Ahern & Ahern & Anor (SSAT Appeal) [2013] FCCA 1072 (13 August 2013)

Last Updated: 29 August 2013

FEDERAL CIRCUIT COURT OF AUSTRALIA

AHERN & AHERN & ANOR (SSAT APPEAL)

[2013] FCCA 1072

Catchwords: CHILD SUPPORT – Appeal from decision of Social Security Appeals Tribunal – costs – where appellant successful – where costs not sought against First Respondent. CHILD SUPPORT – Appeal from decision of Social Security Appeals Tribunal – consequential orders.

Legislation: Child Support (Registration and Collection) Act 1988 (Cth), ss.104, 105, 110B, 111C Family Law Act 1975 (Cth), s.117

Ahern & Ahern & Anor (SSAT Appeal) [2013] FCCA 436 Ahern & Ahern & Anor (SSAT Appeal) [2012] FMCAfam 1299 Brown & Brown [1998] FamCA 115; (1998) 23 Fam LR 349 Child Support Registrar & Kanavos [2010] FamCAFC 244; (2011) 44 Fam LR 422 Colan Products Pty Ltd v Luxon Pty Ltd (No 2) [2002] FMCA 90 Colgate Palmolive Pty Ltd v Cussons Limited [1993] FCA 536; (1993) 46 FCR 225 CSR & MMB (SSAT Appeal) [2007] FMCAfam 944; (2007) 220 FLR 245 Fitzgerald & Fish [2005] FamCA 158; (2005) 33 Fam LR 123 Kindree & CSR (SSAT Appeal) [2010] FMCAfam357; [2010] FMCAfam 357; (2010) FLC 98-052 Kohan & Kohan (1993) FLC 92-340 Penfold v Penfold [1980] HCA 4; (1980) 144 CLR 311 Piersons Pro-Health Pty ltd v Silvex Nominees Pty Ltd (No 3) [2010] FMCA 250 Polec & Staker & Anor [2012] FMCAfam 19 Prantage & Prantage [2013] FamCAFC 105 Pratt v Latta (No 2) [2002] FMCA 43 Stark & Sherman & Anor (SSAT Appeal) [2013] FMCAfam 40

Applicant:

MR AHERN

First Respondent:

MS AHERN

Second Respondent:

CHILD SUPPORT REGISTRAR

File Number:

SYC 5609 of 2012

Judgment of:

Judge Scarlett

Hearing date:

In Chambers

Date of Last Submission:

27 June 2013

Delivered at:

Sydney

Delivered on:

13 August 2013

REPRESENTATION

Counsel for the Applicant:

Ms Kaur-Bains

Solicitors for the Applicant:

Jackson Lalic Lawyers

The First Respondents:

No Orders for costs were sought by or against the First Respondent

Solicitors for the Second Respondents:

Australian Government Solicitors

ORDERS

(1) The Second Respondent Child Support Registrar is to pay the Appellant’s costs fixed in the sum of $18,680.00.
(2) I allow three (3) months to pay.
(3) There will be no Order for costs in respect of the First Respondent.
(4) The Orders made on 23 November 2012 are discharged.

IT IS NOTED that publication of this judgment under the pseudonym Ahern & Ahern & Anor (SSAT Appeal) 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 5609 of 2012

MR AHERN

Applicant

And

MS AHERN

First Respondent

CHILD SUPPORT REGISTRAR

Second Respondent

REASONS FOR JUDGMENT

Application

1. The Appellant successfully appealed against a decision of the Social Security Appeals Tribunal made on 26 May 2012 and posted on 5 June 2012 (Ahern & Ahern & Anor (SSAT Appeal)^[1]). The Appellant has now made a written submission addressing the following issues:
   1. an application for costs in the sum of $55,009.08;
   2. consequential orders flowing from the reasons for the Court’s decision on the Appeal.
2. No costs are sought against the First Respondent.
3. The Second Respondent, the Child Support Registrar, submits that no order for costs should be made. The Registrar also submits that the only consequential order should be to vacate the orders made on 23 November 2012.

Background

4. The litigation had a rather unfortunate beginning, in that the Appellant initially filed an Application for Judicial Review in the Federal Court on 6 July 2012. The Federal Court does not have jurisdiction to hear appeals from a decision of the Social Security Appeals Tribunal in child support matters. Jurisdiction under the Child Support (Registration and Collection) Act 1988 (Cth) is conferred on the Family Court and the Federal Circuit Court of Australia^[2] by s.104 of that Act. On 20 August 2013 Flick J transferred the proceedings to the Federal Magistrates Court.
5. On 23 November 2012 the Appellant sought orders under s.111C of the Child Support (Registration and Collection) Act staying:
   1. the collection and enforcement of child support arrears accrued until further order; and
   2. the operation of all child support assessments pending the determination of his Appeal.
6. On that date I made the following Orders until further Order:
   • (1) The collection and enforcement of child support arrears accumulated up to and including the date of this Order payable by the Applicant to the First Respondent for the children^[3]...is stayed.
     • (2) The sum of $5000.00 held by the Child Support Registrar as a result of the operation of the Notice under section 72A of the Child Support (Registration and Collection) Act 1988 dated 8 October 2012 is to be retained by the Child Support Registrar until further Order of the Court.
     • (3) The Applicant is to pay to the Child Support Registrar for payment out to the First Respondent on account of child support the sum of $150.00 per month the first payment to be made by 30 November 2012 and month and monthly thereafter.^[4]
7. The Appeal itself was heard on 13 May 2013 and judgment was handed down on 11 June 2013.

Submissions as to Costs

8. As directed by the Court, the Appellant and the Second Respondent filed written submissions in respect to costs and consequential orders. The Appellant also filed an affidavit by his solicitor, Mr F, sworn on 17 June 2013, setting out in paragraph 2 (a)-(h) his calculation of the amount of costs sought.
9. The Appellant’s Submissions make it clear that the amount of $4,438.00 itemised in sub-paragraph 2(a) of Mr F’s affidavit is not claimed. The costs referred to there relate to the Appellant’s costs of commencing proceedings in the Federal Court and remitting those proceedings to the Federal Magistrates Court.
10. The Appellant seeks the amounts itemised in the remaining sub-paragraphs, (b) to (h), amounting to $55,009.08.
11. The Appellant refers to my decision in Stark & Sherman & Anor (SSAT Appeal)^[5] where I set out at paragraphs [5] and [6] the relevant principles of law applicable to a costs application in respect of an appeal from the Social Security Appeals Tribunal. Those paragraphs say, relevantly:
    • 5. It is accepted by the parties that the law to be applied is section 117 of the Family Law Act. Subsection (1) sets out the general rule that each party to proceedings should pay their own costs. However, if the Court is of opinion that there are circumstances that justify it in doing so, the Court may make such order for costs as the Court considers just (see s.117(2)).
    • 6. In considering what order (if any) should be made, the Court must have regard to the matters set out in subsection 117(2A).^[6]
12. Counsel for the Appellant submits that the Appeal was successful because the Court^[7] found that there was no jurisdiction in relation to the Tribunal’s decision for the period 1 July 2010 to 30 June 2013, which is the only period the Appellant sought to appeal. Consequently, there is no need to remit the matter to the Tribunal. Thus, it is submitted that the Appellant has wholly succeeded even though there were two other grounds upon which he did not succeed.
13. The Appellant refers to the decision of Polec & Staker & Anor^[8] (cited in Stark & Sherman^[9] at [12]) where Hughes FM^[10] held at [22]:
    • The Child Support Registrar could have conceded the appeal. In that case the decision would have been remitted to the Tribunal for a re-hearing and the costs of the appeal in this Court would have been saved.
14. The Appellant further submits that the jurisdictional question of law which had previously been argued on the basis which was subsequently accepted in this case in CSR & MMB (SSAT Appeal)^[11], so the Registrar could have conceded the appeal.
15. Further, it is submitted that the fact that the Appellant argued three grounds of appeal but was only successful on one ground should not result I a reduction of the costs order in favour of the Appellant.
16. As to costs, the Child Support Registrar submits that:
    1. By the operation of s.105 of the Child Support (Registration and Collection) Act 1988, costs in proceedings under s.110B are governed by s.117 of the Family Law Act;
    2. The general principles which cover the broad discretion to award costs under s.117 were explained by the High Court in Penfold v Penfold^[12] at 315 (see also Child Support Registrar & Kanavos^[13]);
    100. Whilst the weight to be attached to any of the considerations in s.117(2A) is wholly discretionary and no single factor out-ranks any other, there is nothing to prevent one or other from being the sole foundation of a costs order (Fitzgerald & Fish^[14]; Brown & Brown^[15]).
17. The Registrar submits that no order for costs should be made because:
    1. The Appellant has the capacity to bear his own costs, as his affidavit shows that he receives from his solicitor’s practice a weekly income of about $4,300.00;
    2. The Appellant is not in receipt of legal aid;
    100. The Appellant originally commenced proceedings in the wrong court, the Federal Court, which occasioned extra costs to the Registrar because of two appearances on 6 and 8 August 2012;
    4. The Appellant filed two Applications in a Case and five affidavits seeking stay orders, the appointment of a litigation guardian and a change of venue, of which only the stay orders were pressed, again leading to unnecessary expense on the part of the Registrar;
    5. The Appellant filed a Notice of Appeal on 14 November 2012 asserting eight grounds of appeal, of which six were no longer pressed and a third ground was added;
    6. A letter of offer to the First Respondent is not relevant to a claim for costs against the Registrar, the Second Respondent;
    7. The correct question for the Court to consider is not whether the Appellant was wholly successful but whether the Registrar was wholly unsuccessful; as the Appellant only succeeded on one of the nine grounds pressed at various times, the Registrar cannot be said to have been wholly unsuccessful; and
    8. The affidavit of Mr F sworn on 17 June 2013 suggests that the Appellant has incurred costs of nearly $60,000.00 in order to reduce his annual child support liability by about $6,000.00, which would suggest that this expenditure in a “prima facie no costs jurisdiction”^[16] is disproportionate and unreasonable.
18. The Registrar further submits that if the Court is minded to make an order for costs in favour of the Appellant:
    1. the costs should be awarded according to the scale set out in Schedule 1 to the Rules and the usual form of an order for costs would be for costs to be paid in a specific amount (Pratt v Latta (No 2)^[17] at [5]-[6]; Piersons Pro-Health Pty Ltd v Silvex Nominees Pty Ltd (No 3)^[18] at [38]-[43]);
    2. Counsel’s fees cannot be claimed as a disbursement under r.21.10(b) (Colan Products Pty Ltd v Luxon Pty Ltd (No 2)^[19] at [13]);
    100. the prescribed amount of costs for proceedings under s.110B of the Child Support (Registration and Collection) Act is $6,408.00;
    4. Stark & Sherman (SSAT Appeal) should not be followed;
    5. whilst the Court has a discretion to order costs in an amount exceeding the prescribed sum, that is the exception rather than the norm; and
    6. the affidavit of Mr F makes clear that the Appellant, in seeking an amount of $55,009.08, is seeking to recover all of his costs and is thus seeking an order for indemnity costs, although not expressly saying so.

Conclusions

19. I have considered the above submissions and the authorities referred to in those submissions. I have considered the various matters set out in s.117(2A) of the Family Law Act.
20. I am of the opinion that there are circumstances that justify the Court in making an order for costs in favour of the Appellant, although not in the amount sought.
21. Whilst the Court is required to consider the financial circumstances of each of the parties to the proceedings, the fact that the Appellant discloses an income that would appear to be sufficient to allow him to bear his own costs is not of itself a reason to disqualify him from being the recipient of a costs order.
22. The conduct of the parties to the proceedings is a relevant consideration in respect of both the Appellant and the Second Respondent.
23. First, until the Appellant obtained his current representation, the proceedings were conducted by the Appellant in a singularly inept fashion, exemplified by the commencement of proceedings in the Federal Court, which does not have jurisdiction in proceedings under the Child Support (Registration and Collection) Act. It is quite clear from s.104 of the Act that this Court and the Family Court of Australia are the Courts with jurisdiction in matters arising under the Act. The Registrar was clearly obliged to appear to answer the misconceived Application in the Federal Court, thereby occasioning unnecessary costs.
24. Against this, the Registrar defended this Appeal on the basis that the decision in Child Support Registrar & MMB^[20] should not be followed. However, the decision in MMB was a decision that the Registrar had expressly sought in order to clarify the powers of the SSAT, as was pointed out to Sexton FM^[21] by Counsel for the Registrar.^[22] What appears to have happened is that the Registrar prefers to follow the later decision in Kindree & CSR (SSAT Appeal)^[23], rather than the decision in MMB which it fought so hard to obtain in 2007.
25. As it turned out, this was unsuccessful and it is unsurprising that the Appellant, in seeking that the Court should follow the decision in MMB, was successful. As has been submitted, it was always open to the Registrar to have conceded the Appeal.
26. It is not a matter of great consequence, to my mind, that the Appellant only succeeded on one of the three grounds of Appeal that were pressed. The Appellant only needed to succeed on one ground for the Appeal to be allowed. This is not the sort of matter where it could be argued that one or other party was partially successful.
27. In my view, there are circumstances that justify an order for costs in favour of the Appellant. That said, I am not persuaded that an order amounting to $55,009.08, as the Appellant appears to seek, is a proper Order in the circumstances. Insofar as the Appellant appears to be claiming costs on an indemnity basis, there is nothing that warrants a departure from the usual rule that costs are normally awarded on a party and party basis (Colgate Palmolive Pty Ltd v Cussons Limited^[24]; Kohan & Kohan^[25]; see also Prantage & Prantage^[26]).
28. However, it does not necessarily follow, as the Registrar has submitted, the Court is not bound to abide by the scale. It is not clear why the Registrar has submitted that Stark & Sherman (SSAT Appeal) should not be followed, saying:
    • What this means is that, for all appeals against decisions of the SSAT in child support matters, the usual (i.e. party/party) entitlement to costs will be $6,408.00 for the whole of the proceeding (with no additional allowance or loading for costs applications or counsel’s fees). The extent that Stark v Sherman [2013] FMCAfam 40 at [37]- [41] suggests to the contrary, it is submitted that it ought not be followed.^[27]
29. In Stark & Sherman (SSAT Appeal), I said at [40]:
    • In my view, the advocacy loading makes it inappropriate to add counsel’s fees as a separate disbursement.
30. This appears to me, with respect, to be clearly in line with the decision of Raphael FM^[28] in Colan Products Pty Ltd v Luxon Pty Ltd^[29] at [13].
31. As for a separate costs application, in my view it is open for the Court to consider the costs of that application separately.
32. There are no disbursements claimed. Taking into account the earlier interlocutory hearing, the costs submissions and the hearing of the Appeal itself, I propose to allow the amount of $18,680.00 for party and party costs, which includes the advocacy loading.

Consequential Orders

33. There is a sum of $5,000.00 currently being held by the Child Support Registrar as a result of the Orders made by this Court on 23 November 2012.
34. The Appellant submits that the Court should order that:
    1. If the Appellant owes any child support arrears after the decision of the Court on the Appeal has been implemented, then the sum of $5,000.00 currently held by the Child Support Registrar should be debited to that amount, after which any residue should be paid back to the Appellant; and
    2. Order 3 made on 23 November 2012, that the Appellant pay to the Child Support Registrar the sum of $150.00 per month on account of child support, should be vacated.
35. The Child Support Registrar submits that the interlocutory Orders made on 23 November 2012 should be vacated. It is further submitted that the order sought as to amount of $5,000.00 is unnecessary as the Registrar will not disburse the monies held on behalf of the Appellant until after the primary judgment is implemented.
36. It appears to me, with respect, that the submission on behalf of the Child Support Registrar is correct. I propose to vacate the orders made on 23 November 2012, including the Order staying the collection and enforcement of arrears of child support.

I certify that the preceding thirty-six (36) paragraphs are a true copy of the reasons for judgment of Judge Scarlett

Date: 13 August 2013

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^[1] [2013] FCCA 436
^[2] Which was then called the Federal Magistrates Court of Australia
^[3] The names and dates of birth of the children have not been published
^[4] Ahern & Ahern & Anor (SSAT Appeal) [2012] FMCAfam 1299
^[5] [2013] FMCAfam 40
^[6] [2013] FMCAfam 40 at [5]- [6]
^[7] The submission incorrectly refers to “the Tribunal” but that is clearly a typographical error
^[8] [2012] FMCAfam 19
^[9] supra
^[10] As her Honour then was
^[11] [2007] FMCAfam 944 (reported as Child Support Registrar v MMB [2007] FMCAfam 944; (2007) 220 FLR 245
^[12] [1980] HCA 4; (1980) 144 CLR 311
^[13] [2010] FamCAFC 244; (2011) 44 Fam LR 422
^[14] [2005] FamCA 158; (2005) 33 Fam LR 123
^[15] [1998] FamCA 115; (1998) 23 Fam LR 349
^[16] Second Respondent’s Submissions on Costs page 4 subparagraph 11.6
^[17] [2002] FMCA 43
^[18] [2010] FMCA 250
^[19] [2002] FMCA 90
^[20] supra
^[21] As her Honour then was
^[22] Ahern & Ahern & Anor (SSAT Appeal) [2013] FCCA 436 at [115]- [126]
^[23] [2010] FMCAfam 357; (2010) FLC 98-052
^[24] [1993] FCA 536; (1993) 46 FCR 225
^[25] (1993) FLC 92-340
^[26] [2013] FamCAFC 105
^[27] Second Respondent’s Submissions on Costs page 5 at [19]
^[28] As his Honour then was
^[29] supra