Sinclair and Sinclair (SSAT Appeal)

[2009] FMCAfam 434

FEDERAL MAGISTRATES COURT OF AUSTRALIA

SINCLAIR & SINCLAIR (SSAT APPEAL) [2009] FMCAfam 434

CHILD SUPPORT – Appeal from Social Security Appeal Tribunal – appeal out of time.

Child Support (Assessment) Act, s.117(2)
Child Support (Registration & Collection) Act, s.110C
Federal Magistrates Court Rules 2001, rr.3.05, 25A.06

Ketteman v Hansel Properties Ltd [1987] AC 189; [1988] 1 All ER 38; [1987] 2 WLR 312
State of Queensland v JL Holdings Pty Ltd (1997) 189 CLR 146; (1997) 141 ALR 353; (1997) 71 ALJR 294; [1997] 2 Leg Rep 13; [1996] 20 Leg Rep 10b; [1997] HCA 1

Applicant: MS SINCLAIR

Respondent: MR SINCLAIR

File Number: MLC 5853 of 2008

Judgment of: Riethmuller FM

Hearing date: 12 March 2009

Date of Last Submission: 12 March 2009

Delivered at: Melbourne

Delivered on: 6 May 2009

REPRESENTATION

Counsel for the Applicant: Ms Brenton of Counsel

Counsel for the Respondent: The respondent appearing in person

ORDERS

1. Application for leave to appeal out of time is denied.

IT IS NOTED that publication of this judgment under the pseudonym Sinclair & Sinclair is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
MELBOURNE

MLC 5853 of 2008

MS SINCLAIR

Applicant

And

MR SINCLAIR

Respondent

REASONS FOR JUDGMENT

1. This is an application for an extension of time within which to appeal a decision of the Social Securities Appeal Tribunal.  On 1 July 2008 the Social Securities Appeal Tribunal delivered judgment on review of a decision of an objections officer made on 22 October 2007. The objection decision had partly allowed a change of assessment decision made on 2 May 2007 on an application of Ms Sinclair made on

   
   

   8 March 2007.

2. The Notice of Appeal lodged by Ms Sinclair was only received by the registry on 11 September 2008.  The time limit for lodging appeals is 28 days: see s.110C of the Child Support (Registration & Collection) Act and rule 25A.06 of the Federal Magistrates Court Rules 2001. The Court has power to extend the time provided for in the Rules: see rule 3.05 of the Federal Magistrates Court Rules 2001.

Appellant’s Grounds

1. The Amended Notice of the Appeal filed on 8 December 2008 contains the following ground:

   The Social Securities Appeal Tribunal failed to take into account the financial capacity of the respondent as their decision is based on the deemed ‘taxable income’ of the respondent who is self-employed and enjoys benefits of his business which are not taken into account in determining his capacity to support his child.

2. When the matter came before me, Counsel for the Applicant stated that the ground that would be pursued would be was as follows:

   That the Tribunal erred in law in that it failed to give consideration to s.117(2) of the Child Support (Assessment) Act in that it did not have any regard to the income earning capacity of the respondent.

   In particular it failed to consider whether the respondent had a higher earning capacity than was demonstrated by his taxable income. 

   No adequate consideration was given to:

   (a) his business expenses;

   (b) his explanation for relinquishing his second job;

   (c) whether alternative forms of employment may be open to the respondent based upon his training, expertise and past experience.

3. I proceed on the basis that there are 4 potential grounds of appeal that the applicant wishes to pursue, being the ground in the amended notice and the particulars raised in the grounds of appeal provided by counsel for the applicant on the hearing of the application to extend time.

4. The reasons of the Tribunal makes clear that the Tribunal did not proceed to make a decision based simply upon a ‘deemed “taxable income” of the respondent’, but instead explored his actual income, concluding:

   37. After considering the evidence, the Tribunal is not satisfied that Ms Sinclair has established that Mr Sinclair’s income was more than the deemed income, as endorsed by the senior case officer, of $40,337.  Nor is the Tribunal satisfied that Ms Sinclair has in fact established that Mr Sinclair’s actual income has been or is greater than his 2005/06 taxable income of $38,281 and his 2006/07 taxable income of $33,368.

   …

   38. The Tribunal finds that there is no evidence to suggest that the tax returns submitted by Mr Sinclair are not an accurate and fair reflection of his income. 

5. In these circumstances it is difficult to see how it can be argued that the Tribunal based their decision on a deemed income rather than the real income of the respondent.  The Tribunal clearly made a decision that it accepted the taxable income of the respondent as being an accurate and fair refection of his income.  I am not able to discern any merit in the ground of appeal in the Amended Notice of Appeal.

6. I turn then to the grounds put forward by Counsel during argument.

   
   

   I note at the outset that the Tribunal spent some time exploring the income of the respondent in its decision and that it could not be said that the Tribunal simply failed to consider the income earning capacity of the respondent. Therefore consideration is required of the particulars given by Counsel.

7. It is alleged that no adequate consideration was given to the respondent’s business expenses.  The Tribunal said:

   38. …During the hearing, Mr Sinclair was able to describe credibly the expenses incurred in running his business and the Tribunal accepted that these were legitimate.  These include amounts paid by Mr Sinclair in relation to superannuation…

   39. Further, the financial statements of Mr Sinclair’s business have been the subject of litigated property proceedings where

   
   

   Ms Sinclair was advised by Counsel.  The Tribunal notes that no complaints have been made to the Australian Taxation Office and they have not investigated Mr Sinclair in relation to his financial statements.  Ms Sinclair and Ms T indicated that they were unwilling to accept Mr Sinclair’s taxable income in the absence of the primary documentation and/or an audit by the Australian Taxation Office, and they argued that, as the Agency had failed to investigate Mr Sinclair’s income in greater detail, the Tribunal had an obligation to do so and should not simply accept his income as declared for taxation purposes.

   40. The Tribunal is mindful of the difficulties of proof facing a payee parent in relation to the real business income of the payer parent where the payee no longer has any involvement in that business.  However, the Tribunal does not have an investigative role and has not been established to investigate matters on behalf of parties.  The Tribunal’s role is to review a decision in light of the evidence before the Tribunal.  The Tribunal may inform itself on any matter relevant to a review of a decision in any manner it considers appropriate and has determined this case in light of the information provided by the parties and obtained during the course of the hearing.

   41. Ms T argued that the Tribunal should infer that Mr Sinclair’s income was higher than declared because the high rate of expenses versus turnover of the business was not typical of most businesses.  The Tribunal did not consider this submission to be of great assistance, given that it was a general statement only and Ms T was not purporting to be an expert witness on business matters.  Moreover, the Tribunal found Mr Sinclair’s explanations of his business turnover and expenses to be credible and not inconsistent with the nature of the business he operates.  While the Tribunal acknowledges that Ms Sinclair genuinely believes that Mr Sinclair’s income is higher than his taxable income, the Tribunal is not satisfied that this is so, having conducted its own assessment during the hearing and taking into account the financial statements of the business and Ms Sinclair and

   
   

   Mr Sinclair’s oral evidence.

8. Whilst it does not appear that a profit and loss statement or balance sheet was produced to the Tribunal various other documents were, which clearly satisfied the Tribunal.  Appeals from the Tribunal are restricted to questions of law, and it is not for me to review a Tribunal’s decision on the facts.  Whether the Tribunal considered the documents sufficient was a question of fact for the Tribunal.

9. The second particular was a complaint that the Tribunal had not adequately considered the respondent’s explanation for relinquishing his second job.  The Tribunal stated that:

   38.  …The Tribunal notes that between 2005/6 and 2006/7 financial years, Mr Sinclair ceased his secondary part-time employment with [omitted] as he was unable to sustain this employment while trying to run the business…

10. Whilst the Tribunal has not discussed this issue in detail, it is apparent that they have considered the fact that the respondent had ceased his secondary part-time job in determining his financial circumstances.

    
    

    I am not directed to any material or submissions put to the Tribunal in this regard that have been ignored or overlooked.  In the context of the case, it appears to me that the Tribunal has considered the issue and have made a finding of fact.

11. The final complaint was that the Tribunal did not consider whether alternative forms of employment may be open to the respondent. Nowhere in the material was the applicant able to point to any evidence suggesting that alternative forms of employment were open to the respondent, nor is this identified as part of the evidence that the applicant gave to the Tribunal in its summary at [25]. A fair reading of the Tribunal’s decision does not indicate that this was a real issue before the Tribunal: rather, the issue was the actual earning the respondent could achieve from the business. To the extent that it is suggested that he had time to engage in a secondary part-time job, the Tribunal has dealt with this in [38].

12. In the circumstances, I am not persuaded that the appellant has demonstrated an arguable case with respect to her grounds of appeal.

Reasons for Delay

1. Turning to the reasons for the delay, the appellant set out in her affidavit the following:

   1. I am applying for an extension of time regarding my appeal against the SSAT decision.  The original appeal was lodged out of date as it was ‘due to an overwhelming amount of stress due to family court issues, intervention order issues and Workcover issues’.

   2. The SSAT Tribunal erred in law and did not act within its power to investigate the other party relative to child support matters.

   3. I am still undergoing medical treatment and counselling for ‘stress’.

2. It appears clear that the appellant lodged documents with respect to the children’s proceedings on 4 July 2008.  This must have been around the time that the appellant received the decision of the SSAT, assuming it was posted to her. There is no evidence before me of the date she received that decision. Counsel for the appellant described her as requiring medical care during this fraught period, but there is no evidence in this regard.

3. On the material before me I am not persuaded that an adequate explanation for the delay has been given in this case.

Prejudice

1. The administrative application in this case was lodged over 2 years ago.  The length of the proceedings and inherent uncertainties is a hardship for both parties.  The potential prejudice to the applicant of not granting leave is that she has no further remedies with respect to this issue.  However, on my view, she does not have an arguable case in any event. 

2. The prejudice for the respondent is the pressures and costs of ongoing litigation.  Lord Griffiths, in Ketteman v Hansel Properties Ltd [1987] AC 189 at 220 (as referred to in State of Queensland v JL Holdings Pty Ltd (1997) 189 CLR 146; (1997) 141 ALR 353; (1997) 71 ALJR 294; [1997] 2 Leg Rep 13; [1996] 20 Leg Rep 10b; [1997] HCA 1) said, with respect to amendments:

   …justice cannot always be measured in terms of money, a trial judge should take into consideration in assessing where justice lies when exercising his discretion whether to grant an amendment such matters as the strain the litigation imposes on litigants, particularly if they are personal litigants rather than business corporations, the anxieties occasioned by facing new issues, the raising of false hopes…

3. In the circumstances, I decline to grant the appellant leave to bring an appeal out of time with respect to the SSAT decision.  I therefore dismiss the application.

I certify that the preceding twenty (20) paragraphs are a true copy of the reasons for judgment of Riethmuller FM

Associate:  Robin Smith

Date:  6 May 2009