FAMILY COURT OF AUSTRALIA
| CHILD SUPPORT REGISTRAR & CRABBE AND ANOR | [2014] FamCAFC 10 |
| FAMILY LAW – APPEAL – CHILD SUPPORT – Where the Child Support Registrar sought leave to appeal, and if leave granted, to appeal orders of a Federal Magistrate upholding an appeal by the respondent to this appeal against a decision of the Social Security Appeals Tribunal (SSAT) which increased the respondent’s child support liability – Where appeals from the SSAT are confined to questions of law – Where the Child Support Registrar argues that the Federal Magistrate erred in his interpretation of s 103X(3)(b) of the Child Support (Registration and Collection) Act 1988 (Cth) – Where the Child Support Registrar argues that the Federal Magistrate’s interpretation of s 103X(3)(b) allowed a review of the adequacy of the SSAT’s reasons and therefore transgressed “the dichotomy between an appeal on a question of law and an assessment of the merits of the case” – Where the Full Court found that the Federal Magistrate had so erred – Where the Full Court also sets out the statutory process governing appeals from the SSAT – Leave granted because the matters raised on appeal are of considerable general importance – Appeal allowed – No order for costs. |
| Child Support (Assessment) Act 1989 (Cth) Federal Circuit Court of Australia Act1999 (Cth) |
| Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 Minister for Immigration and Multicultural Affairs v Al-Miahi (2001) 65 ALD 141 Minister for Immigration and Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259 Minister for Immigration and Multicultural Affairs v Yusuf (2001) 206 CLR 323 |
| APPELLANT: | Child Support Registrar |
| FIRST RESPONDENT: | Mr Crabbe |
| SECOND RESPONDENT: | Ms Crabbe |
| FILE NUMBER: | BRC | 10444 | of | 2009 |
| APPEAL NUMBER: | NA | 28 | of | 2012 |
| DATE DELIVERED:: | 6 February 2014 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Brisbane |
| JUDGMENT OF: | Bryant CJ, Finn and Kent JJ |
| HEARING DATE: | 30 April 2013 |
| LOWER COURT JURISDICTION: | Federal Magistrates Court (as it then was) |
| LOWER COURT JUDGMENT DATE: | 9 March 2012 |
| LOWER COURT MNC: | [2012] FMCAfam 205 |
REPRESENTATION
| COUNSEL FOR THE APPELLANT: | Mr Niall SC with Dr Brasch |
| SOLICITOR FOR THE APPELLANT: | DLA Piper |
| COUNSEL FOR THE FIRST RESPONDENT: | Mr McGregor |
| SOLICITOR FOR THE FIRST RESPONDENT: | Doyle Family Law |
| COUNSEL FOR THE SECOND RESPONDENT: | In person |
Orders
Leave to appeal the orders made by Federal Magistrate Coates on 9 March 2012 be granted.
The appeal against the orders made by Federal Magistrate Coates on 9 March 2012 be allowed.
The orders made by Federal Magistrate Coates on 9 March 2012 be set aside and in their place Order 4 of these orders be made.
The appeal by Mr Crabbe against the decision of the Social Security Appeals Tribunal dated 16 June 2011 be allowed to the extent necessary to set
Mr Crabbe’s adjusted taxable income at $158,177 for the period from 1 July 2010 to the end of the child support case.
There be no order for…
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Details
- Case
- [2014] FamCAFC 10
- Decision Date
CaseChat Overview and Summary
The parties in this case are the Child Support Registrar, Mr Crabbe, and Ms W. The dispute concerns the assessment of Mr Crabbe's child support liability and whether the Social Security Appeals Tribunal (SSAT) erred in its decision to reduce his taxable income. The Federal Court of Australia was asked to review the decision of the Federal Magistrate.
The legal issues before the court were whether the SSAT correctly identified the sham arrangement between Mr Crabbe and Ms W, and if it was appropriate to disregard Mr Crabbe's interest in the partnership for the purpose of calculating his taxable income. The court also needed to determine if the SSAT properly applied the statutory requirements for making a decision under s 103X(3)(b) of the Social Security (Administration) Act 1999 (Cth).
The court found that the SSAT correctly identified the sham arrangement and disregarded Mr Crabbe's interest in the partnership. It held that the SSAT was not required to make additional findings beyond what it had already done, in line with the principles from the High Court case Minister for Immigration and Multicultural Affairs v Yusuf. The court also concluded that the SSAT did not err in its interpretation of the statutory requirements.
The final orders of the court were to grant leave to appeal, allow the appeal, set aside the orders made by the Federal Magistrate, adjust Mr Crabbe’s taxable income as per the SSAT's decision, and make no order for costs in relation to the appeal.
The legal issues before the court were whether the SSAT correctly identified the sham arrangement between Mr Crabbe and Ms W, and if it was appropriate to disregard Mr Crabbe's interest in the partnership for the purpose of calculating his taxable income. The court also needed to determine if the SSAT properly applied the statutory requirements for making a decision under s 103X(3)(b) of the Social Security (Administration) Act 1999 (Cth).
The court found that the SSAT correctly identified the sham arrangement and disregarded Mr Crabbe's interest in the partnership. It held that the SSAT was not required to make additional findings beyond what it had already done, in line with the principles from the High Court case Minister for Immigration and Multicultural Affairs v Yusuf. The court also concluded that the SSAT did not err in its interpretation of the statutory requirements.
The final orders of the court were to grant leave to appeal, allow the appeal, set aside the orders made by the Federal Magistrate, adjust Mr Crabbe’s taxable income as per the SSAT's decision, and make no order for costs in relation to the appeal.
Orders
Orders of the court
1.
Leave to appeal the orders made by Federal Magistrate Coates on 9 March 2012 be granted.
2.
The appeal against the orders made by Federal Magistrate Coates on 9 March 2012 be allowed.
3.
The orders made by Federal Magistrate Coates on 9 March 2012 be set aside and in their place Order 4 of these orders be made.
4.
The appeal by Mr Crabbe against the decision of the Social Security Appeals Tribunal dated 16 June 2011 be allowed to the extent necessary to set
Mr Crabbe’s adjusted taxable income at $158,177 for the period from 1 July 2010 to the end of the child support case.
5.
There be no order for costs in relation to the appeal.
Background
Background to the litigation
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Evidence
Evidence Before The Court
Importantly for present purposes, the SSAT went on in the following paragraphs to find that “the legal structure created by Mr [Crabbe] and Ms [W] is a sham”:43.[Mr Crabbe] has been unable to provide a satisfactory explanation for his transition from partner to part-time employee to full-time acting manager to part-time employee. He has an incentive to reduce his taxable income in order to reduce his administratively assessed child support liability. The only plausible explanation for why he would agree to relinquish his interest in the partnership is that he and [Ms W] agreed he would not have a legal entitlement to the profits of the company but he would continue to have access to the profits of the company. The Tribunal rejects [Mr Crabbe’s] evidence that, in effect, his financial position vis-à-vis [Ms W] and the company is entirely explained by the legal relationships. The overwhelming inference, and the one that the Tribunal draws, is that the legal structure created by Mr [Crabbe] and Ms [W] is a sham. The Tribunal is mindful of the seriousness of such a finding.…45.There is no direct evidence of the arrangement between Mr [Crabbe] and Ms [W] which exists behind the sham. Mr [Crabbe] and Ms [W] started the partnership together, they both brought expertise to the partnership, they both contributed financially to the partnership, they were in a de facto relationship when they started the partnership and they remained in a de facto relationship throughout the partnership and after Mr [Crabbe] effectively gifted his interest in the partnership to Ms [W]. All those matters would suggest that they agreed to share in the profits equally. (Footnote omitted and emphasis added) The SSAT then considered (at [46] to [53]) whether Mr Crabbe’s reduced work capacity might have caused him to receive less than half of the company’s profits; but having set out evidence on the matter, concluded:52.… It is unclear what the true extent of Mr [Crabbe’s] reduced work capacity was or is, but it is not necessary to form a precise view.…54.Mr [Crabbe] has not disclosed the true nature of the arrangement between himself and Ms [W] concerning the distribution of the company’s profits. While Mr [Crabbe’s] reduced work capacity could form the basis for a lower distribution of profits, the many other factors already mentioned point towards an equal distribution. In the absence of any evidence directly on point, the Tribunal finds that Mr [Crabbe] and Ms [W] arranged for an equal distribution. The SSAT then returned to the provisions of s 98L of the Assessment Act, which it had set out earlier in its reasons (at [4]) and which specifies the matters about which the Registrar must be satisfied before there can be a departure from an administrative assessment:98L Matters as to which Registrar must be satisfied before making determination(1)Subject to this Part, the Registrar may make the determination if:(a)the Registrar is satisfied that, in the special circumstances of the case, application in relation to a child of the provisions of this Act relating to administrative assessment of child support would result in an unjust and inequitable determination of the level of financial support to be provided by the liable parent for the child because of the income, earning capacity, property and financial resources of either parent; and(b) that it would be: (i)just and equitable as regards the child, the liable parent, and the carer entitled to child support; and (ii) otherwise proper;to make a particular determination under this Part.(2)Subsections 117(4) to (9) (inclusive) apply to the Registrar in the exercise of his or her powers under this section as if:(a)any reference in those subsections to the court were a reference to the Registrar; and(b)any reference to an order were a reference to a determination.
Decision
Reasons for decision
Specifically in relation to the requirements placed on the SSAT by s 103X(3)(b), senior counsel for the Registrar relied on certain passages in the judgment of McHugh, Gummow and Hayne JJ in Minister for Immigration and Multicultural Affairs v Yusuf (2001) 206 CLR 323, where reference was made to s 430 of the Migration Act 1958 (Cth) which is in virtually identical terms to s 103X(3)(b) in that it provides:(1)Where the Tribunal makes its decision on a review, the Tribunal must prepare a written statement that:(a)sets out the decision of the Tribunal on the review; and(b)sets out the reasons for the decision; and(c)sets out the findings on any material questions of fact; and(d)refers to the evidence or any other material on which the findings of fact were based.(Emphasis added) The passages relied on from Yusuf on behalf of the Registrar were as follows:68… In its terms [section 430] requires no more than that the Tribunal set out the findings which it did make. Neither expressly nor impliedly does this section require the Tribunal to make, and then set out, some findings additional to those which it actually made. … A requirement to set out findings and reasons focuses upon the subjective thought processes of the decision-maker. All that s 430(1)(c) obliges the Tribunal to do is set out its findings on those questions of fact which it considered to be material to the decision which it made and to the reasons it had for reaching that decision.…75… If the Tribunal … does not make findings about those claims, the statement of its reasons and findings on material questions of fact may well reveal error. The error in such a case will most likely be either an error of law … or a failure to take account of relevant considerations. … It is not accurate, however, to say that the Tribunal is, therefore, under a duty to make all material findings of fact, if, as seems probable, that formulation of the duty is intended to extend the ambit of judicial review beyond accepted and well-established limits. If it is not intended to have that effect, it is not useful to formulate the duty in that way. Rather, the relevant inquiry remains whether the Tribunal has made an error of law, has failed to take account of relevant considerations, or has taken account of irrelevant considerations.…77… it may greatly be doubted that an obligation to set out findings could be said to be a procedure which is to be observed in connection with the making of the decision in question, as the setting out of the decision and reasons assumes that the decision has already been made. It is, however, enough to say that the conclusion that, so far as now relevant, s 430 requires only the recording of what was found and does not impose any duty to make findings, means that an asserted failure to make findings is not a breach of s 430. …(Emphasis in original) The following principles emerge from these authorities and have relevance to our decision as to whether the Federal Magistrate erred in his review of the SSAT decision in a manner which requires our intervention:·The question of whether there is evidence to support a finding of fact or an inference drawn from findings of fact is a question of law (Al-Miahi).·The making of a finding of fact or the drawing of an inference in the absence of evidence is an error of law (Al-Miahi).·A wrong finding of fact is not an error of law (Al-Miahi).·A finding of fact based on reasoning that is “demonstrably unsound” or on an “illogical course” or a “faulty process” of reasoning is not an error of law (Al-Miahi).·Judicial review is not to be over-zealous in seeking to find inadequacy of reasoning by an administrative decision maker; the review of the reasons of an administrative decision maker must not be turned into a reconsideration of the merits of the decision (Wu Shan Liang).·Section 103X(3)(b) of the Registration and Collection Act (by analogy with s 430 of the Migration Act) requires the SSAT to do no more than set out the findings which it did make on facts which it considered material to the decision which it made (Yusuf).
Ratio Decidendi
Legal Principle Established
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