McPhail and Bradley and Anor (No.2)

[2018] FCCA 1937

FEDERAL CIRCUIT COURT OF AUSTRALIA

McPHAIL & BRADLEY & ANOR (No.2) [2018] FCCA 1937

Catchwords:
CHILD SUPPORT – Ruling on form of final orders.

Legislation:

Family Law Act 1975, s.117

Case cited:
Colgate-Palmolive Company & Anor v Cussons Pty Ltd [1993] FCA 801

Applicant: MR MCPHAIL

First Respondent: MS BRADLEY

Second Respondent: CHILD SUPPORT AGENCY

File Number: MLC 5784 of 2014

Judgment of: Judge Burchardt

Hearing date: 26 June 2018

Date of Last Submission: 26 June 2018

Delivered at: Dandenong

Delivered on: 26 June 2018

REPRESENTATION

The Applicant: In Person

Counsel for the Respondent: Ms Wild

Solicitors for the Respondent: Robinson Gill

Child Support Agency: Ms Lewis as amicus curiae

ORDERS

1. The matter be adjourned to this Court for directions before Judge Burchardt on 6 August 2018 at 10.00 am.

2. The Applicant pay the Respondent arrears of Child Support in the sum of $8,361.10.

3. The Applicant pay the Respondent’s costs fixed in the sum of $14,314.

IT IS NOTED that publication of this judgment under the pseudonym McPhail & Bradley & Anor is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT DANDENONG

MLC 5784 of 2014

MR MCPHAIL

Applicant

And

MS BRADLEY

First Respondent

CHILD SUPPORT AGENCY

Second Respondent

REASONS FOR JUDGMENT

1. This is an unusual situation.  It is fortunate that final orders have not yet been entered, so the Court is not functus officio.  The reasons for those introductory remarks will become apparent.  Having checked the Court’s file, it is apparent that Judge Jones ordered, on 23 August 2017, that the applicant father not deal, if I can use that phrase colloquially, in any way with the property he owns in Suburb A.  In order to give force and effect to that order, her Honour purported to grant permission to the respondent to file a caveat in respect of the property.  It is not immediately apparent to me quite where the power to make that order is, but the order was made and the caveat has been filed.

2. Today – and, indeed, in his responding material more generally – the applicant father also refers to what he describes as a caveat on his superannuation, which has the effect of restricting him from reducing it below the figure of $40,000.  He has identified that there is some $86,000 still in the account.  I note that there is a dispute in the parties’ materials as to the tax consequences or otherwise of any withdrawals he might make.  I further note that, on 5 March 2018, the respondent’s costs were reserved and fixed in the sum of $2,200.

3. The next thing to be noted, and it is a matter of embarrassment for which I apologise, is the inadequacy of the reasons for judgment that I published this morning.  In paragraph 2, I observed inter alia that it is inappropriate to make the ancillary orders that the respondent mother seeks, and I noted that that would be for the reasons that follow:  none, or at least none sufficient do follow at paragraph 39.  I apologise for that.  In her amended Response, the mother sought the sale of the property in the event of noncompliance with the orders – a payment of arrears and, additionally, the deposit into a trust account of the sum of $81,176, being the sum designed to, as it were, secure payment of Child Support until the children have turned 18.

4. When I, earlier this morning, indicated I was not prepared to make the orders sought, that was the order to which I referred.  I should clarify and make it clear that first, I am not convinced the Court has proper power to make that order, in such a proceeding and secondly, even if it does, an order like that, operating in futuro is, in my opinion, an inappropriate exercise of the Court’s powers. 

5. However, that leaves at large – and it is a matter to which we shall return – the question as to whether the other ancillary orders which seek simple enforcement of existing obligations orders, in the form of sale of the property and, in the event the father does not comply, is still at large.

6. In that regard, the other extant matter is the question of costs. The respondent seeks indemnity costs, fixed in the sum of $14,314, which sum I would infer includes the $2,200 reserved, or costs on scale, in the sum of $7,851. The father, understandably, seeks to resist that and he points to the fact that it was the respondent’s choice to be legally represented and various unsuccessful endeavours to settle he may have made. The costs are, of course, governed by s.117 of the Family Law Act 1975.  The general rule, if I can so describe it, under subsection (1) of that section is that each party bears their own costs.  However, the Court may, pursuant to subsection 2, if it is of the opinion that there are circumstances that justify it in doing so, make such orders as to costs as it thinks appropriate.  That, however, is subject to mandatory consideration of the matters in subsection (2A).

7. The first of the matters to be considered are the financial circumstances of each of the parties.  In this case, the applicant father lives in a property he owns outright.  He has various other benefits to him and he has, relevantly, $86,000 available in his superannuation account.  The mother’s financial affairs are well-indicated by paragraph 31 of her affidavit, filed on 1 August last year.

   “I continue to work part time and on a casual basis as a (occupation omitted).  My gross income is approximately $57,000 per annum.  I have a health care card and I receive Centrelink payments in the form of fortnightly family assistance payments.  Following separation I accumulated significant debts as my income did not meet the living expenses for the children and myself.  After our property settlement, I was unable to clear all of my debt and I have still not recovered financially since legal proceedings in 2015.  I do not own property and do not foresee that I will be able to enter the property market given that I have no assets and a very modest income.”

8. In her evidence given at the trial, no manifest change emerged to that picture, and I note that in her affidavit material, the mother has deposed to having to borrow $15,000 towards the costs of this proceeding.

9. The Court is next required to consider legal aid, which is not relevant.  And the next matter is the conduct of the parties to the proceedings, more generally.  Here, I would note that the Court was moved to reserve and fix the respondent’s costs of the hearing in March, which points to an inadequacy on the part of the applicant on that occasion.  The next subsection (d) is whether the proceedings were necessitated by the failure of a party to comply with orders of the Court.  The proceeding was brought because the father sought to set aside the Binding Child Support Agreement but, in a sense, the response arose from his failure to comply with earlier orders of the Court, but I would point out that that was the matter in issue between the parties in the proceeding.

10. Subsection (e) is important.  It is whether any party to the proceedings has been wholly unsuccessful in the proceedings.  In truth, the father has been wholly unsuccessful in these proceedings.  His application to set aside the Binding Child Support Agreement has failed, utterly.  The mother has succeeded in her arguments about the construction of the agreement and as to the existence of the arrears that she asserted.  In my opinion, it is appropriate that the mother should receive her costs.  The question then becomes on what basis?  The issue of indemnity costs usually starts with consideration of the well-known judgment of Sheppard J in the Colgate-Palmolive case, which I do not have a copy of immediately available.  It can be said, perhaps, in a rather global way, that what his Honour described was that something more than mere failure – something extra is required to grant an order for indemnity costs.

11. There are two things here that, in my opinion, operate significantly on the matter.  The first is that while, of course, I have regard to the father’s ill health and the consequent difficulties to which that gives rise for him, and they are, of course, matters only for sympathy, the fact is that his claim was wholly devoid of merit.  The parties entered into a deal when they had a financial settlement and the related Binding Child Support Agreement.  As I have found, and I hope I have made this, at least, clear enough in the reasons for judgment, these were clearly interrelated aspects of the matter.  The father got the benefit of the former and has now sought to slough off what he perceives as the lack of benefit of the latter.  The claim was always, in the light of the legislation and the nature of the test, doomed to fail.

12. The mother’s finances are dire.  Her gross income is substantially below average weekly earnings and she has to support herself and the children.  In my opinion, it is appropriate that there be an order in sum sought, by way fixed of $14,314.  I will hear the parties further, after a short adjournment, while they collect their thoughts.

I certify that the preceding twelve (12) paragraphs are a true copy of the reasons for judgment of Judge Burchardt

Date: 26 June 2018