Confidential and Executive Director, Social Security Appeals Tribunal and Confidential (Party Joined)

[2008] AATA 967

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2008] AATA 967

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No 2008/0781

GENERAL  ADMINISTRATIVE   DIVISION		)
Re		CONFIDENTIAL

Applicant

And EXECUTIVE DIRECTOR, SOCIAL SECURITY APPEALS TRIBUNAL  

Respondent

And CONFIDENTIAL

Joined Party

DECISION

Tribunal Mr Egon Fice, Member

Date30 October 2008

PlaceMelbourne

Decision The Tribunal affirms the decision under review.

(sgd) Egon Fice

Member

CHILD SUPPORT – child support assessment – objection – application for review to the Social Security Appeals Tribunal (SSAT) was outside the prescribed time limit – application for extension of time refused by SSAT

Child Support (Assessment) Act 1989

Child Support (Registration and Collection) Act 1988

Budd v Secretary, Department of Education, Employment and Workplace Relations [2008] FCA 1540

Comcare v A’Hearn (1993) 45 FCR 441

Ingram-Nader v Brinks Australia Pty Ltd (2006) 151 FCR 524

Phillips v Australian Girls’ Choir and Another [2001] FMCA 109

Hunter Valley Developments Pty Ltd v Cohen (1984) 3 FCR 344

REASONS FOR DECISION

30 October 2008 Mr Egon Fice, Member      

1.      The applicant and joined party, who are divorced, have two children.  The joined party had been assessed by the Child Support Registrar to pay child support to the applicant.  In order to arrive at the amount of child support to be paid, the Child Support Registrar calculated the joined party’s child support income amount under s 38 of the Child Support (Assessment) Act 1989.  In April 2007 the applicant applied for an increase in the amount of child support assessed and this was granted.  The joined party objected to that assessment.  After considering the applicant’s response to the objection, the Child Support Registrar reduced the joined party’s child support income amount. 

2. The applicant sought a review by the Social Security Appeals Tribunal (SSAT) of the decision of the Child Support Registrar to reduce the joined party’s child support income amount. However, the applicant did not file her application within the 28 day period mandated by s 90(1) of the Child Support (Registration and Collection) Act 1988 (the Act).  She was therefore required to apply for an extension of time within which to lodge her application. 

3.      On 6 February 2008 the Executive Director of the SSAT decided not to grant the applicant an extension of time to lodge an application for review of the decision of the Child Support Agency.  The applicant now seeks a review of the SSAT decision.

RELEVANT BACKGROUND

4.      For the assessment period 1 July 2006 to 30 September 2007, the joined party was assessed to pay child support to the applicant based on a child support income of $19,228.

5.      On 26 April 2007 the applicant applied for an increase in the assessment of the joined party’s child support income amount. 

6.      On 20 July 2007 the Senior Case Officer with the Child Support Agency agreed with the applicant and increased the joined party’s child support income to $30,000 per annum.  The joined party lodged an objection to that decision.  After an internal review, in an objection decision handed down on 22 October 2007, an Objections Officer with the Child Support Agency reduced the joined party’s child support income to $27,147.  The applicant said in evidence that she received notice of the decision on 24 or 25 October 2007.  Therefore, the 28 day period for appeal expired at the end of either 21 or 22 November 2007. 

7.      According to the applicant, and this was supported by a file note made by a counter officer on 12 December 2007, she asked if she could lodge an objection to the SSAT decision.  She was told that she could apply but that she needed an extension of time. 

8.      Although the applicant said that she sent a letter to the SSAT on 20 December 2007 seeking a review of the objection decision made on 22 October 2007, her application was not received until 2 January 2008.

9.      On 6 February 2008 the SSAT decided not to grant the applicant an extension of time to seek review of the decision of the Child Support Agency. 

10.     The applicant’s application to the Tribunal was received on 26 February 2008. 

THE LEGISLATIVE SCHEME

11.     Where the SSAT has refused an extension of time application, the applicant may seek a review of that decision by the Administrative Appeals Tribunal (AAT).  Section 92(7) of the Act provides:

(7)A person whose extension application has been refused by the SSAT Executive Director may apply to the AAT for review of the decision.

12.     The Act does not set out the basis on which this Tribunal should exercise its discretion on an application for review of a decision not to grant an extension of time.  The principles dealing with the exercise of discretion in these circumstances are to be found in the common law, which comprises the many cases that have been dealt with by the courts regarding extensions of time.  The usual starting point for extension of time applications is found in the decision of Wilcox J, in Hunter Valley Developments Pty Ltd v Cohen (1984) 3 FCR 344 at 348‑349. Wilcox J set out six principles which, although not exhaustive, should provide a guide for the exercise of discretion.

13.     The first of those principles is that time limits are not to be ignored.  He said it is a prima facie rule that proceedings commenced outside a prescribed time period would not be entertained.  He also said that it was a precondition to the exercise of discretion to allow an extension of time for an applicant to show an acceptable explanation of the delay.  However, the Full Court of the Federal Court (Black CJ, Gray and Burchett JJ) in Comcare v A’Hearn (1993) 45 FCR 441 disagreed. The Court said, at 444:

… Although it is to be expected that such an explanation will normally be given, as a relevant matter to be considered, there is no rule that such an explanation is an essential precondition…

14.     This approach was adopted by McInnis FM in Phillips v Australian Girls’ Choir and Another [2001] FMCA 109 where the Federal Magistrate said it is clear that this principle referred to by Wilcox J in the Hunter Valley case needs to be modified so that it is no longer regarded as law that an applicant has to show an acceptable explanation for delay, or that it is fair and equitable in the circumstances to extend time, as a pre-condition to the exercise of discretion in favour of the applicant.  The Federal Magistrate’s approach was endorsed by Cowdroy J in Ingram-Nader v Brinks Australia Pty Ltd (2006) 151 FCR 524 and more recently in Budd v Secretary, Department of Education, Employment and Workplace Relations [2008] FCA 1540. According to McInnis FM, the principles which should be regarded when determining whether to grant an extension of time are as follows:

1.There is no onus of proof upon an applicant for extension of time though an application has to be made.  Special circumstances need not be shown, but the court will not grant the application unless positively satisfied it is proper to do so.  The "prescribed period" of 28 days is not to be ignored …

2.It is a prima facie rule that the proceedings commenced outside the prescribed period will not be entertained …  It is not a pre-condition for success in an application for extension of time that an acceptable explanation for delay must be given.  It is to be expected that such an explanation will normally be given as a relevant matter to be considered, even though there is no rule that such an explanation is an essential …

3.…It is relevant to consider whether the applicant has rested on his rights and whether the respondent was entitled to regard the claim as being finalised. …

4.Any prejudice to the respondent … is a material factor [which goes] against the grant of an extension.

5.The mere absence of prejudice is not enough to justify the grant of an extension. …

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

7.Considerations of fairness as between the applicant and other persons otherwise in a like position are relevant to the manner of exercise of the court's discretion …

15.     In this application, the joined party opposed the applicant’s application, principally on the grounds that the applicant rested on her rights and failed to provide an adequate explanation for her delay in lodging an application for review with the SSAT.  The joined party agreed that he would not suffer any prejudice if the extension of time was granted.  He also opposed the extension of time being granted on the basis that there was no merit in the applicant’s substantive application.  The joined party also submitted it would be unfair to have him once again exposed to a rigorous and detailed examination of his financial affairs by the Child Support Agency.

REASONS FOR THE DELAY

16.     Although not determinative of these proceedings, delay is a relevant matter for me to consider.  The first point to be considered is that the applicant said she posted her application for an extension of time and for review of the Child Support Agency decision on 20 December 2007.  It was received at the SSAT on 2 January 2008.  That means it was in fact lodged 39 days, or about five and a half weeks out of time.

17.     The applicant said that she failed to lodge her appeal with the SSAT within time because she was very busy finalising her tertiary studies.  She produced to the Tribunal a copy of an electronically produced diary indicating the extent of her studies and her attendances at the tertiary institution.  She was also involved in voluntary work with high care patients and she undertook several placements during the 2007 year.  It appears she was also employed on a casual basis.  In November, the applicant attended a weekend conference in Melbourne and she also spent some four days in Sydney with her children.  The applicant said that although she may have been aware of the 28 day time limit, she did not turn her mind to that fact after receiving the decision from the SSAT.  This was because of her busy study and work schedule and the fact that she was not emotionally capable of dealing with it at that time.  She said that when saw that she was unsuccessful in her application for an extension of time before the SSAT, she could not face going back to read all of the documents sent to her until her emotional stability returned. 

18.     When she felt that she could cope with rejection by the SSAT, she contacted the Child Support Agency on 12 December 2007.  In her evidence, she said that the person, with whom she spoke over the counter, told her that she had two months to apply for a review of the SSAT decision to refuse an extension of time.  However, the file note made by the counter officer clearly states that the applicant was told that she was out of time, because 28 days had passed, but that she could apply and request an extension of time in which to lodge her application.  It seems to me that the applicant either misunderstood what was told to her by the agency officer on 12 December 2007 or she chose to interpret it in a different way.  I accept the objective contemporaneous file note made by the counter officer.  That means, in my opinion, before 12 December 2007, the applicant simply did not turn her mind to whether she would seek a review of the Child Support Agency decision.  Despite her obviously busy schedule, and the fact that she was undoubtedly emotionally affected by the SSAT decision, I do not believe that it was not possible for her to lodge an application within the prescribed period.  By the time she turned her mind to doing so, the 28 day period had expired.  The Child Support Appeal form is not an extensive document and could have been completed in a fairly short space of time.

19.     While I do not find the applicant’s explanation for the delay in lodging an application with the SSAT to be satisfactory, in my view, nothing turns on that.  For whatever reason, the applicant finally decided to proceed with an appeal on 20 December 2007.  Prior to that date, other than having a discussion with the counter officer, she took no action at all to either contact the Child Support Agency or to let the joined party know that she intended to pursue the matter.  From the joined party’s perspective, he was certainly entitled to believe that after the 28 day period had expired, the applicant’s objections to the assessment made on 22 October 2007 had been concluded.  It can therefore properly be said that the applicant rested on her rights; although, it has to be said, she did not do so for very long.  Although the joined party said it was unsettling to have a late application lodged, he nevertheless will not experience any prejudice as a consequence of that delay.  Therefore, on balance, it seems to me that although the applicant did not provide a satisfactory explanation for the delay, the effect on the joined party and the Child Support Agency of an extension of time would be minimal.  It is therefore not a matter which weighs against the grant of the extension of time sought by the applicant.

MERITS OF THE SUBSTANTIVE APPLICATION

20.     It is my view that this is the most important factor to consider in this particular case.  That is because it would simply be a waste of everybody’s time and money if the matter was to return to the SSAT for review if there was not at least a reasonable prospect of that tribunal changing the assessment made on 22 October 2007.  In order for me to be satisfied that the applicant has such reasonable prospects, she would need to demonstrate that there is a matter or evidence that the Child Support Agency did not previously consider, or that there is evidence that the joined party has not fully and properly disclosed his income levels for the period in question.  

21.     The applicant claimed that the joined party often received cash payments which were not disclosed in his income tax returns.  As evidence of this statement, she said that between 1989 and 2003, they enjoyed significant holidays overseas and that would not have been possible given the joined party’s declared taxable income.  The joined party responded by saying that many of the holidays were backpacker style trips.  He said that they purchased the cheapest fares available and also sought the cheapest accommodation.  The applicant said that she had videos of the family on holidays which would refute the joined party’s evidence.  However they were not produced to me.  In any event, the joined party’s financial situation between 1989 and 2003 does not appear to be relevant for the purposes of the Child Support Agency reaching a conclusion about his present income.  The joined party also said that his former wife received cash payments for work she did and also for a small business that she ran, which involved the production of expensive floral cake decorations.  The applicant said that the joined party received cash payments from clients for whom he worked privately on weekends.  She said that he kept cash in an envelope which was placed under a carpet in the house.  However, the joined party said that most of his work as a carpenter was done for the one builder and that there would be no advantage to the builder to pay him in cash because he would want to claim payments made to the joined party for the purpose of his own tax deductions.  That position had altered recently and he now sourced his work as an independent contractor.

22.     The problem is that although the applicant and the joined party exchanged allegations about receiving cash payments, there was no evidence to support those allegations.  They remain, merely allegations.  The problem for the applicant is that if I were to allow the extension of time, and the SSAT was required to review the objection decision made by the Child Support Agency on 22 October 2007, there would not be any additional evidence of which I was made aware that might cause the SSAT to come to a different result to the decision made on 22 October 2007.  It is clear from the reasons for the objection decision that the Child Support Agency conducted extensive reviews of the joined party’s income for the period in question, examining the profit/loss statement for his business during the 2006/2007 financial year and the joined party’s bank statements for the three month period immediately prior to the income period in question.  The Child Support Agency also examined a loan application made by the joined party in 2006 in which he declared his financial position.  The joined party said in evidence that he regularly returned his quarterly business activity statements to the Australian Tax Office.  No doubt the Child Support Agency would also have access to those.  The problem is that even if the joined party was receiving substantial sums of money by way of undeclared cash payments, there was no evidence before me which would allow any adjudicative body to come to that conclusion.  The joined party admitted that he occasionally received small cash payments but said that they were not significant.  Whether he received substantial cash payments does not indicate that he has failed to declare that income and therefore the situation would only alter if it could be proved otherwise.

23.     On the material which was before me, it is clear that even if I were to grant the applicant an extension of time to seek a review by the SSAT of the decision of the Child Support Agency, the evidence which would be before the SSAT regarding the joined party’s income would not be significantly different to the evidence which was before the Child Support Agency when it came to its decision in October 2007.  If that position has changed since the last assessment, then that will be picked up by the Child Support Agency in the next assessment period, which I understand will commence in January 2009.  Therefore, I am firmly of the view that even if I were to grant an extension of time to the applicant, she would most likely not succeed before the SSAT in having the Child Support Agency’s decision of 22 October 2007 altered.

CONCLUSION

24.     Although I do not find the applicant’s explanations for the delay in lodging her application for review with the SSAT compelling, given the relatively short period of time which passed after the 28 day period prior to her lodging her application, and given the fact that no party before me has indicated that they have or will suffer any prejudice, nothing turns on that.  However, despite the allegations made by the applicant regarding the joined party’s income, and taking into account the joined party’s responses to those allegations, it was clear to me that the applicant has no evidence to support the allegations which she makes about the joined party receiving unaccounted for cash payments.  Therefore, if I were to allow an extension of time, the applicant would most likely not succeed in having the objection decision of 22 October 2007 overturned.  I must therefore agree with the decision made by the SSAT on 6 February 2008 not to grant to the applicant an extension of time to seek review of the decision of the Child Support Agency made on 22 October 2007.  I therefore affirm the SSAT decision.

I certify that the twenty-four [24] preceding paragraphs are a true copy of the reasons for the decision herein of

Mr Egon Fice, Member

Signed:          Cassie Renfrew

Clerk

Date of Hearing  21 October 2008
Date of Decision  30 October 2008
Advocate for Applicant                Self-represented
Advocate for Respondent           Nil
Advocate for Joined Party           Self-represented