Quealy and Child Support Registrar (Child support)

[2021] AATA 5034

Quealy and Child Support Registrar (Child support) [2021] AATA 5034 (19 November 2021)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2021/SC021804

APPLICANT:  Mr Quealy

OTHER PARTIES:  Child Support Registrar

TRIBUNAL:Member J Thomson

DECISION DATE:  19 November 2021

DECISION:

The Tribunal sets aside the decision under review and, in substitution, decides that Mr Quealy should be granted an extension of time to object to the Agency’s decision of 16 June 2020.

CATCHWORDS

CHILD SUPPORT – refusal to grant an extension of time to object – reasonable explanation for the delay in lodging the objection – arguable merit – prejudice to the other parent outweighed by interests of justice – extension of time granted – decision under review set aside and substituted

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.

REASONS FOR DECISION

BACKGROUND

1. Mr Quealy and [Ms A] are the parents of [Child 1], born 2010, and [Child 2], born 2012.

2. Mr Quealy seeks a review of a decision made by the Child Support Agency (the Agency) dated 1 June 2021. This decision refused his request for an extension of time in which to object to an earlier decision of the Agency dated 16 June 2020, refusing to credit a payment of $33,426.54 to [Ms A] as a non-agency payment (NAP) against Mr Quealy’s child support liability.

3. The Tribunal heard the matter on 20 September 2021. Mr Quealy attended the hearing via conference telephone and gave affirmed evidence. The Tribunal had before it documentation provided by the Agency (Exhibit 1). Mr Quealy had copies of these documents with him at the hearing.

4. The Tribunal allowed Mr Quealy the opportunity to provide further documents in support of his case and requested the Agency to provide further documents. The Agency’s additional documents provided pursuant to the Tribunal’s request have been added to Exhibit 1 and the further documents provided by Mr Quealy have been admitted into evidence and marked Exhibit A.

ISSUES

1. The issues which arise in this case are set out in the reasons below.

CONSIDERATION

1. In reaching its decision, the Tribunal has considered the affirmed evidence given by Mr Quealy at the hearing and the documentation contained in Exhibits 1 and A.

2. The statutory provisions relevant to this review are contained in the Child Support (Registration and Collection) Act 1988 (the Registration Act). The relevant provisions are set out below.

3. Subsection 81(1) of the Registration Act provides, relevantly, that an objection to a decision (other than an objection to an appealable collection refusal decision or a care percentage decision) must be lodged by a person within 28 days after a notice of the decision is served on the person.

4. Section 82 of the Registration Act provides that a person may lodge an objection under this part after the period of time for lodging such an objection has ended if, at the time of lodging the objection or at a later time, the person applies to the Registrar to consider the objection despite the period for objection ending.

10. The Registration Act does not set out criteria for consideration, but Agency policy contained in the Child Support Guide provides useful guidelines at chapter 4.1.5. In summary, the Child Support Guide suggests it is ultimately a question as to whether the interest of justice favour the grant or refusal of the application in the particular circumstances. Factors to be considered are the reasons for the delay, the merits of the objection, whether the person has registered on their rights, and any potential prejudice to the other party or the public.

11. The established cases indicate that the starting point is the prima facie rule that proceedings commenced outside a statutory period will not be entertained (Lucic v Nolan (1982) 45 ALR 411 at 416). However, the primary concern “is to do that which will enable justice to be done between the parties” (see Martinsen v Secretary, Department of Family & Community Services [2004] FCA 297 per Spender J). Spender J quoted McHugh J in Gallo v Dawson (1990) 64 ALJR 459 (Gallo) as follows:

In order to determine whether the rules [imposing time limits] will work and injustice it is necessary to have regard to the history of the proceedings, the conduct of the parties, the nature of the litigation, and the consequences for the parties of the grant or refusal of the application for extension of time.

When the application is for an extension of time…it is always necessary to consider the prospects of the applicant succeeding in the appeal…

12. In line with Wilcox J’s survey of cases in Hunter Valley Developments P/L v Cohen (1984) 3 FCR 344, the Tribunal proposes to consider the matters identified in Gallo under the following headings:

·the explanation for the delay;

·the merits of the substantial application;

·any prejudice to the other party, including in defending the proceedings occasioned by the delay;

·any public interest considerations that might flow from a successful application, including “the unsettling of other people…or of established practices”.

Explanation for the delay

13.  The Agency’s documentation contained in Exhibit 1 reflects it sent Mr Quealy a letter dated 16 June 2020 informing him of its decision to refuse his application for credit of a NAP of $33,426.54 to [Ms A] on 13 February 2020. Regulation 19(2) of the Child Support (Assessment) Regulations 2018 provides that, unless the contrary is proved, service of the Agency’s letter dated 16 June 2020 will be taken to have been effected at the time when the letter would, in the ordinary course of the post, have arrived at the place to which it was addressed. If Mr Quealy was receiving his correspondence from the Agency by post, he would therefore be taken to have been served with the Agency’s letter notifying him of its decision to refuse his application for credit of his NAP referred to above by late June/ early July 2020 (COVID-19 amendments to the Regulations provide for a 12-day postage period), and Mr Quealy therefore needed to have lodged his objection by the end of July/ early August 2020, which he did not.

14. His evidence at the hearing was that he had changed his address in the early part of 2020 from the address at [Address 1], Queensland, the address he had provided to the Agency to which the Agency’s letter of 16 June 2020 was addressed and posted, and moved to a new address at [Address 2], Queensland.

15. The objection decision reflects that Mr Quealy changed his communication arrangements with the Agency from surface mail preference to online (myGov) on 23 June 2020 and reverted to surface mail at his new address at [Address 2] on 16 September 2020.

16. Mr Quealy also gave evidence at the hearing that a number of letters sent to him in the mail at that time had been returned unclaimed and denied having received the Agency’s letter of 16 June 2020 notifying him of its decision to refuse his NAP claim.

17. He gave evidence that he did not become aware of the Agency’s letter of 16 June 2020 until the Agency sent him a bundle of mail which had been returned to the Agency. He said this was about a couple of weeks prior to him lodging his objection to the Agency’s 16 June 2020 decision on 11 June 2021.

18. A file note at page 25 of the Agency’s documentation, Exhibit 1 dated 4 June 2021 records the Agency’s letter of 16 June 2020 was returned to the Agency unclaimed. The file note headed “Returned Unclaimed Mail” records the following: “RETURNED UNCLAIMED MAIL: NAP Decision letter dated 16/06/2020 has been received for this customer. ADDRESS MAIL HAS BEEN RETURNED FROM: [Address 1] – notation on envelope: RTS”.

19. The Tribunal is satisfied the evidence, on balance is that Mr Quealy did not receive the Agency’s letter of 16 June 2020 and was therefore not properly served with notice of the Agency’s decision of 16 June 2020 refusing his application for credit of his NAP of $33,426.54 against his child support liability until late May/ early June 2021.

20. The Tribunal is satisfied Mr Quealy has provided a reasonable explanation for his delay in objecting to the Agency’s decision of 16 June 2020 within the statutory period for doing so.

Merits of the substantial application

21. Mr Quealy gave evidence that prior to Christmas in late 2019, he had a discussion with [Ms A] regarding her occupation of the parents’ former matrimonial home at [Address 3] (the property) of which Mr Quealy was the sole registered owner. [Ms A] had been occupying the home since the parents separated and was paying rent for the property to Mr Quealy. No property settlement had been effected at that stage, nor has such a settlement been concluded since, but the evidence Mr Quealy gave suggested that the parents were contemplating some form of final Family Law property settlement.

22. Mr Quealy said that he informed [Ms A] that he intended selling the property in the forthcoming new year, and, in the course of his discussions with her, he undertook to assist her both financially and otherwise in finding alternative accommodation, following the sale of the property. He said he also agreed to pay [Ms A] $33,426.54 from the sale proceeds following settlement of the sale of the property.

23. Mr Quealy gave evidence that he engaged his real estate agents conducting the sale of the property to arrange alternative rental accommodation for [Ms A] on the successful completion of the sale, and instructed his solicitors, [Law firm], who were acting for him in the sale, to deposit the sum of $33,426.54 to [Ms A]’s bank account on settlement of the sale of the property which occurred on or about 13 February 2020.

24. A copy of the sale contract for the property entered into on 20 November 2019 was before the Tribunal as part of the Agency’s documentation, Exhibit 1, as was a copy of Mr Quealy’s solicitors, [Law firm]’s Trust Account statement reflecting the transfer of $33,426.54 to [Ms A] on 13 February 2020.

25. When questioned by the Tribunal during the hearing as to the precise terms and conditions upon which Mr Quealy’s solicitors had been instructed to pay the $33,426.54 referred to in the preceding paragraph to [Ms A], Mr Quealy denied it was pursuant to any form of property settlement he had reached with [Ms A], and although he said he instructed his solicitors to obtain a receipt for the payment of these funds, no evidence of a receipt from [Ms A] of those funds, other than [Law firm]’s Trust Account statement, was provided.

26. Mr Quealy said in his evidence that he had paid the $33,426.54 to [Ms A] out of the goodness of his heart, but was unable to provide evidence of any more specific agreement with [Ms A] as to the terms upon which he had instructed his solicitors to pay and transfer the sum of $33,426.54 from the sale proceeds of the property to [Ms A].

27. At the direction of the Tribunal, Mr Quealy provided a statement from his current partner, [Ms B] regarding a discussion she said she witnessed between Mr Quealy and [Ms A] in early February 2020 concerning the transfer of the amount of $33,426.54 to [Ms A]’s bank account. 

28. In determining whether to grant Mr Quealy’s request for an extension of time to object to the Agency’s decision of 16 June 2020, the Tribunal is not required to conduct a detailed investigation as to the substance of Mr Quealy’s case regarding the existence or otherwise of an agreement between Mr Quealy and [Ms A] as to the terms upon which the payment of the $33,426.54 to her bank account on 13 February was made; the Tribunal needs only to be satisfied Mr Quealy has an arguable case in the substantial application. The Tribunal is satisfied Mr Quealy has an arguable case on objection.

Prejudice to [Ms A]

29. Consistent with the objective of ensuring that justice is done between the parties, the Tribunal is satisfied Mr Quealy has not rested on his rights in this matter. He has provided a satisfactory explanation for his delay in lodging his objection to the Agency’s decision of 16 June 2020 and satisfied the Tribunal that his case has merit. The Tribunal is also satisfied that the interests of justice outweigh any prejudice to [Ms A] in granting Mr Quealy an extension of time to object.

Public interest considerations

30. Parliament has seen fit to set a 28-day time limit for the lodgement of the objections so parents (and the Agency) can act with certainty as to the outcome when the objection period has elapsed. The public has an interest in reviews of decisions made by the Agency being performed in a timely fashion and in a manner that ensures that all applicants are treated fairly and equally. Accordingly, an extension of time for objection is not to be automatically granted.

31. The Tribunal has found that Mr Quealy has provided a reasonable explanation for his delay in lodging his objection to the Agency’s decision of 16 June 2020, that his case has merit, and that the interests of justice are best served by granting him an extension of time to object to the Agency’s decision of 16 June 2020.

DECISION

The Tribunal sets aside the decision under review and, in substitution, decides that Mr Quealy should be granted an extension of time to object to the Agency’s decision of 16 June 2020.