Levitt v Canton
[2020] FCCA 2335
•26 August 2020
FEDERAL CIRCUIT COURT OF AUSTRALIA
| LEVITT v CANTON & ANOR | [2020] FCCA 2335 |
| Catchwords: FAMILY LAW – The Family Law Act 1975 (Cth) and related legislation – Children – Child support legislation – Procedure relating to child support legislation – Notice of Appeal (Child Support) – error of fact – no question of law. |
| Legislation: Administrative Appeals Tribunal Act 1975 (Cth), ss.44(1), 44AAA Child Support (Registration and Collection) Act1988 (Cth) s.110B Federal Circuit Court Rules 2001 (Cth) r.2.04 Federal Court Rules 2011 (Cth) r.33.12 Repatriation Act 1920 (Cth) s.107VZZH(1) |
| Cases cited: Australian Telecommunications Corporation v Lambroglou (1990) 12 AAR 515 |
| Applicant: | MR LEVITT |
| First Respondent: | MS CANTON |
| Second Respondent: | CHILD SUPPORT REGISTRAR |
| File Number: | PEG 351 of 2019 |
| Judgment of: | Judge Jarrett |
| Hearing date: | 24 April 2020 |
| Date of Last Submission: | 24 April 2020 |
| Delivered at: | Brisbane |
| Delivered on: | 26 August 2020 |
REPRESENTATION
| The Applicant in person via telephone link. |
| No appearance for the First Respondent. |
| Solicitors for the Second Respondents: | Mills Oakley |
ORDERS
The applicant’s Notice of Appeal (Child Support) filed on 5 September, 2019 be dismissed.
The applicant pay the second respondent’s costs of and incidental to the Notice of Appeal (Child Support) filed on 5 September, 2019 fixed in the sum of $4,500.
IT IS NOTED that publication of this judgment under the pseudonym Levitt v Canton & Anor is approved pursuant to s.110X(4)(h) of the Child Support (Registration and Collection) Act 1988 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT BRISBANE |
PEG 351 of 2019
| MR LEVITT |
Applicant
And
| MS CANTON |
First Respondent
| CHILD SUPPORT REGISTRAR |
Second Respondent
REASONS FOR JUDGMENT
The applicant appeals pursuant to s.44AAA of the Administrative Appeals Tribunal Act 1975 (Cth) from a first review decision of the Administrative Appeals Tribunal (“the AAT”) made on 31 July, 2019. The first respondent did not appear at the hearing. The second respondent submits that the appeal should be dismissed as no error of law has been demonstrated nor is apparent in the decision of the AAT.
Background
The background to the dispute is set out in the written submissions filed for the second respondent. That recitation of the background is, in my view, accurate. The applicant took no issue with that part of the second respondent’s written submissions. I have drawn upon the second respondent’s written submissions in respect of the background to the present dispute.
The applicant and first respondent are the parents of one child who was born in 2014. The applicant is the liable parent to pay child support. The child is in the primary care of the first respondent.
On 28 June, 2018 the first respondent lodged a change of assessment application on the basis that:
a)the income, property and financial resources of one or both parents of the child for whom child support made the assessments unfair; and
b)the assessment did not correctly reflect one or both parent’s earning capacity.
On 6 September, 2018 the applicant made a cross-application on the basis of:
a)the money, goods or property received by the child, the payee or a third person;
b)the parent’s necessary expenses significantly affect their capacity to support the child;
c)the duty to maintain another child or another person; and
d)the responsibility to maintain a resident child.
On 19 October, 2018 a delegate of the AAT decided that for the period 20 July 2018 to 31 December 2019 the annual rate of child support payable by the applicant be set at $10,535.
On 14 November, 2018 the applicant objected to the decision.
On 19 December, 2018 an objections officer partially allowed the objection and decided that:
a)for the period 20 July, 2018 to 30 June, 2021 the annual rate of child support payable by the applicant be set at $7,713; and
b)the annual rate payable by the applicant be increased by the relevant child support inflation factor on 1 July each year for the duration of this decision.
On 7 January 2019 the applicant lodged an application for first review to the Social Services and Child Support Division of the Administrative Appeals Tribunal.
On 31 July 2019 the AAT set aside the decision under review and decided that:
a)for the period 20 July 2018 to 31 December 2020 the adjusted taxable income for the applicant be varied to $70,600 per annum;
b)for the period 20 July 2018 to 15 September 2018 the adjusted taxable income for the first respondent be varied to $41,755 per annum;
c)for the period 16 September 2018 to 31 December 2018 the adjusted taxable income for the first respondent be varied to $127,755 per annum;
d)for the period 1 January 2019 to 9 April 2019 the adjusted taxable income of the first respondent be varied to $87,534 per annum; and
e)for the period 10 April 2019 to 31 December 2020 the adjusted taxable income for the first respondent be varied to $111,384 per annum.
On 5 September 2019 the applicant filed a Notice of Appeal (Child Support) in the Federal Circuit Court of Australia at Perth. On 30 October 2019 orders were made which, amongst other things, required the parties to file written submissions in support of their respective cases. The applicant was also given the opportunity to amend his notice of appeal but he did not take up that opportunity.
The nature of this appeal
Recently, in DJA19 v DJB19 & Anor [2020] FCCA 1870 I set out my understanding of the nature of an appeal pursuant to s.44AAA of the AAT Act. I repeat those matters here.
An appeal under s.44AAA of the AAT Act is not strictly an appeal, but an application in this Court’s original jurisdiction: BVG17 v BVH17 (2019) 268 FCR 448 at [3]. The application is limited to an appeal on a question of law. The submission for the second respondent referred me to Child Support Registrar & Crabbe & Anor (2014) FLC ¶98–062. That decision was made in relation the previous appeal regime that existed under s.110B of the Child Support (Registration and Collection) Act 1988. Under that legislation, just as for an appeal under s.44AAA of the AAT Act, an appeal from the then Social Security Appeals Tribunal was limited to an appeal “on a question of law”.
In Crabbe the Full Court of the Family Court of Australia explored what might amount to an error of law and the distinction between an error of law and an error of fact for the purposes of an appeal under the previous legislation. The Full Court did so by reference to Minister for Immigration and Multicultural Affairs v Al-Miahi (2001) 65 ALD 141, Minister for Immigration and Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259 and Minister for Immigration and Multicultural Affairs v Yusuf (2001) 206 CLR 323. The Full Court summarised the position as follows:
54. The following principles emerge from these authorities and have relevance to our decision as to whether the Federal Magistrate erred in his review of the SSAT decision in a manner which requires our intervention:
·The question of whether there is evidence to support a finding of fact or an inference drawn from findings of fact is a question of law (Al-Miahi).
·The making of a finding of fact or the drawing of an inference in the absence of evidence is an error of law (Al-Miahi).
·A wrong finding of fact is not an error of law (Al-Miahi).
·A finding of fact based on reasoning that is “demonstrably unsound” or on an “illogical course” or a “faulty process” of reasoning is not an error of law (Al-Miahi).
·Judicial review is not to be over-zealous in seeking to find inadequacy of reasoning by an administrative decision maker; the review of the reasons of an administrative decision maker must not be turned into a reconsideration of the merits of the decision (Wu Shan Liang).
·Section 103X(3)(b) of the Registration and Collection Act (by analogy with s 430 of the Migration Act) requires the SSAT to do no more than set out the findings which it did make on facts which it considered material to the decision which it made (Yusuf).
Whilst Crabbe deals with what might amount to an error of law, it did not deal with the significance of the appeal being on a question of law. The phrase question of law is not synonymous with error of law: Australian Telecommunications Corporation v Lambroglou (1990) 12 AAR 515. In Haritos v Commissioner of Taxation (2015) 233 FCR 315 the Full Court said, at [92]:
We agree with Ryan J in [Australian Telecommunications Corporation v Lambroglou (1990) 12 AAR 515] that merely to assert that the Tribunal erred in law in making a particular finding is not to state a question of law. We also agree with the later statement by Ryan J, at 527, that: “[I]t simply begs the question of law to commence it with the words ‘whether the Tribunal erred in law’. If the question, properly analysed, is not a question of law no amount of formulary like ‘erred in law’ or ‘was open as a matter of law’ can make it into a question of law.” (Emphasis added.) But this is not to say that it is impermissible to commence a question of law for the purposes of s 44 with the expression ‘whether the Tribunal erred in law’ if that is given sufficiently precise content by what follows.
See also Jamal v Secretary, Department of Social Services [2017] FCA 916 at [15]; Westrupp v BIS Industries Limited (2015) 238 FCR 354 at [15] and Berry v Commissioner of Taxation [2015] FCA 1244 at [25].
Appeals on a question of law appear in other Commonwealth statutes and has garnered its own jurisprudence. For example, a similar expression appears earlier in the AAT Act:
44 Appeals to Federal Court of Australia from decisions of the Tribunal
Appeal on question of law
(1) A party to a proceeding before the Tribunal may appeal to the Federal Court of Australia, on a question of law, from any decision of the Tribunal in that proceeding.
In the context of s.44(1) of the AAT Act, it is the question of law that is the subject matter of the appeal: Haritos (above) at [84] – [90]. Earlier instances of the same statutory formulation took the same approach: e.g., Brown v Repatriation Commission [1985] FCA 236 which was concerned with s.107VZZH(1) of the Repatriation Act 1920 (Cth).
In Haritos (above) the Full Court of the Federal Court of Australia (Allsop CJ, Kenny, Besanko, Robertson and Mortimer JJ) said:
62. We now turn to consider the more general questions raised by the appeal in relation to s 44 of the AAT Act. In summary, our conclusions are as follows:
(1) The subject-matter of the Court’s jurisdiction under s 44 of the AAT Act is confined to a question or questions of law. The ambit of the appeal is confined to a question or questions of law.
(2) The statement of the question of law with sufficient precision is a matter of great importance to the efficient and effective hearing and determination of appeals from the Tribunal.
(3) The Court has jurisdiction to decide whether or not an appeal from the Tribunal is on a question of law. It also has power to grant a party leave to amend a notice of appeal from the Tribunal under s 44.
(4) Any requirements of drafting precision concerning the form of the question of law do not go to the existence of the jurisdiction conferred on the Court by s 44(3) to hear and determine appeals instituted in the Court in accordance with s 44(1), but to the exercise of that jurisdiction.
(5) In certain circumstances it may be preferable, as a matter of practice and procedure, to determine whether or not the appeal is on a question of law as part of the hearing of the appeal.
(6) Whether or not the appeal is on a question of law is to be approached as a matter of substance rather than form.
(7) A question of law within s 44 is not confined to jurisdictional error but extends to a non-jurisdictional question of law.
(8) The expression “may appeal to the Federal Court of Australia, on a question of law, from any decision of the Tribunal” in s 44 should not be read as if the words “pure” or “only” qualified “question of law”. Not all so-called “mixed questions of fact and law” stand outside an appeal on a question of law.
(9) In certain circumstances, a new question of law may be raised on appeal to a Full Court. The exercise of the Court’s discretion will be affected not only by Coulton v Holcombe [1986] HCA 33; 162 CLR 1 considerations, but also by considerations specific to the limited nature of the appeal from the Tribunal on a question of law, for example the consideration referred to by Gummow J in Federal Commissioner of Taxation v Raptis [1989] FCA 557; 89 ATC 4994 that there is difficulty in finding an “error of law” in the failure in the Tribunal to make a finding first urged in this Court.
(10) Earlier decisions of this Court to the extent to which they hold contrary to these conclusions, especially to conclusions (3), (4), (6) and (8), should not be followed to that extent and are overruled. Those cases include Birdseye v Australian Securities and Investments Commission [2003] FCA 232; 76 ALD 321, Australian Securities and Investments Commission v Saxby Bridge Financial Planning Pty Ltd [2003] FCAFC 244, 133 FCR 290, Etheridge, HBF Health Funds and Hussain v Minister for Foreign Affairs [2008] FCAFC 128; 169 FCR 241.
…
[94]. In our opinion, the issue must be approached as one of substance. In cases of doubt, the Court should consider the notice of appeal, the alleged question or questions of law, the grounds raised, the statutory context, and the Tribunal’s reasons for its decision, and having considered all those matters, satisfy itself that there is in fact a question of law.
Similar observations have been made by the Full Court of the Family Court in Child Support Registrar & Crowley and Anor [2015] FamCAFC 76, where at [22] and [24] the Court observed:
[22] Appeals from the Tribunal to, relevantly, the FCCA lie only on a question of law (s 110B of the [Collection] Act).
…
[24] A consequence of the confined nature of appeals from the Tribunal to the FCCA is a requirement that the grounds of appeal to that court be drawn with particular precision which bears that restriction firmly in mind.
The Federal Court authorities referred to above have been decided in the context of the rules of that court which provide for a particular form to be utilised in such an appeal. Presently that is a Form 75: Federal Circuit Court Rules 2001 (Cth) r.2.04; Federal Court Rules 2011 (Cth) r.33.12. It requires the specification of the question or questions of law that are the subject of the appeal. It provides thereafter for specification of the grounds relied on in the application. These are two different matters and their relationship was addressed by Branson and Stone JJ in Birdseye v Australian Securities and Investments Commission (2003) 76 ALD 321 where, speaking of the former Federal Court Rules, they observed at [18] (my emphasis):
In our view, O 53 r 3(2) discloses an intention that a question of law to be raised on an appeal from the Tribunal should be stated with precision as a pure question of law. It is in the specification of the grounds relied upon in support of the orders sought that, in our view, one should expect to find the links between the question of law, the circumstances of the particular case and the orders sought on the appeal.
Although Birdseye was overruled in Haritos (as I have set out above), the ratio in Haritos says nothing about the emphasised sentence in the passage from Birdseye above. It continues to be applied. In Sharma v LGSS Pty Ltd [2018] FCA 167, Gleeson J observed at [30]:
The questions of law are to be stated separately from the grounds relied upon in support of the orders sought in the notice of appeal: P v Child Support Registrar [2013] FCA 1312 at [50] (“P”). In P at [51], Wigney J said:
The specification of the grounds relied upon in support of the orders sought should expose the links between the question of law, the circumstances of the particular case and the orders sought on the appeal: Birdseye [2003] FCAFC 232 at [17]-[18]. It is not legitimate to call in aid the grounds specified in the notice to read down the questions of law stated in the notice to what are truly questions of law. If the order sought is that the decision of the Tribunal be set aside, the grounds in support of that order should assume the resolution of the specified question of law in favour of the applicant and indicate, in a summary way, why that resolution requires the decision of the Tribunal to be set aside: Lambroglou at 524. Grounds drawn up in that way could not elucidate a question of law.
Given the similarity between the text of ss.44(1) and 44AAA(1) of the AAT Act, it is appropriate in my view to apply the principles that emerge from the cases I have referred to above when determining an application under s.44AAA(1) of the AAT Act. That is to say, the subject matter of the review is the question or questions of law identified by the applicant for review and which emerges from the processes and reasons of the administrative decision maker. The review is confined to the questions of law so identified. The question or questions identified in the review application need not be “pure” questions of law, but might be seen as mixed questions of law and fact. But a question of law must be involved. The statement of the question of law is important, but a failure to so state the questions in the application for review is not fatal. It is the substance of the application which is important. The form prescribed by the Federal Circuit Court Rules 2001 requires the specification of the question or questions of law raised in the review separate from the grounds of appeal. Observance of these matters ensures that the merits of a case are dealt with, not by the Court, but by the Tribunal.
The questions of law
There has been no attempt by the applicant to state in his notice of appeal a question of law. What he says is this:
Unfactual figures and accounting have been used to derive my income
My income has been derived from unlawful accounting and no factual accounting based evidence. figures have been made up and are extremely different from bank statements / financial statements provided to AAT.
These are not questions, let alone questions of law. Rather, they are statements of complaint by the applicant. His core complaint is encapsulated in his affidavit filed with his application for review as follows (faithfully reproduced):
1. Administrative appeals tribunal has set my income for child support purposes at $70 600 pa for the period 20 July 2018 to 31 December 2020. this is extremely different from my actual income. In the period 20 July 2018 to 20 July 2019 (1 year) my income drawn from my business which is my only source of income was NIL, with personal money I had to put into the business to keep it afloat I actually had a personal loss of -$9220. See Annexure 'A" showing money drawn from the business account as personal income & income paid straight back into the business once reconciled.
2. In reference to "decision and reasons for decision "letter (decision date 31 July 2019 )Administrative appeals tribunal have made many unlawful findings and have zero factual evidence to back up many of their findings, in fact much of their findings are simply non evidence based and based on fictional figures & historical incomes, even with all current evidence provided they pluck figures from previous years incomes & add it to current incomes this is totally unjustifiable & Unlawful. Below are just some of the paragraphs in their decision letter which are findings based on non factual evidence and are unlawful:
Refer to Annexure " B.
Consideration
In his oral submissions, the applicant drew my attention to a number of paragraphs of the AAT’s decision which he submitted demonstrated error on the AAT’s part. The articulated errors centred on paragraphs 44 – 48 of the AAT’s reasons. They are in the following terms:
44. The Tribunal finds that in 2017-18 Mr Levitt had taxable income of $35,213. Mr Levitt argues that his child support should be based on this income alone, however, Ms Canton believes Mr Levitt is not transparent about his income and B Pty Ltd is performing better than he has outlined.
45. The Tribunal accepts, based on the financial statements provided by Mr Levitt, that his business has struggled in the past two years. Sales have fallen by approximately 30 per cent between 2016-17 and 2017-18 while expenses have risen. The business made a loss in 2017-18. Mr Levitt states the health of his business is closely linked to the residential property development sector. The Tribunal notes, according to a recent report by the Housing Industry Forecasting Group, that dwelling commencements in Western Australia continue to decline from a peak in 2014-15 with a turnaround not expected until 2019-20.
46. Nonetheless, the Tribunal is not satisfied that Mr Levitt's true income and financial resources are accurately reflected by his taxable Income alone. Mr Levitt is taking regular drawings from the business in the form of director's fees and these are used to pay many of his personal expenses. Mr Levitt has also benefited as a result of the business meeting his motor vehicle and telephone expenses although he believes it to be minimal and has provided evidence to show this is no longer the case.
47. The Tribunal considers such personal benefits available to Mr Levitt through his business as financial resources that should be regarded as Income for the purposes of child support.
48. Mr Levitt agrees he is taking director's fees from the business, however, he states that such fees are also regularly returned to the business when cash flow is tight. He provided an example where, during one 85 day period, $24,500 was paid in director's fees and $13,200 was returned to the business. Mr Levitt believes it is unreasonable to take the director’s fees from one three month period during the year and calculate an annualised figure as this fails to account for the money he has returned to the business. He argues the Tribunal should take a more precise approach towards assessing his income.
As can be seen from these paragraphs, the AAT:
a)found that in 2017-18 the applicant had a taxable income of $35,213;
b)the applicant was taking regular drawings from his business (which was operated through a trust of which he was the sole beneficiary) in the form of director’s fees and those drawings were used to pay many of his personal expenses;
c)found that the business was meeting his motor vehicle and telephone expenses but recorded that the applicant thought that those were minimal and had since ceased to be the case; and
d)found that the personal benefits available to the applicant through his business (i.e. the drawings and the meeting of some personal expenses) was a financial resource that should be regarded as income for the purposes of child support.
Each of these findings was plainly open to the AAT on the evidence before it. The applicant suggests that they were not and in particular, the finding of the AAT that the business was meeting his personal expenses including his motor vehicle and telephone expenses was not open to it. He points out that earlier in its reasons at [41] the AAT observed:
41. The Tribunal is satisfied the majority of expenses as identified in the trust financial statements are for business purposes and provide no significant personal benefit to Mr Levitt.
However, the findings made by the AAT in [44] – [48] are not inconsistent with the observation at [41]. In the later paragraph, the AAT is talking about the expenses identified in the trust financial statements rather than the drawings made by the applicant from the trust, which seem to have been recorded in the trust financial statements as director’s loans. Further, to the extent that the trust financial statements contain motor vehicle and telephone expenses, the AAT records both in [41] and [46] that those expenses were a benefit to the applicant, but were minimal and not considered significant by the applicant.
At [29] – [31] the AAT considered the evidence before it about how the applicant’s 2017 – 2018 personal income was composed. It considered the evidence put before it by the applicant from his accountant. It recorded that the applicant’s case was that his business was his only source of income and for the 2017 – 2018 year the business had provided him with no income. It recorded the applicant’s evidence that he thought he would receive between $45,000 and $50,000 in the form of distribution from the trust in 2018 – 2019.
The AAT then went on to consider some of the applicant’s bank statements. It noted that those bank statements (which were for limited periods) showed transfers into his accounts that were described as “director’s fees”. It also noted the applicant’s evidence that some of the funds that he received by way of director’s fees were returned to the business to assist with its cash flow.
In [49] – [52] the AAT grappled with ascertaining an accurate income for the applicant for child support purposes. It noted that it was not required to undertake a forensic audit or major investigation of the financial circumstances of each of the parents. Rather, it noted that it must be satisfied on the balance of probabilities, of each party’s income, property and financial resources.
For the purposes of ascertaining the applicant’s child support income, the AAT performed an analysis of the director’s fees received by him that emerged from the applicant’s bank statements. There were two tranches of bank statements: the first which covered a period of 85 days and the second which covered 89 days. As to the first period, the AAT noted that the applicant drew a net amount of $11,300 as director’s fees from the business. As to the second, it noted that he drew an amount of $9,000 as director’s fees. The AAT correctly observed that there was no evidence to suggest that the applicant had returned those amounts to the business at any time. The amount ascertained by the AAT for the first period was a net amount calculated after taking into account the amounts said by the applicant to have been returned by him to the business.
The AAT also recorded the difference between the amount recorded in the beneficiary loan accounts in 2016 – 2017 and 2017 – 2018 for the trust. The difference was $26,000. That amount was recorded as a “physical distribution” in the 2018 financial year. Taking the applicant’s evidence about his receipt of director’s fees and the balance of the loan accounts in the trust’s financial statements, the AAT concluded that the applicant had available to him a sum of $26,000 by way of “additional financial resources” that he received from his business. Because that was recorded in the trust financial statements as, in effect, a repayment of the applicant’s beneficiary loan account it would not have formed part of the applicant’s income. For that reason, the AAT added it to his taxable income to derive an income for child support purposes.
The trust’s financial statements do not record director’s fees in terms. The applicant’s income tax return for the year ended 30 June, 2018 does not record the receipt by him of director’s fees. His income in that year was comprised of dividends from B Pty Ltd. Accordingly, the AAT’s approach of assimilating the director’s fees of which the applicant gave evidence with his drawings (or repayment of his beneficiary loan account) from the trust was open on the evidence. It seems that the receipt by him of director’s fees has not been treated as income at all, but as loan repayments or “drawings”.
The AAT’s approach to ascertaining the applicant’s child support income amount for the 2018 financial year was entirely legitimate. It brought to account not only the applicant’s taxable income as disclosed in his income tax return, but also the capital amounts that he received from the trust. The AAT noted that from the sum so derived ($61,213), motor vehicle and telephone expenses were excluded.
After making a finding at [51] about the applicant’s child support income amount for the 2018 financial year, the AAT turned its attention to the 2019 financial year. The applicant gave evidence that in the 2019 financial year he expected to receive “income from his business in the form of a distribution of about $45,000 – $50,000”.
The evidence about the applicant’s likely taxable income for the 2019 financial year was obscure. The only evidence of the applicant’s “income” was his statement of financial circumstances in which he declared that he had an average weekly income of $788. On an annualised basis, that is a little over $41,000 per annum. It is not at all clear that the “income” deposed to by the applicant in his financial statement was the same as the trust distribution of $45,000 – $50,000 that he said he was likely to receive in the 2019 financial year. It was his evidence that he derived all of his income through the trust, so perhaps it was.
As to the applicant’s child support income amount for the 2019 financial year, the AAT said:
52. Mr Levitt told the Tribunal he will receive income from his business in the form of a distribution of about $45,000-$50,000 in 2018--19. Given the drawings Mr Levitt has taken during the 2018-19 financial year, as shown in his bank accounts, the Tribunal finds it reasonable to add a similar amount of $26,000 in terms of an additional financial resources he will receive from his business.
53. The Tribunal is satisfied that Mr Levitt's income, property and financial resources from 1 July 2018 for the purposes of child support will be approximately $76,000.
To derive its conclusion about the applicant’s income for child support purposes for the 2019 financial year, the AAT added “a similar amount of $26,000 in terms of an additional financial resources he will receive from his business”. That is to say, the AAT adopted the same approach to the calculation of the applicant’s income as it had done for the 2018 year by adding the distribution found by the AAT to have been made to the applicant from the trust to his taxable income.
However, adopting that approach in respect of the 2019 financial year led the AAT to make an error. The evidence given by the applicant was that he would receive a distribution from the trust. To be consistent with the way it had approached the 2018 financial year, the AAT ought to have treated the predicted $45,000 - $50,000 in the same way that it treated the $26,000 received in the 2018 year. That is to say it was likely to be accounted for as a repayment to the applicant of his beneficiary loan account (whether that be called a distribution or director’s fees) rather than to be received by him by way of income and accounted for in his taxable income for the 2019 financial year. It ought to have been added to any taxable income that the AAT considered the applicant would derive for the 2019 financial year.
If the income disclosed by the applicant in his financial statement was likely to be his taxable income for that year, the addition of a further $26,000 to that sum was not justified. The amount to be added to the applicant’s taxable income was $45,000 – $50,000, being the distributions that the applicant gave evidence about. If the income disclosed by the applicant in his financial statement was in fact a reference to the trust distributions that he expected to receive from the trust during the 2019 financial year, given the way in which it had been accounted for in the past, it would be unlikely that that amount would form any part of his taxable income. Thus, his taxable income would be zero and the amount to be added to that taxable income would be the tradition amount of $45,000 – $50,000.
Whatever is the case, the approach of the AAT was erroneous because if it took the view that the applicant had an average weekly income of $788 per week and it added to that the distributions he was likely to receive from the trust of $26,000 for the 2019 financial year, the resulting child support income would have been about $67,000. Alternatively, if it took the view that he was to receive distributions from the trust of $45,000 – $50,000 (about which the applicant had given evidence) and a separate income of about $41,000 per annum, his child support income amount would have been in the range of $86,000 – $96,000. Alternatively again, if it took the view that he was to receive distributions from the trust of $45,000 – $50,000 and that sum was reflected in his financial statement as the weekly income amount set out therein, it seems an error to add to that a further amount of $26,000 for additional distributions from the trust.
However, although the AAT erred in the way in which it calculated the applicant’s child support income amount, the errors that it made are errors of fact. They are not errors of law. Whilst the AAT may have misapprehended the position, the factual error does not lead to relief in this case.
Conclusion
No question of law is raised by the applicant’s notice of appeal. Nor is any question of law apparent on the face of the AAT’s decision. Whilst I have identified that the AAT has made some errors in the way in which it is has approached the application before it, those errors are factual errors which do not lead to a grant of relief in these proceedings.
In those circumstances, the notice of appeal must be dismissed with costs.
I certify that the preceding forty-five (45) paragraphs are a true copy of the reasons for judgment of Judge Jarrett delivered on 26 August 2020.
Associate:
Date: 26 August 2020
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