Sewell and Child Support Registrar (Child support)

[2024] AATA 1895

Sewell and Child Support Registrar (Child support) [2024] AATA 1895 (24 April 2024)

DIVISION:Social Services & Child Support Division

EXTENSION APPLICATION

NUMBER:2024/BC027599

APPLICANT:  Mr Sewell

OTHER PARTY:  Child Support Registrar

DATE DECISION MADE:                24 April 2024

APPLICATION:

An extension application made on 4 March 2024 asking the AAT to consider the application for AAT first review of a decision of the Child Support Registrar on 22 January 2024 despite the period for applying for review having ended.

DECISION:

The extension application is refused.

CATCHWORDS

CHILD SUPPORT – extension of time to apply to tribunal – child support assessment – registrar’s decision not to depart from administrative assessment – objection disallowed – application to tribunal made more than 28 days after objections officer’s decision – no material change in circumstances – applicant looking to transition to retirement but has not yet – multiple change of assessment applications made – application 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. Mr Sewell and [Ms A] are the parents of [the child]. There has been a child support assessment in place from 23 October 2016 with Services Australia (Child Support).

2. The assessment in place prior to Mr Sewell’s change of assessment application made on 30 May 2023 was as follows:

• For the period 1 January 2024 to 31 December 2024, Mr Sewell is assessed to pay the annual rate of child support of $27,870. This is based on Mr Sewell’s set adjusted taxable income (ATI) of $160,000 (this was the decision made by the Administrative Appeals Tribunal (the Tribunal) on 21 December 2023 and applies for the period 8 September 2022 to 31 December 2024) and [Ms A]’s 2022/2023 ATI of $136,783. The annual rate also includes an increased amount for the education costs of [the child].

• For the period 1 August 2023 to 31 December 2023, Mr Sewell was assessed to pay the annual rate of child support of $25,776. This was based on Mr Sewell’s set ATI of $160,000 and [Ms A]’s 2022/2023 ATI of $136,783. This includes the increase relevant to 2023 education costs as per the prior change of assessment outcome.

• The education costs determined prior to this change of assessment application were as follows:

  oFor the period 1 January 2023 to 31 December 2023, the annual rate of child support payable by Mr Sewell is increased by $8,591;

  oFor the period 1 January 2024 to 31 December 2024, the annual rate of child support payable by Mr Sewell is increased by $10,685.

1. On 30 May 2023 Mr Sewell applied for a change of assessment on the basis of Reasons 5 – the money goods or property received by the child or the payee, 8A – the income property and financial resources of each parent and 8B – the earning capacity of Mr Sewell.

2. On 11 December 2023 a delegate of the Registrar refused to depart from the administrative assessment in place at the time, because no reason had been established. On 26 December 2023 an objections officer disallowed Mr Sewell’s objection.

3. On 4 March 2024 Mr Sewell applied to the Tribunal. As this request for review was not lodged with the Tribunal within 28 days of Child Support’s decision, an application for an extension of time was also lodged. The matter was heard on the papers. The Tribunal had regard to the subsection 93(2) statement and documents (607 pages) provided by Child Support in accordance with the Child Support (Registration and Collection) Act 1988 (the Act) as well as the reasons for the extension of time outlined in Mr Sewell’s application for review.

LAW AND CONSIDERATION

1. The law relating to a person’s right to seek review of a decision of the Registrar is contained in section 29 of the Administrative Appeals Tribunal Act 1975 (the AAT Act). Subsection 29(2) of the AAT Act requires that a person must lodge a review request with this Tribunal within 28 days after a notice of the decision of the Registrar is given to them.

2. Where the period for lodgement has ended, the person may send the application to the Tribunal along with a request that the review be treated as if it was duly lodged, that is, that it was lodged within the allowed time (section 91 of the Act). This is commonly referred to as an extension of time request. Section 92 of the Act then provides that the Tribunal must consider the application for an extension of time, and grant or refuse that application in writing.

3. In Brisbane South Regional Health Authority v Taylor [1996] HCA 25, the High Court, in dealing with an extension of time case and the general concept of time limitation periods, noted that while an extension of time is the exception to the general rule, there are legislative provisions which in the circumstances of the facts of an individual case may indicate that justice is served by the general rule being overruled.

4. In making this decision, I considered the guiding principles for the exercise of a discretion to allow an extension of time as set out in Hunter Valley Developments Pty Ltd v Cohen (1984) 3 FCR 344 (Hunter Valley Developments). In that case the Federal Court said that an extension of time should not be granted unless it was proper to do so, noting that in general, applications or proceedings commenced outside of a prescribed time limit will not be considered. The court also said that there must be an acceptable explanation for the delay and that it must be fair and equitable in the circumstances to extend time. The Federal Court identified 6 factors to take into account when deciding whether to grant an extension of time.

5. In Brown v Commissioner of Taxation [1999] FCA 563, Hill J reviewed the principles set out in the Hunter Valley Developments case in the context of a person seeking an extension of time to lodge an objection against an assessment of income tax. In that case, Hill J commented that Wilcox J in Hunter Valley Developments never suggested he was laying down a series of principles to be applied in every case, and that the factors would serve as a guide and were not exhaustive. Further he commented that: “Too slavish an adherence to them should, in my view, be avoided.” Hill J then sought to reshape the factors to be considered in the context of objecting to a tax assessment.

6. The Administrative Appeals Tribunal has applied the principles set out in the Hunter Valley Developments case in Mulheron and Australian Telecommunications Corporation (1991) 14 AAR 42 (Mulheron). The authorities, Hunter Valley Developments and Mulheron, establish that when considering whether to exercise the discretion to allow an extension of time, a decision-maker should consider and balance a range of factors including:

   ·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 that they will experience in providing evidence as a result of the delay;

   ·wider prejudice to the general public;

   ·fairness in granting an extension of time as between the applicant and other persons in a similar position; and

   ·whether it is proper to grant the extension of time.

7. The Tribunal is satisfied that Mr Sewell was advised of his right to seek review with the Tribunal in accordance with subsection 87(3) of the Act. The Tribunal is satisfied Mr Sewell was notified of the objections officer’s decision electronically on 22 January 2024. For Mr Sewell to have lodged his application within 28 days of the objections officer’s decision he would have needed to do this by 19 February 2024. Mr Sewell was 13 days late in his application to the Tribunal.

8. The decision made by the Tribunal on 21 September 2023 (matter 2023/BC026205) in considering just and equitable made the following findings:

   33. … [Mr Sewell’s] 2022/23 tax return has since been completed – I consider the combined financial resource of the taxable income of the company (some $120,000, allowing for a considerable deduction for depreciation, which is a potentially very material benefit to Mr Sewell), the wage paid by the company to Mr Sewell], and the [Financial institution] receipts, roughly equate to $160,000 per annum, broadly equivalent to the figure Child Support arrived at for income prior to April 2023.

   34.      Mr Sewell’s evidence was that he is looking to “transition to retirement” at some point in future; however, it appears that is only proposed at this stage. He received his estimated “full year wage” in 2022/23 based on his own assessment on what the company can afford of some $35,000 to $40,000. Going beyond the end of the 2022/23 financial year, I consider it fair to assume Mr Sewell will continue to be paid a wage in the region of $35,000 to $40,000 per annum. Whilst Child Support appears to have reduced his income from 1 April 2023 on the basis of an assumption he would not receive a wage, I do not consider that appropriate. I consider an assessment of Mr Sewell’s adjusted taxable income at a level of some $160,000 beyond 31 March 2023 to be preferable. In the interests of certainty and limiting transactional friction with Child Support, I consider extending the assessment until 31 December 2024 to be just and equitable.

   35.      I note that if there is a material change in circumstances at any point in future (for example, If Mr Sewell could produce objective evidence that the income for the company had markedly reduced during the 2023/24 financial year), either parent will remain at liberty to make a fresh application for a change of assessment.

9. When Mr Sewell lodged this change of assessment application on 30 May 2023 this review was put on hold pending the outcome of his change of assessment application made on 19 January 2023. As this application worked its way through Child Support from the Delegate to the objections officer and eventually the Tribunal, I considered whether there had been any material changes to Mr Sewell’s circumstances when compared with his circumstances outlined by the Tribunal in their decision of 21 September 2023.

10. Mr Sewell states his reason for his application for an extension of time is that he believes the income set by the Tribunal on 31 September 2023 should be “lowered as he is trying to retire and he can’t afford the CS assessed”. I am satisfied based on the information before me that Mr Sewell has not yet retired. His circumstances do not appear to be any different to those circumstances considered by the Tribunal in their decision of 21 September 2023.

11. Additionally, as Mr Sewell has lodged multiple change of assessment applications, the decision of the Tribunal on 21 September 2023 covers the period of this application which has been on foot since 30 May 2023. I also note that the decision of the Tribunal on 21 September 2023 considered Mr Sewell’s evidence that he is hoping to transition to retirement and this was considered by the Tribunal at that time. At paragraph 37 the Tribunal member writes:

    In terms of going forward, I have determined that, in the interests of giving certainty, Mr Sewell’s adjusted taxable income should be varied until the end of 2024. Similarly, I consider an adjustment for school fees should be made until the end of 2024 . I am satisfied that the adjustments made by Child Support have properly taken into account the bursary received by [Ms A]. Taking account of the “out of pocket” costs, I consider that Mr Sewell’s annual child support liability should be increased by $8,591 (half of $17,182, which is $20,352 (out of pocket costs for 2023 less a 25% discount) less a bursary sum of $3,170 not previously accounted for in the decision of 16 December 2020) for the 2023 calendar year, and $10,685 for the 2024 calendar year. This is the same conclusion as the objections officer.

12. Mr Sewell writes in his application for an extension of time to the Tribunal in summary that he has been prevented from retiring due to his income being set to $160,000. The Tribunal in their decision on 21 September 2023 determined based on Mr Sewell’s circumstances at the time of that decision given that Mr Sewell had not yet retired, that extending the departure determination to 31 December 2024 is not unreasonable in the circumstances.

13. While I understand that Mr Sewell is well past the retirement age of 67 years old set by Centrelink, it is my view based on the information from Mr Sewell in his application for an extension of time that he has not yet retired, and until he does so his circumstances have not materially changed from the decisions made in his change of assessment application of 19 January 2023.

14. I am also satisfied that Mr Sewell has rested on his rights, and he is seeking to have a decision that was previously made by the Tribunal re-heard. He has not provided an acceptable reason for his delay in his application to the Tribunal. I am also satisfied that no new information has been provided by Mr Sewell which would lead the Tribunal to conclude differently to the decision made by the Tribunal on 21 September 2023. It is on this basis that I am satisfied that there is no merit in Mr Sewell’s application for review given he has not yet semi-retired nor retired.

15. The Tribunal finds there exists prejudice to the other party given the delay in Mr Sewell’s application for review and based on the information I have considered it is highly unlikely that a more favourable decision will be determined by the Tribunal on review. [Ms A] is also entitled to some certainty in administrative decision making which allows her to adequately support [the child]. I am also satisfied there exists prejudice to the wider public.

16. Time frames for initiating legal proceedings do serve a useful public purpose. The principal objects of the Act are to ensure that children receive from their parents the financial support that their parents are able to provide; and that the periodic amounts payable by parents towards the maintenance of their children are paid on a regular and timely basis (subsection 3(1) of the Act).

17. To that end it is important that decisions and reviews of administrative assessments are made on a timely basis so that necessary financial support can be provided to the children of the assessment. Any delay may cause hardship for them and the parent providing care and any delay may also mean a parent is placed in a position where they are required to pay back money to the paying parent if it is determined they have paid too much. If an extension of time is allowed, this may place the parent in receipt of child support in a difficult position and cause undue hardship if much later a different determination was made. Mr Sewell lodged an application with the Tribunal  after the 28 days. The Tribunal is satisfied that a 28-day time limit reduces uncertainty for both parties and the general expectation that unless there is a good reason, time frames should be observed.

18. It is for these Reasons that Mr Sewell’s extension of time application is refused.