Child Support Registrar and Pearce & Anor
[2018] FamCAFC 10
•31 January 2018
FAMILY COURT OF AUSTRALIA
| CHILD SUPPORT REGISTRAR & PEARCE AND ANOR | [2018] FamCAFC 10 |
| FAMILY LAW – LEAVE TO APPEAL – CHILD SUPPORT – Administrative review of decision of the Child Support Registrar – Where the primary judge allowed an appeal against a decision of the former Social Security Appeals Tribunal (“the Tribunal”) on the basis there had been a denial of procedural fairness – The issue the subject of the procedural fairness complaint did not properly arise for consideration by the Tribunal – In any event, the Tribunal did not have an obligation to identify something that was apparent from the very nature of the decision that had to be made – Held the approach adopted by the primary judge was misconceived – Leave to appeal granted and appeal allowed – No order as to costs – Costs certificate granted to the first respondent. FAMILY LAW – APPEAL – Notice of Contention – The first respondent’s submissions relied on the same erroneous basis advanced in opposition to the appeal – Notice dismissed. FAMILY LAW – APPEAL – Application to adduce further evidence – Unnecessary to consider the application due to the merit in the appellant’s primary argument. |
| Child Support (Assessment) Act 1989 (Cth) ss 98B, 98C, 98S(2), 117 Child Support (Registration and Collection) Act 1988 (Cth) s 103T (since repealed) |
| Minister for Immigration and Citizenship v SZGUR (2011) 241 CLR 594 |
| APPELLANT: | Child Support Registrar |
| FIRST RESPONDENT: | Ms Pearce |
| SECOND RESPONDENT: | Mr Pearce |
| FILE NUMBER: | PAC | 2109 | of | 2013 |
| APPEAL NUMBER: | EA | 131 | of | 2016 |
| DATE DELIVERED: | 31 January 2018 |
| PLACE DELIVERED: | Perth |
| PLACE HEARD: | Sydney |
| JUDGMENT OF: | Thackray, Aldridge & Watts JJ |
| HEARING DATE: | 11 August 2017 |
| LOWER COURT JURISDICTION: | Federal Circuit Court of Australia |
| LOWER COURT JUDGMENT DATE: | 18 July 2016 |
| LOWER COURT MNC: | [2016] FCCA 1789 |
REPRESENTATION
| COUNSEL FOR THE APPELLANT: | Mr Lloyd SC |
| SOLICITOR FOR THE APPELLANT: | Lander & Rogers |
| COUNSEL FOR THE FIRST RESPONDENT: | Mr Longworth |
| SOLICITOR FOR THE RESPONDENT: | Legal Aid NSW |
| THE SECOND RESPONDENT: | No appearance |
Orders
Leave to appeal be granted.
The appeal be allowed.
The Notice of Contention be dismissed.
The orders made by Judge Scarlett on 18 July 2016 be set aside and in their place the following order is made.
1. The appeal filed on 25 June 2014 be dismissed.
The application in an appeal filed 11 November 2016 be dismissed.
There be no orders as to costs.
The Court grants to the first respondent a costs certificate pursuant to the provisions of s 6 of the Federal Proceedings (Costs) Act1981 (Cth) being a certificate that, in the opinion of the Court, it would be appropriate for the Attorney-General to authorise a payment under that Act to the first respondent in respect of the costs incurred by her in relation to the appeal.
Note: The form of the order is subject to the entry of the order in the Court’s records.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Child Support Registrar & Pearce and Anor has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).
| THE FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT SYDNEY |
Appeal Number: EA 131 of 2016
File Number: PAC 2109 of 2013
| Child Support Registrar |
Appellant
And
| Ms Pearce |
First Respondent
And
| Mr Pearce |
Second Respondent
REASONS FOR JUDGMENT
The Child Support Registrar (“the Registrar”) seeks leave to appeal and, if leave is granted, to appeal orders made by Judge Scarlett on 18 July 2016.
Judge Scarlett allowed an appeal by Ms Pearce (“the mother”) against a decision of the former Social Security Appeals Tribunal (“the Tribunal”) on the basis that the mother had been denied procedural fairness.
Relevant background
The Registrar is an employee of the Department of Human Services which is responsible for the provision of services previously delivered by the Child Support Agency (“the Department”). In 2012, the Department became responsible for collection of the child support payable by Mr Pearce (“the father”) for the benefit of the children of his marriage to the mother.
The father was employed by a trade association (“the Association”) in 2012/13. He had an adjusted taxable income of $116,468 per annum, and was assessed to pay child support on that income (“the original assessment”).
On 23 August 2013, the father ceased work at the Association and received a payment equivalent to about two months’ salary. He also gave the Department an estimate of the income he thereafter anticipated earning, namely $17,585 per annum. Based on that estimate, the father was assessed to pay a reduced rate of child support from 17 September 2013 (“the second assessment”).
On 27 September 2013, the mother applied under s 98B of the Child Support (Assessment) Act 1989 (Cth) (“the Assessment Act”) for a change to the second assessment, claiming that the father had left his employment “on his own accord”. She sought that the father’s child support obligation be calculated on the basis of the income he had been earning at the Association.
In November 2013, the Registrar’s delegate (“the Senior Case Officer”) concluded that the second assessment was “unfair” because of the father’s “earning capacity”. She explained that the father had failed to satisfy her that he had not resigned so as to affect the rate of child support payable.
The Senior Case Officer directed that the second assessment be changed so that the child support would be calculated from 17 September 2013 to 31 October 2015 on the basis of the father having an annual income of $116,000 (“the third assessment”).
The father lodged an objection to the decision of the Senior Case Officer, but the objection was disallowed.
On 20 January 2014, the father applied to the Tribunal for a review of the decision. Shortly thereafter, on 28 January 2014, the husband obtained new employment at a commencing salary of $40,000 per annum.
At the hearing on 13 May 2014, the Tribunal had before it evidence which had not been available to the Senior Case Officer, indicating that the father had been asked to leave his employment at the Association.
The Tribunal found that the father gave up his employment on the advice of the CEO of the Association and on the understanding that “by doing so he would obtain a good reference and would receive the equivalent of about two months pay”. Having accepted the father’s evidence about how he had lost his employment, the Tribunal held that the ground for changing the second assessment relied upon by the Senior Case Officer had not been made out. However the Tribunal also considered the father’s actual income in the relevant period and decided that this provided a different ground for departure. The Tribunal therefore concluded there should be a change to the second assessment to reflect, first, that the father’s income from the Association, in effect, continued for two months after his departure and, secondly, that he had been earning at the rate of $40,000 per annum since 28 January 2014.
On 25 June 2014, the mother appealed the Tribunal’s decision. Her appeal was heard in February 2015, but judgment was not delivered until July 2016. The present appeal against that judgment was filed on 15 August 2016.
The reasons for decision
Judge Scarlett correctly held that the mother was entitled to appeal only on questions of law. Six of the mother’s complaints were dismissed on the basis that they did not raise such a question. However, his Honour found that Ground 7 did raise a question of law. It was expressed in these terms:
[The mother] was denied procedural fairness, in that the [Tribunal] did not put her on notice that a determination that would cause an overpayment of child support was being considered and did not give her an opportunity to respond and place relevant material before it.
His Honour’s reasons about Ground 7 are set out below:
101.… Ground 7 is the procedural fairness ground. It was submitted that the Tribunal was not obliged to specifically identify the possibility of an overpayment being raised and to seek submissions from the [mother] in order to afford her procedural fairness.
102.I have difficulty in accepting this proposition. If there is to be the possibility of an overpayment, this may well cause hardship, and for an unrepresented Appellant to be deprived of the opportunity to make some submissions on that point, as to the hardship to her and perhaps her children, would seem to me to be lacking in procedural fairness. It is well-established that a lack of procedural fairness or a failure to accord natural justice is a jurisdictional error. I am, after some reflection, persuaded that this Ground of Appeal has been established. It is, of course, necessary for only one jurisdictional error to be found, only one error of law, to vitiate the decision of the Tribunal.
103.I intend to allow the Appeal, based on Ground 7.
(Emphasis added)
The statutory framework
It is necessary to make some reference to the statutory context in which the matter was determined, both by the Registrar and by the Tribunal.
The mother’s application to change the second assessment was determined pursuant to s 98C of the Assessment Act, which confers power on the Registrar to depart from the provisions of the Act relating to administrative assessment of child support. The grounds for such a departure are the same as those set out in s 117(2) of the Assessment Act. In exercising the power to change the assessment, the Registrar is obliged to apply, inter alia, s 117(4) of the Assessment Act on the basis that any reference to “the court” is read as a reference to the Registrar.
The mother’s September 2013 application sought that the father’s liability to pay child support be based on his “earning capacity”, rather than on his actual income. This ground for changing an assessment arises from s 117(2)(c)(ib) of the Assessment Act, but must be read subject to s 117(7B) which provides that:
(7B) In having regard to the earning capacity of a parent of the child, the court may determine that the parent’s earning capacity is greater than is reflected in his or her income for the purposes of this Act only if the court is satisfied that:
(a)one or more of the following applies:
(i)the parent does not work despite ample opportunity to do so;
(ii) the parent has reduced the number of hours per week of his or her employment or other work below the normal number of hours per week that constitutes full-time work for the occupation or industry in which the parent is employed or otherwise engaged;
(iii) the parent has changed his or her occupation, industry or working pattern; and
(b) the parent’s decision not to work, to reduce the number of hours, or to change his or her occupation, industry or working pattern, is not justified on the basis of:
(i) the parent’s caring responsibilities; or
(ii) the parent’s state of health; and
(c) the parent has not demonstrated that it was not a major purpose of that decision to affect the administrative assessment of child support in relation to the child.
(Emphasis added)
The fact that a ground for changing an assessment is satisfied is not itself a sufficient basis for changing the assessment. The decision maker must also be satisfied, inter alia, that such a change would be “just and equitable” (s 117(1)(b)(ii) of the Assessment Act). In determining if it would be “just and equitable”, s 117(4) requires various matters to be taken into account, including any “hardship” that would be caused to the child or the carer entitled to child support by “the making of, or the refusal to [change the assessment]”.
The father’s application to the Tribunal for a review of the decision to change the second assessment was made pursuant to the Child Support (Registration and Collection) Act 1988 (Cth), which conferred on the Tribunal all of the powers and discretions possessed by the Senior Case Officer (s 103T now repealed). The Tribunal was thus undertaking a full merit review of the decision and was obliged “to do over again” the task the Senior Case Officer had undertaken: Mobil Oil Australia Pty Ltd v Federal Commissioner of Taxation (1963) 113 CLR 475 at 502 per Kitto J, cited with approval in Shi v Migration Agents Registration Authority (2008) 235 CLR 286 at 315 per Hayne and Heydon JJ.
In conducting its review, the Tribunal was not limited by the terms of the mother’s application for a change of assessment, since s 98S(2) of the Assessment Act provides that the Registrar is not subject to such a limitation. It was this provision which permitted the Tribunal to change the second assessment in the way that it did.
Leave to appeal
The mother accepted that leave to appeal should be granted. We consider this matter justifies that approach.
The appeal
The gravamen of the Registrar’s appeal is that the approach adopted by the primary judge misconceived what the Tribunal had done.
The Tribunal was satisfied that, in resigning from his employment with the Association, the father had not been motivated by a desire to affect his child support obligation. Accordingly:
·The father had demonstrated that it was not a major purpose of his change of employment to affect the administrative assessment of child support in relation to the children; and so
·The requirement of s 117(7B)(c) of the Assessment Act was not satisfied; and so
·The ground relied upon by the Senior Case Officer pursuant to s 117(2)(c)(ib) of the Assessment Act, that the father had an earning capacity of $116,000 per annum was not available; and so
·The question whether a change of assessment based on earning capacity was “just and equitable”, which included a consideration of the issues of “hardship”, did not arise.
If that is where the Tribunal had left its deliberation the second assessment would have been restored. Given the father had been paying at the rate established by the third assessment, the Tribunal’s finding would have created a credit balance in the father’s favour, and without the Tribunal being permitted by the Assessment Act to address the issue of any consequential hardship.
After deciding there was no ground to support the third assessment, the Tribunal continued its review of the second assessment and found a different ground of departure existed, namely the father’s actual income (s 117(2)(c)(ia) of the Assessment Act). It was in that context, and only in that context, that the Tribunal was permitted to consider the matters in s 117(4) of the Assessment Act, including the issue of “hardship”. These matters were discussed at [49] and following of the Tribunal’s reasons, but it is sufficient to recite only the concluding paragraphs where the “hardship” issue was the focus of attention:
69.[The father] indicated to the Tribunal that he does not have the capacity to pay the rate of child support assessed following [the mother’s] departure application. The Tribunal accepts that this is correct. Under the assessment he is required to pay child support at the annual rate of $23,320, taking account of his adjusted taxable income of $116,000 but the Tribunal has found that since 28 January 2014 he has been earning $40,000 and that from 24 October 2013 to 27 January 2014 he had no income. The Tribunal finds that requiring [the father] to pay child support at the assessed rate is causing him hardship.
70.That said, in the period from 22 August 2013 to 16 September 2013 the rate of child support he was assessed to pay was based on his estimated income of $0 and from 17 September 2013 until the departure determination was implemented he was only required to pay an annual rate of $391, equivalent to $7.49 per week. He told [the mother] at that time that he was prepared to pay $400 per month, so the Tribunal finds the assessment at that time did not cause him hardship.
71.For her part, [the mother’s] sole source of income, apart from child support, is the Centrelink payment she receives. Clearly, any reduction in the rate of child support is likely to cause her hardship.
72.The Tribunal considers that an assessment that takes account of [the father’s] changing circumstances will minimise the hardship to both parents while taking account of [the father’s] capacity to pay child support.
73.The Tribunal proposes to depart from the Administrative assessment so that:
·For the period 23 August 2013 to 23 October 2013, [the father’s] adjusted taxable income is set at $93,783. This is the annual equivalent of the termination pay received by [the father] when he left [the Association].
·For the period 24 October 2013 to 27 January 2014, [the father’s] adjusted taxable income is set at $0.
·For the period 28 January 2014 to 30 June 2014, [the father’s] adjusted taxable income is set at $40,000.
It is important to recognise that the “hardship” that the Tribunal was considering here was expressly confined by the Assessment Act to the “hardship” that would be “caused … by the making of, or the refusal to make [the change of assessment]”. The change contemplated was based upon the new “income” ground, and was a change in the mother’s favour, since it would have the effect of reducing the extent of the liability she would otherwise incur as a result of the (now) unchallenged finding about the father’s earning capacity.
The mother’s complaint about not being given an opportunity to raise the “overpayment” is without merit because the “overpayment”, and any ensuing hardship, arose from the Tribunal’s finding that the ground the Senior Case Officer relied upon was not available. As senior counsel for the Registrar observed, when a change of assessment is made increasing child support, and if payments are made according to the new assessment, a credit in favour of the liable parent will inevitably result if the assessment is later set aside on review. The fact there has been an “overpayment” is nothing more than the inevitable consequence of a regime that allows for review of administrative decisions.
The Tribunal had no obligation to identify for the mother’s benefit something that was apparent from the very nature of the decision that had to be made: Minister for Immigration and Citizenship v SZGUR (2011) 241 CLR 594 at 599 per French CJ and Kiefel J. Further, even assuming it was open to the Tribunal to arrive at a decision more advantageous to the mother than the one actually made, there is nothing in the record to suggest that the mother was denied the opportunity to make submissions about the relevance of the “overpayment”.
Accordingly, we agree that the approach adopted by the judge below was misconceived, and the appeal should be allowed. We propose to set aside all of the orders his Honour made and we will order instead that the mother’s appeal against the decision of the Tribunal be dismissed.
The Notice of Contention
The mother filed a Notice of Contention seeking to uphold the order made by Judge Scarlett on the basis that his Honour had erred in deciding certain matters in favour of the Registrar. It is unnecessary to discuss the Notice as the mother’s submissions advanced in support of it proceeded on the same erroneous basis as she advanced in opposition to the appeal.
The further evidence application
The Registrar sought to introduce as further evidence in the appeal the transcript of a directions hearing conducted by the Tribunal in March 2014. Given the merit we have found in the Registrar’s primary argument, it is unnecessary to have regard to this evidence, which was advanced to show that the mother was, in fact, on notice about the “overpayment”.
Costs
The Registrar did not seek an order for costs if the appeal was allowed.
Counsel for the mother sought a costs certificate if the appeal was allowed. Although the mother was legally aided, she may be required to make a contribution to her own costs. The appeal having been allowed on a point of law, we consider that the mother should be granted a costs certificate pursuant to the provisions of the Federal Proceedings (Costs) Act 1981 (Cth).[1]
[1]A remark from the bench at the hearing about the availability of certificates was made per incuriam.
The father did not participate in the appeal and no issue of costs arises in relation to him having been named as the second respondent.
I certify that the preceding thirty-five (35) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court (Thackray, Aldridge & Watts JJ) delivered on 31 January 2018.
Associate:
Date: 31/1/18
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