Crowell and Bodrey (SSAT Appeal)
[2011] FMCAfam 275
•1 July 2011
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| CROWELL & BODREY (SSAT APPEAL) | [2011] FMCAfam 275 |
| CHILD SUPPORT – SSAT APPEAL – Appeal from SSAT decision – adequacy of reasons and requirement for procedural fairness – appeal upheld – matter remitted to SSAT for re-hearing. |
| Child Support (Registration and Collection) Act 1988, ss.103X, 110B, 110F Child Support (Assessment) Act 1989, ss.58, 98, 107, 117 |
| Repatriation Commission v O'Brien [1985] HCA 10; (1985) 155 CLR 422 Kioa v West [1985] HCA 81 Gyselman & Gyselman (1992) FLC 92-279 Merriman & Merriman (1993) FLC 92-422 DJM & JLM (1998) FamCA 97 Johnson & Johnson [1998] FamCA 1519 Spinks & Spinks [2001] FamCA 197 PJ & Child Support Registrar [2007] FLC 98-035 Godfrey & Godfrey [2009] FMCAfam 626 Agrippa & Horton (SSAT Appeal) [2010] FMCAfam 1144 Bedell & Kastens & Anor (SSAT Appeal) [2010] FMCAfam 1250 |
| Applicant: | MS CROWELL |
| Respondent: | MR BODREY |
| File Number: | HBC 919 of 2010 |
| Judgment of: | Bender FM |
| Hearing date: | 25 March 2011 |
| Date of Last Submission: | 25 March 2011 |
| Delivered at: | Hobart |
| Delivered on: | 1 July 2011 |
REPRESENTATION
| Counsel for the Applicant: | Self-represented |
| Solicitors for the Applicant: | Self-represented |
| Counsel for the Respondent: | Self-represented |
| Solicitors for the Respondent: | Self-represented |
ORDERS
The appellant’s appeal against the decision of the Social Security Appeals Tribunal dated 8 October 2010 to add $3,648.00 to the costs of the child for the period 1 April 2009 until 30 October 2012 be allowed.
The matter be remitted to the Social Security Appeals Tribunal for
re-hearing.
IT IS NOTED that publication of this judgment under the pseudonym Crowell & Bodrey (SSAT Appeal) is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT HOBART |
HBC 919 of 2010
| MS CROWELL |
Applicant
And
| MR BODREY |
Respondent
REASONS FOR JUDGMENT
Introduction
This is an appeal from a decision of the Social Security Appeals Tribunal (“the SSAT”) dated 26 August 2010 relating to child support payable by the respondent father.
The parties are the parents of one child, who is the subject of the child support assessment [X] born [in] 1995 (“[X]”). The parties separated in May 1996. Save for a limited period between 2003 and 2006, [X] has had no contact with the respondent and has lived and lives at all times with the appellant.
Since 1996 there has been continuous disputes, review and appeals in relation to the child support the respondent pays for [X].
At the time the parties commenced cohabitation, the respondent was employed as a [omitted]. In 1996, he left the [omitted] profession to embark on full-time study. He was engaged in full-time study until November 2009 when he discontinued his doctoral studies without submission of his doctoral thesis.
The appellant is employed by [omitted] with an adjusted taxable income of approximately $63,000.00.
Both parties were self represented throughout the Review and Appeal processes.
Child Support History
Between 22 September 2006 and 31 March 2009, the annual rate of child support payable by the respondent was set at $3,913.00, to be increased by the relevant child support factor on 1 July each year, as a result of a successful application by the appellant for a departure from the administrative assessment.
During this period, the respondent was in receipt of a tax free scholarship from [university omitted] whilst undertaking his doctorate.
On 3 September 2009, the appellant sought a departure from the then administrative assessment of child support on the basis that the assessment should be increased because of:
·[X]’s special needs, in particular medication for her asthma, gluten and dairy free dietary requirements and chiropractic, podiatry and orthodontic treatment;
·the costs of [X]’s education including public school fees, uniforms, stationery, camp, a language study tour, laptop and internet access, and music and singing lessons; and
·the respondent’s income, property, financial resources and earning capacity.
On 12 December 2009, a Senior Case Officer determined there should be a departure from the administrative assessment. Her decision was:
·for the period of 1 April 2009 until 24 November 2009 the annual rate of child support payable by Mr Bodrey is set at $4,200.00.
Of the above figure, the sum of $1,824.00 is by way of contribution towards the special medical needs of the child [X].
The appellant objected to the decision of the Senior Case Officer. Her grounds of objection were as follows (and are reproduced here as they reflect in real terms the objections taken by her to the SSAT decision and on appeal to this court):
·she agreed with the Senior Case Officer’s decision to increase child support between 1 April 2009 and 24 November 2009 because of [X]’s special needs;
·she disagreed with the decision to exclude estimated orthodontic costs;
·she disagreed with the decision to exclude education expenses; and
·
she disagreed with the manner in which the respondent’s income was set for the periods 1 April 2009 to 24 November 2009 and
25 November 2009 to 30 June 2010 on the basis of the respondent’s earning capacity.
On 19 March 2010 the Objections Officer disallowed the appellant’s objection. In paragraph 6 of the Reasons for Decision handed down by the SSAT on 26 August 2010, the reasons for the Objections Officer disallowing the objection were summarised as follows:
·
[X] has special needs and the costs of these needs impacts on
Ms Crowell’s ability to maintain [X] in respect of her asthma, gluten free food, chiropractic treatment and podiatry;
·An orthodontic consultation is necessary before a need for orthodontic treatment could be established;
·Education costs referred to by Ms Crowell are either ordinary costs associated with attendance at a public school or expenses relating to decisions Ms Crowell made herself, such as music lessons and the overseas study tour. Attendance at public school is not a special circumstance and there is no ground to depart from the administrative assessment on this basis;
·
Until 24 November 2009, Mr Bodrey received a tax free scholarship that equates to an annual amount of $33,381.00. He was assessed as having an annual income of $2,184.00 from
1 April 2009. From 24 November 2009, there is no evidence that Mr Bodrey’s income is higher than newstart allowance;
·In regard to Mr Bodrey’s earning capacity, it was not established that there should be a departure from the administrative assessment on this ground as the change to his income was as a result of his scholarship ceasing, and changes to his income were not motivated by the impact this would have on his child support assessment;
·
The administrative assessment is not unfair from the time that
Mr Bodrey stopped receiving scholarship funds;
·
The assessment of $4,200.00 (including $1,824.00 for [X]’s special needs) as an annual rate of child support from 1 April 2009 to
24 November 2009 is not unfair. This resulted in a weekly payment of approximately $80.00 per week; and
·From 24 November 2009, the administrative assessment results in a payment of approximately $22.65 per week and Mr Bodrey does not have the capacity to pay child support beyond this amount.
On 19 April 2010, the appellant lodged an appeal against the decision of the Objections Officer of 19 March 2010 with the SSAT. The application was heard on 28 July 2010 and on that date the Tribunal adjourned to obtain further information. The parties were both unrepresented before the Tribunal.
The appellant’s appeal to the Tribunal was ultimately unsuccessful.
Reasons of the Social Security Appeals Tribunal
The Tribunal is required to set out its’ reasons, findings of fact and the evidence on which it has made those findings pursuant to section 103X(3) of the Child Support (Registration and Collection) Act 1988.
The Tribunal identified, correctly, the central issues required for it to determine the case as follows:
a)Whether one, or more of the grounds for departure referred to in subsection 117(2) of the Act exists; and
b)Whether it would be:
i)just and equitable as regards the child, the liable parent, and the carer entitled to child support; and
ii)otherwise proper;
to make a particular determination to depart from the administrative assessment of child support.
The Tribunal identified those parts of the Child Support (Assessment) Act 1989 (“the Act”) it would apply under Part 6A of the Act. They are:
·Section 98B which allows a carer to apply to a Child Support Registrar to depart from a Child Support administrative assessment;
·Section 98C which provides that the Registrar may make a determination to depart from the formula and establishes the three step process that must be followed to determine whether such a departure should be made;
·Whether a ground for departure is established and if so, would it be just and equitable to do so as regards the child, the liable parent, and the carer and whether it would be otherwise proper to make a particular determination;
·Section 117(2) of the Act which sets out the grounds for departure;
·Section 98S which sets out the range of determinations the Registrar may make under the departure provision; and
·Section 98C(3) which provides that subsections 117(4) to (9) of the Act must be considered when deciding whether it would be just and equitable or otherwise proper to make the departure application.
The Tribunal then considered if there was a ground for departure established as a result of:
a)[X]’s special needs including orthodontic costs (s.117(2)(b)(ia));
b)The costs of educating [X] and in particular the cost of private music tuition, laptop and internet access and the cost of a French language study tour to New Caledonia (s.117(2)(b)(ii));
c)The income, property and financial resources of the respondent (s.117(2)(c)(ia)); and
d)The earning capacity of the respondent (s.117(2)(c)(ib)).
Before the Tribunal, the appellant indicated she was not seeking to review the decision of the Senior Case Officer to include an amount of $1,824.00 as the respondent’s contribution towards [X]’s special needs for the period 1 April 2009 to 24 November 2009. Rather she was seeking to review the decision not to add [X]’s orthodontic costs to the amount determined for her special needs. She also raised the issue that in limiting the departure from the assessment to 24 November 2009, the respondent was not required to meet those costs subsequent to that date in circumstances where those costs would be ongoing.
The Tribunal found that special circumstances did arise from [X]’s medical expenses because of her asthma and dietary needs. They noted that the amount of $3,648.00, which was payable on an annual basis for those needs, was not disputed by the respondent. The Tribunal did not challenge this annual figure.
In relation to the argument of the appellant that in finding the respondent should contribute to [X]’s special medical expenses only until 24 November 2009, the respondent would not be meeting her special needs after that date, the Tribunal stated:
“This argument is best addressed when looking at whether any particular order should be made as a result of a ground being established and the period any such order should operate.”[1]
[1] Paragraph 31 of the Tribunal’s Reasons.
In relation to [X]’s orthodontic expenses, the Tribunal found that where [X] had not actually had orthodontic treatment and where the appellant had not provided a referral from [X]’s dentist to an orthodontist for diagnosis and treatment; or any evidence of the costs of the treatment or that any such costs had been incurred:
“Ms Crowell has not established a ground to depart from the administrative assessment on the basis of orthodontic treatment.”[2]
[2] Paragraph 30 of the Tribunal’s Reasons.
As to education costs, and in particular the costs of a laptop, internet connection and private music lessons, the Tribunal found:
“The Tribunal does not accept that laptop and internet costs or the costs of private music tuition amount to special circumstances as contemplated by the legislation. It is not unusual or outside normal circumstances for a child of [X]’s age to benefit from access to computers, internet or music lessons.”[3]
[3] Paragraph 34 of the Tribunal’s Reasons.
In respect of the language tour to New Caledonia, the appellant argued the respondent had agreed to this expense because of a comment he had made to the Child Support Agency in August 2006 that he would rather pay for an overseas trip than have [X] attend a private school. The respondent countered that this comment was an illustrative example and not indicative of an intention by him that [X] actually travel overseas. The Tribunal found that it:
“does not accept that there was a joint intention for [X]’s education to include an overseas trip… The Tribunal finds
Mr Bodrey did not intend [X] to have an overseas trip as part of her education.”[4]
[4] Paragraph 36 of the Tribunal’s Reasons.
The Tribunal considered the respondent’s income, property and financial resources. They concluded that the respondent’s:
“receipt of a tax free scholarship is income and amounts to special circumstances that render the administrative assessment unjust and inequitable for the period he was receiving the scholarship… to 24 November 2009”[5]
Accordingly, the Tribunal found it was appropriate there be a departure for that period.
[5] Paragraph 42 of the Tribunal’s Reasons.
The Tribunal noted that the respondent does cash work as a [omitted]. The respondent produced his “earnings” book to the Tribunal who found his annual net income for the period 21 January 2010 to 29 July 2010 was $6,600.00 which equated to an annual income of $13,200.00 before tax. This amount is less than that allowed by the Act for self support and thus did not affect the respondent’s assessment for child support.
The appellant claimed that in addition to this admitted “cash” work, the respondent worked at a [omitted]. The Tribunal issued a Notice to the [employer] requiring information as to whether the respondent had been employed between 1 April 2009 and 21 July 2010. The [employer] responded to the Notice advising the respondent had not been employed by them in that period.
The Tribunal therefore found in relation to the determination of the respondent’s income from 25 November 2009:
“there are no special circumstances that make the administrative assessment unjust and inequitable due to Mr Bodrey’s income, property and financial resources.”[6]
[6] Paragraph 45 of the Tribunal’s Reasons.
The Tribunal considered the respondent’s earning capacity in the context of section 117(2)(c)(ib). Quite properly, the Tribunal noted it must have regard to section 117(7B) of the Act and the three matters it must have regard to when determining whether an administrative assessment should be departed from on the grounds of earning capacity being:
·
The parent does not work despite ample opportunity to do so or has reduced his hours or changed his work patterns
(section 117(7B)(a)); and
·The parent is not working, has reduced his working pattern because of caring responsibilities or his state of health (section 117(7B)(b)); and
·The parent has not demonstrated it was not a major purpose of that decision to not work, reduce hours or work patterns to avoid or reduce child support responsibilities (section 117(7B)(c)).
The Tribunal correctly noted all three criteria of section 117(7B) must be met before a change of assessment can be made under section 117(2)(c)(ib).
The Tribunal found that the respondent’s loss of scholarship, and thus the change to his working pattern, was not within his control and accepted he did not intend to effect the administrative assessment when his scholarship ended.
The appellant argued the respondent has failed to look for work and does not work despite ample opportunity to do so.
The Tribunal found that whilst section 117(7B)(a)(i) referred to a parent who “does not work despite ample opportunity to do so” it considered the ambit of the section sufficiently broad to cover the situation where a person is significantly underutilising his or her own capacity.
The appellant argued the respondent was obliged to provide proper evidence of job seeking in order to satisfy the Tribunal that he was attempting to utilise his earning capacity and that he had failed to do so. The Tribunal held that it had proceeded on the basis that the respondent had met this requirement and did not require any further information from him.[7]
[7] Paragraph 52 of the Tribunal’s Reasons.
In relation to the requirements of section 117(7B)(b), the Tribunal found the respondent’s ability to work was not affected by his responsibilities to care for his son from a subsequent relationship or because of any medical issues.[8]
[8] Paragraph 54 of the Tribunal’s Reasons.
The Tribunal considered the requirements of section 117(7B)(c) and found at paragraph 58 of their Reasons that having looked at the respondent’s positive record of cooperation with the Child Support Agency and his declaration of his non-taxable income:
58.Mr Bodrey… has evinced an intention to comply with his duty to support [X]. It was that due to the cessation of his scholarship his work arrangements changed. The Tribunal finds it was not a major purpose of Mr Bodrey’s change in occupation or work pattern to affect the assessment of child support. It follows that the Tribunal finds this ground is not established.”
The Tribunal stated that having found there were grounds for the departure relating to the costs of [X]’s special needs arising from her medical expenses and from the respondent’s income until 24 November 2009, any specific determination the Tribunal made in relation to findings for departure must be measured under the legislation on the basis of whether it is just and equitable, and otherwise proper, as between the parties and the child.
In paragraph 63 of the Tribunal’s Reasons, the Tribunal set out the particular determinations that it was testing against the measures of just and equitable and otherwise proper as follows:
·
A determination under section 98S(1)(g) of the Act to set
Mr Bodrey’s adjusted taxable income at $33,381 for the period 1 April 2009 until 24 November 2009; and
· A determination under section 98S(1)(j) of the Act to add $3,648 to the costs of the child for the period 1 April 2009 until 30 October 2012.
When considering the second of these determinations, the Tribunal noted that [X]’s needs would not change within the time set by the Child Support Agency under the decision and that it considered that a better approach to ensuring [X]’s special needs were met was to add these costs to the costs of the child. They noted that this allowed the proportion of [X]’s special needs to be met by each of her parents according to their income.
The Tribunal then considered the period over which the departure as to [X]’s special needs should operate as this impacts on the justice and equity of the order. Having noted that the respondent is seeking employment which would impact on both parties’ adjusted taxable income after 24 November 2009, that the parties had been engaged in long standing disputes as to the level of support which both found difficult and that [X]’s medical needs were unlikely to change in the medium to long term, the Tribunal formed the view in paragraph 64 that:
“this warrants a longer period being set to address [X]’s medical needs, and will test a determination that runs from 1 April 2009 until 30 October 2012.”
Having set out the provisions of section 117(4) of the Act, the Tribunal noted at paragraph 66 that the court in Gyselman & Gyselman (1992) FLC 92-279 held that it is not:
“necessary in each case to slavishly go through each of the paragraphs”
in respect to section 117(4).
Having noted that parents have an obligation to support their children, that there was no suggestion that [X] has income, property or financial resources that should be taken into account and that Mr Bodrey’s financial circumstances and earning capacity had already been canvassed in detail in their Reasons, the Tribunal proceeded to consider the appellant’s income, property and financial resources in detail, the necessary commitments of each of the parties and the question of hardship.
In relation to the appellant’s income, property and financial resources, the Tribunal noted that her 2007/2008 taxable income was $60,584.00 and the Notice of Assessment for her 2008/2009 income showed a taxable income of $58,045.00.
The Tribunal noted on the evidence before it that for the year 2008/2009, Ms Crowell’s taxable income would be approximately $66,463.00, comprising of the amount shown in her Notice of Assessment, together with add-backs for her superannuation contributions and net rental losses claimed by her in relation to an investment property. The Tribunal noted that this would not change the annual rate of child support payable by the respondent.
In relation to the necessary commitments of each of the parties, the Tribunal found that for the period 1 April 2009 to 24 November 2009, the proposed determination would result in an annual rate of child support payable by the respondent of approximately $2,113.00 or $40.50 per week. The Tribunal was satisfied that the respondent could meet that amount from his scholarship funds during the period that that assessment operates.
The Tribunal found that from November 2009, the assessment used the adjusted taxable incomes of the parties. The respondent’s adjusted taxable income was set at a deemed amount of $2,814.00 until
30 June 2009, after which his income was set by subsection 58(3) of the Act at $39,236.00. The Tribunal found that the respondent does not earn that amount but that could be remedied by the respondent lodging his tax return. It was noted that the Child Support Agency assessed the respondent at a fixed annual rate of $1,178.00 for the period to 30 June 2009 and this assessment would remain the same.[9]
[9] Paragraph 75 of the Tribunal’s Reasons.
The Tribunal noted that under the proposed determination, from
1 July 2009 the respondent, at least until such time as he lodged his tax return, would be assessed to pay an annual rate of child support of $3,018.00 or $57.84 per week. The Tribunal was not satisfied the respondent could meet that amount from his current earnings, but did not consider a change to the amount was warranted as the respondent could remedy that problem by lodging his tax return.
The Tribunal noted that unless the respondent’s annual income exceeded $21.085.00, he was likely to be assessed for child support at the minimum rate of $365.00 per annum and that he would be able to meet that amount from his earnings.
In conclusion the Tribunal found that, with rental assistance from his landlady, the respondent was just meeting his expenses.
In relation to the appellant, the Tribunal formed the view that she was able to meet her expenses from her income, despite her claim that she was unable to do so.
In relation to the hardship that each of the parties and the child would face as a result of their determination, the Tribunal made a finding that whilst there is no doubt that the appellant suffers from hardship, she has assets to the value of $615,000.00 and superannuation to the value of $145,000.00, compared to the respondent who has assets of $2,800.00 and superannuation to the value of $12,000.00. The Tribunal also noted that the appellant’s income is considerably in excess of that of the respondent.
At paragraph 85 of their Reasons, the Tribunal concluded, on the question as to whether its’ determination was just and equitable and otherwise proper, that:
85.Having considered all of the factors in subsection 117(4) the Tribunal finds that the proposed determinations are just and equitable and otherwise proper.
Social Security Appeals Tribunal decision
On 26 August 2010 the SSAT set aside the decision under review and made the following determinations:
·To set Mr Bodrey’s adjusted taxable income at $33,381.00 for the period 1 April 2009 until 24 November 2009; and
·
To add $3,648.00 to the costs of the child for the period
1 April 2009 until 30 October 2012.
On 7 September 2010 this decision was dispatched to the parties.
Appeal from decision of the Social Security Appeals Tribunal
The appellant filed a Notice of Appeal in this court in relation to the Tribunal’s decision on 8 October 2010.
Rule 25A.06 of the Federal Magistrates Court Rules 2001 provides that an appeal from a decision of the Tribunal must be filed within
28 days of the appellant receiving a written statement of reasons from the Tribunal. In this matter, as noted, the Reasons were dispatched on 7 September 2010 and the appellant filed on 8 October 2010, 30 days after the Tribunal Reasons were dispatched.
Whilst no application for leave to appeal out of time has been made, I am satisfied that the appellant would not have received the Reasons before 9 September 2009 and therefore the Notice of Appeal was filed within the time allowed under the Federal Magistrates Court Rules 2001 and no such application was required.
Grounds of Appeal
The appellant was self-represented in this appeal. She relied on the Grounds of Appeal contained in her Notice of Appeal filed
8 October 2010, together with her Outline of Argument Document filed 25 February 2011 which can be summarised as follows:
(1)That the SSAT erred in law in failing to include the total determined departure amount for special needs, being the sum of $3,648.00, into each year’s child support assessment for the period 1 April 2009 until October 2012.
(2)That the SSAT erred in law in failing to attach sufficient weight to the evidence adduced to the SSAT by the appellant in relation to the respondent’s earning capacity.
(3)That the SSAT erred in law in failing to attach sufficient weight to the evidence in relation to the costs incurred by the appellant for the education of the child and that the SSAT did not give effect to the principle that each parent should contribute to the costs of educating the child in the manner expected by the parties.
(4)The SSAT failed to give proper consideration to the matters set out in section 117(4) of the Child Support (Assessment) Act 1989 in determining whether it was just and equitable to make the orders.
Ground 1 Was there an error in law in the manner in which the Tribunal dealt with [X]’s special needs?
The appellant’s arguments in relation to the Tribunal erring in law under this ground falls under three headings and I will deal with each of those in turn.
Allocating the sum of $3,648.00 over the entirety of the period 1 April 2009 until October 2012
The Senior Case Officer made a finding that the costs of [X]’s special needs for medical and dietary expenses was $3,648.00 per annum. The respondent did not challenge this figure through any of the review or appeal processes. The Tribunal accepted that figure as an accurate reflection of the additional expenses annually incurred for [X]’s special needs.
The appellant argued that in allocating the amount of $3,648.00 as the figure to be added to the costs of the child for the period 1 April 2009 until 30 October 2012, the Tribunal had reduced the accepted amount of those special needs to $1,216.00 per annum.
The Tribunal acknowledged in paragraph 62 of its’ Reasons that [X]’s needs would not change or cease after a particular period and that it considered a better approach was to allow a longer period to address [X]’s special needs and determined that it would run from 1 April 2009 until 30 October 2012.
The appellant takes no issue with the Tribunal extending the period in which [X]’s special needs are to be considered, and there is no doubt that the Tribunal has the power to have done so. She does however take issue with the Tribunal fixing the amount for [X]’s special needs for the three year period at the rate of $3,648.00.
It is a matter of an exercise of discretion for the Tribunal to determine the quantum to be attributed to [X]’s special needs. However, in this instance the Tribunal accepted the figure of [X]’s special needs at $3,648.00 per annum, as did the Senior Case Officer, the Objections Officer and the respondent.
The Tribunal, in paragraph 31 of its’ Reasons, indicated when addressing the appellant’s argument that the decision for the respondent to meet [X]’s special needs only to 24 November 2009 meant he would not be required to assist with those needs after that date was:
“best addressed when looking at whether any particular order should be made as a result of a ground being established and the period any such order should operate.”
As set out earlier in this decision, the Tribunal then determined that as [X]’s medical needs were unlikely to change in the medium to long term, a longer period of three years was to be set to address those needs.
The Tribunal, having accepted that [X] has special medical needs such that a departure order is warranted, accepted that the costs of those needs are $3,648.00 per annum, that those medical needs were unlikely to change in the medium to long term, and by inference therefore the costs of those needs were also unlikely to change in the medium to long term, then ordered such costs be set at $3,648.00 in total for the entire three year period. This has the effect of reducing the annual costs of [X]’s medical needs to $1,200.00 per annum. As such, the Tribunal adjusted the level of child support payable for [X].
The Tribunal’s Reasons offer no explanation as to this component of its’ decision.
Whilst it is possible to speculate the Tribunal made an inadvertent error in not adding to its’ determination the words “per annum” after the figure of $3,648.00, such that the matter could perhaps, if it were before a court, be remedied under the “slip rule”, it is speculation only.
It is also possible the SSAT made a decision to reduce the quantum of the departure order in respect to [X]’s special medical needs.
The absence of any Reasons from the Tribunal as to why they set the figure for [X]’s special needs at $3,648.00 over three years makes it impossible to determine the basis upon which this determination was made.
In PJ & Child Support Registrar [2007] FLC 98-035, His Honour Riethmuller FM noted that an appeal from the SSAT to this court is on a question of law only and is not a review of the merits. His Honour then stated at paragraph 38 as follows:
“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 extent of reasons required in Family Law cases has been considered in many decisions of the Full Court of the Family Court. In PJ & Child Support Registrar (supra) at paragraph 39, Riethmuller FM quoted with approval from the Full Court decision of Merriman & Merriman (1993) FLC 92-422 as follows:
Following the decisions of the Full Court of this Court in Bennett and Bennett (1991) FLC 92-191, Horsley and Horsley (1991) FLC 92-205 and Bonnici and Bonnici (1992) FLC 92-272 the principles governing the need for the giving of adequate reasons for the exercise of the discretion ... are well established. For present purposes they are perhaps best expressed in the following passage from the judgment in Horsley (at page 78,401):
“Counsel for the wife contended that the trial Judge did not give adequate or any reasons for his decision and that his failure to do so amounted to an error of law and additionally contended that his Honour's discretion had miscarried. In Bennett and Bennett (1991) FLC 92-191 the Full Court considered a similar argument (also advanced in that case by the same counsel) and after referring to a number of authorities, ... referred to the judgment of the Full Court of the Supreme Court of Victoria in Sun Alliance Insurance Ltd. v. Massoud (1989) VR 8 and in particular to the passage in the principal judgment of Gray J. where his Honour said:
‘The adequacy of the reasons will depend upon the circumstances of the case. But the reasons will, in my opinion, be inadequate if:
(a) the appeal court is unable to ascertain the reasoning upon which the decision is based; or
(b) justice is not seen to have been done.
The two above stated criteria of inadequacy will frequently overlap. If the primary Judge does not sufficiently disclose his or her reasoning, the appeal court is denied the opportunity to detect error and the losing party is denied knowledge of why his or her case was rejected.'
In Bennett's case the Full Court went on to say:
‘It is unnecessary to decide, in this case, whether the inadequacy of her Honour's reasons was itself an error of law requiring her decision to be set aside, in that we have already determined that the appeal should succeed on the merits. The weight of judicial authority, however, suggests that it might well amount to such an error. At the very least the failure to give adequate reasons places a duty on an appellate court to scrutinise the decision with particular care.
In the absence of adequate reasons, the Full Court is not obliged to uphold a judgment merely because the result may be said to fall within the wide ambit of the Judge's discretion. In general, the appellate Court should be able to discern either expressly or by implication the path by which the result has been reached.'
The Court concluded on this topic:
‘The important thing is that the appellate court must be placed in the position of being able to follow the trial Judge's line of reasoning, as must the parties, if they are to be satisfied that justice has been done.
In Johnson & Johnson [1998] FamCA 1519 the Full Court of the Family Court upheld the principles set out above on an appeal from a child support decision. Thus there is no doubt these principles apply to matters involving child support.
In PJ & Child Support Registrar (supra) Riethmuller FM, at paragraph 41, raises the question as to whether a failure to provide adequate reasons by the SSAT would of itself be sufficient to show an error of law. In that decision His Honour concluded that this was “a question that need not be decided today”. His Honour however made reference to Repatriation Commission v O'Brien [1985] HCA 10; (1985) 155 CLR 422 at [15] where Brennan J found that inadequate reasons may warrant:
“an inference that the tribunal has failed in some respect to exercise its powers according to law”.
Where the decision of a Tribunal has the effect of seriously impacting on the income of a party and his or her ability to properly maintain and support their child, through an increase or reduction of child support, I am of the view that such person is entitled to receive adequate reasons whereby the basis of that decision is able to be discovered and that there will be circumstances in which inadequate reasons from decisions by the SSAT will give rise to an error in law.
In this matter, the failure of the SSAT to give any reasons whatsoever for its’ determination to reduce the quantum of the amount allowed for [X]’s special needs is an error in law.
Further, the Tribunal fails to point to any evidence which would allow an understanding of how the Tribunal determined the amount they have allowed for [X]’s special needs for the three year period.
As a result the appellant must succeed on this ground.
Procedural Fairness
The second submission of the appellant in relation to Ground 1 of her appeal was that she was not afforded procedural fairness.
It was the appellant’s argument that she did not seek a review of the decision of the Child Support Agency to include an amount of $1,824.00 for [X]’s special needs in the sum determined by the Agency to be paid by the respondent in relation to [X]’s care, but that rather in addition to that amount there should be an allowance for orthodontic costs.
This was acknowledged by the SSAT in their Reasons.[10]
[10] Paragraph 20 of the Tribunal’s Reasons.
The appellant argued that the finding of the Senior Case Officer, supported by the Objections Officer, was that the respondent was to pay one half of [X]’s special needs, in the sum of $1,824.00, for the period 1 April 2009 to 24 November 2009, in addition to any monies payable by him in accordance with the assessment of his income for that child support period.
It was the appellant’s case before the Tribunal that this obligation to meet half of [X]’s special needs should continue beyond the period as assessed by the Child Support Agency because those special needs would be ongoing and the parents’ obligations to meet them should similarly be ongoing.
It was the appellant’s submission that the outcome of the Tribunal’s decision to set aside the decision of the Child Support Agency that the respondent pay one half of the agreed costs of [X]’s special needs as part of his assessment for child support and to add [X]’s costs to the costs of the child and thereby allowing the proportion of costs met by each parent to vary according to their income, was that she would bear 100 per cent responsibility for those costs and the respondent would make no contribution to those costs at all.
It was the appellant’s submission that at no time in the hearing before the SSAT, did the Tribunal advise her that they were contemplating the question of responsibility for [X]’s special needs in this way. Accordingly she was not afforded the opportunity to present any counter or alternate arguments to the decision reached. This was particularly so in circumstances where the respondent had agreed to the payment of those costs, at least for the period 1 April 2009 to
24 November 2009.
It was therefore her submission that she had not been afforded procedural fairness by the SSAT.
In the matter of PJ & Child Support Registrar [2007] (supra), His Honour Riethmuller FM considered the requirements of procedural fairness in the context of the inquisitorial model that is the process before the Tribunal. His Honour cited with approval the decision of the High Court in Kioa v West [1985] HCA 81, and in particular Mason J (as he then was) who highlighted the need to consider the statutory framework saying in paragraph 33:
33.In this respect the expression "procedural fairness" more aptly conveys the notion of a flexible obligation to adopt fair procedures which are appropriate and adapted to the circumstances of the particular case. The statutory power must be exercised fairly, that is, in accordance with procedures that are fair to the individual considered in the light of the statutory requirements, the interests of the individual and the interests and purposes, whether public or private, which the statute seeks to advance or protect or permits to be taken into account as legitimate considerations (cf. Salemi (No.2), at p.451, per Jacobs J.).
Riethmuller FM in paragraph 47 of PJ & Child Support Registrar (supra) held:
47.It was open to the Tribunal to make a decision adverse to the appellant: see ss.87 and 103T(1) of the Child Support (Registration and Collection) Act 1988, s.98S(2) of the Child Support (Assessment) Act 1989 and Garnaut v Child Support Registrar [2004] FCA 1100 at [49] to [59]. Whilst decisions adverse to the applicant or appellant are open in many contexts, it is incumbent upon a tribunal or court to ensure that the parties affected are aware the tribunal is considering issues beyond those on which the parties have conducted the case.
When a person makes application to the Tribunal for a review of a decision of the Child Support Registrar, the SSAT is standing in the shoes of the decision-maker it is reviewing. If the Tribunal is satisfied that grounds for departure from an administrative assessment of child support exist, as set out in section 107(2) of the Act, and that it would be just and equitable and otherwise proper to make a particular determination, then the Tribunal must make one of the determinations prescribed in section 98S of the Act as that section sets the powers of the Registrar in whose shoes the Tribunal is standing.
Therefore, when a party makes application to the Tribunal for a review of the decision of the Child Support Registrar, the Tribunal has the option to make a determination under section 98S(j) that the costs of the child be varied if it is satisfied that such a determination is just and equitable and proper in all the circumstances.
Where the practical effect of such a determination is to fundamentally shift the responsibility for the payment of a child’s special needs, such that it moves from being equally shared by both parties to being primarily placed in the hands of one of the parties, should that party be put on notice that the Tribunal is contemplating such a decision? Is a failure to do so a failure to afford the aggrieved party procedural fairness?
In its’ explanations for determining that the costs of [X]’s medical needs be dealt with in this manner, the Tribunal in its’ Reasons at paragraph 64 set out as follows:
64.A part of the particular determination to be tested is the period over which any departure should operate as this period may affect the justice and equity of a particular order. In this case Mr Bodrey is seeking employment. This will ultimately be reflected in the assessment as the proposed determinations do not affect either party’s adjusted taxable income from 24 November 2009. This matter has been the subject of a number of applications and considerable dispute between the parties. The Child Support Agency records both parents as stating the change of assessment process is difficult for each of them. As noted above, [X]’s medical needs are unlikely to change in the medium to long term. The Tribunal considers this warrants a longer period being set to address [X]’s medical needs, and will test a determination that runs from
1 April 2009 until 30 October 2012.
Further, in paragraph 62 of their Reasons, the Tribunal held as follows:
62.Ms Crowell submitted that the amount allocated to meet [X]’s special needs ceased after 24 November 2009. The Tribunal acknowledges that [X]’s needs do not change or cease after a particular period, and considers a better approach is to add [X]’s costs to the costs of the children. This allows the proportion of costs met by each parent to vary according to their income.
It is apparent from this reasoning, that the Tribunal was very much mindful that [X]’s medical needs would continue well into the future and that both parties should contribute to those costs, but in proportions relevant to their income.
In this case, neither the appellant or the respondent were challenging the decision of the Child Support Agency that the respondent should contribute half of the agreed amount of [X]’s special needs between
1 April 2009 and 24 November 2009.
The appellant was seeking an order that this departure be extended such that the respondent continue to meet half those costs beyond
24 November 2009.
At no time did the SSAT advise the appellant that in considering that issue, they were contemplating dealing with this matter by increasing the costs of the child pursuant to section 98S(j) and that in so doing would measurably reduce the amount of child support payable by the respondent.
The appeal process before the SSAT has the potential outcome of an adverse finding against the appellant and this is set out in the explanatory literature that is provided to any appellant by the SSAT. However I believe it is incumbent upon the Tribunal, when hearing a matter, to put the parties on notice that they are intending to deal with a matter in a way that differs from the arguments or submissions being made by the parties.
This is, I think, even more so in this matter as the appellant was not seeking a review of that aspect of the Child Support Registrar’s determination that the Tribunal ultimately altered.
The failure of the SSAT to advise the appellant of their intention in this regard meant she was afforded no opportunity to challenge this finding. In other words, she was not afforded procedural fairness.
In these circumstances I am of the view the appeal be allowed on this ground.
The decision was not just and equitable or otherwise proper pursuant to
section 117(4)
Finally, in relation to Ground 1, the appellant argued that the determination was not just and equitable in accordance with the provisions of section 117(4).
Having determined that the SSAT has erred in law, it will be incumbent upon them, in reconsideration of this matter, to ensure any further determination is just, equitable and otherwise proper pursuant to section 117(4). Accordingly it is not necessary to consider this aspect of the appellant’s argument in relation to this Ground.
Ground 2 Did the Tribunal err in law in failing to attach sufficient weight to the evidence adduced to the Social Security Appeals Tribunal by the appellant in relation to the respondent’s earning capacity?
When considering the income earning capacity of each of the parties, section 117(7B) of the Act provides as follows:
Section117
(7B)In having regard to the earning capacity of a parent of the child, the court may determine that the parent's earning capacity is greater than is reflected in his or her income for the purposes of this Act only if the court is satisfied that:
(a) one or more of the following applies:
(i)the parent does not work despite ample opportunity to do so;
(ii)the parent has reduced the number of hours per week of his or her employment or other work below the normal number of hours per week that constitutes full-time work for the occupation or industry in which the parent is employed or otherwise engaged;
(iii)the parent has changed his or her occupation, industry or working pattern; and
(b)the parent's decision not to work, to reduce the number of hours, or to change his or her occupation, industry or working pattern, is not justified on the basis of:
(i) the parent's caring responsibilities; or
(ii) the parent's state of health; and
(c)the parent has not demonstrated that it was not a major purpose of that decision to affect the administrative assessment of child support in relation to the child.
It was the appellant’s submissions that the respondent’s actions meet all three criterion set out under section 117(7B).
The appellant argued that the respondent has chosen not to work to the full extent of his capacity and that he has not fulfilled his obligation to do all things within his power to avail himself of work opportunities despite having ample opportunity to do so. This is particularly so after the respondent made the decision not to complete his doctorate within the reasonable time constraints of his scholarship or by undertaking part-time work until such time as his theses was completed.
The appellant submitted that she had made available to the Tribunal a large number of job advertisements for employment which she argued the respondent had the qualifications to successfully make application for. She argued the Tribunal failed to properly take such information into consideration.
It was the appellant’s submission that the respondent had not only failed to submit applications for any of those positions, but more importantly failed to provide adequate proof to the Tribunal of his endeavours to obtain employment of the type that the advertisements she placed before the Tribunal indicated was available to him.
The appellant referred the court to the decisions of Godfrey & Godfrey [2009] FMCAfam 626, Spinks & Spinks [2001] FamCA 197 and DJM & JLM (1998) FamCA 97 which she argued supported the position that where a liable parent voluntarily leaves his employment and becomes unemployed or voluntarily changes employment to start his own business in the knowledge it will mean a substantial drop in income, the parent who made that decision has an earning capacity at the level of employment voluntarily abandoned.
The appellant argued that in failing to finish his doctorate in the three years of his scholarship, in abandoning his doctorate with it almost complete and becoming self-employed rather than pursuing full-time employment utilising his qualifications, the respondent’s behaviours were of the type referred to in the above matters. Accordingly, it was her submission that the Tribunal should have found the respondent to have an earning capacity equal to an income commensurate with that of someone in full-time employment in a position reflective of his qualifications.
In relation to what would be an amount reflective of the respondent’s earning capacity, the appellant relied on the Average Income for All Male Full Time Workers based on Total Income from the ABS February 2010 report.
The appellant argued that the respondent has failed to work despite ample opportunity to do so and that accordingly the court should be satisfied that section 117(7B) (a)(i) of the Act had been proven.
There were no issues that the respondent’s responsibilities to care for another or his stated health impacted in any way on his capacity for employment.
The appellant submitted that the finding by the Tribunal that the respondent’s current employment decisions were not motivated by his desire to minimise his child support was incorrect.
It was the appellant’s submission that since 1996, the respondent has made it very clear that he resents having to pay child support for [X] and as recently as 2010, the respondent declined an invitation to attend mediation with the appellant with a view to resolving the longstanding issues of child support between them
It was the appellant’s submission that the actions of the respondent since [X]’s birth in changing his profession, assuming a course of ongoing lengthy study, failing to complete that study and thereafter failing to pursue full-time employment shows a deliberate course of action designed to frustrate his obligations to properly support his daughter.
In its’ Reasons, the Tribunal indicated that the cessation of the respondent’s scholarship was not within his control and therefore whilst he had changed his working pattern and occupation in that he was no longer a student or receiving a scholarship, the Tribunal was of the view that this does not of itself show an intention to affect the administrative assessment.
The Tribunal, whilst being satisfied that a situation whereby a person is significantly underutilising his or her earning capacity falls within the ambit of section 117(7B)(a)(i), said at paragraph 52 of its’ Reasons:
52.…Ms Crowell has said on several occasions that Mr Bodrey should be required to provide evidence of job seeking. As the Tribunal proceeded on the basis that this requirement is met, it was not necessary to require further information from Mr Bodrey on this issue.
From the Tribunal’s reasons above, it is apparent that they were satisfied on the information provided by Mr Bodrey that he was pursuing suitable employment and that, despite the appellant’s arguments to the contrary, the Tribunal did not require any further information from him in order to be satisfied in this regard.
When considering the appellant’s argument that the respondent’s employment decisions and history show he has demonstrated a positive intention to affect the administrative assessment of child support, the Tribunal noted the respondent’s record of open and ongoing contact with the Child Support Agency, and in particular his notification of the tax-free income he received from his scholarship, was such that:
58.On the balance of probabilities the Tribunal finds that
Mr Bodrey, through his actions in co-operating with the Child Support Agency and declaring his non-taxable income, has evinced an intention to comply with his duty to support [X]. It was that due to the cessation of his scholarship his work arrangements changed. The Tribunal finds it was not a major purpose of Mr Bodrey’s change in occupation or work pattern to affect the assessment of child support. It follows that the Tribunal finds this ground is not established.
The argument put by the appellant in respect to this Ground is that the Tribunal, on the evidence before it, should have found the respondent has a much greater earning capacity than is reflected in his current income level.
Section 110B of the Child Support Registration and Collection Act 1988 provides that a party to proceedings before the Tribunal can appeal to this court on questions of law. It is not a review on the merits.
In Bedell & Kastens & Anor (SSAT Appeal) [2010] FMCAfam 1250, Sexton FM cited with approval the decision of Halligan FM in Agrippa & Horton (SSAT Appeal) [2010] FMCAfam 1144 who summarised the applicable law when a court reviews a decision of the Tribunal in the following terms:
…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 Tribunal considered the evidence of both the appellant and the respondent on this issue, including the additional documentation produced by the appellant in relation to the available jobs and income generated from same. The Tribunal formed the view, on the basis of the evidence before it, that the respondent had not changed his income position through any deliberate act of his own, that he was actively seeking employment and that the change in his circumstances came about through no desire to affect his child assessment position.
Such a finding was open to the Tribunal on the evidence before it and in those circumstances this Ground of Appeal is not established.
Ground 3 Do [X]’s additional educational costs constitute special circumstances pursuant to section 117(2)(b)(ii)?
It was the appellant’s submission that the Tribunal erred in not accepting that the costs of [X]’s private music lessons, a laptop and internet access and the language excursion to New Caledonia fell within the special circumstances as set out in section 117(2)(b)(ii).
It was the appellant’s submission that as a former [occupation omitted], the respondent had full knowledge of the curriculum requirements of someone who is studying language, one of which is the opportunity for overseas language experience. She also argued he would understand the reliance of today’s students on computer access in order to be able to fully participate in their education. In these circumstances it was argued the respondent is aware of such special costs.
The appellant argued that the respondent’s submission to the Child Support Agency on a previous occasion, where the possibility of private schooling was being considered for [X], that he would rather pay for her to go overseas than be privately educated indicated a willingness on his part to contribute to the cost of overseas excursions.
The Tribunal in its’ Reasons held as follows at paragraph 34:
34.The Tribunal does not consider that laptop and internet costs or the costs of private music tuition amount to special circumstances as contemplated by the legislation. It is not unusual or outside normal circumstances for a child of [X]’s age to benefit from access to computers, internet or music lessons.
The Tribunal considered the appellant’s arguments in relation to the comments made by the respondent to the Agency in August 2006 and in their Reasons found as follows at paragraph 36:
36.The Tribunal does not accept that there was a joint intention for [X]’s education to include an overseas trip. Ms Crowell relies on a single comment made to the Child Support Agency and expressly denied by Mr Bodrey as showing intention to fund an overseas trip. This is not sufficient to show a joint intention. The Tribunal finds Mr Bodrey did not intend [X] to have an overseas trip as part of her education.
37.The Tribunal finds there is no ground for departure due to the costs of [X]’s education.
I agree with the findings of the Tribunal in relation to this issue and the appeal on this ground fails.
Ground 4 Did the Social Security Appeals Tribunal fail to give proper consideration to the matters set out in section 117(4) of the Act when determining whether it was just and equitable and otherwise proper to make their determination?
It was the appellant’s submission that the determination of the Tribunal did not meet the requirements of just and equitable as set out in the provisions of section 117(4) of the Act.
The appellant argued that whilst Gyselman & Gyselman (supra) did not require that it was necessary in each case to slavishly go through each of the paragraphs of section 117(4), it was necessary that the relevant subsections be considered. It was the appellant’s submission that the Tribunal failed to consider all the relevant sections.
The appellant made specific reference to section 117(4)(f), and in particular, the direct and indirect costs that she would now incur as a result of the determination of the Tribunal as their determination has reduced the amount of child support the respondent is required to pay to her for [X] from 1 April 2009.
It was the appellant’s submission that where the Tribunal did consider the factors under section 117(4), they erred in finding their determination was just and equitable as the Tribunal could not have come to that conclusion when considering the proper needs of [X] and the hardships that will be occasioned to her and to the appellant as a result of the determination reached.
The Tribunal’s findings in relation to whether the determination was just and equitable has been fully canvassed in paragraphs 41 to 52 of this judgment. It is not my intention to repeat them here.
Suffice it to say, I am satisfied that the Tribunal considered all relevant factors under section 117(4) in relation to whether their determination was just and equitable and am satisfied as to their conclusions in this regard.
This Ground of Appeal is not established.
Determination
I have determined to uphold the appeal on the basis of Ground 1 of the Notice of Appeal. Therefore the appeal is allowed as to the determination of the SSAT:
·
to add $3,648.00 to the costs of the child for the period
1 April 2009 until 30 October 2012.
Section 110F(1) and (2) of the Child Support (Registration and Collection) Act 1988 provides as follows:
(1)The court must hear and determine an appeal under this Subdivision and may make such order as it thinks appropriate by reason of its decision.
(2)Without limiting subsection (1), the orders that may be made by the court on an appeal include:
(a)an order affirming or setting aside the decision of the SSAT; or
(b)an order remitting the case to be heard and decided again, either with or without the hearing of further evidence, by the SSAT in accordance with the directions of the court.
The appellant seeks orders that the matter be remitted to the SSAT in the event she is successful. I am satisfied this is the appropriate manner in which to deal with this matter.
Accordingly, the matter will be remitted for hearing to the SSAT for
re-hearing on that aspect of the Appeal on which the appellant has been successful.
I certify that the preceding one-hundred and forty-three (143) paragraphs are a true copy of the reasons for judgment of Bender FM
Date: 1 July 2011
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