Thomas & Harry (SSAT Appeal)

[2010] FMCAfam 310

FEDERAL MAGISTRATES COURT OF AUSTRALIA

THOMAS & HARRY (SSAT APPEAL) [2010] FMCAfam 310

CHILD SUPPORT – Appeal from decision of SSAT – challenge to the findings made about income of the applicant.

Child Support (Assessment) Act 1989
Child Support (Registration and Collection) Act 1988

LDME & JMA (SSAT Appeal) [2007] FMCAfam712

Tasman & Tisdall [2008] FMCAfam 126
S and D [2005] FMCAfam 446

Applicant: MR THOMAS

Respondent: MS HARRY

File Number: CSC 1089 of 2007

Judgment of: Slack FM

Hearing date: 23 March 2010

Date of Last Submission: 23 March 2010

Delivered at: Brisbane

Delivered on: 7 May 2010

REPRESENTATION

The Applicant appeared on his own behalf.

The Respondent appeared by telephone on her own behalf.

ORDERS

1. That the Notice of Appeal (Child Support) –  Appeal from the Decision of the Social Security Appeals Tribunal filed on 14 October 2009 and the Amended Notice of Appeal (Child Support) – Appeal from the Decision of the Social Security Appeals Tribunal filed on 22 March 2010 be dismissed.

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

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
BRISBANE

CSC 1089 of 2007

MR THOMAS

Applicant

And

MS HARRY

Respondent

REASONS FOR JUDGMENT

1. This is an appeal from the decision of the Social Security Appeals Tribunal (hereafter “the SSAT”) dated 24 December 2008.

2. The applicant (representing himself) argues three grounds of appeal:

   1.     Assessment by CSA and decision made by SSAT have been made on speculation that I have the financial resources available to pay.

   2.     The respondent has failed to disclose bank statements of her income and her spouse of the whole household income of Mr E.

   3.     Documents related to the appellant will determine change of income.

3. The respondent (representing herself) seeks that the appeal be dismissed.

The decision of the SSAT

1. The SSAT affirmed the decision under review and the appeal was not successful.

2. The decision under review was a decision of a Child Support Agency objections officer on 12 August 2008 to disallow an objection by
   Mr Thomas to a decision of a senior case officer dated 12 May 2008 which:

   1.     For the period 12 March 2008 to 30 June 2008 set

   
   

   Mr Thomas child support income amount at $113,763 and the exempted income amount at $15,378.

   2.     For the period 1 July 2008 to 30 June 2009 set Mr Thomas adjusted taxable income at $113,763.

Relevant background facts

1. The applicant and respondent are the parents of T born [in] 2006.

2. The parties had a relationship from February 2006 until September 2007.

3. Child support assessments were issued requiring the applicant to pay the respondent:

   The minimum annual rate of $333 for the period 26 September 2007 to 30 June 2008 based on his advised 2006/2007 taxable income of nil and Ms Harry’s 2006/2007 taxable income plus any supplementary amounts of nil; and the fixed annual rate of $1,102 for the period 1 July 2008 to 25 December 2008 on the ground that Mr Thomas is a person with a low taxable income who has not been in receipt of Centrelink benefits.

4. On 12 March 2008 the respondent made a change of assessment application and on 12 May 2008 a senior case officer made a change of assessment setting the applicant’s income, for the purposes of child support calculations, at $113,763 for the period 12 March 2008 to

   
   

   30 June 2009.  The senior case officer also set the exempted income amount at $15,378 for the period up to 30 June 2008 instead of the figure of $14,646 that would otherwise have applied.

Findings of the SSAT

1. The SSAT found that the applicant’s actual income at all material times has been and remains, more than $113,763 (para.73 of the reasons).

2. The SSAT also found that as the Part 5 assessment was based on the 2006/2007 taxable income which was nil that there were special circumstances for a ground of departure because the applicant’s income is greatly in excess of his taxable income (para73 of the reasons).

3. The SSAT found (para.86 of the reasons) that they were dealing with a high income father and a low income mother with neither parent having any very substantial net holdings and no untapped financial resources.

4. The SSAT concluded that settling Mr Thomas’ income at $113,763 for child support purposes is just and equitable (para.94 of the reasons).

5. The SSAT also found assessing Mr Thomas’ income at $113,763 reduces the rate of family tax benefit payable to Ms Harry.  This appropriately shifts much of the cost of supporting T from the community to Mr Thomas who together with Ms Harry is primarily responsible for T’s support.  Ms Harry is meeting a portion of the cost through direct care and this portion is sufficient in view of her low income.  Accordingly a change of assessment setting Mr Thomas’ income at $113,763 is otherwise proper.

Submissions on the appeal

1. It is difficult to understand the grounds of appeal but in summary the applicant’s arguments appear to be that the SSAT erred in their findings about his income and the error was sufficiently grave to constitute an error of law.

2. Similarly he argues that the factual findings in relation to the income of the respondent were incorrect and the error was sufficiently grave to found an error of law.

Important background

1. Relevantly the applicant was made aware by the objection decision dated 12 August 2008 about the issues with respect to understanding his financial position and his income.  The objection officer made the following comments in his reasons:

   Given the difficulty of calculating a combination of income and benefits for Mr Thomas due to limited information received from the bank and also from Mr Thomas, I believe that the calculation should be based on his expenditure on regular commitments.

   …..

   Mr Thomas’ statement of financial circumstances for the Supreme Court of Queensland also shows total monthly expenses of $32,547 annualised to $390,594 however on the same statement of financial circumstances he states his taxable income as nil.

2. Clearly when the applicant made his appeal to the SSAT he was well aware that one of the matters that called for an explanation from him to the SSAT was the incongruity between an asserted income of nil and monthly expenses of $32,547 – that being his sworn testimony in proceedings in the Supreme Court of Queensland and forming part of the record before the SSAT.

3. The SSAT made the following statement in the reasons (para.15):

   The applicant has been reluctant to disclose details of his financial affairs to the Child Support Agency and the Tribunal.  He declined the opportunity to provide a response form to the Child Support Agency on which he would have been required to declare details of his financial circumstances.  Ms Harry not

   
   

   Mr Thomas supplied to the Child Support Agency his Supreme Court statement of financial circumstances and other material including details of real property held by Mr Thomas.

4. At para.18 of the reasons the SSAT says:

   At the hearing Mr Thomas was very reticent in providing financial information.  He provided information adverse to his case only when repeatedly pressed by the Tribunal and then often in vague terms.  For example, on the question of rental income, his evidence (orally and in his statement of financial circumstances) was initially to the effect that he had not derived such income but when pressed admitted that he had.  Similarly only after specific or sustained questioning by the Tribunal did Mr Thomas reveal that he had derived at least some funds from the sale of vehicles, furniture and plant pots.

5. At every stage of the review process, both within the Child Support Agency and before the SSAT, the decision makers were concerned not only about the lack of adequate disclosure but also the failure by the applicant to explain facets of his financial circumstances that really did require some explanation.

6. Those inconsistencies included, for example:

   a)The Supreme Court statement of financial circumstances disclosed an income of nil but monthly expenses of $32,547.

   b)The applicant had a significant monthly Westpac mortgage loan repayment liability of $14,980 yet there was no explanation as to how he was able to service that liability.

   c)It was also clear that the SSAT were unable to reconcile the fact that the applicant had a mortgage debt and borrowings on the Westpac loan in circumstances where he disclosed no income.

Decision – Discussion and conclusion

Principles to be applied

1. In applications for departure from Administrative Assessment before the SSAT, the enquiry remains a positive enquiry to ensure as best can be done the financial needs of children are met with due regard to the objects of the Child Support (Assessment) Act 1989 (hereafter “the Assessment Act”).

2. The enquiry before the SSAT is a merit review of the decision of the Registrar on an objection [s.87(1) of the Child Support Registration and Collection Act (1988) (hereafter “the Registration and Collection Act”)].  In departure applications, the onus lies upon the applicant throughout to satisfy all the requirements in s.98C of the Assessment Act (and those matters contained in s.117 of the Assessment Act).  The decision will be for a particularised child support period.

3. The determination of the SSAT is discretionary and may be in accord with the provisions of s.98S of the Assessment Act.

4. Throughout the enquiry process, the parties have an immutable obligation:

   a)to assist the enquiry by providing reliable and truthful evidence about their financial circumstances;

   b)to provide evidence of their financial circumstances in a manner that can be readily understood;

   c)to make full disclosure of all relevant documents that can assist the enquiry to make a determination and that includes disclosing documents (subject to a claim in privilege) that may have an adverse impact on their case.

5. The SSAT has wide powers to obtain information about the parties and from the parties (see ss.103G to 103L of the Registration and Collection Act).

6. The SSAT is not bound by legal technicalities, legal forms or rules of evidence (s.103N) and may inform itself on any matter relevant to a review of a decision in any manner it considers appropriate [s.103N(2)].

7. Although the SSAT has wide powers to garner information, the extent to which the SSAT will exercise its powers to access information from third parties, will depend upon the circumstances of each individual matter.  It is clear though that the SSAT has discretion to conduct its own enquiry to satisfy itself about the financial circumstances of each of the parties.  The fact that the SSAT has those powers and may exercise them does not though relieve the parties of their obligation to disclose all relevant financial information.

8. It is also clear that, in the event the SSAT comes to a conclusion that for whatever reason a party has failed to disclose relevant information, then the SSAT should not be unduly hampered in the exercise of its discretion.

9. In Kannis & Kannis (2003) FLC 93-135, the Full Court said in relation to nondisclosure in proceedings in the Family Court:

   Whether a non-disclosure is wilful or accidental, is a result of misfeasance, or malfeasance or nonfeasance is beside the point.  The duty to disclosure is absolute.  Where the Court is satisfied the whole truth has not come out it might readily conclude the asset pool is greater than demonstrated.  In those circumstances it may be appropriate to err on the side of generosity to the party who might otherwise be seen to be disadvantaged by the lack of complete candour.

10. Those principles have similar application with respect to matters before the SSAT.

11. It should be noted though that a failure to make proper disclosure does not result in the discretion being exercised without limits.  As was said by FM Riethmuller in S & D (2005) FMCAfam 446:

    The real issue is whether or not there is sufficient evidentiary foundation to draw an inference as to his income or earning capacity or other resources, in the manner suggested by Counsel for the Applicant.  It is clear that the failure to make comprehensive disclosure, of itself, does not create evidence of a particular income or earning capacity.  The failure to make full and frank disclosure or provide evidence properly explaining financial affairs allows the Court to accept what evidence there may be with more confidence than would otherwise have been the case.

12. The applicant was represented by Counsel in the hearing before the SSAT.

13. The applicant has not placed before this Court the transcript of the proceedings before the SSAT but does not seem to complain that he was not accorded procedural fairness by the SSAT. 

14. Decision makers at every level of internal review processes within the Child Support Agency had expressed concerns about the reliability of the financial information provided by the applicant and he was well aware before he went before the SSAT that the reliability of his financial information had been questioned and the information that had been provided created anomalies that needed to be explained.

15. Even in the course of these proceedings the applicant has placed before the Court a bundle of financial records but no clear picture emerges about his financial circumstances.

16. This is not a matter where the SSAT concluded that the applicant was asset rich and income poor.  They accepted that he had a net equity in his properties of approximately $143,000.  Both the objections officer and the SSAT were unable to reconcile a claim that the applicant had nil income but monthly expenses of $34,000.

17. The SSAT were entitled to reach a conclusion that in the special circumstances of the case, the assessment of child support ought to be departed from.  The SSAT was entitled to reach the conclusion that it was otherwise just and equitable to depart from the administrative assessment of child support and otherwise proper.

18. In this matter the applicant has always maintained and contended that his income is nil.

19. Given the financial information that was presented to the SSAT as outlined in these reasons, the SSAT was clearly entitled to reject his evidence about his income.

20. There were matters concerning his financial circumstances that clearly required an explanation including the need for him to explain how, with an alleged income of nil, he was able to maintain his monthly expenses.

21. Having determined that the evidence of the applicant was unreliable and having determined that he had not made full and frank disclosure of his financial circumstances, the SSAT was entitled to reach the conclusion in the exercise of its discretion based on an income amount.

22. The SSAT was, in my consideration, correctly able to draw an inference that he had a much greater income than that claimed by him and the amount that they eventually determined was appropriate for his income was well within their discretion.

23. The SSAT found that his income should be assessed at $113,763 for the purposes of the child support assessment.

24. As I understand the reasons, that figure was arrived at because it was the capped amount for child support.

25. Whilst I accept that the objections officer and the SSAT were somewhat arbitrary at arriving at that figure, nevertheless when the applicant had claimed in the Supreme Court proceedings expenses of $34,000 per month, the figure arrived at would, in my consideration, be within an appropriate range given the available evidence before the SSAT.

26. As a consequence I am not satisfied that there was any error of law in either the approach adopted by the SSAT or in relation to the conclusions they ultimately reached.

27. I am not satisfied that Ground 1 of the appeal has been made out.

Ground 2 of the appeal – the financial circumstances of the respondent

1. The applicant raised as a ground of appeal the manner in which the SSAT dealt with the financial circumstances of the respondent.

2. Again it is noted that the applicant had Counsel representing him in the hearing before the SSAT.

3. Whilst the applicant challenges the way in which the SSAT dealt with the evidence of the respondent, he had a proper opportunity to place before the SSAT the allegations with respect to her income.

4. The SSAT accepted her evidence and rejected the evidence of the applicant.

5. I can find no error in the way that the SSAT dealt with the evidence of the respondent or the findings of fact that it made with respect to that evidence.

6. I am not satisfied that Ground 2 of the appeal has any merit.

I certify that the preceding fifty-five (55) paragraphs are a true copy of the reasons for judgment of Slack FM

Associate:   Karen Smith

Date:  7 May 2010