MARSHALL & MARSHALL (SSAT APPEAL)
[2012] FMCAfam 588
•21 June 2012
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| MARSHALL & MARSHALL (SSAT APPEAL) | [2012] FMCAfam 588 |
| CHILD SUPPORT – SSAT appeal – errors of law alleged – appellant relies on “new evidence” – “new evidence” not admissible – no error of law. |
| Child Support (Assessment) Act1989, Part 6A Administrative Appeals Act 1975, s.44 |
| Agrippa & Horton(SSAT Appeal) [2010] FMCAfam 1144 Tasman & Tisdale [2010] FMCAfam 425 Clements v Independent Indigenous Advisory Committee [2003] FCAFC 143 Gilmour & Gilmour (1995) FLC 92-591 S & D (2005) FMCAfam 446 Kannis & Kannis (2002) FamCA 1150 |
| Applicant: | MR MARSHALL |
| Respondent: | MS MARSHALL |
| File Number: | BRC 4409 of 2011 |
| Judgment of: | Coates FM |
| Hearing date: | 14 March 2012 |
| Date of Last Submission: | 14 March 2012 |
| Delivered at: | Brisbane |
| Delivered on: | 21 June 2012 |
REPRESENTATION
| Counsel for the Applicant: | Ms P Wilson |
| Solicitors for the Applicant: | Mark Gray Lawyer |
| Solicitor for the Respondent: | Self represented |
ORDERS
That the Notice of Appeal (Child Support) filed 25 May 2011 be dismissed.
IT IS NOTED that publication of this judgment under the pseudonym Marshall & Marshall is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT BRISBANE |
BRC 4409 of 2011
| MR MARSHALL |
Applicant
And
| MS MARSHALL |
Respondent
REASONS FOR JUDGMENT
This is an Appeal against the decision of the Social Security Appeals Tribunal made on 13 April 2011.
The child support in question relates to three children, X born (omitted) 1997, Y born (omitted) 1995 and Z born (omitted) 1991.
The Respondent mother had made a departure application under Part 6A of the Child Support (Assessment) Act 1989 on 27 May 2010.
A senior case officer departed from the administrative assessment on 16 July 2010 so that for the period from 1 July 2010 to 30 June 2012:
a)the Appellant’s adjusted taxable income be set at $45,000;
b)the Respondent’s adjusted taxable income be set at $70,364; and
c)The annual rate of child support payable by the Appellant be increased by $3,200.
The Respondent objected to the decision and on 26 November 2010 an objections officer partly allowed the objection so that for the period from 1 July 2010 to 30 June 2013:
a)the Appellant’s adjusted taxable income be set at $45,000;
b)the Respondent’s adjusted taxable income be set at $70,364; and
c)the annual rate of child support payable by the Appellant be increased by $2,567.
The decision states the effect of the objection officer’s decision is that the appellant was required to pay:
a)$6,497 per annum from 1 July 2010 to 18 August 2010;
b)$6,890 per annum from 19 August 2010 to 30 September 2010;
c)$6,752 per annum from 1 October 2010 to 4 November 2010;
d)$1,795 per annum from 5 November 2010 to 30 November 2010; and
e)$9,599 per annum from 22 November 2010 to 31 December 2011.
After reviewing the evidence the Tribunal came to the following decision which set aside the decision under review and substituted a new decision that:
“• for the period 27 November 2008 to 30 June 2009, Mr Marshall’s adjusted taxable income be set at $225,552;
• for the period 1 July 2009 to 31 December 2012, Mr Marshall’s adjusted taxable income be set at $78,600;
• for the period 27 November 2008 to 31 December 2012, Ms Marshall’s adjusted taxable income be set at $70,364;
• for the period 1 January 2010 to 27 September 2010, the annual rate of child support payable by Mr Marshall be increased by $1,600;
• for the period 28 September 2010 to 31 December 2010, the annual rate of child support payable by Mr Marshall be increased by $2,100; and
• for the period 1 January 2011 to 31 December 2012 the annual rate of child support payable by Mr Marshall be increased by $5,483.”
For the Appellant, a document entitled “Orders sought”, folio 15 on the Court file, received by leave on the day of hearing, outlined new grounds of appeal and provide an understanding of what the appeal is based on. They are:
“1. That the Tribunal erred in treating the drawings from the (omitted) Business as capital rather than a loan.
(i) The Tribunal erred in law by considering the drawings, which were a loan to the company, as trustee for the as after tax income.
(ii) The Tribunal erred in law by stating that “the Tribunal is not prepared to speculate as to his (the appellant’s) likely income in the 2010/2011 year other than to assume that it will be approximately equal to his 2009/10 income”.
(iii) The Tribunal, at paragraph 33 of the decision, acknowledged that the Appellant stated that the drawings were in the nature of a loan to the company, but still at paragraph 34 regarded the drawings as after tax income.
(iv)The Tribunal at paragraph 34, made incorrect calculations for treating the withdrawals as income. The justifications for arriving at this conclusion was wrong in law.
(iii) There was no evidence before the Tribunal to make the decision referred to in (ii) supra.
2. That the Tribunal erred in treating the drawings from the (omitted) business as capital rather than a loan.
(i) The Tribunal erred in law by considering the drawings from the (omitted) business as after tax income. The drawings from the trading account of the (omitted) Investment Trust.
(ii) The Tribunal erred in law by assuming that there is a surplus level of equity in the (omitted) business, which is wrong in fact and in law.
(iii) The Tribunal at paragraph 31 of the decision accepted that the Appellant conducted the (omitted) business in equal shares with an unrelated party, it erred in law by not considering the interest of the unrelated party.
3. The determination that the Appellant would have an income of $225,552 in 2008/09 and $78,000 in 2009/10 was not supported by the evidence and was in error.”
The document also stated the orders sought:
“1. The application for review is remitted to a differently constituted Social Security Appeals Tribunal to hear and determine the matter according to law.
2. The orders of Spelleken FM of 30 June 2011 continue:
(1) That the decision made by the Child Support Agency on 26 November 2010 against the applicant be stayed pending the Appeal hearing and the final determination of the proceedings.
(2) That the Social Security Appeals Tribunal decision made on 13 April 2011 against the applicant be stayed pending the appeal hearing and the final determination of the proceedings.
3. That the Appellant’s costs of an[d] incidental to this appeal be paid by the First and Second Respondent.”
The questions of law arising go to alleged errors in how facts were either wrongly assumed, or treated, or not taken into account with regard to the Tribunal’s decision to regard the drawing of money by the Appellant from two businesses as income and not as loans.
New evidence was sought to be introduced to support the Appellant’s case that the Tribunal had wrongly classified the draw down of money.
Before considering the submissions and the evidence, I will refer to the applicable sections of the Act and relevant cases.
The Tribunal has specific requirements in relation to its administrative decision-making process.
It must follow s.103X(3)(b) which states:
“(3) The SSAT must, within 14 days after making the decision, either:
(a)…, or
(b) give to each party a written notice (whether or not as part of the notice under paragraph (1)(a)) that:
(i) sets out the reasons for the decision; and
(ii) sets out the findings on any material questions of fact; and
(iii) refers to evidence or other material on which the findings of fact are based.”
As the wording requires reasons, findings on questions of fact and the evidence supporting the findings, there must be reference to this pathway in the reasons.
There is a general proposition that there does not have to be exhaustive reasons, but they have to be presented in such a way to show how the decision was arrived at because of the mandate to show findings on questions of fact and a reference to the evidence supporting the findings. A reference to the evidence means some analysis of the evidence, but as stated by Halligan FM in Agrippa & Horton(SSAT Appeal) [2010] FMCAfam 1144, “..the reasons for the decision under review are not to be construed minutely and finely with an eye keenly attuned to the perception of error (Collector of Customs v Pozzolanic Enterprises Pty Ltd (1993) 43 FCR 280, at 287, cited with approval in Minister for Immigration and Multicultural Affairs v Wu Shan Liang (1996) 185 CLR 259 at 272 per Brennan CJ, Toohey, McHugh and Gummow JJ...”.
Once the legislative requirement of s.103X(3)(b) is satisfied and no error of law is apparent, then an Appellant cannot succeed merely because of a disagreement by the Court as to a factual finding.
Description of errors of law have been addressed in various cases, but in a useful outline was addressed in Tasman & Tisdale [2010] FMCAfam 425 by Brown FM, who described what is sometimes called jurisdictional error:
“85. In particular, I reiterate an administrative tribunal exceeds its powers and thus commits a jurisdictional error, which is correctable on appeal, in respect of a question of law, if it:
· fails to construe properly the legislative provisions applicable;
· identifies the wrong issues or asks itself the wrong questions;
· ignores relevant material or relies on irrelevant material;
· fails to accord procedural fairness to the party before it;
· makes an erroneous finding of such a magnitude that it goes to the very jurisdiction which it purports to exercise rendering its decision perverse or unreasonable or otherwise offending logic.
86. In summary, an appeal on a question of law:
· is not a review on the merits or a rehearing;
· as such, an appeal on a question of law is not one in which findings of fact, per se, can be called into question;
· however, bearing in mind the statutory intent implicit in Part VIII of the Collection Act and the purpose of the Federal Magistrates Court itself, in dealing with SSAT appeals, the court should not be unduly legalistic or pedantic, particularly where the appellant concerned is self-represented;
· in reviewing a decision of the SSAT for error, the court should not examine the decision in question with an eye “keenly attuned to the perception of error.”
I was referred to some decisions in the Appellant’s case.
As to what I will loosely call mistakes of fact alleged by the Tribunal, I was referred to paragraphs 33 and 34 of the decision.
I will reproduce those paragraphs:
“33. Mr Marshall submitted that his drawings were by way of a loan. The accounts of the entities do not indicate any form of indebtedness associated with the distributions to Mr Marshall. The (omitted) business owns three lots of subdivided land which Mr Marshall currently values (in aggregate) at $935,000 and is indebted in the amount of $842,000. The properties are all currently listed for sale. The drawings to date appear to be a mixture of distribution of the profits on the sale of the first block of land (in 2008/09) and a bringing forward of the anticipated profit on the sale of the other blocks (by way of a debt facility).
34. In these circumstances, the Tribunal has no choice but to regard the drawings as after tax income in Mr Marshall’s hands. On a grossed up basis (for child support purposes) they equate to a taxable income in 2008/09 of $225,552 and in 2009/10 of $78,600. Mr Marshall indicated that his (omitted) business is improving in the current year and is currently earning income at approximately twice the rate of 2009/10 year, however in such a fluid business, the Tribunal is not prepared to speculate as to his likely income in the 2010/11 year other than to assume that it will be approximately equal to his 2009/10 income.”
The withdrawals referred to in paragraph 33 were produced at paragraph 32 in a table and were: from the (omitted) business $38,857 in 2008/09 and $26,201 in 2009/10 and from the (omitted) business $104,772 in 2008/09 and $33,754 in 2009/10.
The submission was that the Tribunal accepted the drawings were loans and has made findings in paragraphs 33 and 34 which are inconsistent with the acceptance that the drawings were loans and the conclusion that it was after tax income.
I was taken to the words in paragraph 33 that the bringing forward of an anticipated profit by sale of property and the bracketed words “by way of debt facility” is an acceptance that the drawings were a loan, and so could not stand against the paragraph 34 statement that the money was after tax income. However, I will point out the full words used, again, in paragraph 33, that the “drawings to date appear to be a mixture of distribution of the profits on the sale of the first block of land (in 2008/09) and a bringing forward of the anticipated profit on the sale of the other blocks (by way of a debt facility)”.
The use of the words that the drawings “appear to be a mixture of distribution of the profits…” cannot be ignored as being a factual finding.
The new evidence, sought to be introduced by both the Appellant and his accountant, Mr W, was said to corroborate the existence of the drawings as a loan. I was also referred to an Affidavit by the Appellant’s business partner, Ms J, although her Affidavit had not been filed at the time of hearing on Wednesday, 14 March 2012. I stated I could not rely on evidence not before the Court. Her Affidavit was subsequently filed on the day after the hearing. I will not rely on it because the Respondent wife had not seen the Affidavit and would be denied opportunity of addressing the issues. That is a matter for the Appellant in ensuring all materials are filed within time, and I will state, even the amended grounds came into Court on the day of hearing, outside the directions given for the filing of material.
Also, what the “new” evidence of the Appellant and Mr W purports to state is that the money was always a loan. The submission was that Mr W’s evidence could be relied on as being evidence of a professional accountant who would have knowledge of the Appellant’s financial affairs.
Paragraphs 6 and 7 of his Affidavit states:
“6. This money was drawn by the applicant as a loan from the company. At all times it was intended by the applicant and Ms J that this withdrawal was taken as loan and to be repaid with interest.
7. In the earlier financial statements, this advance to the applicant was inadvertently treated as physical distribution paid to the applicant. This mistake was identified and has been corrected in subsequent accounts. By virtue of the aforementioned correction the amount withdrawn now appears in the accounts as a debt payable to the company by the applicant.”
Firstly, Mr W cannot give evidence of what the Appellant intended. He is their professional accountancy adviser, not part of the business. He can act only on instructions. That aside, at paragraph 7 he refers to earlier financial statements in a curious way, he talks of a mistake, but does not state what the mistake is, nor does he say how many earlier financial statements were mistaken. He does not say when the mistake was identified and corrected. He does not, as a professional accountant, annex by way of exhibits the financial documents he refers to and about which, it was submitted, he holds professional knowledge.
Although the Act allows new evidence on such an appeal, such would normally be allowed if the evidence was not known or was unavailable at the time of the hearing. Such is sometimes termed fresh evidence. The new or fresh evidence that the Appellant is attempting to rely on was always available before the Tribunal hearing and it is not explained in a manner which suggests it is in any way new or fresh and the appellant himself gave evidence at the hearing that the drawings were a loan. The new evidence lacks, as I say, independence and explanations of when mistakes in the accountancy process took place. It is not evidence which to my mind brings into play the use of fresh evidence as stated in Clements v Independent Indigenous Advisory Committee [2003] FCAFC 143 at 13:
“In matters within the original jurisdiction of the court, there is a general right in a party to place before the court evidence that is probative of facts in issue. Because an appeal under s. 44 of the AAT Act is limited to a question of law, generally there will be no facts in issue. The facts found by the Tribunal will be regarded as the facts for the purposes of the appeal. In a case such as the present, however, it is necessary for the court to find some facts, because the applicant cannot establish the denial of procedural fairness of which he complains unless that is done. See Percerep at 495. Accordingly, his affidavit is admissible”.
Although Clements refers to s.44 of the Administrative Appeals Act 1975, it is in similar terms to s.110B of the Child Support (Registration and Collection) Act 1988, which states:
“s.110B Appeals from decisions of SSAT
A party to a proceeding before the SSAT under Part VIIA may appeal to a court having jurisdiction under this Act, on a question of law, from any decision of the SSAT in that proceeding.”
Also crucially, as the Tribunal points out in paragraph 33, after stating that the Appellant submitted the drawings were a loan, it found that “…The accounts of the entities do not indicate any form of indebtedness associated with the distributions to Mr Marshall”. But what the Appellant is also doing now is coming to the Court to state that there was a mistake, that he knew of the mistake, that he did not claim a mistake at the time, but subsequently some documents have been altered to reflect a true state of affairs, none of which are produced to the Court.
As the Tribunal has quite deliberately referred to the accounts of the business not containing any form of indebtedness by way of loans, which one would expect on the claims made, then it has fulfilled its duty under s.103X(3)(b) in stating the evidence upon which it subsequently determined that the drawings were to be treated as after tax income.
It was put that the Tribunal’s reference to the bringing forward of anticipated profits by way of a debt facility indicated the drawings were a loan. To my mind, that does not indicate a loan. It indicates how the Appellant explained his position. That the words “by way of debt facility” are in brackets indicates that the Tribunal is referring to the Appellant’s explanation, which it states at all times is profit and anticipated profit from the businesses. It is doing nothing more than relying on what the Appellant is stating to be the case.
At paragraph 34 the Tribunal stated it had no choice but to hold that the money was after tax income.
I can see no error in this reasoning such as to constitute the alleged error of law, since the Tribunal took into account the submission of the Appellant that the drawings were a loan, that he had no documents to support that contention and that there was no other choice but to conclude that it was profit which was income.
There is another way I must also view this attempt to rely on new or fresh evidence. It was evidence obviously in the knowledge of the Appellant at the time of the Tribunal hearing. That I am given no financial documents amounts to a lack of disclosure. In Gilmour & Gilmour (1995) FLC 92-591, the Full Court of the Family Court of Australia, with regard to an issue arising under the Child Support (Assessment) Act 1989, it was said: “…there can also be no doubt, in our view, that a party to proceedings under the Assessment Act has the same duty to make a full disclosure of his or her financial affairs as does a party to financial proceedings under the Family Law Act, and that where in such proceedings the court is satisfied that there has been a deliberate non-disclosure by one party, it is open to the court to make findings in favour of the other party (see Weir particularly at page 79,593).” The principle of Weir is well enough known that disclosure is an absolute necessity. The Child Support (Registration and Collection) Act 1988 has an interconnection with the Child Support (Assessment) Act 1989, and in S & D (2005) FMCAfam 446, Riethmuller FM stated “The real issue is whether or not there is sufficient evidentiary foundation to draw an inference as to his income or earning capacity or other resources, in the manner suggested…It is clear that the failure to make comprehensive disclosure, of itself, does not create evidence of a particular income or earning capacity. The failure to make full and frank disclosure or provide evidence properly explaining financial affairs allows the court to accept what evidence there may be with more confidence than would otherwise have been the case”. On the basis of those decisions, I find the requirement to make full and frank disclosure in a child support matter is required to support the case being propounded. In other words, the onus was on the Appellant as soon as he told the Tribunal the monies were a loan to produce the evidence. The evidence he produced did not disclose indebtedness to the business he was operating and so the Tribunal held, on that evidence, that the money received was income. The Tribunal was not even drawing an inference, it had the financial documents referred to by the husband. In coming to the appeal, the onus remains on the Appellant to put before the Court the same documents he claims support his case. He produces his accountant who would be expected to produce the documents and explain the mistakes, not just make mere statements that a mistake occurred. This is a lack of disclosure.
This matter does not need to be assessed with an eye “keenly attuned to the perception of error” as stated in Agrippa & Horton, upon assessment of the authorities.
It needed to be assessed by the Tribunal on the evidence before it and with s.103X(3)(b) in mind and that was achieved by the Tribunal.
There was another submission put forward by Counsel for the Appellant – that the Tribunal did not take into account that the Appellant was in business with Ms J and that should the Tribunal’s decision be upheld, then that may or would cause the collapse of the business.
Despite directions stating that the Appellant was to secure the transcript of the proceedings before the Tribunal, the matter proceeded into Court without the transcript. I had no way of knowing whether the matter was raised before the Tribunal. The Respondent in fact said it was never raised. I am to examine whether there was an error of law arising, and without the transcript, this is not a ground which can be pursued because I have nothing to assess, no words spoken, no questions to refer to, no submissions to refer to no business documentation to refer to. In any case, the Respondent, who was present, stated that the issue did not arise. Further, the Appellant did not appear personally at the appeal, nor did his solicitor, both leaving Counsel merely to make submissions upon written instructions without the possibility of obtaining necessary instructions as matters arose, so it was a matter which could never progress on some allegations of what occurred in the Tribunal.
The Respondent raised another issue with regard to the new evidence. She said that it seems to be stating that the Appellant has reduced the so-called loan by about $100,000 without stating where that money came from or went. I agree. There is no explanation so it is a matter again of failing to make full disclosure. In Kannis & Kannis (2002) FamCA 1150 the issues of non-disclosure were taken further than I have referred to above. It was said:
“Whether the non-disclosure is wilful or accidental, is a result of misfeasance, or malfeasance or nonfeasance, is beside the point. The duty to disclose is absolute. Where the Court is satisfied the whole truth has not come out it might readily conclude the asset pool is greater than demonstrated. In those circumstances it may be appropriate to err on the side of generosity to the party who might be otherwise be seen to be disadvantaged by the lack of complete candour.”
This is the course the trial Judge adopted. It was a course clearly open to him and one that does not merit appellate interference.
Although Kannis was a property matter, given the objects of the child support legislation, the settled law is applicable to child support matters. The objects reflect the legislature’s intention that child support is a primary duty of parents. If disclosure is not insisted upon, the Tribunal would be severely hindered in determining matters before it. Full and frank disclosure is a primary duty and it must be applied to matters before the Tribunal, as well as before the Courts. Apart from that, there was no explanation or submission as to why the evidence was not disclosed at the time of the Tribunal hearing and how I should use that evidence in such circumstances.
The Tribunal followed the legislative command in s.103X(3)(b). It made the decision based on the evidence presented by the parties. It did not mistake the Appellant’s statements about loans and the documentary evidence he produced. If the wording the Tribunal has used is loose, and I do not necessarily think it is, the decision it made is clear, that the Appellant had income, whether by way of profit distribution or by bringing forward anticipated profits, in his hands. He used it for purposes other than child support. That he now claims that there was a mistake is not supported by any new evidence primarily because of a lack of disclosure of the documents allegedly showing how the mistakes were corrected. It was said that the evidence of the account, Mr W was corroborative. It was not. corroborative evidence, while having a special meaning in criminal law and liberally referred to civil proceedings, must at least contain the essential element of being independent and factually related to the fact-in-issue. Mr W’s view of what the Appellant intended with the drawings is not admissible because he cannot have knowledge of another’s intention and he needs to show independence. He does not produce the documents he refers to of a corrected mistake and he acts on instructions. The errors of law alleged to have occurred would be more usefully described as errors of fact and such are not within the power of this Court to correct, unless they are of the nature that they could be said to constitute an error of law. In all of the material before the Tribunal, the Tribunal is clear, the Appellant accessed monies and used it for purposes other than child support and it is irrelevant how the Appellant now classifies that money or his access to it. I do not hold the Tribunal’s decision as speculation, there was no evidence of miscalculating any figure which would be so unreasonable that it should not stand and there was no evidence put about any effect on a business partner. The decisions of the Tribunal were supported by the evidence upon production of the factual material the Appellant then intended to rely on.
On that basis, the cases I was referred to in the Appellant’s case were not of assistance.
I will dismiss the appeal.
I certify that the preceding forty-six (46) paragraphs are a true copy of the reasons for judgment of Coates FM
Date: 21 June 2012
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