Gelber & Child Support Registrar & Anor (SSAT Appeal)

[2012] FMCAfam 45

FEDERAL MAGISTRATES COURT OF AUSTRALIA

GELBER & CHILD SUPPORT REGISTRAR & ANOR (SSAT APPEAL) [2012] FMCAfam 45

CHILD SUPPORT – SSAT Appeal – appeal dismissed – stay of collection of child support lifted – costs.

Family Law Act 1975, s.117
Child Support (Assessment) Act 1989, ss.98L, 117(4)- (9)

Klement & Glynn [2010] FamCA 40

Applicant: MR GELBER

First Respondent: CHILD SUPPORT REGISTRAR

Second Respondent: MS GELBER

File Number: MLC 1583 of 2011

Judgment of: Hughes FM

Hearing date: 1 July 2011

Date of Last Submission: 1 July 2011

Delivered at: Melbourne

Delivered on: 18 January 2012

REPRESENTATION

Counsel for the Applicant: In person

Solicitors for the Applicant: nil

Counsel for the first Respondent: Mr Wilson

Solicitors for the first Respondent: Australian Government Solicitors

Counsel for the second Respondent: Mr Sciola

Solicitors for the second Respondent: NJS Legal

ORDERS

1. The appeal filed on 25 February 2011 is dismissed.

2. Orders 2 and 3 of the orders of 1 July 2011, imposing a stay of collection of the sum of $6,000 payable by the appellant pursuant to the decision of the Social Security Appeals Tribunal of 19 January 2011, is hereby discharged.

3. The appellant shall pay the costs of the first respondent in the sum of $8,674.76 within 28 days.

4. The appellant shall pay the costs of the second respondent in the sum of $2,200 within 28 days.

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

FEDERAL MAGISTRATES
COURT OF AUSTRALIA
AT MELBOURNE

MLC 1583 of 2011

MR GELBER

Applicant

And

CHILD SUPPORT REGISTRAR

First Respondent

MS GELBER

Second Respondent

REASONS FOR JUDGMENT

1. This is an appeal from a decision of the Social Security Appeals Tribunal made on 19 January 2011.

2. The Tribunal’s decision was in three parts.  The first two parts adjusted the appellant’s taxable income for two particular child support periods.  This appeal does not relate to those parts.  The third part of the decision increased the appellant’s annual rate of child support for the 2010 calendar year by $6,000 as a contribution to the education expenses of the younger of the appellant’s two children.  That is the subject of the current appeal.

3. The appellant was unrepresented in the proceedings. Both respondents were represented by counsel.

Background

1. The appellant and the second respondent are the parents of two children who are now aged 22 years and 18 years respectively.  The appellant was liable to pay child support to the second respondent pursuant to an administrative assessment until the end of 2010 when the younger child, X, completed his secondary school education.

2. In February 2010, the Child Support Registrar initiated a change of assessment process pursuant to Part 6A of the Child Support (Assessment) Act 1989 in relation to three child support periods between February 2008 and January 2011.  The appellant had a very low adjusted taxable income for each period and, as a consequence, the annual rate of child support payable by him was nil in the first two periods and $1,178 in the third period. 

3. As a result of the change of assessment process, a senior case officer of the Child Support Agency made a departure determination which increased the appellant’s adjusted taxable income. This resulted in the annual rate of child support payable by the appellant increasing by $1,680 for the period August to December 2008, by $3,562 for the 2009 calendar year and by $3,774 for the 2010 calendar year.

4. On 27 April 2010 the appellant lodged an objection to the decision. On 25 June 2010 an objections officer disallowed the objection which left the departure determination in place.

5. On 2 August 2010 the appellant lodged an application for review of the decision by the Social Security Appeals Tribunal.

6. 19 January 2011 the SSAT set aside the decision under review.  It substituted a new departure determination.  The only part of the determination that is the subject of this appeal is the following:

   In the period from 1 January 2010 to 31 December 2010, Mr Gelber’s annual rate of child support is increased by $6,000, as his contribution to X’s private education costs. 

7. The appellant argued that neither the Child Support Registrar nor the SSAT should have had regard to the costs of the child’s private school education because a decision about that issue had been made in 2006 and the first respondent (the child’s mother) had not appealed that decision. 

The SSAT decision

1. In reviewing the original decision, the SSAT is bound by the same legislative requirements as the decision maker. Section 98L of the Child Support (Assessment) Act 1989 empowers the Registrar to depart from the administrative assessment of child support if particular conditions are met.  The Registrar must be satisfied that, in the special circumstances of the case, the application of the legislative formula would result in an unjust and inequitable determination of child support because of the income, earning capacity, property and financial resources of either parent.  The Registrar must also be satisfied that it is just and equitable and otherwise proper to make a particular determination.

2. The appellant takes no issue with the Tribunal’s determination that a ground for departure was established on an assessment of the income, earning capacity, property and financial resources of each parent. However, when considering whether the determination was just and equitable and otherwise proper, the Tribunal took into account a range of matters including the cost of educating the child. It is this to which the appellant objects.

3. In reaching its determination, the Tribunal was required by subsection 98L(2) to have regard to subsections 117(4) to (9) of the Assessment Act.  Subsections 117(4) and (5) provide a list of factors to which the Tribunal must have regard in determining, firstly, whether it would be just and equitable and, secondly, whether it is otherwise proper to make the particular determination.

4. Section 117(4)(b) requires the Tribunal to have regard to “the proper needs of the child”. In determining the proper needs of the child, the Tribunal must have regard to “the manner in which the child is being, and in which the parents expected the child to be, cared for, educated or trained”.[1]

   [1] S117(6)(a) Child Support (Assessment) Act 1989

5. The Tribunal noted that this was a particularly contentious issue in the proceedings before it.  The appellant complained to the Tribunal that he had not been afforded natural justice in the processes conducted by the Child Support Agency which led to the original departure determination. The Tribunal found that argument irrelevant as it was considering the issue afresh and the appellant was well aware the matter was in issue before the Tribunal. The decision notes that the appellant made oral and written submissions about the issue. 

6. The appellant also argued before the Tribunal that the Tribunal ought to refuse to consider the issue of the costs of the child’s education, relying on the principles of res judicata and issue estoppel. The basis of his argument was that, in 2006, the second respondent applied for a departure from the administrative assessment of child support, partly to take into account the cost of the children’s education. Her application in relation to the education costs was not successful, although she did achieve some increase in the child support assessment for other reasons.  She unsuccessfully objected to the decision in relation to the education costs. The objections officer said it was necessary for her to establish that the parties had agreed to the children attending a private school at joint expense. In the absence of that evidence, there remained a dispute about the parties’ expectations concerning the manner in which the children were to be educated and the ground for departure was not found to be established. The second respondent did not pursue the matter further.

7. The appellant argued before the Tribunal that the decision of the objections officer on 10 August 2006 settled the matter once and for all. The Tribunal correctly dismissed both the res judicata and issue estoppel arguments on the basis that they apply only to judicially determined matters and there had been no court determination of the issue. 

8. The Tribunal then examined in depth the factual dispute between the parties in relation to the private school education of their children.  It noted that on 12 November 1996 both parties had signed application forms for the children to attend (omitted) School at (omitted).  The appellant told the Tribunal that, in about 1997, the parties wrote to (omitted) to advise they wanted to remove the children from the waiting list.  The appellant was unable to produce a copy of the letter but the Tribunal accepted his evidence.  The Tribunal then had regard to subsequent events which included the fact that both children were, in fact, educated at (omitted). The child Y attended (omitted) from 2002 to 2007 and X from 2005 to 2010.

9. During the Tribunal proceedings, evidence was given about family law proceedings between the parties from 2001 to 2003.  The Tribunal was satisfied on the basis of that evidence that, in 2001, both parents intended that Y would attend a private school from 2002 but could not agree on which particular school. The appellant wanted the children to attend (omitted) College in (omitted) and the second respondent wanted them to attend (omitted) School at (omitted). Interim orders made by consent on 29 June 2001 provided for Y to commence at (omitted) at (omitted) in 2002. They also provided for the second respondent to accept an offer of placement for Y at (omitted) College in (omitted) so that he could attend there if that was ultimately ordered by the Court. 

10. The Tribunal noted the final orders made, not by consent, in 2003 which provided for the children to continue to live with their mother in (omitted) and spend time with the father in Melbourne. As a  consequence, the children both attended (omitted) School in (omitted).

11. The Tribunal noted that the appellant attended parent teacher meetings and social functions at the school in support of the children. 

12. It was common ground during the Tribunal proceedings that the second respondent, the mother of the children, had paid for all of the school fees for both children throughout their education at (omitted) except for an amount of $12,060 which remained outstanding at the time X completed his education in December 2010. 

13. It was also common ground between the parties that both parties and both children would shortly inherit approximately $120,000 each.  The appellant submitted that the second respondent could pay the outstanding school fees from her inheritance. 

14. The Tribunal examined all of the relevant factors under sub-section 117 (4) of the Child Support (Assessment) Act, including the income, earning capacity, property and financial resources of each parent and the child; the commitments of each parent in supporting themselves and any other person; the costs of providing care for the child; and hardship issues.  Taking all of those matters into account, the Tribunal found that it was just and equitable for the appellant to contribute $6,000 towards the payment of the outstanding school fees.  In reaching its decision the Tribunal had regard to the fact that X would inherit the same amount as his parents in the foreseeable future but did not consider it just and equitable to require the child to contribute to the debt remaining for his secondary school education.

15. The Tribunal then considered the matters set out in sub-section 117(5) and found that it was otherwise proper to make the departure determination.

The grounds of appeal

1. The Notice of Appeal filed on 25 February 2011 contains seven grounds of appeal:

(i) That the decision arrived at was ultra vires the Tribunal

1. This is an odd ground of appeal given it was the appellant who applied to have the SSAT review the original decision. It was not apparent from the appellant’s documentation how he said the Tribunal lacked power to deal with the matter.  During his oral submissions, the appellant said that this ground was really part of his issue estoppel argument.  He said that what he meant was that the Tribunal should have declined to deal with the issue of the educational expenses because the issue had already been determined in August 2006 and the second respondent had never appealed that decision. 

2. The appellant relied upon the case of Klement and Glynn, [2] a 2010 decision of Dawe J in the Family Court of Australia. In that case the applicant sought an order pursuant to sections 111 and 112 of the Child Support (Assessment) Act allowing the Child Support Registrar to depart from the administrative assessment of child support in relation to a period more than 18 months prior to the application.  The applicant mother alleged that the assessment which issued after a change of assessment process had been based upon incorrect information as to the level of care provided for the child by each party. She did not lodge an objection to that decision at the time and her subsequent request to lodge a late objection to the decision had been refused by the Registrar.  The applicant did not apply for a review of that decision by the Registrar.  Dawe J found that the application was misconceived.  She pointed out that the applicant’s issue was really in relation to the particulars of the child support assessment and that any challenge to those particulars should be made in accordance with the Child Support (Registration and Collection) Act, rather than the Child Support (Assessment) Act.  Her Honour said that the application before the Court was, in reality, an attempt by the applicant to overcome problems created by her failure to exercise the administrative review options available to her at the relevant time.  Dawe J said at paragraph 48 the following:

   …I am satisfied that the mother’s application is not an application for leave to bring a departure application but is a sham, being an attempt to sidestep the provisions of the Registration and Collection Act concerning reviews of administrative assessments.

   [2] [2010] FamCA 40

3. The appellant in this case said that, for similar reasons, the Tribunal should have declined to consider the costs of private education in reaching its determination given the second respondent had failed to exercise her options for review of the decision of the objections officer in August 2006.  I do not agree.  As stated by the Tribunal and reiterated by counsel for each respondent, issue estoppel applies only to judicial determinations, not administrative decisions and, in any event, the decision made in August 2006 related to child support periods between November 2001 and April 2007 only.  The decision of the Tribunal which is challenged in this Court applies to a separate child support period covering the 2010 calendar year.  The Social Security Appeals Tribunal had a lot more information available to it than did the objections officer in 2006.  It is clear from the 2006 determination that there was no evidence at that time that both parties expected the children to be privately educated.  According to the 2006 decision, the appellant denied ever signing any document for enrolment of the children at (omitted) School in (omitted).  However, the Tribunal had before it a copy of the application for enrolment at (omitted) signed by both parents in 1996.  Although it accepted the appellant’s evidence that he later withdrew his agreement to the children attending that school, it was abundantly clear from the evidence before it that the appellant intended the children be privately educated but only at a school of his choice. The Tribunal carefully considered all of the matters relevant to the issue, was not estopped from doing so and did not exceed its powers.  Ground 1, therefore, fails.

(ii) That the decision arrived at was reached in breach of the rules of natural justice

1. The appellant consistently failed to distinguish between the determinations made by officers of the Child Support Agency and the decision made by the Tribunal in relation to questions of natural justice. In his written outline of argument and his oral submissions the appellant repeatedly referred to a lack of procedural fairness accorded to him by officers of the Child Support Agency in the process leading to the original departure decision and the objection decision.  These have no bearing on the Tribunal’s decision.

2. The appellant did allege at paragraph 28 of his outline of argument that there had been a breach of natural justice by the Tribunal in that the Tribunal refused to issue a subpoena to (omitted) School for the production of documents.  It seems likely that the particular document sought by the appellant was the letter he said the parties wrote to the school withdrawing the children from the waiting list.  The Tribunal noted at paragraph 49 that the appellant relied heavily on that letter to prove a lack of intention for the children to attend the School.  There is no substance to the argument, however, as the Tribunal proceeded on the basis that it accepted the appellant’s evidence in that regard.  The production of the letter, therefore, would have made no difference. 

3. During the proceedings the appellant said that he raised with the Tribunal the fact that various documents he sought to rely upon had not been produced by the Child Support Agency. There was, however, no transcript of the proceedings before the Tribunal. The appellant conceded that, during a directions hearing before me in preparation for the appeal, he was advised to obtain a copy of the whole or any part of the transcript on which he relied.  He said he decided to rely instead on a letter he wrote to the SSAT dated 26 September 2010 in which he requested that all information held by the Child Support Agency in relation to the issue of school fees be produced, including transcripts of various telephone communications between the parties and the Child Support Agency in relation to the issue of education costs.  He said the additional information was not produced to the Tribunal.

4. The additional material sought by the appellant was relevant only to the decisions made by senior case officers employed by the Child Support Agency and not to the decision of the Tribunal. The Tribunal was aware that the appellant alleged a denial of natural justice by the Agency in reaching the departure determination and the objection decision.  The appellant was well aware that the issue of the educational expenses of the child was going to be addressed by the Tribunal.  The Tribunal heard evidence and submissions from the appellant on that issue.  There is no evidence the appellant was denied procedural fairness or that there was any other breach of the rules of natural justice by the Tribunal.  Accordingly, ground 2 fails.

(iii) That the decision arrived at was reached in the absence of any evidence to support the decision

1. During the proceedings, the appellant abandoned in this ground of appeal.[3]

(iv) That the Tribunal refused to permit the admission of evidence to rebut the decision and failed to provide any reasons for so doing

[3] Transcript 1 July 2011, page 29.30

1. No particulars were provided in relation to this ground of appeal in the appellant’s outline of argument.  During his oral submissions the appellant said that it related to the failure by the Tribunal to compel the Child Support Registrar to produce the extra documentation he sought in his letter to the Tribunal on 26 September 2010.  This ground, therefore, is really a repeat of ground (ii) above and has already been considered.

(v) That the decision was not just and equitable within the meaning of s117 of the Child support Assessment Act 1989 [sic]

1. As stated earlier, the Tribunal was required to consider the matters set out in section 117(4) of the Child Support (Assessment) Act in determining whether or not the decision it reached as a result of considering the matters in section 98L of the Act was just and equitable. The Tribunal carried out a detailed and comprehensive assessment of each of those matters. No error of law is established in that regard.

(vi) Information was not provided to the Applicant in accordance with s98M(2) of the Child support Assessment Act 1989 [sic] (“the Act”) prior to the Registrar’s decision and since the mandatory procedure was not observed the decision could not be considered to be a determination within the meaning of s98K of the Act and therefore was not reviewable by the Tribunal. The decision should therefore be set aside

1. This ground is obviously a mix of grounds and submissions. It can be restated as being that, because the original decision was invalid, it is not reviewable by the Tribunal. I agree with the submissions by counsel for both the first and second respondents that the ground of appeal is misconceived. In conducting a merits review, the Tribunal considered the departure issue afresh. Any deficiencies in the original decision making process were, therefore, irrelevant. The Tribunal clearly had power pursuant to section 89 of the Child Support (Registration and Collection) Act 1988 to review the decision.This ground, therefore, fails.

(vii) The Child Support Registrar had previously made a determination in 2006 that the Applicant not pay any such school fees and the Tribunal was estopped from denying the existence of that decision and the time for the other party to appeal had expired some 5 years earlier.

1. The appellant agreed that this ground was simply a restatement of his issue estoppel argument which has already been dealt with.

Determination

1. The appellant bears the onus of establishing that the Social Security Appeals Tribunal made an error of law in reaching its determination. No such error has been established and the appeal, therefore, will be dismissed.

Costs

1. Each of the parties sought an order for costs in the event of a successful outcome. Submissions were made by the parties prior to the determination of the proceedings.  Each party simply sought an order for costs to follow the event. 

2. The provisions of the Family Law Act1975 in relation to costs apply in Child Support proceedings.[4] Normally each party bears their own costs.[5]  However, the Court may make an order for costs if it is of the opinion that there are circumstances that justify such an order.[6] 

   [4] Section 105 Child Support (Registration and Collection) Act 1988

   [5] Section 117(1) Family Law Act 1975

   [6] Section 117(2) Family Law Act 1975

3. The matters to be taken into account in determining that issue are set out in s117(2A) of the Family Law Act.  Of the seven matters, there are only two in relation to which I have any information. The first concerns the financial circumstances of the parties.  It was common ground during the proceedings before the SSAT that each parent and each of the children expected to receive an inheritance of approximately $120,000. The respondent said during the current proceedings that he had received approximately $80,000. There is no other relevant information about the financial circumstances of the parties.

4. The only other matter I am required to consider and about which there is some information is whether any party to the proceedings has been wholly unsuccessful in the proceedings. Obviously, the appellant was wholly unsuccessful. 

5. At the very beginning of the proceedings on 1 July 2011, it was pointed out to the appellant by the Court that, in the event he was unsuccessful, the other parties may seek costs well in excess of the $6,000 he was liable to pay as a result of the Tribunal decision. The appellant was undeterred.

6. The appeal had no merit and should not have been pursued.  There is no reason why either of the respondents should be out of pocket as a result of it.

7. The first respondent sought costs in the sum of $8,674.76. This amount was calculated in accordance with the scale of costs provided in Schedule 1 of the Federal Magistrates Court Rules 2001, as at the date of the hearing.  I am satisfied that the costs sought are reasonable and will make that order.

8. The second respondent sought a costs order in the amount was $2,200. This is well within the scale of costs and I will make that order.

I certify that the preceding forty-seven (47) paragraphs are a true copy of the reasons for judgment of Hughes FM

Date:  18 January 2012