Elfers and Child Support Registrar (Child support)

[2020] AATA 1399

Elfers and Child Support Registrar (Child support) [2020] AATA 1399 (2 April 2020)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2020/MC018214

APPLICANT:  Mr Elfers

OTHER PARTIES:  Child Support Registrar

TRIBUNAL:Member S Letch

DECISION DATE:  2 April 2020

DECISION:

The decision under review is affirmed.

CATCHWORDS

CHILD SUPPORT – refusal to grant an extension of time to object – very lengthy delay – arguable merit – significant prejudice to other party – weighing all factors the extension of time was correctly refused – decision under review affirmed

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. Mr Elfers has been assessed by the Child Support Agency (CSA) to pay child support to [Ms A]. On 1 August 2016, the CSA decided to use a provisional 2014/15 income of some $76,000 (by reference to Mr Elfers’ 2013/14 income) to the child support assessment for the period 1 November 2015 to 31 January 2017. This decision was a routine decision by the CSA in the absence of other information. Mr Elfers told the Tribunal that he was unemployed, and had moved, and that he was not aware this decision had been made.

2. On 7 May 2018, the CSA received from the Australian Taxation Office information that Mr Elfers’ 2014/15 adjusted taxable income was much lower (some $30,000). In around October 2019, Mr Elfers approached the CSA and objected to the assessment; he was advised by the CSA he needed to object to the original decision made in August 2016.

3. On 17 December 2019, the CSA – not unexpectedly given the passage of time - decided to refuse to extend the time in which Mr Elfers could object. On 14 January 2020, Mr Elfers applied to the Tribunal for review.

4. Mr Elfers participated in the Tribunal’s hearing by conference telephone.

CONSIDERATION

Background and legislative framework

1. A parent may object to a decision made by the CSA pursuant to section 80 of the Child Support (Registration and Collection) Act 1988 (the Registration Act). Section 81 of the Registration Act provides that an objection must be lodged within 28 days after notice of the decision is served on the person.

2. Section 82 of the Registration Act relevantly provides that a person may apply for an extension of time in which to lodge an objection and that the application must state fully and in detail the grounds for the application, including the circumstances concerning, and the reasons for, the failure by the person to lodge the objection within the 28-day time period prescribed. The Registration Act does not set out criteria for consideration when considering an application for an extension of time within which to object. However, the Child Support Guide (the Guide) contains useful guidelines at chapter 4.1.5. In summary, the Guide suggests that it is ultimately a question as to whether the interests of justice favour the granting 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.

3. 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) 45 ALR 411 at 416). 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) 64 ALJR 459 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 …

4. In line with Wilcox J’s survey of cases in Hunter Valley Developments P/L v Cohen (1984) 3 FCR 344, the Tribunal proposes to consider the matters identified in Gallo v Dawson under the following headings:

   ·      the explanation for the delay;

   ·      the merits of the substantial application;

   ·      any prejudice to the other party including any prejudice in defending the proceedings occasioned by the delay; and

   ·      any public interest considerations that might flow from a successful application including “the unsettling of other people” (Ralkon v Aboriginal Development Commission(1982) 43 ALR 535 at 550) or of “established practices” (Douglas v Allen (1984) 1 FCR 287).

Explanation for the delay

1. Mr Elfers told the Tribunal that he had not been aware of the decision at the time as he had moved address. He said that whilst receiving newstart allowance from Centrelink, they had been taking deductions for child support. As a result, he considered the CSA aware of his changed circumstances and that he did not need to contact the CSA.

2. The Tribunal observes that the delay here is very lengthy.

3. In passing, the Tribunal observes that the CSA may have been receiving information – perhaps on an annual basis – indicating Mr Elfers was receiving a newstart allowance. It is not clear whether any such information, if received, was acted upon by the CSA. This may, or may not, be relevant to the issue of whether Mr Elfers’ actual income can be given retrospective effect (discussed further below).

Merits of the objection

1. There is no point granting an extension if an objection is unlikely to succeed. The CSA decision at the time it was made was the correct decision. To that extent, the application has no merit as it cannot succeed.

2. It seems to the Tribunal that the CSA has directed Mr Elfers to object to the original decision when the appropriate path is to consider whether his actual 2014/15 income can be backdated for the purposes of the child support assessment.

3. The Child Support Guide, consistent with the relevant law, provides the following at 2.4.4.60:

New information about adjusted taxable income

Where the Registrar has made a determination of a parent's adjusted taxable income for a particular year and subsequently ascertains the parent's actual taxable income for that year (when a tax assessment issues for the parent), the child support assessment must be amended immediately. The assessment must also be amended if the Registrar obtains other new information about a parent's adjusted taxable income and makes a later determination of the appropriate adjusted taxable income amount. The later determination of adjusted taxable income will be subject to the different rules pre- and post-1 July 2011, depending on which financial year the later determination relates to.

If more recent income information becomes available that would allow the Registrar to determine a more current indexed income for the parent, another adjusted taxable income will be determined and the assessment will be amended to use the more recent information.

The date of effect of the amendment to the child support assessment will be the beginning of the relevant child support period where:

a.the parent lodged their tax return on time, or still has time to lodge, his or her tax return on time as required under the income tax legislation (for example, under a relevant tax agent lodgement program), or

b.paragraph (a) does not apply and the adjusted taxable income subsequently ascertained or later determined by the Registrar is higher than the amount previously determined, or

c.paragraphs (a) and (b) do not apply and the parent was genuinely unable to provide the Registrar with timely information due to the parent being unaware that an assessment had been made; serious ill health or injury; natural disaster; remote location; imprisonment; or other exceptional circumstances and the parent provided income information as soon as was practicable in the circumstances, or

d.paragraphs (a) and (b) do not apply and the parent resided overseas, was not required to lodge a tax return and the parent provided information about his or her income to the Registrar within a reasonable time in the circumstances.

If the Registrar is satisfied that one or more of the above apply, the date of effect can be applied retrospectively.

When making a decision about whether the circumstances prescribed by CSA Regs section 11 apply, the Registrar must consider all the relevant facts of the parent's particular circumstances and the extent to which they contributed to the parent's delay in providing information about their income to the Registrar.

For the purposes of section 11(1)(c), the Registrar will consider a person provided their income information to the Registrar as soon as was practicable if they provided that information within a reasonable period of time after the special or exceptional circumstances ceased to affect them. A decision about whether the parent provided their income information to the Registrar as soon as was practicable will require an examination of the parent's individual circumstances.

Otherwise, the amendment to the assessment will take effect from the day after the assessment was amended, for the remainder of the child support period.

Potential prejudice

1. The delay here is very significant. The other parent was entitled to rely upon the original decision. This factor weighs against granting an extension.

Public interest considerations

1. The statute provides for a 28-day period for the lodgement of objections so that parents (and the CSA) 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 the CSA 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, even a brief one, is not to be automatically granted.

Conclusion

1. The Tribunal is of the view that the substantive application cannot succeed as the CSA made the correct decision in 2016. The appropriate course is for the CSA to consider whether the Mr Elfers’ 2014/15 adjusted taxable income, when it later came to light, can be given retrospective effect under the particular provisions which govern such determinations.

2. As the Tribunal has reached the same conclusion as the CSA, the decision under review will be affirmed.

DECISION

The decision under review is affirmed.