Earnshaw v Child Support Registrar

[2020] FCCA 1713

FEDERAL CIRCUIT COURT OF AUSTRALIA

EARNSHAW v CHILD SUPPORT REGISTRAR & ANOR [2020] FCCA 1713

Catchwords:
ADMINISTRATIVE LAW – Child Support Appeal – whether the Appellant was denied procedural fairness before the Administrative Appeals Tribunal – allegations of bias on behalf of the decision maker – no denial of procedural fairness – no actual or apprehended bias – Notice of Appeal dismissed with costs.  

Legislation:

Administrative Appeals Tribunal Act 1975 (Cth), s.44AAA(1)

Federal Circuit Court Rules 2001, Division 2 of Schedule 1

Cases cited:

Minister for Immigration and Ethnic Affairs v Wu Shan Liang (1996)136 ALR 481
Minister for Immigration and Multicultural Affairs v Jia (2001) 178 ALR 421 SCAA v Minister for Immigration and Multicultural and Indigenous Affairs [2002] FCA 668

Applicant: MR EARNSHAW

First Respondent: CHILD SUPPORT REGISTRAR

Second Respondent: MS EARLWOOD

File Number: MLG 4052 of 2019

Judgment of: Judge Blake

Hearing date: 5 June 2020

Date of Last Submission: 5 June 2020

Delivered at: Melbourne

Delivered on: 26 June 2020

REPRESENTATION

Advocate for the Applicant: In person

Solicitors for the Applicant: None

Advocate for the First Respondent: Ms Elliott

Solicitors for the First Respondent: Sparke Helmore

Advocate for the Second Respondent: No appearance

Solicitors for the Second Respondent: None

ORDERS

1. The Notice of Appeal filed on 20 November 2019 and amended on 10 March 2020 be dismissed.

2. The Applicant pay the First Respondent’s costs of the proceedings fixed in the sum of $7,200.

IT IS NOTED that publication of this judgment under the pseudonym Earnshaw v Child Support Registrar & Anor is approved pursuant to s.110X(4)(h) of the Child Support (Registration and Collection) Act 1988 (Cth).

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT MELBOURNE

MLG 4052 of 2019

MR EARNSHAW

Applicant

And

CHILD SUPPORT REGISTRAR

First Respondent

MS EARLWOOD

Second Respondent

REASONS FOR JUDGMENT

Introduction

1. This is an appeal against a decision of the Administrative Appeals Tribunal (‘Tribunal’) dated 15 October 2019 (‘Decision’). In the Decision, the Tribunal set aside a decision of a delegate of the Child Support Registrar (‘Registrar’) and substituted a decision that the Appellant's adjusted taxable income was to be set at $70,000 per annum for the period 28 June 2018 to 30 June 2023.

2. The Appellant wishes to appeal the Decision. He seeks, inter alia, orders that the Decision be set aside.

3. For the reasons that follow, I have decided to dismiss the appeal.

The appeal grounds

1. The Appellant filed a Notice of Appeal on 20 November 2019. He subsequently filed an Amended Notice of Appeal on 10 March 2020. He also filed a number of documents in the proceeding, including his affidavits of 20 November 2019 and 7 May 2020, a Financial Statement on 20 November 2019 and an outline of submissions on 26 May 2020. He also provided to the Court a copy of the transcript of the proceedings before the Tribunal on 15 October 2019. He appeared before me at the hearing on 5 June 2020 unrepresented and made oral submissions.

2. The Amended Notice of Appeal raises two appeal grounds. The second ground is, in reality, a general prayer for relief, and need not be considered further. Accordingly, the sole ground of appeal is as follows:

   ‘I have been served with injustice from AAT's review. AAT's member made the decision in prejudice and made deliberate statements in favour of the respondent and blamed me for committing fraud and announced wrong allegations of false business expenses without any evidence and without any such submission from respondent or child support during the hearing. As a Justice Officer the AAT Member breached her duties and made unsubstantiated allegations on me. The AA T member should have refrained herself from making deliberate statements and baseless allegations on me as part of the procedural fairness. Because the AAT member made such damaging statements about me during the hearing, I believe they have made prejudiced decision.’

3. In written submissions, and before me, the Appellant contended, among other things, that he had been the victim of bias or pre-judgement by the relevant Tribunal member. His oral submissions before me were essentially the same as those set out in his written submission. The arguments that are set out in the Appellant’s written outline of submission are as follows:

   ‘(d) On page number 20 at the paragraph number 30 of the transcript, Member AAT blamed on me of telling her some Magical Accounting. I clearly told her I am not a certified accountant and I am just attempting to explain my situation as best as I can.

   (e) On page number 26 paragraph number 35 & 40, member AAT fails to consider the evidence tendered instead makes a choice to consider my personal bank account statement as the more accurate reflection of my income. This reflects member AAT has a biased view against me that I am hiding my income from the child support.

   (f) On page number 29, paragraph number I5, Member AAT blamed upon me that I may use company fuel for my personal reasons and claim it on tax as company expenses, Member AAT proves that she believes that I am telling lies and not presenting the facts. Member AAT has already made up her mind and branded me a liar.

   (g) On page number 29, paragraph number 20, I explained to member AAT I have the statements to prove what the fuel was used for.

   (h) On page number 30, paragraph 5,10 and 15, Member AAT blamed upon me that I must have been grocery shopping with company money and claiming it as part of the company expenses. Member AAT had painted a tainted image of me in her mind and hence way she continued to make blames upon me with her biased decision making.

   (i) On page number 43, paragraph number 40, Member AAT blamed upon me of having a secret bank account and

   (j) On page number 46, paragraph number 15, Member AAT's wordings reflect favourisim.

   (k) On page number 49, paragraph number 30, Member AAT took sides and demonstrated favourism in her duty of delivering justice.

   (1) On page number 52, paragraph number 30, Member AAT chose not to interrogate the other party and made all efforts just to interrogate me, this reflects the ongoing abuse of the power by Member AAT.’ (errors in original)

4. In exercising jurisdiction under section 44AAA(1) of the Administrative Appeals Tribunal Act 1975 (‘AAT Act’), the Court may consider an appeal on a question of law. In this matter, the Appellant complains about procedural unfairness. The substance of his complaint is that the Tribunal was affected by actual or apprehended bias.

5. The legal principles to be applied when assessing allegations of bias have been well traversed. Among other things:

   a)A claim of bias is serious and requires evidence. It is a rare and exceptional case where bias can be demonstrated solely from the published reasons of the decision. Adverse findings of themselves do not give rise to an inference of bias or by itself suggest that the decision-maker approached the task with other than an open mind: SCAA v Minister for Immigration and Multicultural and Indigenous Affairs [2002] FCA 668 at [38];

   b)A person claiming bias must show that the decision-maker was ‘so committed to a conclusion already formed as to be incapable of alteration, whatever evidence or argument may be presented’: Minister for Immigration and Multicultural Affairs v Jia (2001) 178 ALR 421 (‘Jia’) at [72]; and

   c)Further, ‘natural justice does not require the absence of any predisposition or inclination for or against an argument or conclusion’: Jia at [72].

6. I now turned to deal with each of the arguments advanced by the Appellant. The numbering that I used in the headings below reflects the numbering used by the Appellant in his written submissions which I have set out above.

Submission 2(d) and 2(i)

1. The Appellant here complains about statements of the Tribunal in respect of ‘Magical Accounting’ and of the Appellant having a ‘secret bank account’.

2. In respect of the first complaint, the Transcript discloses the following exchange at lines 19-40 on page 20:

   ‘MR EARNSHAW: Yes. So the profit and loss statement that he has mentioned is the (indistinct) mine and the company’s income together and when it’s the  time to report to ATO, you have to go separate as it was (indistinct) my ABN, what is said on my ABN and for a company’s ABN, what (indistinct).

   MEMBER: So this is a profit/loss for B Group, it’s the same as it says on the company tax return. How will I know that theirs is a difference in that name?

   MR EARNSHAW: Because - - -

   MEMBER: How will I know that there is difference? You’re telling me some magical accounting here and I must say it is magical accounting. I am looking at this document as it is, I see a name B Group Pty Ltd, I see a tax return for B Group Pty Ltd, but you’re saying, no a part of that is half and half and part of that is half and half and there is nothing in the paperwork that tells me that that’s correct.

   MR EARNSHAW: Well, I’m just (indistinct) to the company tax return now for the - - -

   MEMBER: Yes, yes.’

3. In respect of the second complaint above, the Transcript discloses the following exchange from line 38 on page 43 to line 7 on page44:

   ‘MEMBER: So there are depreciation expenses listed, $16,153 and they are listed again for 2018/’19 or something similar to that. So tell me how you work your - how you work your replacement? So if you have to buy - you 40 sold the van, the van, as you said, earlier in the year. So if you need to buy a new vehicle for whatever reason how do you work this? So how do you replace the things that you need to replace? Do you have a secret bank account that you save in, do you take a loan or how do you work it?

   MR EARNSHAW: I believe what your Honour is trying to say is how the depreciation works, is that what your Honour trying to say?

   MEMBER: No, I’m trying to work out how you run your replacements, what you do?

   MR EARNSHAW: I haven’t done any replacements.

   MEMBER: Okay.’

4. When the passages above are fairly read in their surrounding context, it can be seen that what the Tribunal was endeavouring to do was to understand the financial reports and circumstances of the Appellant. As can be seen from the extract above, the Transcript did not capture all of what was said. It may be that the Tribunal Member was impatient. It may be that the Appellant was nervous. In my view, however, these extracts do not support a finding of actual or apprehended bias. Rather, what they demonstrate is an attempt by the Tribunal to test the Appellant’s case by raising directly with the Appellant doubts that the Member had about the material before the Tribunal, and seeking to clarify aspects of the Appellant’s case.

Submission 2(e)

1. The Appellant’s submission here is that the Tribunal considered his personal bank account as a ‘more accurate reflection of [his] income’, and instead failed to consider all of the evidence.

2. In respect of this complaint, the relevant exchange that the Appellant takes issue with occurs in the Transcript at lines 35-40 on page 26. It is useful, however, to set out the exchange that begins at line 26 on page 26 and ends at line 8 on page 27. The extract is as follows:

   ‘MEMBER: - - - Coles Express is a company expense? Liquorland is a company expense?

   MR EARNSHAW: No, Member, not that one.

   MEMBER: (Indistinct) C Store is a company expense?

   MR EARNSHAW: Not that one.

   MEMBER: Because most of these are actually - it looks to me like they’re your own private expenses?

   MR EARNSHAW: That’s right, they are my personal expenses because that’s where I used to make some expenses as well but what’s mentioned in the tax return is the more accurate information.

   MEMBER: No, no, no, I am actually looking at this as the most accurate information because I can see you using company money to pay for your own expenses.

   MR EARNSHAW: Because my company needs to pay me, right, I am the one who’s working for the company so I need to have a salary and if I’m spending that money that’s my (indistinct), that’s not company (indistinct) pay cut because that’s (indistinct) that’s where all expenses needs to be done from and when I have my (indistinct) that’s what I - that’s what I spend and when I report that to my taxation agent or the ATO I take those expenses out which are my personal and the ones that belong to the company they stay there.

   MEMBER: Okay.’

3. In addition to the extract above, the preceding page to that extract discloses that the Tribunal Member commences upon a process of reviewing bank statements and assessing income and expenses from those statements.

4. When the extracts above are considered within their context, the following matters become apparent. First, the exchange between the Appellant and the Tribunal discloses, once again, the Member attempting to grapple with and understand the evidence before the Tribunal. A series of questions is posed by the Member, and answered by the Appellant, in relation not only to expenses incurred, but whether those expenses are private or business expenses. In my view, the exchange discloses nothing more than the Member attempting to understand the evidence. Second, to the extent that there is any complaint about the Tribunal examining personal bank account statements of the Appellant,  this is an examination that the Tribunal was permitted to make, so as to consider and weigh the evidence before it. It is uncontroversial that it is up to the Tribunal to decide what weight to a give particular evidence: Minister for Immigration and Ethnic Affairs v Wu Shan Liang (1996)136 ALR 481. Finally, it is apparent from paragraph [21] of the Decision, reproduced to the Court in the Appellant’s affidavit filed on 20 November 2019, that the Tribunal did not disregard other evidence before it. Paragraph [21] of the Decision discloses that the Tribunal considered various ‘income tax returns, Business Activity Statements and bank account statements’.

Submission 2(f), 2(g) and 2(h)

1. The Appellant's submissions in this area arise from an exchange between the Tribunal and the Appellant in relation to the difference between business expenses and personal expenses in the material before the Tribunal. The relevant exchanges pointed to by the Appellant upon which he bases his claim of actual or apprehended bias are set out from line 15 on page 29 and concludes at line 15 on page 30 of the Transcript. Once again, it is useful to set out the exchanges that immediately precede that which is complained about by the Appellant. I set out below the extract of the Transcript from line 6 on page 29 to line 22 on page 30:

   ‘MEMBER: The point that I’m trying to make is you’re using your credit cards for all sorts of things.

   MR EARNSHAW: Yes.

   MEMBER: Okay.

   MR EARNSHAW: That’s right, yes.

   MEMBER: And I look at this credit card, there’s no way for me to determine what is actually a private expense or what is a company expenses. Now, you can say that the petrol that I bought on Caltex Suburb D on 14 July is for my driving but you could’ve just as easily used it for your own private use and there would be no way of distinguishing the two. Okay.

   MR EARNSHAW: But I have nowhere to go, why would I use it for my - and the second fact is I have the statement from all the rideshare company which provides you with the number of kilometres that I’ve done during that period and that can answer your question where that fuel was used if that’s what your Honour is trying to get to.

   MEMBER: Because what I’m trying to get to is that all of your expenses here, because I don’t see it coming out of the bank account unless you have other bank accounts that you haven’t given me.

   MR EARNSHAW: No, no, I don’t have any other bank - what I’m trying to say is I can understand your Honour’s frustration of not being able to find out which is a personal or which is a business expense but the fuel, I suppose that’s what your Honour’s mentioned, that has been pulled because the statement that I get from all the rideshare companies list the amount of kilometres that I have done on those rideshares and that when you (indistinct) to the car’s average of a litre of, you know, five or six k’s a litre that can give your Honour the amount and litres for how much would I have roughly used for that, you know, if that’s what your Honour’s trying to get to.

   MEMBER: Yes. Well, the same though goes not just for petrol but the same goes if you’re buying something at Coles or if you’re buying something at Kmart or if you’re buying something at some other outlet of whatever that might be. Even if it’s an online shopping thing how do I know that that’s not for your own personal use? And I’m not saying you can’t use it, have a car for your personal use, I am trying to discern because everything that you have is - and that is the problem with business. A salary-earner, if you’re working, I don’t know, in a shop or in the government office or whatever you’re getting a salary, it’s usually a week, it’s all the same and then you have to buy your things with that. You’ve got to pay your groceries, you’ve got to pay your whatever.

   Here it all goes together, yes, you’re using it at Coles, yes, you’re using it at the petrol station, yes, you’re using it at this and that and the other but the only person who knows is you and I have no way of verifying that if you say all that was definitely a company expense, well, I can’t tell whether you did your grocery shopping on the way home and it was actually the grocery expense and the fuel that you used to get to the Coles and then back home was not a company expense, it was a private expense and that is the problem that is with all businesses because it’s all so intermingled it becomes extremely difficult to discern one or the other. That’s why most businesses have a separate account that they just put the business expenses through.

   MR EARNSHAW: Yes. Well, my business is not that big that I need to, you know, have fuel different account and pay fees on all of them. (Indistinct) easiest (indistinct) I just use that, you know, because there is no other (indistinct) that I have to pay, you know, whatever I really have I can, you know, put it on my tax return there and put it out there to the taxation office or whosoever it is wants to know that information and that’s what it is.’

2. A number of matters emerge from the Transcript extracted above. First, the Transcript is demonstrative of the Tribunal Member engaging closely with the evidence and attempting to understand it. It is clear that the Tribunal member was trying to understand the difference between personal and business expenses. In this respect, in my view, it is not correct to say that the Tribunal had ‘blamed upon’ the Appellant the issues to do with his expenses. Rather, the Tribunal was trying to understand which expenses were personal, and which were business related. There is no reference that I can find where the Tribunal Member labels the Appellant a ‘liar’. Further, there is no allegation made by the Tribunal Member that the expenses are ‘false’ business expenses. Also, I note that the Tribunal did not accept that any business income should be reduced by certain expenses for child support purposes: see paragraph [40] and paragraphs [46], [58], [62] and [65] of the Decision.

3. The evidence in my view falls far short of suggesting that the Tribunal Member was committed to a conclusion already formed such as to be incapable of alteration.

Submission 2(j), 2(k) and 2(l)

1. The central thrust of the submissions here are that the Tribunal demonstrated ‘favourism’, or favouritism as I assume is meant by the Appellant, and that the Tribunal chose not to interrogate the other party.

2. The extracts pointed to by the Appellant that are said to evidence the alleged favouritism are as follows:

   a)On page 46, line 15 of the Transcript, the following statement by the Member: 'Okay. All right. Thank you. Okay. Now, I think we might turn to you Ms [X], if you won't mind and I just want to check some of the information that you have provided'.

   b)On page 49, line 30 of the Transcript, the following statement made by the Member, following the Appellant making a submission about the other party’s working arrangements: 'How do you know these numbers? Sorry, how do you know these numbers?'.

   c)On page 52, line 30 of the Transcript, the following statement made by the Member after hearing from Ms [X]: 'Mr [Appellant], I just wanted to clarify just your current situation and you have said it already but I just wanted to make sure'.

1. The above statements of themselves do not, in my view, demonstrate any favouritism or bias toward the other party.  There is nothing in the words themselves, whether extracted above or looked at in context that demonstrates, or is evidence of, actual or apprehended bias. 

2. Looked at more broadly, it might be said that the substance of the Appellant's complaint is not so much with the actual words set out above, but is rather a complaint that the Member spent much more time questioning the Appellant, rather than the other party.  That much would appear to be correct when the Transcript is looked at in its entirety.  The fact, however, that the Tribunal spent more time questioning the Appellant does not prove that the Tribunal was biased against the Appellant, or favoured the other party, when having regard to the authorities referred to earlier.  It is apparent that the Tribunal spent much time trying to understand the financial background and records of the Appellant.  The Tribunal was entitled to question the Appellant about those matters in order to understand them.  Simply questioning one party more than the other is insufficient to make good a complaint of bias.

Conclusion

1. If the above were not enough, it is also relevant to look toward the end of the transcript, when the Tribunal was in the process of bringing the hearing to an end. At Transcript page 55, the Tribunal states 'I honestly do not know what I'm going to do as yet...' If any further evidence is needed as to lack of bias, in my view it is to be found in this statement.

2. For all of the above reasons, I find that the Appellant has not made good the grounds that are set out in the Amended Notice of Appeal.  Accordingly, the appeal must be dismissed.

3. In this matter, it is appropriate to order costs in favour of the Respondent. The Respondent has sought costs fixed in the sum of $7,200, pursuant to Division 2 of Schedule 1 to the Federal Circuit Court Rules 2001. I will make that order

I certify that the preceding twenty-seven (27) paragraphs are a true copy of the reasons for judgment of Judge Blake

Associate: 

Date: 26 June 2020