Gannett v Semper

[2020] FCCA 2916

FEDERAL CIRCUIT COURT OF AUSTRALIA

GANNETT v SEMPER & ANOR [2020] FCCA 2916

Catchwords:
ADMINISTRATIVE LAW – Application to set aside a review decision of the Administrative Appeals Tribunal – whether the Tribunal took into account irrelevant considerations – whether the Tribunal denied the applicant procedural fairness – whether the Tribunal did not afford the applicant a real and meaningful hearing – whether actual or apprehended bias in relation to the Tribunal – whether the Tribunal’s decision was legally unreasonable – whether the Tribunal misapplied the relevant law – no jurisdictional error made out – amended notice of appeal dismissed.

Legislation:

Administrative Appeals Tribunal Act1975 (Cth), s.44AAA

Child Support (Assessment) Act 1989 (Cth), ss.98C, 117

Applicant: MR GANNETT

First Respondent: MS SEMPER

Second Respondent: CHILD SUPPORT REGISTRAR

File Number: SYG 1072 of 2020

Judgment of: Judge Street

Hearing date: 27 October 2020

Date of Last Submission: 27 October 2020

Delivered at: Sydney

Delivered on: 27 October 2020

REPRESENTATION

The Applicant appeared in person via Microsoft Teams

The First Respondent appeared in person via Microsoft Teams

Solicitors for the Second Respondent Mr T Hillyard via Microsoft Teams
Sparke Helmore

ORDERS

1. The amended notice of appeal is dismissed.

2. The applicant pay the second respondent’s costs fixed in the amount of $7,200.00.

Date of order: 27 October 2020

IT IS NOTED that publication of this judgment under the pseudonym Gannett v Semper & 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 SYDNEY

SYG 1072 of 2020

MR GANNETT

Applicant

And

MS SEMPER

First Respondent

CHILD SUPPORT REGISTRAR

Second Respondent

REASONS FOR JUDGMENT

1. The applicant filed an amended notice of appeal on 7 July 2020 seeking to appeal from the decision of the Administrative Appeals Tribunal (“the Tribunal”) made on 6 April 2020 in respect of the Social Services and Child Support Division.

2. In that decision, the Tribunal set aside a decision under review and decided to depart from the administrative assessment of the child support under s 98C of the Child Support (Assessment) Act 1989 (Cth) (“the Act”) and decided the applicant’s adjusted taxable income from 1 July 2018 to 30 June 2019 was $379,781.00, and that the applicant’s adjusted taxable income from 1 July 2018 to 31 December 2021 was $132,157.00.

3. It is a necessary part of seeking to invoke this Court’s jurisdiction that there is a question of law falling within s 44AAA(1) of the Administrative Appeals Tribunal Act1975 (Cth). Whilst it is always difficult to formulate a question of law, the second respondent has accepted that the amended notice of appeal has raised a question of law referable, at least on its face, to the allegation of apprehended bias and/or denial of procedural fairness.

4. The grounds in the amended application are too prolix to set out in full.

Ground 1

1. In relation to ground 1, the applicant submitted that the Tribunal had taken into account an affidavit of the applicant that was not in evidence before the Tribunal.

2. The transcript of proceedings before the Tribunal on 24 March 2020 was tendered. The transcript does identify some submissions being made to the Tribunal by the first respondent in the context of which the first respondent referred to the applicant referring to working 82 hours a week. The Tribunal responded “Yes”. The first respondent then stated “Which he later refuted in his Affidavit to the Family Court, saying he only worked 50 to 60 hours. And he’s got that on Affidavit.” The Tribunal responded “Yes, I’ve seen both the Affidavits, yes.”

3. Before the Tribunal was an affidavit by the applicant and an affidavit by the first respondent. There was no affidavit referring to the hours worked by the applicant being only 50 to 60 hours.

4. The applicant submitted that the Court should infer that the Tribunal was accepting that there was another affidavit made by the applicant in evidence or that the Tribunal was having regard to another affidavit made by the applicant that was not in fact in evidence or tendered before the Tribunal.

5. The applicant would be correct that if the Court took into account an affidavit on relevant issues not adduced in evidence, there would have been a denial of procedural fairness in the conduct of the review before the Tribunal. However, on a fair reading of the transcript, the Tribunal was conveying nothing more than having referred to the affidavits that were filed before the Tribunal that had been read. The Tribunal had earlier identified in the transcript having read the material that had been filed. There is no proper basis to infer that the Tribunal was seeking to take into account an affidavit that was not in evidence and had not been tendered before the Tribunal. The Court finds that the Tribunal member was referring to having seen the affidavits that had been filed in the Tribunal proceedings and, on a fair reading, it identified no more than taking into account the evidence that was before the Tribunal.

6. A fair-minded lay observer would take into account the evidence that had been identified that was before the Tribunal and would be aware that the Tribunal had an affidavit from both applicant and the first respondent. In those circumstances, the reference to having seen both the affidavits is not conduct by reason of which a fair-minded lay observer might reasonably apprehend that the Tribunal might not bring an independent, impartial mind to the determination of the matter on its merits.

7. Further, the Court has read the transcript and there is nothing in the conduct of the hearing or in the Tribunal’s reasons to suggest that the Tribunal did other than to approach the review with an open mind reasonably capable of persuasion as to the merits.

8. No apprehended bias or actual bias is made out by reference to the transcript and the reference to both affidavits.

9. The second limb of ground 1 upon which the applicant relies is to submit that the Tribunal failed to raise the loan account with the applicant and that he was not given a real and meaningful hearing in the conduct of the review.

10. It is apparent on the face of the transcript that the Tribunal identified at the outset the nature of the three steps the Tribunal was required to consider in the conduct of the review and also that the Tribunal put the applicant on notice as to the risk of an adverse outcome. It is also patent that it was the financial position of the first respondent that was identified from the transcript as being the subject of significance in determining whether the statutory criteria was met, taking into account the corporate vehicle used by the applicant for what was the construction business that he was running up until the point of time that he decided to focus only on the farming business that was also being run through the same corporate entity.

11. There is no proper basis for the Court to find that the applicant was not aware of the financial position in respect of the corporate entity, including the financial details relating to the loan accounts, as being an issue relevant to the inquiry that was required under the statutory provisions.

12. The applicant had a real and meaningful hearing before the Tribunal. There was no denial of procedural fairness in the conduct of the review arising by reason of the loan accounts and the absence of an express question directed to the same in the course of the hearing. Nor is the taking into account by the Tribunal in its reasons of the loan account conduct by reason of which a fair-minded lay observer might reasonably apprehend that the Tribunal might not bring an independent, impartial mind to the determination of the matter on its merits.

13. No case of bias or actual bias is made out by reference to the Tribunal taking into account the loan accounts.

14. The applicant also submitted that it was legally unreasonable to take into account the loan account in relation to the applicant and not also in relation to the first respondent.

15. The taking into account of the loan account in relation to the applicant was a matter that was open to the Tribunal and which a reasonable decision-maker could take into account. The Tribunal was trying to determine the statutory criteria and it was not manifestly unreasonable to take into account the loan account from the corporate entity in respect of the applicant. No jurisdictional error is made out or any case of bias by reason of the taking into account of the loan account.

16. There any denial of procedural fairness in the conduct of the review including the conduct of the hearing. There was no denial of procedural fairness by the Tribunal in the way in which the hearing was conducted.

17. Further, the Tribunal’s reasons referring to the applicant’s income and increasing the applicant’s income as identified in those reasons is not conduct by reason of which a fair-minded lay observer might reasonably apprehend that the Tribunal might not bring an independent and impartial mind to the determination of the matter on its merits.

18. The next issue raised by the applicant in relation to ground 1 is by reference to an exchange that occurred in the transcript at page 10.

19. The Tribunal, at the commencement of the hearing, explained the nature of the issues and that it was a hearing de novo, referred to the three criteria that the Tribunal was going to take into account and put the applicant on notice of the possibility of an adverse finding. The Tribunal also identified having the evidence now before it to make a decision, whether it be the same or a different one.

20. After referring to the three-stage process, the Tribunal identified the risk of an adverse determination, clearly putting the parties on notice that the Tribunal had taken into account in part the material that was before it in terms of that warning and the applicant indicated that he wished to proceed with the application.

21. The Tribunal identified the process it was going to follow in relation to evidence and referred to the opportunity that would be given to the applicant in relation to contending why the decision was wrong. The Tribunal also referred to being in possession of and having read huge amounts of information provided by the first applicant. The Tribunal referred to being quite aware of the position in relation to the first applicant.

22. The Tribunal then had the respective parties affirmed and sought to explore with the applicant the making of a binding child support agreement and what the terms of that agreement might look like. This was clearly a reference to a potential consensual outcome, not the determination of the review process.

23. The applicant identified what his vision of that outcome might be, which the Tribunal clarified with him as being one in which he was proposing that he should pay half the costs for education, medical, sporting and uniforms to the first respondent and that he should pay nothing else. The applicant response to that was, “Correct.” The Tribunal then said “Right, okay, I can see why she has a problem with that. Okay, now---”.

24. The Tribunal, it was submitted by the applicant, had predetermined the matter or engaged in conduct by reason of which the Court should find that there was apprehended bias as a result of that remark.

25. That remark by the Tribunal was a logical proposition identifying the unrealistic proposition that was being advanced. It was not conduct that identified any predetermination of the review and, relevantly in its context which a fair-minded lay observer would take into account in terms of seeing whether the parties could achieve some consensual outcome, was not conduct by reason of which a fair-minded lay observer might reasonably apprehend that the Tribunal might not bring an independent and impartial mind to the determination of that on its merits. Nor does the observation support the conclusion that the Tribunal would not bring a fair and impartial mind to the determination of the matter on its merits.

26. No case of apprehended or actual bias is made out by reason of the reference by the Tribunal to the unrealistic proposition in terms of consensual agreement by reference to the position of the first respondent.

27. The applicant also submitted that the Court should find that there was apprehended bias because the Tribunal did not know any background at that point of time. That is inconsistent with the clear position identified by the Tribunal that it had taken into account the evidence that was before it and, indeed, it is apparent that was so from the further reference which immediately followed to having read 2000 pages of evidence.

28. No case of actual or apprehended bias is made out by reason of the exchange that occurred on page 10 in the transcript.

29. It was also submitted by the applicant that the Tribunal had not expressly referred to the balance sheet for the 2019 financial year in respect of the corporate entity and that this further supported a case of apprehended bias.

30. Contrary to the applicant’s submission, the Tribunal’s reasons make express reference to the financial statements for the corporate entity for the 2018-2019 financial year. Whilst the reference at paragraph 37 then refers to the turnover, the reference to financial statements patently includes the balance sheet. There is no proper basis to infer that the Tribunal ignored the whole of the financial statements in respect of the corporate entity.

31. There is no conduct in that regard to support any allegation of apprehended or actual bias.

32. The applicant has also submitted that there was a cherry-picking of the financial information.

33. The Tribunal’s reasons do not support any such characterisation and rather, the Tribunal’s reasons support the Tribunal approaching the review with an open mind reasonably capable of persuasion as to the merits.

34. No case of apprehended bias or actual bias is made out by reference to the reasons of the Tribunal.

35. No jurisdictional error is made out by ground 1 of the amended notice of appeal.

Ground 2

1. In relation to ground 2, the applicant submitted that it was manifestly unreasonable, unjust, unequitable and illogical to use liabilities from previous years in respect of the determination. In particular, the applicant sought to rely upon the comparative balance sheet position in respect of liabilities and the consequential diminution in respect of his financial position as a result of the cessation of his construction activities and focusing on his farming business.

2. Part of the argument submitted in relation to ground 2 is, again, to allege that there was a ignoring of the balance sheet by the Tribunal for the corporate entity in respect of the 2018 and 2019 financial year. The Tribunal expressly referred to the balance sheet for the 2018 financial year in paragraph 33 and made reference to the financial statements for the 2019 financial year. There is no basis to find that the Tribunal ignored the balance sheet for the corporate entity in 2018 or 2019.

3. The applicant submitted that the Tribunal had ignored the liabilities and other unavoidable compulsory expenses. This was, in substance, an invitation to this Court to engage in merits review. This Court does not have power to make fresh findings in respect of the merits.

4. The applicant’s reference to profits of the company being used to pay liabilities from previous years and the outgoings in relation to contractors and suppliers is, in substance, an invitation to engage in merits review. The findings of the Tribunal in respect of the financial resources and that the position for the 2019 financial year was of at least $467,670, that being much higher than the income amounts on which the applicant had been assessed for this period, was logical, rational and reasonably open to the Tribunal.

5. The Tribunal gave reasons in respect of the decision-making process in respect of the three steps which cannot be said to lack an evident and intelligible justification, as found in those reasons. Further, the outcome is not one to which no reasonable decision-maker could come.

6. No jurisdictional error is made out by ground 2 of the amended notice of appeal.

Ground 3

1. In relation to ground 3, the applicant referred to his inability to undertake construction work beyond projects of a value of approximately $20,000, the limited profit that he would undertake and be able to make in respect of such projects, the substantial time that would be required to generate a return and the problem he had with refusal of insurance because of a decision made by the first respondent.

2. It is not necessary, nor is it appropriate, for this Court to revisit the insurance position. It is apparent that the Tribunal accepted the insurance had been refused.

3. Nonetheless, the Tribunal in its reasons referred to the financial statements for the family trust for the period 1 July 2019 to 21 February 2020 showing the bulk of the income and equity as a result of the capital gains on the sale of two commercial properties. The Tribunal identified that the profit and loss statement for the corporate entity for the same period shows total income from trading of $113,013.87 and other income of $147,417.97. The Tribunal noted that of the “other income”, $45,454.55 was paid in compensation due to failures of a software system used by the corporate entity and $51,363.64 was paid as a result of a legal settlement from the corporate entity withdrawing from an ongoing project. The Tribunal accepted that those income amounts will not be repeated. The Tribunal referred to the accounts referring to no salaries being paid, that there is an amount for donations and other expenses and to the net profit.

4. The Tribunal accepted that the applicant’s income will be substantially reduced for the 2020 financial year as a result of the decisions he has made about his change of occupation. That was a reference to what the Tribunal said in paragraph 18 of its reasons, where the applicant explained his position in respect of jobs valued at $20,000 and less and that he could not take on new work which was more than $20,000 and referred to the home warranty insurance which was declined.

5. At paragraph 48 of the Tribunal’s reasons, the Tribunal acknowledged the difficulties the applicant would have had and continuing to work in the building industry due to the liquidity ratio of his firm and that he would have had to reduce his hours and therefore his income. The Tribunal, however, found that the applicant made decisions about ceasing to work in the industry and ceasing to generate income from commercial assets after separation and after the child support assessment commenced. The Tribunal found that the applicant could have put the money he was investing in farming into the corporate entity, and could have continued, in those circumstances, to work on smaller jobs. The Tribunal identified that after the sales of the commercial properties in 2020 the applicant’s liquidity ratio changed significantly and that it is far from certain that the corporate entity would have continued to be denied home warranty insurance if the applicant had chosen to continue to work in the industry. Those findings were logical and rational and open to the Tribunal.

6. In the context of those findings, the adverse determination by the Tribunal cannot be said to lack an evident and intelligible justification. The finding was reasonable and was not, in that regard, illogical or legally unreasonable and, further, was based on the evidence before the Tribunal.

7. The Tribunal expressly referred to the applicant’s income for 2018 in the 2018 financial year. That was evidence before the Tribunal. Accordingly, the adverse finding by the Tribunal was open.

8. No jurisdictional error is made out by ground 3 of the amended notice of appeal.

Ground 4

1. In relation to ground 4, the applicant submitted that the Tribunal’s reasons in relation to the reduced hours of work by the first respondent were erroneous and that the Tribunal should have found that the requirements of s 117(7B) of the Act were made out.

1. This reflects a disagreement with the merits. It does not identify any error by the Tribunal. It is apparent that the Tribunal in its reasons at paragraph 71 engaged with the applicant’s submissions concerning the earning capacity of the first respondent and the criteria under s 117(7B) of the Act but could not find that an earning capacity decision could be made in respect of the first respondent or that there was any reason why her income should not be taken into account in the administrative assessment in the ordinary course of events.

2. The Tribunal expressly found that it could not find that the preconditions existed for an earning capacity decision to be made. That adverse finding was open for the reasons given by the Tribunal. The applicant’s disagreement with the same does not identify any error.

3. No jurisdictional error is made out by ground 4 of the amended notice of appeal.

4. Accordingly, the amended notice of appeal is dismissed.

I certify that the preceding fifty-eight (58) paragraphs are a true copy of the transcript of the published oral reasons for judgment of Judge Street delivered in open Court on 27 October 2020 and the parties were sent a sealed copy of the Court’s orders.

Associate:

Date: 27 November 2020