Humphries & Berry (SSAT Appeal)
[2008] FMCAfam 409
•22 April 2008
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| HUMPHRIES & BERRY (SSAT APPEAL) | [2008] FMCAfam 409 |
| CHILD SUPPORT – Appeal from SSAT – duty of disclosure – consequences of lack of disclosure. |
| Child Support (Assessment) Act 1989, ss.41, 42 Child Support (Registration and Collection) Act 1988, s.110B |
| Luton v Lessels (2002) 210 CLR 333 Oriolo (1985) FLC 91-653 Rose v Bridges (1997) 79 FCR 378 |
| Applicant: | MR HUMPHRIES |
| Respondent: | MS BERRY |
| File Number: | BRC13622 of 2007 |
| Judgment of: | Slack FM |
| Hearing date: | 25 February 2008 |
| Date of Last Submission: | 25 February 2008 |
| Delivered at: | Brisbane |
| Delivered on: | 22 April 2008 |
REPRESENTATION
The Applicant appeared on his own behalf
| Counsel for the Respondent: | Ms Nicole Smith |
| Solicitors for the Respondent: | Douglas Law |
ORDERS
That the Appeal from the Decision of the Social Security Appeals Tribunal filed on 16 November 2007 be dismissed.
IT IS NOTED that publication of this judgment under the pseudonym Humphries & Berry is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT BRISBANE |
BRC13622 of 2007
| MR HUMPHRIES |
Applicant
And
| MS BERRY |
Respondent
REASONS FOR JUDGMENT
In this appeal from the decision of Social Security Appeals Tribunal (the “SSAT”) dated 19 October 2007, the appellant (conducting the appeal in person) relied on three grounds in the Notice of Appeal, namely that the SSAT:
“1. Plucked figures from the air without fact or proof.
2. Wrongfully used evidence.
3. Incorrect calculations and speculation of monies.”
In his affidavit filed in the proceedings and during oral submissions, it became clearer that the appeal related to the manner in which the SSAT determined the appellant’s child support income for the relevant period for the purposes of the child support assessment.
Background
The appellant is the payer parent in this matter.
The child support assessment is for the child M born in 2002.
M is predominantly cared for by her mother (the respondent to the appeal).
The following facts relied upon by the SSAT do not appear to be in dispute.
On 9 January 2007, the respondent/payee made an application seeking an unspecified increase in the amount of child support payable by
Mr Humphries on the grounds of his income, earning capacity, property and financial resources. The assessment applying at the time of application required Mr Humphries to pay the minimum $320 per year. That assessment was based on 2005/2006 taxable income of $98 for Mr Humphries. The assessment applied from 1 January 2007 until 31 March 2008.
On 22 February 2007, a Senior Case Officer varied the child support assessment for the period 1 September 2006 to 31 March 2008. The child support income amount for Mr Humphries increased to $64,855. As a result of that decision the CSA varied the annual rate of child support payable by Mr Humphries to $9,038 for the period
1 September 2006to 31 March 2008.
The appellant lodged an objection to the decision which was disallowed on 16 May 2007.
The appellant appealed to the Social Security Appeals Tribunal (SSAT) on 25 May 2007.
The decision of the Tribunal was to “set aside the decision under review and substitute a new decision that Mr Humphries’ child support income be set at $69,111 from 1 September 2006 until 31 March 2008”.
The hearing before the SSAT was conducted over the course of a number of days:
a)The hearing commenced on 27 August 2007 and both parties “attended the hearing in person and each gave evidence on oath”.
b)After the initial hearing the Tribunal adjourned the matter indicating that it “intended to obtain copies of all relevant bank statements of Mr Humphries’ accounts for the 2006/2007 financial year”.
c)On 30 August 2007 the appellant, through his accountant, lodged an unsigned income tax return and profit and loss statement for the 2006/2007 financial year.
d)The Tribunal obtained further records from the Child Support Agency on 6 September 2007. The parties were provided with copies of that material and were asked to provide their response by “not later than 11 October 2007”.
e)It appears no further response was received from the appellant (paragraph 14 of the reasons).
What emerges from the reasons of the SSAT is that
a)The appellant was well aware that the central issue of the controversy before the SSAT was his income and financial resources for the relevant period. He was, in fact, objecting to a determination by the Child Support Agency that his child support income should be assessed at $64,855 for the relevant period.
b)
In addition to the time leading up to the hearing before the SSAT, the appellant had an opportunity between 27 August 2007 and
11 October 2007to put evidence before the SSAT clarifying his financial circumstances and in particular, his earnings for the relevant period.
c)During the relevant period (1 September 2006 to 31 March 2008) the appellant was operating a business as a sole trader (earthmoving and landscaping). He had not lodged taxation returns for the relevant period at the time of the SSAT hearing.
d)According to the reasons, the appellant tendered to the SSAT two profit and loss statements which contained different amounts for the gross income for the business (see paragraph 21 of the reasons). The appellant does not apparently dispute this.
e)There were other discrepancies between the Profit and Loss statements that were not subsequently explained (see paragraphs 22 to 28 of the reasons).
f)The SSAT was also not satisfied with some of the evidence given by the appellant about “cash for some of the work he did” (see paragraph 34 of the reasons).
g)The SSAT recorded that “Mr Humphries is not a good record keeper and the figures contained in the document prepared by his accountant can only be as good as the information Mr Humphries provides to the accountant. Mr Humphries told the Tribunal he has not been lodging quarterly business activity statements, as he is required to do. In addition he told the Tribunal that he does not keep up to date and easily accessible computer records of his business income and expenditure”.
h)The SSAT was not satisfied that the “gross business income shown in the income taxation returns provided to the Tribunal were reliable” (paragraph 29 of the reasons).
After concluding that the information provided by the appellant was unreliable, the SSAT then proceeded to determine his child support income (see paragraphs 37 and 38 of the reasons).
In essence, the appellant complains about the manner in which the SSAT came to that conclusion.
There is no transcript of the proceedings before the SSAT. The appellant was made aware of that fact and chose not to obtain the transcript. He chose to proceed with the Appeal based upon his written outline and oral submissions.
Principles
The appeal is brought under s.110B of the Child Support (Registration and Collection) Act1988 which provides:
“110B. 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.”
The principle object of the Child Support (Assessment) Act 1989 (as amended) (hereafter the Assessment Act) is to ensure that children receive a proper level of support from their parents.
As was said by Gleeson CJ in Luton v Lessels 2002 210 CLR 333 @ 340 “although the legislation is enacted in furtherance of a clearly defined public policy, it creates a distinctly personal liability. The natural and moral obligations of a parent to support a child becomes, by force of the legislation a legal obligation reflected in a debt calculated in accordance with the Assessment Act owing by a parent to a carer of the child.”
Although the application of the Assessment Act creates monetary obligations which will likely be significant to the payer nevertheless the essential intention of the Act is to ensure that a child receives a proper level of child support and; that the contributions to that support as between the parents is determined according to the respective abilities to meet those needs.
Although the Assessment Act provides the mechanisms for that support to be determined by legislatively fixed standards there are a number of review procedures in place to ensure the primary objective. Relevantly, the liable parent and the carer entitled to child support can make an application to depart from the administrative assessment of child support.
After internal reviews, either party to the Review or the Child Support Registrar can seek a review of the decision to the Social Security Appeals tribunal. In each instance, the essential enquiry remains a positive enquiry with the objective to ensure that the children receive a proper level of support.
In any application for departure from the Administrative assessment at each level of review, the onus lies upon the Applicant to satisfy all of the requirements of s.117. If these are satisfied, then the Court is at liberty to revert to the original assessment pursuant to the formula or such other figure as it thinks appropriate (see Johnson and Johnson 1999 FLC 98-004).
In relation to proceedings conducted between parties to a marriage for property settlement, the Full Court of the Family Court in Oriolo (1985) FLC91-653 said:
“We consider that there is a clear obligation on a party to proceedings in this Court to make a full and frank disclosure of all relevant financial circumstances. As was said by Lord Brandon for the House of Lords in Livesey v. Jenkins (1985) 1 All E.R. 106 at p. 114 :
“I stated earlier that, unless a court is provided with correct, complete and up to date information on the matters to which, under sec. 25(1), it is required to have regard, it cannot lawfully or properly exercise its discretion in the manner ordained by that subsection. It follows necessarily from this that each party concerned in claims for financial provision and property adjustment (or other forms of ancillary relief not material in the present case) owes a duty to the court to make full and frank disclosure of all material facts to the other party and the court. This principle of full and frank disclosure in proceedings of this kind has long been recognised and enforced as a matter of practice. The legal basis of that principle, and the justification for it, are to be found in the statutory provisions to which I have referred.''
I consider that these principles applicable to full and frank disclosure in proceedings in the Family Court have the same force in administrative review hearings under the Child Support Registration and Collection Act including appeal hearings by the SSAT.
Although the SSAT has the power to obtain information (s.103K) and the power to require the Child Support Registrar to exercise powers under the Assessment Act and the Child Support Registration and Collection Act for the purposes of gaining information relevant to a review (s.103L), there nevertheless remains a primary duty and obligation on the parties to the review to make a full and complete disclosure of their financial affairs relevant to the matter before the hearing and a duty to assist the Tribunal to come to its determination in the application. The obligation to disclose information and documents extends to the presentation of that material in a way that the true nature of their financial affairs can be readily understood.
The obligation extends not just to providing financial records but also includes presenting the information in a way that can be reasonably and readily understood and examined.
When the appellant appeared before the SSAT he was well aware that the true state of his financial affairs was to be a significant subject of enquiry before the Tribunal.
It was his obligation to put before the Tribunal evidence of his true financial circumstances but also the relevant documents that supported that evidence so that his income could readily be determined.
In circumstances where a party (in this case the appellant) places before the SSAT inconsistent, confusing and incomplete financial information, the fact that the SSAT can and may exercise its powers to obtain further information that might clarify the financial circumstances of a party does not relieve a party of their primary obligation to disclose their financial affairs in a manner that can readily be understood. The extent to which the SSAT should exercise its powers of information gathering and testing of evidence in each case will depend on the circumstances of the matter but the exercise of such power or the failure to exercise such power does not in any way derogate from the immutable obligation and duty of both parties throughout the proceedings before the SSAT to make full, frank and cogent disclosure of all relevant information pertaining to their financial affairs in order that the Tribunal can make a proper assessment of their respective capacities to provide for the needs of their children.
In financial proceedings under the Family Law Act, the authorities make it clear that a Court “should not be unduly cautious about making findings in favour of the other party if it is not satisfied that proper disclosure has been made (see Chang & Su (2002) FLC93-117)”. Such principles, in my consideration, have similar application to these matters before the SSAT.
In this matter it appears clear from the reasons that:
a)The appellant was well aware that in the hearing the essential issue and controversy was his income and/or earning capacity.
b)That the documentation that he presented to the Tribunal as primary evidence of his income, namely the unsigned income tax returns and profit and loss statements, were inconsistent.
c)That he had ample opportunity over the course of the way the matter being conducted to produce cogent and concise evidence about his financial circumstances and in particular about his income.
d)That he had proper opportunity to respond to documents called for and read by the Tribunal.
e)There were inconsistencies about his oral evidence, namely that he was earning $90 per hour and working between 20 and 25 hours per week and his written statements of gross income that he was required to explain.
There is nothing that I can discern in the reasons that would indicate any procedural unfairness to the appellant. He was aware that the central controversy was his income and capacity to contribute to the support of his child. He was appealing against a decision of the Child Support Registrar which had determined that his child support income amount for the purposes of the child support assessment was $64,855. In fact, he was given a number of opportunities to produce the evidence of and explain his financial circumstances. Although the decision of the SSAT resulted in a greater assessment of his child support income the amount was not markedly greater than the decision of the Child Support Registrar. The appellant does not plead as a ground of appeal that he was not accorded procedural fairness. In any event, the onus of establishing that the standard of procedural fairness has not been met is upon him (Rose v Bridges1997 79 FCR 378 @386 Finn J).
The findings made by the Tribunal about the appellant’s income were, in my consideration, appropriately drawn inferences from the evidence that was available to the Tribunal (see paragraphs 37 and 38 of the Reasons).
For the reasons I have given, I consider that the Appeal should be dismissed.
In conclusion and in summary, I was not satisfied:
a)That the grounds of Appeal pleaded any error of law.
b)That there was any error of law established by the appellant or that any error of law emerged from a critical analysis of the reasons.
c)That the Tribunal erred in the inferences drawn from the evidence given by the appellant. Although the appellant now complains about the factual basis for the inferences, he was the author of that difficulty because of his failure to present the evidence of his financial circumstances in a consistent, concise and cogent way.
d)That there was any failure on the part of the Tribunal to accord him procedural fairness. He was aware that the central issue in the matter was his income. The Tribunal gave him every opportunity to present his true financial circumstances and in my consideration accorded him proper procedural fairness in the context of the hearing.
I certify that the preceding thirty-six (36) paragraphs are a true copy of the reasons for judgment of Slack FM
Associate: Karen Smith
Date: 22 April 2008
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