Crabbe and Crabbe (SSAT Appeal)
[2011] FMCAfam 24
•14 January 2011
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| CRABBE & CRABBE (SSAT APPEAL) | [2011] FMCAfam 24 |
| CHILD SUPPORT – Appeal from decision of SSAT – consideration of whether one or more errors of law – failure of Tribunal to distinguish separate legal entities – imposition of suspicions as facts – findings without evidence as to interest in ‘business’ – findings without evidence as to income – fundamental errors in assessment of income – matter remitted to Tribunal for rehearing. |
| Child Support (Registration and Collection) Act 1988, ss.103S, 103X(3)(b), 110B & 110F Child Support (Assessment) Act 1989, ss.98B(1), 117(5) Property Law Act 1974 (Qld), ss.117(4)(b), 117(4)(g)(ii)(a), 272 |
| Agrippa & Horton (SSAT Appeal) [2010] FMCAfam 1144 Farrens & Farrens (2010) FMCAfam 325 Tasman & Tisdall (2008) FMCAfam 126 Damjanovic v Sharpe Hume & Co (2001) NSWCA 407 Collector of Customs v Possolanic Enterprises Pty Ltd (1993) 43 FCR 280 Minister for Immigration and Multicultural Affairs v Wu Shan Liang (1996) 185 CLR 259 PJ & Child Support Registrar [2007] FMCAfam 829 |
| Applicant: | MR CRABBE |
| Respondent: | MS CRABBE |
| File Number: | BRC 10444 of 2009 |
| Judgment of: | Coker FM |
| Hearing date: | 30 September 2010 |
| Date of Last Submission: | 30 September 2010 |
| Delivered at: | Townsville |
| Delivered on: | 14 January 2011 |
REPRESENTATION
| Counsel for the Applicant: | Mr Paratz |
| Solicitors for the Applicant: | Doyle Keyworth & Harris |
| Respondent: | Self-represented |
ORDERS
That the Appellant’s appeal against the decision of the Social Security Appeals Tribunal dated 19 April 2010 be upheld.
That the decision of the Social Security Appeals Tribunal dated 19 April 2010 be set aside.
That the matter be remitted to the Social Security Appeals Tribunal for re-hearing according to law.
IT IS NOTED that publication of this judgment under the pseudonym Crabbe & Crabbe (SSAT Appeal) is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT TOWNSVILLE |
BRC 10444 of 2009
| MR CRABBE |
Applicant
And
| MS CRABBE |
Respondent
REASONS FOR JUDGMENT
This is an appeal from a decision of the Social Security Appeals Tribunal dated 19 April 2010. The date of despatch is 21 April 2010, and the Notice of Appeal was filed in the Brisbane Registry of the Court on 20 May 2010. There is no issue raised in relation to the timeliness of the filing of the appeal.
The appeal details nine separate grounds of appeal in relation to the basis upon which it is submitted that the Social Security Appeals Tribunal has erred in the making of the orders that were made. All of the grounds contained within the Notice of Appeal were relied upon. However, there appears to be, on the face of it, perhaps different weight that would be given to the various grounds that were sought to be relied upon.
The respondent to the application, Ms Crabbe, was not represented at the hearing. The position taken by the respondent was simply to suggest that the appeal should be dismissed.
The parties to the proceedings have three children, who were, at least at some time in the past or are presently, the subject of Child Support Agreements. They are the parents of the child [X], born [in] 1991, now aged 19 years; [Y], born [in] 1994 and therefore 16 years; and [Z], born [in] 1996 and therefore 14 years.
The parties have been separated for a considerable period of time, and during that time, the children have been, it seems acknowledged, primarily in the care of the respondent mother, and the appellant has been the party responsible for the payment of child support.
There has been a child support history provided in relation to this matter, and it is perhaps noteworthy that it should be recorded here:
a)Firstly, an administrative assessment for child support for the period 1 September 2008 to 31 August 2009 was provided on an adjusted taxable income of $14,546 for the appellant for the 2006/2007 taxation period, and an adjusted taxable income of $12,015 for the respondent, again relating to the 2006/2007 assessment period. The assessment was for a payment of $339 per annum.
b)A departure application was filed in relation to the matter, and on 4 August 2009, the Child Support Agency made a departure application under part 6A of the Child Support (Assessment) Act 1989.
c)On 29 September 2009, a senior case officer considered the application and made a number of decisions in relation to the income to be utilised for the purposes of assessment. The income was decided as follows:
·
For the period 1 December 2008 to 30 November 2010, set
Mr Crabbe’s adjusted taxable income at $80,000 per annum;
·
For the period 1 December 2010 to 30 November 2011, set
Mr Crabbe’s adjusted taxable income at $82,640 per annum;
·
For the period 1 December 2011 to 30 November 2012, set
Mr Crabbe’s adjusted taxable income at $85,367 per annum;
·
For the period 1 December 2012 to 30 November 2013, set
Mr Crabbe’s adjusted taxable income at $88,184 per annum; and
·For the period 1 December 2013 to the date the child support case ends, set Mr Crabbe’s adjusted taxable income at $91,094 per annum.
d)Subsequently, the appellant objected to that decision. However, on 23 December 2009, an objections officer disallowed the objection. It was this disallowance which led to the application being made for review of the objections officer’s determination.
The appellant applied to the Society Security Appeals Tribunal on
6 January 2010 to have the objection officer’s decision reviewed. The matter, as I said, was heard on 19 April 2010, and on that day, pursuant to section 103S of the Child Support (Registration and Collection) Act 1988, the Tribunal decided to set aside the decision of the objections officer made on 23 December 2009 and substituted a decision that, for the period 1 July 2008 to 31 December 2010, the appellant’s adjustable taxable income was set at $344,000.
That determination is the subject of the appeal now before me.
Reasons were given by the Social Security Appeals Tribunal in relation to the review and the determination by them following the review. Pursuant to the provisions of section 103X(3)(b) of the Child Support (Registration and Collection) Act 1988, the Tribunal must set out, in its reasons, its findings on questions of fact and the evidence on which those findings were based.
In the reasons, the Tribunal identified the issues in relation to this matter and noted what it was required to consider. Under the heading “Ground for departure”, they specifically made reference to the income, earning capacity, property and financial resources of the appellant, and detailed, similarly, their findings in relation to the income, earning capacity, property and financial resources of the respondent.
Following that consideration, they also, under the heading, “Is a change of assessment otherwise proper?”, detailed the matters that must be taken into account pursuant to the provisions of section 117(5) of the Child Support (Assessment) Act1989 and noted that there was a primary duty upon parents to maintain their children. The Tribunal noted at that time that they considered that it was “otherwise proper to depart from the administrative assessment”.
Under the heading, “Conclusion”, the Tribunal then went on to note the powers that arise pursuant to the provisions of section 103S of the Child Support (Registration and Collection) Act 1988 and, in particular, noted that the Social Security Appeals Tribunal may vary, affirm of set aside a decision. The Tribunal can exercise all the powers and discretions that are conferred upon the Child Support Registrar under the Act.
Thereafter, the Social Security Appeals Tribunal noted at paragraph 50 the following:
The Tribunal found that the disparity between Mr Crabbe’s declared income and actual resources constitutes a reason to depart from the assessment. Accordingly, the Tribunal finds that a departure decision should be made in the current case.
It is from that decision that the appeal arises in this particular matter.
The appellant’s notice of appeal was, as I indicated, filed on 20 May 2010. Section 110B of the Child Support (Registration and Collection) Act 1988 provides that a party to a proceeding before the Tribunal may appeal to a court having jurisdiction on a question of law from any decision of the Tribunal in that proceeding. This is not a review on the merits.
In Agrippa & Horton(SSAT Appeal) [2010] FMCAfam 1144, Halligan FM summarised the applicable law when the court reviews a decision of the Tribunal. His Honour said, and it is detailed as follows:
…the reasons for the decision under review are not to be construed minutely and finely with an eye keenly attuned to the perception of error (Collector of Customs v Possolanic Enterprises Pty Ltd (1993) 43 FCR 280, 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…
Nonetheless, as Riethmuller FM noted in PJ & Child Support Registrar [2007] FMCAfam 829 at [38]
…such an appeal does not allow for a review on the merits. As a result, it is important for the Tribunal to provide appropriate reasons. This will usually entail careful findings of fact and clear explanations of the reasons for any decision, particularly where it involves the exercise of a discretion such as altering a child support amount.
The Notice of Appeal filed on 20 May 2010 details 9 grounds of appeal. The appellant’s counsel indicated that the appellant relied upon all of those grounds. They were as follows:
(1)The Social Security Appeals Tribunal repeatedly failed to adequately distinguish between the company [C] and Associates Pty Ltd and the business name [C] and Associates and in particular:
(a)The Social Security Appeals Tribunal has failed to give any or any proper regard to the evidence that:
(i)The appellant is an employee of and has no interest in [C] and Associates Pty Ltd;
(ii)The appellant has a 20% interest in the business name [C] and Associates which does not trade;
(b)The Social Security Appeals Tribunal has conflated and confused the two entities by:
(i)referring to them collectively (at paragraph 17 and subsequently) as “the Business”;
(ii)finding, without any or any adequate evidence (at paragraph 25):
1. that the appellant had an interest in the company [C] and Associates Pty Ltd; and
2. that the appellant had voluntarily forgone such interest in that company;
(iii) relying upon evidence of joint ownership of the business name [C] and Associates as if it were evidence of the joint ownership of the company [C] and Associates Pty Ltd (at paragraph 26).
(2)The Social Security Appeals Tribunal found without any or without any adequate evidence that the appellant had a joint and equal interest in both the [C] and Associates and in [C] and Associates Pty Ltd.
(3)The Social Security Appeals Tribunal failed to have any or any proper regard to the nature and effect of a Recognised Separation Agreement under Part 19 of the Property Law Act 1974 (Qld) between the appellant and his then former de facto partner dated 26 November 2008 and in particular:
(a)Disregarded the statutory basis of a Recognised Separation Agreement by incorrectly inferring (at paragraph 24) that consideration was a requirement for the validity of such an agreement;
(b)Incorrectly found that there was no consideration for the Recognised Separation Agreement;
(c)Inferred without evidence that the appellant initiated the Recognised Separation Agreement;
(d)Inferred that the appellant sought to give effect to an improper purpose by entering the Recognised Separation Agreement.
(e)Incorrectly determined the matter as if the Recognised Separation Agreement was not binding and had no effect.
(4)The Social Security Appeals Tribunal determined (at paragraph 27) without any or any adequate evidence the appellant’s adjusted taxable income be set at $344,000 for the period from 1 July 2008 to 31 December 2010 and in particular:
(a)Incorrectly found that the appellant was entitled to a joint and equal share of any profit from [C] and Associates Pty Ltd;
(b)Without any or any adequate basis, relied upon unaudited internal profit and loss statements of [C] and Associates Pty Ltd for the period from July 2008 to June 2009 to set an adjusted taxable income for the whole period;
(c)While relying on unaudited internal profit and loss statements of [C] and Associates Pty Ltd for the period from July 2008 to June 2009, without explanation disregarded similar unaudited internal profit and loss statements of [C] and Associates Pty Ltd for the period from July 2009 to March 2010 which disclosed profitability in the following year at a rate that was approximately 26% of the rate set by the Social Security Appeals Tribunal, despite that acknowledgement by the Social Security Appeals Tribunal (at paragraph 28) of the uncertainty of the income stream;
(d)
Despite uncontradicted evidence that [C] and Associates Pty Ltd would be substantially less profitable in periods from
1 July 2009 onwards, applied the assumed income for the
12 months from July 2008 to June 2009 to the period from
1 July 2009 to 31 December 2010.
(5)The Social Security Appeals Tribunal (at paragraph 22) without any or any adequate evidence substituted its own conclusions about the appellant’s health and working capacity for the documented opinion of the appellant’s medical practitioner.
(6)The Social Security Appeals Tribunal (at paragraph 12) incorrectly disregarded the evidence of the appellant in relation to the high costs of spending time with children by confusing the requirements for initiating an application (at section 98B(1) of the Child Support (Assessment) Act 1989 with the matters relevant to determining an application after it has been properly commenced on other grounds.
(7)The Social Security Appeals Tribunal has wrongly disregarded relevant matters in determining what is just and equitable, in particular the appellant’s:
(a)income, property and financial resources;
(b)his legal obligation to repay debt;
(c)his lack of capacity to pay the arrears and hardship caused to the appellant by the creation of substantial arrears.
(8)The Social Security Appeals Tribunal has failed to accord the appellant natural justice.
(9)The Social Security Appeals Tribunal has demonstrated bias against the appellant.
It is necessary for each of the relevant grounds of appeal to be addressed in relation to this matter, though, as I indicated previously, counsel for the appellant indicated that there were, perhaps, varying degrees of weight which would be placed upon the various grounds of appeal.
It is clear that the primary submission in relation to this matter is that there was an error of law in the way that the Social Security Appeals Tribunal dealt with the question of the appellant’s income and, in particular, a failure to distinguish between the company, [C] & Associates Pty Ltd and the business name, [C] & Associates. An error of law is widely construed. In Farrens & Farrens (2010) FMCAfam 325, Slack FM noted at paragraph 20 as follows:
The Child Support (Registration and Collection) Act 1988 …makes clear that a party to a proceeding before the SSAT may appeal on a question of law.
In commenting upon that, he cited with approval the decision of Brown FM in Tasman & Tisdall (2008) FMCAfam 126 at paragraph 44, when Brown FM made the following comments in relation to a jurisdictional error:
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 correctly 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.
Brown FM concluded at paragraph 22 of Tasman & Tisdall that:
It seems clear though that findings of fact, including inferences, may be reviewed to determine whether there has been an error of law.
The first ground of appeal, therefore, relates specifically, as I have indicated, to the distinction to be drawn between the company and the business name, though there is of course, similarity between the two. It is submitted that the Social Security Appeals Tribunal has reached a conclusion and it is noted in paragraph 18 of the reasons given by the Social Security Appeals Tribunal relating to the business, being the corporatisation of a partnership which traded under the same name that:
As a result the Tribunal can see no evidential basis for treating the corporatised entity as being in any facet different from the former partnership and will refer to both entities (as such) as ‘the business’.
It is clear that until 1 July 2008, the appellant was in partnership with Ms W, and that they traded as a partnership known as “[C] & Associates”. It is also clear, however, on the evidence that is available, that the partnership was one which was constituted as to 20 per cent in favour of the appellant and 80 per cent held by Ms W. In fact, this was noted by counsel for the appellant as having been accepted by the Tribunal at paragraph 18 of the reasons, but also was the subject of comment during the hearing of the matter and is recognised in the transcript of the proceedings.
The point taken in relation to the change that occurred on 1 July 2008 is that [C] & Associates Pty Ltd was a separate and distinct legal entity. In relation to that company, it was also clear that the appellant was at all times an employee of the company, and the company records treated him as such. It is, therefore, contended that the conclusion reached by the Social Security Appeals Tribunal, and noted at paragraph 25 of the reasons as follows is erroneous:
Notwithstanding this, the Tribunal does not accept that the Business was (or is) anything other than an equal partnership between de facto partners with complementary skills. To suggest otherwise is to contort the facts out of any semblance of business reality.
It is argued on the part of the appellant that the Tribunal has erred in law in referring to the entity as “the business”, that there is, in fact, no such entity known to law, and that, in describing the company as a partnership or one and the same as a partnership, is a conclusion that is not open to them. The argument put on behalf of the appellant is that, quite simply, the Tribunal is required to make its decision on the basis of law, not on what it sees as “palm tree justice” or what it calls “business reality”.
I must say that I can only agree with that submission in relation to the matter. Even if there were no other head or ground for appeal in relation to this matter, the fact is that the Social Security Appeals Tribunal, like all other administrative authorities, courts and the public generally, cannot ignore the law and cannot simply seek to superimpose their own considerations of what might be appropriate, above what is clearly the legal position in relation to such circumstances.
[C] & Associates Pty Ltd is clearly a company. All documentation that has been provided in relation to the matter supports that position in relation to the matter and, in particular, supports the contention by the appellant that he is an employee of the company. Without any shadow of a doubt, the position in relation to the matter is that the Social Security Appeals Tribunal has erred in law in referring to the entity, [C] & Associates Pty Ltd, as anything other than a company and a separate legal entity, in its own right.
The Tribunal may have had concerns in relation to the legitimacy of the arrangements that were in place between the appellant and Ms W and, of course, may have had concerns in respect of issues with regard to the financial circumstances of the appellant. However, whilst those concerns exist for them, they must be substantiated by the evidence that supports the position taken in relation to the matter.
Suspicion is one thing, fact is very different and, in this instance, there is no basis upon which it could be contended that there is an evidentiary basis upon which it could be suggested that some other structure was in place than that which was contended by the appellant, at the time of the hearing.
The second ground in relation to this matter relates to the fact that the Social Security Appeals Tribunal found without any or any adequate evidence that the appellant had a joint and equal interest in both the business or partnership, [C] & Associates, and in the company, [C] & Associates Pty Ltd. A very similar situation arises in respect of this matter to that which related to the first ground of appeal.
The only evidence that can properly be relied upon is that which is contained within the company documentation. In that company documentation, it shows that Ms W is the sole director and shareholder of [C] & Associates Pty Ltd. There is no evidence other than, perhaps, the suspicions held by the Social Security Appeals Tribunal that the appellant is controlling the funds of the company or is using a corporate veil to disguise his control of that company.
In fact, the evidence, as was submitted on the part of the appellant, is the contrary, it being unchallenged that Ms W has sole and unfettered control in both a practical and legal sense of the financial affairs of the company. The appellant has no ability at law to claim or control any of the assets of the company and it is an error of law for the Tribunal to find otherwise, without an evidentiary basis to establish such a position.
The third ground of appeal relates to the Social Security Appeals Tribunal failure to have any or any proper regard for the effect of the separation agreement which is dated 26 November 2008. The agreement is, it is contended, a binding deed, which is subject to the law of contract and endures, irrespective of whether the appellant and Ms W were to reconcile their relationship. At paragraph 24 of the reasons given in relation to this matter, the following is said by the Tribunal:
Mr Crabbe has gone to considerable lengths to convince outsiders that he has no interest in the Business (indeed in any unencumbered asset). These measures include having no legal interest in property formerly owned with Ms W, having a separation agreement prepared (which appears to refer to assets not then in Mr Crabbe’s legal ownership, such as the Business and a motor vehicle owned by the Business) and forgoing his legal interest in the corporatised entity which now conducts the Business without consideration.
The fact is that the agreement is clear on its face. Pursuant to the provisions of section 272 of the Property Law Act 1974 (Qld), the deed is an enduring document and endures irrespective of whatever the arrangements might be between the appellant and Ms W. The agreement provides specifically for the division of personal chattels between the appellant and Ms W, and expressly refers, at clause 3.1(c), to the following, a division between the parties including:
(c) any shares and/or investments held in [first name omitted]’s name, including those held in [C] & Associates Pty Ltd ACN [omitted].
It was submitted, and it is clearly the position at law, that a deed does not require there to be consideration.
The reference, therefore, in paragraph 24 to the reasons, misconstrues the legal effect of a deed of agreement or separation agreement between the parties and, again, therefore, the Social Security Appeals Tribunal has erred in failing to consider the separation agreement on its face.
It is unquestionable, therefore, that the legal control of [C] & Associates Pty Ltd vests in Ms W. The ground for appeal, therefore, is clearly substantiated.
The fourth ground for appeal in relation to the matter relates to whether the Social Security Appeals Tribunal determined without any adequate evidence the adjustable income and set it at $344,000. I must say that this particular ground in relation to the matter is almost overwhelming in its legitimacy, and the findings made by the Social Security Appeals Tribunal, in relation to the issues of the income of the appellant are staggering in the extreme.
It is contended that the Tribunal’s finding at paragraph 27 of the reasons, that the business had a profit of $627,335 in the financial year 2008/2009 and, accordingly, assessing that there was a profit of that amount, that there should be a division between the appellant and
Ms W equally, though contrary to the interests in the company and in total disregard of the fact that all documentation would indicate that the company was wholly the property of Ms W, and that the appellant was an employee, flies in the face of what could properly be considered an appropriate determination of the income.
It was concluded that the appellant had an entitlement to financial resources which totalled $344,000, being one half of the profit of the company in the financial year 2008/2009 and, in addition, the salary that the appellant received from working for the company. It was this figure, in total $344,000, which was adopted by the Social Security Appeals Tribunal in the decision as to the manner in which it would assess the adjusted taxable income of the appellant.
It is contended on the part of the appellant, however, that the Tribunal erred in law in equating the “pre‑tax income of a company with financial resources available to anyone”, and failed to have any regard to the principles of company law in regard to the treatment of undistributed profits and dividends. Additionally, it was submitted that the pre‑tax profit of the company would be subject to company tax and that that company tax would, in all likelihood, be assessed at different rates to those applicable to the appellant, as an individual income earner.
Finally, it was submitted, and it appears, I must say, to be unanswerable, that there is no basis in law for the company to be required to distribute the amount of $314,000 or in fact any other amount to the appellant, as he is not entitled to receive a dividend, pursuant to the incorporation of the company [C] and Associates Pty Ltd.
It was contended by counsel for the appellant, therefore, that it was implausible and in fact entirely fictitious for the Tribunal to attribute this amount to the appellant’s personal adjusted taxable income. The appellant’s own evidence before the Tribunal was that the company had, as best he knew, a tax liability of “200 and something thousand dollars”, and that the Tribunal has failed to have regard to that particular aspect of the matter.
More particularly, it was contended, and the evidence given in relation to this matter was unchallenged and was to the effect that the earnings of the company [C] and Associates Pty Ltd in the financial year 2008/2009 was an aberration, arising from the then prevailing federal government policy on training.
It was submitted that that was a situation that existed only for a short period of time and that the Tribunal has therefore failed to have regard to the unique features of the 2008/2009 financial year in assessing the appellant’s personal adjusted taxable income.
It was further contended, and again, I must say, appears almost unanswerable, that the undistributed earnings of the company were absorbed in the running of the company, and that therefore these earnings were not available to the appellant.
Accordingly, the Tribunal has erroneously assessed the appellant as having an income which he did not receive, and more particularly, which he has no prospect of receiving now or at any time in the future.
I do not intend to point by point dismantle the decision of the Social Security Appeals Tribunal in relation to this matter. What I do say, however, is that the Social Security Appeals Tribunal, in relation to this particular matter, but particularly with regard to ground 4 of the grounds for appeal, the assessment of the appellant’s adjusted taxable income, has erred in relation to any assessment of what might or might not properly be income available to the appellant. Without hesitation, I find that Social Security Appeals Tribunal has erred at law in relation to this determination.
Ground 5 of the grounds for appeal relates to an assessment as to the appellant’s health and his capacity for work. At paragraph 23 of the reasons given by the Social Security Appeals Tribunal, the Tribunal says the following:
Given the equivocal nature of the opinion, the Tribunal questioned Mr Crabbe closely on his involvement in the Business and his employment prior to that. It quickly became apparent that Mr Crabbe had worked full-time prior to commencing the Business whilst suffering the same injuries (they had been sustained a decade earlier) and the only practical limitation on his participation was whether or not work was available. The Tribunal was not convinced that Mr Crabbe’s work contribution was (or continues to be) materially affected by his injuries.
However, the fact is that the Tribunal has failed, it is contended and I accept, to have proper regard to the uncontested evidence of the appellant’s medical practitioner. At page 73 of the transcript, specific reference is made to the uncontested evidence of the appellant’s medical practitioner. It is contended, therefore, that the Social Security Appeals Tribunal did not have any evidence, or any adequate evidence, upon which it could substitute its own conclusions about the health of the appellant and his working capacity. I am satisfied that, again, that ground is made out in relation to these proceedings.
Ground 6, in relation to the appeal in relation to this matter, was relied upon by the appellant’s counsel in relation to the matter, though it was not the subject of significant submission. The position taken by the appellant, however, is to say that the Social Security Appeals Tribunal incorrectly disregarded the evidence of the appellant in relation to the costs, which he said were significant, in relation to spending time with the children, and therefore led itself into error by confusing the requirements for initiating an application at section 98B(1) of the Child Support (Assessment) Act with the matters relevant to determining an application which had been properly commenced on other grounds.
Quite simply, it was contended that, if the Tribunal were in error in seeking to identify an entity which cannot be identified at law as “the business”, then it was in error in attributing expenses in relation to the appellant spending time with the children to the business. Counsel for the appellant noted that, although the amounts that were referred to were small, the Tribunal had erred in law in finding that there were not so significant as to affect any assessment, when it was in fact the Tribunal’s obligation to consider all amounts claimed in relation to the expenses or circumstances of a party which were properly put before them. Again, I find that the submission in that respect is proper and that the Social Security Appeal Tribunal has erred in law.
Ground 7 of the grounds for appeal related to whether the Social Security Appeals Tribunal has wrongly disregarded relevant matters in determining what is “just and equitable”, in relation to the position of the appellant. The ground is certainly broadly drafted. It is a little difficult to assess specifically what the suggested error might be in relation to this matter, other than to say that there are general concerns that arise.
Certainly, at paragraph 51 of the Tribunal’s reasons, they say the following:
An assessment based on the incomes accepted by the Tribunal will yield a requirement that Mr Crabbe pay approximately $690 per week up to the date [X] turned 18 and $620 per week thereafter.
However, at paragraph 52 of the reasons, the Tribunal goes on to say:
Both figures are well within Mr Crabbe’s capacity to pay ($3,500 per week) and in excess of the needs of the children (as identified by Ms Crabbe). The Tribunal is therefore satisfied that the formula produces a just and equitable outcome which maintains the flexibility required for taking account of changes in the children’s care and proper needs.
The submission made on behalf of the appellant in that regard is simply that the adoption of a level of child support which is in excess of the needs of a child contravenes specifically the provisions of section 117(4)(b) of the Child Support (Assessment) Act 1989 in that that particular section refers to the “proper needs of the child.”
It would seem on the face of it that, again, the submission with regard to an assessment which is, in fact, in excess of the needs which were claimed by the respondent in relation to the children is, in fact, an error and an improper application of the law in relation to the matter. I find that, whilst the ground for appeal is broadly drafted in relation to this matter, it is clear that the Social Security Appeal Tribunal has erred in its consideration of the order that should appropriately be made in relation to this matter.
It was similarly argued that, again, there had been a failure to appreciate the just and equitable considerations which were required in relation to the appellant, as well as the respondent, in that section 117(4)(g)(ii)(A) of the Child Support (Assessment) Act 1989 requires the court to have regard to any hardship that would be caused to the liable parent by a determination.
In that respect it was contended that the Social Security Appeals Tribunal had artificially attributed an adjusted taxable income to the appellant to which he had no entitlement of law and no ability to obtain in practice, which would obviously result in hardship to him. I am satisfied, particularly in light of the previous findings and comments made by me in relation to this matter, that the attribution of an adjusted taxable income of $344,000 per annum is, in fact, an error which gives rise specifically to a hardship to the appellant and a total inability to meet the obligations that are said to arise from that assessment.
Ground 8 is, again, a ground which is in very broad and general terms. It is suggested that the Social Security Appeals Tribunal has failed to accord the appellant natural justice. In that respect, the submission made, was short and to the point and was simply to the effect that the Tribunal had failed to have proper regard for the appellant’s lack of knowledge of the financial affairs of the company and made assumptions, and came to conclusions, contrary to the appellant’s interests, without seeking to inform itself of the exact position in relation to the appellant’s financial circumstances or to consider the evidence of Ms W, relating to her knowledge of those matters. Reference was made, specifically, to the transcript of the hearing at pages 36 and 37.
Natural justice must be afforded in relation to such matters and one can only find, particularly in light of he matters already referred to by me, that the assumptions made in relation to this matter, particularly with regard to the appellant’s actual interest in the company, [C] and Associates Pty Ltd., and specifically with respect to income that might be attributable to the appellant, contrary to the evidence that was before the court and to not inform the appellant of such a position in relation to this matter, was contrary to the rules of natural justice.
I am satisfied in light of the previous findings and comments made by me in relation to this matter that there has been a general failure to afford the appellant natural justice in relation to the determination of this matter.
The final ground for appeal related to whether, in fact, the Social Security Appeals Tribunal has demonstrated a bias against the appellant. In that regard, it is contended that the Tribunal had formed a view of the appellant and of his position in this matter prior to the hearing of the application, which was contrary to law.
In that respect, I was referred specifically to Damjanovic & Sharpe Hume & Co (2001) NSWCA 407 and had submitted to me that Presiding Member Gillespie had “put” a series of propositions to the appellant as to his financial situation, which implied that Presiding Member Gillespie was in a position of being an adversary to the appellant.
The submission was concluded on the basis of it being suggested that the demeanour of the Tribunal raised an implication of real or implied bias against the applicant.
I am not satisfied that that particular ground of appeal is established. The Tribunal was able, obviously, in the process, to raise the concerns that it had in relation to this matter and to seek clarification, as was done in the hearing, by putting forward a series of propositions as to the financial circumstances of the appellant. It was not an inappropriate course to follow.
What might have been inappropriate was what flowed from that in that, when answers were not given which were able to clarify the position, a stance or finding was taken by the Social Security Appeals Tribunal which was contrary to the other evidence that was given in relation to this matter. I am not satisfied that ground 9 of the grounds for appeal is, therefore, established.
For the reasons that I have given in relation to this matter, particularly with regard to being satisfied as to grounds 1 through 8 of the grounds for appeal contained within the notice of appeal filed on 20 May 2010, the appeal will be allowed. Section 110F of the Child Support (Registration and Collection) Act 1988 sets out the powers of courts when determining an appeal from the Tribunal. It provides specifically as follows:
The court… may make such order as it thinks appropriate by reason of its decision.
Counsel for the appellant in relation to this matter submits, therefore, that the decision of the Social Security Appeals Tribunal, made on
19 April 2010 and despatched on 21 April 2010, should be set aside.
I agree, particularly in light of the fact that where findings of this nature have been made, contrary to the appellant, and the extent and consequences of the findings are such that they will need to be thoroughly reviewed, that the appropriate course to follow is to remit this matter to a differently constituted Tribunal. I intend to make such an order.
I certify that the preceding sixty-six (66) paragraphs are a true copy of the reasons for judgment of Coker FM
Date: 14 January 2011
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