Sherburn and Sherburn (Child support)

[2020] AATA 4294

Sherburn and Sherburn (Child support) [2020] AATA 4294 (24 August 2020)

DIVISION:Social Services & Child Support Division

REVIEW NUMBERS:  2020/PC019076 & 2020/PC019058

APPLICANT:  Ms Sherburn

OTHER PARTIES:  Child Support Registrar

Mr Sherburn

TRIBUNAL:Senior Member R Ellis

DECISION DATE:  24 August 2020

DECISION:

The decisions under review are affirmed.

CATCHWORDS

CHILD SUPPORT – particulars of the administrative assessment – overseas income – whether new overseas income could be determined for parent – 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. This review is about the adjusted taxable income amounts that should be applied for Mr Sherburn in the administrative assessment of child support.

2. Ms Sherburn and Mr Sherburn are the parents of [Child 1] (born August 1995) and [Child 2] (born March 2004).  There has been a child support assessment in place since 23 September 2005.

3. On 9 September 2011 the Child Support Agency made the decision to apply a provisional adjusted taxable income for the 2010–11 financial year of $41,187 for Mr Sherburn in the child support assessment for the period 1 October 2011 to 30 September 2012 (the first original decision).

4. On 12 September 2012 the Child Support Agency made the decision to apply a provisional adjusted taxable income for the 2011–12 financial year of $43,243 for Mr Sherburn in the child support assessment for the period 1 October 2012 to 31 October 2013 (the second original decision).

5. On 20 January 2020 Mr Sherburn objected to both the first original decision and the second original decision.

6. On 21 April 2020 the Child Support Agency allowed the objections and made the decisions to apply an income of $0 for Mr Sherburn for the 2010–11 financial year (the first objection decision) and an income of $0 for Mr Sherburn for the 2011–12 financial year (the second objection decision).

7. On 18 May 2020 Ms Sherburn applied to the Administrative Appeals Tribunal (the Tribunal) for a review of the second objection decision and on 19 May 2020 Ms Sherburn applied for review of the first objection decision.

8. The Tribunal conducted a hearing into both applications on 23 July 2020.  Ms Sherburn and Mr Sherburn gave evidence on affirmation by conference telephone.  The Child Support Agency provided the Tribunal and the parties with papers relevant to the matter (302 pages).

ISSUES

1. The statutory provisions relevant to this review are contained in the Child Support (Assessment) Act 1989 (the Act).

2. The Child Support Agency makes child support assessments using a formula in Part 5 of the Act. The elements of the formula include the adjusted taxable income for each parent.  This is ordinarily comprised of the parent’s taxable income for the previous financial year (the last relevant year of income) as assessed by the Australian Taxation Office plus other income components.

3. In circumstances where a parent is a resident of a reciprocating jurisdiction then section 58C of the Act describes how an overseas income may be determined if there is sufficient information available.  Section 58D of the Act describes how an overseas income may be determined if there is not sufficient information available.

4. The issues which arise in this case are what adjusted taxable income amounts should be applied in the child support assessment for Mr Sherburn for the 2010–11 and 2011–12 financial years.

CONSIDERATION

1. Ms Sherburn told the Tribunal she disagreed with both objection decisions made by the Child Support for two main reasons.  Ms Sherburn said Mr Sherburn should not have been permitted to object because his objections were submitted outside the statutory 90-day timeframe and no extensions of time were granted.  Ms Sherburn also said it was incumbent on Mr Sherburn to provide evidence of his unemployment during the periods in question and he had not done so.

2. Ms Sherburn submitted that as Mr Sherburn was a resident of [Country 1], which is a reciprocating jurisdiction, he had 90 days within which to lodge an objection to the first original decision made on 9 September 2011 and the second original decision made on 12 September 2012.  Ms Sherburn said Mr Sherburn did not object until well outside this timeframe.  She said Mr Sherburn was using the excuse that he had not received any correspondence from the Child Support Agency while he was in [Country 1] but she believed the onus was on him to provide his contact details for child support purposes and he had not.  Ms Sherburn pointed out that the Child Support Agency had contacted Mr Sherburn by telephone in 2008 and sent Mr Sherburn correspondence dated 8 May 2013 regarding his residency status so they were aware of how to get in touch with him in [Country 1].  She said in her view the objection decisions were invalid.

3. Ms Sherburn said Mr Sherburn now stating he was unaware of the original decisions made by the Child Support Agency was not an excuse to reopen these two cases after such a long period of time had expired.  She said Mr Sherburn made no attempt to contact the Child Support Agency and it was untenable for the Child Support Agency to then accept the objections and modify the assessments due to an administrative error which could have been corrected.  Ms Sherburn said Mr Sherburn had rested on his rights.

4. Ms Sherburn told the Tribunal she did not believe Mr Sherburn was unemployed while he was living in [Country 1].  She said although Mr Sherburn had stated he was being supported by his parents while in [Country 1], Mr Sherburn’s father had written to her in 2007 confirming he had no knowledge of his whereabouts.  Ms Sherburn said Mr Sherburn travelled frequently to other countries while he was in [Country 1].  Ms Sherburn said Mr Sherburn was highly qualified with a [qualification] in [subject] and she believed he had been working as [an occupation].  She added that when Mr Sherburn returned to Australia he listed this as his occupation on his returning traveller card.

5. The Tribunal notes in evidence from the Child Support Agency a letter from [Mr Sherburn’s father] of [city] to Ms Sherburn dated 7 February 2007.  The letter states that Mr Sherburn is “not available at this address” and that “We are not aware of his whereabouts”.

6. Ms Sherburn said, furthermore, Mr Sherburn had made a number of financial transactions moving significant sums of money between his accounts in November 2006 and January 2007.  She said he also had cash available in an [Bank 1] account in [Country 1] as well as a share portfolio.

7. The Tribunal notes in evidence from the Child Support Agency copies of [Bank 1] statements in the name of Mr Sherburn showing transactions from 20 May 2005 to 18 April 2007. There is also an [Bank 1] financial summary in the name of Mr Sherburn which shows a log in date of 23 June 2017.  The savings account balance is 816,229.62 [Country 1 currency] and the [securities] accounts balance is 2,777,807.20 [Country 1 currency].

8. Ms Sherburn told the Tribunal that the Child Support Agency had the power to request information from Mr Sherburn, including information related to his income, under sections 160, 161 and 162A of the Act before making an appropriate child support assessment.  She said the Child Support Agency had not done this and Mr Sherburn had not provided evidence to prove his income during the periods under consideration.  Ms Sherburn said nonetheless the Child Support Agency had made the objection decisions without any evidence of his income or his employment status during his time in [Country 1].

9. Ms Sherburn said Mr Sherburn also had a long history of avoiding his child support responsibilities which undermined the intent of the legislation.  She said claiming he was not working in [Country 1] and had no income was just another example.

10. Mr Sherburn told the Tribunal that he left Australia in January 2007 and worked in [Country 2] from February 2007 until January 2008 when his employment was terminated.  He said he was in [Country 1] from February 2008 until October 2008 and then worked in [Country 3] from November 2008 until May 2009 before returning to [Country 1].  Mr Sherburn explained that he had not worked in [Country 1] from 1 June 2009 and survived primarily with the support of his parents.

11. Mr Sherburn said he was living with his parents in [Country 1] until the end of 2017 and then moved to [Town 1, in Australia] where he resided in an apartment owned by his parents.

12. Mr Sherburn said he was required to travel to other countries while in [Country 1] because of visa limitations.  Mr Sherburn said he could not stay in [Country 1] for longer than 180 days and so he left the country and spent time in [Country 4] or [Country 3] before returning.  He added that just because he was travelling it did not follow that he was traveling for work purposes.

13. Mr Sherburn confirmed he was contacted by the Child Support Agency by telephone in 2008 but said there had been no other communication with the Child Support Agency.  He said he had received no written communication from the Child Support Agency while in [Country 1].  Mr Sherburn said he did not receive documents from the Child Support Agency relating to child support matters until January 2020 after returning to Australia in November 2019.

14. Mr Sherburn told the Tribunal it was very difficult for him to provide documents to prove he was not working in [Country 1], however, he had signed a declaration before a Justice of the Peace after returning to Australia which explained his circumstances while in [Country 1].

15. The Tribunal notes in evidence from the Child Support Agency a declaration provided by Mr Sherburn signed before a Justice of the Peace and dated 20 January 2020.  In this declaration Mr Sherburn states that from January 2007 until May 2009 he was employed for a period of 18 months and has been unemployed since then.  The Tribunal also notes in evidence an incoming passenger card signed by Mr Sherburn showing he returned to Australia on 7 November 2019.  According to Child Support Agency records Mr Sherburn was not considered a resident of Australia from 24 January 2007.

16. Mr Sherburn said the funds in the [Bank 1] had been frozen under a court order since 25 January 2007.  Mr Sherburn said the [securities] accounts showed the value of a share portfolio.  He said the value of the portfolio had changed but not the number of shares in that portfolio.  He said the balance of the savings account changed only when credited with dividends and interest.  Mr Sherburn said he could not sell the shares or access the funds in the savings account.  Ms Sherburn agreed the accounts had been frozen.

17. Mr Sherburn reiterated he had not worked in either the 2010–11 or 2011–12 financial years.  He said his entire tax residency since 2007 was in other countries and he had no income in Australia.  He added that he was not required to file a tax return in either financial year.

18. The Tribunal finds that at the commencement of the new child support periods on 1 October 2011 and 1 October 2012 Mr Sherburn was determined to be a resident of [Country 1].  [Country 1] is a reciprocating jurisdiction[1].  There are time limits on lodging objections.  An objection to a decision must be lodged within 28 days of the day that the parent was served with written notice of that decision (section 81(1) of the Child Support (Registration and Collection) Act 1988).  This period is extended to 90 days for a parent who resides in a reciprocating jurisdiction.

    [1] Schedule 2 of the Child Support (Registration and Collection) Regulations 1988

19. The Tribunal notes in evidence that letters advising Mr Sherburn of the first original decision and the second original decision are marked as “set to deleted on system”.  This means they were generated by the Child Support Agency but never sent.  The Tribunal also notes the Child Support Agency has determined that Mr Sherburn objected within 28 days of receiving notice of the decisions to apply a provisional income for the 2010–11 and 2011–12 financial years as it was not aware of his address at the time the original decisions were made.

20. The Tribunal is satisfied Mr Sherburn has made valid objections.

21. Ms Sherburn believes Mr Sherburn was working in [Country 1] and not being supported by his parents.  Ms Sherburn argues that if Mr Sherburn was being supported by his parents then his father would not have written to her in 2007 to say he had no knowledge of Mr Sherburn’s whereabouts.  The Tribunal notes that Mr Sherburn was working in [Country 2] for most of 2007 and was not living in [Country 1] with his parents at that stage.  Ms Sherburn has also provided financial information to show that Mr Sherburn was either earning an income or had access to funds, however, this relates to income prior to the 2010–11 and 2011–12 financial years.  Ms Sherburn has also acknowledged that the [Bank 1] accounts have been frozen and Mr Sherburn cannot access the funds in the savings account or the shares in the [securities] accounts.

22. The Tribunal accepts that Mr Sherburn was a resident of a reciprocating jurisdiction during the 2010–11 and 2011–12 financial years.  This has not been disputed by the parents.  The Tribunal also accepts that Mr Sherburn was not required to lodge a tax return in Australia for the 2010–11 and 2011–12 financial years and was unable to be contacted by the Child Support Agency.  In such circumstances subsection 58D(1) of the Act is relevant.  It states:

    This section applies if:

    (a)   the Registrar does not possess sufficient information and documents to determine a parent’s overseas income; and

    (b)   despite requesting, under section 162A, information or documents from the parent or from an overseas authority that are necessary to determine the parent’s overseas income, the information or documents requested have not been supplied.

23. The legislative references to sections 160 and 161 of the Act raised by Ms Sherburn do not apply to a person who is a resident of a reciprocating jurisdiction. Section 162A does relate to the obtaining of information in relation to residents of a reciprocating jurisdiction, however, the Child Support Agency was unable to issue a notice under this section as Mr Sherburn was not contactable. As [Country 1] does not have a clear child support authority such a notice was also not sent to an overseas authority in that country.

24. In making an administrative assessment of child support subsection 58D(2) states the Registrar may determine that the parent’s overseas income is an amount “of at least two thirds of the annualised MTAWE[2] figure for the relevant June quarter”. In this case, as the requirements of subsection 58D(1) were not met, the Child Support Agency was unable to make an income determination under this subsection of the Act.

    [2] Male total average weekly earnings

25. The Tribunal is satisfied that, at the times the first original decision and the second original decision were made, it was not possible to determine an overseas income for Mr Sherburn under section 58D of the Act. The decisions to use a $0 income for Mr Sherburn for the 2010–11 and 2011–12 financial years are, therefore, the correct decisions.

26. The Tribunal is also satisfied, based on the evidence provided, that there is still insufficient information available to determine an overseas income amount for Mr Sherburn for the 2010–11 and 2011–12 financial years.  The Tribunal notes, however, there is nothing to prevent the Child Support Agency from making an assessment of Mr Sherburn’s overseas income for the relevant financial years under the appropriate provisions of the Act.

DECISION

The decisions under review are affirmed.