Mills and Mills (SSAT Appeal)
[2011] FMCAfam 181
•11 March 2011
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| MILLS & MILLS (SSAT APPEAL) | [2011] FMCAfam 181 |
| CHILD SUPPORT – Appeal from decision of SSAT – error of law – interpretation of consent order regarding discharge of arrears of child support – whether order ambiguous – reference by Tribunal to external sources of evidence to interpret order – whether evidence referenced by Tribunal was legally admissible – no error found – appeal dismissed. |
| Child Support (Registration and Collection) Act 1988, ss.80(1), 110B, 110E, 110F, 110G, 116(2) Child Support (Assessment) Act 1989, ss.3, 4(2), 4(3), 58(2), 58A, 95 |
| Neal v Secretary, Department of Transport (1980) 3 ALD 97 Comcare v Etheridge [2006] FCAFC 27 Blackwood Hodge (Australia) Pty Ltd v Collector of Customs (No.2) (1980) 33 ALD 38 Htun v Minister for Immigration & Multicultural Affairs (2001) 194 ALR 244 Apthorpe v Repatriation Commission (1987) 13 ALD 656 Re Minister for Immigration & Multicultural Affairs: Ex Parte Applicant S20/2002 (2003) 198ALR 59 Collector of Customs v Pressure Tankers Pty Ltd and Pozzolanic Enterprise Pty Ltd [1993] 43 FCR 280 LDME & JMA [2007] FMCAfam 712 Repatriation Commission v Nation (1995) 57 FCR 25 Kirkpatrick v Kotis [2004] NSWSC 1265 Hacherl & Berrios [2010] FMCAfam 668 Cawthorn v Cawthorn (1998) FLC 92-805 Codelfa Constructions Proprietary Limited v State Rail Authority of New South Wales (1982) 149 CLR 337 |
| Applicant: | MR MILLS |
| Respondent: | MS MILLS |
| File Number: | ADC 4824 of 2009 |
| Judgment of: | Brown FM |
| Hearing date: | 29 October 2010 |
| Date of Last Submission: | 29 October 2010 |
| Delivered at: | Adelaide |
| Delivered on: | 11 March 2011 |
REPRESENTATION
| Counsel for the Applicant: | Mr McQuade |
| Solicitor for the Applicant: | Adey Lawyers |
| Counsel for the Respondent: | Ms Ross |
| Solicitor for the Respondent: | Legal Services Commission of South Australia |
ORDERS
The Notice of Appeal (Child Support) filed on 7 December 2009 is dismissed.
The stay order made pursuant to section 111C of the Child Support (Registration and Collection) Act 1988 made on 17 February 2010 is dismissed.
IT IS NOTED that publication of this judgment under the pseudonym Mills & Mills (SSAT Appeal) is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT ADELAIDE |
ADC 4824 of 2009
| MR MILLS |
Applicant
And
| MS MILLS |
Respondent
REASONS FOR JUDGMENT
Introduction
These proceedings were commenced by Mr Mills “the applicant”. The respondent in the proceedings is Ms Mills “the respondent”. The proceedings are concerned with a decision of the Social Securities Appeal Tribunal (the SSAT) made on 10 November 2009.
On 7 December 2009, the applicant filed a notice of appeal, in this court, in respect of that decision. He seeks orders that the decision of the SSAT be set aside and in lieu thereof the court substitute its own decision.
Primarily the case concerns the interpretation of an order made by the Family Court at Brisbane on 20 August 1999 which related to the discharge of arrears of child support owed by the applicant to the respondent. Questions have arisen regarding the ambit of this order, particularly as it was only after the order was made and Mr Mills had filed a number of his outstanding tax returns for previous years that the exact amount of the arrears in question was determined.
The relevant order reads as follows:
“That the wife hereby expressly abandons any claims to and wholly releases the husband from liability in respect of any and all outstanding and unpaid accumulated arrears of child support owing by the husband to the wife as at the date hereof.”
This order was part of a comprehensive suite of orders, all of which were made on 20 August 1999 and which were intended to constitute final arrangements for the care of the parties’ three children; division of their matrimonial property; and what was termed child maintenance.
The orders made arose from a document entitled Terms of Settlement, which was subsequently ratified by a registrar of the Family Court at Brisbane and so took effect as an order of the Court. The Terms of Settlement were in the form of a deed, executed by each party.
The deed was described in its recital as being a “Child Support Agreement made pursuant to Part 6 of the Child Support (Assessment) Act 1989 and a Maintenance Agreement under Section 86 of the Family Law Act…” However the Child Support Agreement was a discrete document, which was apparently annexed to the deed entered into by each of the parties.
A note on the deed indicated as follows:
“The terms of the Child Maintenance Agreement are an integral part of the property settlement agreement.”
The agreement had two aspects. Firstly it recognised that Mr Mills had “pre-paid” an amount of child support in the sum of $13,600.00, as part of the settlement of the matrimonial property issues between the parties, which was to be “set off” against any future administrative assessments of child support payable by him, until it had been “fully consumed”.
Secondly it contained Ms Mills’ abandonment of any claim to “all outstanding and unpaid accumulated arrears of Child Support” owing to her by Mr Mills. The deed defined the term “child support” as meaning: “child support as defined by the Child Support (Assessment) Act 1989 and Child Support (Registration and Collection) Act 1989 (sic)”.
Child Support is essentially defined, in both pieces of legislation, as financial support provided pursuant to the provision of the Child Support (Assessment) Act 1989 including by way of lump sum payment or by transfer of property.
On 29 October 1999 the Child Support Agency (“the CSA”) was provided with a copy of these various orders, particularly the part of the Child Support Agreement purporting to discharge arrears of child support. Section 95 of the Child Support (Assessment) Act 1989 provides that were a child support agreement is accepted by the Registrar of the CSA such an agreement has the same effect as if it was an order made by the court.
The Registrar duly accepted the agreement and it has been regarded as an order of the court by the CSA. In compliance with its apparent terms the CSA discharged an amount of child support in the sum of $2,267.54, which had then been calculated as being owed by Mr Mills.
Earlier, on 23 March 1999, the Deputy Child Registrar had issued a certificate, which indicated Mr Mills owed a child support debt of $1,925.42, which was then due and payable to the Commonwealth for the benefit of Ms Mills.[1] It is clear that Ms Mills was aware of this certificate at the time the orders of 20 August 1999 were made.
[1] The certificate was issued pursuant to section 116(2) of the Child Support (Registration and Collection) Act 1988. This section provides that “the mere production of a certificate in writing signed by the Registrar, certifying that an amount specified in the certificate was, on the date of the certificate, due and payable by a specified person to the Commonwealth in relation to a specified registrable maintenance liability…is prima facie evidence of the matters stated in the certificate.”
The parties concerned are the parents of three children: [X] born [in] 1989; [Y] born [in] 1991; and [Z] born [in] 1995. There is no issue that these children have lived predominantly with the respondent at all relevant times.
The parties married [in] 1987 and separated on 30 October 1995. It is unclear to me precisely when the respondent applied for an administrative assessment of child support payable by Mr Mills for the three children concerned, but it is likely to have been in the latter part of 1995.
In addition, I have not been provided with any of the initial assessments, which were first issued by the CSA in respect of child support due and payable by Mr Mills. Accordingly, I am unsure what was the child support income attributed to him and the basis of its calculation.
However, it seems clear that the sum calculated for his child support income was not initially based on income tax data provided by the Australian Taxation Office (the ATO) to the CSA for the child support periods in question. Rather, the CSA had calculated child support due by Mr Mills on the basis of a provisional level of income it had attributed to him.
I reach this conclusion because of the following passage, which appears in the SSAT’s reasons for decision:
“On 20 January 2000 and 31 January 2000, the CSA received details of Mr Mills’ taxable income for the years 1993-1997 from the Australian Taxation Office.
On 17 June 2000, the CSA replaced the provisional incomes previously used in the administrative assessment of child support with the taxable incomes received in January.”[2]
[2] See reasons for decision dated 10 November 2009 at paragraphs 6-7
It is common ground between the parties that, in late 1999, after the parties’ property, childrens proceedings and related child support matters had been finalised in the Family Court at Brisbane, Mr Mills lodged personal tax returns, with the ATO, for the tax years ending
30 June 1994; 30 June 1995; 30 June 1996; and 30 June 1997.
As a consequence, the CSA had actual income figures for Mr Mills, which were applicable to the calculation of child support for the years following the parties’ separation. Utilising these figures, the CSA recalculated child support, determining that the actual figures for arrears of child support, in the post separation period, was $23,836.77.
On 31 August 2000, in accordance with its interpretation of the orders of 20 August 1999, the CSA determined to discharge the recalculated level of arrears. Neither party took any formal action in respect of this decision at the time.
On 18 May 2009, Ms Mills objected to the CSA’s decision to discharge the adjusted amount of child support standing in the sum of $23,863.70 rather than the sum initially calculated around the time of the making of the Family Court order. Because of the effluxion of time, Ms Mills was required to seek an extension of time in which to lodge her objection.
The extension of time application was dealt with on 3 July 2009. The extension of time was granted. It being found that Ms Mills was not formally advised of the CSA’s decision of 3 August 2000 at the time and only became aware of her objection rights on 31 March 2009. Accordingly, it was found that there was a valid reason for the delay in presenting the objection.
This led to an objections officer, of the CSA, considering Ms Mills’ objection on 10 September 2009. Pursuant to section 80(1) of the Child Support (Registration & Collection) Act 1988 (the Collection Act) a person may lodge an objection, in writing, with the Registrar of the CSA in respect of any decision taken to vary a registrable maintenance liability.
The objections officer concerned did not change the CSA’s decision, made on 31 August 2000, to discharge the amount of arrears in the sum of $23,836.77, which had been calculated by reference to Mr Mills lately submitted tax returns. The objections officer found as follows:
“The child support legislation does not expressly provide for arrears to be discharged but CSA will give effect to these orders and agreements where possible by varying the rate of child support for a specified period.
To avoid any uncertainty a departure order or agreement which seeks to discharge arrears should set the rate of child support for the period equal to the amount which has already been paid.
As the court order did not set the annual rate for the period equal to the amount which has already been paid, CSA takes the position that a court order will be implemented as far as practical to give effect to its intention.
The wording of the order: …abandons any claim to and wholly releases the husband from liability in respect of any and all outstanding and unpaid accumulated arrears of child support owing by the husband to the wife as at the date hereof are not “limiting” words.
As such the order cannot be taken to convey that the courts intention was to limit the amount of the discharge to the amount shown on Mr Mills’s account when the order was issued.
Ms Mills has not provided any evidence with regard to the intention of the order other than her own interpretation of the relevant clause as to meaning the amount for discharge was $1924.42.
…
As there is no stipulated amount for discharge on the order, CSA must action the order on face value based solely on the direction that Mr Mills’s arrears be determined by the period nominated: to the date of the order.
Therefore I find that the arrears for the period 29/10/1995 to 19/08/1999 be discharged.” [3]
[3] See annexure G of the mother’s affidavit filed 11 May 2010 – page 35
In effect, the objections officer found that Ms Mills had not demonstrated that it was the intent of the order concerned to limit the amount of child support to be discharged to the specific time at which the order was made, namely 20 August 1999. The objections officer determined that the order did not limit the amount of child support to be discharged.
The respondent appealed this decision to the SSAT on 23 September 2009. The hearing was held on 5 November 2009. The decision of the Tribunal was as follows:
“On 9 November 2009, pursuant to section 103S of the Child Support (Registration & Collection) Act 1988, the Tribunal decided to set aside the decision under review and find that the Child Support Register shall be varied so as to record the discharge of arrears as $2,267.54 on 20 August 1999. This means that all other arrears raised as a result of the amendment to the assessments on 14 June 2000 shall be reinstated to the Child Support Register.”
It is this decision that is the subject of the appeal to this court.
The SSAT hearing
I have not been provided with a transcript of the proceedings before the SSAT. However, from the Tribunal’s decision, it is clear that evidence was taken from each of the parties and it considered documents tendered by Ms Mills. The Tribunal summarised this evidence as follows:
“Ms Mills submitted that her intention was to forgive arrears of approximately $2,000. She did this reluctantly but ultimately consented on the basis of legal advice that she feels left her with no choice. She accused Mr Mills of deliberately delaying the lodgement of his returns because he knew that they would create a greater liability.
Mr Mills denied that there was any intent to deceive in the timing of his return lodgement. He maintained that Ms Mills’ intent was to waive all arrears.
Ms Mills position is supported by the objective evidence that she sought a statement of arrears prior to consenting to the Court Order. She clearly had approximately $2,000 in mind at the time she consented to a waiver of arrears. Mr Mills has produced no evidence which would dispute that proposition.”[4]
[4] See Reasons for Decision at paragraphs 15-17
In its decision the SSAT correctly noted that the order of 20 August 1999 did not specify an exact amount of arrears. Nor did the order provide a definite formula or other mechanism by which the amount of arrears to be discharged could be definitively calculated.
In these circumstances, the Tribunal made findings of fact about what it considered would have been in the minds of each of the parties concerned at the time of the making of the Brisbane Family Court orders. The Tribunal found as follows:
“At the time the order was made, this [the amount of arrears] was an amount able to be definitely ascertained as $2,267.54. Mr Mills could not know with any certainty that it would be any different as his tax returns were still being prepared. Ms Mills knew that the amount was at least $1,925.52 and likely to be slightly more given the elapsed time between the statement was provided and the court order signed.”[5]
[5] Ibid at paragraph 18
The sum of $1925.42 referred to in the SSAT decision, was the figure which the CSA had provided to Ms Mills as being the arrears of child support outstanding as at 23 March 1999.[6] This figure was provided to Ms Mills in the form of a certificate pursuant to section 116(2) of the Collection Act. This provision provides that such a certificate is prima facie evidence of the amount of any child support outstanding as at the date of the certificate concerned.
[6] See SSAT Reasons for Decision at paragraph 4
These factors appeared to be the basis of the following statement made by the SSAT in respect of what it believed was the affect of the parties consenting to the order of 20 August 1999. The SSAT said as follows:
“The court order uses the phrase ‘as at the date hereof’. Given this, the Tribunal cannot draw any other conclusion that the parties were consenting to the discharge of arrears as they stood at the time of the court order and not to some, yet to be determined, future amount.”[7]
[7] Ibid at paragraph 19
The SSAT then posed itself the following question: “Is the CSA stopped from raising further arrears”, as a consequence of its acceptance of the Brisbane Family Court order. In its answer to the question, the Tribunal considered the application of the equitable doctrine of res judicata or issue estoppel to the circumstances of the case, particularly whether the words of the order, which discharged all outstanding and unpaid accumulated arrears of child support, prevented the CSA from collecting further arrears of child support from Mr Mills.
The Tribunal concluded that issue estoppel was not applicable in circumstances where the performance of a statutory duty or the exercise of a statutory discretion was involved in an administrative or public law area. It was of the view that the collection of child support, by the Registrar of the CSA, pursuant to the applicable statutory regime was such a duty.
In this context, the SSAT made reference to the provisions of section 58(2) of the Child Support (Assessment) Act 1989 (the Assessment Act). Given the context of the reference, I believe that the Tribunal has erroneously referred to section 58(2) and must in fact mean section 58A(2) of the Assessment Act.
Section 58 of the Assessment Act grants a discretion to the Registrar of the CSA to determine what is a parents adjustable taxable income for any application child support year in the absence of a tax return from that parent for the period in question. It was pursuant to this discretion that the Registrar calculated Mr Mills’ child support liability prior to him lodging his taxation returns for the years ending 30 June 1994 and onwards.
Pursuant to section 58A of the Assessment Act, when the Registrar subsequently becomes aware of what a parent’s adjusted taxable income is because that parent has filed a tax return for any period to which an assessment made pursuant to the provisions of section 58, the Registrar is mandatorily obliged to amend the administrative assessment of child support in question.
As a consequence, in the present case, the SSAT determined as follows:
“… As relevant in the present case, subsection 58(2) of the Child Support (Assessment) Act 1989 requires the Registrar to amend an administrative assessment if and when the parent’s adjusted taxable income is subsequently ascertained. The res judicata raised by the Court Order cannot, in the Tribunal’s view, override the clear words of the Parliament. So, not only is it possible for the Registrar to amend Mr Mills’ administrative assessment, it is the Registrar’s mandatory duty to do so.”[8]
[8] Ibid at paragraph 23
These various matters caused the SSAT to conclude as follows:
“Under section 103S of the Child Support (Registration & Collection) Act 1988, the Tribunal may vary or set aside a decision. In doing so, the Tribunal can exercise all the powers and discretions that are conferred to the registrar under the Act.
The Tribunal has found that a strict reading of the Court Order leads inevitably to the conclusion that it was intended to discharge arrears of $2,267.54. The Tribunal has also found that the CSA was not estopped by the operation of the Court Order from subsequently assessing additional arrears for a period prior to the date of the Court Order.
Accordingly the Tribunal will set aside the decision under review and find that the Child Support Register shall be varied so as to record the waiver of $2,267.54 on 20 August 1999. All other arrears shall be reinstated to the Child Support Register.”[9]
[9] Ibid at paragraphs 24-26
The grounds of appeal
In his notice of appeal filed on 7 December 2009, Mr Mills provided the following grounds of appeal.
“That the Decision of the Learned Members of the Social Security Appeals Tribunal was wrong in law in finding that:-
a) the terms of the Child Support Agreement as evidenced by the Family Court order made on 20th August 1999 did not discharge the arrears of child support accrued pursuant to reassessments of child support made on 17th June 2000;
b) the respondent was entitled pursuant to Section 80(l) of the Child Support (Registration & Collection) Act 1988 to pursue a review of the particulars contained in the child support register in relation to the registrable maintenance liabilities of the parties;
c) the respondent was not estopped from pursuing a review of the Decision of the Child Support Agency to discharge the arrears of child support;
d) the arrears accrued pursuant to the reassessment of child support made on 17th June 2000 fell outside of and were not covered by the terms of the Family Court order and Child Support Agreement made on 20th August 1999.
That the Decision of the Learned Members of the Social Security Appeals Tribunal was wrong at law in that the Tribunal did not have jurisdiction to determine issues relating to the interpretation of the Family Court order and Child Support Agreement dated 20th August 1999 or the relevant intentions of the parties at that time.
That the Decision of the Learned Members of the Social Security Appeals Tribunal was wrong at law in that they did not accord the appellant with natural justice in that the Tribunal did not permit the appellant to provide evidence in relation to the relevant particulars as contained in the reassessments of child support made on 17th June 2000 and in particular in relation to the accuracy of the respondent’s income used for the purposes of the various child support assessments.
That the Decision of the Learned Members of the Social Security Appeals Tribunal was wrong at law in that they failed to consider properly or at all the issues of fairness and justice as between the parties.”
The Issues on the appeal
Not all of these grounds were pursued at the hearing of the appeal. In particular, no exception was taken to the fact that Ms Mills had commenced the objection process well out of time. In addition it was not asserted that there had been any specific incident of procedural unfairness during the hearing of 5 November 2009.
The main emphasis in the applicant’s case is that the order of 20 August 1999 is not ambiguous in any way. As such, the order does not require interpretation by reference to any external sources of evidence. Its clear intention, on its face, was to discharge all outstanding arrears of child support.
Accordingly the applicant argues that the SSAT fell into legal error in referring to evidence gathered by it to glean what was the intent of the parties themselves, when they mutually agreed to the order. The applicant asserts it was legally impermissible for the Tribunal to do so, given the lack of ambiguity in the order. As such the intention of the parties, at the time of the making of the order, is irrelevant.
The respondent’s position is that the appeal is unmeritorious and should be dismissed. Her position revolves about what she asserts was her understanding of the situation between the parties, when the order was made. In particular, she makes reference to the following incidents:
·the certificate dated 7 March 1999 indicating a child support debt of $1,925.42;[10]
·a letter was sent by the father’s then solicitors to her then solicitors in June of 1999 which made reference to the question of arrears of child support. The relevant passage reads as follows:
“Nobody is sure what the arrears are and certainly for a substantial period of time our client had no income there it would be a limited sum.”[11]
[10] Referred to in paragraph 4 of the Reasons for Decision.
[11] See Exhibit B to the respondents affidavit filed on 11 May 2010.
Accordingly, it is Ms Mills’ position that when she consented to the relevant order of August 1999, she “agreed to discharge all outstanding and unpaid accumulated arrears of child support as at the date of the orders, an amount [she] believed to be about $2,000.”[12]Her evidence of what she thought those arrears were being support by both the CSA certificate and the letter of June 1999.
[12] Ibid at paragraph 7.
The nature and legislative basis of appeals to this court from the SSAT
The nature of an appeal to this court, from a decision of the SSAT, is governed by the provisions of Division 3 of Part VIIA of the Collection Act, in particular section 110B, which reads as follows:
“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.”
This court is authorised to hear such appeals from the SSAT by virtue of the provisions of section 110E of the Collection Act. Pursuant to section 110F of the Collection Act, having determined any such appeal, I am authorised to make any order, which I believe is appropriate but particularly may:
·affirm or set aside the decision of the SSAT; or
·remit the case to be heard again by the SSAT, either with or without the hearing of further evidence.
The first question to consider is what is the nature of an appeal on a “question of law”? The provisions of the Child Support Legislation Amendment (Reform of the Child Support Scheme – New Formula and Other Measures) Act 2006 have significantly reformed the review process in respect of administrative decisions of the Child Support Registrar. The legislation has inaugurated an independent process of review through the SSAT. This process is external of the Agency’s processes and is administrative in nature.
Pursuant to the provisions of section 110B, any further appeal from the SSAT is limited in nature. It is limited only to an examination of how the SSAT applied or failed to apply the applicable principles of law, which were relevant to the determination of the appeal issue which came before it.
As such, an appeal to this court, pursuant to section 110B, does not constitute a rehearing on the merits of the case nor should this court, other than in exceptional circumstances, challenge findings of fact made by the SSAT.[13]
[13] See Child Support (Registration and Collection) Act 1988 at section 110G(1)
The power of this court, in an appeal from the SSAT, to make finding of facts is limited by the provisions of section 110G of the Collection Act. The court may make a finding only if the following two provisos are satisfied:
·Such a finding of fact is not inconsistent with findings of fact made by the SSAT – other than findings made by the SSAT as a result of an error of law.
·It is convenient for the court to make such findings of fact.
Pursuant to section 110G(2) for the purpose of making such findings of fact the court may either have regard to the evidence given in proceedings before the SSAT itself or receive further evidence. However, it is clear that the power to receive further evidence is dependant upon the court discerning an error of law in the decision of the SSAT, which is subject to appeal. Essentially, this court, in its appellant jurisdiction from the SSAT, must be careful not to allow evidence to be adduced in the hope advocated by any appellant that an error of law will thus be demonstrated.
Accordingly, this court should not be concerned as to whether or not it would have come to the same conclusion as the SSAT did, but only whether the SSAT erred in law,[14] as it is only in “exceptional circumstances” that the decision of the Tribunal should not be the final decision.[15]
[14] See Neal v Secretary, Department of Transport (1980) 3 ALD 97 at 100 per Franki J and Comcare v Etheridge [2006] FCAFC 27 at paragraph [14] per Branson J.
[15] See Blackwood Hodge (Australia) Pty Ltd v Collector of Customs (No 2) (1980) 33 ALD 38 at 49 per Fisher J.
It is the function of this court to determine whether the decision of the SSAT was within its legal powers. That is what is meant by a question of law. It is not the function of this court to examine the merits of that decision.
As such, I should be cautious to approach the decision of the SSAT with “an eye [which is] too keenly attuned to perception of error”.[16]Rather I should take a commonsense approach to what the SSAT was saying in its decision and the reasons why it did said what it said.
[16] See Htun v Minister for Immigration & Multicultural Affairs (2001) 194 ALR 244 at 258
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.[17]
[17] See Apthorpe v Repatriation Commission (1987) 13 ALD 656 at 666
As Gleeson C.J. pointed out in Re Minister for Immigration & Multicultural Affairs: Ex Parte Applicant S20/2002:[18]
“To describe reasoning as illogical, or unreasonable or irrational, may merely be an emphatic way of expressing disagreement with it. If it is suggested that there is a legal consequence, it may be necessary to be more precise as to the nature and quality of the error attributed to the decision maker, and to identify the legal principal or statutory provision that attracts the suggested consequence.”
[18] Re Minister for Immigration & Multicultural Affairs: Ex Parte Applicant S20/2002 (2003) 198ALR 59 at 61
In Collector of Customs v Pressure Tanker Pty LtdandPazzolanic Enterprises Pty Ltd,[19] the Full Court of the Federal Court, in respect of the Administrative Appeals Tribunal, characterised the nature of an appeal, restricted to a question of law, from a fact finding and decision making tribunal as follows:
“… the nature of the task of this court is clear. It is to leave to the tribunal of fact decisions as to the facts and to interfere only when the identified error is one of law.”
[19] Collector of Customs v Pressure Tankers Pty Ltd and Pozzolanic Enterprise Pty Ltd [1993] 43 FCR 280
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;[20]
·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”.
[20] See LDME & JMA [2007] FMCAfam 712 at paragraph 29
The legal underpinning of the Child Support Scheme
Pursuant to section 3 of the Assessment Act, the parents of children have the primary duty to maintain their children financially. This duty has priority over all other commitments a parent may have, other than the necessary commitments to enable the parent to support him or herself, or any other child that that parent may have a duty to maintain.
The principal object of the Assessment Act is “to ensure that children receive a proper level of financial level from their parents.” In my view what is “proper” in any given case must largely depend on the appropriate application of the legislative regime for the calculation of child support to the individual circumstances of each case.
This principal object is further delineated by the particular objects of the Assessment Act as set out in section 4(2) and include the following:
a) that the level of financial support to be provided by parents for their children is determined according to their capacity to provide financial support and, in particular, that parents with a like capacity to provide financial support for their children should provide like amounts of financial support; and
b) that the level of financial support to be provided by parents for their children should be determined in accordance with the costs of children; and
c) that persons who provide ongoing daily care for children should be able to have the level of financial support to be provided for the children readily determined without the need to resort to court proceedings; and
d) that children share in changes in the standard of living of both their parents, whether or not they are living with both or either of them.[21]
[21] These specific objects were not in force when the parties entered into the applicable child support agreement, which resulted in the orders of 20 August 1999. Rather section 4(2)(b) provided that the level of financial support to be provided by parents for their children was to be determined by legislatively fixed standards rather than by reference to the actual costs of children.
As can be seen from these various objectives, stipulated by the Legislature, one of the intentions of the child support scheme is that it should be standardised in the sense that its application is readily predictable to those effected by it and not dependent upon the application of any individualised judicial discretion, unless special circumstances can be demonstrated to exist in the case concerned.
The practical underpinning of this objective is the statutorily based child support formula, which is to be administratively applied to the financial circumstances of the parents concerned. The formula has recently been significantly amended by the provisions of the Child Support Legislation Amendment (Reform of the Child Support Scheme – New Formula and Other Measures) Act 2006, which of course was not in place when the order of August 1999 was made.
However, in general terms, both before and after the various amendments, the formulaic basis for the calculation of child support depends on two main variables: what is the taxable income for each parent concerned; and what is the level of care provided by those parents to any relevant child or children.
As rates of parental income and levels of care change from time to time, so should the amount of child support to be paid, as a consequence of those changes and in pursuit of the legislature’s objective that child support should be determined in accordance with parents’ financial capacity to provide that support and children should share in the standard of living of their parents.
Accordingly the formula works most efficiently when the taxable incomes of parents are readily and fairly ascertainable. Most easily this occurs when income is taxed at source, as is the case with PAYG [Pay As You Go] taxpayers, who receives wages from their employers after tax has been deducted.
For such taxpayers, the completion of a tax return is not usually either an unduly complicated or a controversial affair and provides a transparent basis for the calculation of his/her child support income to which the formula can readily attach.
However, in a variety of circumstances, a liable parent may not have prepared a tax return for a period relevant to the calculation of child support, notwithstanding the requirement to furnish such a return. In these circumstances, the Registrar of the CSA is authorised to determine what should be the appropriate level of income for the child support period in question. If the Registrar did not have such a power, the system to provide periodic assessments of child support might otherwise break down.
However the integrity of the system is based on its reference to the actual income of parents (after the deduction of certain specific amounts allowed for self-support). Accordingly, if and when the Registrar subsequently becomes aware of what a liable parent’s actual taxable income was for any period in question, by reason of the filing of a tax return, the Registrar must amend the assessment in question to reflect that parent’s income.
The applicable legislation indicates that the assessments in question are to be amended so that the child support income for the parent in question is and has always been the amount subsequently ascertained or later determined. Accordingly assessments made by the Registrar, as to the appropriate level of income of a parent in question are, by their nature, provisional and subject to irrevocable revision, when that parent’s taxable income is subsequently definitively ascertained.
Essentially child support assessments can be retrospectively amended with the effect that the subsequent assessment “is and has always been” what the assessment has more recently been calculated to be. This power to amend is, it would seem, designed to ensure that the primary objects of the legislation are met.
Section 4(3) of the Child Support (Assessment) Act 1989 recognises the desirability of parents reaching agreement for the financial support of their children. When interpreting the Act, the section requires that “the Act should be construed, to the greatest extent consistent with the attainments of its objects:
a)to permit parents to make private arrangements for the future financial support of their children; and
b) to limit interferences with the privacy of persons.”
This provision was in place in 1999, when the parties entered into their controversial child support agreement. In more recent times, the Legislature has recognised that disputes between separated parents, as to on-going financial support for children, are a source of conflict between such parents and, as such, potentially deleterious to the emotional well-being of children.
In this context the legislature is supportive of parents making private agreements in respect of the private provision of long term financial support for their children. The hope being that such consensual arrangements will lessen the potential for conflict between separated parents.
In a case such as this one, involving what purports to be a child support agreement, there may be tensions arising from the support the legislation offers to parents to make private arrangements for the financial support of their children and the other objects set out in section 4(1) and (2) of the Assessment Act. However in any such situation of conflict, the principal object to ensure children receive a proper level of financial support must be given pre-eminence.
The Applicant’s Case
The applicant’s position is that the child support agreement, which subsequently took effect as a court order, is not ambiguous on its face. Accordingly, the SSAT was not entitled to have regard to extrinsic sources of evidence to interpret the order. In particular, it was not entitled to make findings about what it regarded to be the intentions of the parties themselves, when they executed the child support agreement in 1999.
In support of this position, Mr McQuade, counsel for Mr Mills made reference to an article by Mr Tarrant: Construing undertakings and court orders.[22]In the article Mr Tarrant made reference to the case of Repatriation Commission v Nation [23] which held that “evidence of surrounding circumstances is admissible to assist in the interpretation of an instrument if the language is ambiguous or susceptible of more than one meaning.”
[22] Tarrant, John Construing undertakings and court orders (2008) 82 ALJ 82
[23] Repatriation Commission v Nation (1995) 57 FCR 25 at 33
As such, Mr McQuade favours the view taken of the order by the Objection Officer. He argues that the order in question is not ambiguous, as there is no explicit limitation on the period or extent of the arrears of child support to be discharged. The orders must be taken as a “freestanding piece of prose, unaffected by any surrounding circumstances, for the purpose of deciding their construction.”[24] As such, no reference need be had to any extrinsic sources of evidence to interpret the orders.
[24] See Kirkpatrick v Kotis [2004] NSWSC 1265 per Campbell J at paragraph 39
However, if regard is had to such sources, Mr McQuade submits particular care needs to be taken to avoid the court having regard to evidence of what the parties thought they intended to achieve with the orders concerned. In this regard, he makes reference to Mr Tarrant’s article as follows:
“When construing consent orders it is not permissible to look at the actual intention of the parties or their legal representatives. The consent orders can only be construed by reference to admissible surrounding circumstances as was done by Plowman J in General Accident Fire & Life Assurance Corp Ltd v Inland Revenue Commissioners [1963] 1 All ER 618. Plowman J said that a consent order must “be construed in the light of any admissible evidence of surrounding circumstances, but without direct evidence of the parties’ intention” (at 627). He explained that evidence of surrounding circumstances “includes evidence as to the nature of the dispute which was comprised by the order” (at 627).”
In this particular case, Mr McQuade submits that the various categories of evidence, to which the court can have regard in construing ambiguous consent orders is limited to the following: any reasons for judgement; pleadings; and any correspondence between the parties. He referred me to the comments of Hope JA in Rogers v Wentworth as follows:
“A consent order must… be construed in the light of any admissible evidence of surrounding circumstances, but without direct evidence of the parties’ intention.”[25]
The emphasis, in Mr McQuade’s submission, being on the words direct evidence.
[25] Ibid at paragraph 39
In this case, the pleadings leading up to the orders of August 1999 can no longer be found. Given it was a consent order, there are no reasons for judgement. The extant correspondence between the parties’ lawyers is limited. It is Mr McQuade’s submission that the letter of June 1999 only indicates that the parties agreed that the amount of child support to be discharged would be in an indeterminate amount.
The Respondent’s Case
Ms Ross, counsel for Ms Mills submits that the function of the order made on 20 August 1999 is clear. It was to discharge the extent of the arrears of child support as at the date of that order rather than to discharge any recalculated amount arising from fresh information coming to light regarding the father’s level of income in past child support periods.
Ms Ross drew a parallel between the circumstances prevailing in this case and what was said by Roberts FM in Hacherl & Berrios,[26] which was a child support departure case and as such before any departure was made from an administrative assessment the court had to be satisfied that such a departure would be just and equitable.
[26] Hacherl & Berrios [2010] FMCAfam 668
The departure application arose because the payer in the case had lodged a significant number of overdue tax returns, which had changed his assessable income for child support purposes. Because of the period which had elapsed since the assessments were made, the payer had to make application to the court for leave to proceed with his application. This leave was declined.
Roberts FM said as follows:
“I see the matter somewhat differently. The law obliges all of us to keep our taxation affairs in order and to lodge income tax returns on time on an annual basis, so it should not be seen as a virtue to lodge income tax returns simultaneously for seven separate years. In my view, the father must be seen as the author of his own misfortune in relation any difficulties that the CSA may have had in assessing child support prior to the time that his tax assessments were available.
…
In Cawthorn v Cawthorn[27] the Full Court of the Family Court of Australia said:
‘To obtain the relief that he seeks, the husband must establish to the Court that his cause is one which is just and equitable. One of the principal maxims of equity is “he who comes into equity must come with clean hands”. The husband’s hands are, in our view in the circumstances of this case, very far from clean. We would accordingly decline to grant relief….’
In this particular matter, the father does not come to court with clean hands in relation to the lodgement of his tax returns. He should not therefore be allowed to rely upon his own dilatory behaviour to obtain relief in relation to a period when the Child support agency was hampered by his failure to lodge tax returns for a number of years.”[28]
[27] Cawthorn v Cawthorn (1998) FLC 92-805 at page 85,062
[28] See Hacherl & Berrios at paragraph 35 & 40-41
By necessary implication, it is Ms Ross’ submission that considerations of justice and equity should not permit an interpretation of the order, which is unfavourable to her client, when to a significant extent any ambiguity arising from the order has been as a result of the conduct of the applicant in failing to deal with his taxation affairs promptly and responsibly. This lack of diligence, on his part, resulted in a situation of uncertainty regarding the exact monetary extent of the arrears to be discharged.
In Ms Ross’ submission, if the order in question is found to be ambiguous, the court would be entitled to look to two specific sources of parol evidence to resolve the ambiguity. These take the form of the certificate issued by the CSA on 23 March 1999, which set the arrears of child support in the sum of $1,925.42 and the letter from the applicant’s solicitors dated 25 June 1999, which made the concession that the level of arrears to be discharged “would be a limited sum”.
Accordingly it is her position that the circumstances surrounding the order for the discharge of arrears of child support indicate that the order in question was designed to discharge an amount of arrears within certain parameters, known to each of the parties – namely the amount was to be limited and its quantum was to be directly referable to the section 116(2) certificate, which was prima facie proof at the time of the amount of the arrears.
Discussion
The SSAT did not specifically pose itself the questions, which were essentially the subject of argument before me, namely is the order of 20 August 1999 ambiguous and if so, what sources of evidence should be accessed to resolve that ambiguity? However, in my view, it clearly operated on the basis that the order in question was unclear and, as such, its task was to interpret the order, given the dispute between the parties as to what the order meant.
In this regard, the Tribunal noted that the order in question did not specifically specify an amount of arrears to be discharged. In so doing, it recognised the difficulty arising from this omission in the order. The section of the decision under the heading “Considerations” deals with how the SSAT went about the task of interpreting the order in question. The question for this court is whether any error of law arises from the methodology adopted by the Tribunal in the manner in which it approached this task.
The SSAT made reference to the use of the phrase in the order “as at the date hereof” and indicated that it was unable to draw any other conclusion than that the “parties were consenting to the discharge of the arrears as they stood at the time of the Court Order and not to some, yet to be determined, future amount.”[29]
[29] See SSAT Reasons for Decision at paragraph 19
In reaching this conclusion, the SSAT had regard to the fact that Ms Mills had access to the certificate issued by the Registrar on 23 March 1999, which indicated an amount of arrears of around $2,000.00. It went on to assert that this was the sum she had “in mind” when she consented to the order. On the other hand the SSAT inferred that Mr Mills could not have had an alternative sum in his contemplation because his relevant tax returns were still in the course of preparation.[30]
[30] ibid at paragraph 18
Mr McQuade categorises this as being indicative of an error of law on the part of the SSAT because it has erroneously attempted to ascertain what the individual intentions of each of the parties, particularly
Ms Mills, were at the time of the consent order, in its construal of it.
I do not agree.
In my view, the rules applicable to the interpretation of an ambiguous consent order are more nuanced than a strict prohibition on courts and tribunal having regarded to the intentions of the parties to such an order at the time of its making. The court is entitled to have regard to the circumstances surrounding the making of the order.
In Kirkpatrick v Kotis[31], Campbell J drew parallels between the principles to be applied to interpreting a consent order and those which applied to an ambiguous contractual document. He said as follows:
“…authority and principle both favour the view that surrounding circumstances can be used to construe a consent order. The type of surrounding circumstances which can be used are those which can be used to construe a contract, in accordance with the principles laid down by Mason J in Codelfa Constructions Proprietary Limited v State Rail Authority of New South Wales.”
[31] Kirkpatrick v Kotis (ibid) at paragraph 45
In Codelfa[32] Mason J (as he then was) said as follows (the emphasis is mine):
“The true rule is that evidence of surrounding circumstances is admissible to assist in the interpretation of the contract if the language is ambiguous or susceptible of more than one meaning. But it is not admissible to contradict the language of the contract when it has a plain meaning. Generally speaking facts existing when the contract was made will not be receivable as part of the surrounding circumstances as an aid to construction, unless they were known to both parties, although, as we have seen, if the facts are notorious knowledge of them will be presumed.
It is here that a difficulty arises with respect to the evidence of prior negotiations. Obviously the prior negotiations will tend to establish objective background facts which were known to both parties and the subject matter of the contract. To the extent to which they have this tendency they are admissible. But in so far as they consist of statements and actions of the parties which are reflective of their actual intentions and expectations they are not receivable. The point is that such statements and actions reveal the terms of the contract which the parties intended or hoped to make. They are superseded by, and merged in, the contract itself. The object of the parol evidence rule is to exclude them, the prior oral agreement of the parties being inadmissible in aid of construction, though admissible in an action for rectification.
Consequently when the issue is which of two or more possible meanings is to be given to a contractual provision we look, not to the actual intentions, aspirations or expectations of the parties before or at the time of the contract, except in so far as they are expressed in the contract, but to the objective framework of facts within which the contract came into existence, and to the parties' presumed intention in this setting. We do not take into account the actual intentions of the parties and for the very good reason that an investigation of those matters would not only be time consuming but it would also be unrewarding as it would tend to give too much weight to these factors at the expense of the actual language of the written contract.”
[32] Codelfa Constructions Proprietary Limited v State Rail Authority of New South Wales (1982) 149 CLR 337 at 352
I consider that the order of 20 August 1999 is ambiguous. The lack of clarity stems from the fact that the order does not provide a specific sum of arrears to be discharged or provide a mechanism for the calculation of the sum in question. The words “any and all” in the order, in reference to child support arrears, are not, in themselves, limiting words.
These words are qualified however by reference to the phrases “outstanding and unpaid accumulated” and “as at the date hereof”. The word accumulate derives from the Latin cumulus a heap and the verb accumulare to heap up. In English, the verb accumulate is defined as to “acquire an increasing number of; heap up”. The past participle accumulated is defined as “heaped up; collected;” The adjective “outstanding” is defined in the applicable context as “not yet settled (especially of a debt)”. The adjective “unpaid” is defined as “not paid (of a debt or a person”. [33]
[33] See Oxford English Dictionary
The expression ‘as at the date hereof” is unambiguous. It refers to the orders themselves. The date of their making is not controversial. It is 20 August 1999. The difficulty is that the provisions of the Child Support legislation, in particular section 58A of the Assessment Act, require the Registrar of the CSA to retrospectively amend a child support assessment (including the amount of any arrears arising from such amendment), if fresh information comes to hand about the level of a liable parent’s taxable income. This has the potential to increase (or decrease) the quantum of arrears.
The child support agreement, which is a part of the orders defines child support and, by necessary implication arrears of such child support, in terms of the child support legislation, which empower the Registrar of the CSA to create retrospective assessments of child support in appropriate circumstances.
The difficulty, which the order creates is that the expression “as at the date hereof” makes no concession or reference to the possible retrospective effect of the child support assessment, which is the subject of these proceedings. It is this failure of the order in question to address this issue of retrospectivity which has led to the ambiguity. To use the words adopted by Mason J, the order does not appear to me to have “a plain meaning”.
The words “unpaid” and “outstanding” can, I think, be applicable to a situation of arrears arising retrospectively. Particularly in the context of the description of “any and all”. “Accumulated” has a different connotation, referring to the amount of child support “heaped up” at the date of the orders. However, the words “any and all” in reference to the arrears in question is used in a generic sense in that it does not allude specifically to the question of retrospectively arising arrears.
Accordingly, in order to construe the order in question, it was necessary for the SSAT to look to sources of evidence external to the order itself. The question for the court is whether in selecting the sources which it did, the SSAT fell into legal error.
As was held in Kirkpatrick v Kotis, I consider the rules applicable to the interpretation of ambiguous contractual provisions are analogous to those applying to the interpretation of ambiguous consent orders. As such, it is open to a court such as this one (and by extension to the SSAT) to look to the objective framework in which the order in question came into being, including any intentions which can be presumed to the parties concerned from that framework.
In my view, in this context, the certificate issued by the Registrar on 23 March 1999 is central. In my view, it can be objectively taken as a given (or in other words objectively presumed) that Ms Mills understood that what she was agreeing to, in the consent order, was the discharge of arrears in a quantum which approximated to the sum which had been indicated to her in the certificate.
Although the SSAT did not express itself in these specific terms, in my view, it was looking to the “objective framework of facts within which [the order] came into existence, and to the parties’ presumed intention in this setting”, to adopt the methodology of Mason J in Codelfa, when it stated:
“Ms Mills’ position is supported by the objective evidence that she sought a statement of arrears prior to consenting to the Court Order. She clearly had approximately $2,000 in mind at the time she consented to a waiver of arrears. Mr Mills has produced no evidence which would dispute that proposition.”[34]
[34] See SSAT Reasons for Judgement at paragraph 17
In so doing, it is my view that the SSAT was not looking at or conjecturing about Ms Mills’ actual intention, rather what it was doing was presuming an intention to Ms Mills, which was supported by the objective framework against which the subject order came into being. In my view, it was legally entitled to adopt this methodology and accordingly it did not fall into legal error in so doing.
The existence of the certificate and the sum it recited was objectively the motivating factor which caused Ms Mills to agree to enter the child support agreement. This agreement also stipulated that a sum of $13,000.00, from the property settlement, should be allocated against future assessments of child support.
The SSAT allocated a significant proportion of its reasons for judgement to an analysis of the question of whether the CSA was estopped from
re-calculating retrospectively the amount of child support owed by Mr Mills by reason of the consent order of 20 August 1999. The SSAT concluded that the CSA was not so estopped.This issue was not addressed in the appeal hearing before me. Accordingly it is not necessary for me to determine whether any error of law arises from the SSAT’s conclusion in this regard. However I would afford the following observations.
The objects of the Child Support legislation encourage parents to make their own idiosyncratic and private arrangements for the financial support of their children. However, in my view, the overriding underpinning of the regime is that the provision of financial support to children should be commensurate with the capacity of parents to provide such financial support. This is what is meant by a “proper level of financial support”. Children have an entitlement to share in the standard of living enjoyed by their parents.
For obvious reasons, one of the major factors shaping the standard of living of any parent is his/her level of income. No doubt it is for this reason that the legislature has seen fit to empower the Registrar of the CSA to amend retrospectively assessments of child support, when new information becomes available as to the actual level of income received by any liable parent concerned.
Considerations of this kind influenced Roberts FM in his decision in Hacherl & Berrios. His Honour emphasised the importance of liable parents filing their necessary income tax returns promptly so that the statutorily determined mechanisms for the assessment of child support might operate transparently and efficiently. I share those concerns.
In its decision in the current case, the SSAT stressed the importance of the statutory duty residing in the Registrar of the Child Support Agency to amend administrative assessments of child support, if and when fresh information arose about what was a liable parent’s level of taxable income. As previously indicated, these statutory duties are reflected in the objects of the Assessment Act.
Although it is not necessary for me to determine the issue, at a prima facie level, it seems to me that the legislative framework of the child support regime, particularly its objective underpinnings, may possibly form part of the objective framework of facts to which a court may have reference in its construal of an ambiguous or uncertain consent order regarding the child support obligations of parents.
It would seem to me to be contrary to the intentions of the Assessment Act that a liable parent could avoid his or her obligations to pay child support through imprecisely worded provisions. I reach this conclusion because the child support regime does not deal with the private rights and public obligations of parents alone, it also deals with the entitlements of third parties, namely children, who have an implied entitlement to share in the actual standard of living enjoyed by their parents.
Accordingly, I have come to the conclusion that there is no error of law apparent in the reasons for decision of the SSAT delivered on 10 November 2009 and accordingly the notice for appeal filed on 9 December 2009 should be dismissed.
As there are no longer any child support proceedings on foot between the parties, it is appropriate that the stay order made on 17 February 2010 should be discharged.
For all these reasons, the orders of the court will be as set out at the commencement of these reasons for judgment.
I certify that the preceding one hundred and twenty (120) paragraphs are a true copy of the reasons for judgment of Brown FM
Date: 11 March 2011
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