Dwyer v McGuire
[2007] FMCAfam 944
•29 November 2007
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| C.S.R. & MMB & DEJ (SSAT APPEAL) | [2007] FMCAfam 944 |
| CHILD SUPPORT – Appeal from SSAT – consideration of whether Tribunal had power to deal with matter under Part 6A of the Act – no application for departure by payee, payer or registrar – appeal allowed. |
| Administrative Appeals Tribunal Act 1975 Child Support (Assessment) Act 1989 Child Support (Registration and Collection) Act 1988 Safety, Rehabilitation and Compensation Act 1988 (Cth) |
| Australian Securities and Investments Commission v Donald (2003) 203 ALR 566 Comcare v Burton (1998) 157 ALR 522 LDME & JMA (SSAT Appeal) [2007] FMCAfam 712 Minister for Immigration and Multicultural and Indigenous Affairs v Ahmed and Another [2005] FCAFC 58 PJ & Child Support Registrar (SSAT Appeal) [2007] FMCAfam 829 |
| Applicant: | CHILD SUPPORT REGISTRAR |
| Respondents: | MELANIE MARGARET BRADBURY & DENNIS EARL JACKS |
| File number: | SYC 5102 of 2007 |
| Judgment of: | Sexton FM |
| Hearing date: | 16 October 2007 |
| Date of last submission: | 16 October 2007 |
| Delivered at: | Sydney |
| Delivered on: | 29 November 2007 |
REPRESENTATION
| Counsel for the Applicant: | Mr G Kennett |
| Solicitors for the Applicant: | Australian Government Solicitors |
| Respondent mother | Self-represented (appeared by telephone) |
| Respondent father | Self-represented (appeared by telephone) |
ORDERS
The decision of the Social Security Appeals Tribunal, appeal SC222631, dated 15 June 2007, be set aside.
The matter be remitted to the Social Security Appeals Tribunal for re-hearing according to law.
IT IS NOTED that publication of this judgment under the pseudonym MMB & DEJ is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT SYDNEY |
SYC 5102 of 2007
| CHILD SUPPORT REGISTRAR |
Applicant
And
| MELANIE MARGARET BRADBURY |
Respondent
And
| DENNIS EARL JACKS |
Respondent
REASONS FOR JUDGMENT
Introduction
This is an appeal by the Child Support Registrar from a decision of the Social Security Appeals Tribunal. The Tribunal’s decision concerns an administrative child support assessment for Edwina (not her real name) aged 8, whose parents, Ms Bradbury (not her real name) and Mr Jacks (not his real name) are the respondents to this appeal. Edwina is in the care of Ms Bradbury and Mr Jacks is liable to pay child support. The dispute before the Objections Officer of the Child Support Agency and the Tribunal concerned the level of Mr Jacks’ child support income for the child support assessment period 1 December 2006 to 29 February 2008.
Mr Kennett, the appellant’s counsel, made detailed written and oral submissions. Mr Jacks and Ms Bradbury appeared in person by telephone at the hearing of the appeal and each elected not to make submissions.
Background facts
For the period 1 October 2005 to 30 November 2006, the child support assessment was based on Mr Jacks’ child support income of $54,375 (his taxable income for the 2005 financial year)[1] and Ms Bradbury’s child support income of $41,019.
[1] Appeal Books, page 13.
On 10 November 2006 the Agency issued an assessment for the period 1 December 2006 to 29 February 2008 based on Mr Jacks’ child support income of $65,216 (his taxable income for the 2006 financial year)[2].
[2] Appeal Books, page 15.
On 21 November 2006, Mr Jacks lodged with the Child Support Agency a new estimate of income for the period 1 December 2006 to 29 February 2008 of $66,627 (equivalent to an annual income of $53,331).
On 22 November 2006, the Agency advised Ms Bradbury that the Agency had accepted Mr Jacks’ new estimate of income[3], and issued a new assessment of child support at a reduced figure for the period 1 December 2006 to 29 February 2008[4].
[3] Appeal Books, page 19.
[4] Appeal Books, page 20.
On 30 November 2006, Ms Bradbury objected to the Agency’s decision on the basis Mr Jacks had underestimated his income in the last tax year by approximately 11% and is now estimating an income 18% less than his most recent taxable income in the 2007 financial year[5].
[5] Appeal Books, page 23.
On 2 February 2007, Ms Bradbury’s objection was disallowed by an officer of the Agency. The Objection Decision Report[6] states that Ms Bradbury is objecting to:
…the Child Support Agency (CSA) decision to accept Mr Jacks’ estimated income of $53,331 for the period 1 December 2006 to 29 February 2008…
and claims that Mr Jacks:
…is still working for the same company and is on an annual salary therefore his income should not change.
[6] Appeal Books, page 39.
The objections officer sets out her brief reasons[7] which include consideration of Mr Jacks’ base income and incentive payments. The objections officer decides:
…at the time the estimate of income was lodged the information provided…was as accurate as possible.
noting that the estimate will be reconciled against Mr Jacks’ actual taxable income for the 2007 financial year once assessed.
[7] Appeal Books, page 40.
The Agency notified Ms Bradbury of the objection decision by letter dated 5 February 2007[8]. The letter states:
If you do not agree with CSA’s decision, you have rights. Please refer to the enclosed brochure or visit CSA’s website at: for information on how to exercise your rights.
Ms Bradbury tells the court that when she told the Agency she did not agree with the objection officer’s decision, she was told her only option was to seek a review of that decision at the Social Security Appeals Tribunal.
[8] Appeal Books, page 38.
On 15 February 2007, Ms Bradbury sought a review of the objection officer’s decision by the Social Security Appeals Tribunal. The Tribunal heard the application for review on 14 May 2007. The Child Support Registrar now appeals that decision under s.110B of the Child Support (Registration and Collection) Act 1988. Section 110B provides that a party to a proceeding before the Social Security Appeals Tribunal may appeal to a court having jurisdiction, on a question of law, from any decision of the Tribunal in that proceeding. This is not a review on the merits.[9]
[9] PJ & Child Support Registrar (SSAT Appeal) [2007] FMCAfam 829 at [38] citing LDME & JMA (SSAT Appeal) [2007] FMCAfam 712 at [17] – [44].
Relevant legislation
Mr Kennett, the appellant’s counsel outlined aspects of the statutory scheme relating to the calculation of an administrative assessment of child support, which I include by way of background:
a)Part 5 of the Child Support (Assessment) Act 1989 deals with the administrative assessment of child support.
b)Section 36 sets out the basic formula used to calculate the annual rate of child support. The formula includes an amount for child support income. Section 38 defines “child support income amount.”
c)Division 3 of Part 5 deals with the working out of the child support income amount. Under Subdivision A, that can be done by reference to a person’s taxable income for the last relevant year of income. Under Subdivision B, that can be done by an estimation of taxable income. Section 60(1) (in Subdivision B) gives a person the right to elect that their child support income amount for a child support period will be the amount that they work out using a method set out in s.60(5). Section 60(7) provides that the person makes the election by giving notice to the Child Support Registrar in a specified manner. Section 61 provides that the effect of making the election will be to change the person’s child support income amount for the remainder of the relevant child support period [s.64 provides that the amount elected will later be reconciled with the person’s actual taxable income]. The Registrar is obliged to take action necessary to give effect to the election [s.61(3)] but can refuse to accept the election [s.60A] if the Registrar is satisfied the estimate of income is too low, in which case, the election is taken never to have been made [s.60A(3)]. Section 64A provides penalties for notifying underestimates of income.
Mr Kennett also referred me to the main provisions of Part 6A of the Child Support (Assessment) Act 1989, which deals with departures from administrative assessments:
a)Section 98S sets out the types of determinations a Registrar can make, which includes the power to vary a child support income amount.
b)Section 98C sets out the matters as to which the Registrar must be satisfied before making a determination.
c)Division 2 of Part 6A deals with departures initiated by a liable parent or a carer. Section 98C in that Division says a Registrar can make a departure determination if:
i)there is an application under 98B, which provides for a written application;
ii)one of the grounds for departure is made out [as set out in ss 98C(2) and 117(2)];
iii)it would be otherwise just and equitable; and
iv)it would be otherwise proper
to make the determination.
d)Section 98C(3) provides that s.117(4) to (9) apply to the Registrar which must be considered when deciding whether it would be just and equitable or otherwise proper to make the departure decision.
e)Section 98E gives the Registrar the option of refusing to make a determination and instead, recommending an application be made to a court, if, after consideration, the Registrar is satisfied the issues raised are too complex to be dealt with by the Registrar.
f)Division 3 of Part 6A deals with departure applications initiated by the Child Support Registrar:
i)Section 98K provides for the Registrar to initiate a determination for departure if the Registrar is of the view, because of special circumstances, that there should be a departure from the administrative assessment.
ii)Section 98L sets out the matters as to which the Registrar must be satisfied before making a determination, criteria similar to those in s.117(2). Section 98L(2) provides that s 117(4)-(9) apply to the Registrar as they would apply to a Court dealing with a departure application. There are also procedural requirements, as with applications for departure initiated by carers and liable parents.
Reasons of the Social Security Appeals Tribunal
The Tribunal identified[10] the issues for its consideration as:
·Is there a reason or reasons established justifying a departure from the current assessment in the special circumstances of the case?
·If so, is a change to the assessment just and equitable (fair to the parents and children) and otherwise proper (fair to the community)?
[10] Appeal Books, page 5.
The Tribunal then outlined the provisions of the legislation it intended to apply in determining the case. The provisions to which it referred relate to applications for departure from an administrative assessment of child support under Part 6A. Paragraph 33 reads[11]:
Section 98C of the Act provides that a child support assessment can be changed if, in the special circumstances of the case, a “ground for departure is established” and the change is just and equitable to the children, both parents, and is otherwise proper.
[11] Appeal Books, page 9.
At paragraph 34 of its Reasons, the Tribunal refers to “Reason 8” as the relevant ground under which the departure application is brought by reference to s.117(2)(c)(ia) & (ib) of the Act, one of the grounds of departure under s.117(2). The Tribunal then assesses the evidence available in relation to Mr Jacks’ income and decides that a ground for departure is established (‘Reason 8’). The Tribunal then says[12]:
Once the threshold question that there are special circumstances which justify a departure from the normal administrative assessment has been addressed, a second question arises. Namely, whether any departure is just and equitable in regards the parents and children and that any departure is otherwise proper.
In this case the Tribunal was satisfied that Reason 8 was established. The next step is to determine where it is just and equitable to change the estimate supplied by Mr Jacks.
[12] Page 10 at paragraphs 42 and 43.
In its conclusion, the Tribunal referred to the objects of the Act and the three step process that it must follow in determining an application for a departure order under s.117 of the Child Support (Assessment) Act 1989[13]:
[13] Appeal Books, page 11 at paragraph 47.
a)That the ‘ground’ is established;
b)That it is ‘just and equitable’ to the child and the parent(s); and
c)That it is ‘otherwise proper’ to make the variation.
At paragraph 48 of its Reasons, the Tribunal states:
The Tribunal found that a ground was established, namely that Mr Jacks’ child support income should include the incentives he is paid. The Tribunal considered that inclusion of these incentives was just and equitable and that it was otherwise proper to increase Mr Jacks’ estimate of his income to include these incentives.
It is clear the Tribunal dealt with the application for review as an application for departure from a child support assessment under Part 6A of the Child Support (Assessment) Act 1989. The Tribunal made findings as to Mr Jacks’ income, including incentive payments paid by his employer for the period September 2006 to 11 May 2007 and concluded that Mr Jacks’ child support income amount for the relevant period should include his incentive payments. The Tribunal had more up to date information than the Objections Officer, as to the incentive payments Mr Jacks had received.
Social Security Appeals Tribunal decision
The Tribunal decided to set aside the decision of the Agency and substitute a new decision that Mr Jacks’ annual child support income is $67,192 for the period 1 December 2006 to 29 February 2008.
Grounds of Appeal
The appellant relies on the Amended Notice of Appeal filed 29 August 2007 which lists 7 grounds of appeal. In his written submissions, Mr Kennett summarises the issues of law that arise as:
(a) whether the SSAT was entitled to deal with the case under Part 6A of the Assessment Act in circumstances where neither the primary decision-maker nor the objections officer had done so, or considered doing so (Ground 1);
(b)If Part 6A was available, whether it was open to the SSAT to proceed under Division 2 of that Part (rather than Division 3) in circumstances where no application for a departure determination had been made (Ground 2 – alternatively Grounds 3 and 4); and
(c)if it was open to the SSAT to proceed under Division 2, whether it made its determination in the absence of findings that were an essential prerequisite to such a determination (Grounds 5 and 6) and/or without having considered mandatory relevant considerations (Ground 7).
As to these issues, the appellant submits the Tribunal made errors of law on the following grounds:
a)It was not open to the Tribunal to consider using Part 6A of the Child Support (Assessment) Act 1989; (as already noted, Part 6A deals with Departure Determinations);
b)If it was, the only proper basis for a determination was Division 3 of Part 6A, and the Tribunal did not apply the criteria set out in Division 3; and
c)Even if it was open to the Tribunal to proceed under Division 2 of Part 6A, it erred in law by failing to consider issues that needed to be considered.
Mr Kennett, in written submissions[14] states:
The Registrar does not wish to contend for any particular outcome on the merits as between Ms Bradbury and Mr Jacks, but has commenced this appeal in order to clarify the powers of the SSAT.
[14] Page 3.
Was it open to the Tribunal to consider using Part 6A?
Mr Kennett argues that the exercise of powers under Part 6A was not properly part of reviewing the decision of the objections officer. Mr Kennett submits that:
a)The Tribunal was required by law to confine its review to the decision of the objections officer it was asked to review. The objections officer considered whether or not Mr Jacks’ estimate of income was sufficiently accurate to be accepted. The objections officer found that Mr Jacks had received one incentive payment during the relevant period, but was unable to predict what other payments Mr Jacks might receive. On that basis the objections officer was satisfied that Mr Jacks’ estimate of income should be accepted.
b)The objections officer did not consider, nor was the objections officer asked to consider, whether or not there should be a departure from the administrative assessment of child support calculated under Part 5 of the Act. The objections officer was not dealing with an application for departure.
c)Instead of the Tribunal addressing the question addressed by the objections officer, of whether the power in s.60A(1) of the Assessment Act should be exercised, that is, whether or not Mr Jacks’ income estimate was correct and should have been accepted by the Agency, the Tribunal treated Ms Bradbury’s application for review as a departure application under Part 6A of the Act and decided the case on the basis of its findings in relation to that departure application.
d)The Tribunal incorrectly identified the issues to be decided and embarked on the wrong inquiry.
Mr Kennett refers me to a number of provisions in the child support legislation as well as to several authorities to support his contention that the Tribunal must confine its review to the answer the objections officer gave to the statutory task that was before her.
The Tribunal’s review powers are set out in the Child Support (Registration and Collection) Act 1988 at Division 5 of Part VIIA.
a)Section 103S provides:
If a person applies to the SSAT for a review of a decision under this Part, the SSAT must:
(a) affirm the decision; or
(b) set the decision aside and:
(i) substitute a new decision; or
(ii)send the matter back to the Registrar for reconsideration in accordance with any directions or recommendations of the SSAT.
b)Section 103T(1) provides:
…the SSAT…may…exercise all the powers and discretions that are conferred by this Act and the Assessment Act on the Registrar.
c)Section 103T(2) provides:
to avoid doubt, any limitation on the exercise of a power or discretion by the Registrar also limits the exercise of that power or discretion by the SSAT under this Part.
I accept Mr Kennett’s contention that the legislation imposes limits on the exercise of the Tribunal’s powers.
In Comcare v Burton[15], Finn J of the Federal Court of Australia deals with the powers of the Administrative Appeals Tribunal under the Safety, Rehabilitation and Compensation Act 1988 (Cth). The second respondent had made a claim on Comcare for compensation, but Comcare had not determined her entitlement to compensation, when the second respondent applied to Comcare for reimbursement of taxi fares to travel to and from one of her treating doctors. The second respondent’s application for reimbursement of fares was refused, an independent review officer upheld the refusal, and she applied to the Administrative Appeals Tribunal (AAT) for review of that decision. The AAT expressed an intention to deal not only with the question of the taxi fares but also with the question of the second respondent’s degree of impairment and the compensation that she would be paid. The issue before the Federal Court was whether it was open to the Tribunal to decide a matter (the amount of compensation) not the immediate subject of a “reviewable decision”. The Federal Court held it was not. Section 43(1) of the Administrative Appeals Tribunal Act 1975 is the parallel provision to s.103T of the Child Support (Registration and Collection) Act 1988. His Honour Finn J says:
…section 43(1) of the AAT Act is not a source of jurisdiction for the Tribunal but confers power on the Tribunal in relation to matters in which it has jurisdiction.
The Court held that the AAT’s powers are limited to reviewing a reviewable decision, and one needs to have a reviewable decision:
The process of reviewing the decision is to occur in the setting of the questions that gave rise…the same questions as were before the reconsideration decision maker.
[15] (1998) 157 ALR 522
In Australian Securities and Investments Commission v Donald[16], the Full Court of the Federal Court held that the AAT was not confined to the decision-making power on which the original decision-maker (the Commission) actually relied, as long as it did not go beyond the available range of powers the original decision-maker could have exercised when addressing the question before it. The Full Court decided the AAT had acted within its powers when upon its review of a banning order against the respondent, it firstly, reduced the length of the ban and secondly, determined that the appellant accept an undertaking from the respondent that he do certain things. The Australian Securities and Investments Commission (ASIC) appealed on the basis the Tribunal had no power to decide that it accept the respondent’s undertaking. An undertaking was among the powers ASIC could have exercised “relevant to its consideration of the decision”[17] of the respondent, although ASIC did not choose to exercise that power. The Full Court held it was open to the Tribunal to consider all the powers exercisable by the Commission in deciding the matter, when determining whether the Commission made “the correct or preferable decision”[18]. I agree with Mr Kennett that this decision is authority for the proposition that the Tribunal as the reviewing body, could have exercised any of the powers the objections officer had available to her when addressing the question of whether Mr Jacks’ estimate of income should have been accepted. It is not authority for the Tribunal to exercise powers beyond those which were available to the objection’s officer.
[16] (2003) 203 ALR 566
[17] At paragraph 29.
[18] At paragraph 30.
In Minister for Immigration and Multicultural and Indigenous Affairs v Ahmed and Another[19], a delegate of the Minister had cancelled the respondent’s student visa. The Migration Review Tribunal affirmed the cancellation. The Minister had not followed correct notice procedures and there was therefore a problem with the delegate’s purported exercise of that power. The Full Court decided the Tribunal was entitled to review a purported exercise of the delegate’s power and to make a decision on the merits. The Full Court said[20]:
The subject matter of that review is to be identified by examining the boundaries of the administrative controversy before the delegate…Once that decision and its boundaries are identified one knows the subject matter of the statutory process of review.
[19] [2005] FCAFC 58
[20] At page 322.
Discussion
I find the Tribunal correctly identified in its Reasons, the decision under review as:
A decision made by an objections officer of the Child Support Agency on 22 November 2006, to accept an annualised estimate of income for Mr Jacks of $53,331 for the period of 1 December 2006 until 29 February 2008.
However, I find the Tribunal was then required to confine its inquiry to that decision under review. As held by Finn J in Comcare v Burton[21]:
The Tribunal is obliged to answer the same questions as were before the primary decision-maker and exercises its powers only in that setting.
[21] Supra, referred to at page 10 of Counsel’s written submissions.
I am not satisfied the Tribunal confined its inquiry to the decision it was asked to review. This is clear from the issues the Tribunal identifies in its Reasons as the issues for determination[22]. The Tribunal identifies the issue for its determination as whether there should be a departure from the Agency’s assessment during the relevant period, rather than as whether or not the objection officer was correct in accepting Mr Jacks’ estimate of income. I agree with Mr Kennett’s submission, that until the Tribunal decides whether or not Mr Jacks’ estimate of income should be accepted, the decision as to what the child support assessment will be, remains open. It is essential to know the child support assessment before considering whether or not there is a basis for departure from that assessment.
[22] Paragraph 7 of Reasons for Decision, Appeal Books, page 5.
It was open to Ms Bradbury at any stage, and remains open to Ms Bradbury, to apply to the Registrar for a departure from the child support assessment by way of an application under Part 6A of the Child SupportAssessment Act 1989. At this stage, Ms Bradbury has not done so. If Ms Bradbury were to make such an application and was dissatisfied with the Registrar’s decision, she would be entitled to make an objection to the Registrar’s decision. If she remained dissatisfied with the objection officer’s decision, Ms Bradbury would be entitled to apply to the Social Security Appeals Tribunal for a review of that decision. If Ms Bradbury were to follow such a course, the question for the Tribunal would then be whether there should be a departure from the child support assessment.
In the present case, when the matter came before the Tribunal, Ms Bradbury had not sought a departure from the child support assessment, nor had the Child Support Registrar. It was therefore not open to the Tribunal to deal with the review as a Part 6A application for child support departure.
The appeal will therefore be allowed, the Tribunal’s decision set aside and the matter remitted to the Tribunal for reconsideration in accordance with correct principles.
Although it is not necessary for me to deal with the alternative grounds of appeal, I make these further observations which are raised by counsel in his submissions.
As earlier stated, Part 6A, Divisions 2 and 3 of the Child Support Assessment Act 1989 deals with departure applications. Those provisions contain certain pre-requisites to the availability of the Registrar’s power to the making of a departure determination, including that a carer, liable parent or a Registrar must make a written application in accordance with s.98B. In the present case, no s.98B application had been made by either Ms Bradbury, Mr Jacks or the Registrar. Therefore one of the pre-requisites to the Tribunal exercising its power to make a departure determination under s.98C was not satisfied, as required by s.103T(2) earlier referred to.
The Tribunal had formed the view that it was applying the provisions of Division 2 of Part 6A which concerns departures initiated by a carer. Yet, even if the Tribunal had been entitled to form that view (in other words, it had been reviewing a decision made under Part 6A) the Tribunal failed to correctly address the provisions of Division 2, Part 6A. To review a departure determination based on a liable parent’s income would have involved consideration of the matters in s 98L, including whether application of the assessment figure calculated in accordance with the Act, would result in “an unjust and inequitable determination of the level of child support to be provided by the liable parent for the child because of the income, earning capacity, property and financial resources of either parent” (in this case, Mr Jacks). This would have required a consideration of the effect of income, earning capacity, property and financial resources, not simply “income”. If satisfied of the ground for departure, under s.98L(2), the Tribunal would then have had to decide whether a departure would be “just and equitable” and “otherwise proper” by considering all the issues set out in s.117(4) – (9). The Tribunal in this case, did not address these issues.
Determination
Ms Bradbury sought a determination of the question as to whether Mr Jacks’ estimate of income should be accepted for the purpose of calculating his liability for child support. She did not seek a determination of the question as to whether there should be a departure from Mr Jacks’ assessment. The Tribunal did not address the correct question.
I accept this summary from Mr Kennett:
In other words, here before the Tribunal could decide that the ordinary application of the Act was unjust it needed to form a view about the level at which Mr Jacks’s income should be assessed or would be assessed by the ordinary application of section 60 and 60A. And the Tribunal just didn’t attempt to do that, it jumped over that step and went straight to Part 6A. And this is…embarking on a departure determination without first having something to depart from.
Section 110F of the Child Support (Registration and Collection) Act 1988 sets out the powers of courts when determining an appeal from the Tribunal. It provides:
The court…may make such order as it thinks appropriate by reason of its decision.
As earlier noted, I have decided that the Tribunal’s decision will be set aside and the matter remitted to the Tribunal for re-hearing.
The appellant does not seek costs, and I make no order for costs.
I certify that the preceding forty-four (44) paragraphs are a true copy of the reasons for judgment of Sexton FM.
Associate: Collette McFawn
Date: 29 November 2007
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