons expressed by Fogarty J that supports the proposition that the prohibition in s 115 (and now repeated in s 116) somehow provides any bar to a Court properly considering a lump sum application.
In the shifting sands of majority numbers in Lightfoot and Hampson Fogarty J and I agreed that a procedural failure to hear and determine a pending application for a departure order under Division 4 before hearing a Division 5 application would not be fatal to the exercise of a jurisdiction. Purvis J disagreed with that statement saying that an order made consequent upon non-compliance with a sub-section would be of no force or effect.
Shortly after Lightfoot and Hampson was decided similar issues arose in Ivanovic. An entirely differently constituted Full Court was clearly troubled by the outcome of Lightfoot and Hampson. It said at FLC 83,156-8; Fam LR 461-3:
“We are now faced with the difficult issue of deciding whether we should follow the majority judgment of the Full Court in Lightfoot's case, or whether we should express our own view on the question, regardless of the consequence that if we do so and arrive at a contrary view, then there will be two directly conflicting decisions of the Full Court, with the resulting confusion and difficulty that such a result would cause.
…
Before us and also before the Full Court in Lightfoot and Hampson (1996) 20 Fam LR 69 [1996] FLC 92-663 was an application to read the Division as conferring through s 125(2) a power to increase the amount of child support liability. The long standing view of Div 5 has been that it serves as a means of providing a lump sum consolidation of existing obligations, not an avenue for increasing quantum.
The issue is a difficult issue of statutory interpretation concerning which opinions can legitimately differ. While we have some reservations about the correctness of the majority decision in Lightfoot’s case and in particular the very limited operation that it gives to s 125(2), we are not sufficiently persuaded that it is wrong to express a contrary conclusion and we think that the desirability of adopting a consistent approach to legislation such as this which affects so many people is such that we should not do so.”
Their Honours ultimately determined that they could bring the factual circumstances of Ivanovic within the general category of exceptions defined by Fogarty J and thus did not think it was necessary to specifically disagree with the majority view in Lightfoot and Hampson.
The matter has continued to trouble the Full Court. In Johnson (1999) FLC 98-004; 24 Fam LR 130 Finn J said at FLC 95,286-7; Fam LR 159-160:
“62. The somewhat complex provisions of Div 5 of Pt 7 were the subject of extensive analysis by Fogarty and Kay JJ in their judgments in Lightfoot and Hampson, and it is unnecessary to repeat that analysis here. Nor is it necessary to embark on a discussion of the different conclusions reached by their Honours as to whether the powers in Div 5 are an independent source of power to the power in Div 4 to make departure orders.
63. It is sufficient to say here that essentially Div 5 of Pt 7 permits the court to make orders for the provision of child support in a form other than periodic payments, and that if the court is purporting to use the powers in Div 5 to order that lump sum child support be paid in substitution for periodic sums, it must have regard to the provisions of s 124 and in particular to the matters in s 124 (2).
…
66 In the interests of simplifying the hearing and determination of child support cases, I would be prepared to hold that where a trial judge has before him or her, applications under both Division 4 and Division 5 of Part 7, it is open to the judge to consider in the one exercise the question of whether on the one hand it is just and equitable to the parties and the child, and on the other hand otherwise proper, to make either or both a departure order under Division 4 or an order for support in a non- periodic form under Division 5,”
The learned Magistrate sought support for his proposition from my decision in Kness and Kness (2000) FLC 98-013. That case did not raise the issues that confronted the Magistrate in this case. In Kness the applicant was concerned to increase the periodic payments due to her. She was dissatisfied with the outcome of the Registrar’s determination and wrote a letter of complaint. What I decided in Kness is that the letter of complaint could not be treated as a formal objection within the meaning of s 98X. In those circumstances, absent a formal objection, and absent any other pending proceeding before the court, I lacked any jurisdiction to deal with the departure issue. Those circumstances are clearly distinguishable from this case. Here there were real issues to be determined, namely the extent to which child support should be provided in a form other than periodic payment, which only a Court can determine. In Kness the sole issue could have been determined via the objection process
Summary of conclusions
I conclude that
· The legislation provides no jurisdictional barrier to a court entertaining an application for the payment of child support by way of lump sum.
· There is no requirement to first approach the Registrar via Part 6A for relief that the Registrar cannot give.
· There is no requirement to then object to the failure of the Registrar to grant the relief as a necessary precursor to asking the Court for such relief.
I further conclude that the Court may entertain both a lump sum application and a departure application that are filed within the one document if it chooses to exercise its discretion so to do under s 116.
The orders made by the Magistrate should be set aside and the matter remitted for reconsideration. The effect of setting the orders aside will be to resurrect the existing injunctions. Whether Humpty Dumpty is capable of reconstruction, however, after presumably much of the yolk has been drained away, is a matter that I leave for due consideration by the tribunal rehearing this matter.
It is appropriate in the circumstances that the appellant be granted a costs certificate, both as to this appeal and the retrial of the action.
Orders
The formal orders of the court will be:
1. That the applicant be granted leave to appeal against the orders made by Roberts FM on 6 February 2002.
2. That the appeal be allowed.
3. That the orders made on 6 February 2002 be set aside.
4. That the matter be remitted for hearing of the Application and Response according to law.
5. That the Court grants to the appellant/wife a costs certificate pursuant to the provisions of s.9 of the Federal Proceedings (Costs) Act 1981 being a certificate that, in the opinion of the Court, it would be appropriate for the Attorney-General to authorise a payment under that Act to the appellant/wife in respect of the costs incurred by the appellant/wife in relation to the appeal.
6. That the Court grants to each party a further certificate pursuant to the provisions of s.8 of the said Act being a certificate stating that in the opinion of the Court it would be appropriate for the Attorney General to authorise a payment under that Act to the each party in respect of such part as the Attorney General considers appropriate of any costs incurred by either of them.
I certify that the preceding 68 paragraphs are a true copy of the reasons for judgment herein of the Honourable Justice Kay
The 4th day of July 2002
Associate: Elizabeth Hore
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