Lindsey & Christie and Anor - [2016] FamCAFC 132

FAMILY COURT OF AUSTRALIA

LINDSEY & CHRISTIE AND ANOR

[2016] FamCAFC 132

FAMILY LAW – APPEAL – LEAVE TO APPEAL – CHILD SUPPORT – Where the SSAT made a child support departure order – Where the father appealed the decision to the Federal Circuit Court – Where the father asserted the SSAT erred by assessing the father’s child support liability by reference to his income-earning capacity rather than his actual income – Where appeals from the SSAT are confined to questions of law – Where the Federal Circuit Court found the SSAT did not err in law – Where no appealable error on the part of the Federal Circuit Court was revealed by the father’s proposed grounds of appeal or his submissions – Application for leave to appeal dismissed – Father to pay second respondent’s costs.

Child Support (Assessment) Act 1989 (Cth), ss 102, 117
Child Support (Registration and Collection) Act 1988 (Cth), ss 107A, 110B
Family Law Act 1975 (Cth), ss 94AA, 117

Adam P Brown Male Fashions Proprietary Limited v Philip Morris Incorporated and Anor (1981) 148 CLR 170
Allesch v Maunz (2000) 203 CLR 172
Bass & Bass and Anor (2016) FLC 98-070
Child Support Registrar & Crabbe and Anor (2014) FLC 98-062
Forbes & Bream [2010] FamCAFC 6
Gilmour & Gilmour (1995) FLC 92-591
Hendy v Deputy Child Support Registrar & Anor (2001) 164 FLR 236
Medlow & Medlow (2016) FLC 93-692
Minister for Immigration and Citizenship v SZJSS and Ors (2010) 243 CLR 164
Rutherford and Rutherford (1991) FLC 92-255

APPLICANT:

Mr Lindsey

FIRST RESPONDENT:

Ms Christie

SECOND RESPONDENT:

Child Support Registrar

FILE NUMBER:

CAC

2010

APPEAL NUMBER:

131

2014

DATE DELIVERED:

25 July 2016

PLACE DELIVERED:

Adelaide

PLACE HEARD:

Sydney

JUDGMENT OF:

Strickland, Ryan & Austin JJ

HEARING DATE:

25 May 2016

LOWER COURT JURISDICTION:

Federal Circuit Court

LOWER COURT JUDGMENT DATE:

15 August 2014

LOWER COURT MNC:

[2014] FCCA 1838

REPRESENTATION

APPLICANT:

In Person

FIRST RESPONDENT:

In Person

COUNSEL FOR SECOND RESPONDENT:

Mr B D Kaplan

SOLICITOR FOR SECOND RESPONDENT:

Sparke Helmore Lawyers

Orders

The application for leave to appeal against the order of Judge Hughes made on 15 August 2014 in file number CAC 22 of 2010 is dismissed.
The applicant shall pay the second respondent’s costs of and incidental to these proceedings in the sum agreed or assessed.

Note: The form of the order is subject to the entry of the order in the Court’s records.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Lindsey & Christie & CSR has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).

THE FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT SYDNEY

Appeal Number: EA 131 of 2014
File Number: CAC 22 of 2010

Mr Lindsey

Applicant

And

Ms Christie

First Respondent

And

Child Support Registrar

Second Respondent

REASONS FOR JUDGMENT

Strickland J

I have had the advantage of reading the draft reasons for judgment of Ryan and Austin JJ. Although I agree generally with the reasons of their Honours, and I agree entirely with the orders proposed, I wish to say something about the issue of leave to appeal.
Section 107A of the Child Support (Registration and Collection) Act 1988 (Cth) imposes the requirement for leave to appeal, but does not provide any guidance as to what must be demonstrated to obtain leave. Plainly, the discretion to grant leave is thus unqualified and unfettered.
However, subject to one important rider, it seems to be recognised by the authorities that the principles to be applied are those that are applied generally when leave is required. The rider is that it has been acknowledged that in applying those principles in child support matters, this court should take a less restrictive approach than applies in appeals under s 94AA of the Family Law Act 1975 (Cth) (“the Act”) (for example, see Gilmour & Gilmour (1995) FLC 92-591 at 81,843, Hendy v Deputy Child Support Registrar & Anor
(2001) 164 FLR 236, and Forbes & Bream [2010] FamCAFC 6 at [39]).
That is not to say that leave to appeal should be granted here for that reason, but the point that I wish to make is that the principles that are referred to by all of the authorities as being applied generally, are those emanating from the

Full Court decision of Rutherford and Rutherford (1991) FLC 92-255, namely, there has been an error of principle and/or a substantial injustice caused. However, in [39] my fellow judges have identified that the test to be “applied to applications for leave to appeal is whether, in all of the circumstances, the decision below is attended by sufficient doubt to warrant it being reconsidered and whether substantial injustice would result if leave were refused, supposing the decision to be wrong.” That is a test that is said to emanate from the Full Court decision of Medlow & Medlow (2016) FLC 93-692 at [57], a decision which is being treated as bringing the test to be applied when considering leave to appeal in the context of the Act in line with the test applied in other courts, including in the Federal Court of Australia.
It has not yet been universally accepted that that test is now the one to be applied in the context of the Act, and that is primarily because, in any event, as was emphasised in Bass & Bass and Anor (2016) FLC 98-070 at [87], this cannot be “a test of universal application to be rigidly applied” given that “[t]he adoption of a prescriptive approach, even in relation to appellate courts reviewing decisions pertaining to practice and procedure, was considered by the High Court to be ‘unnecessary and indeed unwise’” (see Adam P Brown Male Fashions Proprietary Limited v Philip Morris Incorporated and Anor (1981) 148 CLR 170 at 177).
To be fair, the Full Court in Medlow recognised that there was an “unfettered discretion given by s 94AA”, and “[i]n appropriate cases, it being a test or a guideline, it will give way to the particular interests of justice in that case”

(at [55]).
However, as I see it, it is presently unclear what test should be applied and in what circumstances. I note that although the Full Court in Medlow proposed that subject to the caveat of there being an unfettered discretion, the test to be applied is that identified above, that was not the test that their Honours then applied in that case. At [109] in expressing the conclusion as to leave, their Honours said this:
There has been an error of principle and a substantial injustice would result if leave to appeal was not granted.
Why this relates to leave to appeal in this case is because of the acceptance by the authorities that the principles to be applied are the same as those that are applied generally when leave to appeal is required. Thus, if there is confusion about the latter, then there is necessarily confusion in a case such as this.
In any event, and out of abundant caution, whatever test is applied, namely, the test from Rutherford, the test set out at [57] of Medlow, or the test set out

at [109] of Medlow, the applicant here has failed to demonstrate that there is a basis for leave to appeal to be granted.

Ryan & Austin JJ

Summary

The applicant’s appeal, if leave was granted to entertain it, entails resolution of his grievance about a child support departure decision which he contends was infected by error from the time it was first made by the second respondent in August 2013 up to and including its review by the Federal Circuit Court of Australia in August 2014.
The asserted error was the assessment of the applicant’s child support liability by reference to his income-earning capacity rather than his actual income. For the reasons which follow, no such error was manifest in the decision and so the applicant’s grievance must be confined to his dissatisfaction with the result, not with the legal process by which the decision was reached.
Leave to appeal should be refused with costs.

History

The applicant and first respondent separated in 2009. Since then, their two children have always lived primarily with the first respondent.
In November 2009, a child support assessment was issued, pursuant to which the applicant became liable to pay child support.
From 2006, the applicant was employed in the Commonwealth public service but, in February 2013, he voluntarily resigned his employment to commence his own business. At the time of his resignation his annual salary was $132,200.
Shortly afterwards, in April 2013, the applicant notified the second respondent of his revised estimate of nil income and, consequently, his child support liability was reduced to nil.
On 18 July 2013, the first respondent applied to the second respondent for a determination to depart from the administrative assessment of child support, backdated to April 2013, on the basis that the nil administrative assessment did not properly reflect the applicant’s income, earning capacity, property, and financial resources.
The first respondent’s application was determined by the second respondent on 23 August 2013, pursuant to which the applicant’s “adjusted taxable income” was set at $132,966 for the period from 5 April 2013 to 30 November 2015.
The applicant’s objection to that departure decision was disallowed and so he applied to the Social Security Appeals Tribunal (“SSAT”) for review of the decision. The SSAT heard the review and then, on 17 March 2014, issued written reasons for its decision to:
(a)Fix the applicant’s “adjusted taxable income” at $132,966 for the period from 5 April 2013 to 30 November 2015, which decision effectively affirmed the former decision of the second respondent; and
(b)Fix the first respondent’s “adjusted taxable income” at:
(i)$59,000 for the period from 6 January 2014 to 1 February 2015; and
(ii)$74,000 for the period from 2 February 2015 to 30 November 2015.
The applicant appealed against the SSAT decision to the Federal Circuit Court, which heard and subsequently dismissed his appeal on 15 August 2014. The second respondent was joined as a party to those proceedings in July 2014.
On 11 September 2014, the applicant filed his Notice of Appeal against the Federal Circuit Court’s decision, thereby commencing these proceedings.

Proposed Grounds of Appeal

The proposed grounds of appeal pleaded by the applicant were as follows:
1.The Federal Circuit Court of Australia (“the Court”) made a decision to reject the applicant’s appeal against a child support departure order by the Social Security Appeals Tribunal (SSAT). The grounds for appealing the Court’s decision are marked “A”, “B” and “C”.
A - Exercising unlimited discretion in making a child support determination
2.The applicant contends that, in endorsing the child support determination, the Court wrongly assumed unlimited discretion for itself and lower-level jurisdictions in the application of ss 117(4) of the Child Support (Assessment) Act 1989 (“the Act”).
3.The determination contains no allowances for several serious income and financial hardship matters relevant to the case. According to ss 117(4), however, the Court “must have regard to” those matters in making an order to depart from an administrative assessment of child support.
B - Exercising unlimited discretion in considering child support matters
4.The [applicant] made detailed submissions to show the Social Security Appeals Tribunal (SSAT) assessments of important, individual matters under ss 117(4) were variously:
(a)non-existent,
(b)partial,
(c)cursory,
(d)dubious and
(e)biased.
5.The Court endorsed the assessments and findings of the SSAT without reservation. It also elected not to discuss any of the individual assessments in its reason for decision.
6.The Court has set an unacceptably low bar for the requirement that decision makers “must have regard to” something. Even where a matter is obviously important (e.g. hardship to children), the Court effectively ruled that there is no onus on a court or tribunal to substantively address that issue.
C – Failing its duty to act fairly
7.The applicant contends that the Court’s decision is unfair because the Court made no attempt to address key issues raised in submissions.
(a)The Court did not address the applicant’s submissions on specific, critical errors made by the SSAT regarding
ss 117(4).
(b)The Court also failed to meaningfully respond to the applicant’s central arguments and presentation as to why the departure order is inconsistent with the Act.
8.Without these issues being addressed, the appeal was [sic] not been properly or fairly considered. The Court asserted its authority and the authority of the SSAT. However, it offered no additional insight into the merit or otherwise of the child support determination. The approach was one-sided, shirked accountability and did not establish a basis for a decision to [sic]
The second respondent submitted the proposed grounds of appeal either appeared to raise only “questions of fact” or were “unintelligible”, but they were also bare contentions. The grounds were not illuminated by the written submissions filed by the applicant because there was no correlation between them. Rather, the applicant’s submissions were a collection of assertions directed to one basic premise, which he expressed thus:
The [child support legislation] mentions both earning capacity and income. Income is not earning capacity.
The [child support legislation] requires that you must consider earning capacity but it also requires that you must consider income.
They [being a reference to the SSAT and Federal Circuit Court] incorrectly used the concept of earning capacity to disregard real income…
The Federal Circuit Court was acutely conscious of both the distinction between income and income-earning capacity and the applicant’s contention that the distinction was either overlooked or mistaken by the SSAT, since Judge Hughes said in the very first paragraph of the reasons for judgment:
The [applicant] resigned from a well-paid job in the public service to commence a business from which he has earned no income. The Tribunal assessed him as having a capacity to earn the income he was earning prior to his resignation and set his child support income accordingly. The [applicant] argued the Tribunal had erred at law by focussing its attention on his income earning capacity at the expense of other relevant legislative considerations.
The applicant’s proposed grounds of appeal and submissions misapprehended the appellate task of both the Federal Circuit Court and this Court.
The applicant’s appeal to the Federal Circuit Court from the SSAT decision was limited to questions of law (s 110B of the Child Support (Registration and Collection) Act 1988 (Cth) (“the Collection Act”)).
Analysis of the SSAT decision for legal error was precisely the task undertaken by the Federal Circuit Court. Judge Hughes correctly recited the legal strictures by which her Honour was bound on the appeal (at [11] - [17]), considered how the SSAT approached its decision by reference to the legislation and evidence before it (at [18] - [27]), considered the applicant’s argument about the alleged errors of law committed by the SSAT (at [28] - [29]), and concluded no error of law was established (at [30] - [32]), in which event the appeal was dismissed.
The weight attributed to the evidence before it was entirely a matter for the SSAT (see Minister for Immigration and Citizenship v SZJSS and Ors (2010) 243 CLR 164 at 176 - 177). Any mistake of that sort for which the applicant contended could only have given rise to argument in the Federal Circuit Court about factual error, not legal error (see Child Support Registrar & Crabbe and Anor (2014) FLC 98-062 at [49] - [54]).
Judge Hughes quite properly resisted the applicant’s entreaties to ignore the statutory construct and simply conduct a hearing de novo. The limitation of appeals from the administrative determinations of the SSAT (now the AAT) to only questions of law was intended to preclude appeals which are no more than requests for the courts to reach different decisions and to give finality to all administrative decisions other than those tainted by legal error.
The Child Support (Assessment) Act 1989 (Cth) (“the Assessment Act”) permits child support determinations to be made which depart from the administrative assessment if, among other things, grounds for departure exist (s 117(1)(b)(i)) and it would be just and equitable for the child, carer, and payer and also otherwise proper to reach such a departure determination (s 117(1)(b)(ii)).
For the purpose of application of s 117(1)(b)(i), the Assessment Act expressly recognises that departure grounds exist if a child support liability is unjustly or inequitably calculated by reliance upon the payer’s income rather than earning capacity (s 117(2)(c)).
For the purpose of application of s 117(1)(b)(ii), the Assessment Act sets out the retinue of matters that need to be considered (s 117(4) - (9)) and entitles the decision maker to determine a payer’s earning capacity to be greater than is reflected in that person’s income, but only if satisfied of certain prescribed circumstances (s 117(7B)).
The SSAT adverted to those statutory provisions and, in so far as his income and earning capacity were concerned, found:
…[the applicant] has not demonstrated that affecting the assessment of child support was not a major purpose of his decision to leave his secure employment to become self-employed (at [49]).
[The applicant] is a highly qualified professional person who has demonstrated that he can earn significant income from his personal exertions (at [55]).
…it was open to [the applicant] to decide to start a business. However it does not take priority over his commitment to maintain the children
(at [76]).
Judge Hughes found no error in the SSAT finding that there were grounds for departure from the administrative assessment of child support because, in respect of the applicant’s income and earning capacity (at [19] - [23]):
(a)The applicant changed his occupation (s 117(7B)(a)(iii)), which he did not dispute;
(b)The change of occupation was not justified by his caring responsibilities or state of health (s 117(7B)(b)), which he did not dispute; and
(c)The applicant resented paying child support and failed to demonstrate it was not a major purpose of his decision to change occupation to affect the administrative assessment of child support (s 117(7B)(c)), even though he contended otherwise.
Judge Hughes then found no error in the SSAT’s finding that it would be just, equitable, and otherwise proper to depart from the administrative assessment of child support (at [24] - [25]). Her Honour did not analyse the SSAT’s reasons for that finding in the same detailed way she did in respect of the first finding, but that difference did not manifest error. Her Honour’s reasoning process was sound.
The applicant’s appeal to this Court, subject to leave being granted to entertain it, would involve re-hearing the appeal conducted by the Federal Circuit Court, which was confined to the identification of any error of law made by the SSAT. The appeal to this Court would not be confined to the identification of any errors of law made by the Federal Circuit Court, but importantly, that would not invite an inquiry of unlimited breadth. This Court would be precluded from interference unless the decision of the Federal Circuit Court itself revealed appealable error (see Allesch v Maunz (2000) 203 CLR 172 at 179 - 181, 187).

No appealable error on the part of the Federal Circuit Court was revealed by the proposed grounds of appeal or either the applicant’s written or oral submissions. The Federal Circuit Court’s analysis of the SSAT decision was punctilious and commendably succinct.

Leave to appeal

The applicant’s appeal from the Federal Circuit Court only lies to this Court with leave (s 107A of the Collection Act).
The test applied to applications for leave to appeal is whether, in all of the circumstances, the decision below is attended by sufficient doubt to warrant it being reconsidered and whether substantial injustice would result if leave were refused, supposing the decision to be wrong. Because the test is not the subject of legislative prescription, it is necessarily a guideline test which is not rigidly applied and will give way to the particular interests of justice in any case (see Medlow & Medlow (2016) FLC 93-692 at [55] - [57]; Bass & Bass and Anor (2016) FLC 98-070 at [85] - [88]). Those authorities discussed the test in the context of the Family Law Act 1975 (Cth) (“the Family Law Act”) (s 94AA) and the Assessment Act (s 102), but the presently relevant provision of the Collection Act (s 107A) is no different.
In this instance, the decision of the Federal Circuit Court is not attended by sufficient doubt to warrant its reconsideration by this Court, regardless of any argument mounted by the applicant about perceived injustice. The Federal Circuit Court determined the appeal before it according to law and, for cogent reasons, found no error of law committed by the SSAT in its antecedent determination. The applicant has been unable to demonstrate error at any point in the litigious process – only his disagreement.

Conclusion and Costs

The applicant’s intended appeal is without merit and so leave to appeal should be refused.
In that event, the second respondent sought a costs order against the applicant, but the first respondent did not.
The second respondent acknowledged that parties to proceedings under the Family Law Act, including those to an appeal or an application for leave to appeal, should ordinarily bear his or her own costs (s 117(1)), but contended a costs order was justified in this instance because the public, represented in these proceedings by him, should not bear the cost of the applicant’s persistent pursuit of an unmeritorious appeal that proved to be wholly unsuccessful

(ss 117(2A)(c), (e), (g)).
Relevantly to the question of costs, the applicant stated in his written submissions:
This appeal is, I believe, important for helping stopping some of the worst practices of decision makers involved in the child support system. I hope it will establish that everyone, even men who change careers, have rights that must be respected.
He contended that “the big error of law” of which he really complained was the mistake of “every decision maker [he has] encountered”, namely the:
…shorthand interpretation of the Act concerning the rules for men who change jobs and temporarily lower their income.
He asserted the SSAT made its decision “based on (terrible) gut instincts” and, in effect, “put lipstick on a pig”, which decision the Federal Circuit Court merely endorsed and thereby gave “unlimited discretion” to those making decisions about child support departure applications.
Both respondents were therefore caught up in the applicant’s crusade to correct the injustice he perceives the legislative system of child support wreaks.
The proposed appeal and the application for leave to pursue it were so unmeritorious and misguided that discretion is enlivened to order the applicant to pay the second respondent’s costs of the proceedings.
The only arguable basis upon which the applicant sought to resist such an order was his unfavourable financial circumstances (s 117(2A)(a)), but, on balance, that factor carried less weight in the discretionary process than those upon which the second respondent relied. Although the applicant contended he has no assets of significant value, the business he left the public service to establish generates annual dividends for him of about $100,000, which he chooses to re-invest in the business (or, perhaps more accurately, in the corporation through which the business is conducted).
The applicant should pay the second respondent’s costs of and incidental to the proceedings in the sum agreed or assessed.

I certify that the preceding fifty (50) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court (Strickland, Ryan & Austin JJ) delivered on 25 July 2016.

Associate:

Date: