CONFIDENTIAL and EXECUTIVE DIRECTOR, SOCIAL SECURITY APPEALS TRIBUNAL

[2009] AATA 342

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2009] AATA 342

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No 2009/0328

GENERAL ADMINISTRATIVE   DIVISION		)
Re		CONFIDENTIAL

Applicant

And EXECUTIVE DIRECTOR, SOCIAL SECURITY APPEALS TRIBUNAL

Respondent

And           CONFIDENTIAL
  Third Party

DECISION

Tribunal Ms A F Cunningham (Senior Member)

Date14 May 2009  

PlaceHobart

Decision The decision of the Tribunal is to affirm the Social Security Appeals Tribunal's decision not to grant an extension of time.  

[Sgd Ms A F Cunningham]

Senior Member

It is noted that publication of this decision is approved by the Administrative Appeals Tribunal pursuant to s 110X(4)(h) of the Child Support (Registration and Collection) Act 1988 (Cth).

CATCHWORDS

CHILD SUPPORT - application for extension of time - acceptable explanation for delay - lack of merit in substantive application - application for extension of time refused

Child Support (Registration and Collection) Act 1988, ss 90, 91 and 92

Hunter Valley Developments v Cohen (1984) 3 FCR 344

Confidential and Executive Director, Social Security Appeals Tribunal [2009] AATA 172

REASONS FOR DECISION

14 May 2009   Ms A F Cunningham (Senior Member)   

1.      On 7 January 2009 the Social Security Appeals Tribunal (the SSAT) refused the applicant's application for an extension of time to consider his application for review of an objection decision made by the Child Support Agency (CSA).  The applicant seeks a review of the SSAT's decision. 

2.      The applicant is the father of a child born in December 1993 and was assessed to pay child support to a third party for the child.  The third party was joined as a party to this application for review, being a party affected by the outcome of the decision, but has chosen not to make any submissions.  

3. This application for review of the SSAT decision has been determined on the basis of the written submissions received from the applicant and the information contained in the documents lodged pursuant to section 37 of the Administrative Appeals Tribunal Act 1975 (the AAT Act). In addition the applicant lodged copies of an income tax assessment notice for the year ending 30 June 2008, and a profit and loss statement, balance sheet, notes to the financial statements compilation report and a schedule of assets for the Family Trust for the year ended 30 June 2008. .

4.      In his application for a waiver of the filing fee associated with this application, the applicant advised that he is residing in a monastery overseas and his occupation is as a community volunteer worker. 

History

5.      The relevant history is contained in the T Documents which include a number of assessment decisions of the Registrar of the Child Support Agency, the applicant's change of assessment applications and decisions made thereunder.  The decision which is the subject of this application to the SSAT was made on 1 July 2008, and disallowed the applicant's objection to a decision of an Objections Officer of the CSA dated 27 June 2008. 

6.      A previous decision of the Registrar made on 15 November 2007 had set the applicant's child support income at $109,135.00 and his annual rate of child support at $17,008.00 for the period 14 June 2007 to 30 September 2009. 

7.      The applicant lodged a change of assessment application based on Reason 8, which is that the relevant assessment is not fair because of the income, earning capacity, property and financial resources of the applicant.  On 31 March 2008, a decision was made that there would be no change to the assessment as no reason had been established.

8.      There are several other letters contained in the T Documents addressed to the applicant regarding his child support assessment up to and including one written on 10 November 2008, which based the assessment on a taxable income of $109,135.00 for the year ended 2008. 

9.      In the letter forwarded to the applicant advising of the delegate's decision of 31 March 2008, being no change to the assessment, the period was stated as 14 June 2007 to 25 July 2008.  The initial decision made on 15 November 2007 referred to the period 14 June 2007 to 30 September 2007, as did subsequent assessment advice of 22 June 2008 and 26 August 2008. 

The Legislation

10.     The relevant legislation is that contained in the Child Support (Registration and Collection) Act 1988 (the CS Act).  Section 90 provides that an application for review must be made within a period of 28 days from the day on which the person is served with the relevant notice. 

11.     On 1 July 2008 the applicant was served with notice that his objection had been disallowed on 27 June 2008. 

12. The applicant's application for an extension of time is made pursuant to section 91 of the CS Act which states:

"91  Application for extension of time

(1)       If the period for applying for review under this Part has ended, a person may make an application for review under this Part that includes a written application (the extension application) asking the SSAT Executive Director to consider the application for review despite the ending of the period.

(2)       The extension application must state the reasons for the person’s failure to apply for the review within the period required by section 90".

13.     The applicant's application to the SSAT Executive Officer was made on 7 November 2008, which is in excess of three months after the due date for filing an application for review. 

14.     The Act provides no criteria upon which an application for an extension of time is to be considered.  The SSAT was guided by principles that have been considered in similar applications.  Despite a finding that there would be no prejudice to the other party or the community if the extension of time application was granted and a finding that the applicant had not rested on his rights and had explained the reason for his delay in lodging the application, the SSAT concluded that essentially the applicant was asking for "a change of assessment application" which is more properly considered by the Child Support Agency. 

Consideration

15.     It is clear from previous decisions which have considered applications to extend time, that the statutory time limit of 28 days is to be enforced unless there are acceptable reasons for departing from the prescribed timeframe.  Wilcox J in Hunter Valley Developments v Cohen (1984) 3 FCR 344 set down a number of guiding principles at pp348-9:

“1. Although the section does not, in terms, place any onus of proof upon an Applicant for extension an application has to be made. Special circumstances need not be shown but the Court will not grant the application unless positively satisfied that it is proper so to do. The “prescribed period” of twenty-eight days is not to be ignored. Indeed, it is the prima facie rule that proceedings commenced outside that period will not be entertained. It is a pre – condition to the exercise of discretion in his favour that the application for extension show an “acceptable explanation of the delay” and that it is “fair and equitable in the circumstances” to extend time.

2. Action taken by the Applicant, other than by making an application for review under the Act, is relevant to the consideration of the question whether an acceptable explanation for the delay has been furnished. A distinction is to me made between the case of a person who, by non-curial means, has continued to make the decision- maker aware that he contests the finality of the decision (who has not “rested on his rights”) and the case where the decision-maker was allowed to believe that the matter was finally concluded. The reasons for this distinction are not only the “need for finality in disputes” but also the “fading from memory” problem…

3. Any prejudice to the Respondent including any prejudice in defending the proceedings occasioned by the delay is a material factor militating against the grant of an extension.

4. However, the mere absence of prejudice is not enough to justify the grant of an extension. In this context, public considerations often intrude. A delay which may result, if the application is successful, in the unsettling of other people or of established practices is likely to prove fatal to the application.

5. The merits of the substantial application are properly to be taken into account in considering whether an extension of time should be granted.

6. Considerations of fairness as between the Applicants and other persons otherwise in a like position are relevant to the manner of exercise of the Courts discretion.”

16.     The above criteria will be considered under the following headings.

Explanation for the Delay and Whether the Applicant Rested on his Rights.

17.     In his written submissions, the applicant stated that the main basis for his request for an extension of time was that the CSA had provided an incorrect date in their Notice of Decision on Objection letter dated 27 June 2008 which led him to believe that the current assessment period would end in July 2008.  It was for this reason that the applicant had initially decided to accept the decision and not seek a review.  The applicant explained that at the time he was in the process of moving house and did not have access to the original decision which had referred to an end date of September 2009. 

18.     It is evident that as soon as the applicant discovered that the reference to July 2008 was incorrect, he initiated correspondence with the Child Support Agency.

19.     The steps taken by the applicant to contact the agency after receiving an assessment notice dated 26 August 2008 informing him of the correct assessment period are detailed in the decision of the SSAT.  The Tribunal agrees with the SSAT's conclusion that the applicant did not rest on his rights once he discovered the error. 

Merits of the Application

20.     As stated by DP Groom in Confidential and Executive Director, Social Security Appeals Tribunal [2009] AATA 172 at para 21 and 22:

"The Tribunal views this as a particularly significant consideration.  If there is no merit in the substantive application then it will be a waste of everyone’s time to permit the matter to proceed further.  At the same time if it has merit and no-one is significantly prejudiced by allowing the matter to proceed it may be an injustice not to permit the applicant to have the opportunity to put his case.

It is, of course, not necessary for this Tribunal to finally determine the merits of the case.  It should consider only whether the claim has sufficient merit to justify an extension of time".

21.     In his written submissions the applicant states that the SSAT had noted that the CSA had not considered more recent developments and that "from July 2008 the changed circumstances were even clearer (ie there was even more evidence via the ATO tax returns)".

22.     What the SSAT said in its decision was that the applicant was asking the Tribunal:

"... to consider his current, very much changed circumstances which, in his view, made it unfair that his child support income should continue to be set at the capped rate till the end of September 2009. 

From the evidence provided it is clear that these more recent circumstances had not been considered by the Child Support Agency at all and that Mr Jones is asking this Tribunal to consider, what is in fact, a "change of assessment" application based on the recent significant changes of his circumstances".

23.     In his submissions to this Tribunal the applicant said that he had enclosed copy documentation to verify statements that had previously been made to the SSAT and the CSA.  He considers that the CSA has made a serious error in its assessment of his income and had based its decision at least in part on incorrect information.  He refers to a conclusion that he was a director of a company from which he had resigned in 2002. 

24. The applicant disputes that he was asking the SSAT to consider a change of assessment based on more recent changes to his circumstances but that he was trying to get the CSA to properly assess his liability based on the evidence that had previously been provided. Section 92 of the CS Act provides however, that if the application for an extension of time is granted, it is the SSAT that would consider the application for review and not the CSA. 

25.     The applicant's contention that the CSA has made a serious error in its assessment is based on his understanding that the assessment is solely referable to his taxable income.  He has provided a copy of his Notice of Assessment and the Family Trust profit and loss statements and balance sheets which he says support information previously supplied to the CSA.  As confirmed in his Child Support Appeal Form the applicant advises that he had provided the CSA with a letter from his accountants, a letter from the company stating that he was no longer employed by them and held no financial interest, a separation certificate from the company, a medical certificate from this doctor stating that he was not to work for three months and a letter from his psychologist.

26.     It is not contended that the information now supplied to this Tribunal is either inconsistent with previous information, indeed the applicant states that it is not, nor does it provide any further information than that available to the CSA when it made its decision disallowing the applicant's objection on 27 June 2008.  The child support assessment is not only based on a persons taxable income as consideration is given to a persons earning capacity and overall financial resources. 

27.     Of relevance is a reference by the senior case officer, Barbara Carthew-Wakefield who referred to the following statement of the Family Court in her original decision of 31 March 2008:

"Further, the Family Court of Australia has made it very clear that for child support purposes, the financial capacity of a parent may be viewed in a very different way from the view of that financial capacity adopted by the Australian Taxation Office.  The income amount used for each parent in the formula is intended to reflect the overall the actual overall financial capacity of the parent.  It is impracticable to monitor the earning levels of parents.  Recent taxation records are therefore used as an initial guide in the automatic administrative assessment of each child support liability.  However, child support laws recognise that the formula may not always operate fairly.  In a review such as this, it is important to ascertain the actual financial circumstances of each parent, not just his or her declared income.  In summary, while the usual administrative assessment by its nature is restricted to the use of taxable income, there is no such restriction when the issue is considered in an application such as this, to change the administrative assessment".

28.     Details of the applicant's financial resources were requested by the CSA regarding the distribution of monies from the Family Trust following the sale of the shares.  The applicant advised that the Trust had been wound up and that the financial records show that no funds were paid to him.  Further that there were significant liabilities to clear.  The documents supplied do not detail these liabilities. 

29.     In his written submissions the applicant also refers to a missing medical certificate.  It is clear from the CSA's decision however, that they considered the available medical certificate and noted that a further one could be provided.  It would appear that the applicant's state of health was not determinative of the assessment issue.

30.     While the applicant alleges that the CSA made a serious error in disallowing his objection, there is no basis upon which the Tribunal can accept that this is the case.  The applicant clearly states that the further documentation provided validates earlier information provided.  No flaw in the CSA assessment process has been identified and it is recognised that the CSA is entitled to take account of the applicant's overall financial position and not rely solely on his income tax assessment for the relevant year.  This Tribunal concurs with the SSAT that any change of circumstances which post-date the decision under review are more properly considered by a request for change of assessment. 

31.     For the above reasons the Tribunal concludes that the applicant has failed to satisfy it that there is any merit in his substantive application for a review of the CSA decision to disallow his objection.

32.     There is essentially no evidence of prejudice, however, the Tribunal considers that in the absence of any identifiable merit in the substantive application, the matter should not proceed further. 

33.     Accordingly the decision of the Tribunal is to affirm the SSAT's decision not to grant an extension of time.

I certify that the 33 preceding paragraphs are a true copy of the reasons for the decision herein of Ms A F Cunningham (Senior Member)

Signed:  ..[Sgd R Hunt]..........................
               R Hunt (Administrative Assistant)

Date/s of Hearing  Hearing on the papers
Date of Decision  14 May 2009