DPH22 v Dpi22
[2023] FedCFamC2G 933
•20 October 2023
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
DPH22 v DPI22 [2023] FedCFamC2G 933
File number(s): MLG 2513 of 2022 Judgment of: JUDGE CHAMPION Date of judgment: 20 October 2023 Catchwords: CHILD SUPPORT – Appeal on a question of law from a decision of the Administrative Appeals Tribunal – Whether special circumstances existed- whether the administrative assessment of child support would result in an unjust and inequitable determination – whether departure order just and equitable - whether departure order otherwise proper - whether departure order can be made to cover a prospective 18 month period - whether departure order must be calculated by a mathematical formula – Application dismissed Legislation: Administrative Appeals Tribunal Act 1975 (Cth) ss. 3, 4, 43, 44AAA
Child Support (Assessment) Act 1989 (Cth) ss. 7A, 98B, 98C, 98S, 117
Child Support (Registration and Collection) Act 1988 (Cth)
Cases cited: AEF23 v Child Support Registrar [2023] FCA 758,
Agrippa v Horton (SSAT Appeal) [2010] FMCAfam 1144
Bond v Child Support Registrar & Anor [2018] FCCA 422
Costa & Fairbank [2010] FMCAfam 39
Gyselman & Gyselman (1991) 103 FLR 156
Hendy v. Deputy Child Support Registrar (2001) 164 FLR 236; [2001] FamCA 632
House v R (1936) 55 CLR 499
Hunter v Transport Accident Commission [2005] VSCA 1
In the Marriage of Savery (1990) 99 FLR 346
Minister for Immigration and Citizenship v Li (2013) 249 CLR 332; [2013] HCA 18
Parrish & Torrey (SSAT Appeal) (2009) 41 Fam LR 236; [2009] FMCAfam 274
Plaintiff M1/2021 v Minister for Home Affairs (2022) 178 ALD 304; [2022] HCA 17
Tasman & Tisdall (SSAT Appeal) [2010] FMCAfam 425
Wright & Wright (2009) 42 Fam LR 281; [2009] FMCAfam 979
Division: Division 2 General Federal Law Number of paragraphs: 97 Date of last submission/s: 14 September 2023 Date of hearing: 30 August 2023 Place: Melbourne Applicant: In person First Respondent: In person Second Respondent: Sparke Helmore ORDERS
MLG 2513 of 2022 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: DPH22
Applicant
AND: DPI22
First Respondent
CHILD SUPPORT REGISTRAR
Second Respondent
ORDER MADE BY:
JUDGE CHAMPION
DATE OF ORDER:
20 OCTOBER 2023
THE COURT ORDERS THAT:
1.The application is dismissed.
2.The Applicant is to pay the costs of the Second Respondent in a sum to be fixed if not agreed.
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.
IT IS NOTED that publication of this judgment under a pseudonym is approved pursuant to s 110X(4)(h) of the Child Support (Registration and Collection) Act 1988 (Cth).
REASONS FOR JUDGMENT
JUDGE CHAMPION
INTRODUCTION
By an amended Notice of Appeal dated 2 April 2023, the Applicant Father (Father) appeals on a question of law from a decision of the Administrative Appeals Tribunal (Tribunal) made on 15 September 2022.[1] The Father and the First Respondent Mother (Mother; together the parents) are the separated parents of two children (X and Y). The Child Support Registrar (CSR or the Second Respondent) had made administrative assessments as to child support which were the subject of de novo review in the Tribunal. The Mother and the CSR submitted that there was no error of law in the Tribunal’s decision.
[1] References to the Tribunal’s Decision are marked “TD.” References to the Father's submissions are marked “FS”. References to the Child Support Registrar's Submissions are marked “CSRS”.
SUMMARY
The Tribunal correctly identified the three statutory preconditions for a departure order under Part 6A of Child Support (Assessment) Act 1989 (Cth) (Assessment Act). The main sections in Part 6A which governed the Tribunal’s power were set out in ss. 98B, 98C, 98S and 117. Before making a departure order the Tribunal in this case had to be reasonably satisfied as to 3 matters. First, that there existed “special circumstances” and that in the special circumstances of the case the administrative assessment would result in an unjust and inequitable determination of the level of financial support to be provided by the liable parent for the child because of the income, property and financial resources of either parent: s. 98C(1)(b)(i) and s.117(2)(c)(ia). Secondly, that it would be just and equitable to make a departure order: s. 98C(1)(b)(ii)(A) with reference to the matters set out in s. 117(4)(a)–(g). Thirdly, it was “otherwise proper” to make a particular departure order: s. 98C(1)(b)(ii)(B).
Once the Tribunal was reasonably satisfied as to those three preconditions for a departure order it had a discretion to make determinations in accordance with s. 98S(1)(a)–(j). Section 98S(3) permitted the Tribunal to make a departure order for a prospective period of 18 months (which it did): that is, for a period longer than one child support period and the 15 month period referred to in s. 7A(3) of the Assessment Act.
The Applicant made submissions as to 12 questions of law supported by 11 grounds of review. I have attempted to deal with each of those questions of law and grounds of review below.
At the outset, I note that there were at least 3 important issues on the Father’s appeal.
The first issue arose in circumstances in which the Father had loaned $200,000 to a company he controlled. The company had repaid $65,000 of that loan (a capital repayment) to the Father in FY21–22 and which he used for personal expenses. Despite the Father’s submissions to the contrary, the Tribunal was correct to characterise the $65,000 loan repayment applied to personal purposes as a “financial resource” within the meaning of s. 117(2)(c)(ia).
Secondly, the Father submitted that the Tribunal was an error because the departure order it made lacked “mathematical integrity”. The Tribunal was not bound to make any departure order by an adjustment of the administrative assessment mathematical formula. Authorities discussed below (Parrish and Wright) are to the effect that once the Tribunal is satisfied of the statutory preconditions for the making of a departure order “it is generally safest to move away from jiggling the formula”: Parrish, [16] below.
Thirdly, the Father submitted that the Tribunal was in error because the child support adjustment was to apply prospectively for 18 months from the date of the hearing: that is, from 15 September 2022 until 1 April 2024. Administrative child support assessments last for a “child support period” of up to 15 months: Assessment Act, s. 7A(3). Notwithstanding the administrative child support period lasts up to 15 months, s. 98S(3) permitted the Tribunal to make a departure order for a period longer than a single child support period provided the departure order was a reasonable exercise of its discretion under s. 98S(1). In circumstances in which the Father’s significant financial resource of $65,000 had not been taken into account in past administrative assessments and the Mother had prospectively committed to significant orthodontic expenses for one of the children up until 1 April 2024 (expenses the Father had not contributed) the Tribunal reasonably exercised its discretion as to the operative period of the departure order.
In summary, the Father has not proved any error of law and for the reasons set out below the application will be dismissed.
BACKGROUND
Since 1 January 2021, the parents have been assessed as providing equal shared care to the children. The Mother has been assessed as the payer of child support and the Father as the payee: TD, [1].
On 8 September 2021 the Mother made an application to the CSR for a departure order from the administrative assessment of child support under Part 6A of the Assessment Act. On 18 October 2021 the Father made a cross-application to the CSR for a departure order. On 13 December 2021 a CSR delegate made a departure order (Original Decision; TD, [4]). The details of the Original Decision are not currently material.
On 11 January 2022 the Father objected to the Original Decision (TD, [5]). On 23 March 2022 a different delegate of the CSR partly allowed the Father’s objection (Objection Decision; TD, [6]).
On 1 April 2022 the Mother applied to the Tribunal for an independent review of the Objection Decision (TD, [7]).
The Tribunal conducted a de novo review under Part VIIA of the Child Support (Registration and Collection) Act 1988 (Cth). The Tribunal has all the powers and discretions of the CSR under Part 6A of the Assessment Act : Administrative Appeals Tribunal Act 1975 (Cth) (AAT Act), s. 43(1).
On 15 September 2022 the Tribunal determined that the Mother was required to pay nil child support for the period from 15 September 2022 to 1 April 2024 (Tribunal Decision).
Pursuant to s. 44AAA(1) of the AAT Act, the Father has appealed on a question of law from the Tribunal Decision.
THE DECISION UNDER REVIEW
It is convenient to summarise the Tribunal’s reasons.
The Tribunal identified the “relevant administrative assessments” which had set the Mother’s annual child support liability at the following rates since 1 January 2021 (TD [2]) (up until its hearing on 8 September 2022) (TD, [9]):
(a)1 January 2021 to 27 June 2021: $5,732;
(b)28 June 2021 to 31 December 2021: $5,776; and
(c)1 January 2022 to 26 August 2022: $8,992.
The Tribunal structured its reasons by reference to the 3 statutory preconditions for a departure order identified above as follows. It considered:
(1)Issue 1 as to whether “in the special circumstances of the case” application of an administrative assessment “would result in an unjust and inequitable determination of the level of financial support to be provided by the liable parent for the child … because of the income, property and financial resources of either parent”: s. 117(2)(c)(ia) (TD, [14]–[41]);
(2)Issue 2 as to whether it was “just and equitable” as regards the child, the liable parent, and the carer entitled to child support to depart from the administrative assessment (TD [42]–[76]); and
(3)Issue 3 as to whether it was “otherwise proper” to depart from the administrative assessment (TD, [77]).
Issue 1 – Were there special circumstances of the case which would result in an unjust and inequitable determination?
The main issue between the parties concerned the “income, property and financial resources of either parent” within the meaning of s. 117(2)(c)(ia).
Special circumstances
A precondition to a departure order was that there existed “special circumstances of the case”: s. 117(2)(c). The Tribunal found that the availability to the Father of additional financial resources (namely $65,000 by way of repayment of loan capital in FY21–22 which he applied to personal expenses) constituted “special circumstances”. The Tribunal found that the “difference between the amounts required to be paid under the administrative assessments and the amounts that would be required to be paid if the parties’ actual levels of income, property and financial resources [were] used create[d] special circumstances” (emphasis added) and, as a result, a ground for departure existed (TD, [41]). If the Father’s additional financial resources (namely the loan repayments) were taken into account, there would be a substantial reduction in the rate of the Mother’s child support liability.
Special circumstances need not be unprecedented. It is sufficient if there are circumstances “out of the ordinary” and the availability to the Father of that financial resource that was not considered in the administrative assessments constituted special circumstances as explained in the authorities: see Gyselman & Gyselman (1991) 103 FLR 156, 164 (TD, [12]).
I find there was no error in the Tribunal’s approach to the concept of “special circumstances”.
Income, property and financial resources of either parent
The Tribunal considered the income, property and financial resources of both parents.
The Tribunal found that the Mother’s adjusted taxable income (ATI) was $103,480 (TD, [21]–[22]). None of the Mother’s other property or assets provided a financial resource to pay for the children’s costs. As a result, the Tribunal found that the Mother’s ATI represented her level of income, property, and financial resources for child support purposes (TD, [23]–[25]).
The Father’s evidence was that he worked in the wine industry and was employed by a company (the Company) of which he was the sole director and shareholder (TD, [26]). The Father had loaned the company $200,000 in 2018 or 2019 following the end of the parents’ relationship and the sale of the matrimonial home (TD, [27]). The Company retained approximately $100,000 (approximately 50% of the $200,000 loan) which it held in a share trading account. The Company had repaid the Father $65,000 loan capital (in 13 x $5,000 tranches) in FY21–22 (TD, [37]). The Father “agreed that the money was placed into his personal account and was used for his living expenses” (TD, [33]).
As a result, the Tribunal found that the Father was “receiving a significant level of financial resources from the business that are not reflected in his taxable income” (TD, [37]). It made the following finding at TD, [37] – [38]:
37. … [the Father] has received the following loan repayments and other financial resources from the business during the 2021/2022 financial year and that the loan repayments are part of the financial resources available to him which (on his own evidence) he is using for regular costs of living:
•The bank statements in the Agency documents (commencing at folio …) show loan repayments to [the father] of $5,000 each on 22 October 21, 5 October 2021, 14 October 2021, 12 October 2021, 10 October 2021, 9 October 2021, 6 October 2021 and 31 August 2021 (totalling $40,000);
•The Profit and Loss Statement for 2021/2022 states that wages and salaries paid amounts to $22,000. Based on [the father’s] evidence that he is the only person involved in the business (that there are no subcontractors etc), the Tribunal finds this is a payment made to him;
•In the “B” documents provided by [the Father] to the Tribunal, his bank statements show that $5,000 in loan repayments were made to him on each of 13 January 2022, 28 February 2022, 10 May 2022, 11 May 2022 and 19 May 2022 (totalling $25,000);
38. The Tribunal finds that, based on these amounts, [the Father] is receiving a minimum amount of $87,000 directly from the business.
[Emphasis added]
The Tribunal found that the ATI used for the Father in the administrative assessments —$25,396 drawn from tax documents in FY19–20 and $26,107 in FY20–21 — “significantly understate[d] [the Father’s] level of income, property and financial resources available to him in these periods” (TD, [39]). The Tribunal found that the Father’s available financial resource of $65,000 (by way of loan repayments) in FY21–22 was not reflected in his administratively assessed ATI. It was “unjust and inequitable” to the Mother as the liable parent not to consider the Father’s additional financial resource.
In its reasons as to Issue 1, the Tribunal adequately addressed each of the concepts within s. 117(2)(ia), namely: whether there were “special circumstances”, whether the administrative assessment resulted in an “unjust and inequitable determination”, and how the Tribunal considered the “income, property and financial resources” of the parties.
Issue 2 – Was it just and equitable to make a departure order?
Issue 2 was whether it would be “just and equitable” under s. 98C(1)(b)(ii)(A) of the Assessment Act to make a departure order. The Tribunal duly had regard to the matters set out in s. 117(4)(a)–(g).
As to the proper needs of the children [s. 117(4)(b)], the Tribunal accepted the Mother’s evidence as her prospective and substantial financial liability as to X’s orthodontic treatment. The Mother had already paid $1,650 on 9 February 2022. She had incurred actual and had further anticipated monthly costs of $5,688 lasting until 1 April 2024 ($237 x 24) (TD, [45]). The Mother’s expected total outlay was $7,338. The Father had not contributed to those orthodontic costs (TD, [48]).
As to each parent’s earning capacity, the Tribunal did not make a determination that their earning capacity was greater than that reflected in her income: ss. 117(4)(da)) and 117(7B) (Mother, TD, [51]–[53]; Father, TD, [53]–[57]).
On the Mother’s necessary “commitments” [s. 117(4)(e)], the Tribunal accepted that the “estimated weekly household expenses of $1,370 was an appropriate representation of ongoing costs for the household” (TD, [59]). On the Father’s necessary commitments, the Tribunal accepted the Father’s estimated weekly expenses of $808 (TD, [60]).
The Tribunal found that refusing to depart from the administrative assessment would cause financial hardship to the Mother. It was not satisfied that departing from the administrative assessment would cause the Father hardship: (TD, [73]). As to “hardship” [s. 117(4)(g)], the Tribunal “accepted… as correct” that the Mother was “paying $300 per fortnight in child support but is meeting most of the cost of the children herself” (TD, [64]). The Tribunal noted that the Father “stated to the Tribunal that any changes to the child support amount payable to him will wipe out his savings even further” (TD, [65]).
Issue 3 – Was it “otherwise proper” to make a departure order?
The Tribunal considered whether it was “otherwise proper” to make a departure order in accordance with s. 98C(1)(b)(ii)(B). The Tribunal had to have regard to the factors set out in s. 117(5) and the primary duty of the parents of a child to maintain the child. The Tribunal noted that the departure order was likely to have only “minimal impact on the public purse” (TD, [77]).
The Tribunal’s departure determination
As to the departure determination under s. 98S, the Tribunal found at TD, [71]:
71.The Tribunal finds on the evidence before it that the administrative assessments of child support do not reflect either parent’s level of income, property and financial resources. In particular, the Tribunal notes its findings, above, regarding [the Father’s] noncompliance with the disclosure requirements before the Tribunal and its conservative estimate (in the absence of full bank accounts or any findings about other benefits flowing indirectly to [the Father] from the business structure) of a level of financial resources from the business in the amount of $87,000 per annum. The use of a significantly lower income for [the Father] has resulted in an inflated and, in the Tribunal’s view, unfair amount of child support to be paid by [the Mother] to [the Father] for the two children.
[Emphasis added]
“Taking into account [its] findings”, the Tribunal considered it was appropriate that from the date of its decision on 15 September 2022 until 1 April 2024, child support should be varied such that the Mother is to pay “nil child support” to the Father (TD, [73]).
The Tribunal held as follows at [73]:
The purpose of varying child support to nil is to reflect the amount of child support that would be payable if the parents’ actual levels of income, property and financial resources are used in the assessment of child support, minus the significant contribution Ms B is making towards [X’s] orthodontic expenses over a prolonged period of time.
The Tribunal declined to backdate its decision as to its varying the amount of child support (TD, [74]). It was “reluctant to cause an overpayment situation” to the Father. Its prospective variation of child support was “intended to provide some financial relief [to the Mother] … from her disproportionate contribution towards the children’s needs, in particular, towards X’s orthodontic treatment” (TD, [74]).
GROUNDS OF REVIEW
Under s. 44AAA of the AAT Act, the Court’s jurisdiction is as to an appeal on a question of law from any decision of the Tribunal. The CSR submitted that reading the Father’s questions of law “beneficially and together with the grounds of appeal, […] it is possible to discern broad questions that can found the Court’s jurisdiction” (CSRS, [22]). I accept the CSR’s submissions.
Although the Father did not express his grounds as questions, in AEF23 v Child Support Registrar [2023] FCA 758, Jackman J dealt with the grounds of review not expressed as questions as follows at [17]:
Although not expressed as questions, I am prepared to treat them as such by replacing the opening word “That” with “Whether”. However, they are not proper questions of law. The purported questions of law are developed by way of twenty grounds of review. Those grounds of review make clear that the applicant’s true complaint concerns the merits of the Tribunal’s decision, which play no part in this Court’s jurisdiction under s 44 of the AAT Act.
The observation of Jackman J in AEF23 that complaints as to the merits of the Tribunal’s decisions “play no part in this Court’s jurisdiction” applies equally to the jurisdiction of the Federal Circuit and Family Court of Australia (Division 2) under s. 44AAA of the AAT Act.
Amended Notice of Appeal
The Father’s Amended Notice of Appeal identifies 12 “Questions of Law” and 11 “Grounds of Appeal”. For completeness, both the “Questions of Law” (1–12) and the “Grounds of Appeal” (1–11) are set out below.
Questions of Law
The Father’s 12 ‘Questions of Law’ as provided in an amended Notice of Appeal (Child Support) filed 2 April 2023 are as follows:
(1)The AAT has erroneously classified the repayment of a loan as a financial resource despite a failure to identify a financial benefit from the transaction and the money being property contrary to principles held in Kennon v Spry (2008) FLC93-388 and In the Marriage of Carey FAMC(l994) 18 Fam LR 118[1994] FLC 92-4891994 WL 1657027.
(2)The AAT has erroneously used the discretionary classification of money which is capital in nature as a financial resource as a special consideration to justify a departure from a standard assessment. It would be illogical that the CSA intended to limit the decision maker's power to make departures from a standard assessment only in special circumstances only to give the decision maker the discretion to classify an ordinary circumstance as special.
(3)The AAT has erroneously made a finding that the applicant did not provide the requested information. The applicant provided all of the information requested, on time and it was unreasonable for the decision maker to imply that additional information was required because of the CSA provisions to limit interference with privacy.
(4)The AAT has erroneously found that the information not supplied was relevant to the proceedings because it was not requested, the information was covered in other company documents and up to date additional information was supplied on request at the hearing.
(5)The AAT has failed to consider a financial resource of the respondent, being the benefit of not paying rent on her home.
(6)The AAT has failed to investigate the value of the respondent's property, arriving at a value which is far below its actual value. The value of the property was then used to establish the property of both parties arriving at an incorrect figure. No questions were asked at all regarding the nature of the property or any improvements made to enable an even approximately correct value.
(7)The AAT has failed to consider relevant considerations such as that the respondent made a number of false statements in the original application. This is especially relevant because the respondent's word was taken as being reliable regarding the value of property and circumstance of leaving one job for a lesser paid job.
(8)The AAT took into consideration money spent by the respondent on braces for one of the children but failed to consider money spent by the application on computers, needed by the children for school.
(9)The AAT unjust and inequitable treatment of the parties by examining the applicant's finances with close scrutiny and refusing to accept the applicant's statements despite evidence having been provided, while accepting most of the respondent's statements without any scrutiny at all.
(10)The AAT failed to consider the hardship caused by the decision, especially that the applicant was not meeting ordinary basic expenses from income and was being forced to use savings to provide for the children while the respondent had admitted to having significant disposable income after expenses and had recently bought a new car, which the respondent failed to initially disclose had been purchased out of pre tax income.
(11)The AAT failed to show proper calculations which justify the end determination.
(12)The AAT made a judgement that would be impossible, at once finding that the applicant’s income was “at least 87,000” while also finding that the applicant’s expenses were approximately $40,000 as stated, while also failing to examine how there could be a discrepancy of $47,000 dollars each year or approximately $117,000 unaccounted for. In addition, the AAT used two transfers of money and assumed that similar transfers had been happening and would continue to happen for a total of two and a half years, when it was known to the decision maker that insufficient funds were available in the account to enable that to happen.
Grounds of Appeal
The Father’s 11 “Grounds of Appeal” are as follows:
(1)The AAT has erred in law by departing from a standard assessment without establishing a special circumstance as required under sections 98 and 117 of the Child Support Assessment Act 1989 ("CSA").
(2)The AAT has erred in law by a finding that it was implied in directions to provide information which was not requested, contrary to s 4(3)(b) of the CSA which requires a limit on interference with privacy.
(3)The AAT has erred in law by failing to consider the respondent's financial resources adequately, namely a financial benefit enjoyed by not paying rent as required by ss 98 and 117 of the CSA.
(4)The AAT has erred in law by failing to consider the respondent's property adequately as required by ss. 98 and 117 of the CSA by accepting a value of her house that is drastically different from its true value without asking any questions to establish if that estimate was likely to be accurate.
(5)The AAT has erred in law by failing to consider all the relevant considerations as required by ss. 98 and 117 of the CSA and case law.
(6)The AAT has erred in law by considering irrelevant considerations as prohibited by ss. 98 and 117 of the CSA and case law.
(7)The AAT has erred in law by failing to be just and equitable as required by the CSA especially s. 117(1)(ii)(A).
(8)The AAT has erred in law by failing to adequately consider the hardship caused by his decision as required by the CSA including s. 98C.
(9)The AAT has erred in law by failing to show how the assessment was calculated as held as required in case law.
(10)The AAT has erred in law by arriving at a decision which offends logic.
(11)The AAT has erred in law by misrepresenting statements made during the hearing.
CONSIDERATION
I adopt the structure of CSR’s submissions to address the “questions and grounds thematically.”
1. Questions 1–4 and 11; Grounds 2, 7 and 11: Did the Tribunal make an error in its finding that the loan repayments by the Company to him was the “income, property and financial resources” of the Father?
The Father had loaned the Company he controlled approximately $200,000 (TD, [27]). The Company had repaid $65,000 of the loan capital to the Father in FY21–22 (TD, [33]). The Father placed the repaid loan money into his personal account and used it for his living expenses (TD, [33]). He thereby obtained a financial benefit because he had the personal use of those funds. His position was that this money ought to be quarantined in any assessment of child support obligations because it represented his savings or capital and did not have the character of income.
The Father’s complaint may be characterised as a submission that the Tribunal misinterpreted the meaning of the phrase “financial resource[s]” in s. 117(2)(c)(ia) of the Assessment Act. “Financial resource” is a term which has a broad definition and refers to any financial benefit that will enhance the capacity of parents to provide a proper level of financial support to their children: Costa & Fairbank [2010] FMCAfam 39, [24] (Slack FM); see also Bond v Child Support Registrar & Anor [2018] FCCA 422 at [110]–[114] (and the cases there cited).
The Father also specifically referred to Tasman & Tisdall (SSAT Appeal) [2010] FMCAfam 425 at [85] (Brown FM) where the Court observed that a tribunal which “makes an erroneous finding of such a magnitude that it goes to the very jurisdiction which it purports to exercise rendering its decision perverse or unreasonable or otherwise offending logic” makes a jurisdictional error able to be corrected on appeal as to a question of law.
The Tribunal’s finding that the repayment of loan capital was a “financial resource” of the Father was not an error of law. It was not misconstruction of the concept of “financial resource” as it appears in the statute having regard to the broad definition of that term: Costa, Bond (above). It was not a perverse or unreasonable finding in the sense referred to in Tasman.
Section 3(1) of the Assessment Act provides: “The parents of a child have the primary duty to maintain the child”. Once it was recognised that the Father had the personal use of the “financial resource” of the repaid loan capital there was no error in the Tribunal having regard to it in assessing whether the administrative assessment would result in an unjust and inequitable determination of the level of financial support to be provided by the liable parent. The repaid loan capital was available to the Father to maintain his children.
A departure order is not confined to a mathematical adjustment of the administrative assessment formula
At Question 11, the Father also submitted that the Tribunal’s approach was in error because it did not have sufficient “mathematical integrity” as referred to in Gyselman, at 164 (citing In the Marriage of Savery (1990) 99 FLR 346, 352 (Kay J)).
I do not accept the submission that the Tribunal had to exercise its discretion as to a departure order by applying a mathematical process, or confining itself to mathematically adjusting the administrative assessment formula. By reference to the authorities of Parrish and Wright discussed below, adopting a purely mathematical process as to a departure order was likely to invite error.
In Parrish & Torrey (SSAT Appeal) (2009) 41 Fam LR 236; [2009] FMCAfam 274 at [16] (referring to the judgment of Kay J in Savery) Judge Riethmuller (as His Honour then was) warned against an approach of “jiggling the formula” if the statutory prerequisites for a departure from an administrative assessment were satisfied:
It appears that the Tribunal has fallen into error by approaching the ‘just and equitable’ requirement as if it is satisfied by determining a notional income amount and then re-applying the formula. What is required under s.117 is for the Tribunal to determine a ‘just and equitable’ rate of child support, not simply adjust one of the formula elements. Thus, in Savery and Savery [1990] FamCA 30; (1990) FLC 92-131, Kay J said:
In the end result, to borrow the jargon of the commercial world “it's the total of the tape that counts”, and the custodial parent and liable parent are only interested in how much is to be paid each month and for how long the formula is to last. ...
... Once a case meets the criteria set out in sec. 117(2) and there is to be a departure from the administrative assessment, then it seems to me any attempt to fit the new calculations within the child support formula may lead to confusion amongst those charged with administering the Act, amongst those offering legal advice and amongst the payers and payees.
… it is generally safest to move away from jiggling the formula and move towards calculating an appropriate amount to be paid on an annual rate, taking into account each of the matters referred to in sec. 117(4).
[Emphasis added]
Further, in Wright & Wright (2009) 42 Fam LR 281; [2009] FMCAfam 979 at [25] Judge Riethmuller held that a mathematical formula cannot model the complexities of an array of family situations:
Put simply, s 117(4) requires the tribunal to identify and consider what the practical outcome of the actual change in week to week income and expenses will be for the parties and children. The importance of this process is clear: a simple mathematical formula cannot be expected to model the complexities of the vast array of modern family situations. The departure provisions are designed to provide a method of identifying cases where the formula does not produce an appropriate outcome, and then to set a rate of child support that meets the unique needs of each of those individual families.
[Emphasis added]
Once the Tribunal was satisfied as to the 3 pre-conditions for the making of a departure order, it had a discretion as to what particular determination to make within the ambit of s. 98S(1)(a) –(j). It did not have to exercise that discretion by way of application of precise mathematical calculations or adjusting the administrative formula.
At Ground 7, the Father submitted that the Tribunal was in error because it could not be reasonably satisfied that the departure order was just and equitable as regards to the children, the liable parent and the carer entitled to child support: see: s. 98C(1)(b)(ii)(A). The Tribunal had regard to (as it had to) the matters set out in s. 117(4)(a)–(g). Looking back, as to what was just and equitable the Tribunal was entitled to have regard to past administrative assessments (as it did) which had resulted in the Mother (as the liable parent) paying a higher level of child support than would have been the case had the Father’s substantial “financial resources” (by way of the loan repayment) been brought to account in the administrative assessments: s. 117(4)(d). Looking forward, the Tribunal was entitled to consider (as it did) the children’s “proper needs” [s. 117(4)(d)] and, in the circumstances of this case, the Mother’s commitment to X’s orthodontic treatment costs of $7,338 to which the Father had not contributed (or committed to contribute). In addition, it was reasonable of the Tribunal, in its discretion as to what was just and equitable, not to backdate the decision (as it declined to do) in the Father’s favour thereby avoiding the situation of him having received an overpayment of child support.
The operative period of the departure order
Section 98S(3) of the Assessment Act provided that “a determination under this Division may make different provision in relation to different child support periods and in relation to different parts of the child support period”. In Hendy v. Deputy Child Support Registrar (2001) 164 FLR 236; [2001] FamCA 632 at [70] –[71] the Full Court held:
[70] We agree with the trial judge that s 98S(3) prescribes that the Child Support Registrar may make determinations in relation to multiple child support periods, and that there is nothing contained in that or any other provision that would lead to a conclusion that such references must be construed as only applying to current or previous child support periods. The first part of s 98S(3) would be meaningless if it only applied to the child support assessment period under review.
[71] As to the power of a court to make an order beyond the year of assessment see the comments of Lindenmayer J in Dwyer v McGuire (1993) 17 Fam LR 42 at 52 ; (1993) FLC 92-420 where his Honour said at FLC 80,316:
In any event, I believe that the structure of the Act is such that once a valid application for departure has been made, it throws open for consideration by the court the question of departure from the administrative assessment provisions of the Act not only in respect of any current or past child support years but also in respect of any future years.
[….] I am aware of many reported decisions of the court in which departure orders have been made in respect of future child support years for which an administrative assessment had not been made.
[Emphasis added]
In this case, there was evidence of the financial resource of $65,000 being available to the father in FY21–22. On my reading of the decision, the evidence was less clear as to whether the Father had received loan repayments in FY20–21 after 1 January 2021 and as at 8 September 2022 (the date of the Tribunal’s hearing) it was unknown as to whether the Father would receive loan repayments in FY22–FY23 or FY23–24 (up until 1 April 2024 the end date of the departure order).
The Father’s non-disclosure and non-provision of requested information
In Questions 3 and 4, the Father asserts that there was an error of law in the Tribunal’s finding that the Father did not provide requested financial information. The Tribunal found the following at [36] of its reasons:
[The Father] was directed by the Tribunal, prior to the hearing, to provide “all bank statements and credit card statements for the business, for the past six months” and “all bank statements and credit card statements in the party’s name and/or joint names for the past 3 months”. [The Father] did not provide statements relating to his share trading accounts and, when asked the reasons for this, stated to the Tribunal that he “didn’t think about it.”
At [38], the Tribunal said:
The Tribunal notes that the bank statements in the Agency documents and those provided by [the father] do not cover the full 2021/2022 financial year and that there may have been other amounts paid to [the father] as loan repayments during the missing period which increase the benefits flowing to him from the business.
[Emphasis added]
As the CSR noted in its Further Submissions (which I accept) that where the Tribunal has found deliberate non-disclosure by a party (as was the case here) it can draw generous adverse inferences against that party. In Agrippa v Horton (SSAT Appeal) [2010] FMCAfam 1144 at [25] the Court held:
In my view the same principle must apply in the assessment of child support for the same reason. If the SSAT is satisfied that a parent has made a deliberate non-disclosure of his or her financial circumstances, it should be reasonably robust in assessing the non-disclosing parent’s financial circumstances adversely to that parent and in favour of the other parent. That is not to say that it may arrive at an entirely arbitrary result, but rather that it may draw generous inferences adverse to the non-disclosing party about that party’s financial circumstances.
Issues as to the parents’ income, property and financial resources were of central importance for the Tribunal’s decision. The Tribunal properly sought details of the Father’s share trading account and the Company’s share trading account (which he controlled). Despite his assertion of error, the Father has not proved he in fact provided the financial information the Tribunal requested.
The Father had disclosed that he had had financial resources of $87,000 in FY2021–2022 on a “conservative estimate” (TD, [71]). The finding the Tribunal made was open to it on the disclosed information — the Father had received for his personal use $65,000 loan repayments in FY21–22 — without any need for the Tribunal to further draw any adverse inference arising from non-disclosure. As to the future period in respect of which it made a departure order up to 1 April 2024, the Tribunal had evidence of the Mother’s sole commitment to X’s orthodontic expenses.
Having regard to all those circumstances, a departure order which varied child support to nil in the period 15 September 2022 to 1 April 2024 was legally reasonable.
Interference with the Father’s privacy
Although he did not anchor the submission in any of his Questions of Law or Grounds of Appeal, the Father also submitted that the Tribunal in its requested financial disclosure made an error of law by interfering with his privacy (FS, [133]).
Section 4(3)(b) of the Assessment Act is as follows:
It is the intention of the Parliament that this Act should be construed, to the greatest extent consistent with the attainment of its objects:
[…]
(b) to limit interferences with the privacy of persons.
[Emphasis added]
I do not accept that there was any error of law for two reasons,
First, the CSR submitted (and I accept) that s. 4(3)(b) of the Assessment Act “says nothing about the construction of directions issued by the Tribunal under the AAT Act” as to the disclosure of financial information (CSRS, [26]).
Secondly, alternatively if that is wrong, interferences with a person’s privacy in s. 4(3), including requests for financial information, are permitted provided that the interference is consistent with the attainment of the objects of the Assessment Act, including “[t]he principal object of this Act […] to ensure that children receive a proper level of financial support from their parents” set out in s. 4(1). In contested Tribunal proceedings, the attainment of that object requires parents to provide full and frank disclosure of their income, property and financial resources so appropriate levels of child support can be properly assessed.
There was no error in the Tribunal’s approach.
2. Questions 5, 7, 8 and 10; Grounds 3, 5, 6 and 8: Whether the Tribunal made an error of law by failing to consider relevant material?
The Father submitted that the Tribunal made an error of law by failing to consider several relevant matters: see House v R (1936) 55 CLR 499 at 505.
The Father identified 4 relevant matters he says the Tribunal failed to consider as follows: the Mother’s financial benefit of her own home, the Mother’s false statements, hardship and his purchase of computers. I consider in turn each of these 4 issues below.
The Mother’s own home
The Father contended that the Mother “receive[d] a financial benefit by not paying rent” (FS, [114]) in circumstances in which she lived in a mortgaged home where the children lived with her when they were in her care. The Mother’s weekly mortgage payments were $250 (TD, [58]). The CSR’s submission, which I accept, is the fact that the “mother was not paying rent did not constitute a financial resource that the Mother could put towards the costs of the children” (CSRS, [28]).
Section 117(7A)(a) was as follows:
(7A)In having regard to the income, property and financial resources of a parent of the child, the court must:
(a) have regard to the capacity of the parent to derive income, including any assets of, under the control of, or held for the benefit of, the parent that do not produce, but are capable of producing, income;
I do not accept that 117(7A) required the Tribunal to approach the matter on the basis of an alternative scenario that the Mother moved out of her mortgaged home, tenanted it and rented elsewhere. In short, on the existing scenario her own home was not capable of producing income because she was living in it (including with the children).
The Mother’s (alleged) false statements
The Father alleged that the Mother made false statements to the Tribunal (FS, [113]). The Tribunal weighed the evidence. It accepted the Mother’s evidence as to her income, property and financial resources (TD, [22]). The Tribunal had an obligation to read, identify, understand and evaluate the evidence before it. It had to have regard to that material. As noted in Plaintiff M1/2021 v Minister for Home Affairs (2022) 178 ALD 304; [2022] HCA 17 at [24]:
From that point, the decision-maker might sift [the material], attributing whatever weight or persuasive quality is thought appropriate. The weight to be afforded to [the material] is a matter for the decision-maker.
The Father has not demonstrated an error of law because the Tribunal accepted the Mother’s evidence. The Tribunal was not bound to reject it.
Hardship
The Father contended that “the Member has failed to consider the hardship caused to the children by reducing one parent’s income when that parent is already living partially on savings” (FS, [140]). The Tribunal expressly engaged with hardship under s. 117(4)(g): TD, [65], [73]. The Father’s contention is no more than an emphatic disagreement with the Tribunal’s conclusion. He has not proved an error of law.
Computers
The Father contended that the Tribunal failed to consider the money he had spent on computers for the children. In 2020, the Father had purchased computers for the children for $2,800. The Tribunal considered administrative assessments back to 1 January 2021 (TD, [2]). Because the Father’s 2020 computer purchase pre-dated the relevant period it was not a relevant consideration.
2. Questions 6 and 9; Ground 4: Did the Tribunal make an error of law by failing to investigate the value of the Mother’s property?
In Question 6, the Father alleged that the Tribunal made an error of law because it “failed to investigate the value of [the Mother’s] property”. The Father’s allegation was that value of the Mother’s house exceeded the Tribunal’s $415,000 estimate (TD, [25]).
The Tribunal has a duty to review, not a duty to investigate. Nonetheless, a failure to make an obvious inquiry about a critical fact may constitute jurisdictional error.: Minister for Immigration and Citizenship v SZIAI (2009) 111 ALD 15; [2009] HCA 39, [25]. I have found that 117(7A) did not require the Tribunal to consider an alternative scenario in which the Mother rented out her mortgaged home rather than living in it. As a result, any investigation as to the value of the Mother’s home was not an investigation as to a “critical fact” in the sense explained in SZIAI.
At Question 9, the Father asserted that there was an error of law because the Tribunal engaged in unjust and inequitable treatment of the parties by closely scrutinising the Father’s finances while accepting the Mother’s statements without the same level of close scrutiny. As noted, the evaluation of the evidence was a matter for the Tribunal and there was no legal error in the Tribunal accepting the Mother’s evidence: Plaintiff M1/2021 (above).
3. Question 1; Ground 9: Whether the Tribunal made an error of law by failing to expose its reasons?
The Tribunal exposed its path of reasoning by reference to each of the 3 relevant statutory pre-conditions for making a departure order. It “provide[d] an intelligible explanation of the process of reasoning that … led the [the Tribunal] … from the evidence to the findings and from the findings to the ultimate conclusion.” Hunter v Transport Accident Commission [2005] VSCA 1, at [21] (Nettle JA). The Tribunal did not make an error of law by failing to expose its reasons.
4. Question 12; Ground 10: Did the Tribunal exercise its discretion in a way which was so irrational or unreasonable so as to indicate that the exercise of its discretion to make a departure order miscarried?
The Father alleges error because “[t]he adjustment to child support has been applied to a period of approximately 18 months from the date of the hearing” (FS, [98]; emphasis added): that is, from 15 September 2022 and 1 April 2024.
The Father has not proved that the Tribunal’s reasoning process was irrational or unreasonable as to the quantum of the child support payment or as to the period of any adjustment: Cf. Minister for Immigration and Citizenship v Li (2013) 249 CLR 332; [2013] HCA 18 at [72]. The Tribunal’s reasoning, as follows, was not legally unreasonable:
(a)the CSR administratively assessed the Mother’s child support liability at approximately $5,700 in 2021 and $8,992 in the calendar year 2022. She had paid child support at that rate for the approximately 20-month period from 1 January 2021 until 8 September 2022 (the date of the Tribunal hearing) (TD, [2]);
(b)the Father had loaned $200,000 to the Company he controlled (TD, [27]). In FY2021–2022, he had wages and salary of $22,000 plus loan repayments of $65,000 which he used for personal living expenses (TD, [37]);
(c)the Objections Officer’s administrative decision had varied the father’s ATI to $35,396 for the period 8 September 2021 to 31 October 2023 (TD, [6]);
(d)if the parties were set on an adjusted ATI of $103,480 for the Mother and $87,000 for the Father (the aggregate of wages plus loan repayments in FY2021–2022) taking into account the father’s financial resources which had not been weighed in the administrative assessments the Mother’s child support liability reduced to $1,790 annually in 2021 and $1,802 in 2022 (TD, [40]);
(e)the Mother had been paying child support at a much higher rate during this period (and the Father had retained a commensurate benefit) than would have been the case had the Father’s additional financial resources been factored in; and
(f)prospectively, the Mother had committed to payments of $7,338 for orthodontic costs over 24 months to 1 April 2024 (TD, [49]), a cost to which the Father was not contributing (TD, [48]).
In making a departure order that was “just and equitable”, the Tribunal had regard to the factors in s. 117(4)(a)–(g). It was entitled to have regard to the Father’s significant financial resources in addition to his income — $65,000 loan repayments in FY21–2022 —which had not been weighed in the administrative assessments: s. 117(4)(d). Under s. 117(4)(c) it was also entitled to consider the rate at which the Mother had paid child support since 1 January 2021. It was entitled to be robust in its assessment of the Father’s circumstances because of his non-disclosure: Agrippa. The Tribunal was also entitled to consider the children’s “proper needs” and, specifically, the future costs of X’s orthodontic treatment: s. 117(4)(b). The Tribunal properly considered whether it was appropriate to backdate the decision and, in the Father’s favour, decided not to backdate its decision so as not to create an overpayment situation for the Father.
As to the period of adjustment (15 September 2022 to 1 April 2024) such a period of adjustment was within the Tribunal’s reasonable discretion having regard to previous administrative assessments and to the period in respect of which the Mother had committed to orthodontic expenses for X.
As I have noted, the Tribunal was not restricted to a purely mathematical approach in making a departure order under s. 98S(1): Parrish, Wright (above).
The Tribunal’s decision was reasonably open to it.
5. Ground 1: Did the Tribunal make an error of law by misapplying the statute to the facts?
The Father contended that the Tribunal misapplied s. 117 because no “special circumstances” existed under s. 117(2)(c) (FS, [73]–[93]).
The Tribunal found at [41] that:
The Tribunal finds the difference between the amounts required to be paid under the administrative assessments of child support and the amounts that would be required to be paid if the parties’ actual levels of income, property and financial resources are used, creates special circumstances in this case.
As set out above, the Father’s “actual levels” of financial resource included the loan repayments which he used for personal expenses (TD, [33]), a financial resource outside the scope of the administrative assessment. The Tribunal’s finding that (in substance) the fact that the administrative assessment did not take into account those financial resources constituted “special circumstances” was in accordance with authority. There were “special circumstances”: that is, circumstances “out of the ordinary”: Gyselman (above).
The Tribunal did not misapply or misconstrue the statute in its finding that special circumstances existed.
Other Issues: bias and procedural fairness
Bias
The Father raised the issue of bias: (FS, [50]–[51], [169]–[171]). The Father referred to a Case Officer’s note following a call between the Mother and the Officer (CB 342). The Officer made the note before the Objection Decision. The application before this Court is as to whether the Tribunal made a legal error. The Tribunal conducted a de novo assessment, regardless of the Objection Decision. The Father’s bias allegation against a decision-maker as to a previous administrative assessment is not relevant. It has been overtaken by subsequent events.
Procedural fairness
In the same vein, the Father made a complaint about the absence of procedural fairness in the making of the Objection Decision (FS, [141]–[168]). The Objection Decision is not the subject of an appeal on a question of law in this Court. In the same way as for the bias allegation, the allegation as to an absence of procedural fairness as to the Objection Decision has been overtaken by the Tribunal’s subsequent de novo review application. The Father raised no allegation of a failure to accord him procedural fairness against the Tribunal.
CONCLUSION
I will dismiss the application. I will make an order that the Father pay the costs of the Second Respondent (the CSR) in a sum to be fixed if not agreed.
I certify that the preceding ninety-seven (97) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Champion. Associate:
Dated: 20 October 2023
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