Loates and Child Support Registrar (Child support)
[2024] ARTA 424
•19 December 2024
Loates and Child Support Registrar (Child support) [2024] ARTA 424 (19 December 2024)
Applicant/s: Ms Loates
Respondent: Child Support Registrar
Tribunal Number: 2024/BC028548
Tribunal: Senior Member A Suthers
Place:Sydney
Date:19 December 2024
Decision:The Tribunal affirms the decision under review.
CATCHWORDS
CHILD SUPPORT – refusal to grant an extension of time to object – income distribution – income reconciliation – no arguable merit – decision under review affirmed
Names used in all published decisions are pseudonyms. Any references appearing in square brackets indicate that information has been omitted from this decision and replaced with generic information pursuant to subsection 16(2AB) of the Child Support (Registration and Collection) Act 1988.
Statement of Reasons
SUMMARY
Ms Loates is the mother of [Child 1], who turned 18 on 1 June 2023. Prior to that terminating event, there was an administrative assessment of child support in force in relation to [Child 1]. That assessment was registered with Services Australia – Child Support (Child Support).
For the 2022/2023 financial year Ms Loates had estimated her income as $61,424. That figure was used in the child support assessment.
When Ms Loates lodged her tax return for that financial year, it disclosed an adjusted taxable income (ATI) of $243,283. That was partly due to Ms Loates’ income from personal exertion exceeding what she had estimated but was predominantly due to her receiving an income distribution of $165,884 from her current partner, upon the sale of shares. Ms Loates did not anticipate the income distribution.
Upon receipt of that tax return, Child Support reconciled Ms Loates’ income and reassessed the child support payable for the relevant period.
Ms Loates was notified of that reassessment by electronic notification dated 24 November 2023. She did not, however, become aware of that electronic notification until 21 January 2024. That was outside the 28 day period allowable for her to lodge an objection to the decision. After some communication with Child Support, Ms Loates lodged an objection, out of time, on 15 April 2024.
By a decision dated 4 September 2024, Child Support declined to grant an extension of time for Ms Loates to object to the decision. Ms Loates then lodged her application for review in the Administrative Appeals Tribunal (the AAT), within the time provided. It is Child Support’s decision to refuse an extension of time which I am to review. Whilst Child Support is a party to the proceedings before me, the Registrar did not appear or make representations.
There were two apparent pathways for Ms Loates to challenge the effect of the income reconciliation decision. The first was to object to the reconciliation on the basis that it was wrong. The second was to lodge a departure application based on special circumstances, which in this case was the unexpected receipt of non-recurring income not derived from personal exertion.
Ms Loates took the first pathway, as is apparent from her ticking a box on the objection application to indicate that she ‘object[ed] to the child support decision regarding: the income used in [her] assessment’: page 105 of the bundle of documents provided by Child Support.
Ms Loates does not dispute the accuracy of the way in which her income has been recorded or reconciled with her estimate by Child Support. Whilst I have not been provided with Ms Loates’ 2022/2023 tax return itself, the figures used by child support in the reconciliation correspond with those advised by Ms Loates’ accountant that are in evidence before me, as well as Ms Loates’ oral evidence. Having reviewed the income reconciliation made by Child Support, I am satisfied it was performed in a manner consistent with Child Support’s obligations under Division 7A of the Child Support (Assessment) Act 1989 (the Act).
The objection was bound to fail. Ms Loates does not dispute that she received a distribution of $165,884 from her partner or that her ATI for the relevant year was $243,283. Had that been in issue, Ms Loates could have lodged an amended tax return, as discussed between her and Child Support on 5 March 2024: page 90 of the bundle of documents provided by Child Support. Nor is there any suggestion on the material before me that the reconciliation of Ms Loates’ actual income for the 2022/2023 year against her estimate has been carried out in error.
I infer that it is for that reason that the correspondence between Ms Loates and Child Support also comments on the alternative pathway that was apparently available to Ms Loates, which was to have sought to make a departure application: see for example page 96 of the bundle of documents lodged by Child Support. However, for reasons I will come to, that pathway does not appear to be available because no such application was lodged whilst there was a child support assessment in force in respect of [Child 1].
It is not a proper exercise of my discretion to extend time for Ms Loates to make an application that is bound to fail. For that reason, I will affirm Child Support’s decision to refuse an extension of time for the more complete reasons that follow.
SIMPLIFIED SUMMARY OF THE LAW AND THE ISSUES TO BE DETERMINED
As this is a ‘statement of reasons’ I am required, amongst other things, to explain the reasons for the decision. To do so, it is necessary to set out to an extent the law to be considered.
On 14 October 2024 the AAT, to which this application was initially brought, was replaced by the Administrative Review Tribunal (the Tribunal). An application for review by the AAT that was not finalised before 14 October 2024 is taken to be an application for review by the Tribunal, and the Tribunal has the authority to continue and finalise any aspect of the review that was not completed by the AAT: Administrative Review Tribunal (Consequential and Transitional Provisions No.1) Act 2024.
A person may apply to the Tribunal for review of a decision by Child Support under subsection 83(1) of the Child Support (Registration and Collection) Act 1988 (the R&C Act) on an application for an extension of time: item 1 of the table in subsection 89(1) of the R&C Act. Subsection 83(1) requires Child Support to consider and either grant or refuse an application for an extension of time to lodge an objection made under section 82. The person who applied to Child Support for an extension of time may apply to the Tribunal for review: item 1 of the table in subsection 89(1) of the R&C Act.
The parties to the review are the applicant and Child Support: the R&C Act, section 95D; Administrative Review Tribunal Act 2024 (the ART Act), section 22.
An objection to a decision of this nature by Child Support must be lodged by a person ‘within 28 days after a notice of the decision is served on the person’: R&C Act, subsection 81(1).
After the period for lodging an objection has ended, a person may lodge an objection if, at the time of lodging the objection or a later time, the person applies to Child Support to consider the objection despite the period ending: R&C Act, subsection 82(1).
The starting position is that proceedings commenced outside a statutory time limit will not be entertained: Lucic v Nolan [1982] FCA 217. However, the discretion Child Support has to extend time under section 83 of the R&C Act is unfettered, save as by:
a. the obligation to enable justice to be done between the parties;
b. the objects of the statutory scheme which comprises the Act and the R&C Act; and
c. the need to consider the ‘grounds of the application, including the circumstances concerning, and the reasons for, the failure by the person to lodge the objection’ within time, which are made relevant considerations by virtue of subsection 82(2) of the R&C Act.
On review in the Tribunal the discretion is similarly unconstrained, save as to the extent the Tribunal must also give effect to objectives in section 9 of the ART Act.
I am to review all the evidence before me and independently decide afresh whether to grant an extension of time to Ms Loates.
There is no dispute that the notice of the income reconciliation decision was served electronically on 24 November 2023, even though Ms Loates was not aware that had occurred. Nor is it in dispute that Ms Loates only became aware of the notice much later, and after the 28 day objection period had expired. I accept that Ms Loates acted with reasonable diligence thereafter to pursue her review rights.
Those factors weigh in favour of an extension of time being granted. However, in Brown v Commissioner of Taxation [1999] FCA 563 at [56], considering an application to extend the time to lodge an objection under the taxation legislation, the Court accepted what had earlier been said in Windshuttle v Deputy Federal Commissioner of Taxation (1993) 93 ATC 4992 that:
…an applicant should show that he or she has an arguable case. No doubt if the objection on the face of it is one which is frivolous or bound to fail as a matter of law it would be a futility to permit an extension of time to enable it to be considered.
I am satisfied that observation is equally applicable here.
CONSIDERATION
I am satisfied that it would be futile to grant an extension of time in these proceedings. As stated above, Ms Loates does not dispute that her ATI in the 2022/2023 year was $243,283. That reconciliation was the only decision to which Ms Loates made an objection and it is correct.
To the extent that the correspondence by Child Support and Ms Loates’ submissions indicate that Ms Loates sought to agitate a change of assessment (or departure) application, I note that Child Support referred to that process being unavailable after the child support assessment has ended. That is not a matter I have to decide, because no departure application has been made, although I note that Child Support’s comments appear to relate to section 98B of the Act, which allows for a departure application to be made ‘at any time when an administrative assessment is in force in relation to a child’ (emphasis added) and the decision in Balshaw & Balshaw & Anor [2016] FCCA 1176 at [27] –[33].
DECISION
The Tribunal affirms the decision under review.
| Date(s) of hearing: | Tuesday, 10 December 2024 |
| Representative for the Applicant: | Self-represented |
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