Conway & Child Support Registrar & Clivery (SSAT Appeal) (No.2)
[2008] FMCAfam 985
•28 October 2008
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| CONWAY & CHILD SUPPORT REGISTRAR & CLIVERY (SSAT APPEAL) (No.2) | [2008] FMCAfam 985 |
| CHILD SUPPORT – Appeal from decision of SSAT – issue regarding the income of the applicant and whether the payer should contribute to private school fees – whether error of law in the way the SSAT treated interest under a Trust. |
| Child Support (Assessment) Act 1989 Child Support (Registration and Collection) Act 1988 |
| Oriolo (1985) FLC 91-653 LDME & JMA (SSAT Appeal) [2007] FMCAfam712 Tasman & Tisdall [2008] FMCAfam126 Johnson and Johnson (1999) FLC 98-004 Chang & Su (2002) FLC93-117 |
| Applicant: | MR CONWAY |
| First Respondent: | CHILD SUPPORT REGISTRAR |
| Second Respondent: | MS CLIVERY |
| File Number: | BRC 9 of 2008 |
| Judgment of: | Slack FM |
| Hearing date: | 30 July 2008 |
| Date of Last Submission: | 30 July 2008 |
| Delivered at: | Brisbane |
| Delivered on: | 28 October 2008 |
REPRESENTATION
The Applicant appeared on his own behalf.
| Solicitors for the First Respondent: | Australian Government Solicitor |
| Solicitors for the Second Respondent: | Anne Marie Proctor & Associates |
ORDERS
That the Appeal from the decision of the Social Security Appeals Tribunal filed on 26 February 2008 be dismissed.
IT IS NOTED that publication of this judgment under the pseudonym Conway & Clivery is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT BRISBANE |
BRC 9 of 2008
| MR CONWAY |
Applicant
And
| CHILD SUPPORT REGISTRAR |
First Respondent
| MS CLIVERY |
Second Respondent
REASONS FOR JUDGMENT
In this Appeal from the decision of the Social Security Appeals Tribunal (hereafter “the SSAT”) dated 18 January 2008, the applicant (conducting the appeal in person) relied on two grounds in the Notice of Appeal. Ground 1 states:
1. In considering the issue of my income, the Tribunal has erred in law – apparently arising from an erroneous interpretation of the Trust Deed for The [Ms C] Estate Trust – that has resulted in the finding that a Default Determination in my favour for 50% of the income and assets of the Trust has either: already occurred; or, will occur in the future. It is clear from the Trust Deed that such Determinations may occur in specific circumstances, including – in respect of income only – the failure of the trustee to make Determinations in respect of distributions within prescribed time limits and – in respect of both incomes and assets – the outright failure of the trust, or the passing of the Vesting Day (some 80 years after my mother’s death). No evidence was provided to the Tribunal by any party indicating that any of those conditions have been satisfied and despite being provided with the contact details of relevant legal representatives and those of the Trustee, the tribunal did not seek to compel any evidence to establish that the circumstances required for Default Determinations had occurred. It is noteworthy that the reason provided for making an assessment of my income on the basis that I had control and possession of both the assets and income derived from 50% of The [Ms C] Estate Trust also included a determination wrong in law 0% of The [Ms C] Estate Trust also included a determination wrong in law – that being the comment that even if such circumstances had not occurred prior to the Hearing, they would occur in the future. There is no justification in law for such a determination. Further similar errors were made in respect of the treatment of interest being loans I have with [J] Pty Ltd (of which I am currently Director, but non-voting shareholder) and which, even after my parents’ Wills have been appropriately executed by their Executor (the current Trustee of The [Ms C] Estate Trust), I will remain a minority shareholder, with 25% shareholding only. In addition, reference to interest-bearing loans, non-taxable and non-assessable Property Settlements (whether my own with Ms Clivery or those of my wife with her former defacto), non-taxable and non-assessable Small Claims settlements and non-assessable receipt of Superannuation funds (such as that occurring following my resignation from the Commonwealth Public Sector) as either assessable income or assessable financial resources has no legal basis.
Background
I have taken into account and accepted the following facts.
The applicant is the eligible carer in this matter.
The child support assessment is for the child [S] (hereafter “the child”) born in 1999. The child is in the care of the applicant as a result of orders made in the Family Court of Australia, Canberra on 1 September 2005.
For the period 1 January 2005 until 31 August 2005, no child support was payable by either parent to the other due to the caring arrangements in place for the child at that time.
For the child support period 1 January 2006 to 31 August 2006 a child support assessment issued such that:
The child support assessment payable by Ms Clivery was to be $11,348 per annum based on a 2003/2004 deemed income for
Ms Clivery of $86,968 and a 2003/2004 deemed income of $60,269 for Mr Conway.
The applicant applied for a change of assessment from 15 June 2005 (the date of his resignation from his position with the Department of [omitted] in Canberra) and an increase in the annual rate of child support payable by Ms Clivery to $13,777.
On 30 November 2005 a senior case officer of the Child Support Agency decided that the annual rate of child support payable by the respondent:
(i)is varied to $11,600 in the period from 1 September 2005 to 31 December 2006;
(ii)is set as $12,180 from 1 January 2007 to 31 December 2007; and
(iii)is varied to $12,789 in the period from 1 January 2008 to
31 December 2008.
That amount of child support payable by the respondent was arrived at based on a deemed child support income amount of the applicant. On 13 December 2005 the applicant objected to that decision. On
27 March 2006an objections officer disallowed the objection.
By application to the Child Support Agency received on 19 July 2006 the applicant sought a change to the child support assessment.
On 21 November 2006 a senior case officer refused to change the child support assessment.
By letter dated 24 November 2006, received by the Child Support Agency on 5 December 2006, the applicant objected to this decision. This objection was disallowed by an objections officer on 2 March 2007.
The applicant appealed to the SSAT on 9 March 2007 against the objection decision and the matter was heard on 28 August 2007.
The decision of the SSAT was to affirm the decision under review and the appeal was therefore unsuccessful.
Decision under review
The SSAT was reviewing:
A decision made by an objections officer of the Child Support Agency on 21 March 2007 to disallow an objection to a decision of a senior case officer made on 21 November 2006 to refuse to make a departure determination under Part 6A of the Child Support Assessment Act (1989) as there are no ground.
As I understand it, the objections officer was asked to review a departure application for the child support period from 1 September 2005 forward.
The child support assessment for the relevant period was that of the senior case officer made on 30 November 2005 referred to in paragraph 8 hereof.
Other background facts
In May 2005 a hearing was conducted in the Family Court of Australia before Justice Waddy (over 10 days) concerning the parenting arrangements for the child.
The decision in relation to that hearing was given on 1 September 2005 and the effect of the orders was that the child was to live with the applicant. Those orders contemplated that the applicant would be living in Queensland because of the contact arrangement that was put in place.
At the time of the hearing before Justice Waddy both parents were living in Canberra and both were employed in the Commonwealth Public Service.
On 15 June 2005 the applicant resigned his employment and he received an eligible termination payment and a payment from his superannuation fund.
In July 2005 the applicant relocated to Queensland.
In his employment in the Commonwealth Public Service, the applicant was employed as a [omitted] in an EL1 position with the Department of [omitted] in Canberra.
The applicant made clear his intentions to relocate to Queensland during the course of the trial before Justice Waddy. During the course of that hearing, he expressed the view that he anticipated that he would obtain a transfer of his position within the Department to Queensland. After the hearing he endeavoured to obtain a number of positions but was unsuccessful. The applicant then says:
The timelines from my relocation was such, in addition to financial pressures, that I considered the best option that I could pursue was to resign from the Public Service to facilitate my movement to Queensland in addition to accessing my employee contributions to superannuation, to do a number of things related to proceedings between [Ms Clivery] and myself and I relocated to Queensland.
Since then the applicant has been unsuccessful in obtaining any position with either the Commonwealth Public Service or the Queensland State Public Service.
When the applicant moved to Queensland he took up residence with his current partner in the western suburbs of Brisbane. [S] was enrolled at the [M] School and continued in that school until October 2006.
After relocating to Queensland the applicant pursued an option of undertaking private [omitted] practice in Queensland and organised “provisional registration [omitted] in Queensland”. Because of the provisional registration, it was apparently necessary for the applicant to undergo some further formal training. At the time of the SSAT hearing, the applicant anticipated he would complete the diploma within six months. It is a graduate diploma in [omitted].
The applicant’s partner is a [omitted] and was working as a practising [omitted] until October 2006 (when she undertook maternity leave).
In October 2006 the applicant and his partner relocated to the Sunshine Coast in Queensland and he has not worked as a [omitted] or in that field since his relocation to the Sunshine Coast.
At the end of 2006 the applicant, with his partner, registered a business “[A]”. The business is owned by the [E] Trust. The corporate trustee of the Trust is [E.G.] Pty Ltd.
In addition to the business “[A]”, the Trust also conducts the “[omitted] services” that the applicant and his partner were able to provide.
Since his relocation to the Sunshine Coast, the applicant and his partner have been in receipt of Centrelink benefits. It is not clear to me whether they were receiving Centrelink benefits prior to October 2006.
The applicant’s parents’ estates
Upon the death of the applicant’s father and pursuant to that Will, the applicant’s mother was appointed Executor and the applicant was left “an equal share of any monies which I have advanced to [J] Pty Ltd and which are available in cash as at the time of my death and one ordinary share each in [J] Pty Ltd. If I hold any shares or like instruments at the time of my death, I leave one half of those shares or other instruments to each of the said Mr Conway and (another named beneficiary).
Sometime prior to the death of the applicant’s father, the applicant, along with his brother, was appointed a Director of [J] Pty Ltd.
The applicant’s mother died on 3 July 2004 and under her Will, her brother was appointed “the Executor and Trustee of this Will”.
Under that Will, the “Trustee shall hold my residuary estate pursuant to 4.1 above (the Trust Fund) upon the following Trusts known as the [Ms C] Estate Trust”.
Apparently probate for the Will of Ms C was issued in November 2004. The applicant contends that the estate has “not been fully administered”.
It would appear though that the [Ms C] Estate Trust is operating because Exhibit 5 in the proceedings before the SSAT was a balance sheet produced by the applicant of the [Ms C] Estate Trust as at
31 January 2007. According to that balance sheet, as at 31 January 2007, the [Ms C] Estate Trust had net assets of $2,883,793.25. According to the balance sheet, part of the current assets of the [Ms C] Estate Trust was a “loan to Mr Conway” in the sum of $222,495.
The applicant acknowledged that he had a loan from the [Ms C] Estate Trust but denied that it was in the sum of $222,495. He said that the loan was taken out in “late 2005” and was in the region of “$50,000”.
The applicant says that he has not received any distributions of income from the Trust and is not aware of any other person receiving a distribution of income. He says that he has been unable to obtain reliable information from the Trustee (his uncle) in relation to the administration of his mother’s estate, the administration of his father’s estate or the administration of the [Ms C] Estate Trust.
The applicant contends that although he has endeavoured to clarify the position of the estates and the Trust via his solicitors, he has received no further information from the Trustee.
During the course of the hearing before the SSAT it was noted and accepted by the applicant that, under the terms of the Trust, the applicant and his brother would be entitled to receive, in equal shares, any income that was not apparently distributed by the Trustee during any accounting period.
The named beneficiaries under the Trust are the applicant and his brother, their respective children and any Trust or Company in which those persons are named beneficiaries.
Financial circumstances of the respondent
There does not appear to be any dispute that the respondent continues in employment with the Commonwealth Department of [omitted] and earns the income which was used to assess the child support payable.
The child’s financial and other circumstances
The child has lived with the applicant since the decision of Justice Waddy of 1 September 2005 and spends time with the respondent every third weekend and during her school holidays.
For the purposes of the contact, the child travels by air between Canberra and Brisbane.
After the relocation by the applicant to Brisbane the child attended the [M] School in Brisbane until October 2006. There were private school fees charged for her enrolment in this school.
Since the relocation to the Sunshine Coast the child has attended the [N] College, a private school in [N]. Fees are charged for her attendance at that school.
The child has a Trust under and pursuant to the Will of Ms C (dec’d) and she is also a named beneficiary of the [Ms C] Estate Trust. There is provision under the Trust for the Trustees to apply “part of the income or capital of the Trust fund towards the maintenance, education, medical expenses advancement or for other general benefit of any beneficiary”.
There is no evidence that the applicant has applied to the Trustees on behalf of the child to pay any of her maintenance and/or education expenses.
As far as I can determine, there has been no attempt by either the applicant or the respondent to quantify the costs of maintaining the child.
There has been an ongoing dispute between the parties (and this was the subject of further hearing before the SSAT) as to whether the mother should contribute towards the private school education expenses for the child.
Principles
The principles relating to “appeals” from decisions of the SSAT have been concisely stated in the decision of FM Halligan LDME & JMA (SSAT Appeal) [2007] FMCAfam 712, paras 17 to 33 of the Reasons. On the question of discerning an error of law in the Reasons of the SSAT, FM Halligan said (and I adopt):
It is well settled then that when reviewing an administrative decision for error, a Court should not be ‘concerned with looseness in language nor with unhappy phrasing’ and, the reasons for the decision under review are not to be construed minutely and finally with a eye keenly attuned to the perception of error” (Collector of Customs v Pozzolanic Enterprises Pty Ltd, above, at 287, cited with approval in Minister for Immigration and Multicultural Affairs v Wu Shan Liang (1996) 185 CLR 259 at 272 per Brennan CJ, Toohey, McHugh and Gummow JJ, and see the comments of Kirby J to similar effect at 291).
The SSAT is an administrative tribunal, not a Court of law, and is bound to pursue the objective of providing a mechanism of review that is fair, just, economical, informal and quick (s.88, Registration Act, and compare s.141, Social Security (Administration) Act 1999). It is not afforded the luxury of lengthy deliberation on the reasons for its decisions, but must give the parties written notice of its decision on the review and written or oral reasons for that decision within 14 days of making the decision (s.103X, Registration Act). The function of the SSAT is not to deliver judgments of jurisprudential excellence when delivering its reasons. In my view, therefore, the above authorities apply to a s.110B appeal, and the court reviewing the reasons for decision of the SSAT in such an appeal to discern legal error should not adopt an overly pedantic approach.
Powers of Court in appeals
I also agree with the principles enunciated by Halligan FM in relation to the power of Courts concerning appeals of this type:
The Court “must” hear and determine an appeal from the SSAT, and “may” make such order as it thinks appropriate by reason of its decision (s.110F(1), Registration Act). The orders a Court may make on a s.110B appeal include an order affirming or setting aside the decision of the SSAT, or an order remitting the case to be heard and decided again by the SSAT, either with or without the hearing of further evidence, in accordance with the directions of the Court (s.110F(2)).
Three points may be made about the Court’s powers in a s.110B appeal.
First, the use of the word “may” clearly signifies that the power is discretionary. The fact an error of law by the SSAT is found does not inevitably lead to the decision being set aside. For example, if it is clear there would be no purpose served by having the case heard again, the Court may, in the exercise of its discretion, decline to remit the matter to be heard and determined again, and affirm the decision under appeal (see Clements v Independent Indigenous Advisory Committee, above, at [41]).
Second, the power to make such order as the Court thinks fit is qualified by the words “by reason of its decision”. The “decision” in this context is the decision on the hearing and determination of the appeal (s.110F(1)), the appeal being “on a question of law” (s.110B). Thus, the orders made must flow from a finding in favour of the Applicant on an identified question or questions of law.
Third, the particular power under s.110F(2) to make the orders specified in that subsection does not limit the general power under s.110F(1) to make such order as the Court thinks appropriate by reason of its decision on the appeal.
In Tasman & Tisdall [2008] FMCAfam126 FM Brown said (at paragraph 44):
An Administrative Tribunal exceeds its powers and thus commits jurisdictional error, which is correctable on appeal in respect to the question of law, if it:
(i)fails to construe properly the legislative provisions applicable;
(ii)identifies the wrong issues or asks itself the wrong questions;
(iii) ignores relevant material or relies on irrelevant material;
(iv) fails to accord procedural fairness to the party before it;
(v)makes an erroneous finding of such a magnitude that it goes to the very jurisdiction which it purports to exercise rendering its decision perverse or unreasonable or otherwise offending logic.
Applicant’s arguments
The applicant contends, in summary, and in effect, that the Tribunal erred in finding:
Mr Conway has a financial resource worth no less than
$1 million being his interest in a beneficiary in a [Ms C] Estate Trust which he is able to access or has to some unknown degree already accessed…
…From the perspective Mr Conway’s financial resources of at least $1 million in the [Ms C] Estate Trust modest conservative investment of such a fund should realise and return at least $73,500 per annum.
He argues that that error of law is fatal to the determination of the Tribunal. He submits that the appeal should be granted and the matter reheard with a proper application of the law.
Decision – Discussion and conclusions
It would appear, at least on the first reading, that the Tribunal did place weight on that finding to reach the conclusion that it “was not satisfied that the grounds for departure set out in sub-paragraph 117(2)(c)(1) of the Assessment Act has been established.”
I accept that the Tribunal erred in coming to that particular conclusion. I am also satisfied that the error seems to be an error of law. Neither the Will nor the Trust gave the applicant access to or control over $1million. There did not appear to be any discussion or significant evidence that the Trustee was a mere puppet of the applicant or that the Trust was a sham.
However, the fact that there has been an error of law does not inevitably lead to the conclusion that the appeal should be granted. As indicated in the discussion of the principles in relation to these appeals, the Court retains a discretion. In the exercise of that discretion, I consider that, in part, I should approach the matter with a consideration of the reasons and evidence in circumstances where the error had not been made.
In relation to the [Ms C] Estate Trust, although the applicant accuses the Trustee (his uncle) of mal-administration, the facts as presented by the applicant would appear to be:
a)The Trust has been in operation since late 2005 (at least) although it is not clear whether all of the assets of the estate have been transferred to the Trust.
b)The applicant’s brother occupies one of the Trust properties and it is unclear whether he pays any rent or makes any contribution to the maintenance of the property.
c)The applicant has borrowed at least $50,000 from the Trust but no evidence was produced about that loan or the terms of repayment. Having regard to what the applicant told the Tribunal, it seems that the applicant is not currently repaying the loan and there is no indication of any demand upon him for the repayment.
d)The evidence of the applicant was that he was not repaying any of the loans including the loan to [J] Pty Ltd.
e)According to Exhibit 5, the Trust has made an accommodation for “provisional tax” of $150,000, which would suggest prima facie that it earns income (there was no evidence that it had sold or disposed of any assets).
f)The applicant and his brother are entitled to any undistributed income at the end of any accounting period [see 5.8 of the Will (Trust instrument)]. Under Clause 5.1(c) the accounting period is at the end of each financial year. Thus it would appear that the applicant and his brother were entitled to any undistributed income for the years ended 30 June 2005, 2006, 2007 and 2008.
g)The other beneficiaries of the Trust are either the children of the applicant or his brother or companies in which they are beneficiaries.
h)There was no evidence from the applicant or his brother that there had been a distribution of income from the Trust during the relevant years.
i)During the hearing the applicant acknowledged that there would need to be some adjustment if he did ultimately receive income from the Trust.
The applicant was well aware at the time of the hearing that his entitlement in the [Ms C] Estate Trust was an issue in the proceedings and he, indeed, produced Exhibit 5 during the course of the hearing. In addition, when the hearing concluded, the applicant was given the opportunity to produce further documents and, although there was no specific mention of any further documents for the Trust, the applicant had that opportunity.
The applicant told the Tribunal that he had decided not to pursue formal legal process against his uncle because he believed and hoped that the matter could be successfully negotiated without costly legal proceedings. There was no evidence produced of any demand made for undistributed income for the relevant years.
There was no evidence that he had ever requested, either formally or informally, from the Trustee a distribution of income. There was no evidence that he had ever asked the Trustee for a distribution of income for the benefit of his daughter. There was no evidence that he had ever asked, either formally or informally, the Trustee for an advance from Trust monies held on behalf of his daughter for her “maintenance, education and welfare”.
There was evidence that he had received a loan of $50,000 from the Trustee and although there is no documentary evidence produced of the loan, the evidence was that the applicant was not making any repayments on the loan and there is no evidence to suggest that the Trust was taking any action against him in relation to any default.
The document about the Trust that was provided by the applicant indicated a loan to the applicant of $222,495. Although the oral evidence of the applicant was to admit that he had received a loan, he denied that it was the amount stated in the document. His evidence was that the loan was “something in the region of $50,000” and “taken out in late 2005”. As it stood there was an inconsistency in the evidence he placed before the Tribunal.
The fact that there was a loan suggests some capacity, at least in 2005, for the applicant to access Trust funds with agreement of the Trustee. There was no evidence that the Trust had ever sought the repayment of the loan. The applicant’s evidence was that he had not been repaying the loan. There was also evidence that the applicant’s brother was living in one of the properties of the Trust but no evidence about the terms of that occupancy.
A careful reading of the reasons indicates that the Tribunal came to its ultimate conclusion based on a number of findings:
a)The Tribunal considered the oral evidence of the applicant “unconvincing”.
b)The Tribunal did not accept his evidence that he and his wife are “running at the redline” and they considered that the applicant’s stated living expenses …reveal a lifestyle unexplained by his evidence of meagre income
c)There was no documentary evidence to substantiate “any real dispute between the Trustee and beneficiaries and the nature of the dispute”.
d)The Tribunal found the oral evidence of the applicant unconvincing and apart from the “loans” referred to in Exhibit 5 under the heading “Other Current Assets”, the applicant did not seem to challenge the other particulars of the statement of assets and liabilities of the Trust in Exhibit 5 nor did he indicate how he came by this evidence.
The principle object of the Child Support (Assessment) Act 1989 (as amended) (hereafter the “Assessment Act”) is to ensure that children receive a proper level of support from their parents. Although the application of the Assessment Act creates monetary obligations which will likely be significant to the payer nevertheless the essential intention of the Act is to ensure that a child receives a proper level of child support and that the contributions to that support as between the parents is determined according to their respective abilities to meet those needs.
Although the Assessment Act provides the mechanisms for that support to be determined by legislatively fixed standards, there are a number of review procedures in place to ensure the primary objective. Relevantly, the liable parent and the carer entitled to child support can make an application to depart from the administrative assessment of child support. After internal reviews, either party to the review or the Child Support Registrar can seek a review of the decision to the SSAT. In each instance, the essential enquiry remains a positive enquiry with the objective to ensure that a child receives a proper level of support.
In any application for departure from the administrative assessment at each level of review, the onus lies upon the applicant to satisfy all of the requirements of s.117. If these are satisfied, then the Court or administrative review is at liberty to revert to the original assessment pursuant to the formula or such other figure as it thinks appropriate (see Johnson and Johnson 1999 FLC 98-004).
In relation to proceedings conducted between parties to a marriage for property settlement, the Full Court of the Family Court in Oriolo (1985) FLC91-653 said:
“We consider that there is a clear obligation on a party to proceedings in this Court to make a full and frank disclosure of all relevant financial circumstances. As was said by Lord Brandon for the House of Lords in Livesey v. Jenkins (1985) 1 All E.R. 106 at p.114 :
“I stated earlier that, unless a Court is provided with correct, complete and up to date information on the matters to which, under sec. 25(1), it is required to have regard, it cannot lawfully or properly exercise its discretion in the manner ordained by that subsection. It follows necessarily from this that each party concerned in claims for financial provision and property adjustment (or other forms of ancillary relief not material in the present case) owes a duty to the Court to make full and frank disclosure of all material facts to the other party and the Court. This principle of full and frank disclosure in proceedings of this kind has long been recognised and enforced as a matter of practice. The legal basis of that principle, and the justification for it, are to be found in the statutory provisions to which I have referred.''
I consider that these principles applicable to full and frank disclosure in proceedings in the Family Court have the same force in administrative review hearings under the Child Support Registration and Collection Act including appeal hearings by the SSAT.
Although the SSAT has the power to obtain information (s.103K) and the power to require the Child Support Registrar to exercise powers under the Assessment Act and the Child Support Registration and Collection Act for the purposes of gaining information relevant to a review (s.103L), there nevertheless remains a primary duty and obligation on the parties to the review to make a full and complete disclosure of their financial affairs relevant to the matter before the hearing and a duty to assist the Tribunal to come to its determination in the application. The obligation to disclose information and documents extends to the presentation of that material in a way that the true nature of their financial affairs can be readily understood.
The obligation extends not just to providing financial records but also includes presenting the information in a way that can be reasonably and readily understood and examined.
When the applicant appeared before the SSAT he was well aware that the true state of his financial affairs was to be a significant subject of enquiry before the Tribunal. There was no real dispute about the income of the payer. The case for the applicant was that there should be an increase in the level of child support payable by the respondent because his financial circumstances (in particular his deemed child support income) resulted in an unjust and inequitable determination of the child support payable by the payer. The applicant knew because it had clearly been raised by the respondent in her response that the affairs of the [Ms C] Estate Trust (and in particular the applicant’s capacity to draw upon the assets of the Trust) were to be the subject of enquiry.
This was not simply a matter where the applicant had a mere expectancy under a discretionary Trust. The applicant conceded during the hearing that under the terms of the Trust he had an entitlement to undistributed income from the Trust during the relevant years of his application before the Tribunal. There was no evidence produced about the income of the Trust. According to the evidence that the applicant did produce, in addition to real property, the Trust comprised a reasonably significant shareholding. The applicant did not seem to dispute that there should be an income produced by the Trust.
In circumstances where a party (in this case the applicant) places before the SSAT inconsistent, confusing and incomplete financial information, the fact that the SSAT can and may exercise its powers to obtain further information that might clarify the financial circumstances of a party does not relieve a party of their primary obligation to disclose their financial affairs in a manner that can readily be understood. The extent to which the SSAT should exercise its powers of information gathering and testing of evidence in each case will depend on the circumstances of the matter but the exercise of such power or the failure to exercise such power does not in any way derogate from the immutable obligation and duty of both parties throughout the proceedings before the SSAT to make full, frank and cogent disclosure of all relevant information pertaining to their financial affairs in order that the Tribunal can make a proper assessment of their respective capacities to provide for the needs of their children.
In financial proceedings under the Family Law Act, the authorities make it clear that a Court “should not be unduly cautious about making findings in favour of the other party if it is not satisfied that proper disclosure has been made (see Chang & Su (2002) FLC93-117)”. Such principles, in my consideration, have similar application to these matters before the SSAT.
Ultimately the onus is upon the applicant to satisfy the Tribunal that the grounds for departure exist.
In this matter the applicant did produce a document that purported to be a statement of the Trust assets. Although the applicant challenged the accuracy of some aspects of the document, he did not challenge all of the particulars. On its face, the document indicates that the Trust has assets capable of producing income. Indeed the document indicated that provision was made for provisional tax of $150,000. The Trust has been operating for each of the child support years in question in the application. The applicant conceded that there may have to be an adjustment for the child support if he ultimately did receive income from the Trust. Apart from the issue of income though, the only document produced by the applicant about the financial affairs of the Trust indicated that the applicant had received a loan from the Trust of $222,495. The applicant denied that he had received such a loan but did admit that he had received a loan of $50,000, which had very beneficial terms of repayment. On his own case there was an inconsistency in the evidence about not only his entitlement under the Trust but his capacity to obtain a benefit from the Trust.
In the course of this matter the applicant sought to make an application to adduce further evidence in the hearing of the Appeal. I dismissed the application to receive the further evidence in the Appeal but indicated to the applicant that if the Appeal were to be successful he would be given the opportunity to apply to adduce his further evidence. I have concluded that there was an error of law in the conclusions reached by the Tribunal. As part of the exercise of my discretion in relation to the Appeal, I consider that I should give consideration to the fact that the applicant may now be in a position to present more reliable evidence about the financial circumstances of the Trust.
The issue of the income of the applicant and his interest in the Trust has been the subject of applications to the Child Support Agency since 2005. The reviews that were the subject of the SSAT Appeal commenced in July 2006. There was a determination by a Child Support review officer within the Child Support Agency. That determination was the subject of an objection and that decision was the subject of review by the SSAT. The issue of the applicant’s interest in the Trust was raised by the respondent at each review. During the course of the SSAT hearing on 28 August 2007 there was an opportunity for the applicant to present his evidence and documents in support of his case and the applicant was given the opportunity to subsequently submit further documents. Indeed he did produce a document purporting to be a financial statement of the [Ms C] Estate Trust. At the hearing he was aware that the respondent was raising the Trust as a resource available to him. I consider that the applicant not only had notice that his interest in the Trust and the income he might derive from it was to be the subject of enquiry but he has also been given proper opportunity to present the financial position of the Trust. I do not consider that the fact that the applicant may now be in a position to present more reliable evidence concerning the affairs of the Trust should unduly influence the exercise of my discretion not to set aside the decision of the SSAT.
Summary
Ultimately it was the responsibility of the Tribunal to determine whether the grounds for departure existed pursuant to s.117 of the Assessment Act. The determination of the Tribunal was that there were no special circumstances that would warrant a departure from the administrative assessment.
Whilst the Tribunal may have erred in concluding that the applicant had access to a “resource” worth $1million that was not the only basis upon which the Tribunal reached its conclusion.
There were clearly a number of matters in the Trust that required an explanation and in my consideration, the onus was upon the applicant to provide a satisfactory explanation.
I consider, notwithstanding their error, the SSAT was entitled to reach the conclusion that the applicant had not satisfied the onus upon him to satisfy the first limb, namely that special circumstances existed to warrant a departure from the administrative assessment.
I am not satisfied that it is necessary in the interests of justice for the applicant to be given another opportunity to provide evidence to in essence satisfy his onus to establish that the grounds for departure exist.
That aspect of the appeal is therefore dismissed.
The other grounds of appeal
In his other grounds of appeal, the applicant contends:
The Tribunal made further errors in law in making the apparent finding that Final Orders made by Justice Waddy – and subsequent Interim Orders – were of the type that must bind the Agency.
In this matter, there were two separate appeals dealt with together. The ground raised by the applicant in this Appeal is almost identical to the ground raised by the applicant in the other Appeal.
I find it unnecessary to have a further discussion on this issue and for the reasons I have already given in relation to this matter, I do not consider that the Tribunal erred in finding that the orders made by Justice Waddy “were of the type that must bind the Agency”.
The other Grounds of Appeal were:
“In addition, errors in law were made by failing to recognise the reported comments by Justice Waddy in respect of positive evidence provided by Ms Clivery at trial in respect of her intent to school [S] privately. Further errors were made in respect of failures to consider the costs of [S]’s after school care fees at [N] College and the costs of travel associated with her contact with Ms Clivery (including costs such as those related to fuel and parking fees). Additional errors were made in failing to consider issues specified in the Act, including the impact of assessments on those who are receiving Social Security benefits”
When the decision was made for the child to live with the applicant, she moved to Brisbane with the applicant and was enrolled at the
[M] School in Brisbane. This was a private school and fees were incurred during the enrolment at the school.
The child remained at the school until October 2006 and then upon the relocation of the applicant to the Sunshine Coast, she was enrolled at the [N] College. This was a private school and fees were incurred during the enrolment at the school.
It does not appear to be in dispute that the applicant advised the respondent of his intention to enrol the child at both the [M] School and the [N] College. It does not appear to be in dispute that the respondent did not agree to the enrolment of the child at either of those schools (although she also did not respond to the applicant to object to those decisions). The applicant seemed to accept that there is no evidence that the respondent agreed to share the cost of the private school education.
The applicant’s case, on this point, appears to be that during the hearing before Waddy J, he made it clear that his intention was that he would enrol the child in a private school in Brisbane if the order was that she live with him. The applicant contends that after the hearing the mother attempted to apply for an order causing the applicant to enrol the child in the public school system but that Waddy J declined to hear such application because that matter was not raised at the trial and the trial proceeded on the basis that the applicant was to enrol the child at a private school if the child was to live with him. The applicant contends that this matter had effectively been dealt with in the hearings before Waddy J and there was either agreement or acceptance that the child would be enrolled at a private school.
The Tribunal dealt with this at paragraph 41 of the reasons and I can discern no error in the manner in which this particular issue was approached or dealt with.
The respondent contended at the hearing before the Tribunal that she “would not have agreed to the private school education that he (the applicant) has subsequently enrolled [S] in. I have a strong belief in public schooling and I have only sought private school options for [S] when trying to give effect to the agreement that [Mr Conway] and I did have with regard to her education which was French emotion schooling”.
The Tribunal seemed to accept that evidence and to not accept the evidence of the applicant that the parties reached an agreement both during the marriage and post separation to enrol the child in a private school education. The Tribunal was entitled, on the evidence, to come to that conclusion and I can discern no error in their findings or approach to that issue.
In relation to the other grounds raised, the applicant did not press those to any significant extent at the hearing of the Appeal or in his written arguments and I can find no discernible error on the part of the Tribunal in relation to those particular grounds.
I certify that the preceding one hundred and one (101) paragraphs are a true copy of the reasons for judgment of Slack FM
Associate: Karen Smith
Date: 28 October 2008
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