Eaton and Child Support Registrar (Child support)

[2024] AATA 3236

Eaton and Child Support Registrar (Child support) [2024] AATA 3236 (1 August 2024)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2024/MC027972

APPLICANT:  Mr Eaton

OTHER PARTIES:  Child Support Registrar

TRIBUNAL:Member J Bakas

DECISION DATE:  1 August 2024

DECISION:

The decision under review is affirmed.

CATCHWORDS

CHILD SUPPORT – application for extension of time – reconciliation of income estimate to adjusted taxable income – outstanding arrears – explanation for the delay – Binding Child Support Agreement – extension of time refused

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

REASONS FOR DECISION

BACKGROUND

1. This review is about whether Mr Eaton should be granted an extension of time to lodge an objection to a Services Australia – Child Support (Child Support) decision to reconcile Mr Eaton’ 2021/22 estimate of adjusted taxable income (ATI) of $34,978 with his ATO assessed ATI of $57,052 made on 19 April 2023.

2. Mr Eaton was notified of that decision on 19 April 2023 and in that notification was advised that should he think the decision is incorrect or the legislation not applied correctly he can object to the decision within 28 days from the date he received the letter.

3. Mr Eaton did not object to that decision until 7 August 2023.

4. On 17 May 2024, Child Support determined that Mr Eaton’s objection to the 19 April 2023 decision was out of time and refused to grant Mr Eaton an extension of time to object.

5. Mr Eaton lodged an application for review of that decision with the Tribunal on 21 May 2024.

6. The hearing of the application took place on 18 July 2024. Mr Eaton spoke with the Tribunal by conference telephone and gave evidence on affirmation.

7. The Tribunal had before it documents from Child Support, copies of which were provided to Mr Eaton prior to the hearing.

8. The Tribunal deferred its decision to obtain a copy of the Binding Child Support Agreement referred to by Mr Eaton at the hearing which was missing from the hearing papers. The Tribunal then sent a copy to Mr Eaton and allowed him an opportunity to make written submissions which were received on 1 August 2024.

ISSUES

1. The statutory provisions relevant to this review are contained in the Child Support (Registration and Collection) Act 1988 (the Act) and the Child Support (Assessment) Act 1989 (the Assessment Act). The Tribunal also had regard to the Child Support Guide, the Australian Government’s online technical and policy guide to the administration of the child support scheme.

2. The objection right to a reconciliation decision is contained in item 11 (a decision as to the particulars of an administrative assessment) of the table in subsection 80(1) of the Act (as to the particulars of an administrative assessment).

3. Section 81 of the Act provides that such an objection must be lodged within 28 days from when notice of the decision is given to the person.

4. Under section 82 of the Act, a person may apply for an extension of time in which to lodge an objection. Such an application “must state fully and in detail the grounds of the application, including the circumstances concerning, and the reasons for, the failure by the person to lodge the objection as required by section 81”.

5. Section 83 of the Act provides that the Registrar must consider the application for an extension of time, grant or refuse the application and advise the person of the decision in writing. If refused, section 89 of the Act allows the person who applied for the extension of time to apply to this Tribunal for review of that decision.

14. The Act does not set out criteria for consideration when considering an application for an extension of time within which to object. However, the Guide at 4.1.5 suggests that it is ultimately a question as to whether the interests of justice favour the grant or refusal of the application in the particular circumstances. Factors to be considered are the reason for the delay, the merits of the objection, whether the person has rested on their rights and any potential prejudice to the other party or the public.

15.  The established cases indicate that the starting position is the prima facie rule that proceedings commenced outside a statutory period will not be entertained (Lucic v Nolan [1982] FCA 217). However, the primary concern “is to do that which will enable justice to be done between the parties” (see Martinsen v Secretary, Department of Family & Community Services [2004] FCA 297 per Spender J). Spender J quoted McHugh J in Gallo v Dawson [1990] HCA 30 as follows:

In order to determine whether the rules [imposing time limits] will work an injustice, it is necessary to have regard to the history of the proceedings, the conduct of the parties, the nature of the litigation, and the consequences for the parties of the grant or refusal of the application for extension of time ...

When the application is for an extension of time … it is always necessary to consider the prospects of the applicant succeeding in the appeal …

16.  In line with Wilcox J’s survey of cases in Hunter Valley Developments Pty Ltd v Cohen [1984] FCA 186, the Tribunal took into account all relevant matters including the matters identified in Gallo v Dawson [1990] HCA 30 as follows:

(a)the explanation for the delay;

(b)the merits of the substantial application;

(c)any prejudice to the other party including any prejudice in defending the proceedings occasioned by the delay; and

(d)any public interest considerations that might flow from a successful application including “the unsettling of other people” (Ralkon v Aboriginal Development Commission[1982] FCA 153) or of “established practices” (Douglas v Allen [1984] FCA 77).

CONSIDERATION

1. Mr Eaton gave the Tribunal the following reasons for his application:

   He and the other parent, Ms [Ms A], entered into a Binding Child Support Agreement (BCSA) in August 2022. At that time there was no knowledge of any outstanding child support amount. Both parties entered into the agreement after receiving compulsory legal advice. Neither the legal advice, or any other advice from Child Support or the legal practitioner, indicated that there may be exceptions to the nil payment by either parent agreed to in the BCSA.

   The BCSA states that neither he nor the other parent shall pay periodic child support to the other for either of the two children.

   He entered into the BCSA with the belief that that was the end of the matter.

   There is no provision in the BCSA for backdated payments to be paid.

   The reconciliation made a difference of about $3,000 and Child Support told him that the other parent can choose to waive it but she is not doing so.

2. Mr Eaton gave the following reasons for asking for an extension of time to lodge his application for review:

   He did not apply within the time limit because initially he thought it was a mistake and that he did not have to respond because of the BCSA. When Child Support kept contacting him, he realised that there was an issue.

   He did lodge his tax return for the 2021/22 year late and is not debating the legality of the figures used. However, as he and the other parent signed a BCSA he really did not think that he would have to pay any more child support.

Explanation for the delay

1. The Tribunal is satisfied that Mr Eaton was advised of his right to seek review of the 19 April 2023 decision within 28 days. There is no evidence before the Tribunal that he was misadvised by Child Support.

2. The Tribunal considered Mr Eaton’ explanation for the reasons for the delay. There is no evidence that there was an actual impediment to him objecting to that decision, even though he may have thought it was an error. Mr Eaton appears to have rested on his rights rather than take action to make the Registrar aware that he disagreed with the decision.

Merits of the objection

1. The arrears that were raised as a result of the reconciliation against the 2021/22 estimate, as compared to his tax return, were arrears that fall prior to the BCSA. As such, had Mr Eaton lodged his tax return in a more timely manner, this arrears amount would have been evident before the finalisation of the BCSA. Further, there is no evidence before the Tribunal to suggest that the BCSA would have been in operation at the relevant time and therefore had any application to the liability to which the arrears he is now contesting relate.

2. The Tribunal considers that given the arrears fall prior to the BCSA, there is little prospect of success on the objection.

Potential prejudice

1. If Mr Eaton were to be successful in his objection, it is possible that there could be a reduction in the amount of child support payable by him to Ms [Ms A]. This can be viewed as a potential outcome prejudicial to that other parent’s interests in circumstances where she has relied upon that decision, and its financial implications, for some months. Nonetheless, if such a reduction were to be the result of the correct or preferable decision being made under the child support law, the Tribunal does not consider that to be a material prejudice to her. In those circumstances, the Tribunal considers potential prejudice to the other parent, Ms [Ms A], to be of neutral weight in considering the exercise of the discretion as to whether an extension of time should be granted for Mr Eaton to lodge an objection.

Public interest considerations

24.  The legislation provides for a 28-day time limit for the lodgement of objections so that parents (and Child Support) can act with certainty as to the outcome when the objection period has elapsed. The public has an interest in reviews of decisions made by Child Support being performed in a timely fashion and in a manner that ensures all applicants are treated fairly and equally. Accordingly, an extension of the time for objection is not to be automatically granted.

1. Aside from this general principle, there is no other apparent prejudice to the public were Mr Eaton to be granted an extension of time to object to the decision. Nonetheless, the Tribunal places some weight on considerations of fairness between Mr Eaton and other persons in a like position by giving due regard to the existence of a statutory time limit for lodging objections.

26.The general public has the right to expect that a matter such as an objection to arrears raised as a result of a reconciliation of income will be dealt with in a timely manner. The Tribunal was not persuaded that the circumstances of this case are such as to warrant challenging that expectation.

1. Mr Eaton lodged an objection to a child support decision after the 28 days. The Tribunal is satisfied that a 28-day time limit reduces uncertainty for both parties and that there is a general expectation that unless there is a good reason, timeframes should be observed.

Conclusion

28.  Balancing the factors and circumstances set out above, the Tribunal is not satisfied that there is sufficient justification to exercise the discretion to extend time. In particular, the objection has been lodged some months out of time. Further, there is little merit in the objection.

29.  Having regard to all matters, the Tribunal has concluded that the extension of time request should be refused.

DECISION

The decision under review is affirmed.