Mcfadden and Child Support Registrar (Child support second review)

[2016] AATA 1067

Mcfadden and Child Support Registrar (Child support second review) [2016] AATA 1067 (22 December 2016)

Division	GENERAL DIVISION
File Number	2016/2150
Re	Mcfadden
APPLICANT
And	Child Support Registrar
RESPONDENT

DECISION

Tribunal	Mr D. J. Morris, Member
Date	22 December 2016
Place	Perth

The decision of the Social Services and Child Support Division of the Tribunal dated 23 March 2016 is set aside.  The Applicant is granted an extension of time to lodge an application for review of the objections officer decision made on 30 April 2015.

.......[Sgd].................................................................

D. J. Morris, Member

Names used in all published decisions are pseudonyms. Any references appearing in square brackets indicate that information has been removed from this decision and replaces 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 1998.

CATCHWORDS

PRACTICE AND PROCEDURE – extension of time for lodgement of application for review – prescribed limit as a general rule – discretion of extend lodgement period – explanation for delay – prospects of success – prejudice to other parties – fairness to other parties – principle of procedural fairness generally – Applicant not initially told of decision and not advised of timeframe for appeal – decision under review set aside – extension of time granted.

LEGISLATION

Child Support (Registration and Collection) Act 1988 s 96A(a)

Administrative Appeals Tribunal Act 1975 s 29

CASES

Hunter Valley Developments Pty Ltd v Cohen, Minister of Home Affairs and Environment [1984] FCA 176

Mehta v Secretary of State for the Home Department (1975) 2 All ER 1084

REASONS FOR DECISION

D. J. Morris, Member

22 December 2016

INTRODUCTION

1. On 23 March 2016 the Social Services and Child Support Division of this Tribunal (AAT1) refused a request by Mcfadden, the Applicant, for an extension of time to seek review of a decision of an objections officer of the Department of Human Services (the Department).

2. On 27 April 2016 Mcfadden lodged an application pursuant to section 96A(a) of the Child Support (Registration and Collection) Act 1988 for review of AAT1’s decision by the General Division of the Tribunal.

   BACKGROUND

3. The Applicant and his former spouse, called [FSNP] in this decision, are the father and mother respectively of two minor children.

4. Mcfadden is required to pay child support to his former spouse in respect of his children.  The children are assessed as being in the greater than primary care of [FSNP].

5. On 3 November 2014 [FSNP] applied for a change in assessment on the basis of Reason 8A – that the income, property and financial resources of either parent make the child support assessment unfair.

6. On 2 January 2015 a change of assessment officer made a decision changing the assessment of child support payable by Mcfadden, finding that Reason 8A was satisfied based on updated information regarding the Applicant’s income, and made the assessment that for the period 1 July 2014 to 30 June 2017 the Applicant’s adjusted income is set at $101,949.

7. On 12 March 2015 the Applicant requested a review of the decision by the Department.

8. On 30 April 2015 the objections officer made an objection decision which affirmed the decision, finding that Mcfadden was linked to two corporate entities, with similar names.  The objections officer found that the Applicant had an income of $101,949 and that it was just and equitable and otherwise proper to make the departure decision.

9. On 14 May 2015 Mcfadden contacted the Department regarding the objection decision and was, according to a file note before the Tribunal, advised that his objection had been rejected but that he could apply to the Social Security Appeals Tribunal (SSAT).  The SSAT was amalgamated with the Administrative Appeals Tribunal from 1 July 2015 and its functions conferred on the new Social Services and Child Support Division (SSCSD) of the Tribunal.

10. The Department sent the decision to the Applicant on 14 May 2015 with a covering letter advising Mcfadden that he had a “limited timeframe” in which to ask the SSAT to review the decision and providing contact details for the SSAT.

11. The time limit of 28 days for an appeal to be lodged, from the date the letter was despatched to the Applicant on 14 May 2015, was 12 June 2015.

12. On 25 January 2016 Mcfadden requested a review by the AAT1 and at the same time lodged an application for extension of time.

13. On 23 March 2016 AAT1 refused the Applicant’s request for an extension of time.

    ISSUE

14. The issue for the Tribunal to determine is whether it is reasonable, in all the circumstances, for an order to be made extending the time within which Mcfadden may lodge an application for review to the SSCSD.

15. The hearing took place on 13 December 2016.  The Applicant gave evidence and was cross-examined by counsel for the Respondent.  [FSNP] did not participate in the hearing.

16. Documents and supplementary documents submitted under section 37 of the Administrative Appeals Tribunal Act 1975 (the AAT Act) were admitted into evidence.

17. The following documents were also admitted into evidence:

    ·Letter dated 9 August 2016 from [the Applicant’s legal representative], with three attachments: (1) ASIC company search print outs; (2) letter dated 30 June 2016 from [the Applicant’s Business Banking Manager]; (3) letter dated 3 August 2016 from [the Applicant’s general practitioner] (Exhibit A1).

    ·Letter dated 27 September 2016 from [the Applicant’s legal representative] with one attachment: an undated letter from [the Applicant’s life trainer] (Exhibit A2).

    ·Witness Statement of “IL”, undated with two annexures, received on 12 December 2016 (Exhibit A3).

    THE LAW

18. Section 29(2) of the AAT Act sets out the prescribed time for making applications as the period commencing on the day the decision was made and ending on the twenty-eighth day after.

19. Section 29(7) of the Act gives the Tribunal the power, upon an application in writing by a person, to extend the time for the making by that person of an application to the Tribunal for the review of a decision if the Tribunal is satisfied that it is reasonable in all the circumstances to do so.  The Tribunal can grant an extension even if the time for making the application has expired.

20. How the Tribunal should assess whether it is reasonable in all the circumstances to grant an extension is not otherwise set out in the statute.  Significant guidance is provided in the Federal Court decision in Hunter Valley Developments Pty Ltd v Cohen, Minister of Home Affairs and Environment [1984] FCA 176.  In that case, Wilcox J stated:

    Section 11 of the Administrative Decisions (Judicial Review) Act does not set out any criteria by reference to which the Court's decision to extend time for an application for review under s.5 is to be exercised. Already there have been a number of decisions of Judges of this Court, all sitting at first instance, dealing with the approach proper to be taken. They differ a little, both in language and in emphasis, but I venture to suggest that from them may be distilled the following principles to guide, not in any exhaustive manner, the exercise of the Court's discretion:

    (a) Although the section does not, in terms, place any onus of proof upon an applicant for extension an application has to be made. Special circumstances need not be shown but the Court will not grant the application unless positively satisfied that it is proper so to do. The "prescribed period" of 28 days is not to be ignored (Ralkon v Aboriginal Development Commission (1982) 43 ALR 535 at p 550). Indeed it is the prima facie rule that proceedings commenced outside that period will not be entertained (Lucic v Nolan (1982) 45 ALR 411 at p 416) It is a pre-condition to the exercise of discretion in his favour that the applicant for extension show an "acceptable explanation of the delay" and that it is "fair and equitable in the circumstances" to extend time (Duff at p 485; Chapman v Reilly, Neaves J, 9 December 1983, not reported, at p 7).

    (b) Action taken by the applicant, other than by making an application for review under the Act, is relevant to the consideration of the question whether an acceptable explanation for the delay has been furnished. A distinction is to be made between the case of a person who, by non-curial means, has continued to make the decision maker aware that he contests the finality of the decision (who has not "rested on his rights": per Fisher J in Doyle v Chief of Staff (1982) 42 ALR 283 at p 287) and a case where the decision maker was allowed to believe that the matter was finally concluded. Compare Doyle, Chapman, Ralkon and Douglas v Allen (Morling J, 3 April 1984, not reported) at p 18 with Lucic at pp 414-415 and Hickey v Australian Telecommunications Commission (1983) 48 ALR 517 at p 519.  The reasons for this distinction are not only the "need for finality in disputes" (see Lucic at p 410) but also the "fading from memory" problem referred to in Wedesweiller v Cole (1983) 47 ALR 528.

    (c) Any prejudice to the respondent including any prejudice in defending the proceedings occasioned by the delay is a material factor militating against the grant of an extension: see Doyle at p 287, Duff at pp 484-485, Hickey at pp 525-527 and Wedesweiller at pp 533-534.

    (d) However, the mere absence of prejudice is not enough to justify the grant of an extension: Douglas at p 18, Lucic at p 416, Hickey at p 523. In this context, public considerations often intrude (Lucic, Hickey). A delay which may result, if the application is successful, in the unsettling of other people (Ralkon p 550, Becerra pp12-13) or of established practices (Douglas p 19) is likely to prove fatal to the application.

    (e) The merits of the substantial application are properly to be taken into account in considering whether an extension of time should be granted: Lucic p 417, Chapman p 6.

    (f) Considerations of fairness as between the applicants and other persons otherwise in a like position are relevant to the manner of exercise of the Court's discretion: Wedesweiller at pp 534-535.

21. As Wilcox J emphasised, these factors are intended as a guide and are not exhaustive.  The Tribunal must weigh together all of these factors in the light of the circumstances surrounding the specific application for extension.

    Length of delay

22. The delay between the date when Mcfadden was apparently advised of the decision (although in his evidence he said he did not remember receiving the advice at the time), and when he lodged his out of time application for review is not inconsiderable.  It amounts to some eight months.  The Tribunal must consider, as one of the factors to be taken into account, whether he rested on his rights. 

23. The Respondent argued that Mcfadden did rest on his rights.  The Applicant gave evidence to the Tribunal that he was suffering from mental illness at the time and had trouble coping with many daily activities, including paying bills, meeting deadlines and considering his correspondence, including that from the Department.  Mr Vasilyev, for the Applicant, submitted an undated letter from [the Applicant’s life trainer].  She said that Mcfadden had been seeing her for “more than 16 months” about how he manages stress levels and emotional trauma.  Mr Vasilyev accepted that [the Applicant’s life trainer] was not a trained medical professional but submitted the evidence as evidence not only that Mcfadden was experiencing difficulties in handling personal matters and that he had tried to do something about it. Mcfadden in his evidence said that his life trainer’s assistance had been the “only help that has worked” and he said it had been beneficial to him.  The Respondent noted that there was no evidence from the psychologist who had previously treated Mcfadden, in relation to his stress levels in the relevant period.

24. The Tribunal also had before it a letter from [the Applicant’s general practitioner], dated 3 August 2016. [The Applicant’s general practitioner] reported that Mcfadden saw him on 24 May 2016 and the Applicant told him that he had been “extremely stressed” over the past year about an “unreasonable request for child support based on theoretical figures”. [The Applicant’s general practitioner] went on:

    I believe that this situation led him to having a recurrence of his previously diagnosed anxiety state and led to a degree of post traumatic stress making him unable to make a rational decision about the demands from the child support agency.

25. Mcfadden said in evidence he had seen his general practitioner for “most of my life”.  He agreed that he did not consult his general practitioner about his mental state in 2015 and that his general practitioner was in this May 2016 letter reporting what the Applicant told him about that period of time. Mcfadden told the Tribunal he did see his general practitioner once in 2015 about a knee problem and believed he briefly discussed his stress levels on that occasion, but it was not the reason for that medical appointment.

26. Mcfadden did say he had travelled overseas in the relevant period both in connection with his work as a sales officer for a bathroom company and for holiday purposes.  This indicates that he was not unable to undertake certain tasks, but the Tribunal considers that in a person who has a history of stress, as corroborated by his doctor, undertaking other work connected with his employment does not mean that he might not have had trouble focussing on what he believed was a very unfair income assessment connected to what had been an acrimonious marriage breakdown.

27. The Tribunal concludes that there may be an element of Mcfadden resting on his rights, but there were reasons relating to that which went beyond mere dilatoriness.

    Explanation of the delay and awareness of appeal rights

28. Mr Vasilyev contended that the reason for the delay in lodging an application for review centred on Mcfadden’s emotional state at the time.  He said that Mcfadden had some history of mental health problems because of the acrimony surrounding the breakdown of his marriage to [FSNP]. He said that the Applicant had received counselling from a psychologist and had been prescribed antidepressants.

29. Mr Vasilyev conceded that these circumstances alone are not sufficient to allow an extension of time but contended that, because of them, Mcfadden should be placed further away from the standard expected of a reasonable person in pursuing their appeal rights promptly and within the legislative provisions.

30. The Tribunal considers that the explanation of the Applicant’s delay is not comprehensive, but also notes some administrative errors of the Department in relation to advice of his appeal rights, which are discussed below.

    Prejudice to the Respondent and [FSNP]

31. The Respondent submitted that there would be no prejudice to the Child Support Registrar but there may be some prejudice to [FSNP].  Counsel for the Applicant submitted that any prejudice to [FSNP] would be minor because it would alter a current debt owed to her and adjust her anticipated child support payments.

    Merits of the substantive case

32. As was made clear at the hearing, the substantive nature of Mcfadden’s application was not being examined by the Tribunal.  However it is necessary for me to look at the general nature of his application for review.

33. As Lord Denning MR stated in Mehta v Secretary of State for the Home Department (1975) 2 All ER 1084 at [1088]:

    We often like to know the outline of the case.  If it appears to be a case which is strong on the merits and which ought to be heard, in fairness to the parties, we may think it is proper that the case should be allowed to proceed, and we extend the time accordingly.  If it appears to be a flimsy case and weak on the merits, we may not extend the time.  We never go into much detail on the merits, but we do like to know something about the case before deciding whether or not to extend the time.

34. Mr Vasilyev contended that Mcfadden was the sole director at the relevant time of a company (Company 1) connected with bathroom products.  Evidence was submitted that there is a separate entity (Company 2) with a similar name of which IL was the sole director.  IL and Mcfadden have been married since 2011 but she submitted in her statement (Exhibit A3) that Mcfadden was a salaried employee of Company 2 and did not share in the profits.  The Applicant submitted that there had been confusion by the Department about of which company he was a director, and this led to a wrong ascription of income to him.

35. The Tribunal also had before it a letter dated 30 June 2016 from the Business Banking Manager of the Morley Branch of ANZ Bank which stated that Mcfadden is not a signatory to any of the existing accounts of Company 2.

36. AAT1 said (at paragraph 29):

    The tribunal concludes that there may be some merit in reviewing the substantive issues of this case, in particular whether the 20% allocation of [Company 2’s] profit [i.e. allocated by the objections officer] should have been included in [Mcfadden’s] income for child support purposes.

37. The Respondent, in submissions to this hearing, said:

    The Registrar accepts that it cannot at this stage be said that the Applicant’s proposed appeal has no prospect of success.

38. The Tribunal finds that prima facie there may have been an error in the assessment by the Department of Mcfadden’s income in the relevant period.  As the Tribunal was not reviewing that decision, I did not delve too deeply into this, except to conclude that Mcfadden’s application was not vexatious or nugatory and, if properly considered in its detail, may lead to a different decision than that made by the objections officer.

    Fairness to others in a similar position

39. The Applicant accepted the general principle, and the Respondent’s contention, that the granting of an extension of time could create uncertainty in the public view and recognised that there would be uncertainty to government agencies if out of time appeals were generally permitted.  However the Applicant submitted that, in accordance with the Hunter Valley decision, this is a matter where it would be “fair and equitable in the circumstances” to allow an extension of time as it would be inequitable to allow an incorrect assessment to lie.

40. The Tribunal adopts the general view that the Parliament puts statutory time limits in Acts deliberately, so that there can be reasonable avenues of appeal of administrative decisions but not infinite avenues.

    CONCLUSION

    General principles of procedural fairness

41. Having considered the Hunter Valley principles generally and noting Wilcox J’s caution that they are not exhaustive and should be as a guide to the exercise of discretion in relation to an extension of time, the Tribunal should also consider general principles of procedural fairness relevant to this particular matter.

42. The Tribunal notes that the Department did not send Mcfadden the original decision made on 30 April 2015.  In fact the Department initiated no contact nor sent him anything until he made contact on 14 May 2015 to inquire what was happening in relation to his objection. The Tribunal had before it a file note of that date written by an officer of the Department of a telephone conversation with Mcfadden in which the officer wrote that he had apologised for this oversight and advised that Mcfadden would be sent a written advice of the decision. Mcfadden under cross-examination said he could not remember the conversation but noted that the decision had not been sent to him at the time it was made.  The file note says that the decision will be sent to him “and an electronic copy”.  Mcfadden said that the Department had never sent electronic correspondence to him; when the Department did send him documents, it was by post.

43. The Tribunal also noted that in the letter sent to the Applicant, although there was a generic, pro forma, paragraph advising him how he could contact the SSAT if he wanted to lodge an application for review, the letter did not contain any advice about the time limit in which to do so.  The letter merely refers to a “limited timeframe”, without setting out what that timeframe is.  Given that the letter appears to be computer-generated, it would be a simple matter to set out the applicable timeframe more clearly in the standard paragraph advising a person of his or her avenues of appeal.  I believe it is not reasonable to expect a person, even a person who has had regular dealings with an agency, to be familiar with the specific provisions of the relevant Acts relating to timeframes for applications for review, without a temporal prompt. The phrase “limited timeframe” is uncertain.  When does the period begin, and when does it end?

1. The Applicant, even taking into account his personal problems, undoubtedly should have acted more quickly in lodging his appeal.  But a person is entitled to know where he or she stands, especially when dealing with a government agency.  When the Department made a decision on his matter, it omitted to tell him. When it did tell him in writing, it provided him with some information about rights of appeal.  But it omitted to tell him how long he had to lodge an appeal.   

2. I find that given these administrative deficiencies in the agency failing to advise Mcfadden of the original decision and the absence in the letter of 14 May 2015 of advice about a specific timeframe, there could be seen to have been a lack of procedural fairness in this matter. Coupling that with the conclusion of the Tribunal (which was also the conclusion of AAT1 and which was conceded by the Registrar) that the substantive nature of his application seems to be not without merit, after weighing up the contentions from both parties at the hearing, the evidence, and all the relevant factors, taken all together leads me to this conclusion: the correct and preferable decision in this specific case is to grant Mcfadden an extension of time to lodge his application for review.

   DECISION

3. The decision of the Social Services and Child Support Division of the Tribunal dated 23 March 2016 is set aside. The Applicant is granted an extension of time to lodge an application for review of the objections officer decision made on 30 April 2015.

I certify that the preceding 46 (forty -six) paragraphs are a true copy of the reasons for the decision herein of D. J. Morris, Member

......[Sgd]..................................................................

Administrative Assistant

Dated 22 December 2016

Date of hearing	13 December 2016
Representative for the Applicant	Mr E Vasilyev
Solicitors for the Applicant	Morris, Alexander & Nelson
Representative for the Respondent	Mr A Burgess
Solicitors for the Respondent	Sparke Helmore Lawyers