Agrippa & Horton (SSAT Appeal)

[2010] FMCAfam 1144

FEDERAL MAGISTRATES COURT OF AUSTRALIA

AGRIPPA & HORTON (SSAT Appeal) [2010] FMCAfam 1144

CHILD SUPPORT – Appeal from decision of SSAT – question of law – whether evidence existed to support findings of fact.

CHILD SUPPORT – Appeal from decision of SSAT – failure of party to make full and frank financial disclosure to SSAT – duty of financial disclosure – consequences of failure to make full and frank financial disclosure.

CHILD SUPPORT – Appeal from decision of SSAT – necessary self-support commitments – failure to allow expenses of deriving rental income – negatively geared investment property.

CHILD SUPPORT – Appeal from decision of SSAT – double counting in arriving at assessed income figure – no reasons for including same amounts twice – error of law – appeal allowed.

CHILD SUPPORT – Appeal from decision of SSAT – appeal allowed - appropriate order – both parties seeking finality on appeal - both parties unrepresented – Registrar not participating in hearing – Registrar-initiated change of assessment – remitted to SSAT for rehearing.

CHILD SUPPORT – Stay application – discretion – whether applicant has reasonably arguable case for substantive relief.

Child Support (Registration and Collection) Act 1988, ss.101, 110B, 110D, 110F, 111C
Child Support (Assessment) Act 1989, ss.98K, 98L(1)(a), 117(4)-(9)

Collector of Customs v Pozzolanic Enterprises Pty Ltd (1993) 43 FCR 280
Minister for Immigration and Multicultural Affairs v Wu Shan Liang (1996) 185 CLR 259
PJ & Child Support Registrar [2007] FMCAfam 829, (2007) 38 Fam LR 31, (2007) FLC 98-035
Black & Kellner (1992) 15 Fam LR 343, (1992) FLC 92-287
Weir & Weir (1992) 16 Fam LR 154, (1993) FLC 92-338

Applicant: MR AGRIPPA

Respondent: MS HORTON

File Number: PAC 2544 of 2010

Judgment of: Halligan FM

Hearing date: 11 October 2010

Date of Last Submission: 11 October 2010

Delivered at: Parramatta

Delivered on: 11 October 2010

REPRESENTATION

Solicitors for the Applicant: In Person

Solicitors for the Respondent: In Person

ORDERS

1. The father’s appeal against the decision of the Social Security Appeals Tribunal made on 14 April 2010 is upheld.

2. The said decision of the Social Security Appeals Tribunal is set aside.

3. The matter is remitted to the Social Security Appeals Tribunal to be heard again.

4. The father’s application for a stay is dismissed.

IT IS NOTED that publication of this judgment under the pseudonym Agrippa & Horton (SSAT Appeal) is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).

FEDERAL MAGISTRATES
COURT OF AUSTRALIA
AT PARRAMATTA

PAC 2544 of 2010

MR AGRIPPA

Applicant

And

MS HORTON

Respondent

REASONS FOR JUDGMENT

SSAT Appeal

Introduction

1. This is an appeal by the father of 13-year-old [X] and 11-year-old [Y] on a question of law against a decision of the Social Security Appeals Tribunal (the SSAT) made on 14 April 2010, notice of which was sent to the parties on 27 April 2010.  The children’s mother is the respondent to the appeal.  Both parties are unrepresented.

2. The Child Support Registrar (the Registrar) is a necessary party to the appeal (ss.110D and 101, Child Support (Registration and Collection) Act 1988 (the Registration and Collection Act)). While the Registrar was not formally joined by the father as a respondent, the father served the Child Support Agency (the CSA) in Parramatta with his notice of appeal on 17 June 2010. There was no appearance on behalf of the Registrar. I proceeded to hear the appeal despite the procedural deficiency in the notice of appeal as I was satisfied the Registrar was on notice of the appeal.

Background

1. The parties were assessed in relation to child support for the children under the usual formula under Part V of the Child Support (Assessment) Act 1989 (the Assessment Act) for the period 1 July 2008 to 22 April 2009 based on their 2007 taxable incomes. The father’s adjusted taxable income was $13,154, being less than the self-support amount of $18,252 and the mother’s adjusted taxable income was $51,114, giving the father 0% of the combined child support income amount and the mother 100%. The costs of each child were $3916, a total of $7832. The mother’s care and cost percentages were assessed at 100% and the father’s at 0%. Thus under the formula the father was assessed to be liable to pay the mother $1122 per annum for each child, a total of $2244 per annum.

2. On 29 September 2008 the Registrar advised the parties that a Registrar-initiated change of assessment process was being undertaken. The Registrar has power to do this in certain circumstances under section 98K of the Assessment Act. After hearing each of the parents, a Senior Case Officer as delegate of the Registrar made a departure determination on 11 November 2008 under which the father’s adjusted taxable income amount for the period 22 October 2008 to 31 December 2010 was set at $75,994.

3. The CSA subsequently issued a number of child support assessments that were quite confusing.  Some are clearly wrong, ignoring the determination by the Senior Case Officer.  Ultimately, it appears that the result of the Senior Case Officer’s decision was that the annual rate of the father’s child support was-

   a)$12,664 for the period 22 October to 30 November 2008;

   b)$12,406 for the period 1 December 2008 to 21 June 2009;

   c)$7,134 for the period 22 June 2009 to 30 September 2009;

   d)$7,510 for the period 1 October to 30 November 2009;

   e)$12,500 for the period 12 November 2009 to 23 September 2010; and

   f)$13,834 for the period 24 September to 31 December 2010.  All of those figures are annual figures.

4. The reason for the fluctuating annual rates based on the same adjusted taxable income for the father was various changes in other elements in the formula.

5. Having successfully sought an extension of time to do so, the father objected to this decision under Part VII of the Registration and Collection Act. The Objections Officer, as delegate of the Registrar, allowed the objection on 13 November 2009 and varied the Senior Case Officer’s decision by fixing the annual rate of child support payable by the father at-

   a)$5,200 for the period 22 October 2008 to 21 June 2009;

   b)$3,952 for the period 22 June to 10 November 2009; and

   c)$5,200 for the period 11 November 2009 to 31 December 2010.

6. On 7 December 2009 the father applied to the SSAT under Part VIIA of the Registration and Collection Act to review the decision of the Objections Officer. After a hearing on 24 March 2010, the SSAT decided on 14 April 2010 to set aside the Objections Officer’s decision and determine that there should be a departure from the administrative assessment by fixing the father’s adjusted taxable income for the period 22 October 2008 to 31 December 2010 in the sum of $55,000.

Applicable law

1. The right of appeal arises under section 110 of the Registration and Collection Act which provides:

   “A party to a proceeding before the SSAT under Part VIIA may appeal to a Court having jurisdiction under this Act on a question of law from any decision of the SSAT in that proceeding.”

2. When reviewing the reasons of the SSAT, an administrative body, the Court should not be “concerned with looseness in language nor with unhappy phrasing” and “the reasons for the decision under review are not to be construed minutely and finely with an eye keenly attuned to the perception of error” (Collector of Customs v Pozzolanic Enterprises Pty Ltd, (1993) 43 FCR 280, at 287, cited with approval in Minister for Immigration and Multicultural Affairs v Wu Shan Liang (1996) 185 CLR 259 at 272 per Brennan CJ, Toohey, McHugh and Gummow JJ, and see the comments of Kirby J to similar effect at 291).

3. Nonetheless as Riethmuller FM noted in PJ & Child Support Registrar, [2007] FMCAfam 829 at [38], (2007) 38 Fam LR 31, (2007) FLC 98-035:

   “38   The only right of review of a decision of the SSAT is an appeal ‘on a question of law’ to the courts  …  Most significantly, such an appeal does not allow for a review on the merits.  As a result, it is important for the Tribunal to provide appropriate reasons.  This will usually entail careful findings of fact and clear explanations of the reasons for any decision, particularly where it involves the exercise of a discretion such as altering a child support amount.”

4. I will deal with whether the appeal raises questions of law later in these reasons.

The SSAT’s Reasons for Decision

1. In its reasons, the Tribunal correctly identified its function as being to, in effect, stand in the shoes of the original decision-maker in the change of assessment process initiated by the Registrar. As such it was required to determine whether the single ground for departure referable to a Registrar-initiated change of assessment under section 98L(1)(a) of the Assessment Act existed, and if so, consider whether it would be both just and equitable and otherwise proper by reference to s.117(4) to (9) of the Assessment Act to make a departure determination.

2. The SSAT recorded that the father stated he was unemployed at the time of the SSAT hearing and earning $150 per week cash in hand as a casual handyman.  He said he could not find permanent work because of his age and difficulty lifting things due to a knee operation two years ago and a frozen shoulder.  He had previously been a self-employed tradesman conducting his business from a commercial property he owned.  He said he closed that business at the beginning of 2008 because he had been losing money due to the global financial crisis.

3. He stated he then worked for someone else two or three days per week for about three months.  He said he ceased this work when he was not paid for a week’s work.  He successfully took action to recover the money he was owed, receiving $1140.

4. The father’s taxable income for 2006/7 was $12,933 and for 2007/8 $15,486.  He had $9000 in superannuation.

5. The father did not provide the SSAT with any business tax returns, activity statements or profit and loss statements to assist the Tribunal.  Nor according to the Tribunal’s reasons did he fully comply with the Tribunal’s direction to provide it with specified information.

6. The Tribunal’s reasons record that up to November 2009 the father owned three properties - his unencumbered home worth $350,000, a mortgaged investment property worth $320,000, and his commercial property.

7. He sold the commercial property in November 2009 for $250,000.  He told the Tribunal he applied these proceeds as to $140,000 in payment to his cousin to repay loans he owed family members who had been financially supporting him, and the balance in reduction of the mortgage on the investment property.

8. The Tribunal was not persuaded by the father’s evidence of repaying family loans of $140,000.

9. I note that the financial records before the SSAT show that the father was paid $250,318.09 by bank cheque on settlement of the sale of the commercial property on 30 November 2009.  That sum was deposited into his Bank A Home Side deposit offset account on the same day, taking the balance in that account to $333,239.61. On 2 December 2009, $91,200 was transferred from the mortgage offset account to the father’s Bank A Classic Banking account, from which the same amount was withdrawn as a bank cheque on 7 December 2009. On 21 December 2009, $220,000 was transferred from the mortgage offset account to the father’s Bank A Home Plus account, being the mortgage account secured on the investment property, reducing the debit balance of the mortgage account to $111,260.93.  This transaction reduced the credit balance in the mortgage offset account to $14,887.82.

10. I also note from the information before the SSAT that on 21 December 2009, the day the bank cheque for $91,200 was drawn from the father’s Bank A Classic Banking account, the father signed a financial statement for the SSAT.  He disclosed funds in banks or other financial institutions of $14,000. He disclosed no other cash assets. He disclosed a mortgage balance of $113,000. There was no reference to the $91,200.

11. The Tribunal’s reasons do not specifically refer to these transactions.  However, evidence of them forms part of the evidence before the Tribunal, and there is no reason to believe the Tribunal ignored them.  These bank records in fact contradict the father’s assertions of repaying family loans totalling $140,000 from the proceeds of sale of the commercial property and support the Tribunal’s decision not to accept the father’s evidence on this point.

12. There is further significance in the inconsistency between the father’s evidence to the Tribunal and the financial records.  In financial proceedings under the Family Law Act 1975 a party has a duty of full and frank disclosure of all of his or her financial circumstances (Black & Kellner, (1992) 15 Fam LR 343, (1992) FLC 92-287, Weir & Weir, (1992) 16 Fam LR 154, (1993) FLC 92-338). If it is established to the Court’s satisfaction that there has been deliberate non-disclosure, “then the court should not be unduly cautious about making findings in favour of the innocent party. To do otherwise might be thought to provide a charter for fraud” (Weir, above, FamLR at 158, FLC at 79,593).

13. In my view the same principle must apply in the assessment of child support for the same reason.  If the SSAT is satisfied that a parent has made a deliberate non-disclosure of his or her financial circumstances, it should be reasonably robust in assessing the non-disclosing parent’s financial circumstances adversely to that parent and in favour of the other parent.  That is not to say that it may arrive at an entirely arbitrary result, but rather that it may draw generous inferences adverse to the non-disclosing party about that party’s financial circumstances.

14. Returning to the reasons for its decision, the SSAT found that the father had a $5,000 Investment Fund managed investment and 148 Bank B shares worth $8505.56 in April 2010.

15. The SSAT recorded that the father indicated he was living off his rental income, dividends and odd jobs totalling $425 per week which was sufficient to meet his weekly living expenses but he was not paying the mortgage instalments, which were being drawn from the mortgage offset account, a limited resource.  He is recorded as advising the Tribunal that strata contributions, rates and water charges were being paid with money lent to him by family members and that he relied on the kindness of his brother who lived next door who provided all his meals.  He acknowledged that in the past he had rented out a granny flat at the rear of his home and had also let a room in his home but was then doing neither.

16. The SSAT was satisfied the ground for departure existed based on the findings that the father’s business, investment property and the proceeds from the sale of his commercial property were significant resources that were not reflected in the administrative assessment, that is, the one originally made under the statutory formula using the father’s taxable income.  The SSAT found that consequently the father’s taxable income used in the original assessment from
    22 October 2008 did not reflect his capacity to provide child support for the children.  As mentioned, the Tribunal was not satisfied with aspects of the father’s evidence as to personal loans he said he had obtained from family members and allegedly repaid with proceeds of the sale of the commercial property.

17. Turning to consider whether it would be just and equitable to make a departure determination, having set out section 117(4) of the Assessment Act and canvassed the relevant evidence, the SSAT found that the children had “the usual expenses of children their ages which are not out of the ordinary”, neither having any special needs.

18. In relation to the mother’s financial circumstances, the Tribunal noted that she had a gross income greater than the adjusted taxable income figure used in the original formula assessment.  It set out her income, financial resources, expenses, assets and liabilities, accepting her evidence on these matters.

19. The Tribunal found that each of the parents appeared to have the usual expenses for their own self-support, noting, however, that the father claimed to rely on family members for meals and money which the mother disputed.  The Tribunal was not persuaded by the mother’s contentions that in fact the father provided financial support to his family.

20. In relation to the father’s income, the SSAT referred to his credit card spending which was regularly repaid in full in most months, his admitted cash earnings, his gross rental income on his investment property, and the total of deposits into his mortgage offset account, all of which totalled $55,164.94 for the year commencing October 2008, together with inconsistent explanations by the father of moneys passing through his bank accounts, the total absence of any records of his business activities, and the absence of any documentary confirmation of funds allegedly generated by the sale of machinery, to find that his cash flow was considerably greater than he could satisfactorily explain consistent with his stated taxable income.  It also relied on its findings that the father failed to satisfactorily explain what became of cash funds, including those from the sale of his commercial property, to support its decision to attribute an assessment of income for the father’s adjusted taxable income figure.

21. The Tribunal also drew inferences adverse to the father from his failure to comply with the direction to produce certain documents to it.

22. Based on its findings of inconsistent and unsatisfactory evidence from the father, the SSAT determined that the father’s adjusted taxable income should be set at a figure based on the identified cash funds the father admitted earning, his admitted rental income, and his credit card expenditure and deposits to his mortgage offset account, rounded down to $55,000 per annum.  The Tribunal also made findings about the father’s assets and liabilities.

23. Having stated that a person with a taxable income of $55,164 would be liable to pay child support “of approximately $8,000 per year”, the Tribunal stated in its reasons that it had no evidence that the father would suffer hardship if he was required to pay child support of approximately $8,000 per year.

24. The basis on which the SSAT arrived at the child support figure of “approximately $8000 per year” is not disclosed in its reasons.  As already noted, various changes in other formula elements affected the amount of child support over the period covered by its decision, resulting in six different annual rates at different times during that period ranging from a low of $7,134 to a high of $13,834 based on the Senior Case Officer’s decision.  Under the assessments that resulted in these figures, but using an adjusted taxable income figure for the father as determined by the SSAT at $55,000 instead of $75,994 as determined by the Senior Case Officer, gives a range in the annual rate of child support of between $4,664 (for the period 22 June to
    30 September 2009) and $11,235 (for the period 24 September to
    31 December 2010).  Using annual rates for the various periods from 22 October 2008 to 31 December 2010, that is, the two amounts just mentioned, and $10,489 for the period 22 October to 30 November 2008, $9,935 for the period 1 December 2008 to 21 June 2009, $5,162 for the period 1 October 2009 to 10 November 2009 and $10,151 for the period 11 November 2009 to 23 September 2010, gives total child support of about $20,395 for a period of 801 days, at an average annual rate of $9,300, not approximately $8,000.

25. The Tribunal stated it was satisfied it would be just and equitable to part from the administrative assessment from 22 October 2008 on the basis it had found that-

    a)The father had a greater capacity to pay child support for the children than is reflected in the formula assessment;

    b)The annual rate payable in circumstances of the case would be approximately $8,000;

    c)The children have no capacity to support themselves and each has the usual needs of a child of their ages; and

    d)The father would not suffer hardship if the Tribunal made such a determination.

1. In determining whether it would be otherwise proper to make a departure determination, the Tribunal, having referred to the relevant matters under section 117(5), noted that the parents have the primary duty to support their children, the mother was in receipt of family tax benefit, and an increase in the amount of child support she should receive may reduce the cost to the community, expressed itself satisfied it would be otherwise proper to make the departure determination.

The father’s challenge to the SSAT’s decision

1. By his Notice of Appeal the father contended that the SSAT erred in law-

   a)In ignoring relevant material by not taking into account relevant expenses when determining the father’s income;

   b)In making a finding that deposits into a mortgage offset should wholly be considered as income; and

   c)In making a finding that the father would not suffer hardship where there is no evidence to support the finding.

2. I will deal with each ground of appeal in turn.

Did the SSAT fail to take into account relevant expenses when determining the father’s income, and hence err in law?

1. The father contended that the SSAT erred in law in failing to take into account expenses he incurred in earning rental income on his investment property, namely, rates, water charges and interest on the loan secured on the property.

2. In assessing the father’s likely income the SSAT included gross rent of $260 per week.  It acknowledged that the property was mortgaged.  The SSAT did not explicitly state in its reasons why it chose not to make any allowance for the expenses the father incurred in earning the rental income.  However it did refer to the fact that the property is negatively geared.

3. For this ground of appeal to be established, the father must show that the failure to make any allowance for the father’s expenses on the investment property while including gross rental income was against the evidence, that is, that there was no evidence to support such a finding.

4. I am not satisfied the father has made out this ground of appeal.  The gross rental income is part of the father’s income.  Whether the expenses incurred in earning this income should be included falls to be determined in accordance with the requirements under section 117(4)(e) that the Tribunal determine “the commitments of each parent who is a party to the proceeding that are necessary to enable the parent to support himself or herself or any other child or another person that the person has a duty to maintain”.

5. Where the property generating income is deliberately negatively geared and thus incurring a loss despite a significant amount of the father’s capital being invested in the property, it was open to the Tribunal to find that the expenses incurred by the father in earning the rental income are not necessary for the father’s self support.  He could, for example, sell the property, and, on the value attributed to the property by the father, after paying off the mortgage, have net proceeds which, if invested at 6% per annum, would generate income of about $260 per week.

6. I am satisfied that there was evidence on which the SSAT could find that the income from the investment property should be attributed to the father was $260 per week with no allowance for expenses incurred in relation to the investment property.  Hence this ground of appeal is not established. 

Did the SSAT err in law in treating deposits to the father’s mortgage offset account as income?

1. In his submissions, the father expanded this ground of appeal to argue that the SSAT fell into error arriving at his imputed income for the
   12 months from October 2008 by-

   a)Including deposits to his mortgage offset account that included the proceeds of sale of machinery, that is, one off deposits in the nature of capital, not income;

   b)Including deposits to his mortgage offset account that included rental income from the investment property which was included as a separate item at $260 per week, thus counting the same income twice; and

   c)Including all expenditure on his credit card as well as deposits to his mortgage offset account where repayments on his credit card were met from the mortgage offset account, thus counting his credit card expenditure twice. 

The proceeds of the sale of machinery

1. The SSAT was of the view that the father’s evidence about the sale of machinery used in his business was unsatisfactory.  The father provided a list of items he said he sold and the amounts he said he was paid for each item.  However, he did not identify when the items were sold nor did he identify to whom they were sold.

2. In submissions in support of this ground the father stated that he began selling the machinery in 2008, and that when he closed his business and leased the commercial property in early 2008 the tenant wanted the premises emptied and the remaining machinery was removed from the commercial property.  But the father professed not to remember when he sold the last of the machinery, nor could he identify any deposit to the mortgage offset account that he could relate to an amount for which he said he sold any item or items of machinery.

3. Based on the unsatisfactory nature of various aspects of the father’s financial disclosure, the SSAT was entitled, if not obliged, to look carefully at what the father asserted and to give the benefit of any doubts to the mother.  The father said nothing to the Tribunal, or to me in his submissions, that proved that any of the proceeds of sale of the machinery were deposited to the mortgage offset account during the period when the SSAT calculated the deposits to that account, that is, in the 12 months from October 2008.

4. The father has not demonstrated that the SSAT’s failure to allow for any deposits to the mortgage offset account being capital in nature from one-off sales of machinery was unsupported by any evidence.  The approach adopted by the SSAT is consistent with the evidence.

Double counting of rental income

1. The father asserted in submissions that rent from both the commercial property and the investment property was deposited to the mortgage offset account.  He at first said it was deposited every month.  He then said that the commercial property rent, $1500 per month, was deposited each month and the rent on the investment property was deposited when he collected it and that varied from each fortnight up to monthly depending upon when he attended to collect it and the tenant’s ability to pay when he did so.  When asked during his submissions to identify any deposits to the mortgage offset account of amounts of rent, he said he collected the rent in cash and would deposit any funds that in effect were surplus to his requirements at the time.  Thus, he could not identify any deposits that equated with the amount of rent on either property.

2. I note that the SSAT did not include any specific figure for rent on the commercial property in the 12 months from October 2008, over which period it assessed the father’s income, as it did with the gross rental income on the investment property even though he was receiving that rental income during the relevant period.  Thus there can be no substance to the father’s contention that the SSAT double-counted rental income from the commercial property.

3. In relation to the inclusion of the gross rental of the investment property as well as deposits to the mortgage offset account, in my view the SSAT was entitled, if not bound, to be sceptical of the father’s assertions in light of the almost total lack of usual financial records and the vagueness and demonstrable unreliability of aspects of his evidence.  I am not satisfied the father has demonstrated this finding was not supported by the evidence.  It was open to the SSAT on the evidence to find that the rental income on the investment property was not deposited to the mortgage offset account.

Double counting of credit card expenditure

1. The father asserted that his credit card expenses were paid from the mortgage offset account, and thus, by adding both his credit card expenditure and all deposits to his mortgage offset account, the SSAT had counted the credit card expenditure twice.  The mother made no submission in contradiction of the father’s submission on this point.

2. It is clear from the evidence in the Court book, for example at p.95, that payments were regularly made from the mortgage offset account to the father’s credit card.  The total of credit card purchases that the SSAT imputed as indicative of income in the 12 months from October 2008 was $15,011.94.  The total of deposits to the mortgage offset account imputed as income over the same period was $18,833.  It appears the latter figure includes the former, and to that extent the method of calculation of the father’s income has counted the same figure in the amount of a little over $15,000 twice.

3. That is, the finding would appear to be against the evidence.  I cannot see any evidence on which such a finding, that the credit card expenditure should be counted twice, could be supported.  I note the difficulty of the task facing the SSAT in arriving at a reasonably imputed income figure for the father where he had clearly failed in his duty of financial disclosure, and that the SSAT was entitled to draw robust adverse inferences against the father from the evidence.  But where on the face of the financial records on which it has based its imputations it is counting the same figure twice, in my view it is incumbent on the Tribunal to explain why it is satisfied it is appropriate to do so if it is intentionally doing so.

4. I am therefore satisfied that the father has made out this ground of appeal and demonstrated an error of law by the Tribunal. 

Was there an absence of evidence on which the SSAT could find that the father would not suffer hardship?

1. The father asserted there was no evidence on which the Tribunal could make a finding that its decision would not cause him hardship.  The mother submitted that the Tribunal was not satisfied by the father’s evidence of having used part of the proceeds of sale of the commercial property to pay family loans and hence the father would have the sum claimed to have been so expended at his disposal, thus establishing he would not suffer hardship.

2. I have already referred to the fact that the financial records contradict the father’s statement of having paid $140,000 to family members in repayments of loans.  It could have been no more than $91,200, if in fact he repaid anything.  The SSAT was entitled on the evidence to come to the conclusion that the father had not satisfactorily explained what he did with these funds and it was open to the Tribunal to infer that the father had these funds available to him.  That would be sufficient to support a finding of no hardship to the father from its determination.  I am not satisfied the father has established this ground of appeal.

3. For completeness, although not referred to in submissions, I note that in assessing hardship the Tribunal suggested its imputation to the father of an adjusted taxable income of $55,000 would result in an annual rate of child support of about $8,000 whereas in fact it would result in widely varying amounts of child support over the relevant period at an average of $9,300.  This error must affect the assessment of hardship by the SSAT.

4. The difference between the annual figure postulated by the SSAT and the apparent actual average is $25 per week.  If the father had not made out any of his explicit grounds of appeal, I would have drawn the parties’ attention to this issue and invited submissions from them.  I did not do so as I am satisfied the appeal must be allowed on one of the grounds explicitly raised.  I therefore need say no more on this point other than to observe that the apparent error on its own would not automatically have resulted in the appeal being allowed.

Decision on SSAT Appeal

1. The father has shown that the SSAT erred in law in double counting an amount of a little over $15,000 in arriving at an imputed adjustable taxable income figure for the father of $55,000.  That is a significant error that must significantly affect the Tribunal’s decision.  The issue is what are the appropriate orders to make in consequence.

2. The court “may” make such order as it thinks appropriate by reason of its decision on the hearing of an appeal, including but not limited to an order affirming or setting aside the decision of the SSAT, and an order remitting the case to be heard and decided again by the SSAT, either with or without the hearing of further evidence, in accordance with the directions of the court (s.110F, Registration and Collection Act).

3. The father sought that the Tribunal’s decision be set aside and that the decisions of the Senior Case Officer and of the Objections Officer also be set aside, that is, he sought orders on the appeal that would result in a reversion to formula assessment.

4. The mother submitted that if the court intended upholding the father's appeal, it should finalise the matter today, that is, it should re-exercise the SSAT’s powers and re-determine the review application.

5. If the established double counting in arriving at an imputed adjustment to taxable income for the father is taken into account, that would reduce the imputed income level to $40,153, well above the adjusted taxable income figure for the father under a normal formula assessment.  I am satisfied that normal formula assessment is inappropriate in this case.

6. However, I am also concerned that with both parties unrepresented before the Court and the Registrar who initiated the change of assessment process not participating in the proceedings, it is difficult for the Court to substitute its exercise of discretion for that of the SSAT standing in the shoes of the Registrar.  That is particularly so with a Registrar-initiated change of assessment.  In my view, the appropriate result is that I set aside the decision of the SSAT appealed from and remit the matter to the SSAT to hear again.

Stay application

Introduction

1. On indicating the outcome of the SSAT appeal, the father sought to press an application for a stay in relation to the child support.  I note he had twice filed applications in a case seeking a stay, neither of which appear to have been previously pressed.

2. The father sought, in effect, a stay of the provisions of the Assessment Act and the Registration and Collection Act sufficient to enable him to draw funds on his bank accounts. The father asserted that when he attempted to do so those funds were intercepted by the CSA to meet his arrears of child support.

Applicable law

1. The power to stay the provisions of both Acts arises under s.111C of the Registration and Collection Act. Whether or not the Court should stay the provisions of the Acts in whole or in part is a discretionary matter for the Court, and it is for the father to establish reasons why the Court should do so.

2. The fist matter the court must consider is whether the applicant for a stay has a reasonably arguable claim for substantive relief, that is, whether there is a serious issue to be addressed in the redetermination of the review application by the SSAT consequent on the father's successful appeal.  If the father establishes there is a serious issue to be determined, the court must then consider the balance of convenience between the parties.

Has the father demonstrated there is there a serious issue to be determined?

1. The current assessment is based upon the decision of the SSAT fixing the father’s adjusted taxable income at $55,000 per annum.  As I have said in determining the father's appeal against that decision, if one eliminates the double counting, that would reduce the SSAT’s figure to $40,000 per annum in round figures.

2. But in arriving at that figure the Tribunal has not taken into account income that the father was in fact receiving during the 12-month period for which it undertook an analysis of the father’s cash flow to arrive at that figure.  The amount omitted is the rental income the father was then receiving on his commercial property of $1500 per month, an annual figure of $18,000.  If that were to be added back in, then instead of a figure of $55,000, one would have a figure of $58,000 for the father’s adjusted taxable income figure.

3. I am not now determining whether in a concluded sense the father can sustain the outcome he seeks through his review application to the SSAT.  I am here determining for the purposes of his stay application whether he has a reasonably arguable claim.

4. Having regard to the information contained in the file received from the SSAT and to what the father has said to me in the presentation of his case, I am not satisfied that he has a reasonably arguable case to significantly alter the amount arrived at by reason of the SSAT.

5. In remitting the matter to the SSAT to hear again, I am conscious that there is evidence upon which a higher figure for the father’s adjusted taxable income may in fact be arrived at. The matter will be at large when the SSAT reconsiders the review, and the SSAT will be able to re-exercise its discretion on the basis of the evidence before it on the rehearing. That may be limited to the evidence that is there now or it may include additional and different evidence. That is a matter for the SSAT. But on the material that I can see at the present time, I am not satisfied that the father has demonstrated a sufficiently cogent case to justify the Court staying any of the provisions of either the Assessment Act or the Registration and Collection Act.

6. His stay application must therefore fail.

I certify that the preceding seventy-eight (78) paragraphs are a true copy of the reasons for judgment of Halligan FM

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