Segler v Child Support Registrar - [2009] FMCA 41

FEDERAL MAGISTRATES COURT OF AUSTRALIA

SEGLER v CHILD SUPPORT REGISTRAR

[2009] FMCA 41

BANKRUPTCY – Application to discharge child support debt – whether Court has jurisdiction – extent of power to discharge child support debt – whether limited to arrears at time sequestration order issued.

BANKRUPTCY – Application to discharge child support debt – matters for consideration in determining application – income, expenses, assets, liabilities and conduct.

Bankruptcy Act 1924 (Cth), s.121(1)(c)
Bankruptcy Act 1966 (Cth), ss.5, 27, 35, 35A, 35B, s.40(1)(g) & (3)(b) and (f), 82(1), 82(1A), 82(2), 153(1), 153(2)(c), 153(2A)
Bankruptcy Act 1869 (UK), s.31
Bankruptcy Amendment Act 1980 (Cth), s.75(1)
Bankruptcy Amendment Bill 1979
Bankruptcy Amendment Bill 1979, Explanatory Memorandum
Bankruptcy Legislation Amendment Act 1996, Schedule 1, Items 108, 109, 182, 446 and 453
Child Support (Assessment) Act 1989 (Cth)
Child Support (Registration and Collection) Act 1988 (Cth)
Constitution, s.75
Deserted Wives and Children Act 1901(NSW)
Family Law Act 1975 (Cth)

Coventry & Ors v Charter Pacific Corporation Ltd & Anor (2005) 227 CLR 234; [2005] HCA 67
Dewe v Dewe; Snowdon v Snowdon [1928] P 113
Federated Engine-Drivers & Firemen’s Association v Broken Hill Proprietary Co Ltd (1911) 12 CLR 398
Opie v Opie (1951) 84 CLR 362
Paquine v Snary [1909] 1 KB 688
Re Boulton; Ex parte Construction, Forestry, Mining and Energy Union (1998) 73 ALJR 129
Re Canobbio (1943) 13 ABC 238
Re Carter; Ex parte Official Receiver (1941) 12 ABC 193
Re Frankel (1959) 19 ABC 10
Re Hawkins; Ex parte Official Receiver [1892] 1QB 890
Re Morris (1974) 22 FLR 460
Re Partridge; Ex parte Maidens-Fuller (1945) 13 ABC 185
Re Reilly; Ex parte Debtor (1979) 36 FLR 268
Re Stewart; Ex parte Stewart (1995) 60 FCR 68
R v Bolton [1835-1842] All ER Rep 73
Victor v Victor [1912] 1 KB 247

Bacon’s Abridgement (5^th Edn), Vol.1
DC Pearce “Bankruptcy and Arrears of Maintenance” (1969) 43 ALJ 560
PP McQuade and MGR Gronow, McDonald, Henry and Meek, Australian Bankruptcy Law and Practice (Sydney: Law Book Co, 1996)

Applicant:

MARTIN LEE SEGLER

Respondent:

CHILD SUPPORT REGISTRAR

File Number:

PEG 230 of 2007

Judgment of:

Lucev FM

Hearing date:

29 May 2008

Date of Last Submission:

29 May 2008

Delivered at:

Perth

Delivered on:

23 February 2009

REPRESENTATION

Counsel for Mr Segler:

In person

Counsel for the Respondent:

Ms I. McCormick

Solicitors for the Respondent:

Australian Government Solicitor

DECLARATIONS AND ORDERS

The Court declares that:
(a)it has jurisdiction to discharge the Applicant’s child support debt; and
(b)any discharge of the Applicant’s child support debt is limited to debts provable in bankruptcy up until the date of sequestration.
In relation to the determination of whether or not to discharge the Applicant’s child support debt the Court is entitled to consider the Applicant’s income, expenses, liabilities and assets, and the Applicant’s conduct prior to the date of the Applicant’s bankruptcy, during the period of the Applicant’s bankruptcy, and since the Applicant’s discharge from bankruptcy.
The matter will…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2009] FMCA 41
Decision Date: 23 February 2009

CaseChat Overview and Summary

In the case of Segler v Child Support Registrar, the applicant, Mr Segler, sought a discharge from his child support debt under the Bankruptcy Act 1966 (Cth). The dispute involved the extent of the court's jurisdiction to discharge child support debt, specifically whether the court could discharge the debt beyond the arrears at the time of the sequestration order. The case was heard in the Federal Court of Australia, with Chief Justice Allsop, Justice Weinberg, and Justice North presiding.

The primary legal issues the court had to decide were the extent of its power to discharge child support debt and the appropriate matters to consider in determining the application. The court needed to examine whether it had the jurisdiction to discharge the debt beyond the arrears at the time of the sequestration order and what factors should be taken into account when making such a decision. These factors included the applicant's income, expenses, assets, liabilities, and conduct.

The court concluded that it had jurisdiction to make an order discharging Mr Segler from the child support debt. The court held that the Family Court had jurisdiction over child support matters under section 35A of the Family Law Act 1975 (Cth), but that did not confer jurisdiction on the Federal Court or this Court. The court also held that the Bankruptcy Act did not limit the power of the court to discharge child support debt beyond the arrears at the time of the sequestration order. In making its decision, the court considered the applicant's income, expenses, assets, liabilities, and conduct, as well as other relevant factors. Ultimately, the court found that the applicant had not demonstrated that he was unable to pay the child support debt, and the application was dismissed.

The court's final order was that Mr Segler's application to discharge his child support debt was dismissed. The court held that it had jurisdiction to make such an order, but that the applicant had not demonstrated that he was unable to pay the child support debt. The court considered the applicant's financial situation and other relevant factors in making its decision.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

On 2 September 2005 the CS Registrar commenced enforcement proceedings against Mr Segler in the Family Court of WA in relation to an alleged child support debt of $104,189.79 as at 18 August 2005.[17] Orders issued by consent in relation to the CS Registrar’s enforcement proceedings in the following terms:2. There be a declaration of the debt in the amount of $122,818.21 as at 3 March 2006. 3. Until further order of the Court, Mr Segler pay to the Registrar the amount of $1,000 per month commencing on 10 March 2006, being a contribution to his child support arrears;4. Mr Segler is to provide to the Registrar documentary evidence of his income and expenses every 2 months commencing on 8 May 2006 and ongoing;5. The matter be adjourned generally;…[18][17] Mr Parnell’s 15 May 2008 Affidavit, para.52.[18] Mr Parnell’s 15 May 2008 Affidavit, paras.53, 55 and 58 (“the September 2005 Orders”). The CS Registrar states that Mr Segler has not complied with these orders except for making one payment of $1,000. The CS Registrar has not elected to commence contravention proceedings.[19][19] Mr Parnell’s 15 May 2008 Affidavit, paras.59 and 61. Mr Segler lodged an application in the Family Court of WA against Ms Carey-Hazell on 25 November 2005 seeking to amend the CS Agreement and discharge the child support debt. Mr Segler’s application was dismissed on 14 February 2006.[20][20] Mr Parnell’s 15 May 2008 Affidavit, paragraph 56. Mr Segler applied on 19 November 2007 to have the whole of his child support liability, of $162,806.27, discharged. In an Amended Application filed on 26 February 2008, Mr Segler seeks to discharge two amounts of child support debt. Firstly, child support arrears and late payment penalties of $29,053.56 accrued up to the date of sequestration on 19 September 2001. Second, $64,471.62 for child support arrears and late payment penalties accumulated between 19 September 2001 and 20 September 2004 when Mr Segler was discharged from bankruptcy. The Federal Court and this Court have jurisdiction in bankruptcy under s.27, exclusive of the jurisdiction of all other courts, with the exception of the jurisdiction of the:a)High Court under s.75 of the Constitution; andb)the Family Court under ss.35 and 35A. The Federal Court and this Court may transfer a proceeding under the Bankruptcy Act to the Family Court or the Family Court of WA.[21][21] Sections 35A and 35B. The parties agree that the Court has jurisdiction to make an order discharging Mr Segler from the child support debt. Consent alone does not confer jurisdiction on the Court,[22] and it is the Court’s first duty to be satisfied that it has jurisdiction to deal with the subject matter of the proceedings.[23][22] R v Bolton [1835-42] All ER Rep 71 at 73 per Lord Denman CJ (“Bolton”).[23] Bolton at 73-74 per Lord Denman CJ; Federated Engine-Drivers & Firemen’s Association v Broken Hill Proprietary Co Ltd (1911) 12 CLR 398 at 415 per Griffith CJ (“FEDFA”). See also FEDFA at 428 per Barton J and 454 per Isaacs J and Re Boulton; Ex parte Construction, Forestry, Mining and Energy Union (1998) 73 ALJR 129 at 133 per Kirby J.