Nesson and Child Support Registrar (Child support)

[2020] AATA 2144

Nesson and Child Support Registrar (Child support) [2020] AATA 2144 (14 April 2020)

DIVISION:Social Services & Child Support Division

EXTENSION APPLICATION

NUMBER:2020/SC018162

APPLICANT:  Ms Nesson

OTHER PARTY:  Child Support Registrar

DATE DECISION MADE:                14 April 2020

APPLICATION:

An extension application made on 6 January 2020 asking the AAT to consider the application for AAT first review of a decision of the Child Support Registrar on 27 February 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 lengthy delay – may have some merit – prejudice to the other parent due to long delay – considering all factors extension of time refused

Names used in all published decisions are pseudonyms. Any references appearing in square brackets indicate that information has been omitted 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 6 January 2020 Ms Nesson lodged an application with the Administrative Appeals Tribunal (the Tribunal) for an extension of time for review of a child support decision made on 27 February 2019.  The matter was considered on 14 April 2020 on the papers (consistent with the Tribunal’s ‘Child Support Review Directions’).  The Tribunal had before it a bundle of documents provided by the Child Support Agency.

2. Ms Nesson and Mr [A] are the parents of [Child 1] (born October 2007) and [Child 2] (born September 2009).  The case commenced on 15 February 2012 and Mr [A] is the parent liable to pay child support under the assessment.

3. On 15 June 2018 Ms Nesson applied for a change to the administrative assessment on the basis of a parent’s income, property, financial resources or earning capacity (the grounds commonly referred to as Reasons 8A and 8B).

4. On 21 November 2018 the Child Support Agency made the decision to change the assessment (the original decision) so that:

   ·     the existing change of assessment decision in relation to Mr [A]’s income will cease on 14 June 2018;

   ·     for the period from 15 June 2018 to 14 June 2019 Mr [A]’s adjusted taxable income is set at $482,337;

   ·     for the period from 1 December 2017 to 31 August 2018 Ms Nesson’s adjusted taxable income is set at $298,453; and

   ·     for the period from 1 September 2018 to 30 November 2018 Ms Nesson’s adjusted taxable income is set at $303,920.

5. On 19 December 2018 Mr [A] objected to this decision and on 27 February 2019 the Child Support Agency allowed the objection in part and made the decision to change the assessment (the objection decision) so that:

   ·     the existing change of assessment decision dated 26 August 2016 will cease to take effect on 14 June 2018;

   ·     for the period from 15 June 2018 until 31 December 2019 the annual rate of child support otherwise payable by Mr [A] shall be set at $10,400; and

   ·     for the period from 1 December 2017 to 31 August 2018 Ms Nesson’s adjusted taxable income is set at $298,453.

6. This was done to reflect the income, property and financial resources of the parents (Reason 8A).

7. 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).

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

9. 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.

10. 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.

11. 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 Ms Nesson was advised about the outcome of the objection decision by electronic means in a letter from the Child Support Agency dated 1 March 2019. Given Ms Nesson lodged her application more than 28 days after she was served with notice, the Tribunal is satisfied that an extension of time was required.

12. 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 186. 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.

13. 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 Ms Nesson’s application for an extension of time on 6 January 2020 in relation to the objection decision made on 27 February 2019, of which she was notified by electronic means on 1 March 2019, is approximately 283 days out of time.

2. In seeking an extension of time Ms Nesson cites three reasons for the delay in her application.  Firstly, Ms Nesson states she had limited capacity as throughout 2019 she was working full-time as well as being a sole parent and self-representing in the Federal Circuit Court.  Secondly, Ms Nesson states additional relevant information arose following the final hearing in the Federal Circuit Court on 23 August 2019 as well as in letters written by Mr [A] on 16 June 2019 and 18 November 2019 which she received from the Child Support Agency on 30 November 2019.  Thirdly, Ms Nesson states the proceeds from the sale of the company Mr [A] owned may have been higher than initially considered following rumours that it was sold for a sum in the vicinity of $20 million.

3. The Tribunal accepts that Ms Nesson may have had significant demands on her time during 2019.  Ms Nesson is not unique in this regard with most parents having to balance numerous competing interests in their professional and private lives.  The Tribunal also notes in evidence that Ms Nesson was able to pursue a separate change of assessment application during this period of time with this application lodged on 8 October 2019.  This suggests she was able to deal with child support matters she believed to be important.

4. That Ms Nesson was extremely busy is not, in the view of the Tribunal, an acceptable reason for failing to prioritise her application for review of the objection decision.

5. Ms Nesson also argues that additional information has become available since the objection decision was made on 27 February 2019.  Ms Nesson states this additional information was in transcripts from a hearing in the Federal Circuit Court on 23 August 2019 and letters from Mr [A] to the Child Support Agency, which she received on 30 November 2019.  The new information, according to Ms Nesson, relates to the income Mr [A] received from the sale of his company and financial resources he had available to pay for private school fees as well as support the children.

6. It is unclear when Ms Nesson received the transcripts from the Federal Circuit Court but as she has said the final hearing was 23 August 2019 this would not explain why she then waited until 6 January 2020 to apply for a review of the objection decision.  The letters from Mr [A] dated 16 June 2019 and 18 November 2019 are included in evidence from the Child Support Agency.  Much of the information contained in these letters relate to financial matters, including the sale of business assets and private school fees, which were considered in the original decision and the objection decision.  Even if there was new information not available to the objections officer at the time of the decision it would not explain why Ms Nesson delayed approximately five weeks from 30 November when she states she received the letters until she made her application to the Tribunal.

7. In relation to income generated from the sale of Mr [A]’s company, the Tribunal notes these matters were addressed in the original decision, the objection decision and the previous change of assessment decision made on 26 August 2016.  Although Ms Nesson states the income may have been higher, possibly in the vicinity of $20 million, the change of assessment process is evidence based and decisions cannot be made on rumour.  Nonetheless, this matter is better considered under the merits of Ms Nesson’s application rather than as a reason for the delay.

8. The Tribunal notes in evidence that on 25 February 2019 the objections officer contacted Ms Nesson to discuss the outcome of the objection decision.  The record of that conversation indicates Ms Nesson was happy with the decision but was still advised both she and Mr [A] had appeal rights.

9. The notification of the objection decision provided by the Child Support Agency dated 1 March 2019 outlines what to do if Ms Nesson 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.

10. Ms Nesson was advised of her appeal rights.  The Tribunal finds Ms Nesson has not provided a reasonable explanation for the lengthy delay in applying for a review of the objection decision and that she rested on her rights.

Merits of the application

1. Ms Nesson is seeking review of an objection decision which set the annual rate of child support at $10,400 until 31 December 2019.  The existing administrative assessment, in place following a previous change of assessment decision, ceased from 14 June 2018.

2. In her application for review to the Tribunal Ms Nesson states that given the sale of Mr [A]’s business for a “rumoured” $20 million the calculation of child support is insufficient.  Ms Nesson also argues that between 2017 and 2019 Mr [A] expended a considerable amount on legal fees, had the financial resources to pay for expensive private school fees for his four children and went to great lengths to avoid financial disclosure.

3. Before making any determination to depart from an administrative assessment, the Child Support Agency must first find a ground for departure. These grounds are listed in the Assessment Act and in this case it was made on the basis of the income, property and financial resources of both parents.

4. In considering the merits of Ms Nesson’s application, the Tribunal therefore conducted a careful review of the information used by the Child Support Agency in reaching its decision.

5. The Tribunal notes the objections officer set the annual rate of child support at $10,400 on the basis that Mr [A] had additional financial resources available to him which exceeded the income set by way of the change of assessment decision of 26 August 2016.  In making this determination the objections officer relied primarily on bank statements and the financial resources available to Mr [A] including those available from the sale of his business.  The objections officer acknowledged that, due to Mr [A]’s complex financial circumstances, it was difficult to establish a precise adjusted taxable income for him.

6. Although Ms Nesson did not respond to the objection, the objections officer did consider a number of matters she had raised in her initial change of assessment application.  These matters included the funds available to Mr [A] for private school fees and legal costs.

7. The difficulty in determining a parent’s income for the purposes of child support based on limited information or complex financial arrangements has been considered judicially on a number of occasions.  In such circumstances the courts have found that it is not necessary to undertake a forensic audit or major investigation into the financial circumstances of a parent.  The Tribunal finds the assumptions made by the Child Support Agency in relation to the income, property and financial resources available to Mr [A] to be reasonable.  The Tribunal accepts, however, that although the Child Support Agency made the objection decision based on all the relevant evidence available at the time it is possible another decision maker may reach a different conclusion.

8. In her application for review to the Tribunal Ms Nesson also raised the earning capacity of Mr [A] (Reason 8B). In order to establish a ground in relation to a parent’s earning capacity, all three compulsory criteria set out in subsection 117(7B) of the Assessment Act must be satisfied. Those three criteria are:

   (a) one or more of the following applies:

   ·the parent does not work despite ample opportunity to do so (subparagraph 117(7B)(a)(i));

   ·the parent has reduced the number of hours per week of his or her employment or other work below the normal number of hours per week that constitutes full-time work for the occupation or industry in which the parent is employed or otherwise engaged (subparagraph 117(7B)(a)(ii));

   ·the parent has changed his or her occupation, industry or working pattern (subparagraph 117(7B)(a)(iii)); and

   (b)  the parent’s decision not to work, to reduce the number of hours, or to change his or her occupation, industry or working pattern is not justified on the basis of:

   ·the parent’s caring responsibilities (subparagraph 117(7B)(b)(i)); or

   ·the parent’s state of health (subparagraph 117(7B)(b)(ii)); and

   (c)   the parent has not demonstrated that it was not a major purpose of that decision to affect the administrative assessment of child support in relation to the child (paragraph 117(7B)(c)). 

9. In relation to the first criterion, as Mr [A] made the decision to sell his company and had reduced his weekly hours of work to below full-time, the Child Support Agency determined there was a change to his working pattern.  In relation to the second criterion, although Mr [A] had ceased work the Child Support Agency was satisfied Mr [A] had not pursued full-time employment due to his caring responsibilities.  Furthermore Mr [A] did not attempt to have the income used in the assessment for him decreased following the sale of his company assets.  As the second of the three criteria was not met, Reason 8B could not be established.

10. The Tribunal is satisfied the Child Support Agency properly reviewed all the relevant criteria in reaching a decision in relation to Mr [A]’s earning capacity.

11. The Tribunal finds, however, that the application by Ms Nesson may have some merit on the basis of Mr [A]’s income, property and financial resources.

Potential prejudice to Mr [A] and the wider public

1. Mr [A] should ordinarily be able to rely on the child support assessment once the time for objection has passed.  Given Ms Nesson is approximately 283 days late in making her application, it would be reasonable for Mr [A] to consider the objection decision was final.  The Tribunal finds Mr [A] would be significantly disadvantaged if an extension of time to lodge an objection was granted.

2. Time limits for the review of administrative decisions should be observed as strictly as possible in order to assist the proper administration of government agencies.  There is also a public expectation that there be a degree of certainty in relation to time limits, however, the law also allows for extensions of time.  In this case the Tribunal believes there would be 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 Ms Nesson 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 Ms Nesson’s circumstances are sufficiently different to that of other applicants in a similar position that an extension of time is warranted.  The Tribunal finds that it would not be fair to others to grant Ms Nesson an extension of time.

CONCLUSION

1. Ms Nesson has not provided a satisfactory explanation for the lengthy delay in applying for a review of the objection decision and the Tribunal has found she rested on her rights.  The reasons for the delay are an important factor in deciding whether or not to grant the application for an extension of time.  There would also be significant prejudice to Mr [A] should an extension of time be granted.  Although her application may have some merit, the Tribunal must weigh all the various factors which should be taken into account and concludes the merits are not so compelling as to outweigh the other considerations.

2. The Tribunal finds, on balance, that it would not be proper to grant an extension of time to seek review of the objection decision made on 27 February 2019 in the circumstances of this case.  Accordingly, the extension application is refused.