Louboutin and Child Support Registrar (Child support)

[2018] AATA 2418

Louboutin and Child Support Registrar (Child support) [2018] AATA 2418 (1 June 2018)

DIVISION:Social Services & Child Support Division

EXTENSION APPLICATION

NUMBER:2018/BC013694

APPLICANT:  Mr Louboutin

OTHER PARTY:  Child Support Registrar

DATE DECISION MADE:                01 June 2018

APPLICATION:

An extension application made on 2 April 2018 asking the AAT to consider the application for AAT first review of a decision of the Child Support Registrar on 9 February 2018 despite the period for applying for review having ended.

DECISION:

The extension application is refused.

CATCHWORDS
Child support - Whether extension of time to apply for review of a departure determination should be granted or refused - Reasonable explanation for the delay - Merit is weak - Extension of time refused

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.

STATEMENT OF REASONS

1. On 2 April 2018 Mr Louboutin lodged an application with the Administrative Appeals Tribunal (the Tribunal) for an extension of time for review of a child support decision made on 9 February 2018.  The matter was considered on 1 June 2018 on the papers (consistent with the Tribunal’s Child Support Review Directions).  The Tribunal had before it a bundle of papers provided by the Department of Human Services, Child Support (the Child Support Agency).

2. Mr Louboutin and [Ms A] are the parents of [Child 1] (born November 1999), [Child 2] (born October 2001), [Child 3] (born May 2003) and [Child 4] (born October 2006).  Mr Louboutin is the parent liable to pay child support under the assessment and child support was first registered for assessment on 18 May 2009.

3. On 30 June 2017 Mr Louboutin applied for a change to the administrative assessment and on 6 November 2017 the Child Support Agency made the decision (the original decision) to change the assessment as follows:

   ·     the change of assessment decision of 23 September 2015 ceases to have effect after 29 June 2017;

   ·     for the period 30 June 2017 to 30 November 2019 the adjusted taxable income for Mr Louboutin is set at $100,384; and

   ·     thereafter the administrative assessment of child support is to be calculated in accordance with the usual provisions of the Child Support (Assessment) Act 1989.

4. This was done to reflect the income, property and financial resources of Mr Louboutin (the ground commonly referred to as Reason 8A).

5. On 30 November 2017 Mr Louboutin objected to the change of assessment and on 9 February 2018 the Child Support Agency allowed the objection in part (the objection decision).  The original decision was set aside and the Child Support Agency made the following decision:

   ·     for the period 1 January 2016 to 29 June 2017, the adjusted taxable income for Mr Louboutin is set at $48,995;

   ·     for the period 30 June 2017 to 30 November 2019 the adjusted taxable income for Mr Louboutin is set at $100,384; and

   ·     thereafter the administrative assessment of child support is to be calculated in accordance with the usual provisions of the Child Support (Assessment) Act 1989.

6. This was done to reflect the income, property and financial resources of Mr Louboutin.  The impact of this assessment was a decrease in the arrears owed by Mr Louboutin by approximately $17,557.62.

7. The statutory provisions relevant to this review are contained in the Child Support (Registration and Collection) Act 1988 (the Act) and the Child Support (Assessment) Act 1989 (the Assessment Act).

8. The issue which arises in this case is whether or not to grant Mr Louboutin’s request for an extension of time to submit an application for review of a child support decision.

9. Part VIIA Division 2 of the Act sets out the procedures for applying to the Tribunal for a review of an objection decision made by the Child Support Agency as well as applying for an extension of time for such a review in the event the application is not made within the prescribed period.

10. Subsection 29(2) of the Administrative Appeals Tribunal Act 1975 establishes that an application for review must be made within 28 days of being served with notice of the decision.

11. If the 28 day period to apply for review has ended then a written application for an extension of time can be made under section 91 of the Act. Mr Louboutin was advised by the Child Support Agency about the outcome of the objection decision by electronic means on 9 February 2018. Given Mr Louboutin lodged his application more than 28 days after he was served with notice, the Tribunal is satisfied that an extension of time was required.

12. Under subsection 92(1) of the Act, the Tribunal must consider and grant or refuse an extension application. In doing so, the Tribunal considers the guiding principles for the exercise of discretion to allow an extension of time as set out in Hunter Valley Developments Pty Ltd v Cohen [1984] FCA 186. In that case, the Federal Court said an extension of time should not be granted unless satisfied it was proper to do so, noting that, in general, applications or proceedings commenced outside of a prescribed time limit will not be considered.

13. A review of other relevant authorities establishes that when considering whether or not to allow an extension of time the Tribunal should consider and balance a range of factors.  These factors are a guide and are not exhaustive, but generally include:

    ·     the reasons for the delay and whether the applicant rested on their rights;

    ·     the merits of the substantive application;

    ·     any prejudice to the other party including any difficulties they will experience in providing evidence as a result of the delay;

    ·     any prejudice to the general public; and

    ·     fairness in granting an extension of time.

Reasons for the delay

1. The Tribunal finds that Mr Louboutin’s application for an extension of time on 2 April 2018 in relation to the objection decision made on 9 February 2018, sent to him by electronic means, was approximately 24 days out of time.  It is noted that Mr Louboutin submitted his application for review of the objection decision to the Tribunal on 14 March 2018.  To have been within the prescribed period Mr Louboutin’s application should have been made no later than 9 March 2018.

2. In seeking an extension of time, Mr Louboutin states he did not receive the decision until 11 February 2018 and has provided a screen shot of his emails received as proof.  Mr Louboutin also states that since receiving the decision he had called the Child Support Agency on no less than four occasions to discuss queries he had with the decision.  As he had “not been contacted at all” by the Child Support Agency in response to these calls he instead decided to submit an application for review to the Tribunal.  Mr Louboutin states he signed his application to the Tribunal on 10 March 2018 and posted it on 11 March 2018 and as this was 28 days after he received the decision he thought he did not need an extension of time.

3. Mr Louboutin receives his correspondence from the Child Support Agency by electronic means rather than by post. Section 14A of the Electronic Transactions Act 1999 sets out that the time of receipt of an electronic communication is assumed to be when it reaches that electronic address.  In the case of Mr Louboutin this would be 9 February 2018.

4. The screen shot of Mr Louboutin’s emails shows the myGov email was sent on 9 February 2018 at 9:23 pm but was not received until 11 February 2018.  The Tribunal accepts it is possible for there to be a delay between an email leaving the myGov system and arriving at its intended electronic destination, however, Mr Louboutin’s application on 14 March 2018 would still have been more than 28 days after he received the email on 11 February 2018.

5. The Tribunal notes in records provided by the Child Support Agency that a child support officer first attempted to contact Mr Louboutin in relation to the outcome of the objection decision on 9 February 2018 but was not successful and left a message.  It appears Mr Louboutin then contacted the Child Support Agency on 28 February 2018 requesting a call back in relation to this missed call on 9 February 2018.   The Child Support Agency next attempted to contact Mr Louboutin on 12 March 2018 which is the day after he posted his application to the Tribunal.

6. Although there are no records provided by the Child Support Agency showing Mr Louboutin attempted to contact the Child Support Agency on no less than four occasions, equally there are no records showing the Child Support Agency responded to Mr Louboutin’s call back request made on 28 February 2018 any sooner than 12 March 2018.

7. On this basis, the Tribunal finds Mr Louboutin’s explanation for the short delay in receiving his application for review to be reasonable.

Merits of the application

1. In his application to the Tribunal for review of the objection decision Mr Louboutin set out several points which he felt were not taken into account by the Child Support Agency.  These relate to his income as well as additional costs, including education costs, he has met for the children and the care arrangements for the children.

2. Before making any determination to depart from an administrative assessment, the Child Support Agency must first find a ground for departure. These grounds are listed in the Assessment Act and in this case it was made on the basis of Mr Louboutin’s income, property and financial resources. In his application for a change to the assessment Mr Louboutin also applied on the basis of the high costs of caring for, educating or training the children (Reason 3) and because he had given money, goods or property to the children, the receiving parent or a third person which made the assessment unfair (Reason 5). The Child Support Agency did not establish these grounds.

3. It is not a requirement in considering an extension of time application to come to a final view about the substantive application.  Deliberation is instead given to whether or not the claim has the merit to justify an extension of time.

4. In considering the merits of Mr Louboutin’s application, the Tribunal therefore conducted a careful review of the information used by the Child Support Agency in reaching its decision.

5. Mr Louboutin believes there is “no reasonable basis” for the objection decision to set his income at $100,384 and by doing so the objection decision is not in line with the intent of the financial agreement between the parents which allows for changes in income.  Mr Louboutin does not raise concerns relating to the setting of his income for the period 1 January 2016 to 29 June 2017 and so the Tribunal will not consider this further.

6. Mr Louboutin is self-employed and runs his own [business].   He estimates his income for 2016/17 to be $65,000 and in his application to the Tribunal he requested that his income be set at $65,000 plus an amount for personal use of telephone and motor vehicles.  Mr Louboutin states in his application that “All the money I have taken out of the business is fully disclosed in the Directors Fees…”.

7. In setting his income at $100,384, the Child Support Agency relied on financial statements for [his company] provided by Mr Louboutin for 2015/16 and draft financial statements provided for 2016/17.  Mr Louboutin also provided his personal tax returns for the 2013/14, 2014/15 and 2015/16 financial years.  He did not provide his personal tax return for 2016/17.

8. Based on the evidence provided the Child Support Agency found that Mr Louboutin received taxable income from the company in 2016/17 of $65,050.  The draft financial statements also show the company made a net profit of $31,999 in 2016/17 with negative retained earnings of $16,157 offset against this net profit in the balance sheet.  As the Child Support Agency was satisfied this amount had not actually been incurred as an expense in 2016/17, the full net profit was added to Mr Louboutin’s income.  In addition, the Child Support Agency added an amount of $3,335 to Mr Louboutin’s income which represented his private use of a motor vehicle and telephone. 

9. The Tribunal acknowledges there are certain advantages in being self-employed which are not generally available to salary and wage earners. Such advantages may include being able to write off personal expenses against the business, reducing personal tax liability as a result of the way the business is structured and being able to claim business expenses which offer a parent some personal gain. In such cases, assessing child support on the basis of taxable income only can result in an unjust and inequitable level of child support.

10. The Tribunal is of the view that in reaching a decision in relation to Mr Louboutin’s income, the Child Support Agency took into account all the relevant evidence available at the time.  The Tribunal is satisfied the figure of $100,384 used in the both the objection decision and the original decision is reasonable.

11. In relation to the high costs of caring for, educating or training the children (Reason 3), the Child Support Agency found that both parents agreed to send the children to private schools.  In addition, a financial agreement between the parents states that Mr Louboutin is responsible for paying all the school fees for the children.  The Child Support Agency could not establish this ground on the evidence provided and the Tribunal, having also reviewed this evidence, is satisfied there is little merit to the application on this basis.

12. In relation to money, goods or property received by the children, the receiving parent or a third person (Reason 5), the Child Support Agency could not find special circumstances existed as the costs incurred by Mr Louboutin were not considered out of the ordinary costs.  In reviewing the evidence provided, the Tribunal is satisfied this is reasonable and there is little merit to the application on this basis.

13. The test of merit has alternatively been expressed as whether, were it to proceed, the application for review “would have good prospects of success” (Smith and Commissioner of Patents [2012] AATA 60 at [29-31]).

14. Having reviewed the evidence available, the Tribunal finds Mr Louboutin’s application for review would not have good prospects of success on the grounds of his income, property and financial resources, the high costs of educating the children or the money, goods or property received by the children.

Potential prejudice to [Ms A]

1. [Ms A] should ordinarily be able to rely on the child support assessment once the period for objection has passed.  On the other hand the application made by Mr Louboutin to the Tribunal is approximately 24 days out of time.  The Tribunal does not consider that [Ms A] would be significantly disadvantaged if an extension of time to lodge an objection was granted.

Potential prejudice to the wider public

1. Time limits for the review of administrative decisions should be observed as strictly as possible in order to assist the proper administration of government agencies.  There is also a public expectation that there be a degree of certainty in relation to time limits, however, the law also allows for extensions of time.  In this case the Tribunal does not believe there would be significant prejudice to the general public if an extension of time to lodge an objection was granted.

Fairness in granting an extension of time as between Mr Louboutin and other persons in similar positions

1. The Child Support Agency notifies parties that they can seek a review of decisions with the Tribunal and they have 28 days within which to submit a request for such a review.  Most people comply within the 28 day timeframe.  It is clear the statutory time limit is to be enforced unless there are acceptable reasons for the delay.  The Tribunal finds that it would not be unfair to others to grant Mr Louboutin an extension of time based on the reasons for the delay.

CONCLUSION

1. The Tribunal is of the view Mr Louboutin has provided a reasonable explanation for the short delay in applying for review of the objection decision.  The Tribunal could find little merit to his application, however, which weighs heavily against the granting of the extension application.

2. Having carefully considered the various factors which it needs to take into account, the Tribunal finds it would not be proper to grant an extension of time to seek review of the objection decision made on 9 February 2018 in the circumstances of this case.  Accordingly, the extension application is refused.