Abrams and Child Support Registrar (Child support)

[2023] AATA 4001

Abrams and Child Support Registrar (Child support) [2023] AATA 4001 (13 October 2023)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2023/SC025571

APPLICANT:  Mr Abrams

OTHER PARTIES:  Child Support Registrar

TRIBUNAL:Member D Tucker

DECISION DATE:  13 October 2023

DECISION:

The decision of 2 February 2023, to refuse Mr Abrams’ application for an EOT to object to a decision made on 2 June 2022, is affirmed.

(This means the application is not successful.)

CATCHWORDS

CHILD SUPPORT – refusal to grant an extension of time to object – no satisfactory explanation for the delay – no merit – weighing all factors the extension of time was correctly refused – decision under review affirmed

Names used in all published decisions are pseudonyms. Any references appearing in square brackets indicate that information has been omitted from this decision and replaced with generic information so as not to identify involved individuals as required by subsections 16(2AB)-16(2AC) of the Child Support (Registration and Collection) Act 1988.

BACKGROUND

1. Mr Abrams and [Ms A] (the mother) are the separated parents of two children. A child support assessment has been registered with Services Australia – Child Support (“Child Support”) since 5 October 2021.

2. On 25 January 2022 Child Support received an application for a change of assessment (CoA) from [Ms A]. This was copied to Mr Abrams and he responded at the invitation of Child Support.

3. On 2 June 2022 Child Support decided that it was appropriate to depart from the formula assessment because Mr Abrams’ annual adjusted taxable income (ATI) had not been correctly reflected (Reason 8A) and there were significant additional costs of care due to the children’s special needs (Reason 2).

4. Child Support varied Mr Abrams’ ATI to $125,000.00 for the period 5 October 2021 to 31 August 2023 and increased his annual rate by $3,844.00 for the period 1 March 2022 to 31 August 2023 based on the cost of the children’s special needs.

5. On 2 June 2022 Child Support’s decision-maker telephoned Mr Abrams to explain her decision, and that she had treated the lump sums he had received into his bank account as income and annualised them to assess his income.

6. Mr Abrams disputed this approach and was told he could lodge an objection.

7. On 3 June 2022 Child Support wrote to Mr Abrams to notify him of this decision.[1]

   [1] Page 131.

8. [Days later] Mr Abrams travelled overseas to attend to the affairs of his mother’s estate and visit his family and spend time with his father who was sick in hospital. Consequently, he did not receive Child Support’s letter regarding its decision until [a day in] August 2022, the day he returned to Australia.

9. On 17 August 2022 Mr Abrams contacted Child Support to express his disappointment and contend that his financial circumstances had not been properly assessed. Child Support correctly advised him that he could lodge an objection to its CoA decision, but he would also need to seek an extension of time (EOT), as it was already more than 28 days since he had been notified.

10. On 22 August 2022 Mr Abrams contacted Child Support by telephone and explained that he had not seen the CoA decision until [he returned in] August 2022 and that he wished to lodge an objection. Child Support told Mr Abrams that according to its policy and guidelines he had 28 days from the date he was notified of the decision, and so he still had [several] more weeks to lodge his objection (that is, until 12 September 2022). The implication was that he did not need to also lodge an application for an EOT.

11. Mr Abrams claims that for the following three months he engaged his accountant and worked with him to lodge amended tax returns for the financial years 2019/20, 2020/21, 2021/22.

12. This was already an onerous undertaking, made more difficult because the mother had obtained an apprehended violence order (AVO) against Mr Abrams which prevented him from accessing financial records that were stored at the house he previously shared with her.

13. On 23 December 2022, Mr Abrams lodged his objection along with an application for an EOT, and his amended tax returns. Mr Abrams told Child Support that he delayed lodging his objection because of the time his accountant needed to compile his amended tax returns.

14. Mr Abrams disputed that his objection was lodged 156 days late, as asserted by Child Support’s decision-maker in their decision of 23 December 2022, given that on 22 August 2022 he was told that he had until 12 September 2022 to lodge his objection. (According to the Tribunal’s calculations, this would mean his objection was 102 days late.)

15. To support his EOT application Mr Abrams provided a report regarding surgery he had [in] July 2020 and documents verifying his absence from Australia from [June] 2022 until [August] 2022.

16. On 2 February 2023 Child Support decided to refuse Mr Abrams’ EOT application.

17. On 8 February 2023 Mr Abrams applied to the Tribunal for independent review of that decision and gave affirmed evidence with the assistance of an Arabic-speaking interpreter at a telephone hearing on 5 September 2023.

LEGISLATION AND ISSUES

1. The relevant legislation is contained in the Child Support (Registration and Collection) Act1988 (the Act) and the Child Support (Assessment) Act 1989 (the Assessment Act).

   · Subsection 80(1) of the Act provides that a party to a child support assessment must lodge an objection in writing to various decisions, including a decision relating to a departure application.

   · Section 81 of the Act requires that a person must lodge an objection to such a decision within 28 days after a notice of the decision is served on them.

   · According to section 82 of the Act, where the lodgement period has ended, a person can still lodge an objection along with an application requesting that the objection be treated as if it was lodged within the allowed time.

   · Section 83 of the Act obliges the Registrar to consider such an application, and to advise the applicant in writing of their decision to grant or refuse it.

   · Section 89 of the Act allows the person who applied for the EOT to apply to this Tribunal for a review of that decision.

2. The issue to be decided by the Tribunal is whether Mr Abrams should he be granted an EOT to object to the decision made on 2 June 2022.

CONSIDERATION

1. The Tribunal considered the guiding principles for the exercise of the discretion to allow an EOT established by previous decision-makers.

2. In Hunter Valley Developments Pty Ltd v Cohen [1984] FCA 176 the Federal Court said that an EOT should not be granted unless it was proper to do so, noting that generally applications commenced outside of the prescribed time limit will not be considered.

3. A consideration of other relevant authorities[2] establishes that when considering whether to allow an EOT, the Tribunal should consider and balance a range of factors. These factors are a guide and are not exhaustive, but generally include:

   [2] See Phillips v Australian Girls’ Choir and Anor [2001] FMCA 109.

   ·   the reasons for the delay and whether the applicant rested on their rights;

   ·   the merits of the substantive application;

   ·   any prejudice to the other party including any difficulties that they will experience in providing evidence as a result of the delay;

   ·   wider prejudice to the general public;

   ·   fairness in granting an EOT as between the applicant and other persons in a similar position; and

   ·   whether it is proper to grant the EOT.

CONSIDERATION

The reasons for the delay and whether Mr Abrams rested on his rights

1. The Tribunal accepts that Mr Abrams did not receive a notice of the CoA decision until [a day in] August 2022 when he returned to Australia from overseas. However, on 22 August 2022 he was informed by Child Support that he had until 12 September 2022 to lodge an objection within the 28-day time limit. Despite this, he failed to do so.

2. The Tribunal also understands that Mr Abrams believed it was necessary for him to provide his amended tax returns, because by his own account, his previous tax returns were inaccurate, and he needed to provide evidence of his income. However, it is not clear why he did not lodge his objection and subsequently provide his amended tax returns, or the bank statements upon which they were based.

3. When asked by the Tribunal why he had not lodged his objection prior to 12 September 2022, Mr Abrams provided several reasons. One was that it was difficult for him to produce his amended tax returns because the mother (his wife) had previously taken responsibility for all his financial affairs.

4. Another explanation was the unwelcome attention he was receiving from police who were monitoring his compliance with the AVO made against him. On one occasion he was arrested for allegedly breaching the terms of his AVO. As a result of this he had a nervous breakdown and was taken to hospital, and for an unspecified period he was unable to concentrate. However, the documents he submitted suggest this occurred on 14 September 2022, after the deadline for lodging a timely EOT had passed.

5. The Tribunal is conscious that Mr Abrams provided his evidence via an interpreter, and that this may have blurred the logic of his arguments. However, even when allowing for this, the Tribunal finds Mr Abrams’ explanations for his late lodgement inadequate.

The merit of Mr Abrams’ objection

1. The mother told Child Support it was likely Mr Abrams was concealing his income by working for cash, or invoicing for his work via a friend. She dismissed his claim to be unemployed and showed Child Support text messages from 2021 in which Mr Abrams stated he could not see the children in particular dates or attend appointments because he was busy working.

2. As outlined in Child Support’s CoA decision of 2 June 2022, and conceded by Mr Abrams, in recent years he has worked, but reported $0 income on his income tax returns. He told the Tribunal that his earnings were paid to his company, from which he was paid a modest amount for living expenses. Because the mother managed all the company business, he did not know what his earnings were, or what tax returns the mother had lodged on his behalf. He attributed his dubious tax declarations to the mother and claimed she had been the director of the company, but subsequently transferred the ownership and directorship of it to him without his knowledge.

3. Mr Abrams’ representative noted that there was no evidence that Child Support’s decision-maker had requested the accounts of Mr Abrams’ company prior to making their CoA decision. It was suggested that this was evidence that should have been considered by Child Support. However, the Tribunal notes the following from the decision-maker’s Reasons:

   I note the companies Mr Abrams advised he had involvement with have also not declared income in recent years, so it is not possible for me to extrapolate an income for Mr Abrams from the company activities.

4. The Tribunal finds it likely that Child Support gleaned this information about his company’s tax declarations from ATO records rather than requesting company accounts from Mr Abrams.

5. In relation to the CoA application lodged by the mother, Mr Abrams told Child Support that he was now unable to work because he was incapacitated by injuries, and consequently had no income, apart from small amounts of money ($150–$200) that he was occasionally paid for doing odd jobs, such as mowing lawns. However, he was unable to produce medical evidence to substantiate this claim.

6. Child Support’s decision-maker noted that in a three-month period, Mr Abrams spent over $15,000 on his living expenses such as food, rent, utilities and discretionary spending. Child Support found this pattern of spending to be inconsistent with Mr Abrams’ claim that he was living off borrowed funds.

7. Mr Abrams claimed that he met his living expenses, the cost of his overseas travel and his legal fees through a combination of loans from friends and family and a $7,000 insurance payout, that appear as lump sums in his bank account. Child Support noted he had received $17,000 from third parties in a two-month period. In the absence of any other evidence regarding Mr Abrams’ income, Child Support based their assessment of his income on these purported loans. It is this decision that Mr Abrams finds objectionable.

8. Mr Abrams continues to claim that these lump sums were loans from friends and family. He claimed there had been no such deposits since, suggesting that they were not ongoing income. However, it was not possible for the Tribunal to test this claim on the available evidence.

9. Mr Abrams provided the Tribunal with statements, purportedly from his brother and a friend, attesting that they have loaned him significant sums of money without security. He also provided a statement, purportedly from [Mr A], stating that Mr Abrams had frequently used his credit card to assist [Mr A’s] customers by buying car parts on their behalf online. Presumably this statement was provided to explain the level of Mr Abrams’ spending on his credit card.

10. The Tribunal asked Mr Abrams several times why he did not produce these declarations when Child Support was considering the mother’s CoA application. He offered various explanations. One was that he had engaged a total of five lawyers to assist him in his family court proceedings and with Child Support, all of whom had made themselves unavailable for various reasons. Without legal advice he did not know what to do. Another explanation was that he was in trouble with the police, and another was that he didn’t have any money, and that he was always thinking about his children, and in a state of confusion.

11. The Tribunal did not find these explanations persuasive, and it assigns little weight to the statements Mr Abrams provided, which despite being headed “statutory declaration” were not made under oath or witnessed.

12. The father asked the Tribunal to accept that his income has now been correctly assessed as $20,000 per annum, based on his amended tax returns.[3] However, by his own account, Mr Abrams’ original tax returns were fictitious. Without further review and evidence, it is not possible to test whether his amended tax returns are any better. In the Tribunal’s view, Mr Abrams’ pattern of spending will be a more reliable indicator of his financial resources.

    [3] Pages 199–214 of the hearing papers.

13. In the Tribunal’s view, Mr Abrams’ objection lacks merit, being based on claims that lack consistency, credibility or solid evidence.

Prejudice to [Ms A] and the wider public

1. The Tribunal does consider that there would be significant prejudice to [Ms A] if an EOT was granted given the apparent lack of merit in Mr Abrams’ application.  

2. The Tribunal is satisfied that there would be prejudice to the wider public if the EOT were granted, as it may lead to unnecessary administrative costs and would be contrary to community expectations regarding the finality and certainty of administrative decision-making.

Whether it would be proper to grant an EOT

1. The Tribunal considers that in the circumstances of this case it would not be proper to grant Mr Abrams an EOT.

Conclusion

1. Mr Abrams has a weak case to object to the CoA decision in question. He has rested on his rights, and allowed an inordinate amount of time to pass after being notified of his right to object. Allowing an extension would be prejudicial to [Ms A] and the wider public. After weighing up all the relevant factors, the Tribunal is not persuaded that it would be fair and equitable to extend the permissible time in which he can lodge his objection. 

DECISION

The decision of 2 February 2023, to refuse Mr Abrams’ application for an EOT to object to a decision made on 2 June 2022, is affirmed.

(This means the application is not successful.)