Cruddas and Child Support Registrar (Child support)

[2021] AATA 997

Cruddas and Child Support Registrar (Child support) [2021] AATA 997 (1 March 2021)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2020/PC020362

APPLICANT:  Mr Cruddas

OTHER PARTIES:  Child Support Registrar

TRIBUNAL:Member A Schiwy

DECISION DATE:  01 March 2021

DECISION:

The decision under review is affirmed.

CATCHWORDS

CHILD SUPPORT – application for extension of time – applicant did not rest on rights - no merit - extension of time refused – decision affirmed

Names used in all published decisions are pseudonyms. Any references appearing in square brackets indicate that information has been omitted from this decision and replaced with generic information so as not to identify involved individuals as required by subsections 16(2AB)-16(2AC) of the Child Support (Registration and Collection) Act 1988.

REASONS FOR DECISION

BACKGROUND

1. This application is about whether Mr Cruddas should be granted an extension of time to lodge an objection.

2. Mr Cruddas and [Ms A] had a child support case registered.  The case terminated on 14 March 2018 when their youngest child turned 18. 

3. On 12 November 2018 Mr Cruddas applied to the Department of Human Services – now Services Australia -  (Child Support) to have an amount of around $15,000 that he paid for school fees, credited against his child support arrears.

4. On 6 July 2020 a Child Support officer decided not to credit the payments as a prescribed non-agency payment. 

5. On 10 October 2020 Mr Cruddas applied for an extension of time to lodge an objection to the  decision and on 5 November 2020 a Child Support objections officer refused the application.

6. On 2 December 2020 Mr Cruddas made an application to this tribunal for an independent review of Child Support’s decision not to allow an extension of time.

7. A hearing into the application was held by the tribunal on 1 March 2021.  Mr Cruddas participated in the hearing via teleconference. 

8. The tribunal had before it relevant documents extracted from Mr Cruddas’s Child Support file and computer records, a copy of which had been provided to Mr Cruddas prior to the tribunal hearing. 

ISSUES

1. The law relating to a person’s right to seek review of a decision of the Registrar is contained in the Child Support (Registration and Collection) Act 1988 (the Act).

2. Section 81 of the Act requires that a person must lodge an objection to a decision of the Registrar within 28 days after a notice of the decision is served on them.

3. Where the period for lodgement has ended, the person may send the objection to the Registrar along with an application requesting that the objection be treated as if it was duly lodged, that is, that it was lodged within the allowed time (section 82 of the Act).  Section 83 of the Act then provides that the Registrar must consider the application for extension of time, grant or refuse that application and advise the person of the decision in writing.  Section 89 of the Act allows the person who applied for the extension of time, to apply to this tribunal for a review of that decision.

4. In this case the tribunal has found that a delegate of the Registrar decided on 6 July 2020 not to credit payments made by Mr Cruddas as a prescribed non-agency payment and that on that day a letter informing him of the decision and objection rights was sent to Mr Cruddas. It is not disputed that Mr Cruddas did not lodge his objection to the decision until 10 October 2020, which is more than 28 days after the decision was notified to Mr Cruddas.  The tribunal was satisfied that Mr Cruddas requires the extension of time he seeks for his objection to be accepted.

CONSIDERATION

1. In Brisbane South Regional Health Authority v Taylor [1996] HCA 25, the High Court, in dealing with an extension of time case and the general concept of time limitation periods, noted that while an extension of time is the exception to the general rule, there are legislative provisions which, in the circumstances of the facts of an individual case, may indicate that justice is served by the general rule being overruled.

2. In making this decision, the tribunal considered the guiding principles for the exercise of discretion to allow an extension of time as set out in Hunter Valley Developments Pty Ltd v Cohen [1984] FCA 176 (Hunter Valley Developments). In that case the Federal Court said that an extension of time should not be granted unless it was proper to do so, noting that in general, applications or proceedings commenced outside of a prescribed time limit will not be considered. The Court also said that there must be an acceptable explanation for the delay and that it must be fair and equitable in the circumstances to extend time. The Federal Court identified several factors to consider when deciding whether to grant an extension of time.

3. In Brown v Commissioner of Taxation [1999] FCA 563, Hill J reviewed the principles set out in the Hunter Valley Developments case in the context of a person seeking an extension of time to lodge an objection against an assessment of income tax. In that case, Hill J commented that Wilcox J in Hunter Valley Developments never suggested he was laying down a series of principles to be applied in every case, and that the factors would serve as a guide and were not exhaustive.

4. The Administrative Appeals Tribunal (second review) applied the principles set out in the Hunter Valley Developments case in Mulheron and Australian Telecommunications Corporation [1991] AATA 673 (Mulheron). The authorities, including Hunter Valley Developments and Mulheron, establish that when considering whether to exercise the discretion to allow an extension of time, a decision-maker should consider and balance a range of factors including:

   ·The reasons for the delay and whether the applicant rested on their rights or took action to make the decision-maker aware that the decision was being contested;

   ·Any prejudice to the other party including any difficulties that they will experience in providing evidence as a result of the delay;

   ·The merits of the substantive application;

   ·Prejudice to the general public, and considerations of fairness as between the applicant and other persons otherwise in a like position.

The reasons for the delay and whether the applicant rested on their rights or took action to make the decision-maker aware that the decision was being contested

1. Mr Cruddas stated the following:

   ·He applied for the payments to be credited more than two years ago and apart from one time when he rang to check on progress, he heard nothing from Child Support.

   ·He receives communication from Child Support through myGov and would have received an email letting him know there was correspondence; however given the considerable time that had elapsed he did not think it would have been a decision to his 2018 request; he thought they would have called him.

   ·He found the letter that was sent unclear and stated that it did not have details about objection rights.

2. The Child Support papers show that Mr Cruddas was contacted about this claim on 13 December 2018, but no further contact was made until they attempted to ring Mr Cruddas on 10 June 2019.  They were unable to contact Mr Cruddas by telephone and sent him a letter on 29 June 2020.  The decision was made on 6 July 2020 without hearing from Mr Cruddas.

3. The tribunal noted that the letter sent on 6 July 2020 did give information about objection rights.

4. The Child Support papers also show that Mr Cruddas contacted Child Support on 24 September 2020 about his arrears and this was when he found out about the decision.  He called again on 30 September 2020 and noted he was preparing his objection.  He sought assistance on 7 October 2020 and then lodged his objection on 10 October 2020.

5. The tribunal concluded that Mr Cruddas did not rest on his rights; given the very long delay between his claim and the eventual decision, his explanation about failing to read the letter when it was sent is reasonable.  He did not act immediately when he found out about the decision, but only delayed for another 16 days.

6. The tribunal also noted that the delay in lodging the objection was not lengthy; it was only out of time by around two months.

Any prejudice to the other party including any difficulties that they will experience in providing evidence as a result of the delay

1. Given the nature of the decision, and the fact that the objection was only out of time by two months, the tribunal did not consider that [Ms A] would be unfairly impacted by granting the extension.  [Ms A] was contacted by Child Support on 6 July 2020 and she gave evidence then.

The merits of the substantive application

1. The tribunal needs to consider whether Mr Cruddas has an arguable case; it does not need to make a detailed consideration of the evidence and merits of the case. 

2. When Mr Cruddas applied for the credit to his arrears he was concerned about the amount of his child support arears at the time and stated that [Ms A] still owed him $11,000 from the property settlement and he had paid $15,000 in private school fees; the two amounts together would wipe out his arrears.  He stated that he did not apply for credit for the fees any earlier as he did not want to put extra financial pressure on his ‘ex’ as she wasn’t working.  He said he was not given any choice but to pay half the school fees as the mother threatened to withhold visitation rights to the children.  He was made to feel guilty if he did not pay half of the fees.

3. [Ms A] stated that the parents each paid half of the school fees and that there was no agreement that Mr Cruddas’s payments were in lieu of child support.

4. Section 71A of the Act states that if a payer makes a payment to a third party in satisfaction of a liability and it is intended by both to be in complete or partial satisfaction of the payer’s child support liability, the amount can be credited against the payer’s liability as a non-agency payment (‘NAP’).  As there is no evidence to support a finding that [Ms A] agreed that the payment of school fees was in lieu of child support, it is not possible to credit the payments as a non-agency payment (‘NAP’).

5. Section 71C of the Act allows for credit of certain prescribed payments, including school fees (‘PNAP’).

6. The credit must not exceed 30% of the amount payable in the payment period. Excess amounts may be credited against the liability for a later payment period if the criteria are met at that time. No amount can be credited unless the payer has paid the remaining 70% of the liability.

7. Given that the case has ended it is not possible for the school fees to be credited as a PNAP. 

8. The tribunal decided that there was no merit to Mr Cruddas’s application.

Prejudice to the general public, and considerations of fairness as between the applicant and other persons otherwise in a like position

1. Parliament has seen fit to set a 28-day time limit for the lodgement of objections so that parents (and Child Support) can act with certainty as to the outcome when the objection period has elapsed.  Aside from this general principle, there is no other apparent prejudice to the public were Mr Cruddas to be granted an extension of time to object to the decision.

Conclusion

1. As a general rule, statutory time limits should be applied unless the decision maker, is positively satisfied that it is proper to exercise the discretion to extend time.

2. Having considered all of the above factors, the tribunal decided not to exercise the discretion to extend time to allow Mr Cruddas to object to the decision made on 7 July 2020.  The finding that Mr Cruddas’s application had no merit was the predominant factor in making this decision. 

DECISION

The decision under review is affirmed.