Ely v Ely & Anor
[2019] FCCA 503
•29 March 2019
FEDERAL CIRCUIT COURT OF AUSTRALIA
| ELY v ELY & ANOR | [2019] FCCA 503 |
| Catchwords: CHILD SUPPORT – AAT Appeal – Where the Tribunal wrongly found that a TPD payment received by the applicant was not part of his property settlement with the first respondent – error of law established – decision set aside and matter remitted to the Tribunal for re-hearing. |
| Legislation: Administrative Appeals Tribunal Act 1975 (Cth), ss.33, 44, 44AAA, 46 |
| Cases cited: Apthorpe v The Repatriation Commission [1987] FCA 649 Australian Broadcasting Tribunal v Bond [1990] HCA 33 P v Child Support Registrar [2015] FCA 116 |
| Applicant: | MR ELY |
| First Respondent: | MS ELY |
| Second Respondent: | CHILD SUPPORT REGISTRAR |
| File Number: | PAC 5499 of 2014 |
| Judgment of: | Judge Terry |
| Hearing date: | 27 March 2018 |
| Date of Last Submission: | 24 April 2018 |
| Delivered at: | Newcastle |
| Delivered on: | 29 March 2019 |
REPRESENTATION
| Counsel for the Applicant: | Mr Tregilgas |
| The Respondent: | In Person |
| Solicitors for the Child Support Registrar: | Sparke Helmore Lawyers |
ORDERS
The decision of the Administrative Appeals Tribunal made on 16 August 2017 is set aside.
The matter is remitted to the Administrative Appeals Tribunal for rehearing.
IT IS NOTED that publication of this judgment under the pseudonym Ely v Ely & 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 NEWCASTLE |
PAC 5499 of 2014
| MR ELY |
Applicant
And
| MS ELY |
First Respondent
And
CHILD SUPPORT REGISTRAR
Second Respondent
REASONS FOR JUDGMENT
Introduction
The applicant, who I will refer to in these reasons as the father, has filed an appeal against a decision of the Administrative Appeals Tribunal dated 16 August 2017.
The Tribunal’s decisions consisted of two parts. It set the father’s adjusted taxable income at $81,467.00 from 7 September 2016 until the child support assessment for his older child [X] born … 2003 ended and it also increased the annual rate of child support payable by him by $1,700.00 from 7 September 2016 to 6 September 2019.
Although the father sought to have the decision set aside in whole he only sought to disturb the first part of the decision. He proposed that after setting the Tribunal’s decision aside this court make an order in terms of the second part of the decision.
The father submitted that the decision should be set aside because the Tribunal had made an error of law:
…by making erroneous findings of fact of such magnitude that went to the very jurisdiction that it purported to exercise rendering its decision unreasonable and/or an offence to logic.
To put some flesh on the bones of this submission, he alleged that the Tribunal misinterpreted the property settlement orders made between himself and the respondent mother in June 2016 and considered the mother’s departure application as if superannuation he cashed in, superannuation he still had and a TPD payment he had received were not part of his entitlement pursuant to the orders.
As a result in coming to its decision it did not have regard to cases such as Carey & Carey[1] and failed to adhere to the policy in its Child Support Guide which stated that the Registrar would avoid undermining the property settlement entered into by the parties.
[1]Carey & Carey (1994) FLC 92-489
The mother and the Child Support Registrar submitted that the father had not established an error of law and sought the dismissal of the appeal.
The evidence
The father relied on his Notice of Appeal filed on 27 September 2017 and his affidavit filed on 29 September 2017. He was not permitted to rely on his affidavit filed on 15 January 2018 which attached a document which was not before the Tribunal or his financial statement filed on 27 September 2017.
A transcript of the proceedings before the Tribunal attached to the affidavit of the father’s solicitor Paul Mereniuk was admitted into evidence and the father’s solicitor referred me to specific parts of the Transcript.
The mother relied on her affidavit filed on 30 January 2018.
The Tribunal’s Reasons for Decision were attached to the father’s Notice of Appeal and a bundle of documents provided by the Tribunal pursuant to s. 46 of the Administrative Appeals Tribunal Act, which included a copy of the property settlement orders made on 16 June 2016, was also in evidence.
Insofar as the affidavits of the mother and father (and the mother’s submissions for that matter) contain material which was not before the Tribunal I cannot have regard to that material. To use slightly out of context a sentence from Mickelberg & the Queen which is referred to in Servos v Repatriation Commission :
In deciding whether there was error, the appellate court looks to the materials which were before the court below.[2]
[2] Servos v Repatriation Commission (1995) FCA 150
The parties all filed written submissions prior to the allocated hearing date of 27 March 2018 and I have had regard to those written submissions. The parties each made further oral submissions on 27 March.
At the commencement of the hearing an issue arose about whether the father should be permitted to rely on the transcript in light of the fact that it was obtained and filed much later than provided for in the procedural orders made on 14 November 2017. I allowed the transcript into evidence but as it had only recently become available I made an order at the conclusion of oral submissions on 27 March 2018 that if the Child Support Registrar or the mother wished to file any additional written submissions arising out of the fact that the court had admitted the transcript into evidence they could do so provided that this was done by close of registry filing on 20 April 2018.
The Child Support Registrar did not file any additional submissions. The mother filed what she termed “submissions in reply” on 20 April 2018. They were essentially a second go at submissions rather than submissions addressing issues arising out of the admission of the transcript but I have read and considered them.
The matter became a reserved decision on 24 April 2019 following me ascertaining that the additional submissions had been filed or not as the case may be.
I apologise for the delay in the delivery of this decision.
Background
The father is 53 and the mother 37. They commenced cohabitation in 2002, married on … 2003 and separated on 14 February 2014.
At the time of separation the father was a medically retired professional and the mother was employed by an Employer. That remained the case at the time the Tribunal considered the mother’s application for review.
The parties have two children, [X] born on … 2003 (16) and [Y] born on … 2008 (10). Pursuant to consent parenting orders made on 31 March 2017 the children live with the mother and spend time with the father.
The time is different for each child. They both spend half the school holidays with each parent but [X] spends time with the father from Friday to Sunday each alternate weekend and each alternate Thursday afternoon/evening during school terms with provision for her to spend time with him from Thursday until Monday if she wishes to do so. [Y] spends time with the father each alternate week from Thursday to Monday and each alternate Thursday afternoon/evening.
The differing care percentages are factored into the child support assessments which post-date the parenting orders.
The property settlement orders
On 16 June 2016 final orders were made by consent in the Federal Circuit Court at Newcastle in respect of the parties’ property dispute.
The orders provided for the father to transfer his interest in a home at Property A to the mother in exchange for a payment of $280,000.00 with a default provision for sale if the mother did not make the payment. They also provided for $58,000.00 of the mother’s superannuation to be transferred to the father and for the mother to pay the father $22,500.00 lump sum spousal maintenance.
Order 2 provided that each party was otherwise declared the owner of all assets in their name and given its significance for this appeal I will include this order in full:
2.Unless otherwise ordered herein and pursuant to s78 of the Family Law Act 1975 (Cth) it is declared that the Husband and the Wife shall each respectively:
2.1 Retain all interest in and entitlement to:
2.1.1All personal property in his or her name, possession or control respectively; and
2.1.2All shares, debentures, units in unit trusts, bank, building society or credit union accounts standing in his or her sole (sic) name respectively; and
2.1.3All interests in life, income protection, trauma protection or any other personal protection insurance policy standing in his or her sole name respectively; and
2.1.4All choses-in-action in which he or she is a party or potential party or in which he or she may have a beneficial interest; and
2.1.5All superannuation entitlements standing in his or her sole name respectively.
The orders are followed by two Notations. Only Notation A (d) is directly relevant to these proceedings but to give that Notation context I will set out Notation A in full.
A.In reaching consensus between them with regards to these proceedings insofar as they relate to financial relief for property adjustment and spousal maintenance:
a. The husband relies upon the Wife’s disclosure that she is not a beneficiary of the Will of the late Ms B;
b. The Husband relies upon the Wife’s disclosure that on or about 11 September 2014 she received a lump sum payment of $32,242.66 from Insurance Company as (sic) a result of a claim made by her relating to her ongoing interest in a trauma insurance policy;
c. The Wife relies upon the Husband’s disclosure that he has recently settled a workers’ compensation dispute and is to receive the sum of $45,262.50 in the near future;
d. The Wife relies upon the Husband’s disclosure that:
i.At paragraphs 100 – 103 of his affidavit filed in these proceedings on 14 November 2014 he anticipated receiving a lump sum amount of $300,000.00 if his claim for a lump sum payout under his total and permanent disability insurance policy was successful; and
ii.The claim remains in dispute and is now under review by the Superannuation Complaints Tribunal (“the SCT”); and
iii.He anticipates being informed of the outcome of the SCT’s review in or about May 2016; and
iv.If his claim is unsuccessful he is entitled to make further application to the Supreme Court of NSW.
The child support proceedings
A child support assessment has been in place for [X] and [Y] since June 2014.
From 23 January 2016 to 30 November 2016 the annual rate of child support payable by the father was assessed to be $0, based on a provisional income of $34,911.00 for the father and the mother’s 2014/15 taxable income of $84,616.00.
The annual rate remained unchanged for the period 1 December 2016 to 30 November 2017 when a provisional income of $105,000.00 was used for the mother.
On 7 September 2016 the mother applied to the Registrar pursuant to s. 98B of the Child Support (Assessment) Act for a departure from the administrative assessment on the grounds that the father’s income, property, financial resources and earning capacity were not properly reflected in the assessment.
The father cross-applied on the basis of the mother’s income, property and financial resources.
On 21 December 2016 the Registrar’s delegate made a decision to depart from the child support assessment by varying the father’s taxable income to $104,000.00 from 1 December 2016 to 30 November 2017.
The father objected to this decision and on 22 March 2017 an Objections Officer made a decision to depart from the assessment for the period 1 December 2016 to 30 November 2017 by varying the father’s adjusted taxable income to $34,000.00.
The effect of this following the parenting orders being made on 31 March 2017 was that the mother was required to pay child support to the father who was assessed to have 35% care of [Y] and 24% care of [X].
On 6 April 2017 the mother applied to the Tribunal for a review of this decision.
The Tribunal conducted an enquiry and handed down a decision on 16 August 2017. The findings of the Tribunal can be summarised as follows:
i)The father is medically retired from the Employer and his income consists of pension payments.
ii)The father’s pension payments in 2015/16 were $35,112.00. However in June 2016 he accessed some of his superannuation and obtained a lump sum of $46,497.00 and this amount less the cost of managing tax affairs was added to his taxable income for that financial year which increased it to $81,467.00.
iii)The father told the Tribunal that he had accessed the money due to hardship. He stated that he used the funds to pay rent and legal costs.
iv)The father argued that because he had accessed this money due to hardship and the mother had had the benefit of living rent free in the former matrimonial home the lump sum payment should be disregarded when it came to determining his capacity to pay child support.
v)The Tribunal did not accept the argument that the payment should be disregarded for these reasons and stated inter alia that “There is no reference to the lump sum superannuation payment obtained by [the father] in the court orders or attached notations made in June 2016”.
vi)The Tribunal noted that the father reported that he had remaining superannuation of $128,000.00 and that although he was 52 years of age he was able to access the funds due to being classified as totally and permanently disabled. This amount was not directly referred to again by the Tribunal in its decision although it later made a general finding that the father had income, financial resources, property and earning capacity “as discussed above”.
vii)The Tribunal noted that in October 2016 the father received a gross sum of $813,872.00 in settlement of a TPD claim. After deduction of $96,888.00 he received $716,984.00.
viii)It further noted that in November 2016 the father was advised that he had to repay $424,087.00 to Employer and that a statement of claim had been filed by his employer in May 2017. The father told the Tribunal that he had made one small part-repayment and that an application for recovery of this money was to be heard in the Supreme Court shortly.
ix)The Tribunal noted that the father had not yet lodged his income tax return for 2016/17 and was unsure what portion of the TPD payments will form part of his taxable income. His pension in 2016/2017 was $35,833.00.
x)The father told the Tribunal that he had a claim against his insurer and that his lawyer had advised him that he had a good chance of obtaining $186,000.00 plus interest.
xi)The Tribunal held that the TPD payments were intended to compensate the father for his inability to work and to replace income which would have been used to support himself and his dependants. It noted that the father disputed this.
xii)The Transcript and the Tribunal’s reasons for decision make clear that the father contended that the TPD payment formed part of the property settlement and for that reason should not be taken into account in determining his capacity to pay child support. The father relied on the Department’s Policy outlined in the Guides to Social Policy Law, Child Support Guide which stated in part that:
The Registrar will avoid undermining the property settlement or any related agreement entered into by the parents.
xiii)The Tribunal had the June 2016 Orders and referred to the fact that the TPD payment was mentioned in the Notations. It then said that:
The tribunal finds that the TPD payments were not a transfer of property in the property settlement.[3]
[3] Reasons for Decision paragraph
xiv)The Tribunal noted that in October 2016 the father purchased a four bedroom home for $680,000.00. He informed the Tribunal that the remainder of the funds available to him had been expended. The Tribunal noted that some of the funds had been expended by way of gifts and loans to his adult daughter from a previous relationship and a loan to his brother. He had also purchased a motor vehicle for $74,889.00. They also noted that his bank statements included payments for luxury goods such as $1,825.00 and $1,195.00 to Designer Stores on 29 September 2016 and 4 February 2017.
xv)The Tribunal found that the TPD funds were a financial resource which provided the father with a capacity to contribute to the children’s support.
xvi)The Tribunal found that the father’s unemployment was justified on the basis of his health and that it was unable to determine that he had any unused earning capacity.
xvii)The Tribunal was satisfied that the mother’s taxable income was $104,972.00 in 2015/16 and $107,169.00 in 2016/17 and that she did not have any unused income earning capacity. It noted that apart from the equity in her home she had some savings, a motor vehicle, superannuation and household contents but that this was not property which was capable of providing her with any significant income.
xviii)The Tribunal received extensive evidence from the mother about particular expenses she was incurring in respect of the children.
xix)The Tribunal was satisfied that the income and resources of the father provided special circumstances to depart from the assessment and that he would be liable to pay child support if the assessment was based on his income and financial resources rather than his 2014/15 adjusted taxable income. It found that the assessment was unfair to the mother and children and that a ground for department under s. 117(2) (c) (ia) had been established.
xx)The Tribunal made the necessary findings to satisfy itself that it was just and equitable to depart from the administrative assessment.
xxi)The Tribunal went on to say:
In light of the considerable financial resources the father received as a consequence of the TPD payments the Tribunal proposes to vary his adjusted taxable income to his 2015/16 adjusted taxable income of $81,467.00 In order to provide some certainty and to ensure that the father’s increased financial resources from September 2016 are taken into account the Tribunal proposes to extend the variation until the child support assessment for [X] ends. The Tribunal also proposes to increase the annual rate of child support payable by Mr Ely to include 50% of the out of pocket expenses relating to the children’s special needs, $1,700.00 for a period of three years.
xxii)The Tribunal noted that this would result in the father being required to pay the mother about $140.00 per week based on their current incomes.
xxiii)The Tribunal was satisfied taking into account the matters in s. 117(5) that it was otherwise proper to depart from the administrative assessment.
The appeal
S. 44AAA of the Administrative Appeals Tribunal Act provides that a person aggrieved by a decision of the Tribunal may appeal to the Federal Circuit Court on a question of law.
The applicant filed an appeal on 4 October 2017. Under the heading Question of Law he said as follows:
The Administrative Appeals Tribunal (AAT) erred at law by making an erroneous finding of such magnitude that went to the very jurisdiction it purported to exercise rendering its decision unreasonable and or/an offence to logic.
His grounds of appeal were as follows:
1. The Administrative Appeals Tribunal (AAT) erred at law by making an erroneous finding of such magnitude that went to the very jurisdiction it purported to exercise rendering its decision unreasonable and/or an offence to logic in that the AAT concluded that:
a.At paragraph 25 of its reasons, the TPD payments received by the Appellant were not a transfer of property pursuant to orders made by the Court on 16 June 2016 (‘the orders’).
b.At paragraph 25 of its reasons, an accounting of the TPD payments as a financial resource available to the Appellant did not undermine the property settlement made between the parties as reflected in the orders.
c.At paragraph 30 of its reasons, the TPD payments were a financial resource which provided the Appellant with a capacity to contribute to the children’s support.
d.At paragraph 19 of its reasons, a finding or inference that the retention of the Appellant’s superannuation interests including a lump sum payment of $46,497 and a remaining superannuation interest balance of $128,000 was not a transfer of property pursuant to the orders.
e.At paragraph 32 of its reasons, a finding that the Appellant has income and financial resources available to him far greater than suggested by his 2014/15 adjusted taxable income of $34,411 that would have been used in the assessment were it not for the departure decisions.
f.At paragraphs 42 and 62 of its reasons that from September 2016 until the child support assessment ends for [X], it was appropriate to vary the Appellant’s adjusted taxable income to his 2015/16 adjusted taxable income of $81,467.
The father’s submissions
The father’s counsel submitted that the amount of $46,497.00 which the father received in the 2015/16 financial year as a result of drawing down on his superannuation formed part of the property settlement. He submitted that this could be inferred from the 3rd and 4th sentence of paragraph 19 of the Tribunal’s reasons.
The father’s counsel referred to Carey & Carey[4] a case in which property settlement orders were made the terms of which included the father retaining his superannuation and the mother retaining most of the readily obtainable assets.
[4][4] Carey & Carey (1994) FLC 91-487
After the orders were made the husband resigned from his employment and cashed in his superannuation and his taxable income in the year in which he did so was increased by the amount he received.
The Registrar took the father’s income which included this amount into account in assessing child support. The husband applied to the court for a departure order and in making a departure order Kay J said as follows:
…it would be unjust and inequitable to require [the husband] to pay child support for the 1992 year based on his actual taxable income given that it includes the repayment of capital and given that the capital has to be otherwise adjusted between the parties.
The father’s counsel submitted that the amount of $128,000.00 which the father continued to hold in superannuation was also part of the property settlement and was clearly referred to in Order 2 of the 16 June 2016 orders.
The father’s counsel submitted that the Tribunal also erred in finding that the husband’s TPD payment was not part of the transfer of property in the property settlement. The Tribunal stated that the only direct reference to the TPD payment was in the Notations but this was not correct; it failed to have regard to Order 2 of the Orders which provided inter alia as follows:
Unless otherwise ordered herein and pursuant to s78 of the Family Law Act 1975 (Cth) it is declared that the Husband and the Wife shall each respectively:
2.1.3 All interests in life, income protection, trauma protection or any other personal protection insurance policy standing in his or her sole name respectively; and
2.1.4 All choses-in-action in which he or she is a party or potential party or in which he or she may have a beneficial interest; and
The TPD payment clearly fell within 2.1.3 and if not within 2.1.4.
In support of his submission that the TPD payment was part of the transfer of property in the property settlement the father’s counsel relied on Hickey & Hickey, which involved the Full Court being asked to consider by way of a case stated inter alia whether s. 79 of the Family Law Act granted the court power to make a declaration in relation to property or resources such as the one contained in Order 2 of the 16 June 2016 order.
It answered the question in the affirmative and said that such an order was made pursuant to the power in s. 79 of the Family Law Act. The Full Court said as follows:
In our view, even if a provision such as paragraph 5 of the Terms of Settlement does not, in the circumstances, alter an interest in property, it stands as part of an entire order which adjusts the interest of the parties in the whole of their property. The order does not cease to be an order pursuant to s.79 simply because one paragraph of the order provides that otherwise each party shall retain what they already have, because, as a whole, the entire order works as an alteration of property interests between the parties. It deals with all the personal chattels in the possession of a party as a collectivity, altering title in some cases, confirming title in others, but without the need to determine in relation to which chattels it is effecting an alteration of interest.
Senior Counsel for the husband submitted, and we accept, that it has, for unexplained reasons, been fashionable or traditional to use the word declaration in the context of this type of paragraph and that this has led to confusion as to the source of the exercise of power. However, it is not a declaration made pursuant to the provisions of s.78 and the use of the word “declared” so far as necessary or possible ought to be avoided. As we have said, the provision is one of several paragraphs or clauses in the s.79 order, not a declaration pursuant to s.78. In order to avoid any confusion, and make clear that it is a single exercise of power, we also accept the submission of Senior Counsel for the husband that it would be preferable that an order made pursuant to the provisions of s.79 expressly stated that it is by way of alteration of property interests pursuant to s.79 and thereafter set out where necessary in paragraphs or clauses, the relevant provisions of the order.[5]
[5] Hickey & Hickey (2003) FLC 93-143 paragraphs 62 & 63
The solicitors who prepared the 16 June 2016 orders used the word “declaration” and referred to s. 78 in the preface to Order 2 but this did not derogate from the fact that the order was part of a transfer of property pursuant to s. 79.
The father’s counsel submitted that if the errors arising from the characterisation of the TPD payment and the superannuation had not occurred and no ground for departure would have existed and the decision of the Tribunal should be set aside. However as noted he did not seek to disturb the finding about the husband being liable to contribute and additional $1,700.00 per year to meet the children’s expenses.
The mother’s submissions
The mother submitted that the father’s grounds of appeal were deficient in that they merely asserted that the Tribunal had made an error of law without specifying what it was.
She submitted that the Tribunal’s decision was just and equitable taking into account the matters in s. 117(4) of the Child Support (Assessment) Act 1989 and that this was articulated within the decision and no error of law existed.
She submitted that in making the decision it did and treating the father’s superannuation and the TPD payment as a financial resource the Tribunal did not undermine the property settlement. She submitted that the TPD Superannuation claim (sic) was merely noted within the property settlement orders and that it was not part of the property settlement.
She submitted that even if this was not correct the Guide prepared by the Department of Human Services did not bind the Tribunal and departure from the guide was not sufficient to show that the Tribunal had fallen into jurisdictional error. In support of this she relied on the following passage from P v Child Support Registrar:[6]
Regardless of whether there was a departure from the Guide, as the Full Court held at [89]–[91], P’s proposition (that, as a matter of law, unless there were compelling reasons not to, the Tribunal was bound to follow it) is unsound. The Tribunal was not required to comply with the Guide or precluded from departing from it except for compelling reasons. As it was in C’s case, so it is here. Subject to the question of procedural fairness, which I have already dealt with, any departure from or misapplication of the Guide is not sufficient to demonstrate that the Tribunal exceeded its powers and fell into jurisdictional error.
[6] P v Child Support Registrar (2015) FCA 116
In her submissions in reply filed on 20 April 2018 the mother submitted that even if the court concluded that the TPD payment did form part of the property settlement “due to the Tribunal making an error of fact” this did not detract from the validity of the departure order nor did it constitute an error of law which impacted on the decision to the extent of justifying the decision being set aside.
The mother submitted that the superannuation draw down by the father and his remaining superannuation were also not referred to in the property settlement orders and that the property settlement had not been undermined by these amounts being taken into account to determine the father’s income in the 2015/16 financial year and his capacity to pay child support.
The Child Support Registrar’s submissions
The solicitor for the Child Support Registrar submitted that the father had failed to precisely identify a question of law. She said that:
The ‘question of law’ articulated in the Notice of Appeal is expressed as an error, rather than a question, and lacks precision. Further, it does not rise above an assertion that the Tribunal made a finding of fact which was ‘demonstrably unsound” and on an “illogical course” which …does not constitute an error of law. [7]
[7] Second Respondent’s submissions paragraph 22
She said that if the court was prepared to overlook this and distill the substance of the father’s complaint from the grounds of appeal then what the father was asserting was that the Tribunal had made a finding of fact which was so illogical or unreasonable that no decision maker could make it and this was a very high bar to meet.
She submitted that it was open to the Tribunal to conclude that the TPD payment was not a transfer in a property settlement and that taking the TPD payment into account did not undermine the property settlement.
She further submitted that in any event the Tribunal ultimately set the father’s adjusted taxable income at $81,467.00 and that this relatively low figure in view of the significant TPD payment reflected an overall assessment of the father’s circumstances rather than a formulaic incorporation of the TPD payments into the income calculation.
She similarly submitted that the finding that taking the 2016 superannuation drawdown into account did not undermine the property settlement was open to the Tribunal.
The solicitor for the Child Support Registrar referred to the fact that the Tribunal noted that the father had remaining superannuation of $128,000.00 but did not specifically address the issue of whether this amount was part of the property settlement.
Discussion
The nub of the father’s case was that in finding that the TPD payment, the superannuation the father drew down and the superannuation he retained were not part of the property settlement the Tribunal made a wrong finding of fact.
An error of fact can amount to an error of law if the facts before the Tribunal do not support the finding. In Apthorpe v The Repatriation Commission (1987) FCA 649 the Full Court of the Federal Court said as follows:
In considering the Tribunal’s finding on the level of the appellant’s incapacity, it is necessary to keep in mind that that Tribunal was the judge of the facts and that its decision is not to be set aside unless it is shown that the Tribunal failed to take into account a relevant matter or misconceived the legislation or that the facts before it could not support the finding that was made, that is to say, that the finding was perverse or unreasonable.[8]
[8] Apthorpe v The Repatriation Commission (1987) FCA 649
The mother and the solicitor for the Child Support Registrar submitted that the father had not reached the high bar of establishing that the Tribunal had made a wrong finding of fact. They referred to CSR & Crabbe & Anor in which the Full Court made some observations about circumstances in which an error of fact might amount to an error of law. Under the heading “Principals Relevant to the Review of the SSAT’s decision” it said as follows but the end of this passage highlighted in bold is the important point:
… in the context of judicial review, the making of findings and the drawing of inferences in the absence of evidence is an error of law. On the other hand, there is no error of law simply in making a wrong finding of fact. Even if the reasoning whereby the [decision maker] reached its conclusion of fact were demonstrably unsound, that would not amount to an error of law. A party does not establish an error of law by showing that the decision-maker inferred the existence of a particular fact by a faulty process, for example by engaging in an illogical course of reasoning. Thus, at common law, want of logic is not synonymous with error of law. So long as the particular inference is reasonably open, even if that inference appears to have been drawn as a result of illogical reasoning, there is no place for judicial review because no error of law has taken place – Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 at 355-6…[9]
[9] CSR & Crabbe & Anor [2014] FamCAFC 10
The importance of the part in bold is apparent from other cases which are referred to in the decision of P v Child Support Registrar. The Judge in that case said inter alia as follows:
In Minister for Immigration and Multicultural Affairs v Al-Miahi (2001) 65 ALD 141; [2001] FCA 744 the Full Court (Sundberg, Emmett and Finkelstein JJ) said at [34]:
[T]here is no error of law simply in making a wrong finding of fact. Even if the reasoning whereby the court reached its conclusion of fact were demonstrably unsound, that would not amount to an error of law. A party does not establish an error of law by showing that the decision-maker inferred the existence of a particular fact by a faulty process, for example by engaging in an illogical course of reasoning. Thus, at common law, want of logic is not synonymous with error of law. So long as the particular inference is reasonably open, even if that inference appears to have been drawn as a result of illogical reasoning, there is no place for judicial review because no error of law has taken place: Australian Broadcasting Tribunal v Bond [1990] HCA 33; (1990) 170 CLR 321 at 355–6; [1990] HCA 33; 21 ALD 1 at 23–4; [1990] HCA 33; 94 ALR 11 at 37–8.
He also said as follows:
As Crennan and Bell JJ explained in Minister for Immigration and Citizenship v SZMDS [2010] HCA 16; (2010) 240 CLR 611 at [131]:
If probative evidence can give rise to different processes of reasoning and if logical or rational or reasonable minds might differ in respect of the conclusions to be drawn from that evidence, a decision cannot be said by a reviewing court to be illogical or irrational or unreasonable, simply because one conclusion has been preferred to another possible conclusion.
In respect of one aspect of the matter there is merit in the submissions of the mother and the Child Support Registrar that no error of law has been demonstrated. It is not clear on the face of the Tribunal’s decision that it was wrong for the Tribunal to find that the superannuation drawdown by the father in 2016 was not part of the property settlement.
The father’s counsel asked me to make inferences based on paragraph 19 of the decision but I do not accept that I can draw anything from that paragraph which supports the father’s submission.
It is unclear on the face of the decision whether the father drew down his superannuation prior to the property settlement orders being made or still had any of it in his possession at the time they were made. A finding that the $46,497.00 was not part of the property settlement was open to the Tribunal.
However the finding that the TPD payment was not part of the property settlement is simply wrong as a matter of law. The entitlement is clearly referred to in Order 2.1.3 and if not in Order 2.1.4. The fact that the TPD entitlement was part of the property settlement is established by Hickey & Hickey. It is not something about which reasonable minds can differ.
The father’s remaining superannuation of $128,000.00 was also part of the property settlement. It is referred to in Order 2.1.5. Again this is not something about which reasonable minds could differ.
I accept that notwithstanding that these amounts were part of the property settlement the Tribunal was not prohibited by law or by the content of the Child Support Guide from taking them into account in determining the father’s capacity to pay child support. However the fact that the TPD payment and the remaining superannuation were not correctly characterised is a significant error of fact.
As a result of finding that these amounts were not part of the property settlement the Tribunal did not consider the principle referred to in the Child Support Guide and consider whether it should depart from it. In determining whether it was just and equitable to make a departure order it did not consider the impact on the father of departing from the principle and it focussed on what the father had done with his share of the property settlement but did not make any inquiry into the value of the property the mother had retained.
Given the size of the TPD payment this was a significant error. On the face of it the father received net $300,000.00 from the TPD payment. The effect of increasing his income to $81,467.00 per annum from September 2016 until the child support assessment for [X] ended was to potentially add over $200,000.00 to his income during this period. To paraphrase Carey & Carey it effectively treated his capital as income in circumstances where the capital had otherwise been adjusted between the parties.
I cannot exclude the possibility that if the Tribunal had correctly characterised the TPD payment and the superannuation it might still have departed from the Guide and treated some or all of the amounts received by or available to the father as a financial resource. However it did not correctly characterise them and as a result the decision made on 16 August 2017 was arrived at by an illogical or faulty reasoning process and I am satisfied that an error of law has been established.
The appropriate orders
The father asked this court to substitute its own decision for the Tribunal’s decision as to an appropriate outcome in respect of the departure application but I concur with the submission of the Child Support Registrar that this would not be appropriate. The Child Support Registrar referred to the following passage from CSR & Crabbe & Anor:
The powers of this Court on appeal under s 44 of the AAT Act are limited to consideration of alleged errors of law by the Tribunal and go no further…The error of law alleged has to be isolated out, a decision made on this question of law and such an order made and directions given as are appropriate only to the decision on this question of law and not to the decision under review by the Tribunal.[10]
[10] Child Support Registrar & Crabbe & Anor [2014] FamCAFC 10 at [54]
The appropriate course is to set the decision aside and remit the case to the Tribunal for rehearing and orders to this effect will be made.
I certify that the preceding seventy eight (78) paragraphs are a true copy of the reasons for judgment of Judge Terry.
Date: 29 March 2019
Key Legal Topics
Areas of Law
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Family Law
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Administrative Law
Legal Concepts
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Judicial Review
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Remedies
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Procedural Fairness
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Statutory Construction
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