Muller and Child Support Registrar (Child support)

[2019] AATA 4356

Muller and Child Support Registrar (Child support) [2019] AATA 4356 (15 August 2019)

DIVISION:Social Services & Child Support Division

EXTENSION APPLICATION

NUMBER:2019/AC016418

APPLICANT:  Mr Muller

OTHER PARTY:  Child Support Registrar

DATE DECISION MADE:                15 August 2019

APPLICATION:

An extension application made on 16 May 2019 asking the AAT to consider the application for AAT first review of a decision of the Child Support Registrar on 12 March 2019 despite the period for applying for review having ended.

DECISION:

The extension application is refused.

CATCHWORDS

CHILD SUPPORT – application for extension of time - no satisfactory explanation for the delay - no merit - extension of time refused

Names used in all published decisions are pseudonyms. Any references appearing in square brackets indicate that information has been removed from this decision and replaced with generic information so as not to identify involved individuals as required by subsections 16(2AB)-16(2AC) of the Child Support (Registration and Collection) Act 1988.

STATEMENT OF REASONS

1. On 16 May 2019 Mr Muller lodged an application with the Administrative Appeals Tribunal (the Tribunal) for an extension of time for review of a child support decision made on 12 March 2019.  The matter was considered on 15 August 2019 on the papers (consistent with the Tribunal’s ‘Child Support Review Directions’).  The Tribunal had before it a bundle of documents provided by the Department of Human Services, Child Support (the Child Support Agency).

2. Mr Muller and [Ms A] are the parents of [Child 1] (born October 2010) and [Child 2] (born August 2012).  There has been a child support assessment in place since 19 July 2012 and Mr Muller is the parent liable to pay child support.

3. From 1 July 2017 the Child Support Agency used an adjusted taxable income for Mr Muller of $53,075 in the Child Support Agency.

4. On 8 May 2017 the Child Support Agency accepted an income estimate from Mr Muller of $38,585 annualised to be used in the assessment and applied this from 1 July 2017 to 30 June 2018.  On 8 January 2018 Mr Muller lodged a subsequent estimate of income of $0 annualised to be used in the assessment from 8 January 2018 to 30 June 2018.

5. On 31 October 2018 the Child Support Agency made the decision to reconcile the estimate of income and issued an assessment notice to Mr Muller advising that his estimated income was $20,190.61 while his actual income as sourced from the Australian Taxation Office was $50,708.

6. The effect of this assessment was that Mr Muller owed an additional $4,725.91 in child support for the period 1 July 2017 to 30 June 2018.  As Mr Muller had underestimated his income by 10 per cent or more of his actual income a penalty of $424 was also imposed.

7. On 9 December 2018 Mr Muller objected to this decision and on 12 March 2019 the Child Support Agency disallowed the objection (the objection decision).

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

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

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

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

12. If the 28-day period to apply for review has ended, then a written application for an extension of time can be made under section 91 of the Act. The Tribunal finds Mr Muller was advised about the outcome of the objection decision by post in a letter from the Child Support Agency dated 12 March 2019. Under provisions of the Acts Interpretation Act 1901 and the Evidence Act 1995, he was therefore taken to be served with written notice of this decision by 28 March 2019.  Given Mr Muller lodged his application more than 28 days after he was served with notice, the Tribunal is satisfied that an extension of time was required.

13. Under subsection 92(1) of the Act, the Tribunal must consider and grant or refuse an extension application. In doing so, the Tribunal considers the guiding principles for the exercise of discretion to allow an extension of time as set out in Hunter Valley Developments Pty Ltd v Cohen [1984] FCA 176. In that case, the Federal Court said an extension of time should not be granted unless satisfied it was proper to do so, noting that, in general, applications or proceedings commenced outside of a prescribed time limit will not be considered.

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

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

    ·     the merits of the substantive application;

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

    ·     any prejudice to the general public; and

    ·     fairness in granting an extension of time.

Reasons for the delay

1. The Tribunal finds that Mr Muller’s application for an extension of time on 16 May 2019 in relation to the objection decision made on 12 March 2019, of which he was notified by post, is approximately 21 days out of time.  It is noted that Mr Muller applied to the Tribunal for a review of the objection decision on 28 April 2019.  To have been within the prescribed period Mr Muller’s application should have been made no later than 25 April 2019.

2. In seeking an extension of time Mr Muller states that he received the letter from the Child Support Agency advising him of the objection decision on 8 April 2019.

3. The 28-day period within which an application for review must be made is calculated starting on the day on which the relevant notice of decision is "served on" the person by the Child Support Agency.  A notice on behalf of the Child Support Agency may be served on a person by sending it by pre-paid post to the person’s address for service.  Unless the contrary is proved, service by pre-paid post is taken to have come into effect at the time when the notice would, in the ordinary course of the post, have arrived at the place to which it was addressed.

4. To determine on what date a notice was posted by the Child Support Agency and how long delivery takes in the ordinary course of the post, the presumptions in sections 160 and 163 of the Evidence Act 1995 should be applied. Under section 163, a letter from a Commonwealth agency addressed to a person at a specified address is presumed to have been sent by pre-paid post to that address on the fifth business day after any date that purports to be the date on which the letter was prepared. Under section 160, it is presumed that a postal article sent by pre-paid post addressed to a person at a specified address was received at that address on the seventh working day after having been posted. Mr Muller is therefore deemed to have been served with written notice of the objection decision on the 12^th business day after the date of the letter.

5. In the absence of a plausible explanation as to why there might be delays in the ordinary postal service, the Tribunal does not accept it would take nearly four weeks for Mr Muller to receive a letter from the Child Support Agency dated 12 March 2019.

6. The notification of the objection decision provided by the Child Support Agency dated 12 March 2019 outlines what to do if Mr Muller disagreed with the decision.  This included asking the Tribunal to undertake a review “within 28 days from the date you receive this letter”.  The words “within 28 days” are in bold which, in the view of the Tribunal, gives a clear indication of the importance of this timeframe.

7. The Tribunal notes that in conversations with child support officers on 10 April 2019 and 11 April 2019 Mr Muller was advised of the need to submit an appeal to the Tribunal.  He did not do so until 28 April 2019.

8. The Tribunal finds Mr Muller has not provided a reasonable explanation for the short delay in applying for a review.

Merits of the application

1. Mr Muller is seeking review of an objection decision which affirmed a decision to reconcile his estimate of income for the period 1 July 2017 to 30 June 2018.

2. In his application to the Tribunal Mr Muller states that an annualised income rate had been applied in the reconciliation where taxable income information for the period was available.

3. An administrative formula assessment of child support made under the Assessment Act uses the adjusted taxable incomes of both parents for the last relevant year of income to assess the rate of child support payable by one parent to the other for a child. Section 60 of the Assessment Act allows a parent to elect to use an estimate of their adjusted taxable income to apply for the whole of the financial year or from the day of the election to the end of the financial year (estimate period). Section 62 of the Assessment Act allows a parent to revoke an estimate election relating to a year of income and make a new estimate election.

4. When the Child Support Agency accepts a parent’s estimate election, their income estimate amount becomes their adjusted taxable income amount for the purposes of assessing the annual rate of child support payable in the application period (subsection 61(1A) of the Assessment Act). The Child Support Agency will amend the assessment to take the income estimate into account.

5. After the year of income has ended the Child Support Agency will compare the parent’s estimated income with their actual adjusted taxable income for that year.  This is known as an estimate reconciliation.  If the parent’s actual taxable income is more than their estimated income, the child support assessment will be amended using their actual income.

6. Section 64A of the Assessment Act also provides a formula for reconciliation. This is a complex process, however, in essence the legislation requires the estimate to be annualised and then reconciled with the actual income of the parent (also annualised).

7. The Tribunal analysed the calculations undertaken by the Child Support Agency in reconciling Mr Muller’s income. For the estimate period from 1 July 2017 to 7 January 2018 Mr Muller estimated he would earn $38,585 (annualised) and the actual amount was $69,098.15 (annualised). For the estimate period 8 January 2018 to 30 June 2018 Mr Muller estimated he would earn $0 (annualised) and the actual amount was $30,521.11 (annualised). The Tribunal is satisfied the Child Support Agency has correctly calculated the annualised income in accordance with the process set out in the Assessment Act.

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

9. The Tribunal has found that Mr Muller’s application for review would not have good prospects of success as the Child Support Agency has correctly reconciled his income.  The Tribunal therefore considers Mr Muller’s application has little merit.

Potential prejudice to [Ms A] and the wider public

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

2. Similarly, in this case, the Tribunal does not believe there would be significant prejudice to the general public if an extension of time to lodge an objection was granted.

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

1. The Child Support Agency notifies parties that they can seek a review of decisions with the Tribunal and they have 28 days within which to submit a request for such a review.  Most people comply within the 28-day timeframe.  It is clear the statutory time limit is to be enforced unless there are acceptable reasons for the delay.  The Tribunal is not satisfied with the reasons provided by Mr Muller for the delay in submitting his objection.  In addition there is little merit to his application.  The Tribunal is not satisfied Mr Muller’s circumstances are different to that of other applicants in a similar position.  The Tribunal finds that it would not be fair to others to grant Mr Muller an extension of time.

CONCLUSION

1. Mr Muller has not provided a satisfactory explanation for the short delay in applying for a review.  The Tribunal is satisfied there would be little prejudice to [Ms A] or the wider public should an extension of time to lodge an objection be granted.  The Tribunal has also found, however, there is little merit to the application made by Mr Muller which weighs heavily against the granting of an extension of time.

2. Having carefully considered the various factors which it must take into account, the Tribunal finds it would not be proper to grant an extension of time to seek review of the objection decision made on 12 March 2019.  Accordingly, the extension application is refused.