Child Support Registrar and Hill
[2008] FMCAfam 708
•14 July 2008
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| CHILD SUPPORT REGISTRAR & HILL (SSAT APPEAL) | [2008] FMCAfam 708 |
| CHILD SUPPORT – Appeal from determination of SSAT – whether provisions of NSW Limitation Act apply to bar or extinguish child support debt and penalties – principles to be applied on appeal. |
| Child Support (Registration and Collection) Act 1988 (Cth), ss.13, 14, 30, 44, 67, 68, 80, 89, 110B, 110F, 110G, 110K Judiciary Act 1903 (Cth), s.64, 78B, 79 Administrative Appeals Tribunal Act 1975 (Cth), s.44 Limitation Act 1969 (NSW), ss.10, 11, 14, 18, 63 Limitation of Action Act 1974 (Qld) Income Tax Assessment Act (Cth) The Constitution, s.51(ii) Child Support (Assessment) Act 1989 (Cth) |
| LDME & JMA (SSAT Appeal) [2007] FMCAfam 712 Deputy Commissioner of Taxation v Moorebank Pty Ltd (1988) 165 CLR 56 Luton & Lessels [2002] HCA 13 |
| Applicant: | CHILD SUPPORT REGISTRAR |
| Respondent: | MR HILL |
| File Number: | SYC 2604 of 2008 |
| Judgment of: | Lindsay FM |
| Hearing date: | 10 June 2008 |
| Date of Last Submission: | 11 July 2008 |
| Delivered at: | Adelaide |
| Delivered on: | 14 July 2008 |
REPRESENTATION
| Counsel for the Applicant: | Mr Gouliaditis |
| Solicitors for the Applicant: | Australian Government Solicitor |
| Counsel for the Respondent: | Self-represented |
ORDERS
The Appeal filed on 6 May 2008 be allowed.
The decision of the Social Security Appeals Tribunal (“SSAT”) of
28 March 2008be set aside.
The review from the decision of the Child Support Registrar of
20 September 2007be remitted to the SSAT for determination according to law.
IT IS NOTED that publication of this judgment under the pseudonym Child Support Registrar & Hill is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT SYDNEY |
SYC 2604 of 2008
| CHILD SUPPORT REGISTRAR |
Applicant
And
| MR HILL |
Respondent
REASONS FOR JUDGMENT
This is an Appeal from a decision of the Social Security Appeals Tribunal (“SSAT”) of 28 March 2008. The Appeal is filed by the Child Support Registrar.
The Appeal is made pursuant to s.110B of the Child Support (Registration and Collection) Act 1988 (“the Collection Act”). Pursuant to that section a party to a proceeding before the SSAT may appeal to this Court on a question of law.
Halligan FM in LDME & JMA (SSAT Appeal) [2007] FMCAfam 712 examines the meaning of the expression “on a question of law” at [23]-[33]. I agree with him as to the significant assistance provided by decisions of the Federal Court in relation to the relevantly identical provisions of s.44 of the Administrative Appeals Tribunal Act 1975 (Cth).
The grounds of appeal specified in the Notice are as follows:
The SSAT’s decision to, under s.68(1)(c) of the Child Support (Registration and Collection) Act 1988 (Cth) (“Registration and Collection Act”), remit so much of the “late payment penalties” imposed on the respondent under s.67 of the that Act as relate to child support debts which, as at 20 September 2007, were outstanding for over six years, involved the following errors of law:
(a)the SSAT erred in finding that the Limitation Act 1969 (NSW) was capable of applying, by operation of s.64 of the Judiciary Act 1903 (Cth), to bar recovery of (or extinguish) child support debts; and
(b)the SSAT erred in finding that legal doubt as to the existence of a child support debt to which a late payment penalty had been applied was capable of constituting ‘special circumstances’ for the purposes of s.68(1)(c).
In my view the Appeal is clearly one articulated on questions of law. Two separate errors of law are alleged. The first is that the SSAT erred in finding that child support debts were extinguished or were unrecoverable because of the operation of s.64 of the Judiciary Act 1903 (Cth) (“Judiciary Act”). The second error of law alleged was the finding that doubt as to the existence of a child support debt constituted special circumstances warranting the remission of late payment penalties pursuant to s.68 of the Collection Act.
The documents provided to the Court by the SSAT pursuant to s.110K of the Collection Act indicate that on 31 January 2007 the respondent Hill asked the Registrar to write-off all child support arrears and late payment penalties that he said (for reasons I will detail hereunder) were statute-barred and to remit late payment penalties in accordance with a request he had made the previous month. By way of letter dated
20 September 2007the Registrar declined to remit the late payment penalties. The Notice of Decision of that date indicates that the Registrar regarded that as the only application by him before it. The file indicates that Mr Hill had made a series of communications to the Registrar in January and February. When he lodges his objection to the decision of 20 September 2007 (on 24 September 2007) he refers to his “two applications to remit penalties of 3 January and 7 January 2007”. In fact, as the SSAT point out at [5] of their Statement of Reasons (“Reasons”), his application to the Registrar is most clearly set forth in his letter to them of 5 February 2007 in which he makes the point that all of his arrears are statute-barred. The file also contains an email from him dated 8 January 2007 in which he requests the remission of penalties and another letter (undated but presumably of 3 January 2007) seeking remission of penalties for late payment.
In any event, his objection of 24 September 2007 sets out thirteen separate grounds on which he objects to the decision “to remit late payment penalties” (I think he intended to refer to a decision to refuse to remit late payment penalties). The full text of the grounds are set out at [4] of the Reasons of the SSAT. They include the following grounds:
3. The decision involves an error of law: specifically the premise that s.68 of the NSW Limitation Act does not take effect to extinguish the right and title to debt until action is commenced in a NSW state court in respect of the debt.
4.The decision involves an error of law: specifically the premise that debt recorded in the Child Support Registrar is sheltered from the operation of the NSW Limitation Act.
11.The decision is not authorized by section 68 of the Child Support (Registration and Collection) Act in respect of most of the penalty amount: specifically, the statute of limitation on penalties is 2 years. For penalties imposed before 20 September 2005 there is no amount of penalty payable to enliven s.68(1) or s.69(2) of the Child Support (Registration and Collection) Act to authorize a remission.
The objection letter is quite explicit in its first sentence as to its purpose:
This is an objection to the decision to remit late payment penalties.
The objection was one Mr Hill was entitled to make pursuant to s.80 of the Collection Act (see the item numbered 8 in sub-s.(1)).
The objection was disallowed on 21 November 2007. The Objection Decision Report of that date is also to be found in the documents provided by the SSAT to this Court. It contains the following passage, noted by the SSAT at [5] of the Reasons:
“In making this decision, I have only considered the CSA’s decision not to remit the LPP’s on this Child Support case, as objected to in [Mr Hill’s] letter to CSA dated 26 September, 2007. I am satisfied that there is a maintenance component for the arrears on [Mr Hill’s] Child Support case, as per CSA’s processes ….”
Mr Hill lodged his review to the SSAT on 26 November 2007. Under the heading in the document which asks what decision he is appealing about he states:
Refusal to remit penalties.
Clearly, then, the review to the SSAT is in relation to its refusal to allow an objection to its decision to refuse to remit late payment penalties. There does not appear to me to be any basis for concluding otherwise.
I should say something at this point about the confusion as to which arrears the penalties relate. It is clear from a perusal of the Reasons of the SSAT and of the papers provided by them that Mr Hill regarded himself as having paid all arrears which were less than six years old and, I assume, all late payment penalties that were less than two years old, though I cannot be certain of this. Certainly, this is how I interpret the SSAT’s summary of the payment position set forth at [18] of the Reasons. The SSAT notes at [12] Mr Hill’s claim before the SSAT that he considered all penalties imposed more than two years previously to be statute-barred. However, under the heading “Findings of Fact” at [22(c)] of the Reasons the SSAT states:
The maintenance arrears of $3,138.70, either totally or substantially related to a liability to pay child support payments which had been registered under the Registration Act prior to 1 January, 2002. The late payment penalties were imposed in respect of the failure to pay those arrears.
That suggests that the late payment penalties are only calculated on arrears more than six years old, whereas the earlier passages I have referred to suggest that the penalties may have accrued on arrears between two and six years old. It is not possible to discern with precision the position with respect to the period over which late payment penalties still owing have been calculated.
Mr Hill’s arguments are predicated on the applicability of the provisions of a New South Wales Act, the Limitation Act 1969 (NSW) (“Limitation Act”), and I will discuss the relevant provisions of that Act in more detail hereunder. That Act prohibits recovery of debts due by virtue of an enactment after six years and of actions to recovery penalties by virtue of an enactment after two years. For present purposes I note that if Mr Hill is correct as to his contention with respect to general arrears, that is non-penalty arrears, then any penalties imposed in respect of such sums would not be able to be imposed pursuant to s.67 of the Collection Act. But there is a separate argument that penalties themselves are not recoverable if more than two years old. However, if the argument as to general arrears is valid then the separate contention about the penalties would become academic. The argument as to the existence of the right to recover both arrears and penalties is identical in substance - only the time limits are different.
I should, at this point, set forth the manner in which child support debts arise.
Section 13 of the Collection Act establishes the Child Support Register.
Section 14 of the Collection Act provides that child support assessments on which a registrable maintenance liability arises must go on the Register.
Section 30 of the Collection Act provides that if a registrable maintenance liability is registered, the amounts payable under it are debts due to the Commonwealth in accordance with the Register.
If the debt remains unpaid, s.67 of the Collection Act provides for the imposition of penalties. The amount payable by penalty is a debt due to the Commonwealth (s.67(2)).
Section 68 of the Collection Act provides that penalties so imposed can be remitted. One of the reasons for remission is if the Child Support Registrar (“Registrar”) is satisfied that there are special circumstances by reason of which it would be fair and reasonable to remit the late payment penalty or part of it (s.68(1)(c)).
The Limitation Act provides in s.14(1)(d) as follows:
(1) An action on any of the following causes of action is not maintainable if brought after the expiration of a limitation period of six years running from the date on which the cause of action first accrues to the plaintiff or to a person through whom the plaintiff claims:
(a) …
(b) …
(c) …
(d) a cause of action to recover money recoverable by virtue of an enactment, other than a penalty or forfeiture or sum by way of penalty or forfeiture.
Section 14(3) provides that the expression “enactment” includes an enactment of the Commonwealth.
Section 18(1) of the Limitation Act provides:
(1) An action on a cause of action to recover a penalty or forfeiture, or sum by way of penalty or forfeiture, recoverable by virtue of an enactment, is not maintainable if brought after the expiration of a limitation period of two years running from the date on which the cause of action first accrues to the plaintiff or to a person through whom the plaintiff claims.
“Action” is defined in s.11 as meaning any proceeding in a court. Section 10 provides for the Act to bind the Crown. Section 11 provides that the Crown includes not only the Crown in Right of New South Wales but also, so far as the legislative power of parliament permits, the Crown in all its other capacities.
Section 63(1) of the Limitation Act provides:
(1) Subject to subsection (2), on the expiration of a limitation period fixed by or under this Act for a cause of action to recover any debt damages or other money, the right and title of the person formerly having the cause of action to the debt damages or other money is, as against the person against whom the cause of action formerly lay and as against the person’s successors, extinguished.
The significance of s.63 may not be as great as first appears given the observations of the High Court in Deputy Commissioner of Taxation v Moorebank Pty Ltd (1988) 165 CLR 56 at 65. This was a case where the provisions of the Limitation of Actions Act 1974 (Qld) were pleaded as a bar to the recovery of income tax assessed under the relevant Commonwealth legislation. Having noted the effect of s.63 of the NSW Limitation Act the Court said:
In that regard, it is relevant to note that it has long been recognized that to speak of even traditional limitation provisions as merely “procedural” or as “barring the remedy and not the right” is misleading in that such provisions will, at least in some circumstances, entail consequences which are substantive in that, by barring the remedy, they will effectively extinguish both rights and liabilities: see e.g. In re Hepburn; Ex parte Smith (1884) 14 QBD 394 at 399-400.
Certain provisions of the Judiciary Act are also relevant. Section 64 provides:
In any suit to which the Commonwealth or a State is a party, the rights of parties shall as nearly as possible be the same, and judgment may be given and costs awarded on either side, as in a suit between subject and subject.
Section 79 provides:
The laws of each State or Territory, including the laws relating to procedure, evidence, and the competency of witnesses, shall, except as otherwise provided by the Constitution or the laws of the Commonwealth, be binding on all Courts exercising federal jurisdiction in that State or Territory in all cases to which they are applicable.
The argument advanced by Mr Hill with the Registrar and then (obliquely) before the SSAT is that such part of his child support debt which is more than six years old is, firstly, extinguished on account of s.63 of the Limitation Act and, secondly, cannot be recovered by action. I use the expression “obliquely” because it will be recalled that the review lodged with the SSAT and the notice of objection which preceded it each only raised the issue of the remission of late payment penalties. However, it is clear from all of the material that pervading the applicant’s contentions to both the Registrar and the SSAT is his view that the Limitation Act has this dual consequence. Presumably, because the section assumed significance before the High Court in Moorebank (supra) the applicant placed significant stress on s.64 of the Judiciary Act but it might be thought that s.79 is at least as significant. Mr Hill was clearly cognisant of the extent to which s.63 of the Limitation Act enlarged the difficulties facing the recovery of the debt, that is extinguishment of the debt, although he mistakenly refers to s.68 instead when setting forth the extinguishment proposition (see [4(3)] of the Reasons).
Given these matters, we would expect to see the issue of the arrears agitated in some way before the Registrar by Mr Hill but I am unable to discern from all of the material made available to me any application by him to have the Registrar address these fundamental issues. He has seemed content to simply raise these matters with the Registrar and to then claim that by his doing so he has imposed or shifted to them the onus of authoritatively determining the issue. So for example, his letter to the Registrar of 5 February 2007 says:
I invited CSA to persuade me (that the Limitation Act does not apply) with an actual rebuttal that might stand up in Court. I am certainly open to persuasion because I do not want to wear Court costs.
That was four months ago and I have not heard anything. A necessary conclusion is that my reading of the law is correct and CSA has no case.
Section 80(1) of the Collection Act includes at item 2 an entitlement for a payer to lodge an objection to a decision of the Registrar in relation to the particulars entered in the Child Support Register. There would appear to be no reason why Mr Hill could not have sought a rectification of the Register to expunge the arrears to which he said the Limitation Act applied. An application to the SSAT for review would then have been open to him under s.89 of the Collection Act if such an application were refused.
He did not pursue such remedy. Instead he agitated these issues in the context of remission of penalty only. It is not clear why he took this position. Perhaps he was unaware of his entitlement to bring the rectification request. Perhaps he apprehended the possibility of the controversy being enlarged so as to bring into play, for example, the need for notices to the Attorney General under s.78B of the Judiciary Act, though as the High Court pointed out in Moorebank (supra) at 62-63 a consideration of the implication of provisions of the Judiciary Act does not involve constitutional considerations:
Although, in some respects, s.64 plays a pivotal role in the federal legal system, it is important to remember that the section enjoys no special authority among the statutes of the Commonwealth. It is neither a constitutional provision nor an entrenched law. Its authority is that of an Act of the Parliament which can be expressly or impliedly amended or repealed either wholly or in part, by a subsequent Act and whose application or operation to or with respect to cases falling within the provisions of a subsequent Act will be excluded to the extent that such application or operation would be inconsistent with those subsequent statutory provisions….
In any event, the way in which Mr Hill elected to proceed is emphasised in this key passage of the SSAT Reasons at [27]:
The correctness of the particulars entered in the Child Support Register in relation to the maintenance liability has not been directly considered by the Objections Officer. In fact, the Objections Officer has been at pains to stress the only decision considered was the decision not to remit the late payment penalties.
Having correctly made that observation the SSAT then goes on to say:
On a narrow view of what the Objections Officer was deciding, a failure to make a decision as to whether the maintenance debt existed or not, or if it did exist if it was payable, would render it inappropriate to impose a penalty for its non-payment.
It then concludes, in a key passage of its decision:
In the view of the Tribunal, the imposition of a late payment penalty in a situation where a determination had not been made on a challenge to the existence of the debt, would be similarly oppressive and inappropriate. Once imposed, in the view of this Tribunal, it would constitute a special circumstances (sic) by reason of which it would be fair and reasonable to remit the penalty pursuant to section 68(1)(c) of the [Collection] Act.
This would seem to be a surprising conclusion to reach given the SSAT’s own observations as to the applicant’s failure to agitate the general arrears issue. The SSAT appears to consider the special circumstance requirement satisfied because the Registrar had not made a determination of the validity or otherwise of contentions raised by the applicant in communications with the Registrar as to his view of the effect of the Limitation Act. It was enough, so the SSAT thought, for Mr Hill to raise a doubt as to the status of the arrears. The SSAT did not consider it necessary in order for it to reach this conclusion to require Mr Hill to have made some kind of request for determination or application to the Registrar or to the Objections Officer.
The way in which the SSAT deals with this issue becomes, with respect to it, more confused at [28]-[30]. It suggests that a broader view of what the Objections Officer was doing would include his making an implicit finding that the arrears existed in accordance with the Register. But it goes on to say that even on that broader approach “the central issue” still remains the question of the penalty. It then returns to its fundamental conclusion in the last sentence of that paragraph:
In the view of the Tribunal, the failure to authoritatively resolve such doubts before such penalties are imposed is a special circumstance justifying the remittance of the penalties.
It is unclear precisely what the SSAT are purporting to do in [28] and [29]. Whatever the Objections Officer decided (narrow or broad) the review to the SSAT was one relating to remission of penalties only. Perhaps that is what is meant by the first sentence of [29] when reference is made to the central issue - that even if the Objection Officer had decided the broader issue of the arrears, the applicant only ever agitated the issue of penalty.
In some respects, the distinction between the general arrears and the penalties imposed on them is distracting. The penalties themselves, if the Limitation Act applies, are statute-barred and extinguished. Precisely the same argument pertains to them as it does to arrears generally. The central issue is whether the Limitation Act applies.
I should note, here, one further complication. Arguably s.18 of the Limitation Act does not conceivably arise because s.67(2) of the Collection Act characterises the penalties imposed as a “debt to the Commonwealth”, which is precisely the same description given to the amounts payable in accordance with the Register pursuant to s.30 of the Collection Act. Perhaps both sums are “money recoverable by virtue of an enactment” pursuant to s.14(1)(d) of the Limitation Act and the specific provision as to recovery of penalties in s.18 of the Limitation Act does not arise. That is one of the matters about which further submissions may be required (see [63] hereunder).
Complicating matters further, the SSAT has missed altogether that element of the applicant’s argument which contended that penalties should be remitted because of s.18 of the Limitation Act, that is, a direct challenge to the collectability of the penalties, and focused exclusively on what might be called the indirect argument that the penalties should be remitted because doubt attended the arrears on which they were calculated. I will return to this aspect hereunder.
I think that the way in which the SSAT dealt with the indirect argument must be regarded as plainly wrong. Mr Hill never challenged the debt itself, either before the Objections Officer or the SSAT. We have already noted that he had a remedy available to him if he had wanted to have the issue confronted before any recovery proceedings were instituted by the Registrar. Of course, if such proceedings were instituted he would plead the Limitation Act as a defence and bar to the claim but even if that were, for whatever reason, considered to be an unsatisfactory remedy he could pre-emptively apply to have the particulars relating to him in the Register corrected. He never did so. Given his failure to seek any remedy in that regard it is surely not open to the SSAT to form the view that the Registrar has failed to authoritatively resolve the issue. Any number of payers might have any number of doubts as to the state of their indebtedness under the Child Support Legislation but unless and until they seek a remedy it is inappropriate to characterise the levying of penalties as oppressive and inappropriate and as providing a special circumstance for remittal. As Mr Gouliaditis, for the appellant, submitted to me, there is no discretion as to the imposition of the penalties. The effect of s.67 is that they arise as a liability by virtue of the child support debt remaining unpaid. An entitlement to remission does not arise because a payer raises arguments, which he does not submit to determination, about the existence of the child support debt. In determining otherwise, the SSAT has made an error of law in respect of the applicability of the provisions of s.68(1)(c) of the Collection Act.
It is appropriate at this point to note the powers of this Court on the appeal. Section 110F(1) of the Collection Act provides:
The court must hear and determine an appeal under this Subdivision and may make such order as it thinks appropriate by reason of its decision.
Two things should be immediately noted (and once again I am indebted to the discussion of these issues by Halligan FM in LDME & JMA (supra) at [36]-[40]). Firstly, the Court has a discretion as to what follows from the decision on the question of law raised by the appeal. There is no inevitability about the setting aside of the SSAT decision. Secondly, the orders that the Court makes are to be determined in the light of the decision. The orders should flow from the findings made as to the questions of law determined.
Section 110G of the Collection Act provides as follows:
(1) If a party to a proceeding before the SSAT appeals to a court under this Subdivision, the court may make findings of fact if:
(a) the findings of fact are not inconsistent with findings of fact made by the SSAT (other than findings made by the SSAT as the result of an error of law); and
(b) it appears to the court that it is convenient for the court to make the findings of fact, having regard to:
(i) the extent (if any) to which it is necessary for facts to be found; and
(ii) the means by which those facts might be established; and
(iii) the expeditious and efficient resolution of the whole of the matter to which the proceeding before the SSAT relates; and
(iv) the relative expense to the parties of the court, rather than the SSAT, in making the findings of fact; and
(v) the relative delay to the parties of the court, rather than the SSAT, in making the findings of fact; and
(vi) whether any of the parties considers that it is appropriate for the court, rather than the SSAT, to make the findings of fact; and
(vii) such other matters (if any) as the court considers relevant.
(2) For the purposes of making findings of fact under subsection (1), the court may:
(a) have regard to the evidence given in the proceeding before the SSAT; and
(b) receive further evidence.
(3) Subsection (1) does not limit the court's power under paragraph 110F(2)(b) to make an order remitting the case to be heard and decided again by the SSAT.
The section is almost identical to s.44(7), (8) and (9) of the Administrative Appeals Tribunal Act 1975 (Cth). Halligan FM at [95] of LDME & JMA (supra) sets out the explication of those sections by the Full Court of the Federal Court in Comcare v Etheridge [2006] FCAFC 27, and what is said there applies with equal relevance to the provisions of the Collection Act set out at [45] above.
I agree with the observations of Halligan FM at [97] as to the caution that should be taken before the Court steps into the shoes of the SSAT:
In relation to a s.110B appeal, there seems to me to be a clear legislative intention, evinced by the comprehensive amendments to the review procedures that commenced on 1 January 2007, that questions as to the level of child support are to be treated as administrative matters, and are not, subject to the limited exceptions under s.116 of the Assessment Act, to be determined by courts. Consistent with that apparent legislative intention, in my view the court on an appeal under s.110B ought not, as in this case, undertake the task of the SSAT where, because of an error of law, the SSAT has made no endeavour to deal with the review application on its merits.
To summarise, therefore, the appeal as it relates to the penalty remittal on account of the doubt said to be attendant as to the issue of the existence of the child support debt, must succeed in my view. With the applicant having made no challenge to the child support debt, other than in, as it were, arguendo with the Registrar, the failure of the Registrar to authoritatively determine the matter cannot ground an entitlement to invoke special circumstances. How could the Registrar have authoritatively determined the matter? The Registrar indicates, throughout his dealings with Mr Hill, in the period January/February 2007 a rejection of his contentions about the child support debt. What can the Registrar have been expected to do about the matter absent any request by Mr Hill for a correction to the particulars of the debt in the Register or other request for a determination to be made?
However, in dealing with the matter in the way that it has, the SSAT did not explore what I have herein described as the direct challenge to the failure to remit the penalties on the ground that they should, to the extent that they are more than two years old, be remitted on account of them having been extinguished and/or rendered unrecoverable on account of s.18 of the Limitation Act.
I have discussed at [13] the confusion as to what period the penalties related but it is at any rate plain that they are constituted by or include penalties imposed more than two years “running from the date on which the cause of action first accrues” (to use the language of s.18 of the Limitation Act), which would be date, pursuant s.67 of the Collection Act, that the penalty is imposed and became, by virtue of sub-s.(2), a debt to the Commonwealth.
It is clear from ground 11 of Mr Hill’s objection that the challenge includes one in these terms (see [7] hereof). It is possible to read that ground as an objection to the remittal of penalties between two and six years old, that is that the ground relates to an objection to the actual remittal (not the failure to remit) on the basis that no remittal can be made because the debt is now extinguished. That is the other side of the same argument, however. The challenge is to the levying of penalties more than two years old; remittal should be made of all such penalties, it is said. That is the plain tenor of this ground and of the grounds read as a whole.
I have already observed that the argument is essentially the same as the argument as to the child support debt itself - the applicability of the Limitation Act. In dealing with the direct challenge to the penalties I would also be dealing with the same issues that were not agitated by Mr Hill before the SSAT and before the Objection Officer.
I think that is the answer to any suggestion that the form of the order on this appeal should be a simple remitter to the SSAT. The issue to be determined is the applicability of the Limitation Act. That is a question of law. No question of fact-finding pursuant to s.110G of the Collection Act is required. It is not disputed that Mr Hill has not paid child support that is now more than six years old and has not paid penalties imposed under s.67 of the Collection Act that are at least two years and possibly more than six years old (though the position is probably that they are all between two and six years old).
What remains is the resolution of a legal question and that is a task that this Court should not eschew, particularly in the circumstances in which the matter has come before the Court.
When the appeal was argued before me, the Court put to counsel for the Registrar that no issue as to the extinguishment of the debt had been determined by the SSAT. Ground 1(a) of the appeal was couched in terms of an alleged error by the SSAT in finding that the Limitation Act was “capable of applying to bar recovery or extinguish child support debt”. Argument focused, in fact, on the way in which the SSAT did in fact proceed, rather than on the arguments not addressed by them. The issue of the applicability of the Limitation Act was not meaningful explored before me because it was not apparent at that stage that the issue was in fact one that had been before the SSAT. I have explained why I think that the direct challenge was indeed before the SSAT as to penalties, but was not in fact addressed. There is no criticism of the Registrar’s counsel or Mr Hill that arises from this - the Court itself directed the argument away from the exploration of these issues.
The issue that remains is plainly one of substantial importance. It raises the question of the enforceability of child support debts more than six years old and penalties more than two years old (of course, different time considerations may arise in different states of the Commonwealth).
The High Court in Moorebank (supra) identified a broad range of matters relating to the Income Tax Assessment Act (Cth) (“Tax Assessment Act”), which indicated to them that the Limitation of Action Act 1974 (Qld) had no room to apply to it. They included:
a)that the tax assessment scheme was complete upon its face and left no room for operation of State law provisions pursuant to s.64 of the Judiciary Act;
b)that the power of the Commonwealth Parliament to legislate with respect to taxation given by s.51(ii) of the Constitution was subject to an express requirement not to discriminate between the States; the collection of tax from citizens should not be subject to any immunities that may be enjoyed in any particular State compared to another;
c)that any barring of recovery of tax or extinguishment of tax debt was inconsistent with the Tax Assessment Act delineation of tax due as a debt to the Commonwealth (there were reservations about this consideration, however - see Moorebank (supra) at 66);
d)that the broad power of the Tax Commissioner to grant extensions of time for payment of tax where inconsistent with State Act provisions that barred recovery; that is the Commissioner’s discretion would be significantly confined;
e)that the intrusion of Limitation Act provisions cut across the detailed arrangements in the Tax Assessment Act for dealing with objections to payment of tax. The Court noted that there would be cases where it would be oppressive to collect tax and impose penalties when a genuine objection was pending (these occasions were the subject of judicial recognition); any forbearance by the Commissioner in such circumstances would possibly result in him being possibly liable to the barring of his debt even if the assessment was found to be correct after challenge;
f)the scheme of amendment of assessments would be significantly intruded upon.
Of course, a number of broader issues arising from the application of s.64 of the Judiciary Act and consequent application of State laws on governmental functions, such as tax collection, were left unexplored on account of the way in which the High Court determined the case before it (see Moorebank (supra) at 68).
It will be seen that some, but certainly not all, of these considerations may arise in the context of an examination of the child support scheme.
It is important to note the High Court case of Luton & Lessels [2002] HCA 13 at this point. That case answered a series of questions put in a case stated to the High Court about the constitutional basis of the child support scheme established by the Collection Act and the Child Support (Assessment) Act 1989 (Cth). The case was decided in 2002. There have been significant changes to the Acts since then, principally the provisions establishing a role for the SSAT under the Collection Act and consequential amendments relating to appeals from them, such as in this case, to the Court. Those changes do not vitiate either of the two important conclusions reached about the scheme: firstly, that it does not have the character of taxation; and secondly, that it does not confer the judicial power of the Commonwealth on the Registrar. The power of the Parliament to legislate for such matters is found in the matrimonial causes power coupled with the reference of power to the Commonwealth Parliament by the various states of the Commonwealth.
Lack of power to self-enforce his determination on the part of the Registrar was significant in determining the non-judicial function of the Registrar. The absence of a revenue-raising characterisation of the scheme was significant in the Court’s determination that the scheme did not involve the levying of a tax. As the Court said at [14]:
What is alleged to be taxation is in substance no more than a mechanism for the enforcement of a pre-existing private liability.
All of these considerations should be borne in mind in any evaluation of the issues thrown up in this case in the light of the decision in Moorebank (supra).
Before reaching a decision in relation to the remaining aspect of the appeal I thought a further opportunity should be provided to the parties to make submissions. The potential of any impact of any decision on the scheme, the curtailment of submissions on this topic at the previous hearing and the relative complexity of the issues required such an opportunity to be given.
I convened a further short hearing on 11 July 2008.
It was the position of both Mr Gouliaditis and Mr Hill that the matter should be remitted to the SSAT.
Mr Gouliaditis was especially concerned about the difficulties that would confront the Court in fact-finding with respect to both the issue in respect of which arrears the penalties had been raised and the date upon which the existing penalties had been imposed. I have already described herein at [13] and [50] the uncertainties associated with the penalties.
Mr Hill was adamant that all remaining penalties had been imposed more than two years ago. The date of imposition of the penalty must be the date upon which the cause of action first accrues in accordance with s.18(1) of the Limitation Act. Mr Gouliaditis did not dispute this but considered it appropriate to ascertain from the Registrar that such was the case. If there are no penalties imposed more than two years ago currently owing, no issue will arise with respect to the application of the Limitation Act.
But in any event it is important to have an accurate understanding of the way in which the penalties have accrued. The task that remains will be partly one of fact-finding and partly the determination of the legal issue identified at [49] herein.
In all of the circumstances, and bearing in mind the observations of Halligan FM set out at [47] herein, I think the better course of action is to remit the matter to the SSAT for determination of the review from the decision of the Registrar in the light of these Reasons.
I certify that the preceding sixty-nine (69) paragraphs are a true copy of the reasons for judgment of Lindsay FM
Associate: Ms N. Julius
Date: 14 July 2008
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