Scroggs and Eberly (SSAT Appeal)
[2010] FMCAfam 1375
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| SCROGGS & EBERLY (SSAT APPEAL) | [2010] FMCAfam 1375 |
| CHILD SUPPORT – Appeal from SSAT – whether error of law in the way the tribunal determined income – no determination of error – appeal dismissed. |
| Child Support (Assessment) Act 1989, ss.117(2)(b)(ii), 117(2)(c)(i)(a) and (b) Child Support (Registration and Collection) Act 1988, ss.103S, 110B |
| Agrippa & Horton (SSAT Appeal) [2010] FMCAfam 1144 Collector of Customs v Possolanic Enterprises Pty Ltd [1993] 43 FCR 280 Minister for Immigration and Multicultural Affairs v Wu Shan Liang (1996) 185 CLR 259 PJ & Child Support Registrar [2007] FMCAfam 829 |
| Applicant: | MS SCROGGS |
| Respondent: | MR EBERLY |
| File Number: | TVC 233 of 2010 |
| Judgment of: | Coker FM |
| Hearing date: | 21 September 2010 |
| Date of Last Submission: | 21 September 2010 |
| Delivered at: | Townsville |
| Delivered on: | 9 December 2010 |
REPRESENTATION
| Applicant: | In person |
| Respondent: | In person |
ORDERS
The Appellant’s appeal against the decision of the Social Security Appeals Tribunal dated 11 May 2010 be dismissed.
IT IS NOTED that publication of this judgment under the pseudonym Scroggs & Eberly is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT TOWNSVILLE |
TVC 233 of 2010
| MS SCROGGS |
Applicant
And
| MR EBERLY |
Respondent
REASONS FOR JUDGMENT
This is an appeal from a decision of the Social Security Appeals Tribunal. The decision is dated 11 May 2010. It is with respect to the issue of child support. The notice of appeal has been filed by
Ms Scroggs, whom I shall refer to as the Appellant. Unfortunately, the grounds for appeal are a little difficult to assess from the information contained within the notice of appeal filed on 16 June 2010. The grounds of appeal are in these terms:
1.There is no reason addressed to the fringe benefits of the respondent given in decision.
2.Respondent has income benefits and resources that have not being given reason in SSAT decision and discluded [sic].
The orders that are sought in the Notice of Appeal, if it were to be successful, is simply that there be a reversion to the decision which was originally dated 25 September 2009.
The respondent to the appeal is Mr Eberly. His response in relation to the matter is simply to seek that the appeal be dismissed.
The appeal relates to the determination of the payment of child support for the child, [X]. [X] was born [in] 2002 and is, therefore, at this time 8 years of age.
[X] has been the subject of a child support assessment since January of 2009. It is noted, and appears to be accepted, that [X] is for the greater part of the time in the primary care of the Appellant. It is also accepted that both the Appellant and the Respondent have two relevant dependent children for the purposes of determinations in respect of these proceedings. Under the heading Assessments, the reasons for decision set out by the SSAT detail the various assessments that have been made in relation to the respondent's obligations with regard to the payment of child support. They can best be summarised as follows:
a)an administrative assessment for the period 5 January 2009 to 30 September 2009 resulting in a child support liability of $1109 per annum;
b)an administrative assessment of child support for the period 1 October 2009 to 4 December 2010 resulting in a child support liability of $1034 per annum;
c)a determination by a senior case officer, that for the period 25 September 2009 to 31 October 2011:
i)the Respondent's taxable income should be set at $49,045;
ii)the Appellant's taxable income should be set at $34,000;
iii)the annual rate of child support payable by the Respondent should be increased by $774;
d)on 12 January 2010, an objections officer partly allowed the objection and fixed child support for the period 12 August 2009 to 31 December 2011:
i)the Respondent's adjusted taxable income should be set at $88,147;
ii)the annual rate of child support payable by the Respondent should be increased by $774;
The Respondent appealed to the SSAT on 13 January 2010, and the Tribunal heard the matter on 23 April 2010. The decision following the hearing was dated 11 May 2010 and was in these terms:
On 11 May 2010, pursuant to section 103S of the Child Support (Registration and Collection) Act 1988, the Tribunal decided to set aside the decision of the objections officer made on 12 January 2010 and replace it with a decision that for the period 12 August 2009 to 31 December 2011:
· Mr Eberly's adjusted taxable income be set at $60,944;and
· The costs of the child ([X]), be increased by $1668 per annum in 2009 and $1904 per annum in 2010 and 2011.
The reasons for the Social Security Appeals Tribunal decision was detailed in the reasons for decision made on 11 May 2010, but dated 21 May 2010. It is clear that at pages 3 and 4 of its reasons, the Tribunal identified the issues that it was required to consider. Those issues were noted as including, particularly:
a)the costs of education for the child;
b)the income property and financial resources and earning capacity of the parties;
c)the Appellant's taxable income; and
d)the Respondent's taxable income.
The Tribunal outlined the provisions of the legislation it intended to rely upon in relation to those various considerations. In particular, reference was made to section 117(2)(b)(ii) of the Act - commonly referred to as "Reason 3". It provides, as a ground for departure, as follows:
(b)that, in the special circumstances of the case, the costs of maintaining the child are significantly affected:
…
(ii)because the child is being cared for, educated or trained in the manner that was expected by his or her parents …
Additionally, of course, consideration was given to the provisions of subsections 117(2)(c)(ia) and 117(2)(c)(ib) - commonly referred to as "Reason 8", and they provide as follows:
(c)that, in the special circumstances of the case, application in relation to the child of the provisions of this Act relating to administrative assessment of child support would result in an unjust and inequitable determination of the level of financial support to be provided by the liable parent for the child:
…
(ia)because of the income, property and financial resources of either parent; or
(ib) because of the earning capacity of either parent …
The Tribunal found that there was a basis for departure arising from the issues with regard to the costs of education. An adjustment was accordingly made in that regard. It was not the subject of appeal, and whilst the Respondent's brief oral address at the conclusion of the hearing of the appeal was to the effect that he was struggling with the obligations that were now placed upon him, pursuant to the decision of the Social Security Appeals Tribunal, he did not contend that there should be any variation. Accordingly, it is not necessary to consider that particular aspect of the determination.
The Tribunal’s determination in relation to issues with regard to the income, property and financial resources and earning capacities of each of the parents were noted in paragraphs 25 and 33 of the reasons for decision. At paragraph 25, when commenting about the Appellant’s financial circumstances, they made the following comment:
Ms Scroggs has meticulously kept her lodgment of tax returns up to date. While her income in the 2009/2010 year is likely to be marginally higher than the adjusted taxable income used in the assessment, the Tribunal is confident that application of the formula to her income (once her tax return has been lodged) will result in a just and equitable outcome and that there is therefore no reason to depart from the administrative assessment on this basis.
When commenting about the Respondent’s taxable income the following was said, paragraph 33:
It is therefore the Tribunal’s view that an assessment based on
Mr Eberly’s taxable income would not be consistent with his true level of earnings and would constitute a special circumstance likely to result in an unjust and inequitable determination of the level of financial support to be provided to [X]. This ground is therefore established in relation to Mr Eberly’s income.
In fact, the entire thrust of the submissions made in relation to this matter and, of course, it is reflected when one considers the ground of appeal, was to note that there has been no inclusion of fringe benefits received by the Respondent from the operation of a business through a trust. At paragraph 29 of the reasons for decision the following comments are made:
Ms Scroggs submitted that Mr Eberly has provided various services to the Trust free of charge and that this therefore showed that Mr Eberly had an entitlement to a claim on the Trust which was not included in the financial statements. The services submitted for examination by Ms Scroggs were supplied prior to separation and are therefore outside the scope of the Tribunal’s consideration of Mr Eberly’s current income. Nevertheless,
Mr Eberly was happy to provide evidence that services which
Ms Scroggs alleged he had provided had in fact been provided by others. The Tribunal examined the invoices supplied and is satisfied that Mr Eberly does not appear to have provided the services alleged. Even were the Tribunal not to be satisfied in this regard, the quantum of the services ($3,000) does not represent a significant entitlement to claim Trust assets (even were such a proposition to be successfully established at law).
Then at paragraphs 30 and 31, they went on to say:
The Tribunal examined the Trust financial statements (and accompanying bank statements) and came to the conclusion that they have been meticulously and fairly prepared. Mr Eberly has received a small ($40,000) loan from the Trust and it is being slowly repaid. He explained that this was incurred by him in order to pay out a property settlement with his former wife in 2001. There was no evidence of any unaccounted for benefit to Mr Eberly in the accounts of the Trust.
Paragraph 31:
The Tribunal has carefully examined the financial statements provided for the Business (and accompanying bank statements) and finds them also to be truly and fairly prepared. There are no significant undisclosed benefits to Mr Eberly associated with his conduct of the Business. Whilst the Business has run at a profit ($35,783 for tax purposes) in 2009, approximately one third of that is attributable to the (non cash) depreciation expense ($9,657) and the Tribunal notes that this has enabled the Business to pay $47,698 in (after tax) drawings to Mr Eberly. The Tribunal calculates that drawings of this magnitude equate to a taxable income of $60,944 for a wage and salary earner. Accordingly, the Tribunal finds that this amount is Mr Eberly’s taxable income for child support purposes.
Most significantly it was important that it should be recognised that the Tribunal specifically found that there was nothing in the evidence presented to the Tribunal which is inconsistent with a “finding that
Mr Eberly will continue to enjoy benefits associated with the business at approximately the same level into the foreseeable future.”
It is noteworthy, therefore, that the Tribunal specifically considered at length the various issues relating to the benefits, including specifically income received by the Respondent as a result of his work for the trust.
The thrust of the Appellant’s position in relation to this matter is to say that the Respondent receives fringe benefits which have not been taken into account in relation to the determination of these proceedings.
In particular, and in support of that, the Appellant relies on the decision of Senior Case Officer C. The date of that decision is 12 January 2010, and it resulted in an assessment of the Respondent’s adjustable taxable income at $88,147.
In the details of the objection decision, the Senior Case Officer found that there were various benefits received by the Respondent which needed to be included in the final assessment of his income. They included, in particular, his benefits in relation to a telephone and also benefits relating to the use of a motor vehicle. It was noted by the Tribunal, however, that they “carefully examined the financial statements provided for the business” and found them to be truly and fairly prepared. It was also noted by the Tribunal that the financial statements were meticulously and fairly prepared.
It is somewhat difficult, therefore, to make a finding that there has been some fundamental error included within the decision making process of the Social Security Appeals Tribunal.
Section 110B of the Child Support Registration and Collection Act 1988 provides that a party to a proceeding before the Tribunal may appeal to a court having jurisdiction on a question of law from any decision of the Tribunal in that proceeding. This is not a review on the merits.
In Agrippa & Horton (SSAT Appeal) [2010] FMCAfam 1144, Halligan FM summarised the applicable law when the Court reviews a decision of the Tribunal. His Honour said, at paragraphs 10 and 11, the following:
…the reasons for the decision under review are not to be construed minutely and finely with an eye keenly attuned to the perception of error (Collector of Customs v Possolanic Enterprises Pty Ltd (1993) 43 FCR 280, at 287, cited with approval in Minister for Immigration and Multicultural Affairs v Wu Shan Liang (1996) 185 CLR 259 at 272 per Brennan CJ, Toohey, McHugh and Gummow JJ…
Nonetheless, as Riethmuller FM noted in PJ & Child Support Registrar [2007] FMCAfam 829 at [38]
…such an appeal does not allow for review on the merits. As a result, it is important for the Tribunal to provide appropriate reasons. This will usually entail careful findings of fact and clear explanations of the reason for any decision, particularly where it involves the exercise of a discretion such as altering a child support amount.
In other words there is obviously a requirement for there to be precision and careful explanation given in relation to a finding, but there is also not the suggestion that there should be a minute or fine re‑consideration of the evidence that might be before the Tribunal, looking for an error of whatever nature.
The fact is that here the Tribunal has closely examined the financial records of the trust. As indicated previously the Tribunal examined the financial statements provided for the business and accompanying bank statements. The Tribunal indicated that there had also been a close examination of the trust’s financial statements and accompanying bank statements, and found that in relation to each, there was no evidence of any unaccounted for benefit to the Respondent in relation to the accounts of the trust, nor was there anything which gave rise to a suggestion that there were benefits over and above those which had been considered by them, in relation to the determination of these proceedings.
There is an obvious obligation that falls upon an appellant in relation to any determination, which may lead to an exercise of discretion such as altering a child support amount. Whilst not necessarily the same considerations arise in relation to an appeal from a decision of the Social Security Appeals Tribunal it is fundamentally clear that there must be a proper basis upon which there could or should be a determination that there need be a reconsideration or a re-hearing of the appeal, according to law.
In this matter the Social Security Appeals Tribunal may perhaps have been more expansive in the information that they gave in respect of the matter. However, it is clear that there has been a thorough and complete examination of the financial records relevant in relation to the matter, and I am unable to consider that there has been any failure on the part of the Social Security Appeals Tribunal to fully consider the income of the Respondent and, therefore, to properly assess the basis upon which there should have been an assessment made of the child support to be paid.
I am not satisfied that there is an error of law or a failing in relation to the proceedings, such that there would be such a finding open to the Court in relation to this matter. Accordingly, it is the finding of the Court that the appeal should be dismissed, and the orders of the Court will be, therefore, in those terms.
I certify that the preceding twenty-seven (27) paragraphs are a true copy of the reasons for judgment of Coker FM.
Date: 9 December 2010
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