Twelftree and Forster (Child support)
[2023] AATA 4699
•30 October 2023
Twelftree and Forster (Child support) [2023] AATA 4699 (30 October 2023)
DIVISION:Social Services & Child Support Division
REVIEW NUMBER: 2023/SC026286
APPLICANT: Ms Twelftree
OTHER PARTIES: Child Support Registrar
Mr Forster
TRIBUNAL:Senior Member D Benk
DECISION DATE: 30 October 2023
DECISION:
The Tribunal sets aside the decision under review and, in substitution, decides:
· From 28 October 2022 to 31 December 2024, Mr Forster is to be assessed as having an adjusted taxable income of $87,000.
CATCHWORDS
CHILD SUPPORT – departure determination – income, property and financial resources of the liable parent – a ground for departure established – decision to depart - decision under review set aside and substituted
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
This matter has a long history. To make the complex simple, immediately prior to Mr Forster’s change of assessment application, he was assessed to pay child support at a rate of $8,750 per annum for his son [Child 1] for the period 1 November 2021 to 31 December 2023 following a review by the Tribunal (differently constituted) on 7 December 2021.
Mr Forster lodged a change of assessment maintaining that the decision of the Tribunal above failed to take into account his changed financial circumstances and caring responsibilities. On review by a senior case manager, the objection was disallowed as it was determined there was no ground established. Mr Forster then lodged an objection which ultimately determined there were grounds to depart from the previous decision and set Mr Forster’s child support liability as follows:
· An annual rate of $8,750 to apply until 27 October 2022 (as determined by the Tribunal, differently constituted);
· An annual rate of $3,614 between 28 October 2022 and 11 May 2023; and
· An annual rate of nil between 12 May 2023 and 30 June 2026.
Ms Twelftree now seeks review by the Tribunal maintaining the assessment beyond 28 October 2022 does not take into account Mr Forster’s financial resources as he has recently sold property and purchased assets, nor does it reflect the changed care arrangements. Mr Forster objects to any change.
The matter underwent the usual case management pathway with a telephone directions hearing resulting in directions being issued. Ms Twelftree complied in full but Mr Forster did not. The matter then proceeded to hearing proper on 30 October 2023 when Mr Forster asked the Tribunal to formally recuse itself.
Recusal
The request for recusal was refused. An extempore decision was given at hearing. For the sake of completeness, the application and reasons for refusal are outlined below.
In short, Mr Forster contends that my previous role in managing a complaint against a Member of the Division who presided in a previous review in which Mr Forster was a party, approximately three years ago, impedes my impartiality. Certainly, at that time my role was to oversee the membership, but at no stage was I involved in the decision-making or review of the evidence as it pertained to the substantial issues to be resolved.
Mr Forster in submissions referred to the applicable principles for recusal being those set out by the High Court in Ebner v Official Trustee in Bankruptcy.[1]
[1] [2000] HCA 63; (2000) 205 CLR 337.
The Court held in that case that a judge (or in this case, the Tribunal) is disqualified, subject to qualifications relating to waiver or necessity, “if a fair‑minded lay observer might reasonably apprehend that the judge might not bring an impartial mind to the resolution of the question the judge is required to decide”.
The Ebner case identifies three tests:
(1) there must be an identification of the factor which is said might lead a judge to resolve the question other than on its legal and factual merits;
(2) there must be an articulation of the logical connection between that factor and the apprehended deviation from deciding that question on its merits; and
(3) assessment of the reasonableness of that apprehension from the perspective of a fair‑minded lay observer.
In the present case, the Tribunal does not accept that a “fair-minded lay observer might reasonably apprehend that [I] might not bring an impartial mind to the resolution of the question [that I am] required to decide”, that is, to “decide [the] case other than on its legal and factual merits”. My historical involvement with Mr Forster was to respond to a complaint he made regarding conduct of a member when I was charged with oversight of the Division. Mr Forster in his submissions has not established any logical connection between my previous assessment of his complaint and the apprehended deviation from deciding the current matter on its merits.
Further Mr Forster has not explained how my previous involvement three years ago might lead me to resolve the current issue other than on its legal and factual merits.
Finally, it is inferred that a fair-minded observer may infer a deviation from the tasks, however, given that I have had no involvement in merits review of the substantive application previously again, this has not been satisfied.
My role is to conduct a merits review of the substantive decision before me. I have not engaged in such a process relating to these parties previously. I therefore concluded there was no legal basis established upon which I should recuse myself.
Preliminary comments
Mr Forster was a difficult witness. He did not answer questions put to him and seemed to ramble in what could only be seen as an attempt to avoid the question. When asked why he did not comply with the Directions in full he responded by labelling the Tribunal as “hostile”, maintaining that he had provided enough information. At this point, the Tribunal explained that it endeavoured to afford him procedural fairness and understand why he failed to comply to determine whether other case management strategies could be adopted to allow him to put his best case forward. Again, Mr Forster expressed unrestrained criticism of the Tribunal maintaining he did not appreciate “the tone”. He testified he has no income and his partner supports him but he was “not at liberty to say” how she does so. The Tribunal was uncertain as to who removed the liberty but as this statement was repeated on multiple occasions, ultimately concluded that it suited Mr Forster’s narrative and apparently was the foundation for his defence.
Be that as it may, given the difficulty in obtaining direct responses from Mr Forster, the Tribunal preferred the documentary evidence even if incomplete.
On this point, the Tribunal recalls the discussion of Halligan FM in Manchester v Maher and Ors [2011] FMCA 877.
Procedural fairness requires, inter alia, that a party be given a reasonable opportunity to be heard. But where a party is given that opportunity and chooses not to use it, for example by being required to produce documents of significance to the decision maker’s task within a reasonable time frame but failing to either produce the documents or to provide a satisfactory explanation for that failure, then that party has failed to avail themselves of the opportunity afforded to them to be heard.
The Tribunal is satisfied Mr Forster was given an opportunity both following the telephone directions hearing and immediately prior to hearing to fully produce documents relevant to the matter. He chose to throw this opportunity away. Whilst more criticism is foreshadowed, it is not legitimate. Procedural fairness was offered.
CONSIDERATION
The parties are familiar with the process of departure. However, for the sake of completeness and background the Tribunal will summarise the law.
Before making an order for departure from the assessment under section 116 of the Child Support (Assessment) Act 1989 (the Act), subsection 117(1) requires the Tribunal to be satisfied that a ground for departure exists under subsection 117(2); that it would be just and equitable as regards the child, the carer parent and the liable parent to make such an order; and that it would be otherwise proper to make the order.
Subsection 117(2) sets out the grounds upon which such an order might be made. Relevantly, paragraph (c) states as follows:
That, in the special circumstances of the case,[2] application in relation to the child of the provisions of this Act relating to administrative assessment of child support would result in an unjust and inequitable determination of the level of financial support to be provided by the liable parent for the child:
(i) because of the income, earning capacity, property and financial resources of the child; or
(ia) because of the income, property or financial resources of either parent; or
(ib) because of the earning capacity of either parent; or
(ii) because of any payments, and any transfer or settlement of property, made or to be made (whether under this Act, the Family Law Act 1975 or otherwise) by the liable parent to the child, to the carer entitled to child support or to any other person for the benefit of the child.
[2] The phrase “special circumstances of the case” is not defined in the Act. The Full Family Court, in the case of Gyselman and Gyselman (1992) FLC 92-279 stated that:
It is intended to emphasise that the facts of the case must establish something which is special or out of the ordinary. That is, the intention of the Legislature is that the court will not interfere with the administrative formula result in the ordinary run of cases.
When submitting the change of assessment application, Mr Forster requested Child Support to consider subparagraph 117(2)(c)(ia).
To establish this ground to depart, the Tribunal would need to establish that the annual rate as set by the previous Tribunal ($8,750) does not reflect Mr Forster’s income, property or financial resources. When examining the reasons of the previous Tribunal, it concluded that Mr Forster’s income was in the ballpark of approximately $84,000 and set the annual rate taking that as a base line calculation.[3] Mr Forster was also critical of that Tribunal and suggested that it had engaged in a frolic of its own. To be clear, this is not an appeal of the previous Tribunal’s decision. This is a review of the most recent change of assessment application.
[3] Folio 59 of the papers refers – Matter Number 2021/SC021246.
Mr Forster testified he has no income. He has no money. He is supported entirely by his wife. He does not work. He does not claim Centrelink benefits. His company is in the process of being shut down. He has sold two properties but the profits from sale were used to repay family debts and purchase a new vehicle outright at $87,000. Mr Forster said that he needed such a vehicle to travel to his farm. The Tribunal has little interest in why or how Mr Forster spends his money; its concern is what is the level of financial resources that are available to support his child. Mr Forster continued by saying that he hopes to fix the fencing on his property to enable agistment and therefore secure an income source but that is a plan for the future. He reinforced that his wife supports him but “was not at liberty” to say how and to what extent.
Mr Forster then continued saying that the involvement of Child Support was unnecessary. Both he and Ms Twelftree have near equal care of [Child 1]. He looks after [Child 1]’s expenses when he lives with him during the week and likewise Ms Twelftree should do that on her end. He continued to state that Ms Twelftree has made greater care arrangements difficult and he thinks this may be motivated by child support. He finds the whole situation frustrating, clearly evident in his behaviour at hearing. No up-to-date taxation returns for the company were provided. Mr Forster said that it was in the process of being wound up. That may be the case, but winding up a company does not automatically mean that there has been no income earned.
In the absence of documentation confirming income, the Tribunal must look to the bank statements. At first glance, Mr Forster has spent $87,000 on a vehicle from the proceeds of sale from his property. He also discharged various debts to family members, but in the absence of a paper trail, it was difficult to verify this. However, given this, the baseline assessment has to start at $87,000, as clearly this level of financial resources was available to purchase the vehicle. The Tribunal could attempt to forensically analyse the balance of the accounts, but this would only be inaccurate and increase the tension between the parties. However, given that it is clear from the information available that at least $87,000 was available and given that the application of such an adjusted taxable income would result in a child support assessment of greater than the $0 as assessed by the objections officer for all periods beyond 12 May 2023, the Tribunal finds the ground for departure set out in in subparagraph 117(2)(c)(ia) of the Act has been made out in respect of Mr Forster’s income, property and financial resources.
As the requirements of subparagraph 117(2)(c)(ia) have been satisfied, there are grounds to depart from the administrative assessment. However, such departure is not automatic.
Issue 1 – Is it just and equitable to make a departure determination?
As the Tribunal is satisfied that there is a ground to depart from the administrative assessment of child support, the next step is to consider whether it is just and equitable as regards the child, the liable parent and the carer entitled to child support to make a particular determination in accordance with sub-subparagraph 98C(1)(b)(ii)(A) of the Act. This in turn requires the Tribunal to consider a range of factors, set out in subsection 117(4) of the Act.
The nature of the duty of a parent to maintain a child and the income, earning capacity, property and financial resources of the child
[Child 1] is in the shared care of the parties. A recent care decision has been made by Child Support reflecting a 29% care level to Mr Forster. Mr Forster maintains this should be 38%. The Tribunal is not reviewing the care decision. Both parents agree that [Child 1] has no independent regular income and relies entirely upon them for financial support. The Tribunal so finds. (Ms Twelftree testified that there may be increased care to Mr Forster when [Child 1] gets a little older.)
The proper needs of the child
Subsection 117(6) of the Act states that in having regard to the proper needs of the child, the Tribunal must have regard to the manner in which the child is being, and in which the parents expected the child to be, cared for, educated or trained; and any special needs of the child/ren.
[Child 1] attends public school and is largely in good health. He may need orthotics due to postural deformity. No expenses have been incurred to date. Mr Forster testified he would be willing to examine such expenses and if necessary contribute.
Mr Forster also has another child, [Child 2], and this will be reflected in the formula assessment.
The income, property and financial resources of Mr Forster
This has largely been dealt with above within the confines of the information to hand. Ms Twelftree asked the Tribunal to carefully review the bank records as Mr Forster has been on a spending spree with the proceeds of sale from his two properties. This was understood and acknowledged, but the Tribunal has dealt with this above, perhaps not in the detail requested by Ms Twelftree, but with caution and globally.
The Tribunal assessed financial resources made available to Mr Forster arising from asset sales and finds that he had financial resources of at least $87,000. This is a conservative figure. The Tribunal so finds.
The income, property and financial resources of Ms Twelftree
The Tribunal finds that the administrative assessment correctly reflects Ms Twelftree’s income. She is a PAYG employee. Mr Forster attempted to discredit Ms Twelftree’s evidence regarding her income by overanalysing her Statement of Financial Circumstances, however, the taxation returns reflect the full extent of income and financial resources at $75,118 (for the most recent financial year). This includes some royalties from her work as an [occupation], her PAYG salary and some share dividends. The Tribunal so finds.
The earning capacity of Mr Forster
On the basis of the evidence before it, the Tribunal cannot find at this point that Mr Forster has changed his occupation, industry or working pattern. Certainly he alleges that his company is in the process of deregistration but this has not been formalised. The Tribunal finds it is not open to make an earning capacity determination in respect of Mr Forster’s circumstances.
The earning capacity of Ms Twelftree
On the basis of the evidence before it, the Tribunal finds Ms Twelftree is working and has not reduced her weekly hours of work or otherwise changed her occupation, industry or working pattern in the main. The Tribunal finds that it is not open to make an earning capacity determination in respect of Ms Twelftree’s circumstances.
The necessary commitments of Mr Forster
According to Mr Forster all of his needs are met by his partner. His own personal resources do not cater to any of his costs relating to his management or welfare.
The Tribunal cannot take this further as Mr Forster did not complete the Statement of Financial Circumstances and was “not at liberty” to explain to what extent his expenditure was met by his now partner.
The necessary commitments of Ms Twelftree
Ms Twelftree testified she has no significant expenses relating to her welfare that impact her ability to support [Child 1].
The Tribunal accepts the record of income and expenditure in the Statement of Financial Circumstances which was entirely consistent with Ms Twelftree’s evidence.
The Tribunal has had regard to/considered the commitments of each parent that are necessary to enable the parent to support himself or herself or any other child or another person they have a duty to maintain and could not find that any self-support commitments take priority over any child support liability and further each parent’s budget is sufficient to cater for such needs.
The direct and indirect costs incurred by Mr Forster in providing care for [Child 1]
Mr Forster testified there are no significant direct or indirect costs in maintaining contact or providing care.
Hardship
Paragraph 117(4)(g) of the Act requires the Tribunal to consider any hardship that would be caused to the children or the parties by the making of, or refusal to make, a departure determination, and also to consider any hardship that would be caused to Mr Forster or any other child or other person that Mr Forster has a duty to support, by the making of, or the refusal to make, a departure determination.
There was a general claim for hardship made by Mr Forster, which overall the Tribunal finds could not be sustained given its analysis of the financial material before it.
No specific financial hardship was claimed by Ms Twelftree. She reinforced that [Child 1] deserves to have the support of both parents and that it should not be forgotten that she has the lion’s share of the responsibility as [Child 1] is predominantly in her care.
What is the proposed departure determination in this case?
There is no outcome that will satisfy both parents. This is not the goal/purpose of the review process but is said as an acknowledgement.
There are a number of ways that the assessment can be made. One common view is to apply adjusted taxable incomes, but in circumstances where there have been periods of self-employment or other financial resources, this can never be done with the greatest degree of accuracy.
Another option allowed by the Act is to set an annual rate of child support. The Tribunal considered this to be an option but then such an avenue prevents care changes from easily being applied.
Once a special circumstance is established under subsection 117(2), the formula no longer governs the outcome. Rather, consideration must be given to the actual income and financial resources of the parties and the actual costs of the children in order to determine the amount of child support that should be paid.[4]
[4] Carlson & Acuff & Anor (SSAT Appeal) [2010] FMCAfam 677
The Tribunal opted to set an adjusted taxable income as this will allow Child Support to adjust the level of child support to reflect changes in care. For the purposes of this review, the Tribunal sets an adjusted taxable income for Mr Forster of $87,000. This is largely consistent with previous decisions and also reflects his financial resources.
Overall, the Tribunal finds that it is just and equitable to depart from the administrative assessment as follows:
· From 28 October 2022 to 31 December 2024, Mr Forster is to be assessed as having an adjusted taxable income of $87,000.
As indicated, this figure represents the financial resources that Mr Forster has disclosed. It is conservative. It results in an overall child support liability of approximately $2,000 per year following the most recent care change. The figure is in line with the Child Support Calculator generally relating to the range of income assessed by the Tribunal and considering the care levels. It represents a liability of less than $6 per day and on assessment of the evidence before it, cannot be said to realistically result in hardship to Mr Forster. The annual rate will be higher prior to any care change and commensurate with the previous decision of the Tribunal (differently constituted). Bank records show that Mr Forster has sold two properties and does have funds. He has elected to repay family members and discharge debts and purchase vehicles, however, this does not take away from the fact that financial resources exist to satisfy the liability imposed by this decision. Mr Forster is likely to be aggrieved but he has not provided any evidence to disrupt previous findings relating to income, electing to throw away that opportunity and providing only what he considered relevant.
The Tribunal declined to extend the departure beyond 31 December 2024 as it is highly likely that the financial positions of the parents and the needs of [Child 1] will change.
The last issue to be considered is whether it is otherwise proper to depart from the administrative assessment. When doing so, subsection 117(5) sets out what the Tribunal must have regard to when deciding whether it would be otherwise proper to make a particular order. Subsection 117(5) states:
In determining whether it would be otherwise proper to make a particular order under this Division, the court must have regard to:
(a) the nature of the duty of the parent to maintain a child (as stated in section 3) and, in particular, the fact that it is the parents of a child themselves who have the primary duty to maintain the child; and
(b) the effect that the making of any order would have on:
(i)any entitlement of the child, or the carer entitled to child support, to an income tested pension, allowance or benefit; or
(ii)the rate of any income tested pension, allowance or benefit payable to the child or the carer entitled to child support.
Family tax benefit will now be adjusted to take this assessment into account. Overall, the Tribunal therefore finds that it is “otherwise proper” to depart from the administrative assessment.
Conclusion
Section 4 of the Act sets out the objectives of the Act. These objectives include:
· Parents of a child have a primary duty to maintain that child;
· That duty has a priority over all commitments of the parent other than commitments necessary for self-support;
· The level of financial support to be provided by parents to their children should be determined in accordance with the legislatively fixed standards; and
· The level of financial support is to be determined according to the capacity to provide financial support and noting that parents with a like capacity to provide financial support should provide like amounts.
The Tribunal could not identify on the basis of the evidence before it any hardship to either parent or child arising from this decision.
The Tribunal has found that there is a ground for departure in this case, and it would be just and equitable and otherwise proper to make a departure determination in accordance with its findings above.
DECISION
The Tribunal sets aside the decision under review and, in substitution, decides:
· From 28 October 2022 to 31 December 2024, Mr Forster is to be assessed as having an adjusted taxable income of $87,000.
0
3
0