Sabatino and Fahn (Child support)

[2018] AATA 4421

Sabatino and Fahn (Child support) [2018] AATA 4421 (8 August 2018)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2018/BC014245

APPLICANT:  Mr Sabatino

OTHER PARTIES:  Child Support Registrar

Ms Fahn

TRIBUNAL:Member S Letch

DECISION DATE:  08 August 2018

DECISION:

The decision under review is affirmed.

CATCHWORDS
CHILD SUPPORT – Child support terminating event – Whether the parent ceased to be a resident of Australia and became a resident of a non-reciprocating jurisdiction – Decision under review affirmed

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.

REASONS FOR DECISION

BACKGROUND

1. Mr Sabatino and Ms Fahn are the parents of [Child 1] and [Child 2], who are recorded in the 100% care of Ms Fahn. Mr Sabatino has been assessed to pay child support to Ms Fahn.

2. On 13 March 2017, Mr Sabatino applied to the Child Support Agency (CSA) to be regarded as a non-resident of Australia for child support purposes. He claimed to be a resident of [Country 1] (an excluded jurisdiction for child support assessment purposes). The effect of Mr Sabatino becoming a non-resident would be to give rise to a terminating event for child support purposes: see section 12 of the Child Support (Assessment) Act 1989 (the Act).

3. On 24 May 2017, the CSA refused Mr Sabatino’s application to be treated as a non-resident. He objected on 29 August 2017, and was granted an extension of time by this Tribunal (differently constituted) to bring his objection.

4. On 25 May 2018, an objections officer disallowed Mr Sabatino’s objection. On 4 June 2018, Mr Sabatino applied for review by the Tribunal.

5. The Tribunal conducted a hearing by telephone on 8 August 2018. Mr Sabatino participated by conference telephone, and gave sworn evidence. Ms Fahn elected not to participate in the hearing. The Tribunal accepted into evidence the section 37 Statement and Documents (Exhibit 1) and additional documents from Ms Fahn numbered B1 to B4 (Exhibit B).

CONSIDERATION

1. Mr Sabatino’s case is well summarised in his written submissions to both the CSA and Tribunal:

   …

   This debt incurring against my name is not only an incorrect reflection of an income that I do not earn. More importantly, CSA have refused to acknowledge that I do not live in Australia, I have not lived in Australia for a period of 2 years and I have no plans to move back. I wish to advise I will NOT be coming back to Australia except to see my family at specific times like Christmas. I would like to be very clear that I do not live in Australia and do not have plans to become a resident again in the future. I have lodged a non-resident Tax return reflecting the income I have received from working abroad.

   I have a [Country 1] bank account, private international Health cover, a Visa, I’m not on the electoral role in Australia and I submit a non-residents tax return. My property is for sale and my personal affairs are now all in [Country 1]. My company provides my accommodation; my children are not of Primary School age so this is not a relevant issue.

   In closing I would like to reiterate very clearly as it appears you are not appreciating my residential circumstances - I have NO intention of returning to Australia as a resident. I DO NOT LIVE IN AUSTRALIA. I will NOT BE RETURNING to Australia for any other reasons other than to attend family celebrations or if there are emergencies that require my attention.

   …

   I REFER TO THE DOMICILE TEST

   I Mr Sabatino acquired a new 'domicile of choice' in [Country 1]: I will outline below how I meet the criteria.

   • I’m legally present in [Country 1], I have all the correct Visa’s. Attached to this letter is a copy of my Visa. A new Visa for 3 more years in being processed.

   • I have formed an intention to remain in that country for the foreseeable future, and for a period that is indefinite.

   • My name has been removed from the electoral role

   • I work for a [Country 1] company

   • I have proved my domicile is [Country 1] by residing outside the Commonwealth of Australia for 2 years.

   • I WILL NOT be relocating back to Australia.

   • I have established a home in [Country 1]

   • This place of abode is accommodation supplied by my employer

   • I have international private health insurance paid for by my employer.

   • I do not move from country to country. I remain in [Country 1], I intend for this to be where I live and work for an indefinite period of time.

   • As evidenced previously, I have placed my property for sale.

   • According to the Child support legislation It is not necessary for me to close my Australian bank accounts in order to establish a permanent place of abode overseas. I still have Australian bank accounts however I have a bank account in [Country 1], this is what I use in the country that I live. I have evidenced this in the attachments. I keep bank accounts in Australia for the reasons to give money to [Child 2] and [Child 1] should they need it, Also as per the legislation I have an interest bearing account.

   I REFER TO THE SUPERANNUATION TEST

   This test does not apply to my situation, I Mr Sabatino am not employed by the Government of Australia.

   I REFER TO THE 183 DAY TEST

   I Mr Sabatino have not been a resident of Australia for two years.

   I have been living and had my place of abode in the country of [Country 1].

   I have lived outside the Commonwealth of Australia for the most part of each year.

   I have my residents in [Country 1] and go holidays to visit friends and family.

   I have the appropriate Visa’s which allow me to remain in [Country 1].

2. Ms Fahn’s email to the Tribunal dated 30 July 2018 sums up her position:

   …

   I am not sure that I can add anything of consequence to assist you with a decision.

   Mr Sabatino has managed to hold things up and simply does not want to pay.

   Mr Sabatino has worked abroad for any years and has not paid maintenance. Sometimes a minimal amount of $200 a month. That only lasted a few months and was prior to the final outcome made by child support upon their completed investigations.

   If at conclusion of his hearing the decision goes in his favour I do hope he is still held
   accountable for support he ‘should have’ given to myself and the boys prior to his 183 days out of country.

   Whilst he has decided not to return to Australia due to child support not allowing him to leave, he and his family have holidayed in Asia.

   This shows his disregard to the child support system.

   …

3. During the hearing, Mr Sabatino explained that he recently had a visa renewal in [Country 1] for another three years. He holds a permanent position with his employer.  Mr Sabatino finished a full-time course [in] late 2017 (he started the course in 2015 when he was out of work).  As a general pattern leading up to the beginning of 2018, he was working four weeks (sometimes longer), four weeks off. He would fly back to Australia during his time off to be with his family. Since the beginning of this year, the CSA has imposed a Departure Prohibition Order (DPO) which has effectively precluded him from returning to Australia as he would be unable to leave. Mr Sabatino said he genuinely and in good faith attempted to negotiate a repayment plan with the CSA; he said the CSA officer ‘completely refused to entertain any agreement’.  His father died [in] January 2018; he was unable to return to Australia to attend his funeral. He told the Tribunal he was concerned about payment of his entire child support debt given he did not want to create an overpayment situation in the event his application before the Tribunal succeeded.    

4. The family home [in City 1] is held in joint names with his wife – he said it is still on the market. His wife and children continue to reside there. He said [City 1] is ‘very slow’; he said ‘they can’t just throw it away’. It was purchased in 2010. Indications are the market will improve ‘at some stage’. He said there have been no offers as yet, and that the list price had been reduced ‘slightly’. Mr Sabatino said the plan ‘at this stage’ is to rent the house out if it does not sell.

5. Mr Sabatino said he is looking at leasing a property in [Country 2] for his wife and children to live; it is a short flight from [Country 1]. He considers [Country 1] not to be the most suitable environment for his family.  He has already looked into his family obtaining necessary visas to stay in [Country 2]; he understands that to be a relatively simple process. His wife has two children from a previous relationship (aged 13 and 11) who he said will continue schooling in Australia when his wife leaves Australia; Mr Sabatino and his wife have two children aged 5 and 3.

6. Mr Sabatino told the Tribunal that his mother and grandmother are suffering ill health. He wants to come back to Australia to support them, and wants the DPO lifted. To that end, he said he has acted in good faith with the CSA, recently paying them $20,000. He said he has been told they will not accept anything but the full sum, which is not consistent with what he understands to be the usual approach of the CSA to accept genuine repayment plans. Mr Sabatino considers the CSA approach particularly unreasonable and harsh given his personal circumstances.  

Application of the law

1. The Tribunal observes its jurisdiction is limited to decisions reviewed by an objections officer.  The original decision was made on 24 May 2017. In the Tribunal’s view, the scope of its review is limited to considering the question of whether Mr Sabatino became a non-resident of Australia (a terminating event) on or before the original decision was made on 24 May 2017. The Tribunal observes that there is no fetter on the date of effect given to a terminating event; in other words, if, for example, Mr Sabatino made a later application to be considered a non-resident, and it was found there was a ‘terminating event’ on any date after 24 May 2017, it would take effect from the date of the terminating event, regardless of when Mr Sabatino had asked the Registrar to make such a determination.

2. As a general observation, it is not uncommon for fly-in fly-out workers to work outside Australia and retain Australian residency. The CSA position is, in effect, that Mr Sabatino’s situation is not materially distinguishable from a fly-in fly-out Australian resident.

3. A person is a resident of Australia if they are a resident of Australia for the purposes of the Income Tax Assessment Act 1936 (see section 10 of the Child Support (Assessment) Act 1989 and section 4 of the Child Support (Registration & Collection) Act 1988).

4. Section 6 of the Income Tax Assessment Act 1936  provides the following:

   resident or resident of Australia means:

   (a) a person, other than a company, who resides in Australia and includes a person:

   (i) whose domicile is in Australia, unless the Commissioner is satisfied that the person's permanent place of abode is outside Australia;

   (ii) who has actually been in Australia, continuously or intermittently, during more than one-half of the year of income, unless the Commissioner is satisfied that the person's usual place of abode is outside Australia and that the person does not intend to take up residence in Australia; or

(iii) who is:

(A) a member of the superannuation scheme established by deed under the Superannuation Act 1990 ; or

(B) an eligible employee for the purposes of the Superannuation Act 1976 ; or

(C) the spouse, or a child under 16, of a person covered by sub-subparagraph (A) or (B); and

(b) a company which is incorporated in Australia, or which, not being incorporated in Australia, carries on business in Australia, and has either its central management and control in Australia, or its voting power controlled by shareholders who are residents of Australia.

1. The CSA has developed policy to assist decision-makers. The Tribunal is not bound by Departmental policy but the Tribunal will apply lawful Departmental policy unless there are cogent reasons to the contrary: Drake and Minister for Immigration and Ethnic Affairs [1979] AATA 179. The relevant policy is contained at 1.6.1 of the Child Support Guide which is available on the internet. It includes the following:

…

Australian resident leaving Australia

Where a person who was an Australian resident leaves Australia, the Registrar will consider whether the person continues to be a resident of Australia according to:

·the ordinary meaning of 'resident', or

·the statutory domicile test, or

·the statutory superannuation test.

…

Ordinary meaning of 'resident'

The word 'resides' has its ordinary meaning for this test. The Macquarie Dictionary defines 'reside' as 'to dwell permanently or for a considerable time; have one's abode for a time'.

Australian resident leaving Australia

When considering whether a person has ceased to be a resident of Australia according to the ordinary meaning of the word 'resides', the Registrar will take into account the person's intention in going overseas and the length of their intended stay overseas.

A person who usually resides in Australia but is overseas on holidays continues to reside in Australia during their absence.

Where it is not clear that the person who has left Australia continues to be a resident of Australia according to ordinary concepts of residency, the statutory tests will be considered.

…

Domicile test

This test generally applies to Australian residents who leave Australia.

A person whose domicile is in Australia continues to be a resident of Australia unless their permanent place of abode is outside Australia.

Domicile

A person acquires a domicile of origin at birth. This is the domicile of their parents.

A person whose domicile is Australia will maintain their Australian domicile unless they acquire a different domicile by choice or by operation of law.

Generally, a person will have acquired a new 'domicile of choice' in a particular country if:

·     they are legally present in a country, and

·     they have formed an intention to remain in that country for the foreseeable future, and for a period that they regard as indefinite.

A person will generally not have acquired a new 'domicile of choice' in a country if:

·they intend to leave the country in the foreseeable future, for example on the completion of a contract of employment or other project, or

·they intend to return to their country of origin on the occurrence of some definite future event, such as retirement (even if the timing for their retirement is distant and uncertain).

However, a willingness to move to another country if better opportunities present themselves, or a hope of returning to one's homeland at some unspecified time in the future, will not defeat an intention to acquire a new domicile of choice.

Generally, for the Registrar to be satisfied that a person has acquired a new domicile of choice, the person needs to have demonstrated by their actions that they genuinely do have an intention to reside in the new country indefinitely, for example, obtaining a migration visa or citizenship in the new country.

If a person's domicile is outside Australia they will not be considered to be a resident of Australia under this test, and there is no need to consider their 'permanent place of abode', which is the second part of the test. If the person's domicile is Australia, their permanent place of abode needs to be considered.

Permanent place of abode

A permanent place of abode does not have to be 'everlasting' or 'forever'. A person who intends to return to live in Australia in the foreseeable future can still set up a 'permanent place of abode' elsewhere. If a person whose domicile is in Australia is residing elsewhere, the Registrar will take into account the following factors when deciding if that other country is their permanent place of abode:

·the intended and actual length of the person's stay in the overseas country:
As a broad rule of thumb a period of 2 years or more may be regarded by the ATO as a substantial period for the purposes of a person's stay in another country. However, the duration of a person's actual or intended stay overseas is not of itself conclusive, and must be considered in conjunction with the other factors listed.

·the person's intention to return to Australia at some definite point in time or to travel to another country:
Generally if a person has an intention of returning to Australia at the end of a 'transitory' stay overseas, they will not be considered to have established a permanent place of abode outside Australia. Whether a stay overseas is 'transitory' depends on the circumstances of the case, but as a general rule of thumb a stay of less than 2 years may be considered 'transitory'.

·whether the person has established a home outside Australia:
If a person has established his or her home in an overseas country (e.g. purchased a house or apartment to live in or entered into a long-term lease on a home), this would tend to show the place of abode in the overseas country is permanent.

·whether the person has abandoned their residence or place of abode in Australia:
If a person maintains a home in Australia that is available for them to live in while they are outside Australia, it may tend to suggest (in conjunction with other factors) that the person remains resident in Australia. If a person has sold or rented out their home in Australia it may tend to suggest that the person has established a permanent place of abode overseas.

·the duration and continuity of the person's presence in the overseas country:
If a person has no fixed or habitual place of abode overseas but moves, for example, from one country to another, this may tend to suggest that the person has not established a permanent place of abode outside Australia.

·the durability of the person's association with a particular place in Australia:
It is not necessary for a person to close all Australian bank accounts in order to establish a permanent place of abode overseas. For example, if a person closes their 'everyday use' accounts in Australia but maintains a long term investment account in Australia, it is still possible to establish, on the basis of other factors, that the person has a permanent place of abode outside Australia.

·If a person's children are enrolled at and attend school in the overseas country, this may tend to suggest that the person has established a permanent place of abode overseas. However, if a person's children continue their schooling in Australia despite the presence of adequate educational facilities in the overseas country this would tend to show that the person has not established a permanent place of abode outside Australia.

The weight to be given to each factor will vary with individual circumstances of each case and no single factor will be decisive.

1. It is arguable that Mr Sabatino, at the time in question, should properly be regarded as a resident of Australia under ordinary concepts. In considering whether a person has formed a genuine intent to permanently reside in a country other than Australia, regard must be had not only to the person’s stated intent, but whether the objective facts support such an intention.

2. Mr Sabatino’s wife and children still remain in Australia and continue to live in the family home. Despite his stated intent to sell his home in Australia, which, according to Mr Sabatino, has been on the market since at least March 2017, the property remains unsold. While the Tribunal understood Mr Sabatino was concerned about the sale price, the fact the property remains unsold after such an extended period does not support his stated intention to leave Australia and establish a home for himself and his family in another country. Mr Sabatino maintains a bank account in Australia. During the relevant time, his usual travel pattern was to return ‘home’ to Australia every four or five weeks for a period of approximately four weeks. He was studying full-time at an Australian university. He did not establish his own accommodation in [Country 1]; rather, he accessed fly-in fly-out employer-provided accommodation. He has very strong family ties in Australia. It is only more recently that Mr Sabatino suggests he has investigated establishing a residence suitable for his family in [Country 2]. While Mr Sabatino has obtained a visa to stay and work in [Country 1], this is a requirement of his employment contract. Mr Sabatino has previously worked overseas while maintaining his Australian residency. The Tribunal did not consider Mr Sabatino’s international private health insurance to be a weighty indicator supporting an intention to leave Australia on an indefinite basis. 

1. On balance, the Tribunal does not consider the objective facts relevant to the period under review support an intention to leave Australia on a permanent or indefinite basis. The Tribunal considers Mr Sabatino remained an Australian resident, temporarily absent, under ordinary concepts. Materially, his circumstances are not distinguishable from an Australian resident working in [Country 1], or away from ‘home’.

2. If the Tribunal is wrong in reaching that conclusion, the Tribunal is not satisfied Mr Sabatino had established a new domicile in [Country 1]; rather, he was accessing the employer-provided accommodation while temporarily in [Country 1] for work purposes. That is not the same as establishing his own home, and one suitable as a family residence. It is only more recently he has taken steps to enquire about establishing a family domicile in [Country 2]. He has not abandoned his residence in Australia; his wife and children continue to live in the family home. His ‘home’ or domicile is in Australia with his family. There is no suggestion his children have yet been enrolled in a school outside Australia (his oldest child will be school age in 2019 as the Tribunal understands it). As already observed, Mr Sabatino retains strong family and financial ties in Australia. Under the domicile test, at the relevant time, the Tribunal considers Mr Sabatino should be regarded as a continuing resident of Australia.

3. Accordingly, the Tribunal agrees with the conclusion of the objections officer that, up to and including 24 May 2017, Mr Sabatino did not cease to be a resident of Australia for child support purposes.  

4. The Tribunal observes the issue of the DPO is not before it. However, it seems to the Tribunal that Mr Sabatino, to his credit, has, as he describes it, shown good faith in his attempts to resolve the situation by making recent payments totalling $20,000. The Tribunal observes Mr Sabatino has separate rights of review in respect of attempting to have the DPO lifted.

DECISION

The decision under review is affirmed.