Levitas and Child Support Registrar (Child support)
[2019] AATA 4233
•18 September 2019
Levitas and Child Support Registrar (Child support) [2019] AATA 4233 (18 September 2019)
Division:GENERAL DIVISION
File Number: 2019/1843
Re:Perry Levitas
APPLICANT
AndChild Support Registrar
RESPONDENT
DECISION
Tribunal:Dr Stewart Fenwick, Senior Member
Date of decision: 18 September 2019
Date of written reasons: 17 October 2019
Place:Melbourne
The Tribunal affirms the decision under review.
.....[sgd]...................................................................
Dr Stewart Fenwick, Senior Member
Catchwords
CHILD SUPPORT – departure prohibition order – whether criteria requiring revocation met – whether discretion to revoke should be exercised – decision under review affirmed
Legislation
Administrative Appeals Tribunal Act 1975
Child Support (Registration and Collection) Act 1988
Cases
Feras Naboush and Child Support Registrar [2014] AATA 930
Kenyon and Child Support Registrar [2012] AATA 714
Onder and Child Support Registrar and Sari (No.2) [2011] FMCAfam 430Whittaker v Child Support Registrar [2010] FCA 43
REASONS FOR DECISION
Dr Stewart Fenwick, Senior Member
17 October 2019
BACKGROUND
Mr Levitas applied for a review of a decision of the Child Support Registrar (the Registrar) dated 25 March 2019 to refuse to revoke a Departure Prohibition Order (DPO). This order was put in place on 24 May 2017 at which time Mr Levitas had a child support liability of $148,604.07, and a total outstanding debt, including penalties, in excess of $350,000. At the time of the hearing this figure was in excess of $370,000.
Mr Levitas is currently aged 61 years. His children were born in 1987 and 1990 and his child support liability commenced in 1995.
Material was filed by both parties prior to the hearing, including T documents lodged on behalf of the Registrar. The material addressed Mr Levitas’ financial situation including certain arrangements relating to his assets, income, and his medical condition.
Mr Levitas represented himself at the hearing and at its conclusion I affirmed the decision under review, giving oral reasons. These written reasons are now provided as Mr Levitas sought a statement in writing of the reasons for the decision under s 43(2A) of the Administrative Appeals Tribunal Act 1975.
LEGISLATION
DPO’s are administered under Part VA of the Child Support (Registration and Collection) Act 1988 (the Act). The Registrar may make an order under s 72D of the Act prohibiting a person from travelling overseas from Australia, relevantly, where that person has an outstanding child support liability.
A child support liability is defined under s 72E of the Act and includes a registerable maintenance liability, in turn defined to include child support assessed under the Act. Under s 30 of the Act if a liability is registered, the amounts payable become debts due to the Commonwealth.
Section 72I reads as follows:
Revocation and variation of departure prohibition orders
(1)The Registrar must revoke a departure prohibition order in respect of a person if:
(a) the person no longer has a child support liability or carer liability; or
(b) the person has a child support liability or carer liability, but arrangements satisfactory to the Registrar have been made for the liability to be wholly discharged; or
(c) the person has a child support liability or carer liability, but the Registrar is satisfied that the liability is completely irrecoverable.
(2)However, if the Registrar considers that the person may later become subject to a child support liability or carer liability in respect of, or arising out of, matters that have occurred, the Registrar must not revoke a departure prohibition order under subsection (1) unless the Registrar is satisfied:
(a) that the liability will be wholly discharged; or
(b) that arrangements satisfactory to the Registrar will be made for the liability to be wholly discharged; or
(c) that the liability will be completely irrecoverable.
(3)The Registrar may also, at the Registrar’s discretion, revoke or vary a departure prohibition order in respect of a person if the Registrar considers it desirable to do so.
(4)The Registrar may revoke or vary a departure prohibition order under subsection (1) or (3):
(a) on application by the person in the approved form; or
(b) on the Registrar’s own motion.
The principal objects of the Act are stated in s 3 in this way:
(1)The principal objects of this Act are to ensure:
(a)that children receive from their parents the financial support that the parents are liable to provide; and
(b)that periodic amounts payable by parents towards the maintenance of their children are paid on a regular and timely basis …
ISSUES
The issues are therefore whether conditions exist such that the DPO must be revoked under s 72I(1), or whether it may otherwise be revoked using the discretion in s 72I(3).
SUBMISSIONS AND EVIDENCE
Mr Levitas submitted at the hearing that he had no current or future capacity to pay the outstanding amount, and had no assets or income. International travel undertaken prior to the DPO was paid for by his wife. He cashed in a superannuation benefit of $22,130.98 in 2017 in order to fund his wedding and honeymoon, having been married earlier in 2000 with no ceremony.
Mr Levitas submitted his name was only associated with the current matrimonial home, which is in his wife’s name, for loan purposes. In addition, his initial interest in the property was only as to a 1/100 share as demonstrated by a title search (Exhibit A1). Mr Levitas submitted that the Registrar had explored all sources of recovery and found none.
Regarding future capacity, Mr Levitas submitted that neither he nor his wife would be entitled to the age pension as her assets will exceed the requisite asset test. He has permanently retired from work, and has made a declaration to the Australian Taxation Office to that he effect which, Mr Levitas submitted, he cannot breach.
In relation to the exercise of the discretion, Mr Levitas submitted, based on research into DPO’s, that they were pursued on the basis of quantity and not quality in the case of child support. He submitted that he never had capacity to pay the debt, and therefore failure to exercise the discretion was a punishment. His was an incapacity to pay, not an unwillingness.
In his written submission, Mr Levitas stated that he had made voluntary payments in the past based on his capacity to pay. He had been diagnosed with Graves’ disease leading to the cessation of a gardening business and any ability to generate income. His wife currently pays for daily living expenses and a statement of her financial support and income and expenses was attached to this submission (Annex F).
Mr Levitas’ written submission also included other documents relating to the financial affairs of himself and his current wife:
(1)a document dated 1 April 2011 titled ‘Financial Agreement’ (Annex G) in which he purports to acknowledge that he has no present or future claims to her assets; and
(2)an unsigned letter dated 26 May 2011 to his wife from solicitors (Annex H) describing instructions said to be made in relation to the structure of her will, providing a life tenancy to Mr Levitas over the matrimonial home, with financial interests passing to their respective children.
A further document lodged with the Tribunal by Mr Levitas is a signed statement from his wife dated 24 July 2019 stating that all her assets and accounts are held solely in her name.
A report from an endocrinologist dated 4 October 2017 (Annex J(i)) states that Mr Levitas was diagnosed with Graves’ disease ‘around May 2017’. It further states: ‘he had to give up his gardening job at the time due to extreme tiredness, lethargy and palpitations. He He still feels tired and this may persist for a couple of months’.
Mr Levitas’ written statement cites the decision of Kenyon and Child Support Registrar [2012] AATA 714 (Kenyon), and quotes two observations from that decision: it is no object of the Act to punish those who are delinquent in meeting their obligations (at paragraph 10); and that the power to prevent a citizen from travelling overseas at will is an extraordinary power (at paragraph 12).
At the hearing the representative of the Registrar identified the evidence of the debt (being the certificate produced under s 116(2) of the Act as to the amount due and payable, Child Support Payer Transaction Statement, Annex A to the Registrar’s Statement of Facts, Issues and Contentions). It was submitted that the elements of s 72I were not made out as the liability had not been met, arrangements have not been made for it to be satisfied, and the Registrar was not satisfied the amount was irrecoverable.
It was submitted that I should not be satisfied that Mr Levitas was unable to work, and that he had not demonstrated his incapacity to meet the liability. The manner in which his financial arrangements are structured was not a relevant consideration. The DPO is an incentive to repay the debt, and if the discretion were exercised this would undermine the purposes of the Act.
Mr Levitas stated in evidence that it was ‘impossible to gain employment.’ He gave evidence of his employment history including a series of sales roles, including time as a financial adviser, from which position he was retrenched in 1997. He had also been unemployed, on Newstart, and established a gardening business. He affirmed the position put in his written statement that his experience of unemployment and lack of skills meant that he was unable to gain employment.
Mr Levitas confirmed in evidence that he withdrew the superannuation funds in 2017 to repay his current wife for their earlier wedding, and a later honeymoon. He confirmed that he executed a written agreement in April 2011 to the effect that he has no present or future entitlement to her assets.
The representative of the Registrar submitted that the evidence regarding Mr Levitas’ medical condition was not strong, not current, and, that no long term prognosis had been provided. It was submitted that he had chosen to retire and was apparently unwilling to take on further training or work. It was also submitted that the structure of his financial interests was in order to undermine recovery of the debt.
It was submitted on behalf of the Registrar that the phrase ‘completely irrecoverable’ in s 72I(1)(c) is a high bar, citing the decision of Feras Naboush and Child Support Registrar [2014] AATA 930 (at paragraph 15). As regards to the desirability of exercising the discretion under s 72I(3) it was submitted this subsection should be interpreted consistent with the objects of the Act, specifically ss 3(1)(a) and (b). The cases of Whittaker v Child Support Registrar [2010] FCA 43 and Onder and Child Support Registrar and Sari (No.2) [2011] FMCAfam 430 were cited in support of the proposition that a DPO was designed to prevent recovery being frustrated. It was further submitted that the size of the debt weighs against exercise of the discretion.
The representative of the Registrar distinguished Kenyon on the basis that in that decision, revocation was considered warranted only if it did not adversely impact the Registrar’s ability to receive payments which were being received against the liability (at paragraph 14).
CONSIDERATIONS
I am satisfied that Mr Levitas has a child support liability, and that it is of a significant size. I am also satisfied that arrangements have not been made for the liability to be wholly discharged.
Credits, or payments made by Mr Levitas, total nearly $150,000 and the last payment, of $103.00, made was on 29 May 2017. Payments made by Mr Levitas vary over time in value and frequency. For the period 2009-2015 payments were made approximately monthly and were in the order of $40.00. Between 2002-2009, regular payments were made varying, in the main, between approximately $10.00 and $12.00. Much larger payments were made in the years 1995 to early 2001. The record shows a zero balance in May 2000.
Mr Levitas clearly has a history of making payments, albeit in many instances in quite small sums. There is an apparent correlation in time between Mr Levitas ceasing work, based on his claim of retirement due to ill health, and the end of payments towards his child support liability. I accept that his employment history has been variable, due at times, possibly, to no fault on his part. It is also the case that in recent years Mr Levitas chose to draw a relatively sizeable sum from superannuation and, on his evidence, pay this to his wife rather than commit the funds toward the liability.
I accept the submission on behalf of the Registrar that the medical evidence provided is not particularly robust. I note that no medical witness was called and Mr Levitas did not call on his wife to give evidence. I also accept the submission on behalf of the Registrar that Mr Levitas’ personal financial arrangements do not, in themselves, demonstrate the debt is irrecoverable.
In essence, I consider that accepting Mr Levitas’ submission as to his present and future capacity to gain income of some kind, including in the form of a government-funded entitlement, requires me to speculate. This speculation also needs to be weighed against both the words of s 72I(1)(c) and the context in which it must be interpreted. The phrase ‘completely irrecoverable’ is, in any event, itself clear. I do not accept that the liability can be considered to be completely irrecoverable.
Is it desirable to exercise the discretion to revoke the DPO? The above considerations in my view also speak against the exercise of the discretion. While the discretion in s 72I(3) is unconfined, it needs to be exercised in a manner consistent with the scope and purpose of the Act, and the principal objects of the Act include the regular and timely payment of financial support to children, which Mr Levitas has failed to achieve.
No persuasive arguments were made by Mr Levitas about his particular circumstances and his need to travel. Indeed, his submissions were aimed primarily at the issue of recoverability. What is more, Mr Levitas’ liability is very large indeed. Accordingly, I am not satisfied that it is appropriate in the circumstances to exercise the discretion and provide Mr Levitas the outcome he seeks.
DECISION
The Tribunal affirms the decision under review.
I certify that the preceding 32 (thirty -two) paragraphs are a true copy of the written reasons for the decision of Dr Stewart Fenwick, Senior Member
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Associate
Dated: 17 October 2019
Date of hearing: 18 September 2019 Applicant: In person Advocate for the Respondent: Ms Danielle Nicholson Solicitors for the Respondent: Sparke Helmore Lawyers
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