Warnock and Armfield and Anor (SSAT Appeal)
[2013] FCCA 113
•22 April 2013
FEDERAL CIRCUIT COURT OF AUSTRALIA
| WARNOCK & ARMFIELD & ANOR (SSAT APPEAL) | [2013] FCCA 113 |
| Catchwords: CHILD SUPPORT – Appeal from decision of SSAT – question of law – whether SSAT failed to properly apply s.117(7B) – no issue raised before the SSAT of a failure to appropriately exercise earning capacity at a relevant time – asserted failure to consider hardship to appellant mother – SSAT explicitly addressing hardship – asserted failure to apply equitable doctrine of clean hands – SSAT addressing relevant facts – no error on question of law established – appeal dismissed. |
| Legislation: Child Support (Registration and Collection) Act 1988, ss.103S, 110B Child Support (Assessment Act) 1989, ss.98C, 112, 117 |
| Collector of Customs v Pozzolanic Enterprises Pty Ltd (1993) 43 FCR 280 Hacherl & Berrios [2010] FMCAfam 668 |
| Applicant: | MS WARNOCK |
| First Respondent: | MR ARMFIELD |
| SecondRespondent: | CHILD SUPPORT REGISTRAR |
| File Number: | HBC 674 of 2009 |
| Judgment of: | Judge Halligan |
| Hearing date: | 22 April 2013 |
| Date of Last Submission: | 22 April 2013 |
| Delivered at: | Parramatta |
| Delivered on: | 22 April 2013 |
REPRESENTATION
| Solicitors for the Applicant: | In Person |
| Solicitors for the First Respondent: | No Appearance |
| Counsel for the Second Respondents: | Mr Caplan |
| Solicitors for the Second Respondents: | Program Litigation & Review Branch |
ORDERS
The mother's Amended Notice of Appeal (Child Support) filed on
14 June 2012 is dismissed.
IT IS NOTED that publication of this judgment under the pseudonym Warnock & Armfield & Anor (SSAT Appeal) is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT PARRAMATTA |
HBC 674 of 2009
| MS WARNOCK |
Applicant
And
| MR ARMFIELD |
First Respondent
| CHILD SUPPORT REGISTRAR |
Second Respondent
REASONS FOR JUDGMENT
Introduction
This is an appeal on a question of law against a decision of the Social Security Appeals Tribunal (the SSAT), made on 4 October 2011. The decision under appeal had the effect of rejecting an application by the mother of a child to change an administrative assessment of child support for the child for the period 19 September 2006 to 27 June 2007 (the relevant period).
The mother is the appellant. The child’s father and the Child Support Registrar (the Registrar) are the first and second respondents respectively.
The mother conducted her case without legal representation. The mother relied on an amended Notice of Appeal and written submissions in support and written submissions in reply to those on behalf of the Registrar. I heard supplementary oral submissions from the mother.
As just inferred, the Registrar relied on written submissions. I did not need to hear oral submissions on behalf of the Registrar.
The father did not attend the hearing. I was satisfied on the affidavit of the mother filed in court today that the father was given written notice of today’s hearing, and thus, that to proceed in his absence would not deny him procedural fairness. I therefore proceeded in his absence.
After the close of submission but before I delivered these reasons, the father rang the Registry enquiring when he would be called to participate in the hearing. The father had not applied to participate in the hearing by phone. I permitted the father to listen to my reasons by phone but not otherwise to participate in the hearing by phone.
Background
The following facts and chronology are taken from the SSAT’s reasons.
The child in relation to whom the child support has been assessed is [X] born in 1997. [X] primarily lived with the mother until 19 September 2006. During the relevant period [X] lived primarily with the father. Until 19 September 2006, the father was assessed to pay child support to the mother. For the relevant period, the mother was assessed to pay child support to the father.
The child support assessment for the relevant period was initially based on a deemed taxable income for the father as he had not filed his tax returns. The father's deemed taxable income for the relevant period was $83,151, giving rise to an assessed annual rate of child support payable by the mother of $6,342.
The husband lodged his tax returns for the financial years ending in 2006, 2007 and 2008 in June 2009. On income tax assessments being issued, the Registrar reassessed child support for the relevant period using the usual statutory formula and thus the husband's actual adjusted taxable income for the 2006 year of $37,462, giving rise to an annual rate of child support payable by the mother of $10,056. The father's taxable income for 2006/2007 was $87,076.
On 11 May 2010, on application by the mother, orders were made by this court pursuant to s.112 of the Child Support (Assessment) Act 1989 (the Assessment Act) granting the mother leave to apply within 21 days to the Registrar to change the child support assessment for the relevant period. The effect of this order was to permit the Registrar, or the SSAT exercising the Registrar’s powers in a review of a decision of the Registrar under Part VIIA of the Child Support (Registration and Collection) Act 1988 (the Registration Act), to make a departure determination under Part 6A of the Assessment Act for a period that was or that extended more than 18 months before an application for the departure determination was made. The order did not require the Registrar (or the SSAT exercising the Registrar’s powers) to make a departure determination. Whether or not a departure determination should be made fell to be determined under Part 6A of the Assessment Act if an application was made in accordance with the court’s order for a departure determination.
On or about 28 May 2010, the mother lodged an application with the Registrar for a departure determination, or, to use the language used by the Registrar in the form of application provided for the purpose, for a change of assessment.
That change of assessment application was determined by a Senior Case Officer, as delegate of the Registrar, on 5 August 2010. The decision was that the father's child support income amount for the relevant period should be fixed at $87,076. As mentioned, this was his taxable income for the year of tax in which the relevant period fell.
The father objected to that decision. On 28 January 2011, an Objections Officer, as delegate of the Registrar, disallowed the father's objection, leaving the change of assessment by the Senior Case Officer in place.
The father then applied to the SSAT to review the decision of the Objections Officer. This involved the SSAT conducting a full merits review of the original change of assessment application.
On 4 October 2011, the SSAT made a decision that “the objection is allowed” and that “for the period … there shall be no departure from the administrative assessment”.
In determining an application under Part VIIA of the Registration Act to review a reviewable decision of the Registrar, the SSAT “must:
a)affirm the decision; or
b)vary the decision; or
c)set the decision aside and;
i)substitute a new decision; or
ii)send the matter back to the Registrar for reconsideration in accordance with any directions or recommendations of the SSAT” (s.103S(1), Registration Act).
Although not explicitly expressed in the words of s.103S(1), it is clear that the result of the SSAT’s decision was to set aside the decision of the Senior Case Officer as delegate of the Registrar and to substitute a new decision.
In coming to its decision, the SSAT was satisfied of the ground for departure under s.117(2)(c)(ia), but was not satisfied it would be just and equitable under s.117(4) to make a departure determination.
The applicable law
The right of appeal arises under s.110B of the Registration Act, which provides-
“A party to a proceeding before the SSAT under Part VIIA may appeal to a court having jurisdiction under this Act, on a question of law, from any decision of the SSAT in that proceeding.”
When reviewing the reasons of the SSAT, being an administrative body, the court should not be “concerned with looseness in language nor with unhappy phrasing”, and “the reasons for the decision under review are not to be construed minutely and finely with an eye keenly attuned to the perception of error” (Collector of Customs v Pozzolanic Enterprises Pty Ltd, (1993) 43 FCR 280, at 287, cited with approval in Minister for Immigration and Multicultural Affairs v Wu Shan Liang (1996) 185 CLR 259 at 272 per Brennan CJ, Toohey, McHugh and Gummow JJ, and see the comments of Kirby J to similar effect at 291).
Nonetheless, as Riethmuller FM noted in PJ & Child Support Registrar, [2007] FMCAfam 829 at [38], (2007) 38 Fam LR 31, (2007) FLC ¶98-035:
“38 The only right of review of a decision of the SSAT is an appeal ‘on a question of law’ to the courts … Most significantly, such an appeal does not allow for a review on the merits. As a result, it is important for the Tribunal to provide appropriate reasons. This will usually entail careful findings of fact and clear explanations of the reasons for any decision, particularly where it involves the exercise of a discretion such as altering a child support amount.”
The mother's grounds of appeal
I will deal with each of the four grounds of appeal as set out in the mother's Amended Notice of Appeal. Grounds 1 and 2 both relate to s.117(7B) of the Assessment Act, and I will therefore address them together.
Grounds 1 and 2
As expressed in the Amended Notice of Appeal, these grounds are-
“1. That the Tribunal erred by correctly not applying section(s) 117(7B)(a)(i), 117(7B)(a)(ii), 117(7B)(a)(iii), 117(7B)(b)(i) and 117(7B)(b)(ii) of the Child Support Assessment Act 1989; and in particular does not consider the income, earning capacity, property and financial resources of Mr Armfield or Mrs Warnock as by required by this section; resulting in an error of law. (sic)
2. The Tribunal failed to consider section 117(7B)(c) of the Child Support Assessment Act 1989, with respect to the motivation of the carer parent resulting in an error of law.”
Section 117(7B) imposes certain conditions that must be met before a court may determine that a person’s income earning capacity is greater than is reflected in his or her income for child support departure purposes. This subsection also applies to the Registrar when determining a change of assessment application (s.98C(3), Assessment Act), and hence to the SSAT when exercising the Registrar’s powers under Part 6A.
Section 117(7B) is in the following terms-
“(7B) In having regard to the earning capacity of a parent of the child, the court may determine that the parent’s earning capacity is greater than is reflected in his or her income for the purposes of this Act only if the court is satisfied that:
(a) one or more of the following applies:
(i) the parent does not work despite ample opportunity to do so;
(ii) the parent has reduced the number of hours per week of his or her employment or other work below the normal number of hours per week that constitutes full‑time work for the occupation or industry in which the parent is employed or otherwise engaged;
(iii) the parent has changed his or her occupation, industry or working pattern; and
(b) the parent’s decision not to work, to reduce the number of hours, or to change his or her occupation, industry or working pattern, is not justified on the basis of:
(i) the parent’s caring responsibilities; or
(ii) the parent’s state of health; and
(c) the parent has not demonstrated that it was not a major purpose of that decision to affect the administrative assessment of child support in relation to the child.”
To the extent that Ground 1 complains that the SSAT failed to correctly apply any part of s.117(7B) “in particular” by not taking into account the income, property and financial resources of anyone, it is plain from the wording of the subsection that these matters are not relevant. They are clearly relevant under various other parts of s.117, but s.117(7B) is directed to the consideration of the ground for departure under s.117(2)(c)(ib), and the consideration of the matter under s.117(4)(da) when considering whether it would be just and equitable to make a departure order or determination.
The SSAT addressed the issue of earning capacity briefly in its consideration of the matters relevant to determining whether it would be just and equitable to make a departure determination as follows (Reasons, [64]):
“64. In this matter during the relevant period 19 September 2006 to 27 June 2007 both (the father) and (the mother) were working full time and therefore there is no earning capacity which needs to be considered for the relevant period. In his written submissions (the father) requested the Tribunal to address what he considers to be an error of law in the decision of the previously constituted Tribunal made on 26 November 2008. It related to a determination about earning capacity of (the mother). The Tribunal cannot hear appeals from itself. However even if there were reasons and evidence to suggest that this issue could be revisited, the determination of the previous Tribunal related to something which occurred on 27 June 2007, namely (the mother's) leaving work on that date. It cannot affect the period under review. Consequently the Tribunal does not propose to further consider this issue.”
The SSAT recorded the fact that in the 2005/2006 tax year the father was unemployed from August 2005 to March 2006 (Reasons, [35]).
The mother's application to change the child support assessment was based on the fact that the father's child support for the relevant period was calculated on his taxable income for the 2005/2006 tax year, during part of which he was unemployed, of $37, 462, while his annual taxable income for the relevant period was in fact $87,076. What she wanted is unambiguously stated in the additional information attached to her change of assessment application (Ex A), where the mother stated, on the second page-
“I seek the (the father's) 2006-07 actual taxable income of $87,076 be applied in the assessment period under review, rather than his taxable income for 2005-06 of $37,462”.
This is acknowledged as being what the mother was seeking in the SSAT’s reasons (at [35]).
There was no suggestion that the father did not appropriately exercise his earning capacity during the relevant period. The mother's complaint was that he did not do so in the 2005/2006 tax year. But the relevant time when the SSAT had to determine the parties’ financial circumstances was during the relevant period and at the time of the hearing before the SSAT, not in the 2005/2006 tax year.
Thus, the mother's complaint reflected in Grounds 1 and 2 is misconceived. I am satisfied that the SSAT properly assessed and took into account the parties income, property and financial resources, and their earning capacity, at the relevant time, which the SSAT correctly identified.
In any event, assuming the SSAT should have more fulsomely addressed the matters in s.117(7B) (and I am not satisfied it should have done so), I am not satisfied there was any error of substance. The SSAT took into account the father's taxable income for 2006/2007. I have not been taken to anything to suggest that the mother asserted at any time that the father ought to have been earning more than disclosed in his tax returns. Thus, I am satisfied the SSAT considered the figures the mother argued it should have regard to in assessing the relevant figure for the father's income. To the extent to which it did that without recourse to s.117(7B), this could only have been to the mother’s advantage, not to her disadvantage, and could provide no basis for interfering with the SSAT’s decision.
Ground 3
As expressed in the Amended Notice of Appeal, this ground is-
“3. The Tribunal failed to consider the matters detailed with section 117(4)(g)(ii)(A).” (sic)
Section 117(4)(g) is in the following terms-
“(4)In determining whether it would be just and equitable as regards the child, the carer entitled to child support and the liable parent to make a particular order under this Division, the court must have regard to:
(g) any hardship that would be caused:
(i) to:
(A) the child; or
(B) the carer entitled to child support;
by the making of, or the refusal to make, the order; and
(ii) to:
(A) the liable parent; or
(B) any other child or another person that the liable parent has a duty to support;
by the making of, or the refusal to make, the order; and
(iii) to any resident child of the parent (see subsection (10)) by the making of, or the refusal to make, the order.”
The SSAT considered the matters covered by s.117(4)(g) at [72]-[76] of its reasons. In doing so, the SSAT acknowledged that it was looking at a past period, but observed that the Tribunal also needed to consider current circumstances. The Tribunal-
a)expressed the conclusion that “the greater hardship if the change of assessment were made would be to (the father) and to [X]”;
b)observed that the father's expenses exceed his income and the mother's do not;
c)noted that the CSA was then using an adjusted taxable income of $43,176 for the mother for a child support assessment ending in December 2011;
d)commented that “the general pattern is one of increasing income for (the mother) and decreasing for (the father) over the period from the relevant period to the current time”;
e)noted that if the mother had to pay the additional amount of child support under a formulaic assessment, she would have to pay $2,850 or roughly an additional $70 per week for the relevant period; and
f)expressed the view that the mother could meet this from available income and/or adjustment of non-essential expenditure such as $20 per week for holidays. (Reasons, [73])
Thus, as the mother in fact conceded, the SSAT did consider the issue of hardship to the mother that would be caused by making or refusing to make a departure determination. This ground clearly has no merit.
To the extent to which the mother sought to challenge findings of fact by the SSAT in its treatment of this and other matters, there is no question of law raised by a complaint that the SSAT made an incorrect finding of fact, unless that fact was found with no evidence at all to support it. I am not satisfied the mother's complaints about fact finding by the SSAT raise any question of law.
Ground 4
As expressed in the Amended Notice of Appeal, this ground is-
“4. The Tribunal failed to correctly apply the of test of higher jurisdictional decisions as stated in Hacherl & Berrios [2010] FMCAfam 668, and misconstrued the facts in Warnock & Armfield [2010] FMCAfam 498 and Armfield & Warnock [2008] FMCAfam 804 resulting in an error of law.” (sic)
While this ground potentially raised two discrete issues, the mother submitted that she wished it to be considered as a single ground of appeal.
I note that the mother proceeded on a misapprehension of the nature of the matter before the SSAT, which she categorised as the father's application “in which he is seeking a change of assessment” (mother's written submissions lodged 7 August 2012, [25]). The father's application to the SSAT was to review the Objections Officer’s decision on the mother's change of assessment application. It was a merits review of that decision, and therefore entailed the SSAT itself exercising the powers of the Registrar under Part 6A of the Assessment Act in relation to the mother's change of assessment application. It was the mother, not the father, who was seeking to change the administrative assessment of child support, and this is significant when considering this ground of appeal.
In Hacherl & Berrios, the court was concerned with an application by a father to vary his child support obligations for periods that extended more than 18 months before his application was made. The father therefore also sought an order under s.112 of the Assessment Act to authorise an order being made for the relevant period that extended back more than 18 months.
There had been a change of assessment decision by a Senior Case Officer in 2006. The father's tax returns had not been completed since the 1998/1999 tax year. The Senior Case Officer fixed the rate of child support on the basis that the father’s earning capacity was $60,838. In 2007, the father having lodged his tax returns, tax assessments issued, and in 2008 the father made a change of assessment application based on these assessments. This application was rejected by a Senior Case Officer and the father's objection to that decision was disallowed. Hence the father brought the departure and s.112 applications.
In dealing with the s.112 application, the court addressed the circumstances leading to the change of assessment being sought so long after the event, namely the father having failed to lodge his tax returns. The court said-
“39. The father is seeking an outcome that must be just and equitable (sub-section 117(4)), so it is quite clear that equitable principles must apply.
40. In Cawthorn v Cawthorn, (1998) FLC 92-805 at page 85,062, the Full Court of the Family Court of Australia said:
To obtain the relief that he seeks, the husband must establish to the Court that his cause is one which is just and equitable. One of the principal maxims of equity is “he who comes into equity must come with clean hands”. The husband’s hands are, in our view in the circumstances of this case, very far from clean. We would accordingly decline to grant relief….
41. In this particular matter, the father does not come to court with clean hands in relation to the lodgement of his tax returns. He should not therefore be allowed to rely upon his own dilatory behaviour to obtain relief in relation to a period when the Child Support Agency was hampered by his failure to lodge tax returns for a number of years.”
The mother also sought to rely on the decision in Cawthorn in her written submissions.
The short answer to this ground of appeal is that the equitable doctrine of clean hands is not a bar to a party obtaining relief, but rather is a relevant consideration in determining a claim for discretionary relief, not that the party said to be without clean hands was an applicant for any relief in a relevant sense in the matter before the SSAT.
Assuming for the moment this doctrine applies to an administrative decision maker, and it is unnecessary for me to conclusively determine that issue, the SSAT adverted to the fact that the late lodgement of the father's tax returns caused the particular circumstances that led to the mother's application. The SSAT noted differences in the circumstances of both Hacherl and Cawthorn to the matter before it, and ultimately concluded it would not be just and equitable to make a departure determination.
The mother has not satisfied me that there was any error of law in the SSAT’s treatment of this issue.
To the extent to which this ground of appeal asserts that the SSAT misconstrued facts, as already noted this does not raise a question of law. I am not satisfied the SSAT found any fact identified by the mother in the absence of any evidence of that fact. A suggested error of fact cannot become an error of law by describing it as such in a ground of appeal.
Decision
The mother having failed to demonstrate any merit in any of her grounds of appeal, her appeal is dismissed.
I certify that the preceding fifty-one (51) paragraphs are a true copy of the reasons for judgment of Judge Halligan
Associate:
Date: 23 April 2013
Key Legal Topics
Areas of Law
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Administrative Law
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Civil Procedure
Legal Concepts
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Appeal
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Procedural Fairness
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Jurisdiction
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