Tan and Tan and Anor (SSAT Appeal) - [2011] FMCAfam 913

FEDERAL MAGISTRATES COURT OF AUSTRALIA

TAN & TAN and ANOR (SSAT APPEAL)

[2011] FMCAfam 913

CHILD SUPPORT – Appeal from SSAT – reconciliation of estimate of income with taxable income – whether the appellant had an arguable case – percentage of care.

Child Support (Assessment) Act 1989, ss.48, 59, 60, 64, 64A, 98S, 111, 112, 118

Drysdale & Drysdale [2011] FamCAFC 85
Earle & Lampman [2009] FMCAfam 1080; [2009] FLC 98-045
In the Marriage of Mee & Ferguson [1986] FamCA 3; [1986] FLC 91-716; 84 FLR 179; (1986) 10 Fam LR 971
In the Marriage of Paradine v Paradine (1981) 7 Fam LR 125; (1981) FLC ¶91-056.
Luton & Lessels [2002] HCA 13; (2002) 210 CLR 333; 187 ALR 529; [2002] FLC ¶98-015; 76 ALJR 635; 49 ATR 471; 28 Fam LR 398
Parish & Torrey (SSAT Appeal) [2009] FMCAfam 274; 41 Fam LR 236.
Ross & McDermott [1998] FamCA 134; 147 FLR 235; [1998] FLC ¶98-003; 23 Fam LR 613
Tasman & Tisdall (SSAT Appeal) [2008] FMCAfam 126

Parkinson, In the Best Interests of Children – Reforming the Child Support Scheme – Report of the Ministerial Taskforce on Child Support, May 2005

Applicant:

MR TAN

First Respondent:

MS TAN

Second Respondent:

CHILD SUPPORT REGISTRAR

File Number:

MLC 4576 of 2009

Judgment of:

Riethmuller FM

Hearing date:

3 September 2010

Date of Last Submission:

8 October 2010

Delivered at:

Melbourne

Delivered on:

31 August 2011

REPRESENTATION

Counsel for the Applicant:

The Appellant appearing in person

Counsel for the first Respondent:

Mr Grant of Counsel

Solicitors for the first Respondent:

CE Family Lawyers

Counsel for the second Respondent:

Mr Wilson

Solicitors for the second Respondent:

Child Support Registrar

ORDERS

The appeal with respect to the SSAT decision MC234270 be allowed and the matter be remitted to be considered by the Tribunal according to law.
The appeal with respect to the SSAT decision MC234271 be dismissed.
The appeal with respect to the SSAT decision MC233747 be allowed and the appellant be granted an extension of time to lodge an objection to the departure decision of 21 July 2005 to 30 September 2011.
The appeal with respect to the SSAT decision MC225454 be dismissed.
The appeal with respect to the SSAT decision MC232867 be dismissed.
The appeal with respect to the SSAT decision MC232868 be allowed and the matter be remitted to be considered by the Tribunal according to law.

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

FEDERAL MAGISTRATES
COURT OF AUSTRALIA
AT MELBOURNE

MLC 4576 of 2009

MR TAN

Applicant

And

MS TAN

First Respondent

CHILD SUPPORT REGISTRAR

Second Respondent

REASONS FOR JUDGMENT

The appellant in this matter appeals against a series of decisions of the Social Security Appeals Tribunal (‘SSAT’) with respect to his child support assessment.
On 1 March 2010 in the Tribunal dealt with two decisions:
a)With respect to decision MC234270 the Tribunal set aside the decision of an Objections Officer made on 3 December 2009 and sent the matter back to the Agency Registrar for reconsideration in accordance with the direction that the particulars of administrative assessment be amended such that the reconciliation of the appellant’s estimated and actual taxable income amount of ($36,599) applies to the child support period 23 May 2005 to 30 June 2006.
b)With respect to decision MC234271 the Tribunal set aside the decision of an Objections Officer made on 2 December 2009 and sent the matter back to the Agency Registrar for reconsideration in accordance with the direction that the particulars of administrative assessment be amended such that the reconciliation of the appellant’s estimated and actual taxable income and supplementary amount (of $71,412) applies to the child support period 1 July 2001 to 11 October 2001, and;
On 4 January 2009 in the decision MC233747 the Tribunal affirmed the decision of an Objections Officer made on 20 October 2009. The objections officer decided to refuse to grant an extension of time to lodge an objection to a departure from an administrative assessment decision dated 21 July 2005.
On 12 December 2007 in the decision MC225454 the Tribunal affirmed the decision of an Objections Officer made on 27 June 2007. The Objections Officer had disallowed an objection to a decision made on 11 April 2007 to set the appellant’s child support income amount at $53,802 for the period 1 March 2007 to 30 June 2008.
On 16 February 2010 in the decision MC232867 the Tribunal affirmed the decision of an Objections Officer made on 28 October 2008. The Objections Officer had disallowed the appellant’s objection to the Agency’s decision that he had a percentage of care of 7% for the children and Ms Tan had a percentage of care of 93%.
On 16 February 2010 in the SSAT decision MC232868 the Tribunal set aside the decision of an Objections Officer made on 25 June 2009 and substituted a new departure determination as follows:
a)For the period 1 July 2008 to 31 December 2009 the appellant’s adjusted taxable income is set at $63,708.
b)For the period 1 July 2008 to 31 December 2009 Ms Tan’s adjusted taxable income is set at $35,981.
c)For the period 1 January 2010 to 20 June 2011, the appellant’s adjusted taxable income is set at $65,708.
d)For the period 1 January 2010 to 30 June 2011, Ms Tan’s adjusted taxable income is set at $37,981.

Decision MC234270

The SSAT’s decision with respect to this issue is contained in their decision of 1 March 2010. This issue relates to the reconciliation of an estimate lodged on 23 May 2005 for the period 23 May 2005 to 30 June 2006. In that estimate the appellant estimated that his annual income would be $10,934 through the period. The CSA received information from the ATO showing that in the 2005/2006 financial year period the appellant earned a taxable income of $40,293.
The appellant has not lodged a tax return with respect to the 2004/2005 financial year; however the Tribunal accepted that, for the relevant part of that financial year, he received some Centrelink benefits and no income. The provisions with respect to reconciliation of estimates that applied in the relevant year are contained in s.64 of the Act, which relevantly provided:
64.    [Reconciliation of estimated and actual taxable income and supplementary amount after end of child support period] (1A) This section applies if:
(a) an election made by a person under section 60 in relation to a child support period has not been revoked at the end of the period; and
(b) the total of the person’s real remaining period taxable income and real remaining period supplementary amount is more than the total of the amounts the person estimated at Steps 2 and 3 of the Method statement in subsection 60(5) for the purposes of making the election.
(1)    For the purposes of assessing the annual rate of child support payable by or to the person for days on or after the election was made but before the end of the child support period, the person’s child support income amount is taken to be (and always to have been) the amount worked out by:
(a) adding up the person’s real remaining period taxable income and real remaining period supplementary amount; and
(b) if the remaining period was not 12 months:
(i) dividing the sum from paragraph (a) by the number of days in the remaining period; and
(ii) multiplying the quotient by 365.
(2)    Subsection (1) does not apply in relation to any day in the child support period in relation to which an income amount order made before the making of the election applies in relation to the person.
(3)    Where an income amount order made after the making of the election applies in relation to the person and any part of the child support period, subsection (1) has effect subject to the order.
(4)    The Registrar is to take such action as is necessary to give effect to this section in relation to the person (whether by amending any administrative assessment that has been made in relation to the child support period or otherwise).
(5)    In this section:
real remaining period supplementary amount of a person who made an election under section 60 is the amount that would have been the person’s supplementary amount for the remaining period had the remaining period been a year of income.
real remaining period taxable income of a person who made an election under section 60 is the amount that would have been the person’s taxable income (as defined in the Income Tax Assessment Act 1997) for the remaining period had the remaining period been a year of income.
remaining period for a person who made an election under section 60 is the period the person used in applying the method in subsection 60(5) to make the election.
Sub-section 60(5) defines the ‘method’ referred to in s.64(1A)(b). In substance the ‘method’ simply requires the person to provide an estimate of their child support income amount for the remainder of the child support period in an annualised form. In this case the estimate lodged by the appellant was $10,094 for the period 23 May 2005 to 30 June 2006.
The Tribunal found that the appellant earned:
a)$679.36 between 22 March 2005 and 23 June 2005;
b)Nil income between 24 June 2005 and 30 June 2005; and
c)$40,293 for the financial year 2005/06 (from his tax return).
The Tribunal Member then averaged the earnings in the March to June period to find an average daily rate, which was applied to the days between 23 May and 30 June. This figure was then added to the 2005/06 income, and divided the total by the number of days in the period (404 days) and multiplied by 365 to reach an annualised sum of $36,599. This calculation is in accordance with s.64(1).
The Tribunal relied upon comments of Slack FM in Earle & Lampman(SSAT Appeal) [2009] FMCAfam 1080; [2009] FLC 98-045. Unfortunately the quote in the Tribunal’s decision is not entirely accurate. FM Slack did not say that ‘a change in circumstances did not place any positive obligation upon the Registrar to take action regarding the election’, in the sense that no changes would ever place an obligation upon the Child Support Registrar. Rather, his Honour, when rejecting with an estoppel argument, pointed out that:
[47] ...
c.... In my consideration there was a primary obligation upon the applicant to revoke the election if his circumstances changed and there is no evidence that he ever gave formal notice of his revoking the election. The fact that he might have informed the Registrar of his changed employment circumstances did not place any positive obligation upon the Registrar to take action regarding the election.
...
However, this is of little moment in this appeal. More importantly, his Honour concluded that:
[47] ...
e. The scheme of the Act would suggest that departure applications are the intended means by which there would be a review of the application of the Assessment Act and formulas to the assessment of Child Support. The applicant subject to considerations of leave would appear to have the capacity to make an application to depart from the amended assessment for the Child Support for the relevant period.
f. I do not consider that the Child Support Registrar had any discretion in the decision to amend the assessment as was required by s.64(4) of the Assessment Act.
...
I see no reason to doubt the views expressed by FM Slack, in light of the terms of s.64(4) which require the Child Support Registrar to make the changes to the child support income amount.
In determining the income amount, the Tribunal Member has taken an average of the income earned between 22 March 2005 and 23 June 2005. However, on the evidence before the Tribunal, that income came from two sources: $679.36 from earnings in employment and $1,996 from Centrelink payments. The appellant gave evidence that he became unemployed around Easter and received Centrelink benefits from March 2005 onwards. The appellant did not produce documents to show when he received the payment from his employer and the Tribunal did not make any specific finding as to when the payment was received.
Whilst, in the strict application of s.64, it is not open to the Tribunal to annualise a period of days beyond the days covered by the estimate, that is not what was actually done in this case. The averaging of income in the period from March to June to find an average daily income amount was simply a fact finding process to find an income figure for the relevant period from 23 May to 30 June. In the absence of records of daily or weekly earnings for the period, or other evidence to show when the income was earned this may be the only way that a reasonable finding of fact can be made as to the relevant days. This is particularly the case when a person fails to produce relevant documents that would ordinarily be in their possession to enable the Tribunal to accurately determine the income on each of the relevant days.
Whilst, in this case, the appellant has failed to produce relevant documents, the underlining facts do not support an averaging of the totality of the income amount over the whole period. The Tribunal made findings at paragraph [24] that:
[24] ... [the appellant] gave evidence that he became unemployed form Crown at around Easter 2005, and that he received Centrelink benefits from March 2005 onwards. This is consistent with the Agency’s records, and the Tribunal accepts that during the period 22 March 2005 to 23 June 2005, [the appellant] earned income of $679.36 in addition to Centrelink benefits of $1,996.
As the sum of $679.36 was the appellant’s final payment from employment, which ceased around the end of March, it was not a payment that could have been included in the relevant calculations as it was received prior to the relevant period. The relevant period only started on 23 May 2005.
The only reference in the court-book to social security payments is in a form that appears to be of a printout of a computer screen at page 78. The screen shot appears to detail information from Centrelink showing the total amount of $1,996, described as ‘inside: 679 and outside: 1317’. At the top of the screen shot it describes allowable deductions as $1283 for the 2004/2005 financial year. It also describes the total salary and wages as $4,046 for the financial year.
The only other place that the figures appear in the Tribunal documents are in the objection decision being reviewed, where the period is described as showing Centrelink income $1,996 together with income of $679.36. Where these figures actually came from is not stated in the documents nor explained in the SSAT decision. More importantly, whether the social security was taxable income or not is not clear from the documents. Presumably the social security payment was not income that was taxable.
As a result it appears that the Tribunal have acted without evidence before them that this amount was earned in the relevant period. This is an error of law.
In the circumstances, this part of the decision of the SSAT must be set aside. As the relevant information about social security payments is not available in the documents it must be remitted for reconsideration.
The appellant argues that the Registrar also erred in failing to undertake the reconciliations in a timely fashion. With respect to this particular decision, it does appear that there was some delay before the reconciliations were carried out. However, this has not resulted in the appellant being denied an opportunity to challenge the decisions or bring an application for departure in the relevant period. It is not demonstrated that the delay was a deliberate or tactical ruse by the CSA. In the circumstances I am not persuaded that this argument shows an error of law on this issue. In any event, FM Slack has found that an estoppel does not arise in such a situation, and I see no reason to depart from his Honour’s findings in this regard.

Decision MC234271

The decision of the SSAT of 1 March 2010 also reviews the objection decision relating to the appellant’s child support for the period 1 July 2001 to 30 June 2002.
The chronology of the facts in this matter is important:
·29 July 2001 – the appellant estimated his income at $42,913 for the period 1 July 2001 to 30 June 2002.
·26 November 2001 – Departure Decision under Pt.VIA of the Act, setting the child support rate at $13,000 per annum from 11 October 2001 to 30 September 2002.
·18 September 2008 – the Child Support Agency (‘CSA’) receive taxation return information from the Australian Tax Office (ATO) with respect to 2001/2002 tax year.
·18 September 2008 – CSA reconcile the appellant’s estimate with taxation information.
·18 December 2008 – CSA correct an error in the reconciliation.
As was explained in the Senior Case Officer’s decision, the appellant worked as a [occupation omitted] and had in place salary sacrifice arrangements to sacrifice income from his salary into superannuation and a bonus scheme. As a result, his estimated taxable income was, at the time of lodgement of his estimate, accurate. The Senior Case Officer, when increasing his child support assessment, looked at the entirety of his income and financial resources, and the significant fact that he could choose to take the additional income and bonus as cash in hand income rather than salary-sacrificing it into his superannuation scheme.
The Senior Case Officer commenced the change on 12 October 2001, explaining:
I have not backdated the increase to 1 July 2001 as I consider that this will cause hardship to Mr Tan as he will require time to rearrange his financial affairs in order to meet the increased rate of child support in this case.
Thereafter the appellant did rearrange his financial affairs so as to receive a greater cash-in-hand payment from his employer, in order to meet his expenses and child support obligations. This, in turn, resulted in his taxable income for the 2001/2002 financial year increasing from the amount that he had estimated, that is, from $42,913 to $71,412.
The relevant provision for the purpose of the reconciliation is s.64(3), as there is no doubt that the departure determination made after the estimate was lodged was an ‘income amount order’ within the meaning of the Act: see s.59.
The appellant argues that the restrictions in s.64(2) and (3) limit the relevant days in the ‘real remaining period’ to those not covered by an income amount order. The Tribunal took the view that the limitations in s.64(2) and (3) only operated to limit the days that the Child Support Registrar would reconcile, not the days used in calculating the income amount.
There can be no doubt that s.64 ought not to cause an amount set by an income amount order to be altered. The days covered by an ‘income amount order’ have been the subject of consideration and decision in a departure application and should be presumed to be set at the appropriate amount and not altered later. In cases where the ‘income amount order’ is a court order it is not open to the CSA to do anything but comply with the order.
Section 64(3) does not require s.64(1) to be applied as if the days of the child support period that are not covered by the income amount order are to be treated as the remaining days of the period. Rather, it simply provides that the changes required in the operative part of s.64(1) (the clause before the colon) are to have effect subject to the order: that is only be made to the days not covered by the order. There is nothing in s.64(3) that requires a change to the method of calculation of the income amounts to be used for the assessment on the relevant dates.
I have reflected upon this literal interpretation as it has the potential to create unfairness to one or other party in cases of this type (where there is an income amount order for part of a period) as it averages income received during the income amount order period with days affected by the election. However, I have ultimately concluded that the legislation is sufficiently clear that a literal reading is Parliament’s intention, and this should be applied.

The appellant pursues this appeal with respect to the estimate reconciliation, as he is precluded from challenging the amount of the child support assessment for the period 1 July 2001 to 12 October 2001 in the usual way: that is under Pt.VIA of the Act. This is because, under s.98S and s.118 of the Child Support (Assessment) Act 1989, neither the Registrar nor the Court can make a departure determination altering the child support rate for a day in a child support year more than

7 years prior to the date of application for the change. In this case, the appellant was not aware of the reconciliation of his child support income amount until after the 7 year time limit had expired. Indeed, the majority of the period covered by the reconciliation was more than

7 years before the date that the reconciliation occurred. Sections 111 and 112 only provide for the Court to grant leave to bring applications out of time in cases more than 18 months after the relevant child support date, but no more than 7 years after that date.
This aspect of the case does raise an interesting question as to the legislation, when one has regard to the High Court’s reasoning in Luton & Lessels [2002] HCA 13; (2002) 210 CLR 333; 187 ALR 529; [2002] FLC ¶98-015; 76 ALJR 635; 49 ATR 471; 28 Fam LR 398. In Luton & Lessels the High Court determined that the Child Support Assessment scheme is not constitutionally invalid, despite the argument that it resulted in the exercise of judicial power by the Child Support Registrar. An important indicia referred to by all of the judges of the Court was the fact that if a payer or payee is dissatisfied, they could ‘appeal’ to a Court. Gleeson CJ specifically referred to the fact that the court exercised original jurisdiction in reviewing departure applications (as the Act was then framed) in paragraph [24]. Gaudron and Hayne JJ similarly refer to these provisions in paragraph [74]. At paragraph [76] their Honours noted that reviews were available with the Court deciding the questions afresh without regard to what the Registrar has had done. McHugh J agreed with Gleeson CJ. Kirby J considered the matter in detail and also referred to the re-hearing available before the Court with respect to any departure application at paragraph [131] of his decision. Finally, Callinan J referred to the rights of hearing de novo at paragraph [194]. Whilst each of the members of the Court referred to this incident of the operation of the Child Support (Assessment) Act 1989 (as it was then framed) as relevant indicia in their decision, I note that it was not stated that this indicia was a necessary element to the test that they applied.
In the matter before me it has not been argued that the provisions of the Act cannot stand, at least with respect to determinations of the Registrar increasing child support liability for periods more than

7 years prior to the date of the change (and therefore unimpeachable by administrative review under Part VIA or application to the court under Pt.VII of the Act). It appears to me that it is not appropriate for me to explore these issues in the circumstances.
I therefore dismiss the appeal with respect to this decision.

Appeal with respect to decision MC233747

This application is a review of a decision of an Objections Officer to refuse to grant the appellant leave to object out of time to a decision of a Senior Case Officer.
It appears that on 21 July 2005 a Senior Case Officer, acting under Pt.VIA of the Child Support (Assessment) Act 1989, declined to alter the assessment in force for the 2005/2006 year, at a time when the appellant’s estimates as to his income had been accepted by the CSA. This was essentially a decision by the Senior Case Officer under Pt.VIA in favour of the appellant. Unfortunately that decision was not available to me in hearing the appeal as the Tribunal did not provide any appeal books with respect to MC233747. Following the CSA reconciling the estimate, the assessment for the relevant period increased dramatically. The appellant sought to object to the Senior Case Officer’s decision so as to have an opportunity to have the merits of his case considered under Pt.VIA, in light of the assessment in the final form.
In substance it appears that the appellant’s case in this regard is that he was content with the Senior Case Officer’s decision not to change the assessment when the CSA was acting upon his estimated income. Following that, he drew down monies from his superannuation whilst he was unemployed and, upon reconciliation of his estimated income and his taxable income, he has received a much larger child support assessment. As a result, he seeks to object to the Senior Case Officer’s decision on the basis that the figure in force at the time the decision was made is appropriate, but that on all of the facts and circumstances currently existing that figure (presumably thought to be appropriate by the Senior Case Officer at the time) is no longer the one on which the CSA can rely upon for the calculations and assessment.
The Tribunal correctly identified that the appellant had no reason to object to the Senior Case Officer’s decision at the time, as it was as favourable to him as it could have been. The reason that it is no longer favourable to him is that the CSA have reconciled his estimate, changing the assessment rate, the subject of the decision. In paragraph [14] the Tribunal said:
[14] In respect of the Agency decision about reconciling his income estimate for the 2001/2002 financial year:
·    A change of assessment decision was made by the Agency on 26 November 2001 which set his rate of child support at $13,000 per year for the period form 12 October 2001 to 30 September 2002.
·    He was not notified of the amendments made in September 2008, and he certainly did not make an estimate for the period 1 July 2001 to 30 September 2002.
·    He has a letter (copy submitted to the Tribunal) which states that the Registrar decided to disallow Ms Tan’s objection to base the administrative assessment for 1 July 2001 to 30 September 2002 on his estimated income of $42,897, and that if he is dissatisfied he may appeal to a court having jurisdiction under the Family Law Act 1975 or in a court of summary jurisdiction;
·    The reduction in his income which gave rise to him making an estimate was because he was paying the mortgage on the property Ms Tan was living in, he had not at that time received his annual bonus which was usually paid in October each year, and he was salary sacrificing which meant that his income from overtime and higher duties was absorbed into his Australian Workplace Agreement, and;
·    He was not in arrears with his child support account until 2 February 2004.
The Tribunal identified (at paragraph [20]) that they ought to at least consider whether the appellant has an arguable case. The Tribunal does not appear to have made a finding on this issue, being distracted by the difficulties caused by the reconciliation of the estimate. A decision of an Objections Officer or a Tribunal under the Child Support (Assessment) Act 1989 is undertaken on a de novo basis, reliant upon the facts and circumstances then before the Tribunal. Whether or not the appellant had a prima facie case would be dependent on whether or not the Tribunal concluded that, on the assessment as it is now, he has an arguable case that it should be reduced back to what it was at the time of the Senior Case Officer’s decision. Given that he has previously obtained a Senior Case Officer’s decision declining to alter the lower rate of child support, after enquiring into the circumstances of the parties, it does appear that the appellant would have a prima facie case that a different outcome would flow now that the CSA has significantly increased the child support assessment. The fact that since the Senior Case Officer’s decision circumstances have so changed the complexion of the facts, that one could not be critical of the Senior Case Officer’s decision on the facts then before them is of little moment, as the Tribunal must determine those questions on the facts existing at the time of the review decision.
It appears to me that the Tribunal have erred in law in failing to come to a clear view as to whether or not the appellant had an arguable case.
The Tribunal identified that the respondent would not be prejudiced by delay insofar as the provision of documentary evidence is concerned nor with respect to the level of child support already paid. The Tribunal considered that there would be prejudice to the respondent as it would provide an opportunity for the reconsideration of matters that have already been dealt with by the CSA and which had been finalised. This appears to me to show circuitous reasoning. The very substance of the application to extend time was on the basis that matters which appeared to have been finalised by the Senior Case Officer’s decision were significantly altered by the CSA’s later actions. The assessment currently in force is not one in the terms considered on its merits by the Senior Case Officer but the assessment flowing from the reconciliation. In substance there has never been a consideration of these matters by a Senior Case Officer. Therefore to conclude that this would provide an opportunity for the ‘reconsideration of matters that have already been dealt with’ appears to me to misconceive the nature of the application.
The Tribunal concluded that there would be prejudice to the wider community if an extension of time were granted. It concluded that this would be contrary to the community’s expectations of the manner in which reconciliation and estimates should be dealt with by the CSA. One can understand that the appellant would find such a conclusion somewhat one sided in his particular case, where the CSA had reconciled an estimate more than 7 years after it was made, denying him any opportunity to review the particular year of income. Whilst the community’s expectations are that the CSA will act with alacrity, it appears to me that it is difficult to conclude that the community would be prejudiced. Indeed, it is arguable that the community would be prejudiced by a failure to grant an extension of time as it would result in a citizen being effectively denied a departure application on the merits of his case as a result of the way in which the CSA has administered this particular case under the legislation.
In the circumstances I am persuaded that the Tribunal have erred in law in refusing to extend the time for the lodgement of an objection to the Senior Case Officer’s decision with respect to this decision.
I must also consider whether to remit this question or determine it in this Court. There is no need for further factual enquiry and the issue is a narrow one. I take into account that the time between the reconciliation and the objection lodged by the appellant was over

2 years. However, I take into account the complexity of the overall nature of his child support case, and the difficulties caused by estimates, their reconciliation and the limitations on bringing court proceedings. I also take into account that submissions made on behalf of the respondent that, in the intervening period, he had sought to bring the matters back to the courts.
In all of the circumstances it appears to me that there is little to be gained by remitting the matter to the Tribunal to hear and determine again. The matter is better dealt with by an order of this Court that the time should be extended so as to allow his objection to be heard and determined on its merits with respect to the relevant period.

Decision MC225454

This was a decision of the Tribunal of 12 December 2007 affirming an Objections Officer’s decision made on 11 April 2007 setting the appellant’s child support income amount at $53,802 for the period

1 March 2007 to 30 June 2008.
The appellant’s ground of appeal with respect to this decision was a complaint that the respondent’s property and financial resources were not properly taken into account in determining whether it was just and equitable to depart from the child support assessment.
The appellant referred to three authorities in his initial documents: Ross & McDermott [1998] FamCA 134; 147 FLR 235; [1998] FLC ¶98-003; 23 Fam LR 613, Parish & Torrey (SSAT Appeal]) [2009] FMCAfam 274; 41 Fam LR 236, Tasman & Tisdall (SSAT Appeal) [2008] FMCAfam 126. What can be distilled from these references is that the appellant is complaining that:
a)The Tribunal failed to have regard to the respondent’s financial circumstances;
b)The Tribunal erred in failing to properly consider the income and expenses of each of the parties in determining the child support rate; and
c)The Tribunal erred in failing to have regard to the impact of a retrospective decision.

Ground One

The first ground was expanded upon in submissions, where the appellant referred to paragraph [35] of the SSAT’s decision. The Tribunal stated:
The Tribunal considers that, in circumstances where she has sole care of the children, it is not appropriate to consider a departure determination on the basis of Ms Tan’s income, property or financial resources unless it is established that she earns more than the disregarded amount set out in the provisions of the Assessment Act relating to administrative assessment. The Tribunal has found that Ms Tan does not earn more than the disregarded income amount…
Whilst this decision may be seen as relying on a rule of thumb, it may also be seen as a very brief explanation of the reasons in a case where there is little material on the issue. There are many cases where applying the full definition of ‘just and equitable’ as referred to in s.117(2) with respect to income earning capacity, property and financial resources, in such a simple description of the operation the provision, is too limited. In this case, however, it makes no practical difference: a ‘special circumstance’ was established which led to the Tribunal moving to the second step of determining a ‘just and equitable’ assessment of child support.
In the circumstances, I find no error in this regard.
The appellant’s second complaint was that the Tribunal had excluded from his estimated expenses amounts for the ‘children’s activities’ (see paragraph [44] of the decision). There were also a number of other discretionary items that the Tribunal excluded from his expenses. The appellant points out that the Tribunal took into account expenses for entertainment, hobbies, holidays and gifts in the respondent’s expenses for the children. As a matter of principle, if these are proper expenses for the children in either household, they should be taken into account. Although not the subject of specific reasons by the Tribunal, I note that the children spend one day a fortnight with the appellant, which may well have led the Tribunal to consider that expenses of this nature would be minimal given the limited time the appellant spends with the children and the likelihood that that time would be largely consumed by personal interactions compared to the respondent’s household where the children live for the majority of the time and they would have to participate in other activities.
In any event, it appears that this ground does not lead to a basis for overturning the Tribunal’s decision. Ultimately the Tribunal concluded that the assessment was approximately $206 per week and that, on their calculations, the appellant had an average surplus of $278 per week. On this basis there was an additional $72 per week available to the appellant on the Tribunal’s findings. Even if the Tribunal erred in its findings with respect to the expenses in his household, it does not appear that it was of such a great difference that it would ultimately result in a different outcome.
For this reason I therefore dismiss this ground of appeal.
The final ground of appeal with respect to this decision is a complaint that the Tribunal have failed to consider the impact of the decision’s retrospective nature. The Tribunal deals with the question of retrospectivity at paragraph [67], stating:
[67] The Tribunal notes that section 98S(3) and section 118 of the Assessment Act provide that a determination may be made in relation to different child support periods. The child support assessment under review is for the period 1 March 2007 to 30 June 2008. The objections officer commenced the period from 1 March 2007 as this was the date Mr Tan would have been aware of the application to change the assessment. Given that Mr Tan could have then taken action to rearrange his finances so as to avoid repayments for the personal loan and credit card, the Tribunal can see no reason to change the commencement date. The child support period under review runs until 30 June 2008, just prior to the commencement of new legislative provisions in relation to the administrative assessment of child support. In light of those changes, the Tribunal does not consider it appropriate to extend the child support period beyond 30 June 2008.
Whilst the decision is retrospective in the sense that it deals with a period prior to the date of the actual decision, it is not retrospective in the sense of dealing with a period prior to a time when the appellant was aware of the respondent’s claim and the pending applications. Whilst the reasons on this item are brief, the timing of the application and notice to the appellant, being a time before the commencement of the change, appears to me to be a crucial and significant factor in this case. A more detailed consideration would no doubt be required if the retrospective nature of the decision was to go back beyond a time when a person had notice of the application for the change, as it would be seeking to change circumstances after the appellant had arranged his affairs and before a notice of the claim was received. In circumstances where the person is aware of the claim, they can assess its likely outcome and arrange their affairs bearing in mind that the claim for a change to the assessment is that pending.
In the circumstances, I am not persuaded that the Tribunal have erred in this regard. I therefore dismiss the appeal with respect to this decision.

Decision MC232867

With respect to this decision, the appellant argues that the Tribunal failed to properly consider the percentage of care that he has of the children as a result of the Tribunal limiting their considerations to the number of nights that the children spend at his household, rather than focusing on the number of hours that the children are in his care. The appellant explained, he has the children from 9am Saturday until 5pm on Sunday, a total of 32 hours, yet for the purposes of determining his percentage of care this is assessed as one day. He described it as 76% of the weekend. More reasonably, it seems to me that it is one day plus seven hours, if counted mathematically.
Earlier versions of the Child Support (Assessment) Act 1989 contained reference to overnight care for the purpose of determining the proportion of care of the parents. The Act, as it is currently drawn, simply refers to the person’s percentage of care for a child for a day in a child support period (see s.48(1)). That is not to say that the Act requires the assessment to be conducted for every single day, rather that the total percentage of care of each parent through the assessment period should be taken into account (at least for the first 12 months of that period). In the legislation there is a note, not a section, which states that ‘generally a person’s percentage of care is worked out based on the number of nights the child is likely to be in the care of the person during the period’. Originally the Act provided for determining percentages of care by counting the number of nights (although the Registrar was not limited to counting nights if determining shared care). During the period relevant to this case there was no provision directing the Registrar as to the method of determining the percentage. The Act has since been amended by adding s.54A which provides:
54A [Working out actual care, and extent of care, of a child] (1) The actual care of a child that a person has had, or is likely to have, during a care period may be worked out based on the number of nights that the Registrar is satisfied that the child was, or is likely to be, in the care of the person during the care period.

Somewhat surprisingly, the CSA made no submissions as to how this part of the legislation is intended to operate or be implemented.
Before the Tribunal the practical proposition was put to the appellant that, if care was calculated hour by hour throughout the child support period he would not reach the threshold he sought for the level of care. He explained to the Tribunal that he believed that the weekend that he has should be counted as two full days that he has the children in his care and that, thereby, he would reach the relevant threshold.
Importantly, at paragraph [28] of their decision, the Tribunal noted that ‘the Tribunal took into account that neither party contended that the tribunal should calculate based on hours in care’.
The Tribunal went on to accept that the policy position of generally counting nights was unobjectionable, but turned its mind to this particular case in order to focus upon the outcome for these litigants, as it was required to do. The Tribunal concluded:
The Tribunal considered that adopting Mr Tan’s approach would lead to an inappropriate allocation of care time to himself which did not reflect the reality of care occurring. The Tribunal therefore does not accept Mr Tan’s argument that he should be regarded as having the children in his care for full days on both Saturday and Sunday of the alternative weeks.
In the report that led to the amendments concerned, Parkinson, In the Best Interests of Children – Reforming the Child Support Scheme – Report of the Ministerial Taskforce on Child Support, May 2005, the authors state at [157]:
It is reasonable to give the same allowance for regular contact or shared care to parents with daytime contact, or a mixture of daytime and overnight contact falling short of the requisite level of nights, if a parent can establish that they incur a substantial level of expenditure on the child through daytime contact. The applicable test is whether the costs incurred are approximately the equivalent to the costs formula takes as incurred by having the care of the child for at least the minimum number of nights required for regular contact or shared care.
The authors go on to state that ‘if there are no infrastructure costs for housing as a consequence of having contact, then typically it would be expected that the daytime contact would need to be substantially in excess of 14% of the days in order to justify the Registrar determining that the parent is incurring costs equivalent to someone with regular contact of one night per week.’ The report authors contemplated that the onus would be on the parent seeking such recognition to make a case.
I note that this is not a parliamentary paper nor the Second Reading Speech, but the report that formed the background to the amendments that were made. However, the content of the relevant passages of the report do provide a rational explanation for the way in which the Act would operate.
It appears to me that counting nights is a shorthand way of counting twenty-four hour periods in order to reasonably balance the time and difficulty involved in assessing the percentage of care against the importance of an accurate assessment in individual cases. In this case, the appellant has the children for 1.3 twenty-four periods, far short of 2 whole twenty-four hour periods. Looked at substantively, as contemplated by the Parkinson Report, it is difficult to see how the costs incurred would be substantially greater as a result of the extra several hours on a Sunday in the context of this particular case. More importantly, it was not put to the Tribunal that there were substantial costs or indeed any other reason for assessing care on the basis put forward by the appellant rather than the basis ordinarily adopted, and contemplated by the Note in the legislation as being the ordinary application of the Act. In the absence of material being put before the Tribunal with respect to costs by the appellant, it does not appear that in this case that it was necessary for the Tribunal to seek out that material.
The Tribunal made a determination of fact on the issues and material put before it. The method it adopted was open to it on the material before the Tribunal.
In the circumstances, I am therefore not satisfied that the Tribunal in this case has made an error of law in the way in which it has approached this particular issue.

Decision MC232868

Decision MC232868 is a review of an objection decision with respect to a departure from the formula assessment for the period 1 July 2008 to 30 December 2009. The application was heard by the SSAT on 19 January 2010 and determined on 1 March 2010. The appeal concerns the appropriate considerations with respect to determining a departure application under s.117 of the Child Support (Assessment) Act 1989.
The appellant raised a number of grounds with respect to this decision in his oral argument. Whilst they are not all set out in his notice of appeal (as amended) it is still appropriate to deal with each of them.

Costs of Children findings

The appellant argues that the SSAT’s findings in relation to the children’s costs are inappropriate as the Tribunal failed to make findings as to the children’s specific costs, and the material on which the SSAT relied upon was in a form that failed to allow the appellant procedural fairness.
The Tribunal found that the children’s costs in this case came to $620 per week. This figure appears to be taken from a financial statement lodged by the respondent with the SSAT as part of the review process. Importantly, the statement made clear (in the respondent’s handwritten notations on the form) that the figures were ‘Estimates’. The proportion allotted to the children and to her were not the same for each item of expense. For example, the children’s expense in relation to household supplies were 2/3 of the total, yet the amount allowed for ‘House repairs’ was set at 70% and gardening expenses set at 60%. It appears that in many expenses the figures were in the 60% to 70% range (where the figures fell within the range seemed to correlate to the ease of calculation). This is entirely consistent with the figures being ‘Estimates’ as the mother set out on the face of the form.
The appellant refers to In the Marriage ofParadine v Paradine (1981) 7 Fam LR 125; (1981) FLC ¶91-056. The Full Court of the Family Court first recounted a submission of the appellant’s counsel in that case (at 129 to 130):
Mr Broun for the appellant submitted that an applicant for maintenance must say how much is needed for the support of the child in respect of whom the order is sought and that no such evidence had been given by affidavit or orally. It was, he submitted, not open to the court to take the wife's figures as to her expenses in her statement of financial circumstances and simply divide them by three, ie the number of persons living in the household.
This submission was accepted by the majority. Simpson J with whom Yuill J agreed (at 126) said:
In the absence of evidence of even the most general nature giving some estimate of the needs of the subject child, apart from educational expenses, I do not consider it was open to her Honour to extrapolate the expenses of the child from the wife's statement of financial circumstances which sets out the joint expenses of the wife and the two children of the marriage for the year ended 30 June 1979.
However, Gun J said (at 131), after setting out various common household expenses, that:
In spite of Mr Broun's submission to the contrary, it would not, in my opinion, be unreasonable for her Honour to attribute a proportion of those expenses as being required for the support of the child. I do not think that it would be unreasonable to attribute one-third of these expenses to the child.
Paradine’s Case was approved in In the Marriage of Mee & Ferguson [1986] FamCA 3; (1986) FLC ¶91-716; (1986) 84 FLR 179; (1986) 10 Fam LR 971. The issue was discussed recently by the Full Court in Drysdale & Drysdale [2011] FamCAFC 85, although ultimately this issue did not need to be determined.
In this case, however, the mother did give evidence of her breakdown of the figures (albeit the ‘Estimates’ in the form). In the absence of any other evidence or challenge this may have been sufficient, although it is not necessary to determine that question in this appeal as a result of the issues surrounding the MasterCard statements.
In this case the proof of the detail of the expenses was at issue. The appellant says that he was provided with the MasterCard statements that showed the expense amounts, but with the details of each expense obliterated by a black line. Copies of the statements appear in the court book. Surprisingly, the only expense where the description is not obliterated is an expense that is clearly irrelevant to the issues (the expense relates to how much the mother was paying her former solicitors, and the name of the firm). Every relevant expense has its description blacked out (assuming that each of those expenses are relevant). The reality is that the appellant could not effectively know the details of the expenses claimed nor make any realistic challenge. Whether the Tribunal had the unedited version of the statements is not clear, although the following finding was made:
[95] Ms Tan estimated that the financial needs of the children amount to around $620 per week or $32,240. The Tribunal examined the list of expenses as provided by Ms Tan and concluded that they were reasonable and appeared to be a fair description of the actual costs of providing for the children’s day to day needs. Ms Tan’s combined income from her employment and other sources were effectively utilised in full to meet her own and children’s needs.
[96] Mr Tan asserted that the cost of the children tables (2008) state that the actual costs of the children are $17,606, though in his mind this was more than was actually needed, which he stated was around $12,000. He also appeared to be of a view that the costs of the children ought to be restricted and could not exceed the amount as outlined in the cost of children tables. The Tribunal accepts that the cost of children table, utilising the child support incomes as found by the objections officer, does lead to an assessment of the costs of the children as $17,606 in 2008. However, the Tribunal does not accept that the table provides a definitive and immutable statement of the whole costs incurred by parents in providing for their children. In this case, the Tribunal is satisfied that the needs of the children, when reduced to dollar terms, is more likely to approach the sum of $32,240 as stated by Ms Tan. Given that the annual amount of child support assessed as payable by Mr Tan has been significantly less than half of this amount, (and despite his historically having a higher income than Ms Tan the Tribunal formed a view that Ms Tan has been carrying the greater burden of the costs of the children in this case.
The relative importance of the appellant having a real opportunity to challenge the expenses claimed by the respondent is apparent from the fact that the children’s expenses in this case are far greater (nearly double) than the amount set out in the statutory scale for the costs of children under the scheme: see paragraph [96] of the Tribunal’s decision. That is, this is not a case where the costs are less than the statutorily recognised costs, but far greater than that amount.
A hearing where a person does not know the evidence against them is no hearing at all. It can only be described as Kafkaesque. It is a fundamental breach of the rules of procedural fairness. For this reason alone the decision must be set aside.

Findings with respect to the appellant’s rent

The Tribunal did not accept that the appellant paid rent to his current partner. This issue was the subject of considerable discussion in the Tribunal’s decision. The Tribunal set out the nature of the rental claim, and identified the lack of documentary evidence to support it. The SSAT also found that they would ordinarily expect some documentary evidence, even if it were only a regular withdrawal from a bank account (if rent were being paid in cash).
Whilst the Tribunal identified the lack of evidence and its expectations of documents being ordinarily available, it did not rely solely on this aspect of the case. Quite properly the SSAT considered the credibility of the appellant and found this wanting. At paragraph [64] the SSAT said:
[64] In taking evidence from Mr and Ms Tan, the Tribunal found Ms Tan’s evidence to be credible, and noted that she had provided all of the information requested by the Tribunal. Ms Tan adopted a reasonable approach and impressed the Tribunal with her demeanour during a difficult and at times confronting hearing. Mr Tan’s evidence, on the contrary, was largely provided reluctantly and in an argumentative manner which the Tribunal did not find credible or particularly helpful. Ultimately, in points of difference between Mr and Ms Tan, the Tribunal preferred

Ms Tan’s version of events on every occasion, and the Tribunal did not accept the vast majority of Mr Tan’s arguments as having any merit or relevance, and for that reason much of his written submissions (which were directed at procedural and historical grievances with the Child Support Agency) and comments made during the hearing are not restated there.
Considering all of the circumstances the SSAT found against the appellant on this issue. The SSAT’s findings of fact on the rental issue were open to it. I find no error on the part of the Tribunal in examining the appellant’s credibility, nor in looking at the factual matrix and the ordinary arrangements one would expect with respect to rental payments.
The appellant also complained that the effect of him moving in with his de-facto partner was that her social security was reduced. The SSAT was not able to take into account income tested pensions or benefits when assessing child support. More importantly, the appellant appears to have owed no duty to his current de-facto partner (at least at that time) to support her, and therefore her reductions in social security payments can not impact upon the child support payable between him and the respondent, just as the income of any subsequent spouses of the parties can not be the basis for changes to the child support assessment as subsequent spouses would not have a duty to maintain the children who are the subject of the child support assessment.

The Mother’s income amount

The SSAT set the mother’s income amount at $35,000 per annum. The appellant complains that the Tribunal found that the mother had a capacity to meet expenses at around $76,000 per annum.
At paragraph [74] the Tribunal found that the mother’s taxable income was $35,891 for the 2008/09 financial year. The relevant period for the decision was during the 2008/09, 2009/10 and 2010/11 financial years.
The appellant complains that the SSAT found that the respondent’s income was $51,480 at the time of the hearing (January or February, 2010). Thus, it is argued, the Tribunal’s decision is wrong. However, the relevant finding must be carefully considered. The SSAT said:
[76] Ms Tan’s current annual income is approximately $51,480, comprised of her salary earnings of $30,680, dividends of $520 and her parenting payment and Family tax benefits.
Unfortunately it is not made clear in the Tribunal’s reasons that income tested pensions and benefits are not to be taken into account when assessing child support:s.3(c)(ii) of the Act. Once this rule is recognised, the alleged difficulty in the reasoning between the finding as to the respondent’s total income at paragraph [76], and the findings of the Tribunal falls away: the Tribunal simply complied with the relevant statutory rules.
I therefore find that this ground of appeal is not a basis for setting aside the decision.

Backdating of decision

The appellant argues that the SSAT erred in that they made a decision in February 2010 that had effect from 1 July 2008.
Backdated decisions are not prevented by the legislation or the rules of procedural fairness. The common difficulties with backdated decisions are a failure to give notice that a backdated decision is being considered, and a failure to consider the effect of any backdating in causing a large child support debt.
In this case the Objection decision had already dealt with periods commencing 1 July 2008. Thus, there is no doubt that the parties were aware that the days back to 1 July 2008 were under consideration: indeed, it was the appellant’s review application to the SSAT with respect to this decision.
The SSAT specifically considered the arrears that would be created by the decision at paragraph [112], saying:
[112] The Tribunal has considered what the annual rate of child support that will be payable under the departure determination. The annual rate of child support will be approximately $11,606 for the period 1 July 2008 to 31 December 2009 and approximately $12,996 for the period 1 January 2010 to 30 June 2011. The Tribunal took into consideration the payer’s level of income and necessary expenses and is satisfied that he will have resources to meet this liability. There will be arrears (approximately an additionally $75 for the first child support period above those which arose as a consequence of the decision under review), but those will arise as a consequence of the Tribunal setting both parties’ adjusted taxable income at a level which reflected their actual capacity to provide for their children’s needs. In the circumstances of this case, the Tribunal is satisfied that it is fair and reasonable that any consequent arrears be paid. The Tribunal notes also that Mr Tan is paying his arrears by fortnightly reduction at the current time.
In the circumstances I find no error of law on the part of the SSAT in this respect.

Conclusions

I therefore find that:
a)The appeal with respect to the SSAT decision MC234270 should be allowed and the matter be remitted to be considered by the Tribunal according to law.
b)The appeal with respect to the SSAT decision MC234271 must be dismissed.
c)The appeal with respect to the SSAT decision MC233747 ought to be allowed and the appellant be granted an extension of time to lodge an objection to the departure decision of 21 July 2005.
d)The appeal with respect to the SSAT decision MC225454 must be dismissed.
e)The appeal with respect to the SSAT decision MC232867 must be dismissed.
f)The appeal with respect to the SSAT decision MC232868 should be allowed and the matter be remitted to be considered by the Tribunal according to law.
I must therefore make orders accordingly.
If this were an appeal from decisions of the AAT, I would have the power to grant a costs certificate under the Federal Proceedings Costs Act. However, such certificates are not available with respect to appeals from the SSAT, and therefore I cannot issue such a certificate. If such a certificate were able to be issued on this appeal, I would have granted one in favour of the mother in this case.

I certify that the preceding one hundred and one (101) paragraphs are a true copy of the reasons for judgment of Riethmuller FM

Date: 30 August 2011