Bazley and Sissons

[2013] FCCA 311

FEDERAL CIRCUIT COURT OF AUSTRALIA

BAZLEY & SISSONS [2013] FCCA 311

Catchwords:
CHILD SUPPORT – Determination – Application for leave – where application applies for leave for a determination under Child Support (Assessment) Act 1989 (Cth) either s.98S or s.118 – leave granted for Child Support Registrar to make a determination.

Legislation:
Child Support (Assessment) Act 1989 (Cth), ss.98S, 111, 112, 118

Child Support (Registration and Collection) Act 1988 (Cth), s.111C

Applicant: MS BAZLEY

Respondent: MR SISSONS

File Number: SYC 1293 of 2013

Judgment of: Judge Scarlett

Hearing date: 14 May 2013

Date of Last Submission: 14 May 2013

Delivered at: Sydney

Delivered on: 14 May 2013

REPRESENTATION

The Applicant: In person

The Respondent In person (by telephone)

ORDERS

1. Leave is granted for the Child Support Registrar to make a determination under the provisions of section 98S of the Child Support (Assessment) Act 1989 to vary the Applicant’s adjusted taxable income and vary the rate of child support payable by the Applicant for:

   (a)the period 1 July 2009 to 30 June 2010; and

   (b)the period 1 January 2011 to 14 June 2011.

2. The enforcement of the payment of arrears of child support and late payment penalties outstanding at 14 February 2013 is stayed until the determination by the Child Support Registrar referred to in Order (1) above.     

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

FEDERAL CIRCUIT COURT OF AUSTRALIA

AT SYDNEY

SYC 1293 of 2013

MS BAZLEY

Applicant

And

MR SISSONS

Respondent

REASONS FOR JUDGMENT

Application

1. This is an Application by the mother of two children for leave under s.112 of the Child Support (Assessment) Act 1989 (Cth) for either the Child Support Registrar or the Court to make a determination under s.98S of the Act or for the Court to make a determination under s.118 of the Act to vary the Applicant’s adjusted taxable income for the financial year ending 30^th June 2010 and for the period 1^st January to 14^th June 2011.

2. The Applicant also seeks a stay of enforcement of the decision of the Child Support Registrar.

3. The reason for this Application is to correct the situation when a Child Support Assessment was made as a result of an Income Tax Assessment which has since been adjusted. Unfortunately for the Applicant, the adjustment has been made too late for the Child Support Registrar to make a fresh determination because the relevant child support periods are more than 18 months old.

Background

1. The Applicant and the Respondent are divorced. They are the parents of two children, [X], who was born [in] 1997 and [Y], who was born [in] 2003. The children live with the Respondent as a result of Orders made by the Magistrates’ Court of Western Australia at 150 Terrace Road Perth on 12^th September 2012.

2. For the financial year ending 30^th June 2010 the Applicant was assessed by the Australian Taxation Office as having a taxable income of $63,268.00. As a result, she was assessed to pay child support at the annual rate of $10,596.00.

3. However, as the Applicant has deposed in her affidavit of 7^th March 2013, she discovered that she had made an error in completing her income return for the 2010 tax year, and failed to show that she had in fact made a loss of $63,268.00, not an income of that amount. She then applied to the Australian Taxation Office to have her income tax assessment for that year reassessed.

4. On 30^th November 2012 the Australian Taxation Office a Notice of Amended Assessment, showing that the Applicant’s previous taxable income was $63,268.00 but her amended taxable income was reduced to $0. The Applicant then sought to have her child support assessment for the period from 1^st January to 31^st July 2011 varied. The reason for that was because the Applicant had an outstanding child support liability of $5,991.81.  

5. On 14^th February 2013 a Senior Case Officer of the Child Support Agency found that the Applicant had established that the child support assessment was unfair and decided:

   For the period 15 June 2011 to 31 October 2012 the child support assessment be set to the minimum annual rate.[1]

   [1] Affidavit of Ms Bazley 7.3.2013 Annexure “F”

6. In the reasons for decision, the Senior Case Officer made these comments, which explain the reason for the Application to this Court:

   It must be addressed here that the Child Support (Assessment) Act 1989 only allows the registrar to make changes to the assessment for a period no more than 18 months prior to the date of application. Mrs Bazley is seeking a change from 1 January 2011 to 31 July 2011, however this period is mostly outside of the time frame to which I can consider making a change. I will review Mrs Bazley’s financial situation from the earliest date available to be changed, that being 15 June 2011.

   …

   If Mrs Bazley would like the period prior to 15 June 2011 altered to reflect her amended income tax return she may seek leave from the courts to enable the Department to consider that situation. In that event, the income I have not considered will be considered in a subsequent change of assessment process as it relates to that prior period.[2]

   [2] Affidavit of Ms Bazley Annexure “F”

7. For those reasons, the Senior Case Officer decided to change the child support assessment from no earlier date than 15^th June 2011 until 31^st October 2012. 

Evidence

1. The Applicant relied on her affidavit of 7^th March 2013 to which she had annexed copies of:

   a)her Income Tax Statement of Account dated 30^th November 2011;

   b)her Notice of Amended assessment – year ended 30^th June 2010 from the Australian Taxation Office;

   c)her Notice of Assessment – year ended 30^th June 2011 from the Australian Taxation Office;

   d)her Child Support Assessment for the period 1^st January 2011 to 31^st July 2011 issued on 27^th March 2012;

   e)her Child Support Assessment for the period 1^st January 2011 to 14^th June 2011 issued 15^th February 2013; and

   f)Notice of Decision by Senior Case Officer dated 14^th February 2013.

2. The Applicant attended Court.

3. The Respondent, who lives in Western Australia, was given leave to attend by telephone. He did not file any documents.  

4. Although he was critical of the Applicant’s account in her affidavit of how she had made an error in completing her income tax return for the 2010 tax year, the Respondent neither opposed nor consented to the Application for leave.

The relevant sections of the Act

1. Section 98S of the Assessment Act provides in subsection (1) that:

   (1)The determinations that the Registrar may make under this Part are as follows:

   (a)a determination varying the rate of child support payable by the liable parent concerned;

   (b)a determination varying the child support percentage, adjusted income amount, child support income amount or exempted income amount of the liable parent;

   (c)a determination making provision of a kind permitted under the regulations with respect to the calculation of any such amount in relation to the liable parent;

   (d)a determination varying the child support income amount or disregarded income amount of the carer entitled to child support concerned;

   (e)a determination making provision of a kind permitted under the regulations with respect to the calculation of any such amount in  relation to the carer entitled to child support;

   (f)a determination directing that one or more of the following provisions is not to apply:

   (i)         section 42 (Cap on child support if child support income amount exceeds 2.5 times yearly equivalent or EAWE amount);

   (ii)    section 52 (Cap on combined child support liabilities of 2 liable parents);

   (g)a determination varying a factor ascertained under paragraph 54(1)(b).

2. However, there is a time limit placed on the Registrar’s power to make any of the above determinations:

   (3B)The Registrar may only make a determination under this Part in respect of a day in a child support period, being a day that is more than 18 months earlier than:

   (a)the day on which the application for the determination is made under section 98B; or

   (b)the day on which the Registrar notifies the relevant parties under subsection 98M(1);

   if a court has granted leave under section 112 for the determination to be made.

   (3C)If a court has granted leave under section 112, the Registrar may only make a determination under this Part in respect of a day in a child support period if the day is within the period specified by the court, under subsection 112(6), in the order granting the leave.

3. Subsection 111(1) of the Act entitles parties to apply for amendment of an administrative assessment that is more than 18 months old:

   (1)Parent or carer applications A liable parent or a carer entitled to child support, (the applicant) may apply to a court having jurisdiction under this Act for leave for:

   (a)the Registrar to make a determination under section 98S; or

   (b)     the court to make an order under section 118;

   in respect of a day in a child support period, being a day that is more than 18 months, and less than 87 years, earlier than the day on which the application under this section is made.

4. Section 112 empowers the Court to grant leave and sets out the matters to be considered:

   (1)If an application is made to a court under section 111, the court may grant leave for:

   (a)the Registrar to make a determination under section 98S; or

   (b)     the court to make an order under section 118.

   (2)The court may grant leave for an order to be made under section 118 if the court is satisfied that it would be in the interest of the parties to the proceeding for the court to consider, at the same time as it hears the application under section 111, whether an order should be made under section 118. If the court does so, the applicant is taken to have made an application to the court under section 116 for such an order.

   (3)Otherwise, the court may grant leave for the Registrar to make a determination under section 98S.

   (3A)To avoid doubt, the court may grant leave for the Registrar to make a determination under section 98S, or for the court to make an order under section 118, irrespective of what the applicant applied for under section 111.

   (4)Matters to be considered   In considering whether to grant leave under subsection (1), the court must have regard to:

   (a)     any responsibility, and reason, for the delay in:

   (i)    making an application under section 98B or 116; or

   (ii)    making a determination under section 98S;

   as the case requires; and

   (b)the hardship to the applicant (other than the Registrar) if leave is not granted; and

   (c)the hardship to the other party or parties (other than the Registrar) if leave is granted.

   (5)    The court may have regard to any other relevant matter.

   (6)Orders granting leave to specify period      An order granting leave under this section must specify the period in respect of which the Registrar may make a determination or the court may make an order.

   (7)    The period specified in subsection (6):

   (a)must not include a day in a child support period if the day is more than 7 years earlier than the day on which the application under section 111 was made; and

   (b)     is not limited by the terms of that application.

   (8)No requirement to make determination or order     The granting of leave under subsection (1) does not imply that:

   (a)the Registrar is required to make a determination under section 98S; or

   (b)the court is required to make an order under section 118.

5. If the Court does decide to make an order under section 118 of the Act, subsection 118(1) gives the Court the same powers as the Registrar is given to make a determination under s.98S(1).

Conclusions

1. There does not appear to have been any delay on the part of the Applicant in making her application to the Child Support Agency. Once the original error was ascertained, it was necessary for her to seek an amended assessment from the Australian Taxation Office for the 2010 financial year. The Amended Assessment was issued on 30^th November 2012.

2. The Applicant then made her application to the Child Support Agency, which she did on 14^th December 2012. It is not, in my view, unreasonable for her to have made her original application to the Child Support Agency, even though it was not able to grant all the relief that she sought. The Senior Case Officer did change the child support assessment for the period 15^th June 2011 to 31^st October 2012.

3. The decision was made on 14^th February 2013 and included the advice to the Applicant that she would need to seek leave from the Court to obtain relief for the period prior to 15^th June 2011, i.e. the period more than 18 months and less than 7 years prior to that date.

4. The Applicant then applied to this Court on 13^th March 2013, less than a month after the decision was made. I find that there was no undue or unreasonable delay on the part of the Applicant.

5. The Applicant will suffer hardship if leave is not granted. There are child support arrears which have arisen as a result of her original error. The Senior Case Officer noted in the decision of 14^th February 2013 that the Applicant then had an outstanding child support liability of $5,991.81.

6. The Respondent has adduced no evidence nor made any assertion that he will suffer hardship as result of leave being granted.

7. I also have regard to the fact that the Senior Case Officer made a finding in favour of the Applicant but was only able to change the assessment in so far as it related to a date no more than 18 months previously.

8. I am satisfied that leave should be granted. I am not of the view that it is necessary for an order to be made under section 118 of the Act. Court proceedings are often stressful and expensive for the litigants.

9. In my view, the proper course is to grant leave for the Registrar to make a determination under section 98S of the Child Support (Assessment) Act.     

10. As there are outstanding arrears, it is proper to stay any enforcement of those arrears until the Child Support Registrar can make a determination

I certify that the preceding twenty-nine (29) paragraphs are a true copy of the reasons for judgment of Judge Scarlett

Associate: 

Date:  17 May 2013