CEN23 v Child Support Registrar

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FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA

(DIVISION 2)

CEN23 v Child Support Registrar [2024] FedCFamC2G 1442

File number: PEG 195 of 2023
Judgment of: JUDGE LADHAMS
Date of judgment: 23 December 2024 
Catchwords: ADMINISTRATIVE LAW – Child support – judicial review of a decision of the Administrative Appeals Tribunal regarding a departure determination – whether the Tribunal failed to afford the applicant procedural fairness, failed to consider relevant considerations, misapplied the law or acted unreasonably in varying the applicant’s adjusted taxable income to take into account a lump sum compensation payment he received – whether the Tribunal failed to understand the implementation of its decision in a manner that went to its jurisdiction – whether the Tribunal misunderstood or misapplied relevant legislation – no error of law established – notice of appeal dismissed.    
Legislation:

Administrative Appeals Tribunal Act 1975 (Cth) s 44AAA

Child Support (Assessment) Act 1989 (Cth) ss 43, 98F, 98S, 112, 117
Cases cited:

Ladd & Child Support Registrar & Anor (SSAT Appeal) [2010] FMCAfam 23

Minister for Immigration and Multicultural Affairs v Eshetu (1999) 197 CLR 611; [1999] HCA 21

Minister for Immigration and Citizenship v Li (2013) 249 CLR 332; [2013] HCA 18

P v Child Support Registrar (2014) 225 FCR 378; [2014] FCAFC 98
Division: Division 2 General Federal Law
Number of paragraphs: 61
Date of hearing: 12 February 2024
Place: Perth
Applicant: The applicant appeared in person.
Counsel for the First Respondent: Ms G Ellis
Solicitor for the First Respondent: Sparke Helmore Lawyers
Second Respondent: The second respondent appeared in person.

ORDERS

PEG 195 of 2023

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN:

CEN23

Applicant
AND:

CHILD SUPPORT REGISTRAR

First Respondent

CEO23

Second Respondent

ORDER MADE BY:

JUDGE LADHAMS

DATE OF ORDER:

23 DECEMBER 2024

THE COURT ORDERS THAT:

1.The Notice of Appeal (Child Support) filed on 6 September 2023 is dismissed.

Note: The form of the order is subject to the entry in the Court’s records.

Note: The Court may vary or set aside a judgment or order to remedy minor typographical or grammatical errors (r 17.05(2)(g) Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 17.05 Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth).

Section 110X(4)(h) of the Child Support (Registration and Collection) Act 1988 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in child support review proceedings.

IT IS NOTED that publication of this judgment under a pseudonym is approved pursuant to s 110X(4)(h) of the Child Support (Registration and Collection) Act 1988 (Cth).

REASONS FOR JUDGMENT

JUDGE LADHAMS:

INTRODUCTION

  1. The applicant and the second respondent are the separated parents of two children and there has been a child support case registered in relation to the children since 2013. Relevant to the application presently before the Court,…

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Details
Case
[2024] FedCFamC2G 1442
Decision Date

CaseChat Overview and Summary

The case between CEN23 and the Child Support Registrar involves a dispute over child support assessments and the subsequent review of these assessments by the Administrative Appeals Tribunal (Tribunal). CEN23, the father, sought a reduction in the child support he was required to pay based on changes to his income and financial resources, including a lump sum compensation payment he received. The Tribunal varied the father's adjusted taxable income to reflect this lump sum payment, resulting in a reduced child support obligation. The Registrar filed an appeal against the Tribunal's decision, arguing that the Tribunal failed to afford procedural fairness, failed to consider relevant considerations, misapplied the law, or acted unreasonably.

The key legal issues before the court were whether the Tribunal erred in its treatment of the applicant's lump sum compensation payment and whether it failed to understand the implementation of its decision in a manner that went to its jurisdiction. The court examined the Tribunal's reasoning and the evidence it considered, particularly whether the Tribunal correctly identified and applied the relevant provisions of the Child Support (Assessment) Act 1989 (Cth) and the Child Support Guide. The court also assessed whether the Tribunal's decision was just and equitable and whether it was based on an understanding of its implementation.

The court found that the Tribunal had not erred in its treatment of the lump sum compensation payment. It was satisfied that the Tribunal correctly identified the payment as a financial resource that should be considered for child support purposes and that it appropriately varied the father's adjusted taxable income to reflect this payment. The court held that the Tribunal's consideration of the lump sum payment was consistent with the relevant legislation and policy guidance. The court also found that the Tribunal's reasons for decision demonstrated a proper understanding of the implementation of its decision, despite the father's argument that the outcome was unreasonable.

The court concluded that no error of law was established in the Tribunal's decision, and therefore dismissed the appeal. The notice of appeal filed by the Registrar was dismissed, and the Tribunal's determination stood affirmed. The court emphasized that the Tribunal had considered all relevant factors and applied the law correctly in making its decision.

Orders

Orders of the court

PEG 195 of 2023

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)

BETWEEN:

CEN23

Applicant

AND:

CHILD SUPPORT REGISTRAR

First Respondent

CEO23

Second Respondent

ORDER MADE BY:

JUDGE LADHAMS

DATE OF ORDER:

23 DECEMBER 2024

THE COURT ORDERS THAT:

1. The Notice of Appeal (Child Support) filed on 6 September 2023 is dismissed.

Note: The form of the order is subject to the entry in the Court’s records.

Note: The Court may vary or set aside a judgment or order to remedy minor typographical or grammatical errors (r 17.05(2)(g) Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 17.05 Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth).

Section 110X(4)(h) of the Child Support (Registration and Collection) Act 1988 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in child support review proceedings.

Background

Background to the litigation

For reasons explained below, I find that the applicant has not established that the Tribunal made an error of law and the application to this Court is therefore dismissed.BACKGROUND The applicant is the father and the second respondent is the mother of two children born in 2004 and 2006 respectively, who are the subject of administrative assessments of child support. On 7 June 2022 the applicant lodged a change of assessment application with Services Australia – Child Support (Child Support). The applicant relied on Reason 8A for the change of assessment, being a change sought because the assessment did not correctly reflect one or both parent’s income, property and/or financial resources. The applicant sought a reduction to the rate of child support he was required to pay from 24 December 2021 to nil based on changes to the second respondent’s income and financial resources. On 3 January 2023 a delegate of the Registrar refused to change the assessment. The delegate found that although Reason 8A was established, it would not be just and equitable to change the assessment. The applicant objected to this decision on 16 January 2023. On 25 March 2023 an objections officer disallowed the applicant’s objection (objection decision). The officer also found that Reason 8A was established but the application was refused because it would not be just and equitable in accordance with s 98F of the Child Support (Assessment) Act 1989 (Cth) (Assessment Act). On 31 March 2023 the applicant lodged an application to the Tribunal seeking merits review of the objection decision. The applicant and the second respondent both appeared at a hearing convened by the Tribunal on 25 July 2023. On 25 July 2023 the Tribunal set aside the objection decision and, in substitution, decided that the applicant’s adjusted taxable income was varied to $91,746 for the period 7 June 2022 to 16 November 2022, and the second respondent’s adjusted taxable income was varied to $86,965 for the period 7 June 2022 to 30 October 2023.SUMMARY OF THE TRIBUNAL DECISION The Tribunal identified that the following administrative assessments of child support were under consideration:(a)for the period from 24 December 2021 to 30 September 2022 the applicant was assessed to pay an annual rate of child support of $1,572 to the second respondent, based on 2020-21 adjusted taxable incomes of $55,479 for the applicant and $44,575 for the second respondent;(b)for the period from 1 October 2022 to 18 November 2022 the second respondent was assessed to pay an annual rate of child support of $4,338 to the applicant, based on 2021-22 adjusted taxable incomes of $56,196 for the applicant and $86,965 for the second respondent; and(c)for the period from 19 November 2022 to 31 December 2023 the second respondent was assessed to pay an annual rate of child support of $12,924 based on 2021-22 adjusted taxable incomes of $56,196 for the applicant and $86,965 for the second respondent. The Tribunal identified the following issues for its consideration, based on the approach required by s 98C of the Assessment Act:(a)whether or not a ground for departure set out in s 117(2) of the Assessment Act was established; and(b)if so, whether or not it was just and equitable to make a particular departure determination; and(c)if so, whether or not it was otherwise proper to make a particular departure determination.

Evidence

Evidence Before The Court

Grounds 1, 2 and 4 are not established. Question of law 2; ground 3: Whether the Tribunal failed to consider relevant evidence and made an erroneous conclusion Ground 3 directs attention to the effect of the implementation of the Tribunal decision and [66] of the Tribunal’s reasons. In this paragraph, in addressing whether it would be just and equitable to make the determination, the Tribunal said:The determination of the Tribunal will result in an overpayment to [the second respondent] as it will reduce the amount of child support payable by [the applicant]. This will be offset by the fact that [the applicant] remains the paying parent until 17 November 2022 when [the second respondent] becomes the paying parent. The Tribunal is, on balance, satisfied the proposed determination will not cause hardship to [the applicant], [the second respondent] or the children and is just and equitable. The applicant annexed to his written submissions a letter from Child Support dated 25 August 2023 advising him that he had a child support overpayment of $551.53 and requiring him to repay that amount. No party objected to this document being received by the Court, notwithstanding that it was not a document that was before the Tribunal at the time of the Tribunal decision. The gist of the applicant’s submission is that the Tribunal said that its determination would result in an overpayment to the second respondent, but the letter from Child Support upon implementation of the Tribunal’s decision is different to this and reflects ‘such an adverse juxtaposition in outcome goes to the very jurisdiction which it purports to exercise rendering the administrative outcome to be so unreasonable as to be correctable on appeal’: applicant’s written submissions at [24]. The difficulty with the applicant’s position is that it focuses on one sentence of the Tribunal’s reasons that is favourable to the applicant and reads it in a way that is isolated from its proper context in the reasons for decision. While it is correct to say that the Tribunal found that its determination would result in the applicant having overpaid child support for a period, the Tribunal also found that this would be offset by the applicant remaining the paying parent until 17 November 2022, whereas under the administrative assessment of child support (which was varied by the Tribunal’s determination), the second respondent was the paying parent from 1 October 2022 to 18 November 2022 and had been assessed to pay child support to the applicant at an annual rate of $4,338. In other words, the Tribunal considered that the effect of its determination would be that the amount of child support payable by the applicant would decrease for part of the period the subject of the determination, but that the applicant would have to pay child support for a part of the period during which he had previously received child support. The Tribunal does not indicate in its reasons, one way or the other, whether the net outcome will be an overpayment of child support to the applicant or to the second respondent.

Decision

Reasons for decision

On 25 July 2023 the Tribunal set aside the objection decision and, in substitution, decided that the applicant’s adjusted taxable income was varied to $91,746 for the period 7 June 2022 to 16 November 2022, and the second respondent’s adjusted taxable income was varied to $86,965 for the period 7 June 2022 to 30 October 2023.SUMMARY OF THE TRIBUNAL DECISION The Tribunal identified that the following administrative assessments of child support were under consideration:(a)for the period from 24 December 2021 to 30 September 2022 the applicant was assessed to pay an annual rate of child support of $1,572 to the second respondent, based on 2020-21 adjusted taxable incomes of $55,479 for the applicant and $44,575 for the second respondent;(b)for the period from 1 October 2022 to 18 November 2022 the second respondent was assessed to pay an annual rate of child support of $4,338 to the applicant, based on 2021-22 adjusted taxable incomes of $56,196 for the applicant and $86,965 for the second respondent; and(c)for the period from 19 November 2022 to 31 December 2023 the second respondent was assessed to pay an annual rate of child support of $12,924 based on 2021-22 adjusted taxable incomes of $56,196 for the applicant and $86,965 for the second respondent. The Tribunal identified the following issues for its consideration, based on the approach required by s 98C of the Assessment Act:(a)whether or not a ground for departure set out in s 117(2) of the Assessment Act was established; and(b)if so, whether or not it was just and equitable to make a particular departure determination; and(c)if so, whether or not it was otherwise proper to make a particular departure determination. The Tribunal was satisfied that a ground for departure under s 117(2)(c)(ia) of the Assessment Act existed, namely, that in the special circumstances of the case, application of the administrative assessment of child support would result in an unjust and inequitable determination of child support to be provided by the liable parent in respect of the child because of the income, property and financial resources of either parent. In reaching this conclusion, the Tribunal found that the applicant’s taxable income alone did not represent the true income and resources available to him because it did not take into account a lump sum compensation payment of $35,550 that the applicant received on 17 November 2021. The Tribunal considered this lump sum payment to be a financial resource available to the applicant for child support purposes and considered that it was appropriate to take into account this amount. The Tribunal also considered that the second respondent’s income had increased in 2021-2022 and that it was appropriate for child support to be assessed taking into account the increased income. The Tribunal found that applying the varied amounts in the child support formula, the annual rate payable by the applicant would be approximately $644, which was less than the amount that he had been assessed to pay under the administrative formula that applied (in the period from 24 December 2021 to 30 September 2022, which as set out above, had been calculated at $1,572 per annum) and was satisfied that in the special circumstances of the case the application of the administrative assessment of child support would result in an unjust or inequitable determination of child support to be provided by the applicant and therefore a ground for departure existed.

Ratio Decidendi

Legal Principle Established

The Registrar filed a court book, comprising the documents that were before the Tribunal, which was received into evidence and marked as exhibit 1. The applicant and the Registrar both provided written and oral submissions to the Court. The second respondent made brief oral submissions to the Court. I have had regard to all the documents before the Court, and the submissions made by all parties, but only refer to them where they are expressly relevant to the issues to be determined in this matter. CONSIDERATION OF THE NOTICE OF APPEALQuestions of law 1 and 2; grounds 1, 2 and 4: Whether the Tribunal erred in its treatment of the applicant’s lump sum compensation payment The evidence before the Tribunal showed that the applicant received a lump sum compensation payment of $35,550 in late 2021. In considering whether this should be treated as a financial resource available to him for the purposes of child support, the Tribunal said at [27]-[30] of its reasons: 27.The term “financial resources” is not defined in the Act. In Costa & Fairbank (SSAT Appeal) [2010] FMCAfam 39 the Court said about the interpretation of the term “financial resources” that it: refers to something which is not property but from which a financial benefit is or may be gained…The term financial resource in the light of the objects of the Assessment Act should be broadly defined and would in my consideration refer to any financial benefit that would enhance the capacity of parents to provide a proper level of financial support for their children. 28.The Tribunal considers the lump sum payment received by [the applicant] to be a financial resource available to him for the purposes of child support. In doing so the Tribunal is mindful of policy guidance set out in the Child Support Guide at 2.6.14 in relation to lump sum payments. It states, relevantly:Where a parent receives a substantial amount of money (a lump sum) that would otherwise not form part of their income amount used for child support purposes, and therefore is not included in the assessment of child support, the lump sum may be taken into account in deciding whether the assessment should be changed. Such payments may arise as a consequence of the parent:•being retrenched from their employment•drawing funds from a superannuation fund•receiving a distribution from a deceased estate•being compensated for some loss or damage, or•being successful in a lottery or some other gambling venture. In each case it will be necessary to decide whether receiving the money makes the amount of child support payable unjust and inequitable. 29.Although not bound by policy as set out in the Child Support Guide, the Federal Court has held that a tribunal should take into account relevant government policy which is not inconsistent with the provisions or objects of the legislation. 30.The Tribunal is satisfied, in the circumstances of this case, it is appropriate to take into account the lump sum payment of $35,550 received by [the applicant] [in late] 2021. [The applicant] chose to receive this payment as a lump sum rather than a pension. The Tribunal is of the view that assessing child support on the basis of his taxable income alone would result in an unjust and inequitable outcome. While not grossing up the value of the lump sum the Tribunal considers it reasonable to add back this amount from the date it was received.