Escott and Child Support Registrar (Child support)

[2018] AATA 1838

Escott and Child Support Registrar (Child support) [2018] AATA 1838 (19 April 2018)

DIVISION:Social Services & Child Support Division

EXTENSION APPLICATION

NUMBER:2018/MC013496

APPLICANT:  Mr Escott

OTHER PARTY:  Child Support Registrar

DATE DECISION MADE:                19 April 2018

APPLICATION:

An extension application made on 13 February 2018 asking the AAT to consider the application for AAT first review of a decision of the Child Support Registrar on 18 December 2017 despite the period for applying for review having ended.

DECISION:

The extension application is refused.

CATCHWORDS
Child support – Request for extension of time to apply for AAT first review - Departure determination - Applicant rested on rights - Little merit - Extension of time refused

Names used in all published decisions are pseudonyms. Any references appearing in square brackets indicate that information has been removed 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

STATEMENT OF REASONS

1. On 13 February 2018 Mr Escott lodged an application with the Administrative Appeals Tribunal (the Tribunal) for an extension of time for review of a child support decision made on 18 December 2017.  The matter was considered on 19 April 2018 on the papers (consistent with the Tribunal’s Child Support Review Directions).  The Tribunal had before it a bundle of papers provided by the Department of Human Services, Child Support (the Child Support Agency).

2. Mr Escott and [Ms A] are the parents of [Child 1] (born July 2006) and [Child 2] (born July 2007).  Child support was registered on 22 December 2015 and Mr Escott is the parent liable to pay child support under the assessment.

3. For the period 1 October 2016 to 19 January 2017 the annual rate of child support was $414 based on Mr Escott’s 2016 taxable income of $14,204 and [Ms A]’ 2016 taxable income of $23,142.

4. On 28 July 2017 [Ms A] applied for a change to the administrative assessment and on 11 October 2017 the Child Support Agency made the decision to set the adjusted taxable income for Mr Escott at $71,256 for the period 28 July 2017 to 31 July 2019 (the original decision).  This was done to reflect the income, property and financial resources of Mr Escott (the ground commonly referred to as Reason 8A).

5. On 26 October 2017 Mr Escott objected to the change of assessment and on 18 December 2017 the Child Support Agency allowed the objection (the objection decision).  The original decision was set aside and Mr Escott’s adjusted taxable income was instead set at $60,000 for the period 28 July 2017 to 31 July 2019.  This was done to reflect the income, property and financial resources of Mr Escott.

6. 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).

7. The issue which arises in this case is whether or not to grant Mr Escott’s request for an extension of time to submit an application for review of a child support decision.

8. Part VIIA Division 2 of the Act sets out the procedures for applying to the Tribunal for a review of an objection decision made by the Child Support Agency as well as applying for an extension of time for such a review in the event the application is not made within the prescribed period.

9. Subsection 29(2) of the Administrative Appeals Tribunal Act 1975 establishes that an application for review must be made within 28 days of being served with notice of the decision.

10. If the 28 day period to apply for review has ended then a written application for an extension of time can be made under section 91 of the Act. Mr Escott was advised about the outcome of the objection decision by electronic means on 18 December 2017. Given Mr Escott lodged his application more than 28 days after he was served with notice the Tribunal is satisfied that an extension of time was required.

11. Under subsection 92(1) of the Act, the Tribunal must consider and grant or refuse an extension application. In doing so, the Tribunal considers the guiding principles for the exercise of discretion to allow an extension of time as set out in Hunter Valley Developments Pty Ltd v Cohen [1984] FCA 186. In that case, the Federal Court said that an extension of time should not be granted unless satisfied it was proper to do so, noting that, in general, applications or proceedings commenced outside of a prescribed time limit will not be considered.

12. A review of other relevant authorities establishes that when considering whether or not to allow an extension of time, the Tribunal should consider and balance a range of factors.  These factors are a guide and are not exhaustive, but generally include:

    ·     the reasons for the delay and whether the applicant rested on their rights;

    ·     the merits of the substantive application;

    ·     any prejudice to the other party including any difficulties they will experience in providing evidence as a result of the delay;

    ·     any prejudice to the general public; and

    ·     fairness in granting an extension of time.

Reasons for the delay

1. The Tribunal finds that Mr Escott’s application on 13 February 2018 in relation to the objection decision made on 18 December 2017, which he received by electronic means, was approximately 29 days out of time.

2. In seeking an extension of time, Mr Escott states as the reason for the delay that during the lead up to Christmas “my focus was on my children and how I would spend time with them and provide for them financially while they were with me”.  Mr Escott requests an extension of time “as the current ruling from CSA is financially crippling the house hold in which I and my son live.”

3. The notification of the objection decision provided by the Child Support Agency dated 18 December 2017 outlines what to do if Mr Escott disagreed with the decision.  This included asking the Tribunal to undertake a review “within 28 days from the date you receive this letter.”  The words “within 28 days” are in bold which, in the view of the Tribunal, gives a clear indication of the importance of this timeframe.

4. The Tribunal also notes that in a conversation with the Child Support Agency on 22 November 2017 Mr Escott was reminded of his right to appeal to the Tribunal.  The Child Support Agency attempted to contact Mr Escott on 18 December 2017 to advise him of the outcome of the objection decision and, as there was no answer, a message was left which also included a reminder of his appeal right to the Tribunal.

5. That Mr Escott may have been focussed on his children during the lead-up to Christmas is not an excuse to postpone dealing with child support matters within the required time frame.  The Tribunal does not, therefore, find the explanation by Mr Escott for the delay in lodging his objection to be reasonable.

6. Although the application made by Mr Escott to the Tribunal on 13 February 2018 was out of time by only approximately 29 days, the Tribunal finds he nonetheless rested on his rights.

Merits of the application

1. Mr Escott is seeking a review of an objection decision which decreased his level of child support when compared to the original decision.  The objection decision set his adjusted taxable income for the purposes of child support at $60,000 primarily on the basis of income available to him from his business which provides medical services to events.  An amount of $13,694 was included in this sum as Mr Escott also receives newstart allowance.

2. While Mr Escott told the Child Support Agency he did not receive any income from his business and was reliant on a newstart allowance for support, in both the original decision and the objection decision, it was found that his business did provide him with a financial resource that was not reflected in his taxable income.

3. In considering the merits of Mr Escott’s application, the Tribunal therefore conducted a review of the financial information used by the Child Support Agency in reaching this conclusion. 

4. Mr Escott is the sole director of [Company 1].  The documents provided by the Child Support Agency show that in 2015–16 the business generated gross income of $164,318 and had total expenses of $161,580 leaving a profit of $2,738.  Expenses included sub-contractor expenses of $81,367, motor vehicle expenses of $19,695, depreciation of $10,841, purchases of $20,641, insurance of $3,377, telephone expenses of $2,490 and travel of $2,436.

5. In setting Mr Escott’s income during the objection decision process the Child Support Agency acknowledged that it was not easy to determine an income from the business for Mr Escott based on the information available and so relied only on money credited to his personal bank account. As there was $14,000 deposited into his personal bank account from varying sources over the period from 8 July 2017 to 27 November 2017 the Child Support Agency annualised this amount and concluded this was a fair reflection of the income and financial resource available to him.  The Child Support Agency did not add an additional amount to Mr Escott’s income to reflect the other benefits he may receive from having his business, such as a fully maintained vehicle.

6. The Tribunal finds this to be a cautious approach given that in many instances a self-employed person such as Mr Escott is able to claim business expenses which may have some personal gain.  This could include expenses such as the travel, insurance and telephone expenses which are listed in the financial information for   [Company 1].

7. In the absence of any new evidence from Mr Escott the Tribunal is satisfied the assumptions made by the Child Support Agency in relation to the benefit Mr Escott receives from his business, while conservative, to be reasonable under the circumstances.

8. The test of merit has alternatively been expressed as whether, were it to proceed, the application for review “would have good prospects of success” (Smith and Commissioner of Patents [2012] AATA 60 at [29]–[31]).

9. Based on the evidence available, the Tribunal finds Mr Escott’s application for review would not have good prospects of success on the ground of his income, property and financial resources.

10. The Tribunal therefore considers Mr Escott’s application has little merit.

Potential prejudice to [Ms A] and the wider public

1. [Ms A] should ordinarily be able to rely on the child support assessment once the period for objection has passed.  On the other hand the application made by Mr Escott to the Tribunal is approximately 29 days out of time and he is not up-to-date with his child support payments.  The Tribunal does not consider that [Ms A] would be significantly disadvantaged if an extension of time to lodge an objection was granted.

2. Time limits for the review of administrative decisions should be observed as strictly as possible in order to assist the proper administration of government agencies.  There is also a public expectation that there be a degree of certainty in relation to time limits, however, the law also allows for extensions of time.  In this case the Tribunal does not believe there would be significant prejudice to the general public if an extension of time to lodge an objection was granted.

Fairness in granting an extension of time as between Mr Escott and other persons in similar positions

1. The Child Support Agency notifies parties that they can seek a review of decisions with the Tribunal and they have 28 days within which to submit a request for such a review.  Most people comply within the 28 day timeframe.  It is clear the statutory time limit is to be enforced unless there are acceptable reasons for the delay.  The Tribunal finds that it would not be fair to others to grant Mr Escott an extension of time to seek review of a decision in view of the statutory time frame which applies and the lack of merit to his application.

CONCLUSION

1. It is the view of the Tribunal that Mr Escott has not provided a satisfactory explanation for the delay in applying for review of the objection decision and that he rested on his rights.  In addition the Tribunal could find little merit to his application based on the evidence available.  The Tribunal notes that Mr Escott can lodge his own change of assessment application should his financial circumstances, or that of his business, change in the future.

2. The Tribunal therefore finds it would not be proper to grant an extension of time to seek review of the objection decision made on 18 December 2017.  Accordingly the extension application is refused.