Walston and Child Support Registrar (Child support)

[2022] AATA 3507

Walston and Child Support Registrar (Child support) [2022] AATA 3507 (14 July 2022)

DIVISION:Social Services & Child Support Division

REVIEW NUMBERS:  2022/BC023611

2022/BC023769

2022/BC023770

2022/BC023771

APPLICANT:  Mr Walston

OTHER PARTIES:  Child Support Registrar

TRIBUNAL:Member J Leonard

DECISION DATE:  14 July 2022

DECISION:

2022/BC023611

The decision under review is set aside and a decision substituted that Mr Walston is granted an extension of time in which to lodge his objection to a decision made on 5 December 2020.

2022/BC023769

The decision under review is set aside and a decision substituted that Mr Walston is granted an extension of time in which to lodge his objection to a decision made on 17 August 2019.

2022/BC023770

The decision under review is set aside and a decision substituted that Mr Walston is granted an extension of time in which to lodge his objection to a decision made on 22 February 2020.

2022/BC023771

The decision under review is set aside and a decision substituted that Mr Walston is granted an extension of time in which to lodge his objection to a decision made on 27 July 2020.

CATCHWORDS

CHILD SUPPORT – refusal to grant an extension of time to object - reasonable explanation for the delay in lodging the objection late – some prospects of objection succeeding and therefore there is arguable merit – some prejudice to the other parent – no significant prejudice to the public – the extension of time should have been granted - decisions 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.

BACKGROUND

1. This review concerns whether an extension of time should be granted to allow Mr Walston to lodge an objection to four decisions made by Services Australia (Child Support).

2022/BC023611

1. Mr Walston is the parent liable to pay child support to [Ms A] in respect of two children. On 5 December 2020 a decision was made in relation to the commencement of a new child support period on 1 January 2021. That decision – in the absence of lodgement of a tax return by Mr Walston in respect of the 2019–20 financial year, was to apply a 2019–20 provisional income of $51,151 to the child support assessment (or two–thirds of the Male Total Average Weekly Earnings (MTAWE)) for the period 1 January 2021 to 31 March 2022.

2. Mr Walston lodged an objection to that decision on 2 March 2022 which is more than 28 days after the decision was notified to him. On 22 March 2022 he lodged an extension of time request. The extension of time request was refused on 24 March 2022.

2022/BC023769

1. Mr Walston is the parent liable to pay child support to [Ms A]. On 17 August 2019 a decision was made in relation to the child support period 1 October 2019 to 31 December 2020.  That decision – in the absence of lodgement of a tax return by Mr Walston in respect of the 2018–19 financial year – was to apply a 2018–19 provisional income (MTAWE) of $50,076.

2. Mr Walston lodged an objection to that decision on 2 March 2022 which is more than 28 days after the decision was notified to him. On 22 March 2022 he lodged an extension of time request. The extension of time request was refused on 24 March 2022.

2022/BC023770

1. Mr Walston is the parent liable to pay child support to [Ms B] in respect of one child. On 22 February 2020 a decision was made relation to the child support period 1 April 2020 to 30 June 2021. That decision – in the absence of lodgement of a tax return for the 2018–19 financial year – was to apply a 2018–19 provisional income (MTAWE) of $50,076.

2. Mr Walston lodged an objection to that decision on 2 March 2022 which is more than 28 days after the decision was notified to him. On 22 March 2022 he lodged an extension of time request. The extension of time request was refused on 24 March 2022.

2022/BC023771

1. Mr Walston is the parent liable to pay child support to [Ms B]. On 27 July 2020 a decision was made in relation to the child support period 1 September 2020 to 30 November 2021.  That decision – in the absence of lodgement of a tax return by Mr Walston in respect of the 2019–20 financial year – was to apply a 2019-20 provisional income (MTAWE) of $51,151.

2. Mr Walston lodged an objection to the decision on 2 March 2022 which is more than 28 days after the decision was notified to him.  On 22 March 2022 he lodged an extension of time request. The extension of time request was refused on 24 March 2022.

10.  Mr Walston lodged an application with the Tribunal on 1 April 2022 in respect of application 2022/BC023611 and on 21 April 2022 he lodged an application with the Tribunal in respect of the remaining three decisions.   

11.  A hearing was conducted on 14 July 2022. The Tribunal had approved Mr Walston’s accountant, [Mr C] to appear as a witness.  The Tribunal was unable to reach Mr Walston at the appointed time. The Tribunal had regard to the documents supplied by Child Support and the additional documents provide by Mr Walston prior to the hearing numbered A1 to A32 together with [Mr C]’s oral evidence.

ISSUES

12.  The issues to be decided by the Tribunal are:

·     whether Mr Walston’s objections were lodged outside the statutory time frame; and if so

·     should Mr Walston be granted an extension of time to object to the decisions made on 17 August 2019, 22 February 2020, 27 July 2020 and 5 December 2020?

CONSIDERATION

13. Subsection 80(1) of the Child Support (Registration and Collection) Act 1988 (the Act) provides that a party to a child support assessment can lodge an objection in writing to a decision as to the particulars of a child support assessment. Section 81 of the Act requires that a person must lodge an objection to such a decision within 28 days after a notice of the decision is served on them.

14.  The Tribunal is satisfied that Mr Walston did not lodge written objections to the decisions until 2 March 2022, well outside of the statutory timeframe.  

15.  Where the period for lodgement has ended, a person may send their objection to the Registrar along with an application requesting that the objection be treated as if it was lodged within the allowed time (section 82 of the Act). Section 83 of the Act provides that the Registrar must consider the application for extension of time, grant or refuse that application and advise the person of the decision in writing. Section 89 of the Act allows the person who applied for the extension of time to apply to this Tribunal for a review of that decision.

16.  The Tribunal considered the guiding principles for the exercise of a discretion to allow an extension of time as set out in Hunter Valley Developments Pty Ltd v Cohen [1984] FCA 176 (Cohen). In that case the Federal Court said that an extension of time should not be granted unless it was proper to do so noting that, in general, applications or proceedings commenced outside of a prescribed time limit will not be considered. The Court held at [18] that a pre-condition for the discretion to be exercised favourably for the applicant for an extension of time is that the applicant provide an ‘acceptable explanation of the delay’ and that it is ‘fair and equitable in the circumstances’ to extend time (citations omitted). 

17.  A consideration of other relevant authorities establishes that when considering whether to allow an extension of time the Tribunal should consider and balance a range of factors. These factors are a guide and are not exhaustive, but generally include:

·     the reasons for the delay and whether the applicant rested on their rights;

·     the merits of the substantive application;

·     any prejudice to the other party including any difficulties that they will experience in providing evidence as a result of the delay;

·     wider prejudice to the general public;

·     fairness in granting an extension of time as between the applicant and other persons in a similar position; and

·     whether it is proper to grant the extension of time.

The reasons for the delay and whether Mr Walston rested on his rights

18.  In his application to the Tribunal Mr Walston stated he was outside of the country for three years so could not lodge his income tax returns. He returned to Australia [in] January 2022 and the returns were lodged promptly.

19.  [Mr C] stated Mr Walston departed Australia in 2019 and was living in a small village on the border of [Country 1] and [Country 2] caring for his elderly mother who passed away in December 2021. He stated communication was difficult. It is not known whether Mr Walston received the notice of the original decisions which appear to have been delivered to an address in Queensland. [Mr C] stated that he thought that once the returns were lodged with the Australian Taxation Office which demonstrated Mr Walston had nil income, the assessments would be revised. Child Support made a decision not to accept the income details contained in the returns and Mr Walston promptly applied for review with the Tribunal.

20.  The Tribunal finds that Mr Walston provided a reasonable and adequate explanation for the delay in lodging his objection.

The merits of Mr Walston’s objection

21.  Mr Walston lodged a 2018–19 and 2019–20 provisional (income tax declaration) income of $0 on 9 February 2022.

22. Section 58A of the Child Support (Assessment) Act 1989 sets out the circumstances in which a person’s adjusted taxable income is subsequently determined to be a different amount. So far as is relevant here (that is, where the later amount is less than the amount applied to the assessment), a retrospective determination can only be made in circumstances prescribed by the Child Support (Assessment) Regulations 2018 (the regulations). If so, the Registrar must immediately amend the administrative assessment for the child support period on the basis that the parent’s adjusted taxable income for that year of income is, and has always been, the amount that was subsequently ascertained or later determined (as the case requires).

23.  Regulation 11 of the regulations provides the following:

(1) For the purposes of section 58A of the Act, the following circumstances are prescribed in relation to a parent who was unable to provide information about the parent’s adjusted taxable income to the Registrar at the time the relevant administrative assessment was made:

(a)  one or more of the following applied in relation to the parent at that time:

(i)  the parent did not know that an application for the assessment had been made and accepted;

(ii)  the parent had a serious illness or injury;

(iii)  the parent was under detention or imprisonment;

(iv)  the parent resided in a remote location which made it difficult to contact the Registrar;

(v)  a natural disaster prevented the parent from being able to contact the Registrar;

(vi)  there was some other exceptional circumstance that prevented the parent from providing the information;

(b)  the Registrar confirms that the parent was unable to provide the information at that time because of a circumstance mentioned in paragraph (a);

(c)  the parent later provides the information to the Registrar as soon as is practicable in the circumstances.

(2) For the purposes of section 58A of the Act, the following circumstances are prescribed in relation to a parent who resided overseas during the last relevant year of income for the child support period for which the Registrar made the relevant administrative assessment:

(a)  the parent was not required to lodge a tax return under the Tax Act;

(b)  the parent provides the information about the parent’s adjusted taxable income to the Registrar within a reasonable time in the circumstances.

24.  From the available evidence Mr Walston was living in [Country 1] for approximately three years caring for his elderly mother in a war zone. [Mr C] stated she died of coronavirus and Mr Walston was very unwell for a period after contracting the illness. [Mr C] stated he kept in touch with Mr Walston as best he could, however there were communication difficulties and the village Mr Walston lived in was 924 km  away from the nearest large town. [Mr C] stated he notified the Australian Taxation Office that he was unable to obtain Mr Walston’s signature for the completion of income tax returns until he returned to Australia.

25.  While Child Support correctly applied the provisions of section 58 of the Act in determining a provisional income for Mr Walston, it has not properly considered the provisions of paragraph 58A(2)(c) of the Act. 

26.  The Tribunal is of the view that Mr Walston provided information to the Registrar regarding his 2018–19 and 2019–20 income as soon as reasonably practicable.

27.  The Tribunal finds that if Mr Walston is granted an extension of time in which to lodge his objection further enquiries by Child Support may reveal that either subsection 11(1) or 11(2) of the regulations are applicable. 

Prejudice to other parties

28.The Tribunal also considered whether there would be prejudice to [Ms A] or [Ms B] should the extension of time be granted. It was satisfied that [Ms A] and [Ms B] would be prejudiced because the outcome of the decision was presumed determined once the 28 days for lodging an objection had passed, and a decision in Mr Walston’s  favour would result in the amount of child support arrears decreasing.

29.The Tribunal also considered whether there would be prejudice to the general public and whether it is in the public interest for the issues raised by Mr Walston’s objection to be determined. The Tribunal concluded that there would be no significant prejudice to the general public if the application was granted.

Fairness in granting an extension of time as between the applicant and other persons in a similar position

30.  The Tribunal finds that it would be fair to others to grant Mr Walston an extension of time.  This is because he had adequate reasons for his delay, did not rest on his rights and his objection may have merit.

Whether it would be proper to grant an extension of time

31.  The Tribunal considers that in the circumstances of this case it would be proper to grant Mr Walston an extension of time to object to Child Support’s decisions of 17 August 2019, 22 February 2020, 27 July 2020 and 5 December 2020.

DECISION:

2022/BC023611

The decision under review is set aside and a decision substituted that Mr Walston is granted an extension of time in which to lodge his objection to a decision made on 5 December 2020.

2022/BC023769

The decision under review is set aside and a decision substituted that Mr Walston is granted an extension of time in which to lodge his objection to a decision made on 17 August 2019.

2022/BC023770

The decision under review is set aside and a decision substituted that Mr Walston is granted an extension of time in which to lodge his objection to a decision made on 22 February 2020.

2022/BC023771

The decision under review is set aside and a decision substituted that Mr Walston is granted an extension of time in which to lodge his objection to a decision made on 27 July 2020.