Anthony Ian Luton v Commonwealth of Australia [1997] ACTSC 85 (29 October 1997)

SUPREME COURT OF THE ACT

ANTHONY IAN LUTON v. COMMONWEALTH OF AUSTRALIA
No. SCA 52 of 1996
Number
of pages - 9
Appeal - Administrative Law - Practice and Procedure

COURT

IN THE SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY

HIGGINS J

CATCHWORDS

Appeal - Appeal from Small Claims Court - Whether Magistrate erred in law in dismissing claim for refund of Child Support payments deducted from appellant's salary - Refund of one deduction ordered.

Administrative Law - Child Support (Registration and Collection) Act 1988 (Cth) - Notice sent to employer to deduct maintenance payments from appellant's salary - Validity and effect of Notice addressed to incorrectly described employing Commonwealth department - Still valid - Validity and effect of subsequent revocation of notice and replacement notices authorising deductions - Court order to stay deductions - When effective - From first moment of day on which it was made - Deduction made on same day as stay order contrary to that order - Should be refunded.

Practice and Procedure - Appeal from Small Claims Court - Appropriate to have regard to substantive defence raised both at first instance and on appeal - Plaintiff must be given fair opportunity to meet any additional defence - But plaintiff not entitled to raise new issues on appeal.

Child Support (Registration and Collection) Act 1988 (Cth), ss4, 8, 43, 44, 45, 46, Reg 14

Child Support (Assessment) Act 1989 (Cth), s140

Acts Interpretation Act 1901 (Cth)

Administrative Arrangements Act 1987 (Cth), Schedule 2

Leotta v Public Transport Commission (NSW) (1976) 50 ALJR 666; 9 ALR 437, cited

Dare v Pulham [1982] HCA 70; (1982) 148 CLR 658, cited

Church of Scientology v Woodward [1980] HCA 38; (1982) 154 CLR 25, cited

Superannuation Fund Investment Trust v Commissioner of Stamps (SA) [1979] HCA 34; (1979) 145 CLR 330, cited

Ryan v Registrar of Motor Vehicles and Chief Police Officer (Higgins J, Supreme Court of the ACT, 18 June 1997, unreported), discussed and followed

In the Marriage of Bishop (Cohen J, Family Court of Australia, 20 September 1994, unreported), cited

HEARING

CANBERRA, 15 April 1997 (hearing), 29 October 1997 (decision)

29:10:1997

Appearances

The Applicant appeared in person.

Counsel for the Respondent: Mr G McCarthy

Instructing solicitors: Australian Government Solicitor

ORDER

THE COURT ORDERS THAT:

1. The appeal be upheld.

2. The dismissal of the claim on 25 July 1996 in the Small Claims Court be set aside.

3. The respondent pay to the appellant $208.82 and interest thereon.

4. The parties be heard as to costs.

DECISION

HIGGINS J

On 15 February 1996, the appellant issued a claim against the respondent in the Small Claims Court.

The appellant claimed $835.28 being the aggregate of deductions made by the respondent from the appellant's salary, "... on or about 17/11/94, 1/12/94, 15/12/94 and 22/12/94 ...".

The defence filed claimed that the deductions were made pursuant to a notice issued on or about 7 October 1994 by the Registrar of Child Support (Registrar) pursuant to the Child Support (Registration and Collection) Act 1988 (Cth) (Collection Act). It acknowledged that, on or about 22 December 1994 the Registrar had advised the appellant's Personnel Officer that no further deductions should be made pursuant to the notice.

The claim was heard by Magistrate Dainer on 25 July 1996.

Documents then produced from the records of the respondent revealed that the notice of 7 October 1994 had been replaced by another dated 30 November 1994. The latter notice also contained the following statement,

The deduction on the payday of 01/12/94 is the last deduction you should make for this employee until further notice.

There was a further notice, dated 2 December 1994. It purported to authorise child support deductions on and from 15 December 94.

On 22 December 1994, the Deputy Child Support Registrar (also referred to as the "Registrar") gave notice to the appellant's personnel officer that,

No further deductions should be made from this employee's wages after 22/12/94. Any deductions made after this date may be refunded to the employee ...

Ms Rowling, appearing for the respondent in the lower court, conceded that,

Verbal advice was received around 15 December 1994 of the likelihood or actuality of a stay order. That was eventually confirmed by notice from the Registrar on 22 December 1994 and deductions ceased accordingly.

The appellant did point out that the defence filed relied only on the notice of 7 October 1994.

He then proceeded to raise a number of objections to that notice.

The first was that the notice was not addressed to his employer department, nor to the Commonwealth of Australia. It was, in fact, addressed to the "Dept of Health, Housing, Local Government and Community Services". It is conceded that at all material times the department in which the appellant was employed was the Department of Housing and Regional Development. The correct name of the department was used on the notice of 2 December 1994 and all subsequent notices.

Secondly, the appellant contended that the notice relied on had been revoked. That also was conceded, although the notices replacing it were, apparently, produced and relied on by the respondent at the hearing before the Small Claims Court though no formal amendment of the defence was either sought or made.

The submissions of the respondent asserted that, notwithstanding those matters, relief should be denied because the sums deducted were credited towards the appellant's liability to pay child support and, if the Commonwealth paid him the money, he would gain "an unjust enrichment".

The appellant objected that if the monies had been disbursed as alleged, it did not affect his right to be reimbursed if the deductions had been made unlawfully. Any overpayment to the child's mother could, he pointed out, be adjusted by the Registrar. He had, he stated, in any event, a legitimate expectation that having sought and obtained a stay order on deductions, no further deductions would have been made.

His Worship rejected the submission that the notices of 7 October 1994 and 30 November 1994 were invalid by reason of the incorrect description of the employing department.

The appellant then raised the fact that the stay order made on 15 December 1994 had not been complied with, thus, he said, affecting the validity of the two deductions made thereafter. He had, he stated, notified both his employer and the Registrar on the same day that the order had been made.

His Worship, however, accepted the contrary submission of the respondent that the Commonwealth was not obliged to obey the stay order until the Registrar had formally notified the appellant's employing department of the making of it.

His Worship then dismissed the claim.

On 15 August 1996, the appellant sought leave to appeal against that decision. Leave was granted by Gallop J on 29 November 1996.

The Notice of Appeal relied on the following grounds,

1. The Magistrate was wrong on a question of law in concluding that the notices issued by the Deputy Registrar of Child Support, and acted upon by the Appellant's Employer, were correctly addressed to, and served upon, the Appellant's Employer, the Commonwealth of Australia.

2. The Magistrate was wrong in law in concluding the notices were valid and in compliance with Section 45 of the Child Support (Registration and Collection) Act, 1988 and the Magistrate was therefore wrong in Ordering that the Appellant's Claim be dismissed.

3. The notices were wrongly issued and were not addressed or served upon my relevant "employer" as defined in Section 4 of the Child Support (Registration and Collection) Act, 1988 and therefore were invalid and not in force and were wrongly acted upon.

4. The Magistrate was wrong on a question of law in concluding the notices remained valid and in force, upon and from 15 December 1994, being the day the Local Court (Family Matters) Sydney, granted a Stay Order upon the Appellant's Child Support Assessment; and until further notice dated 22 December 1994.

5. Any deductions made by the Respondent, from the salary of the Appellant, in reliance upon those notices was not properly deducted and were monies wrongfully deducted and retained. All monies improperly deducted and retained should be repaid by the Respondent to the Appellant.

6. The Magistrate was wrong in law in failing to enter as Exhibits in the Court record, documents tended [sic] as evidence during the proceedings. The Magistrate was wrong in law in preventing the Appellant from tendering to the Court all his oral and documentary evidence in the proceedings.

Ground 6 has been overtaken by events. The appellant and the respondent were given leave to adduce further evidentiary material on the hearing of this appeal if they wished to do so.

Further material

The appellant has, with his submissions, tendered a number of documents,

- A copy of a High Court Writ and Statement of Claim;

That action challenges the validity of the Collection Act, 1988 (Cth) and the Child Support (Assessment) Act 1989 (Cth) (Assessment Act).

- A decision of Cohen J in the Family Court of Australia given on 20 September 1994 in a matter of Bishop to the effect that a stay order may be made under s140 of the Assessment Act preventing enforcement of an assessment made under that Act. That decision supports the view that the Registrar may be restrained from enforcing collection under the Collection Act by virtue of such an order.

- Letter dated 16 December 1996 from the Registrar, to Ms Gillian Lessels. Ms Lessels is the person to whom child support was payable. It purports to explain her entitlements to any payments for child support following the stay order of 15 December 1994 and to detail the collections which had been made from the appellant. For present purposes, it may be noted that it concedes that the appellant was entitled to have refunded the deduction made on 22 December 1994 of $208.32. It was further acknowledged that a further sum of $14.92 had been erroneously collected before 15 December 1994.

- Letter dated 22 November 1995 from the Registrar to the appellant as to ongoing liabilities acknowledging that, by then, $522.62 had been over-collected but asserting that $626.96 had been refunded resulting in a "Consolidated Revenue Debt" of $104.34.

- Letter dated 12 September 1996 from the Registrar to the appellant as to the status of the latter's child support account. It stated that the refund of the deduction taken out after 15 December 1994 had been effected on 16 January 1995. It acknowledged $14.92 as a further unrefunded credit but required payment of the "debt" of $104.34.

- Letter dated 14 October 1996 from the Registrar to the appellant refunding the $14.92 and claiming a "debt" of $119.26, that is, the same "debt" increased by the amount of that refund.

- Statement dated 3 January 1997 from 3 December 1996 showing $2,223.81 due as the accumulated balance of the child support liability unsatisfied to that date.

- Letter dated 26 March 1997 to the appellant correcting details previously given of the state of the appellant's child support account and advising that his request for credit for "non-Agency payments" was being considered.

- Letter dated 22 April 1997 re similar request for credit for a further "non-Agency payment" allegedly made on 31 March 1997.

The respondent tendered further documents being,

- Delegations by the Registrar (Mr Carmody) dated 17 February 1994, to various office holders.

- Request by the appellant dated 6 May 1996, addressed to the Registrar, seeking reasons for certain decisions. Those decisions related to the issue of notices from 7 October 1994 to 15 December 1994 and to the decision to make the refund of $208.32 on 17 January 1995.

- Statement of child support account for period from 1 July 1994 to 30 June 1995.

- Documents supporting the raising and presentation of the refund cheque for $208.32.

Claim for Refund

Having regard to the uncontroverted documentary evidence, it is clear that the deduction of 22 December 1994 was refunded on 17 January 1995. It was, therefore, not due and owing as at 15 February 1996. To that extent, the appellant's claim must fail.

The deduction on 15 December 1994 was made notwithstanding the terms of the stay order granted the same day. Whilst, practically speaking, the deduction could not have been prevented, there was no reason why it could not have been refunded if the deduction was, as a result, not lawfully authorised.

The validity of the challenged deductions before 15 December 1994 depends on the validity and effect of the notice of 7 October 1994. Strictly speaking, the defence relies only on that notice which was withdrawn by further notice dated 30 November 1994, which latter notice authorised the deduction made on 1 December 1994 only. That notice, in turn, was replaced by a further notice dated 2 December 1994 purporting to authorise the deduction on 15 December 1994.

However, the Small Claims Court is not a court of pleading. It is appropriate to have regard to the substantive defence raised both at first instance and on appeal. That is, of course, subject to satisfaction that the plaintiff has been given fair opportunity to understand and meet any defence additional to that originally notified. Even in a court of pleading, where the evidence supporting a case made by a party has gone beyond the particulars supplied, then, subject to fairness to the other party, such amendment should be made as will expose and resolve the real issues as they have by then emerged, see Leotta v Public Transport Commission (NSW) (1976) 50 ALJR 666; 9 ALR 437, Dare v Pulham [1982] HCA 70; (1982) 148 CLR 658.

Thus, it is appropriate to have regard to each notice allegedly justifying or affecting the deductions made.

However, for the same reasons, it is not appropriate for me to go beyond the issues of formal validity and the effect of the stay order raised by the appellant or to go beyond his claim to a refund of the four (4) deductions under challenge.

Formal Validity

In this case, it is conceded that the appellant's employer is the Commonwealth of Australia. The various Departments of State have no separate legal status. Even where a function of the Commonwealth is carried out through a statutory corporation, the Commonwealth may be regarded in some cases as the principal of such an agent and the agent may be regarded as a manifestation of the Commonwealth, see Church of Scientology v Woodward [1980] HCA 38; (1982) 154 CLR 25 but cf Superannuation Fund Investment Trust v Commissioner of Stamps (SA) [1979] HCA 34; (1979) 145 CLR 330.

The designation of a Department of State and the meaning of references thereto in a statute, is dealt with under the Acts Interpretation Act 1901 (Cth) and the Administrative Arrangements Act 1987 (Cth). The designation of Departments and the assignment of Ministers thereto is achieved by the provisions of the latter Act as amended from time to time so as to reflect new administrative arrangements.

As at and during 1994, the correct designation of the Department of State within which the appellant was employed was "The Department of Community Services and Health", see Schedule 2, Administrative Arrangements Act 1987.

The "Registrar" as defined under the Collection Act, includes a delegate of the Registrar. The notices in question were signed by a duly authorised delegate.

Under Part IV of the Collection Act, the Registrar is required to collect an "enforceable maintenance liability" by deduction from a salary or wage due to a liable "payer", "so far as practicable", see s43(1).

Section 44, it is conceded, permits a relevant court to stay or nullify the effect of any notice authorising any automatic withholding of monies from salary or wages which otherwise would apply. It was not disputed that the stay order made on 15 December 1994 was made by a competent court and had to be afforded full force and effect by the Registrar and the appellant's employer. It was contended by the respondent that the terms of the Collection Act did not require immediate obedience to that order.

The Registrar's obligations under s44 (Collection Act) following such an order are defined by subsection 44(4) and arise when, after the order is made,

(b) the payer of the registrable maintenance liability furnishes a certified or sealed copy of the order to the Registrar.

The Registrar is then to note on the Child Support Register (Register) the effect of the order, s44(4)(c).

It is purportedly pursuant to s45 of the Collection Act that the alleged deductions were made. That section states, relevantly,

(1) The Registrar may, for the purpose of collecting amounts due to the Commonwealth under or in relation to an enforceable maintenance liability by deduction from the salary or wages of the payer under this Part, give a notice in writing to an employer of the payer:

(a) specifying the name of the payer and other particulars of the payer sufficient to enable the payer to be identified by the employer; and

(b) instructing the employer [to make the specified deductions].

Subsection 45(2) is also applicable. It requires the Registrar, where particulars in the Register are varied so as to require revocation or variation of a previous notice, to,

... forthwith give a notice in writing to the employer to whom the notice was given varying or revoking accordingly the earlier notice given to the employer.

Subsection 45(2A) extends that obligation to situations where the Registrar "thinks" that a variation of such a notice is,

... necessary or desirable for the purpose of collecting amounts already due to the Commonwealth ...

Section 46 then imposes obligations on employers in relation to making deductions from the salary or wages of an employee in respect of whom a notice is in force. Failure to make such a deduction is a criminal offence.

The term "employer" is defined in s4 so as to mean,

... an employer within the meaning of Division 2 of Part VI of the Income Tax Assessment Act 1936 (Cth).

Under s8, the Collection Act is expressed to bind the Crown in right of the Commonwealth.

However, it will be observed that the legislation does not either prescribe a form of notice nor does it require that it be addressed to an employer. It need only identify to the employer the relevant employee and, of course, the deduction to be made. Regulation 14 made pursuant to the Collection Act addresses the means by which service of a notice may be effected. The form of the notice is not addressed.

Obviously, for administrative purposes, the Registrar, in the case of an employee of the Commonwealth, would notify the person's pay officer of the deduction assessed as being required. However, strictly speaking, once the Registrar has performed the statutory function of assessment, the Crown in right of the Commonwealth needs no further notice to be subject, as employer of the relevant paying employee, to the obligations imposed on it by Parliament under the Collection Act.

Whether or not the Commonwealth might be prosecuted if it failed to obey a penal section of the legislation I need not consider. Nor does it arise in the present case.

It seems to me that the error in describing the employing department was not relevant to the creation or performance of the obligation created by the assessment made by the Registrar. In fact the appellant's pay officer was served with the relevant notice and acted accordingly. That notice therefore supported, in terms, the deduction made on 17 November 1994. It was apparently valid and, absent any constitutional invalidity, lawfully authorised that deduction. The claim must therefore fail on the basis of the challenge made to that deduction in these proceedings.

The revocation of the notice of 7 October 1994

A further notice dated 30 November 1994 revoked the notice of 7 October 1994, to replace it with another, which purported to authorise a deduction on 1 December 1994. Why this notice was considered necessary or desirable is not recited. However, apart from terminating deductions from and after 1 December 1994 it otherwise did not create any different legal obligation from that imposed by the notice of 7 October 1994. It may, therefore, be regarded as altering the source of the obligation to make a deduction on 1 December 1994 but not the obligation itself.

In that sense, the notice of 7 October 1994 continued to support the deduction made on 1 December 1994. It was varied by termination of the obligation to make deductions thereafter.

Although there is no evidence on the point, it may be assumed, in favour of regularity, that the Registrar had, as at 30 November 1994, for undisclosed reasons, formed the view that deductions should not continue beyond 1 December 1994.

Similarly, the notice of 2 December 1994 may be assumed to reflect a decision of the Registrar that deductions should be made thereafter on and from 29 December 1994. It was, however, replaced by a further notice dated 6 December 1994 requiring deductions to commence on 15 December 1994. Again, that notice should be taken as altering the previously notified obligations.

But for the court order dated the same day, it follows that the deduction made on 15 December 1994 would have been apparently supported by a notice given by the Registrar under the Collection Act. It is not appropriate in these proceedings to attempt to go behind the Registrar's decisions to issue the various notices which he did. That would more appropriately be done in administrative law proceedings. None of the material adduced, in any event, enables that issue to be addressed.

The effect of the court order of 15 December 1994.

Contrary to the terms of this order, the respondent made a deduction on 22 December 1994. However, before this action was commenced on 15 February 1996, it had refunded that sum to the appellant.

It may be that there were other obligations inter partes referable to an accrued liability for child support. However, it is beyond the scope of the action taken by the appellant or the defence raised at first instance by the respondent now to take accounts as between the Registrar and the appellant. The Registrar is not a party to these proceedings. It is, of course, arguable that he acted for and on behalf of the respondent in doing so. As I have already observed, that issue has not been fairly raised, even if it was possible for the scope of the original dispute to be enlarged to embrace it.

The relevance of the further correspondence concerning the dispute is that it establishes not only the fact of the repayment of the deduction of 22 December 1994 but also the practicality both in law and fact of the respondent refunding a deduction wrongfully made.

In Ryan v Registrar of Motor Vehicles and Chief Police Officer (Higgins J, Supreme Court of the ACT, 18 June 1997, unreported) I reviewed the authorities, statutory and otherwise, supporting the proposition that, absent any other provision, an order of a court takes effect on the day it is made from the first moment of that day. Disobedience of it prior to notice of its making cannot, of course, be contempt. There may be a lack of statutory obligation to obey it till served or registered. However, a party in whose favour an order is made is otherwise entitled to the benefit of its terms on and from the day it is pronounced. In any event, the employer and the Registrar were both "the Commonwealth". It follows that the Commonwealth, as employer, was, through its agent, the Registrar, aware of the order the same day as it was made. In any event, the appellant made sure that all relevant persons employed by the Commonwealth were informed that the order had been made.

It follows that the appellant is correct in asserting that the deduction made on 15 December 1994 was contrary to the terms of the court order made that day. Unless the order specified a later date for it to come into effect, it was in effect on 15 December 1994. There is nothing in the Collection Act which purports to delay or postpone the effect of such an order.

I would, therefore, uphold the appeal, set aside the dismissal of the claim and enter judgment for the appellant in the sum of $208.82 and interest thereon.

I will hear the parties as to costs.