Russo & Child Support Registrar
[2009] FMCAfam 437
•30 April 2009
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| RUSSO & CHILD SUPPORT REGISTRAR | [2009] FMCAfam 437 |
| CHILD SUPPORT – Appeal from a Departure Prohibition Order – dismissed. |
| Child Support (Registration and Collection) Act 1988, ss.17 & 72 Taxation Administration Act 1953, s.14V |
| Jones v Child Support Registrar [2007] FCA 1732 Poletti v Deputy Commissioner of Taxation (1994) 124 ALR 373 |
| Applicant: | MR RUSSO |
| Respondent: | CHILD SUPPORT REGISTRAR |
| File Number: | SYC 7131 of 2008 |
| Judgment of: | Sexton FM |
| Hearing date: | 29 April 2009 |
| Date of Last Submission: | 29 April 2009 |
| Delivered at: | Sydney |
| Delivered on: | 30 April 2009 |
REPRESENTATION
| Counsel for the Applicant: | In Person |
| Solicitors for the Respondent: | Minter Ellison Solicitors |
ORDERS
The appeal in relation to the Departure Prohibition Order filed
2 December 2008 be dismissed noting a transcript of the reasons for decision will be made available to each party as soon as practicable.
The Respondent’s costs application in relation to the appeal be adjourned to 25 June 2009 at 10.00a.m.
The Applicant attend personally on the adjourned date noting if the Applicant retains legal representation, the legal representative may attend court on the Applicant’s behalf.
The Respondent’s legal representative provide the Applicant and the Court with written submissions in relation to costs sought on both an indemnity basis and in accordance with the costs schedule by no later than 4.00p.m. on 22 May 2009.
The Applicant provide the Respondent’s legal representative and the Court with written submissions in relation to the costs application by no later than 4.00p.m. on 17 June 2009.
IT IS NOTED that publication of this judgment under the pseudonym Russo & Child Support Registrar is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT SYDNEY |
SYC 7131 of 2008
| MR RUSSO |
Applicant
And
| CHILD SUPPORT REGISTRAR |
Respondent
REASONS FOR JUDGMENT
Ex Tempore
These reasons were delivered orally.
This matter is an appeal by the applicant father of two children, [X] aged 18 and [Y] aged 11 years, from a decision of the Child Support Registrar to issue a Departure Prohibition Order. The Child Support Registrar asks that the appeal be dismissed.
The Registrar issued the Departure Prohibition Order on 21 November 2008. The Applicant filed a notice of appeal from the Registrar's decision on 2 December 2008. In his notice of appeal, the Applicant sought an order that the Departure Prohibition Order be set aside. In summary, the Applicant's grounds of appeal state that he is required to travel overseas for work related and family matters. He says that his elderly mother resides in Germany, and he has travelled to Germany in the past on average every two years to visit her. He also says that his business requires him to travel overseas approximately twice a year.
The Applicant was self‑represented at the hearing. The Child Support Registrar was represented by Ms Gibbons of Minter Ellison Solicitors. The Applicant relies on his own affidavit affirmed on 27 March 2009, filed on 30 March 2009, and on his financial statement filed on
2 December 2008, in support of the appeal.
The Respondent relies on an affidavit sworn by Ms P, a senior employee of the Child Support Agency, and a delegate of the Child Support Registrar.
The Applicant's contention from the Bar Table, and when cross‑examining Ms P, is that the Agency has made a number of errors in calculating his child support liability and he has concluded that he should have no child support arrears. The Applicant annexes to his affidavit, a Child Support Transaction Statement with a Balance Summary as at 20 March 2009. He deposes to payments he claims to have made directly to his daughter, now 18 years of age, to others on behalf of his children, and to costs incurred by him in spending time with his children. He says, or implies, that these payments should have been deducted from his liability. The Applicant submits that the Registrar was wrong to issue a Departure Prohibition Order because he has dealt openly at all times with the Agency, has paid in excess of his liability at times, and does not have the capacity to enter into arrangements with the Agency to pay arrears. The Applicant does not address in his material the issues the Court must determine in an appeal of this kind.
It is apparent from Annexure A of Ms P's affidavit that the Applicant's liability has been calculated by applying the formula assessment for the periods 22 July 2002 to 29 October 2002 and from 1 January 2008 to 21 January 2010, and by applying change of assessment decisions from 30 October 2002 to 31 December 2007. The Applicant has therefore been involved in the change of assessment process, at least within the agency. On the evidence before me, I am satisfied the Applicant has not chosen to have the change of assessment decisions reviewed independently of the Agency, as was his right, either by the Social Security Appeals Tribunal (after the relevant legislative changes) or by a Court (prior to the introduction of those changes). I formed the view during the hearing that the Applicant did not appreciate that in deciding whether his Departure Prohibition Order should be set aside, the Court would not be embarking on a reassessment of his child support liability and hence the arrears of child support he owes.
Relevant law
The law relating to Departure Prohibition Orders is set out in the Child Support (Registration and Collection) Act 1988, which I will refer to in these reasons as the Registration Act or the Act. The Registrar has the power to make a Departure Prohibition Order against a person liable for child support under section 72D of the Registration Act.
Section 15(1) of that Act provides that:
The Registrar may, in writing, delegate all or any of the Registrar’s powers or functions under this Act to an officer or employee of the Department.
In this case, the Registrar delegated his power to make a Departure Prohibition Order to Ms P.
Section 72D(1) provides that:
The Registrar may make an order (a departure prohibition order) prohibiting a person from departing from Australia for a foreign country if:
(a) the person has a child support liability; and
(b)the person has not made arrangements satisfactory to the Registrar for the child support liability to be wholly discharged; and
(c)the Registrar is satisfied that the person has persistently and without reasonable grounds failed to pay:
(i)child support debts arising from a registrable maintenance liability under section 17; or
(ii)a child support debt arising from a registrable maintenance liability under section 17A; and
(d)the Registrar believes on reasonable grounds that it is desirable to make the order for the purpose of ensuring that the person does not depart from Australia for a foreign country without:
(i) wholly discharging the child support liability; or
(ii)making arrangements satisfactory to the Registrar for the child support liability to be wholly discharged.
Section 72D(2) provides that:
For the purposes of paragraph (1)(c), the Registrar must have regard to the following matters:
(a)the capacity of the person concerned to pay the debt or debts;
(b)the number of occasions on which action has been taken to recover the debt or debts, and the outcome of the recovery action;
(c)if subparagraph (1)(c)(i) applies—the number of occasions on which the debts mentioned in that subparagraph had not been paid on or before the day on which they became due and payable;
(d)if subparagraph (1)(c)(ii) applies—the length of time for which the debt mentioned in that subparagraph has remained unpaid after the day on which it became due and payable;
(e)such other matters as the Registrar considers appropriate.
Once a Departure Prohibition Order has been made and not set aside on appeal, the Registrar of the Child Support Agency has the power to revoke or vary a Departure Prohibition Order pursuant to section 72I, or issue a departure authorisation certificate if the person has applied for a departure authorisation certificate under section 72L, or accept a person giving security for their return to Australia under section 72M. Section 72T(1) of the Registration Act gives a person who is subject to a Departure Prohibition Order right of appeal to the Administrative Appeals Tribunal, but only in relation to decisions made by the Registrar under section 72I (the revocation and variation provision), section 72L (the departure authorisation certificate provision) and section 72M (the lodgement of security provision).
Section 72Q(1) provides that:
A person aggrieved by the making of a departure prohibition order may appeal to the Federal Court of Australia or the Federal Magistrates Court against the making of the order.
The Federal Magistrates Court has discretion to either set aside the Departure Prohibition Order or dismiss the appeal pursuant to section 72S of the Registration Act.
His Honour Justice Emmett in the very recent decision of Jones v Child Support Registrar [2007] FCA 1732 said this[1] when dealing with an interlocutory application concerning an appeal from a Departure Prohibition Order:
In an appeal under s 72Q of the Act, the person aggrieved must establish that the order was wrongly made. That may be done by satisfying the Court that any one of the essential elements of s 72D is absent. However, the Registrar bears no onus of establishing the validity of the order.
[1] At paragraph 5.
The onus is on the applicant.
The Federal Magistrates Court can only consider whether a Departure Prohibition Order has been properly made. The questions that need to be determined were outlined by the Federal Court in Poletti v Deputy Commissioner of Taxation (1994) 124 ALR 373. This decision considered section 14V of the Taxation Administration Act1953 which is in similar terms to section 72Q(1) of the Registration Act. The principles adopted by the Court in Poletti were applied by Justice Emmett in Jones, where his Honour stated [2] that:
An appeal may involve questions of fact or law or both… [and] would ordinarily involve the determination by the Court of at least three principal questions. The first is whether the affected person has a child support liability. The second is whether the Registrar was satisfied as to the matters, and had the belief, referred to in s 72D. The third is whether reasonable grounds existed for the Registrar to be satisfied as to those matters and for the formation by the Registrar of the requisite belief.
[2] At paragraph 6.
Findings and Determination
Dealing with these three questions in the present case:
Firstly, whether the affected person has a child support liability.
It is common ground that the Applicant has been assessed to pay child support for his children to their mother. The first assessment, excluding a five year period when the parties separated and then reconciled, was for the period 22 July 2002 to 21 October 2003, and was first registered for collection with the agency from 16 January 2003[3]. For this period, the Applicant's liability was assessed at $804.75 a month. During this period, the Applicant made several “non-agency payments” totalling $1800. These payments were accepted by the agency and credited towards the Applicant's liability[4]. The Applicant deposes to making additional payments directly to [M] College for [X]’s tuition fees during this period totalling $997.64, which he submits should have been included as a credit against his liability[5], but were not.
[3] Annexure A to affidavit of Ms P
[4] Annexure D to Applicant’s affidavit
[5] Annexure E to Applicant’s affidavit
At the time the Departure Prohibition Order was authorised, the applicant had an unpaid child support liability of $36,704.89 in addition to $9,700.46 he had incurred in penalties for non-payment. This total figure of $46,405.35 is itemised as the Applicant's liability as at 31 October 2008 in the Child Support Transaction Summary annexed to the Applicant's affidavit. As already noted, while the Applicant claims this figure is incorrect as a result of errors made by the Agency, the Applicant at no time exhausted the pathway available to him to have the assessments reviewed. I explained to the Applicant that the Court in these proceedings would not be changing his current or previous child support assessments. The Court was required to undertake an entirely different inquiry. Although I am aware the Applicant was represented in these proceedings prior to the hearing yesterday, I am not certain the Applicant understood the nature of this inquiry.
The meaning of child support liability, as referred to in section 72D is set out in section 72E of the Registration Act. Section 72E provides that:
For the purposes of this Part, a person has a child support liability if:
(a)the person has a registrable maintenance liability of a kind mentioned in section 17 or 17A; and
(b)an amount payable under the registrable maintenance liability is a child support debt; and
(c)the day on which the debt became due and payable under section 66 has passed, and the debt remains unpaid in whole or in part.
Section 17(2) provides that:
Subject to section 19, a liability is a registrable maintenance liability if it arises under a child support assessment.
Section 19 does not apply to the facts of this case. In the present case, the liability is a registrable maintenance liability because it arises under a child support assessment in accordance with section 17(2).
Sections 72E(b) and (c) apply because the amount payable is a child support debt and the day on which the debt became payable has passed and the debt remains wholly unpaid.
I find the Applicant's position on this point that he should not have a child support debt misconceived. The child support liability referred to in section 72D(1) is the liability arising from the Applicant's child support assessments from 22 July 2002 until the present. That liability amounts to $46,405.35 as at 31 October 2008, just prior to the Departure Prohibition Order being authorised. The child support liability which existed at the time the Registrar made the Order is the child support liability which must be taken into account by the Registrar under section 72D(1).
I find therefore that the Applicant had a child support liability at the relevant date.
The second question for determination is whether the Registrar was satisfied as to the matters and had the belief referred to in s.72D(1)(a) to (d) inclusive.
As already noted, I find Ms P was satisfied as to the Applicant having a child support liability in accordance with section 72D(1)(a).
The Registrar must next be satisfied under section 72D(1)(b) that the Applicant:
…has not made arrangements satisfactory to the Registrar for the child support liability to be wholly discharged...
The Applicant does not challenge Ms P's assertion that he has made no attempt to make any arrangements with the Agency to pay his child support liability. The Applicant takes no issue with the client contact file notes for the period November 2007 to 21 November 2008[6]. These file notes satisfy me that the Applicant made no attempt at all to enter into sensible discussions with the Agency in relation to payment of his arrears. On the contrary, the file notes indicate that on each occasion the Applicant terminated the call with the Agency officer. I find the file notes clear evidence of the unsuccessful efforts made by the Agency to recover the child support debt or part of that debt from the Applicant.
[6] Annexure A of Ms P’s affidavit sworn 15 April 2009
The Applicant submits that he has not made any arrangements with the Registrar to discharge his child support liability, either in whole or in part because he does not accept the liability and because he has no capacity.
I find the Registrar was satisfied that the Applicant has not made satisfactory arrangements to wholly discharge his liability.
The next question about which the Registrar had to be satisfied, under section 72D(1)(c), was that the Applicant has persistently and without reasonable grounds failed to pay a child support debt arising from a registrable maintenance liability under section 17 of the Registration Act. I have already referred to section 17. The Applicant's child support debt arises from a registrable maintenance liability under section 17(2).
Section 72D(2) provides that for the purposes of section 72D(1)(c), the Registrar must have regard to the capacity of the Applicant to pay the debt; the number of occasions action has been taken to recover the debt, and the outcome of the recovery action; the number of occasions the debt has not been paid on or before they became due and payable; and such other matters as the Registrar considers appropriate.
In relation to the capacity to pay the debt – section 72D(2)(a)
The Applicant submits that the Registrar made an error in concluding he had capacity to pay his outstanding child support liability. The Applicant cross-examined Ms P as to the basis upon which she came to the view that he had the capacity to pay. Ms P summarised her reasons for deciding the Applicant had capacity to meet his child support liability in her affidavit, and gave additional evidence in cross-examination. She said she had regard to all matters set out in the submission annexed to her affidavit which included details of searches relating to the applicant's assets including his bank account records, his business income and all information available on the computer in relation to the matter, including the Applicant's payment history, and she then assessed the Applicant's capacity to settle the debt.
Specifically, in relation to the Applicant’s capacity, she had regard to the following:
a)The applicant had been identified as the sole director and shareholder of [G] Pty Ltd, which, according to the Business Activity Statements, had $144,497 in total sales and total salary of $48,000, between 1 October 2006 and 30 September 2008.
b)Bank statements obtained by the Agency showed that $400 was consistently being transferred from the company to the Applicant's personal bank account each week.
c)The Applicant's assessed income in the 2006 financial year of $48,170, and his assessed income in the 2007 year of $54,288.
d)
The Applicant's last direct payment to the Agency was $80 on
25 July 2007. That is the last payment before the Departure Prohibition Order was made.
e)Immigration records showing the Applicant has travelled overseas twice in the last two years, leading up to the making of the Departure Prohibition Order. The Applicant has continuously refused to enter into an arrangement for the payment of his overdue liability, prior to travelling overseas or when he has returned to Australia. Ms P said in cross-examination she had regard to the trips rather than the purpose of the trips.
f)All customer interactions and decisions made by the Agency, revealed by a search of the electronic case management system of the Agency.
g)The RTA search of 21 November 2008 which reveal the Applicant owns two motorbikes, a Yamaha and a Suzuki, with active registrations.
h)A search which reveals the Applicant has never been in receipt of Centrelink benefits.
i)The Applicant is a Director of a company which first reported on 19 February 2007 with an address at Banksia, New South Wales, the same address as the address for the Applicant's company known as [G] Pty Ltd.
In oral evidence, Ms P said she had particular regard to the Applicant's taxable income and payments made to him from the company. She had regard to the relevant change of assessment decisions, but not to the whole of the material used by the Senior Case Officer to reach a decision in the assessment process.
Ms P said that when considering the Applicant's overall capacity to meet his child support debt, either by way of instalments or otherwise, she took into account all of these matters relating to the Applicant's financial position. She formed the view that the Applicant had capacity to make payments towards his child support arrears.
In his Form 13 sworn on 2 December 2008, the Applicant deposes to being self‑employed as a [occupation omitted]. He deposes to a gross weekly income of $1000, and to paying tax of $250 a week. He deposes to a rental payment of $310 a week. The total to which he deposes for expenses do not add up. The amount he includes for his child support liability is different from the liabilities shown in the Agency's Transaction Statement. He deposes to having no assets, no superannuation, no liabilities. He does not refer to his income, assets and liabilities in his affidavit. Given the results of searches conducted by the Child Support Agency, I am not satisfied the Applicant has completed his financial statement carefully or indeed accurately. Although in his affidavit the Applicant deposes to payments he says he has made for the benefit of his children, and costs incurred by him to spend time with the children, the Applicant fails to adduce any evidence of his alleged incapacity to pay payments towards his arrears of child support.
In relation to number of occasions the Agency has taken action to recover the debt and the outcome of that action – section 72D(2)(b)
In accordance with s.72D(2)(b) the Registrar must then have regard to:
…the number of occasions on which action has been taken to recover the debt or debts, and the outcome of the recovery action…
Ms P says she reviewed the computer records in the case which included file notes of efforts made by the Agency staff to recover child support from the Applicant. I have already referred to these file notes and to the fact that the Applicant did not challenge their accuracy.
Under cross‑examination Ms P said all payments from the Applicant that had been received, except possibly payments made in 2002/03, resulted from enforcement action, including garnisheeing his wages when he was employed.
When challenged by the Applicant as to the amounts which should have been credited to his account in 2005, Ms P said she found no record at all on the Agency computer of communications between the Applicant and the Agency as to the quantum of his debt.
Ms P said she had regard to the fact that the Agency's efforts had been wholly unsuccessful.
The number of occasions the debt had not been paid on or before the due date – section 72D(2)(c)
As submitted by Ms Gibbons, neither the voluntary payments made by the Applicant nor the amounts withheld by his former employer ever satisfied the Applicant's monthly child support liabilities. I am satisfied the Applicant has never paid his child support debt on or before the due day on which it was due and payable.
Other matters the Registrar considers appropriate – section 72D(2)(e)
Ms P deposes to the fact that according to Agency records, all administrative options to enforce payment of the applicant's child support liability have been pursued. Enforcement has been the only successful method in securing any substantial payment from the Applicant, despite the number of attempts made to negotiate voluntary payments as outlined in the submission. She says administrative collection is made much more difficult in the Applicant's case due to his self-employment. When cross‑examining Ms P, the Applicant asserted he had made some voluntary payments without the need for enforcement. However, he did not adduce evidence in support of that assertion. I am satisfied, from the submission relied on by Ms P, that the Agency obtained some funds from the Applicant by intercepting two tax refunds, intercepting his MBF payment from their demutualisation and issuing a notice to his employer between
1 September 2004and 8 June 2006 to withhold payments from the Applicant. I am also satisfied on the basis of the Transaction Statement and Ms P's confirmation from Agency records, that the last voluntary payment made by the Applicant to the Agency prior to the Departure Prohibition Order being made in November 2008 was on 25 July 2007.
The question is whether the Registrar was satisfied that the Applicant's failure to pay was without reasonable grounds, having regard to the matters set out in section 72D(2) above already canvassed.
I find that Ms P carefully evaluated the material available to her and was satisfied that the Applicant's failure to pay was without reasonable grounds, having regard to the matters in section 72D(2).
The final question under section 72D(1) of which the Registrar had to be satisfied was whether she believed on reasonable grounds that it was desirable to make the order for the purpose of ensuring that the person does not deport from Australia for a foreign country without wholly discharging the liability or making arrangements satisfactory to the Registrar for the liability to be wholly discharged. In the order dated 21 November 2008 Ms P makes this statement:
Pursuant to sub-s 72D(1) of the Child Support (Registration and Collection) Act 1988 I, Ms P, delegate of the Registrar of the Child Support Agency, believing on reasonable grounds that it is desirable to do so for the purpose of ensuring that the person subject to the child support liability referred to in the schedule does not depart from Australia for a foreign country without (a) wholly discharging the child support liability or (b) making arrangements satisfactory to the Registrar of the Child Support Agency for the child support liability to be wholly discharged, hereby prohibit the departure of Mr Russo from Australia for a foreign country.
I find that Ms P believed on reasonable grounds it was desirable to make the order for the purpose of ensuring that the Applicant does not depart from Australia for a foreign country without wholly discharging the liability or making arrangements satisfactory to the Registrar for the liability to be wholly discharged.
The third question for determination on this appeal is whether reasonable grounds existed for the Registrar to be satisfied as to the relevant matters and for the holding of the requisite belief.
The Applicant addressed me briefly at the outset of the hearing on one component of one of the relevant matters to which the Registrar was required to have regard, that is, his capacity to pay the debt. This is one of the matters to which the Registrar was required to have regard under section 72D(2) when the Registrar considered whether the applicant had persistently and without reasonable grounds failed to pay under section 72D(1)(c). The applicant did not adduce evidence in relation to, nor address the Court in relation to any of the other relevant matters about which the Registrar had to be satisfied, and he made no final submissions.
As earlier noted in these reasons, the Applicant needed to demonstrate that one of the pre-requisites to the making of a Departure Prohibition Order was not satisfied.
The Applicant's cross-examination was focused on Ms P's finding that he had the capacity to make payments towards his arrears. He said the Registrar was unable to point to a source of funds from which he could pay his liability. He said he could not apply for a departure authorisation certificate because he expected he would have to deposit funds with the agency to do so, which he had no capacity to do. As he made no submissions, the Applicant did not comment on Ms P's evidence that each application for a departure authorisation certificate is considered on its merits.
Ms Gibbons for the Registrar relied on the case of Jones, to which I have already referred. Ms Gibbons correctly submits that the onus is on the Applicant to establish that the Departure Prohibition Order was wrongly made, which may be done by satisfying the Court that any one of the essential elements is absent.
Ms Gibbons submits the applicant has not discharged this onus.
Ms Gibbons submits that Ms P clearly articulated the matters she had regard to in making her decision, and the Court should be satisfied she had reasonable grounds to be satisfied about all the matters in section 72D she was required to consider. Ms Gibbons said Ms P had regard to other matters beside the Applicant's capacity to pay. She had regard to the Agency's need to take action to recover the debt in the past and had been forced to intercept taxation refunds and funds from the MBF demutualisation. The Applicant had refused to negotiate with the agency and chose not to explain why he was not able to make payments. Rather, the Applicant terminated the calls with the Agency officers.
Decision
I find from the Child Support Transaction Statement that at the time the Departure Prohibition Order was made the Applicant had a child support liability and had been in arrears since April 2003. I am satisfied he had been told about the option available to him to have the objection decision of late 2007 reviewed by the Social Security Appeals Tribunal, but chose not to exercise that option. The Applicant made no arrangements with the Agency to discharge his liability or any part of his liability when given a number of opportunities to do so, particularly in the 12 months leading up to the making of the Departure Prohibition Order. On the day the order was made, the Applicant was given a final chance to negotiate a payment arrangement of his arrears, which the Applicant refused.
Taking into account the matters considered by Ms P, which includes among a number of matters the Applicant's attitude to his child support obligations, I am satisfied the Registrar had reasonable grounds to be satisfied in relation to the relevant matters in section 72D and reasonable grounds for holding the requisite belief that it was desirable to make the Departure Prohibition Order to prevent the Applicant leaving Australia without discharging his child support liability, or making satisfactory arrangements with the Registrar to do so.
The appeal will therefore be dismissed.
I certify that the preceding fifty-eight (58) paragraphs are a true copy of the reasons for judgment of Sexton FM
Associate: Skye Owen
Date: 30 April 2009
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