Kruger and Child Support Registrar (Child support)

[2018] AATA 4984

Kruger and Child Support Registrar (Child support) [2018] AATA 4984 (15 November 2018)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2018/MC014849

APPLICANT:  Mrs Kruger

OTHER PARTIES:  Child Support Registrar

TRIBUNAL:Member F Hewson

DECISION DATE:  15 November 2018

DECISION:

The decision under review is affirmed.

CATCHWORDS

CHILD SUPPORT – refusal to grant an extension of time to object - no satisfactory explanation for the delay - arguable merit - weighing all factors the extension of time was correctly refused - decision under review affirmed

Names used in all published decisions are pseudonyms. Any references appearing in square brackets indicate that information has been removed from this decision and replaced with generic information so as not to identify involved individuals as required by subsections 16(2AB)-16(2AC) of the Child Support (Registration and Collection) Act 1988

REASONS FOR DECISION

BACKGROUND

1. This application for review is about whether Mrs Kruger should be given an extension of time to object to the decision made on 20 January 2018 to depart from the administrative assessment of child support so that the adjusted taxable income of [Mr A] was varied to $140,000 for the period from 1 November 2017 to 30 November 2017.

2. On 2 July 2018, the Department of Human Services – Child Support (the Department) recorded that Mrs Kruger lodged a written objection to the decision of 20 January 2018. As this was more than 28 days after she was given notice of the decision, Mrs Kruger was also required to apply for an extension of time to lodge the objection.

3. On 8 August 2018, an officer of the Department refused the application for an extension of time to object (the refusal decision).

4. On 20 August 2018, Mrs Kruger applied to the Social Services and Child Support Division of the Administrative Appeals Tribunal (the tribunal) for review of the decision to refuse the application for an extension of time to object to the decision of 20 January 2018. The application was heard on 15 November 2018. Mrs Kruger spoke to the tribunal by conference telephone. The tribunal also had regard to documents provided by the Department, a copy of which was also provided to Mrs Kruger, and to additional documents provided by Mrs Kruger after the hearing.

ISSUES

1. The statutory provisions relevant to this review are contained in the Child Support (Registration and Collection) Act 1988 (the Registration and Collection Act).

2. Apart from persons residing in particular foreign countries, objections must be lodged within 28 days from the day on which notice of the decision is given (section 81). An application outside that timeframe can only proceed if the objector also applies for an extension of time in which to object and that application is granted (section 83). 

3. The issues which arise in this case are:

   ·     Whether Mrs Kruger  lodged an objection within the statutory timeframe; and, if not

   ·     Whether, in the particular circumstances of the case, it is appropriate to extend the time for lodging an objection.

CONSIDERATION

1. The original decision, which is the subject of the Department’s refusal of an extension of time, is the decision of 20 January 2018. A copy of the notice advising Mrs Kruger of the decision is contained in the documents provided by the Department. The letter was dated 20 January 2018.

2. The record shows that Mrs Kruger lodged an objection on 2 July 2018, outside the statutory 28-day timeframe.

3. In considering whether to exercise the discretion to extend the time for making an application for internal review, the tribunal had regard to the guiding principles set out in Hunter Valley Developments Pty Ltd v Cohen (1984) 3 FCR 344. In that case, the Federal Court said that an extension of time should not be granted unless it was proper to do so, noting that, in general, applications or proceedings commenced outside of a prescribed time limit will not be considered. The Court also said that there must be an acceptable explanation for the delay and that it must be fair and equitable in the circumstances to extend the time.

4. In Re Mulheron and Australian Telecommunications Corporation (1991) 14 AAR 42 O’Connor J outlined some principles to be applied in considering an application for an extension of time.

   The principles to be applied in considering an application for extension of time are:

   (i)   prima facie proceedings commenced outside the prescribed period will not be entertained. An extension of time will be granted, however, if it is proper to do so;

   (ii)     it is relevant whether the applicant rested on his [or her] rights or took action to make the decision maker aware that the decision was being contested;

   (iii)    any prejudice to the respondent that would be caused by granting the extension of time is relevant;

   (iv)    any wider prejudice to the general public in terms of disruption to established practice is relevant;

   (v)     the merits of the substantial application are relevant; and

   (vi)    fairness of granting an extension of time as between the applicant and other persons in like position is relevant.

5. In Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541, the High Court, in dealing with an extension of time and the general concept of time limitation periods, noted that while an extension of time is the exception to the general rule, there are legislative provisions which in the circumstances of the facts of a particular case may indicate that justice is served by the general rule being overturned.

6. In Comcare v A’Hearn (1993) 119 ALR 85, the Full Federal Court noted that there is no requirement that there must be an acceptable reason for delay:

   We note that the Tribunal used language that might be taken to suggest that it is a precondition for success in such an application that an acceptable explanation for the delay must be given. Although it is to be expected that such an explanation will normally be given, as a relevant matter to be considered, there is no rule that such an explanation is an essential precondition.

Reason for the delay and whether Mrs Kruger rested on her rights

1. As noted above, the decision which was the subject of the refusal of an extension of time to object was the decision of 20 January 2018 and Mrs Kruger’s objection lodged on 2 July 2018 is about four and a half months out of time.

2. At the hearing, Mrs Kruger said she was not aware of the difference between a formula assessment and an assessment based on a change of assessment application when the change of assessment decision was made. Mrs Kruger initially said she was not aware of [Mr A]’s taxable income for 2016/17 until May 2018, but later conceded that the information was in the child support assessment issued in February 2018, which was within 28 days of the notice of decision of 20 January 2018. The tribunal referred Mrs Kruger to records of conversation she had with employees of the Department on 1 February 2018 and 8 February 2018 which show that she was aware of her objection rights and had indicated that she would lodge an objection. Mrs Kruger said she didn’t understand the situation at that time and didn’t have sufficient information until May 2018 to lodge an objection to the decision.     

3. The tribunal was not persuaded that the there was a reasonable explanation for the delay in this case, and that Mrs Kruger, who was aware of her objection rights, did rest on her rights.

Merit of the objection

1. The tribunal did not conduct a substantive review of the decision of 20 January 2018 to depart from the administrative assessment of child support so that the adjusted taxable income of [Mr A] was varied to $140,000 for the period from 1 November 2017 to 30 November 2017.

2. The evidence shows that [Mr A]’s adjusted taxable income in 2016/17 was assessed by the ATO to be $249,776. This included $95,000 in commissions which were apparently paid to him in error by his employer. He has, according to the evidence of Mrs Kruger, retained the $95,000 and paid tax on that amount in the 2016/17 year. So far as the tribunal could tell, the arrangement is that he will repay the money to his employer by foregoing commissions earned in the subsequent year(s). Mrs Kruger said his taxable income for 2016/17 has not been amended and she does not believe it will be amended. This may result in [Mr A]’s taxable income in the year(s) following 2016/17 being artificially reduced.

3. The Department varied [Mr A]’s income to $140,000 for the period from 1 November 2017 to 30 November 2017, replacing the provisional income of $33,613 which was used in the child support assessment at that time.  From 1 December 2017 to 30 June 2018 the assessment was based on [Mr A]’s estimate of his income for the 2017/18 year of $139,896. From 1 July 2018 to 28 February 2019 the assessment is based on [Mr A]’s estimate of his income for the 2018/19 year of $173,900. He was entitled to lodge an estimate of his income for the current year on the basis that his income had reduced. If those estimates are less than his adjusted taxable income for those years, they will be reconciled and the child support for the periods to which the estimates applied will be adjusted. It is not clear to what extent, if at all, the estimate for 2017/18 included commission. The documents do show that the estimate of $173,900 for 2018/19 does include an amount of $35,000 in commissions for the current year.

4. The tribunal concluded that another decision maker could make a decision more favourable to Mrs Kruger, although this is by no means certain. The tribunal was satisfied, therefore, that there is arguable merit in Ms Kruger’s objection.

Prejudice to others

21.The tribunal also considered whether there would be prejudice to [Mr A] should the extension of time be granted. It was satisfied that there would be some prejudice to [Mr A] because the outcome of the decision was presumed determined once the 28 days for lodging an objection had passed, and a decision in Mrs Kruger’s favour could result in [Mr A] being determined to owe increased amounts of child support for a past period.

22.The tribunal also considered whether there would be prejudice to the general public and whether it is in the public interest for the issues raised by Mrs Kruger’s objection to be determined. The tribunal concluded that there would be no significant prejudice to the general public if the application was granted.

Conclusion

23.The tribunal carefully weighed the various factors it had to consider. It concluded that the explanation for the long delay in this case is not reasonable and although there is arguable merit in the objection, it relates to a decision which had effect for one month only. If [Mr A]’s adjusted taxable income in 2017/18 or 2018/19 is higher than his estimates, the amount of child support payable by him will be increased. If [Mr A] has evidence that his actual income and financial resources are not accurately reflected in his estimated income it is open to her to lodge a new change of assessment application. Taking these, and the other factors it had to consider, into account, the tribunal concluded that it is not appropriate in the circumstances of this case to grant the extension application for Mrs Kruger to object to the decision of 20 January 2018.

DECISION

The decision under review is affirmed.