CTE22 v Child Support Registrar [2023] FedCFamC2G 998
File number(s):
PEG 153 of 2022
Judgment of:
JUDGE LUCEV
Date of judgment:
3 November 2023
Catchwords:
ADMINISTRATIVE LAW – Child support – appeal from decision of the Administrative Appeals Tribunal – whether Tribunal failed to afford applicant the opportunity to provide further information – whether Tribunal failed to afford applicant procedural fairness – whether appeal raises a question of law – cross-appeal – whether cross-appeal raises a question of law
PRACTICE AND PROCEDURE – Extension of time – application to extend time to file appeal – factors for consideration – length of and explanation for delay – prejudice – whether sufficient merit in proposed appeal
[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.
[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.
[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.
Consideration
[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.
[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.
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AGLC
Cte22 v Child Support Registrar [2023] FedCFamC2G 998
Case
[2023] FedCFamC2G 998
Decision Date
CaseChat Overview and Summary
The case between CTE22 and the Child Support Registrar revolves around a dispute over child support assessment and subsequent appeals. CTE22, the liable parent, sought to appeal the Administrative Appeals Tribunal’s (AAT) decision to vary the child support assessment, arguing procedural unfairness and seeking a departure from the administrative assessment. The AAT had considered the financial circumstances of both parents, ultimately deciding to adjust the taxable income for both CTE22 and CTF22, leading to a higher child support obligation for CTE22. CTE22 filed an application for an extension of time to appeal this decision, citing delays due to the complexity of the financial information and the recent change of accountants. CTF22, the carer, cross-appealed the AAT's decision, arguing for a higher adjustment in her favour.
The court examined whether the AAT failed to afford CTE22 procedural fairness by not allowing sufficient time to provide further financial information. The court also considered whether the appeal and cross-appeal raised questions of law warranting review. In addressing these issues, the court applied principles from established case law and legislation, focusing on the length of delay, the explanation for the delay, potential prejudice to the parties, and the merits of the appeal and cross-appeal.
The court found that the AAT had not procedurally erred by allowing CTE22 to submit additional financial information after the hearing, as CTE22 had indicated that the financials were still being completed. The court concluded that the delay in filing the appeal was significant and unjustified, with no evidence that the delay was due to exceptional circumstances. The court also found that there was no prejudice to CTF22 and that the merits of the appeal did not warrant an extension of time. Regarding the cross-appeal, the court determined that it did not raise a question of law sufficient to merit an extension of time.
Ultimately, the court dismissed both the application for an extension of time and the cross-appeal, upholding the AAT's decision. The reasoning underscored the importance of timely filings and the need for a compelling justification for extensions, particularly in child support matters where finality and efficiency are crucial.
Orders
Orders of the court
PEG 153 of 2022
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN:
CTE22
Appellant and Second Cross-Respondent
AND:
CHILD SUPPORT REGISTRAR
First Respondent and First Cross-Respondent
CTF22
Second Respondent and Cross-Appellant
ADMINISTRATIVE APPEALS TRIBUNAL
Third Cross-Respondent
ORDER MADE BY:
JUDGE LUCEV
DATE OF ORDER:
3 NOVEMBER 2023
THE COURT ORDERS THAT:
1. The Appellant’s application for an extension of time in which to file a Notice of Appeal under s 44AAA of the Administrative Appeals Tribunal Act 1975 (Cth) filed 9 August 2022 be dismissed.
2. The Notice of Cross-Appeal filed 1 September 2022 be dismissed.
Note: The form of the order is subject to the entry in the Court’s records.
Note: The Court may vary or set aside a judgment or order to remedy minor typographical or grammatical errors (r 17.05(2)(g) Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 17.05 Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth).
Section 110X(4)(h) of the Child Support (Registration and Collection) Act 1988 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in child support review proceedings.
Background
Background to the litigation
Full text does not contain this section.
Evidence
Evidence Before The Court
Full text does not contain this section.
Decision
Reasons for decision
The Tribunal Decision concerned whether there should be a departure from the administrative assessment of child support: Tribunal Decision at [1]. The Tribunal Decision is annexed to CTE22’s Proposed Appeal and Extension of Time Application.TRIBUNAL DECISION In the Tribunal Decision the Tribunal:(a)set out the background, noting that there has been a child support assessment in place since early 2006 with CTE22 being the liable parent under the assessment: Tribunal Decision at [1]-[2];(b)noted that the following administrative assessments of child support were under consideration:(i)for the period from 1 April 2020 to 10 February 2021 CTE22 was assessed to pay an annual rate of child support of $4,803 based on a 2018-19 provisional adjusted taxable income of $54,1811 for CTE22 and a 2018-19 adjusted taxable income for CTF22 of $16,998;(ii)for the period from 11 February 2021 to 30 June 2021 CTE22 was assessed to pay an annual rate of $1,558 based on a 2018-19 adjusted taxable income of $34,855 for CTE22 and a 2018-19 adjusted taxable income for CTF22 of $16,998; and(iii)for the period from 1 July 2021 to 26 November 2021 CTE22 was assessed to pay an annual rate of $4,405 based on an amount derived from Male Total Average Weekly Earnings of $52,638 for both parents: Tribunal Decision at [3];(c)set out the relevant child support review history between the parties prior to the Tribunal Decision which is as follows:(i)on 22 April 2021 CTF22 applied to the Child Support Agency (“CSA”) for a change to the assessment on the basis of a parent’s income, property, financial resources and earning capacity: Tribunal Decision at [4];(ii)on 16 July 2021 the CSA decided to change the assessment so that from 1 May 2021 to 26 November 2021 the adjusted taxable income of CTE22 was set at $120,629: Tribunal Decision at [5];(iii)on 31 July 2021 CTF22 objected to this and on 3 October 2021 the CSA allowed the objection in part and decided to change the assessment so that from 1 May 2021 until a terminating event for the Child, the adjusted taxable income of CTE22 was set at $120,631 (“October 2021 CSA Decision”): Tribunal Decision at [6]; and(iv)on 20 October 2021 CTF22 applied to the Tribunal for administrative review of the October 2021 CSA Decision: Tribunal Decision at [7];(d)noted that it held a directions hearing on 1 February 2022 (“Tribunal Directions Hearing”) with CTF22 and CTE22 both attending by telephone: Tribunal Decision at [8];(e)noted that it held a hearing on 12 May 2022 (“Tribunal Hearing”) with CTF22 and CTE22 giving evidence on affirmation by Microsoft Teams audio: Tribunal Decision at [10]. Documents provided by CTF22 and CTE22 prior to the Tribunal Hearing were distributed to the parties. During the Tribunal Hearing the Tribunal agreed to allow CTE22 to provide additional financial information which was received later on 12 May 2022. A copy of this additional financial information was sent to CTF22 with the Tribunal receiving no further written correspondence in response: Tribunal Decision at [10];(f)noted that at the Tribunal Directions Hearing, the Tribunal sought clarification from CTF22 and CTE22 as to the reasons for their concerns. CTF22 stated that the CSA had calculated the income of CTE22 based on out of date information and wanted a more current assessment by the Tribunal. CTF22 further stated that she was seeking to have any decision by the Tribunal backdated by 18 months. CTE22 stated that the CSA had determined his income based on inaccurate information and arrived at an incorrect amount. CTE22 further claimed that the proportion of income from his business had been unfairly split between him and his current wife (“Wife”) and should have been shared equally: Tribunal Decision at [11];(g)set out the relevant law to be considered: Tribunal Decision at [12]-[20];(h)noted that in circumstances where multiple grounds for departure from an assessment are put forward, the Tribunal needs only be satisfied that one ground is established before going on to determine whether or not a particular determination is just and equitable and otherwise proper: Tribunal Decision at [21];(i)identified that a ground for departure exists where, in the special circumstances of the case, an application of the administrative assessment of child support would result in an unjust and inequitable determination of child support to be provided by the liable parent in respect of a child because of the income, property and financial resources of either parent, citing the Child Support Assessment Act 1989 (Cth) (“CS Assessment Act”), s 117(2)(c)(ia): Tribunal Decision at [22];(j)had regard to CTF22’s income, financial circumstances and relevant documents including copies of her ATO pre-filing report for 2019-2020 and draft accounts for 2020-2021: Tribunal Decision at [23]-[27];(k)had regard to CTE22’s income, financial circumstances and relevant documents including individual tax returns filed with the ATO in 2018-2019: Tribunal Decision at [30], [35]-[36];(l)considered CTE22’s evidence in which he stated that:(i)he was self-employed and has run a business called B Company in Perth since around late 2016, and that he was also involved with a second business known as C Company in City D: Tribunal Decision at [31];(ii)B Company operated under a trust structure through the “E” Family Trust (“E Family Trust”), the corporate trustee of which was “F” Pty Ltd (“F Pty Ltd”). CTE22 stated that he was a director and 50% shareholder of F Pty Ltd and his Wife was the other 50% shareholder, noting that CTE22 said his Wife played a vital role in the business: Tribunal Decision at [32]; and(iii)C Company also operated under a trust structure through the “E” Unit Trust (“E Unit Trust”), the corporate trustee of which was “G” Pty Ltd (“G Pty Ltd”). CTE22 stated that he was a director of G Pty Ltd and that F Pty Ltd was a 50% shareholder in G Pty Ltd, and that the other 50% was owned by his Wife’s parents who had provided all the capital to establish the business: Tribunal Decision at [33]-[34];(m)in relation to CTE22’s income:(i)noted that CTE22 told the Tribunal he did not receive a wage from B Company but was paid through weekly drawings, and that this income was reflected in the accounts of the E Family Trust and in CTE22’s individual tax return, and that he did not receive income from any other source: Tribunal Decision at [35];(ii)that CTE22 said he was unable to provide the Tribunal with his 2019-2020 and 2020-2021 individual tax returns in accordance with directions given by the Tribunal, as neither had been filed with the ATO: Tribunal Decision at [36];(iii)noted that in evidence from the CSA was a copy of CTE22’s 2018-2019 individual tax return which showed an adjusted taxable income of $34,855 derived from a trust, and that CTE22 now said he did not expect his income in 2019-2020 or 2020-2021 to be much different (presumably from his 2018-2019 income): Tribunal Decision at [36];(iv)that CTE22 said that B Company had been running for about three years and had only just started making money, and that an average business like B Company would make a profit of around 15% of gross sales but in 2018-2019 B Company’s profit was only around 8%, which was not surprising as B Company was still paying off equipment and expenses as the business was still in its infancy: Tribunal Decision at [38];(v)at the start of the Tribunal Hearing CTE22 said he was unable to provide the tax returns for the E Family Trust or the accounts for B Company for 2019-2020 and 2020-2021 and said that he had recently swapped accountants, and that the tax returns “were still being completed”: Tribunal Decision at [39];(vi)CTE22 said that C Company had only been operating since 1 July 2020 and that he did not have financial information available for it: Tribunal Decision at [39]; (vii)noted that in evidence from the CSA was a copy of the E Family Trust tax return for 2018-2019 which showed net income of $69,711 derived from total business income of $892,482 less total expenses of $839,893, and that in this respect profit as a proportion of gross sales was 7.8% with a cost of sales total of $461,278 plus other major expenses which were set out: Tribunal Decision at [40];(viii)noted that CTE22 explained that the 2018-2019 income of $892,482 was generated in the course of his business and that sales were $461,278 : Tribunal Decision at [41];(ix)noted that CTE22 said that sales revenue for B Company fell in the first half of 2019-2020 due to the COVID-19 pandemic but then bounced back strongly and that sales in 2020-2021 were up from 2019-2020: Tribunal Decision at [42];(x)noted that CTE22 said that C Company generated sales revenue of approximately $1.2m in 2020-2021 but was running at a loss, and that neither CTE22 nor his Wife had received any drawings from C Company and that up until the start of 2022 had not received a salary, and that C Company’s business losses were being funded by his Wife’s parents: Tribunal Decision at [42];(xi)noted that following the Tribunal Hearing CTE22 provided the Tribunal with draft profit and loss statements for B Company for 2019-2020 and 2020-2021, according to which B Company returned a net profit of $143,917 in 2019-2020 based on total income of $935,257 and total expenses of $791,340, with profit as a proportion of gross sales being 15.3%: Tribunal Decision at [43];(xii)noted that in the 2020-2021 profit and loss statement for B Company a loss of $4,076 based on total income of $1,122,993 and total expenses of $1,127,069 was shown: Tribunal Decision at [43];(xiii)no balance sheets, depreciation schedules or any other relevant financial information was provided in conjunction with the draft profit and loss statements for B Company for 2019-2020 and 2020-2021: Tribunal Decision at [43];(xiv)noted that in 2020-2021 an amount of $70,342 for administration wages was listed, that being a role which CTE22’s Wife was performing in addition to marketing activities: Tribunal Decision at [44]; and(xv)noted that an amount of $20,726 as an expense for C Company was listed in the 2020-2021 profit and loss statement which suggested some expenses for C Company were being run through B Company: Tribunal Decision at [44];(n)was not satisfied that CTE22 had provided full disclosure of his financial circumstances: Tribunal Decision at [45];(o)referred to the difficulty in determining a parent’s income for the purposes of child support in such circumstances, a difficulty which had been judicially considered on a number of occasions, citing Humphries & Berry (SSAT Appeal) [2008] FMCAfam 409 (“Humphries”) and Morse & Potts(SSAT Appeal) [2010] FMCAfam 1305 (“Morse”): Tribunal Decision at [46];(p)based on B Company’s annual revenue of $1,122,193 in 2020-2021, and CTE22’s evidence of profits made by businesses, was satisfied that CTE22 had a net income available to him from the operation of B Company of approximately $168,449: Tribunal Decision at [46]-[47], noting that CTE22 told the Tribunal that up until the start of 2022 he was not receiving a salary or other benefits from C Company but provided no evidence to support this contention: Tribunal Decision at [47];(q)noted that CTE22 had said that he and his Wife were equal shareholders in B Company, but the Tribunal determined that it was the skills of CTE22 upon which the business is based. In light of the role performed by the Wife the Tribunal considered her share of business income to be more appropriately fixed at 30%: Tribunal Decision at [48];(r)referred to further evidence of CTE22’s financial circumstances: Tribunal Decision at [49]-[51] including that:(i)CTE22 had provided the Tribunal with a statement of financial circumstances on 17 December 2021 showing an average weekly income of $732 being income and benefits derived from CTE22’s business (presumably only B Company), and total weekly household expenditure of $802 including CTE22’s share of the home mortgage being $313, with no motor vehicle expenses and total personal expenditure of $1,198 which includes $1,153 for child support, which the Tribunal observed was obviously not a weekly amount based on the administrative assessment: Tribunal Decision at [49];(ii)CTE22 had total assets valued at approximately $256,016 which included his half share of the family home being $180,000, a motor vehicle valued at $16,000, household contents of $40,000 and personal items, and declared total liabilities of approximately $180,000 being his half share of the family home mortgage: Tribunal Decision at [49];(iii)the Tribunal was not satisfied that CTE22’s income and financial resources for the purposes of child support were accurately reflected by his taxable income alone, and determined that CTE22 had access to income from his business of approximately $118,000 and that after allowing reasonable deductions found that he had income, property and financial resources equivalent to a person with an adjustable taxable income of approximately $116,000 in 2020-2021 and going forward: Tribunal Decision at [50];(iv)as CTE22 and CTF22 were receiving additional benefits through their respective businesses in the form of motor vehicle and telephone expenses the Tribunal had treated those equally and not considered those benefits in its determination: Tribunal Decision at [51]; and(s)when using the income, property and financial resources available to the parents as calculated by the Tribunal the annual rate of child support would be approximately $14,092: Tribunal Decision at [52], and found this to be “significantly more” than CTE22’s liability under the administrative assessment, and was therefore satisfied that special circumstances existed and that the application of the administrative assessment would result in an unjust and inequitable determination of child support to be provided by CTE22, and on this basis found that there was a ground for departure from the administrative assessment: Tribunal Decisional at [53];(t)in accordance with s 98C(1)(b)(ii)(A) of the CS Assessment Act considered whether it is just and equitable as regards the Child, the liable parent, and the carer entitled to child support to make a particular determination, which it said required it to consider the matters referred to in s 117(4) of the CS Assessment Act: Tribunal Decision at [54], namely:(i)the nature of the duty of a parent to maintain a child, in relation to which the Tribunal had regard to the fact that CTE22 had four dependent children and CTF22 had one other “liable child”: Tribunal Decision at [55]-[56];(ii)the proper needs of the Child, in relation to which the Tribunal observed that CTE22 and CTF22 had not made the Tribunal aware of any particular expectations in relation to the Child: Tribunal Decision at [57]-[58];(iii)the income, earning capacity, property and financial resources of the Child, in relation to which the Tribunal was satisfied that the Child had no income, earning capacity, property and financial resources: Tribunal Decision at [59]; and(iv)the income, property, financial resources and earning capacity of each parent, which was a matter the Tribunal observed it had already considered, and in relation to which otherwise the criteria for rendering the assessment unfair under s 117(7B) of the CS Assessment Act were not met: Tribunal Decision at [60]-[63];(v)any hardship that would be caused: Tribunal Decision at [64]-[73], in relation to which the Tribunal considered: (A)the respective incomes of the parties, noting that CTF22 was “on a low income”: Tribunal Decision at [64]; (B)that CTF22 was struggling to meet expenses and was currently not receiving child support from CTE22: Tribunal Decision at [65];(C)that CTE22 had access to income, earning capacity, property and financial resources of approximately $116,000 per annum for child support purposes, declared estimated household expenditure of $41,704 per annum and “minimum personal expenditure”: Tribunal Decision at [66]; (D)that CTF22 had not fulfilled the onus with respect to any backdating of the assessment, and it was therefore just and equitable to commence any new determination from 22 April 2021: Tribunal Decision at [70]; (u)having considered the interests of both parents, proposed to make the following determination:(i)for the period from 22 April 2021 until a terminating event for the Child the adjusted taxable income of CTF22 be varied to $50,000; and(ii)for the period from 22 April 2021 until a terminating event for the Child the adjusted taxable income of CTE22 be varied to $116,000: Tribunal Decision at [71] and p 12, which it found would not cause hardship to CTE22, CTF22 or the Child, and which was otherwise just and equitable: Tribunal Decision at [73];(v)calculated the annual rate of child support payable by CTE22 as being approximately $14,092: Tribunal Decision at [72];(w)as to whether it is otherwise proper to make a particular departure determination, found that an increase in child support entitlements may decrease the extent to which the community had to support CTF22 (through family assistance), and that it was satisfied that the increase in child support entitlements would result in an appropriate apportionment of financial responsibility between the parents and the taxpayer: Tribunal Decision at [74]-[75]; and(x)set aside the October 2021 CSA Decision and in substitution therefore decided that:(i)for the period from 22 April 2021 until a terminating event for the Child the adjusted taxable income of CTF22 be varied to $50,000; and(ii)for the period from 22 April 2021 until a terminating event for the Child the adjusted taxable income of CTE22 be varied to $116,000: Tribunal Decision, p 13.EXTENSION OF TIME APPLICATION
Ratio Decidendi
Legal Principle Established
The Registrar’s oral submissions adopted the written Outline of Submissions filed on 13 March 2022, but also submitted that:(a)the Tribunal Hearing took place on 12 May 2022, but the Mr H Letter was dated 21 November 2022, a significant number of months post-hearing; and(b)the Tribunal Decision at [39] indicated that, at most, CTE22 had told the Tribunal that he had recently swapped accountants and that the “financials were still being completed”: Transcript, p 4, and there was no evidence that there was additional or other evidence before the Tribunal about the timeframe in which further tax and accounting information might be submitted by CTE22. CONSIDERATION - EXTENSION OF TIME APPLICATIONLegislation and case law CTE22 seeks an extension of time in which to appeal the Tribunal Decision pursuant to s 44AAA of the AAT Act, which provides for an appeal to be made to this Court from a child support first review (which the Tribunal Decision is: see AAT Act, s 3(1), definition of “child support first review”, and the Child Support (Registration and Collection) Act 1988 (Cth) (“CS Collection Act”), s 89) by a non-Presidential member of the Tribunal. Section 44 of the AAT Act, which relevantly applies by reason of s 44(2), (3) and (4) thereof, provides that:(a)a party may appeal “on a question of law, from any decision of the Tribunal”: AAT Act, s 44(1); and(b)an appeal must be instituted, under s 44(2A)(a) of the AAT Act:not later than the twenty-eighth day after the day on which a document setting out the terms of the decision of the Tribunal is given to the person or within such further time as the … [Court] (whether before or after the expiration of that day) allows … Whether or not to grant an extension of time to appeal is a discretionary decision for the Court. Relevant considerations as to whether to extend time on appeals from, or reviews of, administrative decisions are generally well established and include: (a)the length of the delay;(b)the explanation for the delay;(c)whether there is any prejudice to the parties;(d)the nature of the decision and in that context, the relevant public interest considerations including the need for finality in litigation; and(e)the merits of the proposed action. See Tu’utaKatoa v Minister for Immigration, Citizenship, Migrant Services and Multicutural Affairs [2022] HCA 28; (2022) 96 ALJR 819; (2022) 403 ALR 604; (2022) 178 ALD 573 (“Katoa”) at [12] per Kiefel CJ, Gageler, Keane and Gleeson J; Hunter Valley Developments Pty Ltd v Cohen [1984] FCA 186; (1984) 3 FCR 344; (1984) 58 ALR 305; (1984) 7 ALD 315 (“Hunter Valley Developments”); FCR at 348-349 per Wilcox J; Hamden v Secretary, Department of Human Services [2013] FCA 3; (2013) 59 AAR 108 (“Hamden”) at [35] per Besanko J; Somer & Child Support Registrar & Anor [2016] FCCA 49 (“Somer”) at [8] per Judge Jarrett. The Court will not grant an extension of time if there is no arguable case for relief: Hunter Valley Developments, FCR at 348-349 per Wilcox J; Hamden at [36] per Besanko J; Somer at [9] and [60] per Judge Jarrett; MZZIV v Minister for Immigration and Border Protection [2013] FCA 1203 (“MZZIV”) at [6] per Mortimer J.Length of delay