Penman and Child Support Registrar and Anor (SSAT Appeal) (No.2)
[2013] FCCA 1045
•13 August 2013
FEDERAL CIRCUIT COURT OF AUSTRALIA
| PENMAN & CHILD SUPPORT REGISTRAR & ANOR (SSAT APPEAL) (NO.2) | [2013] FCCA 1045 |
| Catchwords: CHILD SUPPORT – Costs – Application for costs of Appeal – whether financial hardship would be suffered – time to pay allowed. EVIDENCE – Whether letters referring to offers of settlement should be considered – whether breach of Evidence Act 1995 (Cth), s.131. |
| Legislation: Evidence Act 1995 (Cth), s.131 |
| Cases cited: Brown & Brown (1998) 23 Fam LR 349 Charlton & Sinclair (Costs) [2009] FamCA 1359 Child Support Registrar & Kanavos [2010] FamCAFC 244; (2011) 44 Fam LR 422 Child Support Registrar & Stewart [2010] FMCAfam 38 Fitzgerald & Fish [2005] FamCA 158; (2005) 33 Fam LR 123 Hendy & Deputy Child Support Registrar (2001) 27 Fam LR 641 Laurie v Child Support Registrar [2009] FamCAFC 183 Penman & Child Support Registrar & Anor (SSAT Appeal) [2013] FCCA 492 Piersons Pro-Health Pty Ltd v Silvex Nominees Pty Ltd (No 3) [2010] FMCA 250 Pratt v Latta (No.2) [2002] FMCA 43 |
| Appellant: | MR PENMAN |
| First Respondent: | CHILD SUPPORT REGISTRAR |
| Second Respondent: | MS MORGAN |
| File Number: | SYC 6524 of 2012 |
| Judgment of: | Judge Scarlett |
| Hearing date: | Dealt with in chambers |
| Date of Last Submission: | 19 June 2013 |
| Delivered at: | Sydney |
| Delivered on: | 13 August 2013 |
REPRESENTATION
| The Appellant: | In person |
| Solicitors for the First Respondent: | Australian Government Solicitor |
ORDERS
The Appellant is to pay the costs of the First Respondent fixed in the amount of $5,000.00.
The Appellant is allowed six (6) months to pay.
IT IS NOTED that publication of this judgment under the pseudonym Penman & Child Support Registrar & Anor (SSAT Appeal) (No.2) is approved pursuant to s.110X(4)(h) of the Child Support (Registration and Collection) Act 1988 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT SYDNEY |
SYC 6524 of 2012
| MR PENMAN |
Applicant
And
| CHILD SUPPORT REGISTRAR |
First Respondent
| MS MORGAN |
Second Respondent
REASONS FOR JUDGMENT
Application
This is an Application by the Child Support Registrar for costs against the Appellant as a result of the dismissal of the Appeal against the decision of the Social Security Appeals Tribunal handed down on 14th June 2013 (Penman & Child Support Registrar & Anor (SSAT Appeal)[1]). The Child Support Registrar seeks an order that the Appellant should pay the Child Support Registrar’s costs fixed in the amount of $6,408.00 within 28 days.
[1] [2013] FCCA 492
The Appellant, in a written submission filed on 19th June 2013, opposes the Application seeks an order that the parties should pay their own costs.
Submissions
The Child Support Registrar, in a written submission filed on 17 June 2013, submits that by the operation of s.105 of the Child Support (Registration and Collection) Act 1988 (Cth) costs in proceedings under s.110B, i.e. appeals from decisions of the Social Security Appeals Tribunal, are governed by s.117 of the Family Law Act 1975 (Cth), see Hendy v Deputy Child Support Registrar[2].
[2] (2001) 27 Fam LR 641
The Registrar also relies on the decision of the High Court of Australia in Penfold v Penfold[3] at 311 and the decision of Boland J in Child Support Registrar & Kanavos[4] at [65]. It is submitted that the weight to be attached to any of the considerations in s.117(2A) of the Act is discretionary but there is nothing to prevent one or other of those considerations from being the sole foundation for a costs order (Fitzgerald & Fish[5] at [41] per Kay, Warnick and Boland JJ, and Brown & Brown[6] at [17] per Kay J). In the absence of any countervailing consideration, the fact that a party was “wholly unsuccessful” will ordinarily justify the making of a costs order against that party (Laurie & Child Support Registrar[7] at [123]-[126] per O’Ryan J).
[3] (1980) 114 CLR 311
[4] [2010] FamCAFC 244;(2011) 44 Fam LR 422
[5] [2005] FamCA 158; (2005) 33 Fam LR 123
[6] (1998) 23 Fam LR 349
[7] [2009] FamCAFC 183
In this case, the Registrar submits that there are several features that warrant the making of a costs order under s.117(2) of the Family Law Act, being:
a)that the SSAT found that the Appellant had an earning capacity of “at least the annualised male average wage, currently $64,865.00 per annum”; and
b)the Appellant was recently awarded costs against the Registrar by the Federal Court in the amount of $9,917.00 in another matter;
c)the Appellant is not in receipt of legal aid;
d)the manner in which the appeal was prosecuted caused the Registrar to incur considerable legal costs in defending the proceeding, where the Court found that:
i)the grounds of appeal were not particularised and repetitive, making it difficult for the Respondents to answer the Appellant’s case; and
ii)the Appellant’s written submissions were prolix and unfocused;
e)the Appellant’s natural justice grounds were manifestly untenable;
f)the Appellant made an allegation of bias against the Social Security Appeals Tribunal in his submissions which either misrepresented the facts or were misconceived; and
g)the Appellant was wholly unsuccessful in the proceedings.
As to the quantum of costs, the Registrar seeks costs in accordance with the scale (see Rules 21.02 and 21.10). The usual form of an order for costs in accordance with Schedule 1 to the Rules is for costs to be paid in a specific amount (see Pratt v Latta (No.2)[8] at [5]-[6] per Driver FM[9]; also Piersons Pro-Health Pty :Ltd v Silvex Nominees Pty Ltd (No.3)[10] at [38]-[43] per Lucev FM[11]).
[8] [2002] FMCA 43
[9] As his Honour then was
[10] [2010] FMCA 250
[11] As his Honour then was
The Registrar seeks the fixed amount of $6,408.00, being the prescribed amount of costs recoverable under Division 2 of Part 2 of Schedule 1. Whilst that amount has only recently been increased, which is why the Registrar’s earlier submissions claimed the earlier applicable figure of $6,240.00, the Registrar relies on the decision of Child Support Registrar & Stewart[12] at [39]-[58] in support of the argument that the current figure should be applied.
[12] [2010] FMCAfam 38
The Registrar also seeks that the costs should be paid within 28 days.
The Appellant seeks that the Court should order that the parties pay their own costs, noting that the general rule under s.117(1) of the Family Law Act is that each party should bear his or her own costs. He correctly submits that the Court, if it is satisfied that there are circumstances that justify it in doing so, is required to consider the matters set out in s.117(2A) of the Act.
In this regard, the Appellant submits that an award of costs against him would result in extreme hardship (see Charlton & Sinclair (Costs)[13]. In support of this contention , the Appellant submits that:
a)there is evidence before the Court as to the parties’ financial circumstances, especially as to the fact that his own financial circumstances have deteriorated since 2011;
b)the SSAT stated in its decision that the Appellant has no assets and is in considerable debt, so that if the application for costs were to be successful it would place him into further debt and potential bankruptcy;
c)whilst the SSAT found the Appellant had an earning capacity of $64,865.00 per annum, this potential income is not reflective of his current income;
d)the Australian Taxation Office has recorded the Appellant’s actual taxable income as $16,282.00 for the 2012 taxation year;
e)the amount sought by the Child Support Registrar would force the Appellant “well below the self-support amount” and cause him and the children considerable hardship.
[13] [2009] FamCA 1359
The Appellant is not in receipt of legal aid.
As to the conduct of the parties to the proceedings, the Appellant submits that he made numerous requests to both Respondents to enter into discussion to avoid the hearing. He annexes copies of letters, apparently to that effect. However, I am not disposed to read the annexed letters, as they seem to be evidence of settlement negotiations which should not be adduced under s.131 of the Evidence Act 1995 (Cth).
The Appellant further submits that the failure by any party to comply with previous orders of the Court is not a relevant consideration.
As to whether any party to the proceedings has been wholly unsuccessful in the proceedings, the Appellant submits:
The Child Support Scheme is not optional. Once one parent applies to the Child Support Agency for an administrative assessment, the other parent cannot opt out, except with the agreement of the first parent. The applicant is obliged by law to comply with the administrative assessment or run the risk of serious consequences, including financial penalties. The only way to challenge a decision is through the administrative and judicial processes provided by the legislation. The applicant followed those processes.[14]
[14] Applicant’s Submissions on Costs page 4
The Appellant submitted that he had requested a meeting with the other parties on 9th January “to determine if there was a way to avoid the hearing on 11 March 2013”[15] and further submitted that he made “numerous requests” to the Respondents to enter into discussions that would avoid the hearing.
[15] Ibid
It is for those reasons that the Appellant submits that the Court should order the parties to pay their own costs.
Conclusions
The Court, in dealing with an application for costs in any proceeding under the Child Support (Registration and Collection) Act, must apply the provisions of s.117 of the Family Law Act. In deciding whether to form an opinion under s.117(2) that there are circumstances that justify making an order for costs, must have regard to the matters set out in s.117(2A).
As to the Appellant’s financial circumstances, it is noted that the Social Security Appeals Tribunal set his adjusted taxable income at $64,865.00. As the Appellant points out in his submission, this finding relates to a deemed earning capacity and not to an actual income. Although the Registrar asks the Court to take into account the fact that the Appellant was recently awarded an amount of $9,917.00 by way of costs against the Registrar in the Federal Court. However, a costs order is an order to compensate a person for a liability that the person has incurred for legal costs of a proceeding in a court and can hardly be seen as a profit to the person.
There is no issue that the Appellant is not in receipt of legal aid.
The Court must consider the conduct of the parties to the proceedings in relation to the proceedings. The Appellant’s written submissions, albeit apparently prepared by counsel, were criticised by the Court in the decision as “not particularised and repetitive” and “prolix and unfocussed”[16]. I further held at [111]:
In my view, the lack of particularity of certain grounds renders them unable to be met. It will not do for an Appellant to make a bald statement alleging error on the part of the Tribunal and expect the Court to trawl through a lengthy submission in the hope that a particular part of the submission meets the ground alleged.[17]
[16] Penman &Child Support Registrar & Anor (SSAT Appeal) [2013] FCCA 492 at [109]-[110]
[17] Ibid at [111]
It is also relevant that the Appellant in his submission made allegations of bias against the Tribunal which were held to be “entirely without merit”.[18]
[18] Ibid at [202]
Whilst it seems apparent that the Appellant’s submissions caused the Respondents difficulty in preparing submissions in reply because of the matters to which I have referred, it does not appear to be the case that the hearing of the Appellant was significantly lengthened as a result, nor was it necessary for an adjournment for any reason.
It is not the case that the proceedings were necessitated by the failure of a party to comply with previous orders of the Court.
It is clear, however, that the Appellant was wholly unsuccessful in his Appeal. His explanation, set out at [14] above, does not appear to meet this fact and, indeed, it is difficult to ascertain what the Appellant is submitting.
The Appellant claims that the Respondents failed to respond to his overtures to settle the matter before the Appeal was heard. With respect, noting that the Appeal was unsuccessful, it would appear in hindsight that the Respondents’ decision was well-founded.
It was the Appellant who commenced the proceedings by appealing against the decision of the Social Security Appeals Tribunal. If the Respondents were not disposed to settle the matter, it would have been open to the Appellant to discontinue the Appeal. He chose to proceed and the result was that he was unsuccessful.
I note the decision of Austin J in Charlton & Sinclair (Costs)[19], to which the Appellant has referred the Court. In my view, with respect, the conclusions of his Honour at paragraphs [5] and [6] of the judgment would seem to apply to the particular facts of the judgment and do not lay down a general rule which the Court would find persuasive. The decision can be distinguished.
[19] supra
In my view, the circumstances justify the Court in forming the opinion that an order for costs should be made in favour of the Child Support Registrar against the Appellant.
Subsection 117(2) provides that the Court, if it is of the opinion that an order for costs should be made, may make “such order as to costs…as the court thinks just.”
The Registrar seeks an order for a fixed sum in the amount of $6,408.00, which is the amount provided by the Court scale, with payment to be made within 28 days. In my view, whilst the Appellant’s financial circumstances have been considered in deciding whether or not to make an order for costs, those financial circumstances are also relevant in deciding:
a)the amount of costs that should be ordered; and
b)the time to be allowed to pay.
In short, I am satisfied that it would cause the Appellant financial hardship if he were required to pay the sum of $6,408.00 within 28 days. In my view, that hardship may be somewhat alleviated by a reduction in the amount to be ordered and the allowance of a significantly greater time to pay than the 28 days sought by the Registrar.
I propose to set the costs to be paid in the fixed sum of $5,000.00. I will allow the Appellant six months to pay.
I certify that the preceding thirty-two (32) paragraphs are a true copy of the reasons for judgment of Judge Scarlett
Associate:
Date: 7 August 2013
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