Morton and Morton and Anor (SSAT Appeal)
[2014] FCCA 1737
•19 August 2014
FEDERAL CIRCUIT COURT OF AUSTRALIA
| MORTON & MORTON & ANOR (SSAT APPEAL) | [2014] FCCA 1737 |
| Catchwords: CHILD SUPPORT – Social Security Appeals Tribunal appeal – calculation of income – further adjustment for the payment of the health insurance – consideration of the payment of health insurance premiums. |
| Legislation: Child Support (Assessment) Act 1989, s.117(7B) |
| Stead v State Government Insurance Commission [1986] HCA 54; (1986) 161 CLR 141 Re Refugee Review Tribunal; Ex parte Aala [2000] HCA 57; 204 CLR 82; 176 ALR 219; 75 ALJR 52 |
| Applicant: | MR MORTON |
| First Respondent: | MS MORTON |
| Second Respondent: | CHILD SUPPORT REGISTRAR |
| File Number: | MLC 1412 of 2012 |
| Judgment of: | Judge Riethmuller |
| Hearing date: | 20 June 2014 |
| Date of Last Submission: | 20 June 2014 |
| Delivered at: | Melbourne |
| Delivered on: | 19 August 2014 |
REPRESENTATION
| Counsel for the Applicant: | In person |
| Counsel for the First Respondent: | In person |
| Counsel for the Child Support Registrar: | Mr Palfrey |
| Solicitors for the Child Support Registrar: | Sparke Helmore Lawyers |
ORDERS
The decision of the Social Security Appeals Tribunal made 9 September 2013 be set aside.
The appellant’s application be remitted to the Social Security Appeals Tribunal to be determined according to law.
IT IS NOTED that publication of this judgment under the pseudonym Morton & Morton & Anor (SSAT Appeal) is approved pursuant to s.110X(4)(h) of the Child Support (Registration and Collection) Act 1988 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT MELBOURNE |
MLC 1412 of 2012
| MR MORTON |
Applicant
And
| MS MORTON |
First Respondent
| CHILD SUPPORT REGISTRAR |
Second Respondent
REASONS FOR JUDGMENT
In this case, the appellant appeals from a decision of the Social Security Appeals Tribunal made on 9 September 2013. The appellant and respondent are the parents of three children who are in substantially shared care of the parties.
The parties registered a child support case from 9 January 2012. As a result of the care arrangements and differences in income between the parties the appellant, Mr Morton, is assessed to pay child support to the respondent. The application for review to the Social Security Appeals Tribunal arose out of a decision by an objections officer following a decision of a senior case officer with respect to departure from a child support assessment.
There are two significant matters that were the subject of these proceedings:
(a)the correct income amount for the respondent;
(b)the costs of braces for one of the children.
The objections officer made a decision to vary the child support assessment by way of:
(a)setting the income amount for the respondent mother at $52,124 from 14 January 2013 to 31 October 2014 (with an indexation clause for 1 January 2014);
(b)reducing the appellant father’s income amount by $2,019 annually from 14 January 2013 to October 2014;
(c)increasing the child support rate payable by the father for the period 1 February 2013 to 31 May 2014 by $2,438.
The rationale for these changes as expressed by the objections officer was:
a)that the mother was then employed full-time in a child-care centre;
b)that the father had been paying private health insurance and this should be adjusted for in the child support assessment; and finally
c)that the orthodontic expenses for the child of the parties was $6,500, which the objections officer concluded should be shared between the parties after accounting for the rebate that would occur from the health insurer.
The matter then went on review to the Social Security Appeals Tribunal, who concluded that the mother’s income should be set at $53,342 from 14 January 23 to 21 July at 2013 and thereafter at $33,432 until 31 October 2014.
When adjusting for the orthodontic costs for the child’s braces, the SSAT increased the child support assessment by $4,130 on the basis of the parents sharing equally in the cost after taking account of the payment that the appellant father had received from his health insurer towards the costs of the orthodontic care. The Social Security Appeals Tribunal set aside the objection decision, but did not make any further adjustment for the payment of the health insurance by the appellant father.
The Tribunal was faced with a considerable volume of material, exceeding some 300 pages in the court book. Their decision traversing that material runs for some 19 pages. In substance the Tribunal accepted that the mother had been earning the larger sum for the six-month period but had chosen to return to part-time work and that this was reasonable when assessed against the requirements of s.117(7B) of the Child Support (Assessment) Act 1989.
The Tribunal struck the rate for contribution by the father towards orthodontic expenses, having regard to the payment he received from the health insurer. The Tribunal do not appear to have squarely dealt with the question of what adjustment, if any, should be made as a result of the cost to the father of making the insurance premium payments each month for the health insurance.
The appellant relies upon five specific grounds of appeal.
Ground 1
The first ground of appeal relied upon by the appellant is that the Social Security Appeals Tribunal failed to accord him procedural fairness in failing to consider the final written submissions that he had made to the Tribunal.
By letter to the parties dated 2 August 2013 (annexure B1 to the appellant’s affidavit) the Social Security Appeals Tribunal made a number of directions to facilitate the proper hearing of the application. Importantly, it was directed that:
1. Any written submissions that a party wishes to make in response to the further evidence must be made to the SSAT by 5 pm on 20 August 2013.
The directions also included a direction that:
2. The parties may apply in writing to the presiding member (through the case manager or the deputy registrar) for variation of the directions in paragraph 1.
The respondent mother made further submissions to the Tribunal dated 31 August 2013, but not received by the Tribunal until 2 September (see document C(2) to the affidavit of the appellant). The Tribunal noted these further submissions were received (at para.13 of their decision), saying:
13. Mrs Morton provided these documents on 6 August 2013. They were numbered B94-B97 and a copy was forwarded to
Mr Morton on 8 August 2013 for his comments to be provided by 15 August 2013. On 19 August 2013, Mr Morton provided further written submissions which were numbered A264-A267 and were exchanged with Mrs Morton for information. On 2 September 2012, Mrs Morton provided further written submissions which were numbered B98-B100 and a copy was exchanged with
Mr Morton for his information. On 9 September 2013, the Tribunal proceeded to makes its decision.
What the Tribunal do not mention in that paragraph are the further written submissions by the appellant, in response to the late submissions of the respondent mother, dated 5 September 2013. A copy of these appear at D(1) to the affidavit of the appellant and run for one and half pages of single spaced typing. Importantly, it can be seen that aside from making similar submissions to earlier ones with respect to the issues generally, a specific submission was made in response to the late submission of the wife that:
It is clear to me that [Ms Morton] is being assisted with her correspondence. The structure and language used in her most recent response should be compared to her earlier written submissions.
Her recent correspondence comes a week after her father returned from an eight-week overseas holiday.
If [Ms Morton] is disclosing information to a third party, she is committing an offence.
Later in the submissions, he says, with respect of the working hours of the mother:
Any reduction was a lifestyle choice and designed to affect the child support and assessment.
The Tribunal are faced with a difficult situation in dealing with a very large number of people without representation. The directions that they made seemed entirely appropriate. Unfortunately the respondent mother did not comply with the directions and sent in a submission a little late without a specific request for variation of the directions. Not surprisingly, the Tribunal proceeded to consider that material, given that it had only come in a little late. Unfortunately it does not seem that the Tribunal specifically notified the appellant that they were going to take late submissions, although in the context of this case he has assumed that they would and made his response in a timely fashion.
The terms of the decision indicate that the Tribunal did not have regard to his response, at least some of which goes to questions of credibility with respect to findings about likely income and the capacity to work. It seems to me that in this regard, the appellant has established a breach of the rules of procedural fairness given that the Tribunal has accepted (without notifying him of a decision to do so) the late submissions of the mother, in circumstances where they have not had regard to his responding submissions that came only three days after the late submissions from the mother.
I have considered whether or not this ground on its own would be a sufficient basis to allow the appeal and return the matter to be heard again by the Tribunal, given the relatively limited amount of extra information or submissions in the document that the appellant sent on 5 September 2013. I am mindful of the High Court’s comments in Stead v State Government Insurance Commission [1986] HCA 54; (1986) 161 CLR 141 and Re Refugee Review Tribunal; Ex parte Aala [2000] HCA 57; 204 CLR 82; 176 ALR 219; 75 ALJR 52 on the discretion to refuse to grant relief.
It seems to me that this is a borderline case. However having regard to my decisions with respect other grounds of appeal I don’t ultimately need to determine this issue in this case.
Ground 2
The second ground that the appellant relies upon alleges that the SSAT failed to correctly assess and calculate the child support liability for the appellant and, therefore, the decision resulted in an unfair and inequitable assessment and denied him natural justice.
Whilst the underlying basis for this ground is not apparent on its face, it seems that it is in fact a complaint about the way in which the Tribunal dealt with the appellant’s contribution to orthodontic work and his health insurance. The Tribunal, at para.79, said:
79. The Tribunal has considered what the annual rate of child support that will be payable under the departure determination for the period 1 January 2013 to 31 October 2014 and has set it out in the following table:
Period
Annual rate of child support payable by Mr Morton
14 January 2013 to 21 July 2013
$10,752 annual rate ($896 pcm)
22 July 2013 to 31 October 2014
$12,528 annual rate ($1,044 pcm)
14 January 2013 to 31 May 2014
increase in rate of child support of $4,130 ($258.13 pcm for 16 months)
The table contains an error where it says that the rate of child support between 14 January 2013 and 21 July 2013 is $10,752. This is the rate once one includes an increase for the cost of the orthodontic expenses, not the rate prior to an increase. The Tribunal goes on to state:
80. The Tribunal’s determination means that for the period of 14 January 2013 to 21 July 2013, Mr Morton will pay a monthly rate of child support of $1,154.13; and for the period 22July 2013 to 31 May 2014, Mr Morton will pay a monthly rate of child support of $1,3012.13; and from 1 June 2014 to 31 October 2014, he will pay a monthly rate of child support of $1,044. This determination will result in a small increase in the amount of child support to be paid by Mr Morton which the Tribunal considers to be fair and equitable given that it mainly relates to meeting the costs of [child omitted]’s braces and that Mr Morton has the capacity, as discussed in paragraphs 63 and 74 above, to meet an increased child support liability.
The Tribunal is, therefore, considering a rate of child support above that which was ultimately calculated in accordance with its decision. To this extent, if anything, the Tribunal’s error on the face of its decision had the result of potentially giving the appellant slightly more favourable treatment than might have otherwise have been the case, in that it was considering whether or not he could afford to pay a greater child support assessment than was ultimately imposed.
However, the appellant has read this in conjunction with the large number of documents he has received from the Child Support Agency as assessments have been changed and varied, together with the accounting documents about payments. He argues that the documents indicate that, in effect, he has been assessed to pay the additional child support for orthodontic expenses as contemplated by the objections officer in addition to the contribution assessed by the SSAT.
There is not, presently an appeal before me as to the calculations of the amount currently owing. However, on the material before me, I’m not persuaded that that is, in fact, the case; although, I am persuaded that he has genuinely been concerned about the accounting that has gone on between the rates of assessment and the actual payments. It appears to me that it would be prudent for the agency to assign a time for him to attend upon an agency officer who was familiar with the calculations and accounts in order to fully explain how the figures are currently calculated by the Child Support Agency.
In this regard, I am not persuaded that the appellant has made out this ground.
Ground 3
In support of ground 3, the applicant argues that the Tribunal failed to correctly calculate an equal sharing of the cost of braces by failing to consider all relevant factors.
In this case, the Tribunal accepted that the child was in need of orthodontic care and this was not disputed. That the cost of that care prior to any healthcare rebates at $6,500 is not disputed.
The parties do not seek to agitate an argument that they should not share in that cost equally (although, there is certainly a significant income differential between them). The dispute centres upon whether or not the parties should share in the benefit of the payment made by the health insurer of $1,750 towards the cost of the orthodontic care.
The appellant points out that this benefit is only available because he has been making payment of premiums for health insurance for the children (the cost of premiums for him and the children being around double what the cost of premiums would be for him without the children on his policy). The respondent mother does not have private health insurance. It is a relevant consideration to take into account the cost of maintaining health insurance if one is also going to take into account the benefits received from the health insurance policy. The benefits from the policy do not come from thin air: they come at a cost to the person who pays the policy premiums.
This was clearly identified by the objections officer when considering how, if at all, to take into account the cost of payments on the policy. The Tribunal, in their decision, have concluded that the cost of maintaining private health insurance is not a necessary expense of the appellant father and, therefore, have not taken it into account when considering his necessary commitments to support himself (see paras.50 and 65 of the decision). The Tribunal appear to identify the issue at para.65 when they say:
65. The Tribunal noted that Mr Morton also chooses to have private health insurance at a cost of $2,470 although Mrs Morton has not for some time been permitted to receive any rebated on medical expenses incurred for the children.
The question of how, if at all, the cost of maintaining the policy is taken up is a relevant consideration in determining the role the payment under the policy is to play in any adjustment for the costs of the orthodontic work. In these circumstances, I’m persuaded that the Tribunal have erred in failing to consider a relevant consideration in making their decision and, therefore, find that the appellant has made out this ground.
Grounds 4 and 5
In support of ground 4, the appellant argues that the Tribunal failed to correctly apply the Act when assessing the taxable income of the respondent mother without supporting documentation. Ground 5 makes the same claim but with respect to the SSAT’s consideration of her earning capacity and current income.
It is convenient to deal with these two grounds together. The substance of the complainant is that:
a)The Tribunal erred in making a finding that she had reduced earning capacity;
b)That the Tribunal erred in striking the current rate of her earnings; and
c)That the Tribunal erred in making a finding as to her income without support documentation.
The issue of the respondent’s earning capacity was a significant issue before the Tribunal. In the circumstances of the case, this is not surprising given that she had, for six months leading up to the Tribunal hearing been working full-time, and had reduced her hours back to part-time which had a significant impact upon the child support assessment. The Tribunal carefully considered this issue in their decision when dealing with the mother’s earning capacity. At paras.32 to 34, the Tribunal identified the relevant legislative test. The appellant’s argument that the reduction in working hours was so that he would have to pay more child support was specifically identified at para.36. The submissions of the parties are summarised in dot point form at paras.37 and 38.
At para.39, the Tribunal concludes that the respondent mother had reduced her working hours below full-time as is referred to in s.117(7B)(a)(ii) before turning to consider the potential justification and to make findings. The Tribunal’s reasons in this regard are detailed, with the Tribunal saying:
40. As to the justification for Mrs Morton’s reduction in working hours, the Tribunal noted Mr Morton’s submission that it was not concerned with her caring responsibilities towards the children or any personal health considerations. In this regard Mr Morton stated that the after school care was adequate and that [Z] and [Y] could get themselves home from school. The Tribunal noted Mrs Morton’s evidence that [X] was refusing to go to after school care and that some nights he would not be picked up until 6:30pm. The Tribunal accepted Mrs Morton’s evidence that [X] had learning difficulties and associated low self-esteem which was not disputed by Mr Morton. The Tribunal noted that both parents stated that [Z] has Asperger’s. The Tribunal further considered that Mrs Morton provides the majority of care for the children. Given that Mrs Morton only recently shifted to full time work after a working pattern of half time hours, and in view of [Z] and [X]’s particular needs, the Tribunal does accept that Mrs Morton’s decision to reduce her hours was because of her caring responsibilities.
41. As the Tribunal is satisfied that Mrs Morton’s reduction in hours was due to her caring responsibilities, the Tribunal must also determine in accordance with paragraph 117(7B)(c) of the Act whether affecting a major purpose of Mrs Morton’s decision to reduce her hours was to affect the assessment of child support. Mr Morton made written and oral submissions that Mrs Morton’s sole aim in reducing her working hours was to force him to pay additional child support. The Tribunal noted that Mr Morton first knew of Mrs Morton’s reduction in hours as a consequence of the mediation proceedings he had initiated. That Mrs Morton did not contact the Agency to advise of her reduction in hours indicates that her principal focus was not to receive the additional child support that might flow from her reduced income. The Tribunal in fact considered that Mrs Morton demonstrated that she had a number of more compelling reasons for reducing her hours of employment than to affect the amount of child support she received; first, she has 62% care of three children aged 14, 13 and 11; secondly, two of her children have particular conditions that require additional care and attention; and thirdly,
Mrs Morton, after a relatively brief period of full-time work, is now working more hours per week than her previous working pattern while married and in the first couple of years following their separation. The Tribunal is satisfied that Mrs Morton is working at her capacity in view of her caring responsibilities and in light of her previous pattern of employment. The Tribunal is not persuaded that affecting the child support assessment was a major purpose of Mrs Morton’s decision to reduce her working hours. The Tribunal has concluded that Mrs Morton’s earning capacity is not greater than her income. It follows that grounds for a change of assessment on the basis of Reason 8 are not made out.
It was open to the Tribunal to have made the decision that they did on the material before them. As this is an appeal only on an error of law, it is not for me to review the merits of that decision to the extent that the Tribunal may be alleged to have erred in finding that the percentage of care of the children was 62 per cent rather than 58 per cent, as it is unlikely in isolation to have been significant in this decision. However, this is a matter that can certainly be re-agitated if the matter returns to the Tribunal.
The appellant argues that the letter from the employer which was relied upon by the Tribunal, provides little information from which to make findings. The letter (which appears at B97) does not set out the current working hours of the mother, nor does it set out any information about her income. It simply says that the employer is happy to reduce the mother’s hours if that suits her and otherwise is a very positive letter about the mother as an employee.
The mother did not provide any pay slips or other documents relating to her income following her reduction in hours. In substance the only information that the Tribunal had as to the mother’s earnings after the reduction in hours is that which appears at B93, where the mother says:
My estimated income for the following year is $31,027.65 cents.
The mother had provided material with respect to past years. The Tribunal at para.59 says:
59. The Tribunal noted that Mrs [M] has worked fulltime for the period 14 January 2013 to 22 July 2013 at a salary of $50,000 and from 22 July 2013 has been earning an amount of $575 gross per week or $30,000 per annum and finds accordingly. The Tribunal noted that Mrs Morton received a financial payment of $145,145 on 8 October 2012. In her statement of financial circumstances, Mrs Morton recorded a term deposit income of $66 per week of $3,432 per year.
It is difficult to see where the figure of $30,000 per annum came from, other than it was perhaps a rounding of the figure set out in the mother’s email at B93. None of the parties (including counsel for the Child Support Agency) were able to point to any other potential source of that evidence. Whether this was a finding without evidence (that her income would be $30,000 per annum) is a difficult question, given that there is at least some evidence by the mother that her income was likely to be $31,027.65 cents. Why the Tribunal would round down that figure in the context of this case is not apparent to me.
Ultimately it seems that the Tribunal have struck a figure not supported by specific evidence, where the only evidence before them was for a higher figure.
The final part of the ground is that the Tribunal acted without supporting documentation. This is a difficult issue for the appellant. It is common in trials and hearings for less than perfect evidence to be placed before the court, even when specific evidence is apparently available and specifically requested by the Tribunal or court. That seems to be the situation here: that is, the Tribunal specifically requested evidence about the current earnings of the mother and she hasn’t provided a pay slip which would have otherwise been very strong evidence in that regard.
The Tribunal, however, must do the best that it can on the material before it. Prima facie, there is an inference to be drawn against a person who fails to provide evidence that appears to be easily available to them and that inference is that the evidence not provided is unlikely to support them. That inference, whilst available, is not an inference that the court or Tribunal is obliged to draw. It is ultimately a question of fact what weight the Tribunal or court places upon evidence of such circumstances, before making an ultimate decision in the case.
Whilst disappointing for the appellant, it seems to me that it was nonetheless open to the Tribunal to simply accept the evidence in the email from the wife. Presumably when the matter returns to the Tribunal, she will provide proper evidence so as to not let this situation arise again.
In the circumstances I find that this ground is made out only on the limited basis of the income figure struck by the Tribunal for the wife.
Conclusions
Ultimately I am persuaded that the appellant has established errors of law on the part of the Tribunal. It is therefore appropriate for me to set aside the decision and remit the matter to be heard and determined by the Tribunal according to law.
I certify that the preceding forty-eight (48) paragraphs are a true copy of the reasons for judgment of Judge Riethmuller
Associate:
Date: 19 August 2014
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