Frost & Frost & Anor (SSAT Appeal) - [2011] FMCAfam 1311

FEDERAL MAGISTRATES COURT OF AUSTRALIA

FROST & FROST and ANOR (SSAT APPEAL)

[2011] FMCAfam 1311

CHILD SUPPORT – Appeal from decision of SSAT – error of law – jurisdictional error – factual issues concerning income, property and financial resources of liable parent – manner in which SSAT approached issue of taxation claim for depreciation and treated [F] deposit made by liable parent – questions of fact for the SSAT – no error of law established – appeal dismissed.

Child Support (Assessment) Act 1989, ss.98K, 98L, 98S, 117
Child Support (Registration & Collection) Act 1989, ss.88, 103X, 110B, 110G

Repatriation Commission v Owens (1996) 70ALJR 904
Neal v Secretary, Department of Transport (1980) 3 ALD 97
Comcare v Etheridge [2006] FCAFC 27
Blackwood Hodge (Australia) Pty Ltd v Collector of Customs (No.2) (1980) 33 ALD 38
Htun v Minister for Immigration & Multicultural Affairs (2001) 194 ALR 244
LDME & JMA [2007] FMCAfam 712
Apthorpe v Repatriation Commission (1987) 13 ALD 656
Re Minister for Immigration & Multicultural Affairs: Ex Parte Applicant S20/2002 (2003) 198 ALR 59
Collector of Customs v Pressure Tankers Pty Ltd and Pozzolanic Enterprise Pty Ltd [1993] 43 FCR 280
B & P [2001] FMCAfam 159
Ryan v Ryan (change of assessment) [2009] SSATACSA 12
Ladd v Child Support Registrar & Anor (SSAT Appeal) [2010] FMCAfam 23
Comcare v Moon [2003] FCA 569
Minister for Immigration & Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259

Applicant:

MR FROST

First Respondent:

MS FROST

Second Respondent:

CHILD SUPPORT REGISTRAR

File Number:

ADC 2040 of 2007

Judgment of:

Brown FM

Hearing date:

26 July 2011

Date of Last Submission:

26 July 2011

Delivered at:

Adelaide

Delivered on:

1 December 2011

REPRESENTATION

Counsel for the Applicant:

In Person

Counsel for the First Respondent:

In Person

Counsel for the Second Respondent:

Ms Bell

Solicitor for the Second Respondent:

DHS Legal Services Division

ORDERS

The applicant’s appeal against the decision of the Social Securities Appeal Tribunal made on 13 December 2010 is dismissed.

IT IS NOTED that publication of this judgment under the pseudonym Frost & Frost and Anor (SSAT Appeal) is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).

FEDERAL MAGISTRATES
COURT OF AUSTRALIA
AT ADELAIDE

ADC 2040 of 2007

MR FROST

Applicant

And

MS FROST

First Respondent

CHILD SUPPORT REGISTRAR

Second Respondent

REASONS FOR JUDGMENT

Introduction

This is an appeal from a decision of the Social Securities Appeal Tribunal (the SSAT) dated 13 December 2010. Pursuant to section 110B of the Child Support (Registration & Collection) Act 1988 “the Collection Act” the only ground on which such an appeal can be based is an error arising from a question of law.
Mr Frost “the appellant” and Ms Frost “the respondent” are the parents of [X] born [in] 1995; [Y] born [in] 1997; and [Z] born [in] 2000. The appellant has been assessed to pay child support in respect of the three children concerned.
Mr Frost is an [occupation omitted]. He also operates a [F] business. The issue before the SSAT concerned what was the appropriate level of income to be attributed to Mr Frost for the purposes of assessing child support.
The SSAT found that “Mr Frost’s income, property and financial resources were $85,690.00 in 2009 and $78,489.00 in 2010.”[1]
[1] See reasons for decision at paragraph 100
As a result, the SSAT determined as follows:
·For the period 1 October 2008 to 30 June 2009, Mr Frost’s annual rate of child support is $13,938.00.
·For the period 1 July 2009 to 31 December 2009, Mr Frost’s annual rate of child support is $12,080.00
·For the period 1 January 2010 to 30 September 2011, Mr Frost’s annual rate of child support is $12,339.00
It is this decision which is subject to appeal. The applicant filed his notice of appeal on 19 January 2011. The two grounds of appeal on which the appellant relies are as follows:
“The tribunal erred in law in failing to allow depreciation on [F] assets in determining the applicant’s adjusted taxable income.
The tribunal erred in law in failing to allow deduction of [F] deposits in determining the applicant’s adjusted taxable income.”[2]
[2] See notice of appeal filed 19 January 2011
The appellant has acted on his own behalf in these proceedings and prepared his own documents. He seeks an order that the decision made by the SSAT be “recalculated to take into account depreciation and [F] deposits for the relevant assessment years.” I assume Mr Frost wishes that the determination of the SSAT be set aside and in lieu thereof this court calculate the amount of child support payable by him for the periods in question.
The respondent seeks the dismissal of the appeal. The Registrar of the Child Support Agency was included as a respondent to the appeal. During the appeal the Registrar was represented by counsel, Ms Bell. The Registrar also seeks the dismissal of Mr Frost’s appeal.

Background

I have not been provided with any of the relevant decisions of the Child Support Agency “the CSA”, which led to the SSAT hearing. Nor have I been provided with a transcript of the proceedings before the SSAT. Mr Frost provided a written summary of argument in support of his appeal.
The background to the current proceedings is set out in the decision of the SSAT. It confirms that Mr Frost runs an [omitted] business known as [K] through a company [Mr W] Pty Ltd. He also has a [F] business that he runs as a sole trader on a property effectively owned by his mother.
Prior to any administratively based departure process, the CSA assessed Mr Frost to pay an annual amount of child support of $6,041.00, which was based on a deemed income of $50,156.00 for

Mr Frost and a taxable income of $30,135.00 for Ms Frost.
In April of 2010, the Registrar of the CSA initiated what is known as a Registrar Initiated Change of Assessment process, which is mandated by Division 3 of Part 6A of the Child Support (Assessment) Act 1989 “the Assessment Act”. Essentially, this is a process which enables the Registrar to examine the administrative basis of any child support assessment and determine whether special circumstances exist which warrant a change to any such administrative assessment of child support.
In the case of Mr Frost, this process resulted in the Registrar finding that Mr Frost’s adjusted taxable income should be set at $95,005.00. This figure was based on wages and profit of $41,173.11 from the [K] business; superannuation and [F] expenses of $17,548.13; income from the [F] business of $35,006.96; and income from investments of $1,276.00.
This assessment was confirmed by an objections officer, within the CSA, who provided an internal review process. The objections officer also found that orthodontic expenses of $3,400.00 should be met jointly by each of the parents concerned.
It was this Registrar Initiated Change of Assessment, which led to the SSAT hearing, which is the subject of these proceedings. However, during the hearing of the applicant’s appeal, the SSAT also decided to regard a letter received from Ms Frost as an application for departure made on her behalf.

Reasons of the SSAT

The SSAT outlined the provisions of the legislation which are applicable in this case. These are the provisions relating to Registrar initiated departures, from administrative assessments of child support, which are set out in division 3 of Part 6A of the Assessment Act.
In particular, section 98K provides for the Registrar to initiate a determination for departure, if the Registrar is of the view, because of special circumstances, that there should be a departure from the applicable administrative assessment.
Section 98L sets out the matters in respect of which the registrar must be satisfied before making such a determination. The criteria applicable are similar to those provided in section 117(2) of the Act, which deal with court based departure applications. This is the “three step” process which applies in all departure applications.
In respect of registrar initiated departure applications, section 98L(1)(a) provides one ground for departure, namely:
“… in the special circumstances of the case, application in relation to a child of the provisions of this Act relating to administrative assessment of child support would result in an unjust and inequitable determination of the level of financial support to be provided by the liable parent for the child because of the income, earning capacity, and property financial resources of either parent.”
Section 98L(1)(b) provides that the Registrar must be satisfied that it is just and equitable, so far as all persons affected are concerned and otherwise proper for such a departure order to be made. Section 98L(2) then provides that sections 117(4)-(9) apply to the registrar, as they would apply to a court dealing with a departure application.
Section 98S sets out the range of determinations available to the Registrar, in any departure proceeding initiated under Division 3 of Part 6A. They include the power to make a departure by varying a parent’s child support income or the annual rate of child support payable by a parent.
Pursuant to section 103X(3)(b) of the Child Support (Registration & Collection) Act 1988 the SSAT is required to set out the reasons for its decision, together with findings of any material question of fact and the evidence on which those findings were based. In this particular matter the SSAT provided its reasons on 17 December 2010.
Under the heading What is Mr Frost’s income, property, earning capacity and financial resources, the SSAT examined the appellant’s financial affairs in 2009 and 2010 in four discrete areas – the [K] business; the [F] business; [P] Pty Ltd and the [R] Family Trust (these are the entities which own the [F] [property] in question); and his personal resources available from share trading, bank accounts and superannuation.
The SSAT determined that it was entitled to lift the corporate veil to determine whether Mr Frost was able to derive a personal financial benefit for himself through operating his businesses through the agency of a proprietary limited company or a trust. In my view, it correctly posed itself the following question in determining of the matter before it.
“… the Tribunal can examine the extent to which Mr Frost’s interest in [Mr W] Pty Ltd provides a financial benefit … it is also appropriate to examine Mr Frost’s [F] business in [P] Pty Ltd to determine whether he receives any financial benefit from this business that does not form part of his taxable income. Mr Frost has a share trading account and other accounts which must also be examined to determine if there is undisclosed income or financial resources.”[3]
[3] See reasons for decision at paragraph 25
These inquiries were directed towards the SSAT determining whether special circumstances existed to justify a departure from the administrative assessment on the ground provided by section 98L namely the income, earning capacity, property and financial resources of Mr Frost.

a) [K] business

The SSAT found that Mr Frost’s income from the [K] business was $44,912.52 in 2009 and $53,785.09 in 2010. In each year, the Tribunal added back additional superannuation contributions Mr Frost had made to his contributory superannuation fund above the nine percent statutory minimum.
The SSAT did not consider that the operating profit of the [K] business, which in the case of each year in question was considered to be modest, should be included in Mr Frost’s income. It was considered appropriate that this profit be retained within the business to meet future running costs and meet any potential losses in future.
The SSAT also allowed Mr Frost to claim expenses, relating to his [F] expenses, as deductions from his [K] [business]. Although the SSAT considered it unusual that the expenses be paid through the [K] [business omitted], it found that they were genuine expenses, incurred by Mr Frost, and did not constitute additional income or resources.
In addition, the SSAT did not query any other of the expenses claimed by Mr Frost in respect of the running of his [K] [business omitted], including claims for rates and taxes on the business premises occupied by him. In addition, it disallowed an objection raised by Ms Frost, who argued that Mr Frost should be attributed a sum of around $10,000.00, in potential income, as moneys saved by him through sharing services with Mr W.
It is my understanding that Mr Frost has not challenged any of these specific findings in his appeal to this court.

b) [F] business

The SSAT utilised figures from Mr Frost’s 2009 and 2010 profit and loss statements to identify income and expenses derived by him from his [F] business, which comprised [activities omitted].
The 2009 profit and loss statement showed gross income of $59,954.00 for [omitted] and interest and expenses of $33,633.24, leaving an operating profit of $23,321.37.[4]
[4] See reasons for decision at paragraph 49
The 2010 profit and loss statement showed income of $52,138.15 from the same sources and expenses of $46,490.88, leaving an operating profit of $5,647.27.[5] The 2010 balance sheet for Mr Frost’s [F] business showed a figure of $15,000.00 standing as a current asset. It was designated as a [F] deposit.
[5] See reasons for decision at paragraph 50
In each year in question, Mr Frost claimed depreciation. In 2009, the amount was $16,131.00 and in 2010 the amount was $17,727.00. In regards to this issue, the SSAT found as follows:
“… Depreciation is an entry as an expense that is not necessarily an amount that is actually incurred by the business. Mr Frost said he does not separate out the amount for depreciation for future costs. The remaining costs of his business are being met by the income of the business, and there is no evidence that this amount is being used for other debts of the business. The Tribunal considered that depreciation expenses claimed by Mr Frost are amounts that can be used for child support. The Tribunal concluded that an amount of $16,181 should be added to

Mr Frost’s income for 2009 and an amount of $17,727 in 2010.
The Tribunal has found Mr Frost’s income from [F] comprise operating profit, and depreciation. This results in an income from [F] of $39,502 in 2009 and $23,374 in 2010.”[6]
[6] See reasons for decision at paragraphs 58-59
Mr Frost is critical of this finding. It is his position that the SSAT fell into legal error by adding these amounts of depreciation back into his [F] income. The question for the Tribunal was what was the practical effect, so far as Mr Frost was concerned, of his claim for depreciation of capital assets.
Did it mean that Mr Frost, notwithstanding the claim for depreciation, still had money available to him to pay child support. In this context, the SSAT found that Mr Frost had not earmarked the amounts attributed as depreciation to any other business purpose. Mr Frost has not provided any evidence, which was led before the SSAT, to challenge the evidentiary basis of this finding. As such the question for the court is whether this finding amounts to an error of law.
Other controversies arise in respect of a scheme known as a [F] deposit. Mr Frost made such a deposit, in the sum of $15,000.00, in June of 2009. In respect of this issue, the SSAT found as follows:
“Mr Frost has a [F] deposit of $15,000 which was made in June 2009. A [F] deposit is described in the Child Support Policy as a tax effective way to save money during good years to be used during bad years, and that by using a [F] deposit, a [occupation omitted] can reduce his or her taxable income in that year. The policy goes on to say that where a [F] deposit is made in a good year after a history of low taxable income, it would not generally be appropriate to add the [F] deposit. It would also not be appropriate if there were evidence that they intend to withdraw it over the next few years.
Mr Frost says he made this deposit for [equipment omitted] and to replace [omitted]. He said he has not been able to replace [omitted] at present as the prices for [omitted] are high. Mr Frost said the [omitted] work had been done without needing to use the [F] deposit and appears under the expense of repairs and maintenance. Mr Frost said his last [F] deposit was in early 2000. Mr Frost’s [omitted] statement shows a decrease of 90 [omitted] from 2009 to the end of 2010. The Tribunal considers this supports his statement that he needs to replace [omitted] and concluded that the [F] deposit should not be added back to

Mr Frost’s income and financial resources for 2010.”[7]
[7] See reasons for decision at paragraphs 55-56
I have not been provided with any evidence, which was led before the SSAT, dealing with this discrete issue. Annexed to Mr Frost’s Notice of Appeal were a number of documents, one of which was the 2010 Profit and Loss Statement and Balance Sheet for Mr Frost’s [F] activities. As previously indicated the Balance Sheet shows a [F] Deposit as a current asset standing in an amount of $15,000.00.

c) [P] Pty Ltd and the [R] Family Trust

The SSAT accepted that [P] Pty Ltd, of which Mr Frost was a shareholder, was the trustee for the [R] Family Trust, which owned the [F] [property], where he operated his [F] enterprise. The SSAT accepted that Mr Frost did not receive any financial benefit from the trust.

d) Personal resources from share trading, bank accounts and superannuation

The SSAT found that Mr Frost’s income from interest and dividends to be $1,276.00 in 2009. It estimated that he would earn approximately six percent on his various investments in 2010. Accordingly, the SSAT found his income from these sources, for 2010, to be $1,352.00.
Ms Frost’s representative at the SSAT hearing, her accountant Mr B, queried details provided by Mr Frost in respect of his share trading account and other lump sums deposited into accounts controlled by

Mr Frost. In this context, the SSAT said as follows:
“The Tribunal considered any unaccounted for funds in

Mr Frost’s accounts are adequately addressed by adding back depreciation to Mr Frost’s income.”[8]
[8] See reasons for decision at paragraph 68
As a result of these various findings, the SSAT determined as follows:
“The Tribunal has found that in 2009 Mr Frost had income of $44,912 from the [K] business, $39,502 from the [F] business, and $1,276 interest and dividends, giving a total of $85,690. In 2010, the Tribunal has found Mr Frost had an income of $53,785 from the [K] business, $23,347 from the [F] business and $1,352 from interest and dividends, giving a total of $78,484. He is currently assessed on a deemed income of $50,156. The Tribunal finds that the disparity between his resources and the amount on which his child support is currently assessed makes the administrative assessment unjust and inequitable. There are special circumstances that arise from Mr Frost’s ability to make additional contributions from superannuation and claim expenses such as depreciation through his [F] business.”[9]
[9] See reasons for decision at paragraph 75
It would appear to be the case that the [F] Deposit did not feature in the SSAT’s determinations regarding Mr Frost’s level of income in the 2009 child support period. Similarly it did not feature in 2010.

e) Other matters

Ms Frost wrote to the CSA on 12 January 2010. I have not been provided with a copy of her letter. However, it seems clear it was related to expenses incurred by her in respect of [Y]’s orthodontic treatment. The CSA seems to have regarded the letter as an application for departure from the applicable administrative assessment.
The SSAT accepted that Ms Frost had incurred $3,500.00 in orthodontic costs between October 2008 and February 2010. It further found that this expense represented a special circumstance that significantly affected the costs of the children.

f) The SSAT’s conclusions

As has previously been indicated, the SSAT accepted that special circumstances existed, relating to Mr Frost’s ability to make additional contributions to his superannuation and claim other expenses, such as depreciation through his [F] business, rendering the applicable administrative assessment unjust and inequitable. This was the first step of the process envisaged by section 98L of the Assessment Act.
It then turned its mind to the provisions of section 98L(1)(b) as to whether it would be just and equitable and otherwise proper to make a departure order. In determining this issue, the SSAT considered the responsibility parents have to maintain their children; the proper needs of the children concerned; the income, earning capacity, property and financial resources of the children themselves; and the income property and financial resources of each of the parties to the proceedings.
The Tribunal considered that the parties had each overstated the costs incurred by them in caring for the children. It found that Ms Frost’s income for the periods in question was modest. Issues did however arise concerning a family trust, which distributed income between the parties and the children concerned.
In this context, the SSAT said as follows:
“This is a complex matter, with many factors that need to be balanced. Ms Frost’s income is considerably lower than

Mr Frost’s and she has 81% care of the three children. Ms Frost has met the costs of [Y]’s orthodontic treatment. The costs of the children given by Mr and Ms Frost are significantly higher compared with those provided by the legislation. Mr Frost has low weekly commitments, and therefore has a greater ability to contribute child support from his income.”[10]
[10] See reasons for decision at paragraph 123
Ultimately, the SSAT determined that it would vary Mr Frost’s annual rate of child support pursuant to the provisions of section 98S(1)(a) of the Assessment Act. In support of this decision, the SSAT said as follows:
In arriving at a child support amount, the Tribunal has had regard to administrative assessment that would result from using Mr and Ms Frost’s incomes as found and [Y]’s orthodontic costs in each of the periods below as well as the costs of the children. The different periods were selected to take into account the changes in the self support amount with different child support periods and to use the income for each of the 2009 and 2010 financial years.
The results in the following determination, which the Tribunal makes under section 98S(1)(a) of the Assessment Act:
Ø For the period 1 October 2008 to 30 June 2009, Mr Frost’s annual rate of child support is $13,938;
Ø For the period 1 July 2009 to 31 December 2009, Mr Frost’s annual rate of child support is $12,080.
Ø
For the period 1 January 2010 to 30 September 2011,

Mr Frost’s annual rate of child support is $2,339.”[11]
[11] See reasons for decision at paragraph 132 and 133

The nature and legislative basis of appeals to this court from the SSAT

The nature of an appeal to this court, from a decision of the SSAT, is governed by the provisions of Division 5 of Part 7A of the Collection Act, in particular section 110B, which reads as follows:
“A party to a proceeding before the SSAT under Part VIIA may appeal to a court having jurisdiction under this Act, on a question of law, from any decision of the SSAT in that proceeding.”
This court is authorised to hear such appeals from the SSAT by virtue of the provisions of section 110E of the Collection Act. Pursuant to section 110F of the Collection Act, having determined any such appeal, I am authorised to make any order, which I believe is appropriate but particularly may:
·affirm or set aside the decision of the SSAT; or
·remit the case to be heard again by the SSAT, either with or without the hearing of further evidence.
The first question to consider is what is the nature of an appeal on a “question of law”? The provisions of the Child Support Legislation Amendment (Reform of the Child Support Scheme – New Formula and Other Measures) Act 2006 has significantly reformed the review process in respect of administrative decisions of the Child Support Registrar. The legislation has inaugurated an independent process of review through the SSAT. This process is external of the Agency’s processes and is administrative in nature.
The intent evinced by the legislature, in limiting any appeal from the SSAT to a question of law, is to ensure that the merits of the case are dealt with not by this court but by the SSAT. The High Court has characterised “this distribution of function [as] critical to the correct operation of the administrative review process.”[12]
[12] See Repatriation Commission v Owens (1996) 70ALJR 904
Accordingly, pursuant to the provisions of section 110B, any further appeal from the SSAT is limited in nature. It is limited only to an examination of how the SSAT applied or failed to apply the applicable principles of law, which were relevant to the determination of the appeal issue which came before it.
As such, an appeal to this court, pursuant to section 110B, does not constitute a rehearing on the merits of the case nor should this court, other than in exceptional circumstances, challenge findings of fact made by the SSAT.
The power of this court, in an appeal from the SSAT, to make finding of facts is limited by the provisions of section 110G of the Collection Act. The court may make a finding only if the following two provisos are satisfied:
·Such a finding of fact is not inconsistent with findings of fact made by the SSAT – other than findings made by the SSAT as a result of an error of law.
·It is convenient for the court to make such findings of fact. [13]
[13] See Child Support (Registration and Collection) Act 1989 at section 110G(1)
Pursuant to section 110G(2), for the purpose of making such findings of fact, the court may either have regard to the evidence given in proceedings before the SSAT itself or receive further evidence. However, it is clear that the power to receive further evidence is dependant upon the court discerning an error of law in the decision of the SSAT, which is subject to appeal. Essentially, this court, in its appellant jurisdiction from the SSAT, must be careful not to allow evidence to be adduced in the expectation advanced by any appellant that an error of law will thus be demonstrated.
Accordingly, this court should not be concerned as to whether or not it would have come to the same conclusion as the SSAT did, but only whether the SSAT erred in law,[14] as it is only in “exceptional circumstances” that the decision of the Tribunal should not be the final decision.[15]
[14] See Neal v Secretary, Department of Transport (1980) 3 ALD 97 at 100 per Franki J and Comcare v Etheridge [2006] FCAFC 27 at paragraph [14] per Branson J.
[15] See Blackwood Hodge (Australia) Pty Ltd v Collector of Customs (No 2) (1980) 33 ALD 38 at 49 per Fisher J.
It is the function of this court to determine whether the decision of the SSAT was within its legal powers. That is what is meant by a question of law. It is not the function of this court to examine the merits of that decision. Essentially, it is not the function of this court to reappraise the evidence led before the SSAT and re-determine the case, according to the conclusions it draws from the available evidence.
As such, I should be cautious to approach the decision of the SSAT with “an eye [which is] too keenly attuned to perception of error”. [16]Rather I should take a commonsense approach to what the SSAT was saying in its decision and the reasons why it did said what it said. The function of the SSAT is not to produce reasons of “jurisprudential excellence”.[17] It is to provide an informal and expedient level of independent review.
[16] See Htun v Minister for Immigration & Multicultural Affairs (2001) 194 ALR 244 at 258
[17] See LDME & JMA [2007] FMCAfam 712
An administrative tribunal exceeds its powers and thus commits a jurisdictional error, which is correctable on appeal in respect of a question of law, if it:
·fails to construe properly the legislative provisions applicable;
·identifies the wrong issues or asks itself the wrong questions;
·ignores relevant material or relies on irrelevant material;
·fails to accord procedural fairness to the party before it;
·makes an erroneous finding of such a magnitude that it goes to the very jurisdiction which it purports to exercise rendering its decision perverse or unreasonable or otherwise offending logic.[18]
[18] See Apthorpe v Repatriation Commission (1987) 13 ALD 656 at 666
As Gleeson C.J. pointed out in Re Minister for Immigration & Multicultural Affairs: Ex Parte Applicant S20/2002:[19]
“To describe reasoning as illogical, or unreasonable or irrational, may merely be an emphatic way of expressing disagreement with it. If it is suggested that there is a legal consequence, it may be necessary to be more precise as to the nature and quality of the error attributed to the decision maker, and to identify the legal principal or statutory provision that attracts the suggested consequence.”
[19] Re Minister for Immigration & Multicultural Affairs: Ex Parte Applicant S20/2002 (2003) 198ALR 59 at 61
In Collector of Customs v Pressure Tanker Pty LtdandPazzolanic Enterprises Pty Ltd,[20] the Full Court of the Federal Court, in respect of the Administrative Appeals Tribunal, characterised the nature of an appeal, restricted to a question of law, from a fact finding and decision making tribunal as follows:
“… the nature of the task of this court is clear. It is to leave to the tribunal of fact decisions as to the facts and to interfere only when the identified error is one of law.”
[20] Collector of Customs v Pressure Tankers Pty Ltd and Pozzolanic Enterprise Pty Ltd [1993] 43 FCR 280
In summary, an appeal on a question of law:
·is not a review on the merits or a rehearing;
·as such, an appeal on a question of law is not one in which findings of fact, per se, can be called into question;[21]
·however, bearing in mind the statutory intent implicit in Part VIII of the Collection Act and the purpose of the Federal Magistrates Court itself, in dealing with SSAT appeals, the court should not be unduly legalistic or pedantic, particularly where the appellant concerned is self-represented;
·in reviewing a decision of the SSAT for error, the court should not examine the decision in question with an eye “keenly attuned to the perception of error”.
[21] See LDME & JMA [2007] FMCAfam 712 at paragraph 29
In brief terms, the requirement that a hearing be procedurally fair requires the decision making tribunal concerned to apply the rules of natural justice. There are two traditional rules of natural justice. Firstly, the hearing rule which requires a decision maker to hear a person before making a decision which affects the interests of that person. Secondly, the bias rule which provides for the disqualification of a decision maker where doubts arise as to the actual or perceived impartiality of the decision maker concerned.[22]
[22] See Aronson & Dyer: Judicial Review of Administrative Action (2^nd Edition) 2000 LBC Information Services at p.300

Ground one

Mr Frost provided the following written submission in support of his first ground of appeal:
“The Tribunal erred in law in failing to allow a deduction for depreciation on [F] assets in determining by adjusted taxable income, as the circumstances did not amount to ‘special circumstances’ as required by section 117(2)(c) of the Child Support (Assessment) Act 1989. The facts of the case were not “special or out of the ordinary” as noted in the decision of Gyselman and Gyselman.”
I am not sure that I understand this ground of appeal fully. The SSAT did in fact determine that special circumstances existed, which justified a departure from the original administrative assessment of Mr Frost’s income. The special circumstances related to his ability to reduce his [F] income, for taxation purposes, by claiming depreciation.
The basis of this finding was that although depreciation is entered as an expense of a business, it is not necessarily always an amount that is actually incurred by the business in question. In some circumstances, a sum claimed in relation to depreciation, may nonetheless be available to a liable parent to allocate to child support purposes. Whether this is so is a question of fact for the relevant decision maker in the case.
Essentially, the SSAT determined that in this particular case there was a level of artificiality about Mr Frost reducing his child support income by claiming depreciation expenses in respect of his [F] income. The SSAT provided the following rationale for this decision:
“Mr Frost said he does not separate out the amount for depreciation for future costs. The remaining costs of his business are being met by the income of the business, and there is no evidence that this amount is being used for other debts of the business. The Tribunal considered that depreciation expenses claimed by Mr Frost are amounts that can be used for child support.”
In support of his position, Mr Frost relies on the case of B & P[23] in which Roberts FM said as follows:
“The father is in partnership with his wife and the financial statements of the partnership for the year ended 30 June 2001 show that the partnership made a loss in the vicinity of $20,000.00. The mother’s counsel attempted to persuade me that I should ignore the depreciation claimed in the approximate sum of $40,000.00, thereby arriving at an income of $20,000.00. I fail to see how I can do that, because depreciation is claimed for very good reason. Business assets wear out and need to be replaced. Consequently, some provision must be made for their replacement.”
[23] B & P [2001] FMCAfam 159
The case concerned an application to the court to depart from an earlier court based assessment of child support. The liable parent, in the case, operated a fishing charter business. The case concerned what were his financial resources and income available to pay child support. It was not an uncommon scenario. One parent asserting that the other self-employed and liable parent had sufficient financial resources to meet an existing child support obligation. The other parent asserting to the contrary.
In the case, Roberts FM was the fact finder and was in a position to determine issues of both fact and credit, arising from taking evidence in the case. His role was analogous to the role of the SSAT in the present case. It is not the same role allocated to me pursuant to the applicable legislation dealing with appeals to this court from the SSAT on questions of law.
As such, Roberts FM was required to calculate what was the father’s asset backing and available income. Having read the decision, I do not think that His Honour intended to assert that in every case concerning a departure from an administrative assessment of child support the court was required to accept uncritically any claim made for depreciation by the liable parent in question. Rather the case turned on the facts as Roberts FM found them, as he was required to do.
Mr Frost also relied on a decision of the SSAT itself, namely Ryan v Ryan (change of assessment)[24] where it was held as follows:
“The objections officer had added back an amount for depreciation as it is a non-cash expense. Mr Ryan argued that this was not appropriate given it related to the only substantive asset of the business (the work vehicle). The work vehicle in question was purchased for approximately $42,000 five years ago and recently traded on a similar work vehicle for $16,000. It therefore depreciated $26,000 over the intervening period. The work vehicle is clearly a critical component of the business and is a real cash cost of the business (albeit spread over more than one financial year). In those circumstances, the Tribunal regards it as entirely appropriate that the cost be claimed as a real expense notwithstanding it is not actually paid in the year in question. The Tribunal will not add back depreciation.”
[24] See Ryan v Ryan (change of assessment) [2009] SSATACSA 12 at paragraph 23
Finally, Mr Frost drew my attention to a decision, Ladd v Child Support Registrar & Anor,[25] a decision of Sexton FM. In that case, Her Honour determined that the SSAT had reached a conclusion of depreciation, which was not available to it on the evidence. In particular, Sexton FM said as follows:
“…the Tribunal failed to understand that it needed to look at the whole of the financial evidence of the appellant, including the financial records of his company, in the context of determining what the actual personal financial resources of the appellant really were. This required a careful analysis of the personal benefits the appellant actually had available to him from the company, (such as the car, telephone, drawings and salary).”
[25] See Ladd v Child Support Registrar & Anor (SSAT Appeal) [2010] FMCAfam 23 at paragraph 32
There are no specific provisions detailing how the registrar of the CSA is to approach claims for depreciation. The factual issue, in the current case, which was before the SSAT, was whether Mr Frost’s child support income should be regarded as higher than originally administratively assessed because it had been unfairly reduced by reason of his claim for depreciation expenses. This was fundamentally an issue of fact and so one in the sole domain of firstly the registrar of the CSA and then the SSAT, which stands in the shoes of the decision maker, the decision of which it is reviewing.
In this particular case, the SSAT found that Mr Frost did not allocate any amount claimed for depreciation towards the future provision of plant, equipment or any other future costs. To the contrary, it found that these expenses were being met from the income of the business concerned. Accordingly, it considered that the moneys claimed for depreciation could be used for child support.
A finding of fact is not reviewable by a court in the context of judicial review, unless the finding of fact is made in the absence of evidence to support it. That is an error of law. As is the drawing of a factual inference in the absence of evidence to support it. However, the making of a wrong finding of fact is not in itself an error of law provided there is some evidence before the decision maker concerned which is rationally (as opposed to perversely) capable of supporting such a conclusion.
What moneys, in the form of income, earning capacity, property and financial resources, were available to Mr Frost, in the child support periods in question, was a question of fact. As such, it was a matter for the Tribunal to determine on the basis of the evidence available to it. It was not a question to be determined by reference to principles of accounting. In my view, the SSAT was required to consider, in the circumstances which prevailed in the case before it, what was the financial effect or implication of the claim for depreciation made by

Mr Frost.
To reiterate, in my view, the implications of the claim for depreciation made by Mr Frost, was a question of fact. As such it fell to the SSAT to determine the matter on the basis of the evidence led before it. The SSAT determined that monies designated as arising from depreciation were in fact available to Mr Frost. In my view, this was an issue of fact alone.
In this regard, I bear in mind what was said by Mansfield J in Comcare v Moon[26] as follows:
“Care must be taken not to convert questions of fact into questions of law. The Tribunal more over does not commit an error of law merely because it finds facts wrongly or upon a doubtful basis or because it adopts unsound reasoning. If there is any evidence rationally and legally capable of supporting the finding of fact the finding of fact does not involve an error of law.”
[26] See Comcare v Moon [2003] FCA 569 at paragraph 33

In the circumstances of this case, particularly Mr Frost’s evidence that monies designated as arising as a consequence of depreciation were not specifically earmarked to replace capital items and repairs and similar expenses were met from recurrent income, I do not think the SSAT’s finding can be characterised as being either irrational or incapable of being logically supported by the evidence available to it.
For these reasons, I do not believe that Mr Frost has been able to demonstrate an error of law in respect of this aspect of the SSAT’s determination.

Ground two

Mr Frost has made the following written submission in respect of the second ground of appeal:
“The Tribunal correctly determined [at Para 56] that the [F] deposit should not be added back to my income. However, they then incorrectly calculated my adjusted taxable income for the 2009 financial year by not allowing a deduction for the [F] Deposit. They refused to correct this apparent error as provided by section 103Y of the Child Support (Registration & Collection) Act.”[27]
[27] See applicants summary of argument at paragraph 8
As I understand it, the principle purpose of [F] deposits is to enable [occupation omitted] to average their income out over a period of up to five years, for taxation purposes, to reduce the impact of marginal tax rates. In addition, it can be a mechanism through which a [occupation omitted] can reduce his or her taxable income for the year in which such deposits are made.
It does not appear to me to be the case that the SSAT approached

Mr Frost’s [F] deposit of $15,000.00 as being a deduction from his income for the year in which it was made 2009. Similarly, it has not been treated as income in 2010. Accordingly, it does not seem to me to be the case that this issue has been in any way determinative of the SSAT’s calculation of Mr Frost’s income for the period in question.
In my view, this aspect of the decision of the SSAT is not particularly well expressed. I am not critical for the tribunal in this regard. Its obligation is not to craft reasons of “jurisprudential excellence”. Rather its raison d’être is to provide an expeditious and expedient mechanism for review of decisions of the CSA.
The legislative direction which is furnished to the SSAT is that it is provide mechanisms for review of decisions of the Child Support Registrar, following reconsideration, that are fair, just, economical, informal and quick [Collection Act at section 88].
In this context, I rely on the often cited dated principle in Minister for Immigration & Ethnic Affairs v Wu Shan Liang[28] namely:
“… the reasons of an administrative decision-maker are meant to inform and not to be scrutinised under over-zealous judicial review by seeking to discern whether some inadequacy may be gleaned from the way in which reasons are expressed. In the present context, any court reviewing a decision upon refugee status must beware of turning a review of the decisions-maker, upon proper principles into a reconsideration of the merits of the decision.”
[28] Minister for Immigration & Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259 at 272
For these reasons, I am unable to see that the SSAT has fallen into any legal error in the parameters argued by Mr Frost. Accordingly, I have reached the conclusion that the appeal filed in this matter should be dismissed.
For all these reasons, the orders of the court will be as set out at the commencement of these reasons for judgment.

I certify that the preceding ninety-two (92) paragraphs are a true copy of the reasons for judgment of Brown FM

Date: 1 December 2011