Sedano and Child Support Registrar (Child support)

[2020] AATA 1764

Sedano and Child Support Registrar (Child support) [2020] AATA 1764 (15 April 2020)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2020/SC018545

APPLICANT:  Mr Sedano

OTHER PARTIES:  Child Support Registrar

TRIBUNAL:Member F Staden

DECISION DATE:  15 April 2020

DECISION:

The tribunal sets aside the decision under review and, in substitution, decides that Mr Sedano is granted an extension of time in which to lodge an objection to a decision made on 19 July 2019.

CATCHWORDS

CHILD SUPPORT – refusal to grant an extension of time to object - satisfactory explanation for the delay - arguable merit - weighing all factors the extension of time should be 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 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. This review is about whether Mr Sedano should be granted an extension of time to lodge an objection to a decision made by the then Department of Human Services – Child Support (the Department).

2. Mr Sedano and [Ms A] are the parents of [Child A]. [Child A] has been in the greater than primary care of [Ms A] (100%) since he was born in 2010.

3. On 4 April 2019, [Ms A] lodged a change of assessment application on the basis that the child support assessment did not properly reflect Mr Sedano’s income, property and/or financial resources (Reason 8A) or his earning capacity (Reason 8B). The Department informed Mr Sedano of [Ms A]’s application by online letter dated 8 May 2019.

4. On 21 May 2019, Mr Sedano’s representative, [Ms B], contacted the Department to query a letter sent to [Company 1] in relation to Mr Sedano. It emerged that Mr Sedano had not received the 8 May 2019 letter because of a problem related to the linking of Mr Sedano’s child support account to his mygov account.

5. Mr Sedano did not lodge a response to [Ms A]’s application.

6. On 19 July 2019, a Departmental decision maker found Reason 8A established in relation to Mr Sedano and decided to vary Mr Sedano’s income to $208,731 for the period 1 April 2019 to 31 March 2023.

7. Mr Sedano was informed of the 19 July 2019 decision by letter dated 19 July 2019.

8. In a letter dated 14 August 2019, Mr Sedano requested an explanation of the 19 July 2019 decision, essentially stating that it was based on incorrect information.

9. On 20 August 2019, a Departmental officer wrote to Mr Sedano, enclosing a copy of the 19 July 2019 decision. The letter explained that the change to the child support assessment happened as a result of the change of assessment process; the only way this could be redressed was by lodging a formal objection in writing (the appropriate form was enclosed) within 28 days of receiving the decision; and that Mr Sedano would need to provide evidence that the decision was incorrect, for example, business financial papers.

10. [Ms B] contacted the Department on 26 August 2019. A Departmental record states that [Ms B] was informed that the 20 August 2019 Departmental letter explained to Mr Sedano the need to object to the 19 July 2019 decision.

11. [Ms B] contacted the Department again on 3 October 2019 about the decision to vary Mr Sedano’s income. The record of this contact reads in part “Discussed the decision made and provided details of AAT”.

12. On 5 November 2019, Mr Sedano lodged a request for review of the 19 July 2019 decision with the Administrative Appeals Tribunal (AAT).

13. On 11 November 2019, the Department informed the AAT that the most recent objection decision found for Mr Sedano was that of 16 June 2016. It was noted that a 19 July 2019 decision had been made, setting Mr Sedano’s income but no objection had been received from him.

14. On 29 November 2019, a Departmental officer is recorded as explaining to Mr Sedano that to question the 19 July 2019 decision he needed to lodge an objection with a request for an extension of time in which to lodge that objection plus provide reasons for his delay in lodgement. An objection form was issued to Mr Sedano.

15. On 3 December 2019, the AAT dismissed Mr Sedano’s application for review.

16. On 10 December 2019, [Ms B] contacted the Department. She was told about the requirement for an objection decision before a matter can be considered by the AAT and the need for an extension of time request for lodgement of an objection.

17. On 29 December 2019, Mr Sedano formally lodged an objection to the 19 July 2019 decision. He additionally provided his 2018/19 notice of assessment from the Australian Taxation Office (ATO) plus evidence of his debt to the ATO.

18. On 22 January 2020, Mr Sedano lodged a letter requesting an extension of time for lodgement of his objection. He argued that he did not receive the letter from the Department on time and that nothing was sent to his mygov account.  He also stated that he had provided all relevant information about his income.

19. On 5 February 2020, the Department decided to refuse Mr Sedano an extension of time and informed him of this by letter of that date.

20. On 3 March 2020, Mr Sedano lodged an application with the Social Services and Child Support Division of the AAT (the tribunal) for a review of the 5 February 2020 decision. A hearing was conducted on 15 April 2020. Mr Sedano gave sworn evidence by telephone. He was represented by his lawyer, [Mr C]. The tribunal had before it documents provided by the Department (188 pages), a copy of which was provided to Mr Sedano prior to the hearing, and a submission from [Mr C] (A1 to A70), a copy of which was given to the Department.

21. Relevant aspects of the evidence before the tribunal will be referred to in the consideration below.

ISSUES

1. The statutory provisions relevant to this review are contained in the Child Support (Registration and Collection) Act 1988 (the Registration Act) and the Child Support (Assessment) Act 1989 (the Assessment Act). The tribunal also had regard to the Child Support Guide, Child Support’s online technical and policy guide to the administration of the child support scheme.

2. The key issue in this case is whether Mr Sedano should be granted an extension of time within which to object to the Department’s 19 July 2019 decision.

CONSIDERATION

1. Under section 80 of the Registration Act, a liable parent such as Mr Sedano can object to a decision of the Department to make or refuse to make a determination under Part 6A of the Assessment Act about a departure from the administrative assessment.

2. Section 81 of the Registration Act provides that such an objection must be lodged within 28 days from when notice of the decision is given to the person.

3. Under section 82 of the Registration Act, a person may apply for an extension of time in which to lodge an objection. Such an application “must state fully and in detail the grounds of the application, including the circumstances concerning, and the reasons for, the failure by the person to lodge the objection as required by section 81”.

4. Section 83 of the Registration Act provides that the Registrar must consider the application for an extension of time, grant or refuse the application and advise the person of the decision in writing. If refused, section 89 of the Registration Act allows the person who applied for the extension of time to apply to this tribunal for review of that decision.

5. The Registration Act does not set out the criteria to consider when determining an application for an extension of time within which to object. The Child Support Guide at 4.1.5, Extensions of time to lodge objections, states that the key factors to consider are the reason for the delay, whether the person has rested on their rights, the merits of the objection and any potential prejudice to the other party or the public.

Reasons for the delay and whether Mr Sedano rested on his rights

1. Mr Sedano argued that he did not receive the letter telling him of the 19 July 2019 decision. This may have been the case. However, by 14 August 2019, Mr Sedano wrote to the Department expressing disagreement with the decision and so was aware of it and objected to it informally.

2. On 20 August 2019, the Department wrote to Mr Sedano, explaining the objection process and enclosing the necessary form. Information about the objection process is recorded as also being provided to [Ms B] on 26 August 2019. Additionally, the tribunal noted that Mr Sedano has lodged a timely objection previously.

3. The next contact in relation to this matter was between the Department and [Ms B] on 3 October 2019, in which [Ms B] again queried the objection decision and appears to have possibly been referred to the AAT. Mr Sedano incorrectly lodged an application for review with the AAT on 5 November 2019 and correctly lodged such an application with the Department on 29 December 2019.

4. The tribunal found that the delay between 3 October 2019 and 29 December 2019 was the result of a miscommunication between [Ms B] and a Departmental officer. Once the request for review was incorrectly lodged with the AAT, it took some weeks for the error to be realised and righted.

5. In relation to the earlier delay, [Mr C] explained that Mr Sedano was then experiencing and continues to experience mental health difficulties. He relied on [Ms B] to assist him in his dealings with the Department. [Ms B] is not legally trained and appears not to have understood the importance of timeliness in relation to lodging an objection. Mr Sedano was unable to provide direct evidence from his GP about his mental health. However, the tribunal found Mr Sedano’s evidence about his psychological problems, his GP’s response and his referral for psychiatric assessment to be convincing.

6. Overall, the tribunal found that Mr Sedano’s mental health difficulties and his consequent reliance on an unskilled representative led to his initial delay in formally lodging an objection to the 19 July 2019 decision. The tribunal observed that these circumstances also explained why Mr Sedano did not actively participate in the change of assessment process, either on his own behalf or through his representative. The tribunal therefore further found that Mr Sedano did not deliberately rest on his rights.

Merits of the objection

1. The 19 July 2019 decision maker relied upon ATO data showing Mr Sedano to be a director of two companies referred to in the decision as Company A and Company B. The decision maker then derived an income for Mr Sedano from the 2017/18 income tax return of Company B.

2. The available evidence indicates that Company A is [Company 1] and Company B is [Company 2]. While there is clear evidence available of Mr Sedano’s ongoing involvement in [Company 1], this is not the case for [Company 2].

3. The ATO data referred to by the 19 July 2019 decision maker shows Mr Sedano to have been a director of [Company 1] from 28 November 2008 and of [Company 2] from 1 July 2002. While Mr Sedano disputes his control of [Company 1], he agrees that he still works for that company. However, he stated that he ceased involvement with [Company 2], a company set up and run by his older brother, [Mr D], after a falling out in 2012. [Mr C] provided evidence indicating that [Mr D] has been the sole director of [Company 2] from 2012. Here the tribunal noted that there was no reference to Mr Sedano’s involvement in a company other than [Company 1] in the previous 22 March 2016 change of assessment decision or related 17 October 2016 objection decision.

4. As the tribunal found it probable that the 19 July 2019 decision maker set Mr Sedano’s income on the basis of financial information for a company that Mr Sedano is not involved with, it follows that Mr Sedano’s objection to the 19 July 2019 decision has apparent merit.

Prejudice to the other party

1. The tribunal accepted that [Ms A] is entitled to know how much she can expect to receive in child support from Mr Sedano so that she can arrange her financial affairs accordingly. However, given the large amount of Mr Sedano’s arrears (more than $20,000 at around the time this application for review was made), the impact on [Ms A]’s expenditure is currently limited. The tribunal therefore found that there would not be significant prejudice to [Ms A] if Mr Sedano’s extension of time request was granted.   

Prejudice to the general public

1. The general public has the right to expect that a matter such as an objection to a change of assessment decision will be dealt with in a timely manner. However, in the particular circumstances of this case, the tribunal found that extending the period in which Mr Sedano can object was not a significant challenge to that expectation.

Conclusion

41.The tribunal found that the delay in Mr Sedano’s objection was understandable in the circumstances, that Mr Sedano has an arguable case and that the prejudice to the other party and to the general public are not such as to warrant refusing an extension of time for him to lodge an objection to the 19 July 2019 decision. The tribunal therefore concluded that the interests of justice are best served by granting Mr Sedano an extension of time in which to lodge that objection.

DECISION

The tribunal sets aside the decision under review and, in substitution, decides that Mr Sedano is granted an extension of time in which to lodge an objection to a decision made on 19 July 2019.