Hallam v Judd and Anor (SSAT Appeal)
[2013] FCCA 325
•7 June 2013
FEDERAL CIRCUIT COURT OF AUSTRALIA
| HALLAM v JUDD & ANOR (SSAT APPEAL) | [2013] FCCA 325 |
| Catchwords: CHILD SUPPORT – Appeal from SSAT – child support legislation – assessment – other matters. CHILD SUPPORT – Children – child support legislation – assessment – formula elements – child support income amount. EVIDENCE – Acts Interpretation Act1901 – Evidence Act1905 (Cth) – service – service by post. |
| Legislation: Child Support (Assessment) Act 1989, s.117(2)(c)(ia) Child Support (Registration and Collection) Act 1988, s.102 Acts Interpretation Act1901, s.29 Evidence Act1905 (Cth), ss.160 & 163 |
| Cases cited: Fancourt v Mercantile Credits Ltd [1983] HCA 25; (1983) 154 CLR 87 |
| Appellant: | MR HALLAM |
| First Respondent: | MS JUDD |
| Second Respondent: | CHILD SUPPORT REGISTRAR |
| File Number: | MLG 914 of 2012 |
| Judgment of: | Judge Riethmuller |
| Hearing date: | 18 February 2013 |
| Date of Last Submission: | 18 February 2013 |
| Delivered at: | Melbourne |
| Delivered on: | 7 June 2013 |
REPRESENTATION
| Counsel for the Appellant: | In Person |
| Counsel for the First Respondent: | In Person |
| Counsel for the Second Respondent: | No Appearance |
| Solicitors for the Second Respondent: | Department of Human Services |
ORDERS
The Appeal be dismissed.
There be no order as to costs.
IT IS NOTED that publication of this judgment under the pseudonym Hallam v Judd & Anor (SSAT Appeal) is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT MELBOURNE |
MLG 914 of 2012
| MR HALLAM |
Appellant
And
| MS JUDD |
First Respondent
| CHILD SUPPORT REGISTRAR |
Second Respondent
REASONS FOR JUDGMENT
Background
The appellant appeals against a decision of the Social Security Appeals Tribunal made in June 2012. The Tribunal set aside the Registrar’s decision and substituted it with the following:
· For the period 9 May 2011 to 8 May 2013 Mr Hallam’s adjusted taxable income is set at $75,000.
· For the period 9 May 2011 to 30 September 2011 Ms Judd’s adjusted taxable income is set at $28,000 and for the period 1 October 2011 to 8 May 2013 it is set at $26,000.
The principal issue in the decision of the SSAT was whether a ground existed to depart from the administrative assessment pursuant to s.117(2)(c)(ia) of the Child Support (Assessment) Act1989 which provides as follows:
(c) that, in the special circumstances of the case, application in relation to the 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:
(ia) because of the income, property and financial resources of either parent…
In this case the appellant is a self employed [occupation omitted] (see paragraph 23 of the SSAT decision).
The SSAT set out the background in its Reasons for Decision as follows:
2. The child support assessment commenced from 9 February 2010.
3. On 28 April 2011 Ms Judd lodged a departure application under Part 6A of the Child Support (Assessment) Act 1989 (the Assessment Act)…
4. Ms Judd sought a departure on the grounds that Mr Hallam’s earning capacity was $110,000 a year and the value of his assets. She stated he was able to holiday overseas, had the benefit of a company car and sufficient cash flow to pay his mortgage and living expenses. She requested that Mr Hallam be assessed to pay child support of $150 a week.
5. On 16 August 2011 a senior case officer of the Agency decided that a ground had been established to depart from the administrative assessment as the senior case officer was satisfied that Mr Hallam’s gross business income was increasing. After considering the gross sales income of approximately $167,950 in the 12 month period ending 31 December 2010 and allowing a cost of sales of 45%, the senior case officer found that the gross business profit was around $92,370 in that period. After then allowing 50% for other business costs, Mr Hallam’s estimated net business profit was $46,200. The senior case officer then allowed that Mr Hallam would receive some personal benefit from the business and made a departure determination to set Mr Hallam’s adjusted taxable income at $51,000 for the period 9 May 2011 to 8 May 2013 and to set Ms Judd’s adjusted taxable income at $28,000 for the same period. As a result Mr Hallam was assessed to pay an annual rate of child support of $3,649 to Ms Judd.
On review the SSAT found that:
33. Overall the Tribunal finds that Mr Hallam has income that is greater than that reflected in his adjusted taxable income of $0 and there are special circumstances in this case to depart from the administrative assessment.
…
45. …the Tribunal does not accept that Mr Hallam’s income is properly reflected in his tax returns but prefers the evidence obtained from the Bendigo Bank in which Mr Hallam declared that his income was $75,000 a year. Accordingly, based on the information before it the Tribunal finds that Mr Hallam’s income is $75,000 a year. Mr Hallam also declared to the bank that he had a car collection valued at $700,000. He declared to the Tribunal that the collection has a scrap value of around $5,000 and that the cars were stored on a friend’s farm. He had declared a cost value of $20,000 to the Agency on 24 May 2011. It is apparent that the Tribunal is unable to determine an accurate value for these cars but in view of Mr Hallam’s lack of candour with the Tribunal about his dealings with the Bendigo Bank, the Tribunal forms the view that the collection has a value well above $20,000.
Grounds of Appeal
Two main grounds of appeal were put forward by the appellant, which can be summarised as being the failure of the Tribunal to provide material to the appellant and the failure of the Tribunal to properly consider the impact of Ms Judd not having complied with its directions. The grounds were defined in the Amended Notice of Appeal as follows:
1. By making its decision on the basis of information in its possession and denying him the opportunity to explain or make submissions on those matters.
2. By taking into account matters not relevant to a determination of his adjusted taxable income and denying him the opportunity to explain or make submissions on those matters.
3. By making its decision without having considered the financial documents which it directed by paragraphs 1.6 and 1.7 of its Pre-Hearing Directions made the 7th February 2012 and dated the 8th February 2012 that the First Respondent supply to it with which directions the First Respondent did not comply.
The primary order sought by the appellant is:
…that so much of the decision as relates to the Appellant Mr Hallam be dismissed, namely that:
“For the period 9 May 2011 to 8 May 2013 Mr Hallam’s adjusted taxable income is set at $75,000”.
Grounds 1 and 2
In reaching its decision the Tribunal had regard to the tax returns of the appellant together with documents from the Bendigo Bank. Following the hearing, the Tribunal sought further documentation from the Bendigo Bank relating to an increase in the loan limit applied for by the appellant in May 2011. In its reasons the Tribunal stated:
30. The Bendigo Bank documentation contains a copy of a Customer Application form signed by Mr Hallam on 29 April 2011 on which he declares that his gross monthly income is $6,250 and he has assets totalling $1,635,000 including his home valued at $700,000, contents valued at $60,000, superannuation of $55,000, stock of $120,000 and “other” of $700,000. There is a Bendigo Home Equity Loan Application signed by Mr Hallam at three stages in the document on 20 April 2011. As well, there is a Financial Summary stating that the Bank’s assessment of Mr Hallam’s capacity to repay the loan was based on information provided by him stating his monthly income was $6,250. Attached is a Self Certification of Income signed by Mr Hallam on 20 April 2011 declaring his monthly income to be $6,250 and his monthly living expenses to be $1,662. There is also a property valuation of Mr Hallam’s home obtained by the bank showing a value of $650,000 and the bank’s “diary comments” which notes that the $700,000 asset listed by Mr Hallam is his luxury vehicle collection which is being held as his superannuation for the future…
Importantly the Tribunal found at paragraph 31 that:
31. The information in the Bendigo Bank material is in direct conflict with that provided by Mr Hallam to the Tribunal both about his income and his assets. As well, it contradicts his evidence to the Tribunal that he had not signed any self assessment forms with the bank…Whilst Mr Hallam has given evidence to the Tribunal that his income is minimal and he cannot afford to be assessed for child support on an adjusted taxable income of $51,000, the Tribunal finds the evidence of the financial position he declared to the bank in April 2011 is significant and weighty. Mr Hallam also told the Tribunal that his business income is “improving” and he expects to repay a personal, undocumented loan of $5,000 this year. He also has the benefit of various business assets and expenses such as petrol, car usage, telephone and internet usage that may reduce his personal expenditure…
The Tribunal then went on to rely upon Carey & Carey [1994] FLC 92-489 at paragraph 32 where the Court said:
32. It is a well established principle in the Family Court of Australia that the taxable income of a parent who is self employed may not be an accurate reflection of their earning capacity and financial resources. This is because self employed people are able to derive additional benefits from their business and also have greater control over the structure of their finances than ‘Pay As You Go’ employees. While expenses and deductions claimed are quite legitimate for taxation purposes, this does not automatically extend to child support. It is accepted that there is a divergence between the taxation system and the child support system in this area. Expenses accepted for child support purposes must not only be legitimate, they must be essential, and have a greater priority than the support of children.
The appellant argues that he never received a copy of any of the information that the Tribunal was sent by his bank. Further, that he did not ever have the opportunity to make submissions or provide an explanation for the material contained within the documents. The Tribunal states in its reasons that the appellant failed to comment on the further documentation (see paragraph 29). The appellant says that he was unable to comment as he did not have the opportunity.
The Bank Documents
In April 2011 the appellant signed a Loan Affordability Self Assessment document with the Bendigo Bank. When making submissions on the Appeal the appellant said “I have no recollection of signing the document… But having said that, and in the pressure that I was under, I would have signed anything that was put in front of me to facilitate that loan which I needed to support and pay for my case in the custody hearing…if that had have put down there that I needed to earn a $100,000 a year, it would have been that. A million dollars, whatever it took, whatever the bank was prepared to do, I would have signed”.
In evidence before me, the appellant agreed that his signature appears on the relevant Bank document (see T40.13).
During the course of the hearing, when asked whether the circumstances would have been altered had he received the correspondence dated 16 May 2012 from the Tribunal, the appellant stated that he thought that the values provided on the bank document were “highly optimistic” and that he “certainly would have asked for further evidence from the bank or put forth an independent valuation of the property”.
Whilst the appellant would have faced a difficult task in persuading the tribunal to accept a version different to that which he gave the bank, it was not impossible that such an outcome could flow.
Notice to the Appellant
At paragraph 6.1 of his affidavit sworn 16 October 2012 the appellant states:
6.1 I was never given a copy of any of the information that the Tribunal received from my Bank, the Bendigo Bank, ([omitted] Branch) (“the Bank”) and never had any opportunity to make any submission or provide any explanation for the material contained in it. Accordingly, even though the Tribunal says in paragraph 20 that I failed to respond I did not in fact have the opportunity to do so because I was not given the opportunity.
This is consistent with what he told the Tribunal:
28. After the hearing Mr Hallam wrote to the Tribunal stating that in relation to the overdraft limit increase in 2011, he provided no tax records, business records, asset valuations or proof of income. He had no memory of what detailed questions may have been asked of him but he was in a desperate financial position and would have said yes to almost any question that facilitated the increased borrowings.
The first respondent challenged the appellant’s claim that he had not received the letter (see T34.15).
There is no doubt that the first respondent was challenging the appellant’s claim, however those challenges were put in overly generalised forms such as “he has a history of losing documents very conveniently’. Unfortunately such broad allegations are of little assistance. As the first respondent was representing herself I had to ask questions of the appellant to allow him a proper opportunity to respond to the position of the first respondent.
The Tribunal documents include a letter sent by the Tribunal to the appellant on 16 May 2012 which said:
The Tribunal has received additional material in relation to the review. A copy of the material is enclosed for your information & comment.
Please find enclosed numbered documents D1 to D23.
By sending the material to you, we have not made any decision as to whether or not this material will be accepted by the Tribunal member who will conduct the hearing. The decision about whether the material is relevant to the review is one which can only be made by the Tribunal member.
A party is not obliged to respond to additional material. However, if any party wishes to respond to any matter in the additional material they should:
· Send in a written response (which will be provided to other parties to the review).
This written response must be received by 30 May 2012.
There is no evidence to suggest that the letter was not sent in the ordinary course by the Tribunal. The evidence of the appellant squarely on this issue was (at T43.3 – 43.15):
HIS HONOUR: …Mr Hallam, the address that that letter in May was sent to…It was sent to your home address? Yes. All right. And does all of your CSA and SSAT correspondence go to your home address?
MR HALLAM: Yes. And I’ve responded to them all previously, your Honour.
HIS HONOUR: Yes. And what’s the circumstances at your home address for receiving mail?
MR HALLAM: I have a letter box at the front of the house, your Honour, that – with a flip top on it. And the mail goes there. To my knowledge, your Honour, I don’t lose mail, so this is an extremely unusual case for this not to have arrived; if it has been sent.
Neither party sought to call or cross-examine the relevant clerical officer of the SSAT. In any event the provisions in s.163 of the Evidence Act would apply.
Statutory presumptions
Section 102 of the Child Support (Registration and Collection) Act 1988 provides for the method of giving notice to parties as follows:
102 Notice of application to persons affected by decision
(1) If:
(a) an application has been made to the SSAT under this Part for review of a decision; and
(b) the SSAT Principal Member is satisfied that the interests of a person who is not a party to the review are affected by the decision;
the SSAT Principal Member must take reasonable steps to give the person written notice that an application has been made to the SSAT for review of the decision…
…(3) The notice under subsection (1):
(a) must be in writing; and
(b) must include, or be accompanied by, notification of the person’s right under subsection 101(2) to apply to the SSAT Principal Member to be added as a party to the review; and
(c) may be given at any time before the determination of the review.
(4) The SSAT Principal Member must give each party to the review a copy of the notice.
Section 29 of the Acts Interpretation Act1901 applies to notices sent by post, providing:
29 Meaning of service by post
(1) Where an Act authorizes or requires any document to be served by post, whether the expression “serve” or the expression “give” or “send” or any other expression is used, then the service shall be deemed to be effected by properly addressing, prepaying and posting the document as a letter and, unless the contrary is proved, to have been effected at the time at which the letter would be delivered in the ordinary course of post.
The Evidence Act1905 (Cth) also has provisions that relate to notices sent by post:
160. Postal articles
(1) It is presumed (unless evidence sufficient to raise doubt about the presumption is adduced) that a postal article sent by prepaid post addressed to a person at a specified address in Australia or in an external Territory was received at that address on the fourth working day after having been posted…
…(3) In this section:
working day means a day that is not-
(a) a Saturday or a Sunday; or
(b) a public holiday or a bank holiday in the place to which the postal article was addressed.
Note [NSW & Vic Acts only]: Section 182 of the Commonwealth Act gives section 160 of the Commonwealth Act a wider application in relation to postal articles sent by a Commonwealth agency.
163 Proof of letters having been sent by Commonwealth agencies [Cth Act only]
(1) A letter from a Commonwealth agency addressed to a person at a specified address is presumed (unless evidence sufficient to raise doubt about the presumption is adduced) to have been sent by prepaid post to that address on the fifth business day after the date (if any) that, because of its placement on the letter or otherwise, purports to be the date on which the letter was prepared.
(2) In this section:
business day means a day that is not:
(a) a Saturday or a Sunday; or
(b) a public holiday or bank holiday in the place in which the letter was prepared.
Commonwealth agency
letter means any form of written communication that is directed to a particular person or address, and includes:
(a) any standard postal article within the meaning of the Australian Postal Corporation Act 1989; and
(b) any envelope, packet, parcel, container or wrapper containing such a communication; and
(c) any unenclosed written communication that is directed to a particular person or address
163 Proof of letters having been sent by Commonwealth agencies [NSW & Vic Acts only]
Note: Section 5 of the Commonwealth Act extends the operation of section 163 of the Commonwealth Act to proceedings in all Australian courts.
The operation of a section in Queensland legislation equivalent to s.29 is discussed in Fancourt v Mercantile Credits Ltd [1983] HCA 25; (1983) 154 CLR 87, where the High Court said (at 95):
In the present case, the notices were not returned undelivered and there was no other circumstance which suggested that they did not reach their destination. Hence under s 39(1)(b) service is deemed to have been effected at the time when the notice would have been delivered in the ordinary course of post.
The Court then went on to say at (96-97):
There is a line of cases, commencing with Reg. v. County of London Quarter Sessions Appeals Committee; Ex parte Rossi (1956) 1 QB 682, which deal with the effect of proof of non-delivery where service by post is permitted and used, having regard to s. 26 of the Interpretation Act 1889 (U.K.). That section is the equivalent of s.39(1) of the Queensland Acts Interpretation Acts. The effect of the cases appears to be that proof of non-delivery means that service cannot be deemed to have taken place under the second limb of the section at the particular time, proof of non-delivery is as effective as proof of nonservice, notwithstanding that service by post is in the circumstances permitted and the requirements of the Interpretation Act are observed…
It may be thought that there is an anomaly in such a result because it means that, notwithstanding the adoption of a permitted means of service, the service is nevertheless ineffective if there is proof of non-delivery. It is, however, unnecessary to pursue these decisions here save to remark that they are all cases in which delivery was disproved… As the present case shows, delivery may be different from receipt by the intended recipient and, provided that delivery is not disproved, the fact of non-receipt does not displace the result that delivery is deemed to have been effected at the time at which it would have taken place in the ordinary course of the post. There is here no evidence of non-delivery.
More recently the Full Court of the Federal Court, in Skalkos v T & S Recoveries Pty Ltd [2004] FCAFC 321, discusses a plethora of case law on the application of the section, saying:
20. In Re Ocean Distributors Pty Ltd (1990) 2 ACSR 486 a notice was sent by post to the registered office of a company. There was evidence that the notice had not been received by the company, but not that it had not been delivered. It was held by Mackenzie J in the Supreme Court of Queensland that the notice had been duly served.
21. In Deputy Commissioner of Taxation v Coco [2003] QSC 119; (2003) 52 ATR 700 the respondent expressed the belief that he had not received a document. Mullins J in the Supreme Court of Queensland held that in the absence of proof of non-delivery, the propounded belief was not sufficient to displace the presumption of service in s 29 of the Acts Interpretation Act 1901 (Cth), which is to the same effect as s 39(1) of the Queensland Act and s 26 of the 1889 Act.
22. In Repatriation Commission v Gordon [1990] FCA 417; (1990) 100 ALR 255 the addressee of a letter sent by post gave evidence that he had never received it. Spender J said at 265:
In my opinion, in relation to the deeming provision in [s 29 of the Acts Interpretation Act] to the time at which service was effected, the qualification ‘until the contrary is proved’ is not restricted to proving a time of delivery different from the ordinary time at which the letter would be delivered, but encompasses proof that the letter was never delivered at all. Of course, any such claims would have to be very carefully scrutinised and the mere claim of non-receipt would be likely to be insufficient. Non-receipt is not the same as non-delivery.
In the view I take of s 29, there is a statutory presumption that what is proved to have been properly dispatched by post arrived at the usual time, but that non-delivery at that time, or non-delivery at all, might be proved by evidence.
23. In Perpetual Nominees Ltd v Masri Apartments Pty Ltd [2004] NSWSC 500; (2004) 49 ACSR 714 at [23] Austin J said:
Section 29(1) would allow Masri to prove that a demand properly addressed to its registered office was not delivered in the ordinary course of post, but it has not done so. Its evidence only establishes non-receipt, which is not sufficient to prove non-delivery: Fancourt…
As a result, in Skalkos’ case, a debtor was not permitted to lead evidence of non-receipt of a bankruptcy notice as such evidence did not prove non delivery with respect to Reg.16 of the Bankruptcy Regulations (a provision in relevantly similar terms with respect to service). In dismissing the appeal the Full Court of the Federal Court concluded that:
[25] It is not necessary in the present case, any more than it was in Fancourt, to decide whether the Rossi line of cases should be followed. If, on the proper construction of reg 16.01(2), the words “proof to the contrary” permit proof that the document was not delivered, there is no such proof in the present case. It is clear from Fancourt that proof of non-receipt as opposed to non-delivery is not permitted. If on the other hand those words only permit proof that the document was delivered on a date other than that on which it would have been delivered in the due course of post, there is no such proof.
[26] Thus on either view of reg 16.01(2), the primary judge correctly said there was no point in the appellant filing an affidavit of non-receipt.
In this case the evidence is that the appellant’s mail goes to a letter box with a flip top. There is no evidence that the letter box is secured. There is no evidence of non-delivery, simply evidence of non-receipt. The evidence of non-receipt from the appellant must be seen in light of his evidence with respect to the information that he provided to the Bank, about which he says he would have told the bank anything to obtain the finance he was seeking at that time.
On the material before the court the appellant has not proved non-delivery of the letter, and therefore the presumption applies. As a result the appellant is not able to show that he was not given an opportunity to be heard with respect to representations that he made to the bank about his financial affairs.
Ground 3
In this ground the appellant complains that the first respondent failed to provide documents requested by the Tribunal. I have dealt with this issue in the recent decision of Tan & Tan (SSAT Appeal) and Tan v Child Support Registrar & Anor [2013] FCCA 123. In that matter the appellant claimed that the second respondent did not provide up-to-date detail or detailed information to the Tribunal to aid the fact-finding process. As discussed at paragraph 22:
22. …the appellant would have been hopeful that the tribunal would draw an adverse inference against the second respondent with respect to her evidence as to the costs of children given the lack of corroborative material and the failure to attend and give evidence before the tribunal. It is certainly open to a tribunal or a court to draw such an inference as a matter of law. However, an often overlooked aspect of this area of the law is that a tribunal or court is not required to draw an adverse inference. The failure of the second respondent to provide more information or to attend is a relevant part of the considerations in determining the factual question, but did not require the tribunal to determine it adversely to her.
These comments apply equally to this case. It was a matter for the Tribunal to determine what inference they would draw, and the weight that they placed upon any failure by a party to produce documents or give evidence.
The Tribunal has considered these issues at paragraphs 8, 46, 47, 52 and 53 of their decision where they said:
8. On 23 February 2012 a pre-hearing conference was conducted by telephone with both parties. Following this conference directions were made to the parties requiring them to provide further information and documents.
46. Ms Judd’s 2011 taxation return shows an income of $17, 689. She told the Tribunal that she had some difficulty maintaining work in early 2011 because [name omitted] was unwell. At that time she was employed earning $28,000 a year. In October 2011 she changed her employment and earns $25,000 a year and the Tribunal so finds. Ms Judd provided payslips showing she is employed at $25 an hour and works 20 hours a week. This equates to an annualised income of $26,000 and the Tribunal so finds. She stated she also receives parenting payment of $190 a fortnight which is $4,940 annualised.
47. Mr Hallam stated that Ms Judd has other assets in a different name but Ms Judd denied this at the hearing. In the absence of any evidence in this regard the Tribunal is unable to find that
Ms Judd has access to any financial resources other than her salary and Centrelink payments.
52. On her Statement of Financial Circumstances, Ms Judd stated her household expenses are $906 a week and her other expenses are tax of $50 a week. Her largest household expense is rent of $500 a week and Ms Judd stated that she is required to live where she does because of court orders relating to the shared care of her two daughters and the school they attend. Mr Hallam also alleged that Ms Judd is involved in a business but Ms Judd denied this at the hearing. There are no documents before the Tribunal regarding these claims.
53. The Tribunal accepts that Ms Judd’s gross weekly income is around $500 salary and around $95 parenting payment, a total of $595. This is well below her stated expenses however she states she also receives family tax benefit of around $138 a fortnight. It is clear she cannot manage her expenses without child support.
Within the List of Documents to be Relied Upon by the Child Support Registrar, there is a document which provides some evidence as to why the respondent did not provide all of the material as requested. The Document marked B15 is correspondence sent by the first respondent and states at paragraph 6:
6. Copies of 2009 and 2010 tax returns are not available as I have not lodged a tax return for these years. 2011 tax return was lodged via e-tax and I do not have a copy, however the CSA documentation shows screen dumps of retrieved information from the ATO in relation to this return.
Although the appellant relies on this ground, during the hearing of the matter before me he did not in fact directly allege what the missing documents would have addressed.
The Tribunal has clearly turned its mind to the finances of the first respondent. It had various key documents before it. The Tribunal is not required to record every aspect of the proceedings before it. Given the documents that the Tribunal has referred to I am not persuaded that this is an issue of such significance that it required specific mention in the Tribunal’s reasons, at least in the context of the claims in this case.
The appeal must therefore be dismissed.
I certify that the preceding thirty-seven (37) paragraphs are a true copy of the reasons for judgment of Judge Riethmuller
Date: 7 June 2013
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