Wales & Falls & Anor (SSAT Appeal)
[2010] FMCAfam 116
•25 March 2010
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| WALES & FALLS & ANOR (SSAT Appeal) | [2010] FMCAfam 116 |
| CHILD SUPPORT – Appeal from SSAT – formula assessment – special circumstances – high costs of contact – not for Tribunal to determine whether contact reasonable. |
| Child Support (Assessment) Act 1989, s.117 Family Law Act 1975, s.98C, Part VII |
| Bagala & Bagala [2009] FMCAfam 953 Charnock & Bullions (SSAT Appeal)[2008] FMCAfam 36 Coon v Cox (1994) FLC ¶92-464, (1993) 116 FLR 166; (1993) 17 Fam LR 692 Gyselman & Gyselman[1991] FamCA 93; (1992) FLC ¶92-279; (1991) 15 Fam LR 219 Hallinan v Witynski[1999] FamCA 1127; (1999) FLC ¶98-009; [1999] FamCA 1127; (1999) 25 Fam LR 647 Hides and Hatton [1997] FamCA 28; (1997) FLC ¶92-759; [1997] FamCA 28; (1997) 21 Fam LR 855 In the Marriage of Houlihan (1991) FLC ¶92-248; (1991) 104 FLR 299; (1991) 14 Fam LR 910 Love v Henderson (1995) FLC ¶92-653; (1995) 125 FLR 129; (1995) 20 Fam LR 128 Parrish & Torrey (SSAT Appeal)[2009] FMCAfam 274 ; (2009) 41 Fam LR 236 PJ & Child Support Registrar (SSAT Appeal)[2007] FMCAfam 829 ; (2007) 38 Fam LR 31 Ross & McDermott[1998] FamCA 134; (1998) FLC ¶98-003 Tyagi & Meares (SSAT Appeal)[2008] FMCAfam 886 ; (2008) 39 Fam LR 604 |
| Applicant: | MR WALES |
| First Respondent: | MS FALLS |
| Second Respondent: | CHILD SUPPORT REGISTRAR |
| File Number: | SYC 5408 of 2008 |
| Judgment of: | Riethmuller FM |
| Hearing date: | 16 November 2009 |
| Date of Last Submission: | 16 November 2009 |
| Delivered at: | Melbourne |
| Delivered on: | 25 March 2010 |
REPRESENTATION
| Counsel for the Applicant: | The Applicant appearing in person |
| Counsel for the First Respondent: | There being no appearance by or on behalf of the First Respondent |
| Counsel for the Second Respondent: | Ms Rayment |
| Solicitor for the Second Respondent: | Sparke Helmore |
ORDERS
That the decision of the Social Security Appeals Tribunal, appeal SC227546 be set aside.
The matter be remitted to the Social Security Appeals Tribunal to hear and determine according to law.
IT IS NOTED that publication of this judgment under the pseudonym Wales & Falls & Anor (SSAT Appeal) is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT SYDNEY |
SYC 5408 of 2008
| MR WALES |
Applicant
And
| MS FALLS |
First Respondent
| CHILD SUPPORT REGISTRAR |
Second Respondent
REASONS FOR JUDGMENT
The appellant appeals from a decision of the SSAT made on 29 August 2008. The sole issue on the appeal related to the way the SSAT dealt with the costs of the appellant exercising contact with his children.
The appellant lives and works in Australia. The respondent and the children live in England. Between February 2007 and February 2008 the appellant made 4 trips to England in order to spend time with the children, costing him around $2500 per trip for economy air tickets. His costs are largely limited to air tickets, as he has family in England who assist in facilitating his time with the children.
When considering whether this amounted to a ‘special circumstance’ under s.117(2), the Tribunal concluded:
[25] The Tribunal considered it to be very important and in the interest of the children that [the appellant] spends time with his children. However, the Tribunal considered allowing the costs of four visits to enable him to have contact and communicate with his children as unreasonable and excessive. The Tribunal considered two trips in a 12 month period as reasonable. This means that the Tribunal is allowing $5000 as his contact cost in the relevant child support period under Reason 1. The Tribunal also considered his telephone costs of A$20 per month as unnecessary and avoidable. Phone cards are commonly available and these allow for calling overseas with minimal cost.
The issue on the appeal was whether it was open to the Tribunal to make its own determination of the amount of contact that is reasonable in the case, and then calculate the costs of that basis, rather than accepting the contact arrangement that was in place between the parents and calculating the actual costs of enabling that contact to occur.
Section 117(2)(a)(iv) refers simply to ‘high costs involved in enabling a parent to spend time with, or communicate with, any other child or another person that the parent has a duty to maintain’. The method of calculating those costs is set out in s.117(2B), as follows:
(2B) A parent’s costs involved in enabling the parent to care for a child can only be high for the purposes of subparagraph (2)(a)(iv) or (2)(b)(i) if the costs that have been or will be incurred, during a child support period, total more than 5% of the amount worked out by:
(a) dividing the parent’s adjusted taxable income for the period by 365; and
(b) multiplying the quotient by the number of days in the period.
(2C) If a parent has at least regular care of a child, then the only costs that can be taken into account for the purposes of subsection (2B) are costs related to travel to enable the parent to spend time with, or communicate with, the child.
The words of the section refer to the actual costs incurred (or, in the case of future costs, must clearly be read as the likely costs to be incurred for the relevant period), and are not limited to such costs as relate to the amount of contact that the Tribunal considers to be reasonable. There are sound policy reasons for this limitation on the Tribunal’s powers.
Determinations as to the care arrangements of children are made by the Courts under Division VII of the Family Law Act. In some cases these are made by court order after a trial, in others by consent order, and in a great many cases by private agreement between the parties that never become formalised in a court order. There is no jurisdiction on the part of the Tribunal to make determinations as to the amount of time that a parent should have with their children.
The court’s power in Part VII of the Family Law Act is not fettered by the provisions of the Child Support (Assessment) Act: see Love v Henderson (1995) FLC ¶92-653; (1995) 125 FLR 129; (1995) 20 Fam LR 128.
On the facts of this case, there is no finding that the parents have concluded that it is unreasonable for the children to see their father four times per annum, if this is within the means of the family, nor is there a dispute between the parties on this issue. Nor could it be said that it would be likely that a court would restrict a father from seeing his children four times per annum in a case where there were otherwise good relations between the father and the children, if the father was prepared to undertake the travel involved, even if it involved international travel.
In these circumstances, I find that the Tribunal have erred in law in restricting the costs that they were prepared to consider under this ground to two trips per annum to the United Kingdom rather than analysing, on the evidence before them, the actual costs that had been incurred in the past and were likely to be incurred in the future.
In these circumstances the appeal should be allowed and the matter remitted for rehearing by the Tribunal.
A further difficulty with this decision, like so many decisions that have been the subject of appeal (see, for example, Gyselman & Gyselman[1991] FamCA 93; (1992) FLC ¶92-279; (1991) 15 Fam LR 219; Hides and Hatton [1997] FamCA 28; (1997) FLC ¶92-759; [1997] FamCA 28; (1997) 21 Fam LR 855; Hallinan v Witynski[1999] FamCA 1127; (1999) FLC ¶98-009; [1999] FamCA 1127; (1999) 25 Fam LR 647, Ross & McDermott[1998] FamCA 134; (1998) FLC ¶98-003; PJ & Child Support Registrar (SSAT Appeal)[2007] FMCAfam 829 ; (2007) 38 Fam LR 31, Tyagi & Meares (SSAT Appeal)[2008] FMCAfam 886 ; (2008) 39 Fam LR 604; Charnock & Bullions (SSAT Appeal)[2008] FMCAfam 36; Parrish & Torrey (SSAT Appeal)[2009] FMCAfam 274 ; (2009) 41 Fam LR 236), is that the Tribunal have not identified the reasonable costs of caring for the children nor the income available to each of the parents. Rather, the Tribunal has simply approached the costs of contact from a formulaic perspective. Once high costs of enabling contact had been established, it was incumbent upon the Tribunal to consider the income and expenses of both parties as a whole, in order to determine the needs of the children and the capacity of the father to contribute to them. Nowhere in the decision are the needs of the children identified, nor is the capacity of the father to meet those needs clearly calculated having regard to his actual income, his necessary commitments for his own self-support and his expenses in enabling contact to take place. It would be at this point in the considerations that a balance would be struck between the competing needs, having regard to the obligations of the parties and the objects of the Act.
A method of alteration by which the decision-maker ‘tinkers’ with an element of the formula may produce a result that is ‘just and equitable’: see Houlihan (1991) FLC ¶92-248; (1991) 104 FLR 299; (1991) 14 Fam LR 910. Indeed, in many cases it has the attraction of appearing to be a logical extension of the objects of the Act, which are to ensure that child support is calculated having regard to the legislatively-fixed standard: see s.4. However, to fulfil the obligations under s.98C(1)(b)(ii)(A), it is necessary for the Tribunal to consider the facts and circumstances discussed in s.117(4)-(9).
Unlike decisions before senior case officers and objections officers, there is no further merits review available to parties following a decision of the SSAT. The fact that appeals lie only on a question of law, and that no hearing on the merits is available before the courts, highlights the importance of the SSAT decision and the need to carefully apply the provisions. In this respect the work of the SSAT in child support is fundamentally different to areas such as social security where a de novo hearing is available before the AAT on review. As can be seen from decisions such as Bagala & Bagala [2009] FMCAfam 953 the SSAT decision is, on a practical level, the final decision in most cases.
It is therefore incumbent upon the SSAT to ensure that the decision reflects not only the actual needs of the children, but the actual capacity of each of the parents to financially meet those needs. Put simply, whilst a formulaic approach may provide an appropriate indication of the outcome, and in many cases may provide an appropriate outcome, it is not sufficient on its own but must be seen as a check against the decision based upon the actual circumstances of the party.
In this respect it is instructive to have regard to the comments of the Full Court in Coon v Cox (1994) FLC ¶92-464, (1993) 116 FLR 166; (1993) 17 Fam LR 692, when discussing the relevance of a formula assessment to the determination of the just and equitable rate of child maintenance under the provisions of the Family Law Act. Notably, the considerations required by s.117(4)-(9) are similar to those required in maintenance cases under Part VII. In Coon v Cox (1994) FLC ¶92-464, (1993) 116 FLR 166; (1993) 17 Fam LR 692, the Full Court said that in respect of Stage 1 cases:
Counsel for the father also sought to rely upon what would be payable by the father under stage 2 of the child support scheme if it applied to this child, which would be virtually nothing. This was in support of an argument that maintenance should not be increased. In this regard, she made reference to the majority of the Full Court in Beck and Sliwka (1992) FLC ¶92-296; (1992) 15 Fam LR 520. However, I reiterate as I did in Stratton supra, that that case decided no more than that it was open for the court to have regard to the formula in child maintenance cases but that the formula in no way controls the matter in non-stage 2 cases.
In the present case I do not find the formula to be of assistance and indeed it is one of those cases where I consider that an application of the formula will do a considerable injustice to the custodial parent.
The appeal is therefore allowed and the matter remitted to the SSAT for rehearing according to law before a different member.
I certify that the preceding seventeen (17) paragraphs are a true copy of the reasons for judgment of Riethmuller FM
Associate: Katherine Sudholz
Date: 22 March 2010
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