REEDS & ALBELO
[2012] FamCAFC 44
•20 March 2012
FAMILY COURT OF AUSTRALIA
| REEDS & ALBELO | [2012] FamCAFC 44 |
| FAMILY LAW – APPEAL – APPLICATION FOR LEAVE TO APPEAL – CHILD SUPPORT – where s 102A of the Child Support (Assessment) Act 1989 (Cth) (“Assessment Act”) requires leave to appeal when seeking to appeal against an order under that Act – where it must be demonstrated that there has been an error of principle or a substantial injustice has been caused – where the respondent opposes the application – where the complaint made falls into two categories first, whether the Federal Magistrate erred in finding that the father was the liable parent within the meaning of s 124 of the Assessment Act and secondly, if he was, whether the Federal Magistrate erred in making the orders that he did on the evidence that was before him – where the Federal Magistrate erred in finding that the father was the liable parent – where there is no need to consider whether the Federal Magistrate erred in making the orders that he did on the evidence that was before him – where leave to appeal is granted – where there is merit in five of the six grounds of appeal – where the appeal must succeed – Orders 4 and 5 made by the Federal Magistrate on 28 January 2011 set aside. FAMILY LAW – APPEAL – COSTS – where the applicant sought an order for costs against the respondent and in the alternative if no order for costs was made that a cost certificate issue – where the respondent opposed any order for costs but also sought a cost certificate – where there should be no order for costs given that the appeal succeeded on a question of law – costs certificates ordered. |
| Child Support (Assessment) Act 1989 (Cth) s 5(1)(a) and (b), s 102A, s 121, s 123(2), s 124 Family Law Act 1975 (Cth) s 94AA |
| Forbes & Bream [2010] FamCAFC 6 D C Pearce & R S Geddes, Statutory Interpretation in Australia (LexisNexis Butterworths, 7th ed, 2011) |
| APPLICANT: | Mr Reeds |
| RESPONDENT: | Ms Albelo |
| FILE NUMBER: | HBC | 209 | of | 2010 |
| APPEAL NUMBER: | SOA | 21 | of | 2011 |
| DATE DELIVERED: | 20 March 2012 |
| PLACE DELIVERED: | Adelaide |
| PLACE HEARD: | Adelaide |
| JUDGMENT OF: | Strickland J |
| HEARING DATE: | 5 July 2011 |
| DATE OF LAST SUBMISSION: | 5 August 2011 |
| LOWER COURT JURISDICTION: | Federal Magistrates Court |
| LOWER COURT JUDGMENT DATE: | 28 January 2011 |
| LOWER COURT MNC: | [2011] FMCAfam 18 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Ayliffe |
| SOLICITOR FOR THE APPLICANT: | Munro & Associates |
| COUNSEL FOR THE RESPONDENT: | Mr Barker |
| SOLICITOR FOR THE RESPONDENT: | PWB Lawyers |
Orders
Leave to appeal be granted.
The appeal be allowed.
Orders 4 and 5 of the orders made by Federal Magistrate Roberts on 28 January 2011 be set aside.
The Court grants to the Applicant Father a costs certificate pursuant to the provisions of s 9 of the Federal Proceedings (Costs) Act 1981 (Cth) 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 Applicant Father in respect of the costs incurred by the Applicant Father in relation to the appeal.
The Court grants to the Respondent Mother a costs certificate pursuant to the provisions of s 6 of the Federal Proceedings (Costs) Act 1981 (Cth) 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 Respondent Mother in respect of the costs incurred by the Respondent Mother in relation to the appeal.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Reeds & Albelo is approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
| THE APPELLATE JURISDICTION OF THE FAMILY COURT OF AUSTRALIA AT ADELAIDE |
Appeal Number: SOA 21 of 2011
File Number: HBC 209 of 2010
| Mr Reeds |
Applicant
And
| Ms Albelo |
Respondent
REASONS FOR JUDGMENT
Introduction
By Notice of Appeal filed 24 February 2011 Mr Reeds (“the father”) seeks leave to appeal against orders made in relation to child support by Roberts FM on 28 January 2011. The respondent to the application is Ms Albelo (“the mother”).
In summary, the orders in relation to which leave is sought provided, pursuant to s 124 of the Child Support (Assessment) Act 1989 (Cth) (“the Assessment Act”), for each parent to pay child support for the two children of the relationship for the period from 1 January 2011 to 31 December 2014 by way of meeting half of all school fees, levies, the costs of text books, excursions and uniforms, as and when they become payable whilst the children attend M School, and for each parent’s annual rate of child support to be reduced by 100 per cent for that period.
In the event the father is granted leave to appeal, he seeks orders in the appeal that those orders be discharged and that the mother pay the father’s costs of and incidental to the appeal.
The mother opposes the father’s application for leave and his appeal.
Background
The parties commenced living together in 1996 and separated in early 2006.
The parties have twin daughters, X and Y, born in July 1998 (“the children”). The children were due to commence high school in 2011.
On 5 February 2009 consent orders were made in the Family Court providing for the children to live with each parent on a week about basis, apart from the long summer school holidays when a fortnightly cycle would operate. Order 4 of those orders also provided for the children to have weekly telephone communication with the parent with whom they were not living, and that each party should have an accessible landline telephone number for such purpose.
On 12 March 2010 the father filed an application in the Federal Magistrates Court seeking orders that he be able to travel with the children to the United States of America for a period of seven days in May 2010. The father also sought various orders in relation to the children’s passports.
In her response, the mother sought orders that the father’s application be dismissed and that the children be enrolled at and attend M School for the entirety of their high school education, commencing in 2011. In relation to child support, the mother sought orders that the father provide child support by paying half of all school fees, levies, text books, excursions and uniforms as and when they become payable, commencing in the 2011 school year; and that such an order not reduce the annual rate of child support payable by the father. The mother also sought orders to vary the telephone communication order made on 5 February 2009 to allow the use of a mobile telephone, and a further order that a communication book travel with the children between the parents’ households.
On 21 and 22 July 2010 the parties and the children attended reportable child-inclusive counselling, and the family consultant provided a report dated 26 July 2010.
The matter came before Roberts FM for hearing on 7, 8 and 9 December 2011.
His Honour made orders and delivered his reasons for judgment on 28 January 2011.
Reasons for judgment of the Federal Magistrate
The Federal Magistrate commenced his reasons for judgment by setting out the applications of each party and providing the background of the parties and the proceedings, as outlined above.
Thereafter the majority of his Honour’s reasons addressed the issues of the proposed trip to the United States of America, where the children should attend school, telephone communication, and the use of a communication book. None of these issues are the subject of this application and I need not say anything more about them. I turn then to the issue of child support.
His Honour set out the relevant legislation, namely s 124 and s 125 of the Assessment Act, before outlining the arguments of each party. In summary, counsel for the father asserted that the Federal Magistrate had no jurisdiction to make the order sought by the mother because the father was not the “liable parent” as specified in s 124 of the Assessment Act. “Liable parent” is defined in s 5(1) of the Assessment Act as being “(a) in the case of an administrative assessment––a parent by whom child support is payable for the child under the administrative assessment”.
His Honour noted it was common ground that the mother had only recently become liable to pay child support to the father in the sum of $7.90 per fortnight, and as such counsel for the father argued that it was the mother who was the liable parent, and not the father.
The Federal Magistrate accepted counsel for the mother’s argument that, as was said in N & B [2003] FMCAfam 72, both parents are considered “liable parents” in a shared care arrangement, and thus the father was a liable parent with a liability of nil. His Honour therefore concluded that he had the jurisdiction to determine the mother’s application.
The Federal Magistrate then turned to consider the financial circumstances of each party. The mother had filed a Financial Statement but the father had not, and his Honour determined that the mother should not be disadvantaged by the father’s failure “to make full disclosure”. The mother’s evidence revealed that her expenses exceeded her income, however, his Honour noted that the mother was receiving financial assistance from her family and that she was pursuing a claim against the father for financial adjustment in the Supreme Court of Tasmania under the Relationships Act 2003 (Tas). The Federal Magistrate though gained the “clear impression that the father [was] not keen to advance those proceedings and [was] dragging his heels in relation to them”, presumably because “he [was] aware that he will have to make a payment of some significance to the mother”. His Honour also noted that the father did not dispute the mother’s evidence that he effectively owned five properties and resided in the parties’ former home on one of those properties, whereas the mother did not own any real estate in her own right. Furthermore, his Honour accepted the mother’s evidence that until the parties received the latest child support assessment suggesting the mother’s income was slightly higher than that of the father, the father had at all other times since separation been liable to pay child support to the mother. Thus, his Honour determined the father’s income had “generally been higher” than that of the mother and that the child support assessment was likely to be “corrected” before long. The Federal Magistrate observed that both parties had been sharing the costs of the children’s education equally, save that the father refused to contribute to a recent school trip.
Despite the mother’s current financial position, and the father being in a better position to contribute to the education costs, the mother was prepared to meet one half of those costs. His Honour was satisfied that if necessary the mother would put her Supreme Court settlement towards the children’s education or that her family would provide her with assistance. Thus, in the circumstances, his Honour concluded that it was just and equitable for the parents to each contribute half of the costs of the children’s education at M School and that such payments should reduce each parent’s annual rate of child support payable to the other parent to nil. His Honour considered such an order was appropriate until the children completed grade 10 at M School at the end of 2014.
Orders made 28 January 2011
Roberts FM made the following orders:
1. That the Application filed 12 March 2010 on behalf of [MR REEDS] (“the father”) is dismissed.
2. That [X] and [Y] both born [in] 1998 (“the children”) attend [M School] in Tasmania (“the [School]”) in 2011 and each remain enrolled at the [School] until she leaves school or completes Year 10 whichever is the earlier, unless otherwise agreed between the parties in writing, or as Ordered by a Court of competent jurisdiction.
3. That [MS ALBELO] (“the mother”) and the father forthwith take all steps necessary to enrol the children at the [School].
4. That pursuant to section 124 of the Child Support (Assessment) Act 1989 the father is to provide child support to the mother for the children for the period from 1 January 2011 to 31 December 2014 (“the period”) by way of payment of half of all school fees, levies, and costs of text books, excursions, and uniforms as and when they become payable for the children while the children attend the [School], and the annual rate of Child Support payable by the father for the period is to be reduced by 100%.
5. That pursuant to section 124 of the Child Support (Assessment) Act 1989 the mother is to provide child support to the father for the children for the period from 1 January 2011 to 31 December 2014 (“the period”) by way of payment of half of all school fees, levies, and costs of text books, excursions, and uniforms as and when they become payable for the children while the children attend the College, and the annual rate of Child Support payable by the mother for the period is to be reduced by 100%.
6. That Order 4 on the third page of the Orders made by the Family Court of Australia on 5 February 2009 be varied by deleting therefrom the sentence: “Each party shall have available an accessible land line telephone number service for use of the children for the purpose of telephone communication”.
7. That the father and the mother are to utilise a communication book to record only relevant details relating to the children and that communication book is to travel with the children at changeover between the parties.
The father appeals against Orders 4 and 5.
Leave to appeal
Section 102A of the Assessment Act provides that no appeal can be brought against an order made by a Federal Magistrate under the Assessment Act without leave, however, there is no indication of what is required to obtain that leave.
With leave under s 94AA of the Family Law Act 1975 (Cth) (“the Act”) it must be demonstrated that there has been an error of principle or that a substantial injustice has been caused (Rutherford and Rutherford (1991) FLC 92-255). It seems that that requirement has spilled over to child support matters, but with a less strict application of the principles.
In Gilmour and Gilmour (1995) FLC 92-591, the Full Court (Ellis, Finn and Maxwell JJ), after reviewing the authorities addressing leave to appeal in child support matters, said at 81,843:
However, in granting leave for the reasons which we have in this case, we would not want to be taken as saying that the grounds upon which leave to appeal an order made under either of the Child Support Acts are necessarily the same as the limited grounds upon which leave will be granted in respect of an interlocutory decree under Section 94AA of the Family Law Act. Indeed, we would endorse the suggestions made in Bassingthwaite and Best that a less restrictive approach may be necessary where the order sought to be appealed involves substantive rights or liabilities in relation to child support. In so doing we would, however, draw attention to the unreported decision of Conn v. Martusevicius (delivered in Melbourne on 9 June 1992) in which, in dismissing an application for leave to appeal pursuant to Section 102 of the Assessment Act, both Barblett D.C.J. and Nygh J. in separate judgments expressed the view that the same principles which apply to applications for leave to appeal under Section 94AA of the Family Law Act (being the principles stated in Rutherford) should apply to applications for leave to appeal under Section 102 of the Assessment Act.
In Hendy v Deputy Child Support Registrar and Anor (2001) 27 Fam LR 641, the Full Court (Ellis, Kay and Mullane JJ), with reference to the authorities including Gilmour, reiterated that the court should not be too restrictive in relation to granting leave to appeal if it is perceived that there has been any error of principle which has affected the applicant’s substantive rights.
More recently in Forbes & Bream [2010] FamCAFC 6 the Full Court (Bryant CJ, Boland and Stevenson JJ) recognised, at paragraph 39 that while generally there must be demonstrated that there has been “an error of principle in the making of the order sought to be appealed or that the order will result in substantial injustice” before permission to appeal is granted, in child support matters it is “inevitable” that the orders will affect the financial position of the parties. This may therefore be a relevant matter to take into account in determining whether to grant leave.
Turning to the application in this case, there is an immediate difficulty in that instead of setting out in the application the facts relied on in support of the application for leave to appeal and which establish an error of principle or a substantial injustice, the applicant has inserted over six pages of what can only be described as the submissions or argument as to why the Federal Magistrate erred in the orders that he made. Thus, although I am not assisted by this in the way that is required, fortunately it is possible to discern the basis of the application by also referring to the grounds of appeal in the event that leave is granted. I observe though that the grounds of appeal themselves are difficult to follow given the omission at the commencement of the same of some statement indicating that the following six “grounds” identify where it is that the Federal Magistrate has erred.
Accordingly, the only way to make any sense of this is to in effect proceed on the basis that the error of principle or the substantial injustice caused is to be found in the submissions set out in the Notice of Appeal combined with the proposed grounds of appeal. Fortunately, the respondent takes no issue with how the Notice of Appeal is set out.
Proposed grounds of appeal and orders sought
The father’s proposed grounds of appeal appear precisely as follows in his Notice of Appeal filed on 24 February 2011:
1. In holding that the father was a liable parent within the meaning of s124 and therefore he had power to make an order obligating the father to pay half the costs of the children’s education at [M School];
2. In following the case of N & B [2003] FMCAfam 72 in deciding that he was entitled to make the order pursuant to s124 of the Child Support (Assessment) Act 1989 obligating the father to pay half the education costs of the children at [M School];
3. In determining the ordering that the annual rate of child support payable by the mother was to be reduced by 100%;
4. In determining and holding that the respondent should pay half the education costs of the children at [M School];
5. In determining and holding that the child support payable by the father was to be reduced by 100%;
6. In determining and holding that there was child support payable by the father to the respondent referrable to the children.
The father seeks orders that Orders 4 and 5 made by Roberts FM on 28 January 2011 be discharged and that the mother pay the father’s costs of and incidental to this appeal.
The relevant legislation
Section 123 Application for order under division
123(1) [Application for non-periodic child support] An application may be made to a court having jurisdiction under this Act for:
(a)an order that a liable parent provide child support otherwise than in the form of periodic amounts paid to the carer entitled to child support; or
(b)an order that a liable parent provide child support in the form of a lump sum payment to be credited against the amount payable under the liability under the relevant administrative assessment.
123(2) [When application may be made by carer or liable parent] An application under subsection (1):
(a)may only be made if an administrative assessment is in force in relation to the child, the carer entitled to child support and the liable parent; and
(b) may be made by the carer entitled to child support or the liable parent.
123(3) [Pending application] Before hearing the application, the court must hear and determine any pending application made to the court for an order under Division 3 (administrative assessments more than 18 months old) or Division 4 (departure orders) in relation to the child, the carer entitled to child support and the liable parent.
Section 124 Orders for provision of child support otherwise than in form of periodic amounts paid to carer entitled to child support
124(1) [When court may order non-periodic child support] Where:
(a)a carer entitled to child support or a liable parent makes an application under paragraph 123(1)(a); and
(b) the court is satisfied that it would be:
(i)just and equitable as regards the child, the carer entitled to child support and the liable parent; and
(ii) otherwise proper;
to make an order that the liable parent provide child support for the child otherwise than in the form of periodic amounts paid to the carer entitled to child support;
the court may make the order.
Section 125 Court to state relationship between order and assessed child support
125(1) [Statement whether child support to be credited against liable parent’s liability under administrative assessment] If the court makes an order under section 124, the court must state in the order whether the annual rate of child support payable by the liable parent under any relevant administrative assessment is to be reduced, in the manner specified under subsection (3), by the child support ordered to be provided by the liable parent.
Discussion
The gravamen of the challenge to the orders made by the Federal Magistrate falls into two categories. First, whether the Federal Magistrate erred in finding that the father was a liable parent within the meaning of s 124, and secondly, if he was, whether the Federal Magistrate erred in making the orders that he did on the evidence that was before him.
As to the first issue the applicant argues as follows:
· The Court is only able to make an order under s 124 of the Assessment Act against a “liable parent”.
· The relevant definition of “liable parent” is to be found in s 5(1) of the Assessment Act.
· That definition is “exhaustive and straightforward”, and on the facts of this case it is the mother who is the liable parent and not the father. The only assessment that is in place provides for the mother to pay to the father the sum of $7.90 per fortnight. No child support is payable by the father to the mother.
The Federal Magistrate appeared to reject this argument by relying on how Federal Magistrate Brown in N & B [2003] FMCAfam 72 described both parties to a shared care arrangement as liable parents “in a technical sense”. Federal Magistrate Brown said this:
21.If the parents have a “shared care child”, the basic formula is applied as if both parents have the child for 50% of the time and, by necessary implication share equally in the costs of caring for that child. In a technical sense, they are both considered liable parents, as both are assessed, on their income, for child support.
…
23.In cases of shared care, if all the children of the relationship are shared; neither of the parents of those children has any other child or children financially dependent on them and the incomes of the parents are equal; there will be a nil assessment of child support in each of their cases. However, the assessment will change depending on any disparity between the incomes of the parties concerned and the number of children towards whom they have a legal obligation to provide financial support. In cases of shared care, the child support formula treats both parents as if they were paying child support to each other and calculates an annual rate for both parents based on their relevant incomes and number of dependents. The child support that is payable by one parent to the other is the difference between those two rates.
24.… As a matter of principal, in cases of shared care, the amount of child support payable by the parents to one another will be nil, where the circumstances for child support are identical. Where there are differences between the parties in terms of their income and the number of children they are required to financially support, the formula will recognise that difference and one parent will be required to pay child support to the other.
However, not only were these observations obiter dicta, they cannot override, or govern, the plain meaning of a “liable parent” in s 5(1) of the Assessment Act. Indeed, it is apparent that that was not what Federal Magistrate Brown was intending by his comments.
There is no doubt that in calculating the child support liability where the care of the children is shared the income of each parent is taken into account and that the respective liabilities are offset. Indeed, as emerges from the respondent’s submissions, this is clearly set out on the Australian Government website for the Department of Families, Housing, Community Services and Indigenous Affairs. There, under the heading of the Formula for Assessment of Child Support the following appears:
3.13 Shared Care
The child support formula changes where there is contact of more than 30%. Where a child’s care is shared between both parents, or each parent has a child living with them, each parent has an entitlement to child support from the other. The calculation of how much each parent has to pay is according to how much care the other parent has. The liabilities are then offset so that only one parent overall is the payer.
As can be seen this is consistent with what the Federal Magistrate was saying in N & B. However, to talk of each parent being a liable parent in this context is not what the definition in s 5(1) is referring to. It is referring to the end result of the calculation, and the particular parent by whom child support is payable. In this case that is the mother, and not the father. The mother is the liable parent and the father is the parent who is entitled to be paid child support.
This is also borne out by the evidence that was before the Federal Magistrate. The only child support assessment tendered was the assessment setting out the liability of the mother. There was no assessment presented for the father.
The respondent also attempted to argue that the meaning of “liable parent” in
s 124 of the Assessment Act is not found in s 5(1), and that leaves it open to adopt the so-called approach of Federal Magistrate Brown in N & B. It is said, correctly, that paragraph (a) of the definition in s 5(1) of the Assessment Act provides the definition of “liable parent” in the context of an administrative assessment of child support, and paragraph (b) provides the definition of “liable parent” in the context of child support agreements. It is then suggested that an order under s 124 of the Assessment Act is not made pursuant to an assessment or an agreement, and accordingly the definition of liable parent in s 5(1) does not apply. However, that overlooks that for s 124 to be invoked there needs to be in place an administrative assessment (see s 123(2) and s 124(2)(a) of the Assessment Act). Thus I do not accept that submission.
There was then a general submission by the respondent that not to make the order that each party equally pay the education costs would be contrary to the objects of the Division set out in s 121 of the Assessment Act, namely that parents share equitably in the support of their children. However, the objects cannot override the plain meaning of the legislation. The purpose of an objects clause is “to indicate the intended purpose of the legislation” (D C Pearce &
R S Geddes, Statutory Interpretation in Australia (LexisNexis Butterworths, 7th ed, 2011)) and they are used as an aid to the construction of words of legislation. Thus, s 121 cannot assist the argument of the respondent here.
Conclusion
In all the circumstances I am satisfied that the Federal Magistrate erred in finding that the father was the liable parent such that an order could be made under s 124 of the Assessment Act against him. To put that in the terminology of what is required for leave to appeal to be granted, there has been a clear error of principle by the Federal Magistrate and a substantial injustice caused to the applicant. Thus, leave to appeal should be granted.
As a result I do not need to consider the second aspect of the challenge to the orders made by the Federal Magistrate, namely whether the Federal Magistrate erred in making the orders that he did on the evidence that was before him.
Turning then to the appeal, I find that there is merit in Grounds 1 and 2. With Ground 3, given that the mother is the liable parent and pays child support, prima facie there should be no difficulty with his Honour’s order that is the subject of this challenge. However, the fact is that there was no application by either party, as there could have been, for the mother to pay one half of all of the education costs, and nor was there any application to then reduce the annual rate of child support payable by her. Thus, whatever the position is with the father, these orders as they relate to the mother simply cannot stand.
In relation to Grounds 4 and 5, the orders therein challenged are entirely dependent on the father being a liable parent for the purposes of s 124 of the Assessment Act. However, that is not the case, and thus these grounds of appeal clearly have merit.
With Ground 6, I must confess that I do not understand that ground. I cannot see where the Federal Magistrate has determined and/or held that there was child support payable by the father. Thus, I do not consider that this ground has any merit.
Given that I have found merit in Grounds 1, 2, 3, 4 and 5, the appeal must succeed.
In that event, to repeat, the father seeks orders that Orders 4 and 5 made by the Federal Magistrate on 28 January 2011 be discharged. In the circumstances it is beyond doubt that that must be the result of this appeal.
Costs
At the conclusion of the hearing I received the submissions of the parties as to costs.
In the event that the appeal succeeded, the appellant sought an order for costs against the respondent, but if no order for costs was made, he sought a costs certificate.
The respondent opposed any order for costs and sought a certificate.
In my view there should be no order for costs. The appeal has succeeded on a question of law and therefore the respondent should not be visited with an order for costs. However, both parties should have costs certificates.
I certify that the preceding forty-nine paragraphs (49) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Strickland delivered on 20 March 2012.
Associate:
Date: 20 March 2012
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