Welch and Child Support Registrar (Child support)

[2022] AATA 1563

Welch and Child Support Registrar (Child support) [2022] AATA 1563 (20 April 2022)

DIVISION:Social Services & Child Support Division

EXTENSION APPLICATION

NUMBER:2022/MC023493

APPLICANT:  Mr Welch

OTHER PARTY:  Child Support Registrar

DATE DECISION MADE:                20 April 2022

APPLICATION:

An extension application made on 17 March 2022 asking the AAT to consider the application for AAT first review of a decision of the Child Support Registrar on 16 November 2021 despite the period for applying for review having ended.

DECISION:

The extension application is refused.

CATCHWORDS

CHILD SUPPORT – application for extension of time – departure determination - no satisfactory explanation for the delay – some merit – prejudice to the other parent - extension of time refused

Names used in all published decisions are pseudonyms. Any references appearing in square brackets indicate that information has been omitted 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.

STATEMENT OF REASONS

1. A parent may object to a decision made by the CSA pursuant to section 80 of the Child Support (Registration and Collection) Act 1988 (the Registration Act).

2. Mr Welch was notified of an objection decision made on 16 November 2021 that for the period from 22 March 2021 until a terminating event, Mr Welch’s adjusted taxable income will be set at $68,468 per annum.

3. Mr Welch was advised in that notice, pursuant to subsection 29(2) of the Administrative Appeals Tribunal Act 1975, that if he believed this decision is wrong he must ask the Tribunal to review it, and that he must do that within 28 days from the date of the letter notifying the decision.  

4. Section 91 of the Registration Act provides that if a person applies to the Tribunal for an extension of time in which to lodge an application for review, that application must state the reasons for the failure by the person to lodge the application within the 28-day time period prescribed.

5. Mr Welch gave the Tribunal the following reasons for his application:

   The change of assessment team made a first decision in August 2021 based on my occupation and decided that I was earning $60K, as [an Occupation], which I am not.  I created my own [company] in 2018 and I am the Director.  The company is growing but is not making enough profit for me to make a proper wage. (2018: $21000, 2019: $19,000)  I injected a lot of my personal money into this business and the multiple lockdowns hit hard the business.  I tried to provide as much evidence as I could without the 20-21 tax returns (Xero reconciliations & information I provided were not taken into account.

   After my objection in September 2021, a final decision has been made and the change of assessment team decided that I was earning $68K in 2020-21.  My taxable income for 2020-21 is $25234.  The accountants are busy lodging the tax return now.

   This decision left me in a real difficult position as I take a very small salary out of business, especially during the lockdown, and my partner earned only $7300 on 20-21 and we have a newborn baby.  Because of this decision I have to pay $850 per month for my daughter to her mother.  I can’t pay this monthly amount anymore as the business is struggling and I am trying to work hard to keep the business onboard and my staff employed.  My whole situation has not been taken into account.

6. Mr Welch gave the following reasons for asking for an extension of time to lodge his application for review:

   We did not apply within the time limit because we didn’t have the 2020-21 company and personal tax returns ready.  I have moved the business accounting to new accountants, as the previous ones were making mistakes and took too long to finalise the 2020-21 tax returns.

   I wanted to wait until I have the 2020-21 business and personal tax returns to apply for a review of the final decision.  The new accountants have finished both tax returns after 3-4 months of sorting out the previous mistakes and our accounts.

   I am asking an extension of time please as we are financially in a difficult position and I needed all the accounts and documents to be fixed and finalised before applying, for the Tribunal to have correct information to take a correct and fair decision.

7. The Registration Act does not set out criteria for consideration when considering an application for an extension of time within which to object. The type of factors that must be considered are determined by case law.

8. The established cases indicate that the starting position is the prima facie rule that proceedings commenced outside a statutory period will not be entertained (Lucic v Nolan (1982) 45 ALR 411 at 416). However, the primary concern “is to do that which will enable justice to be done between the parties” (see Martinsen v Secretary, Department of Family & Community Services [2004] FCA 297 per Spender J). Spender J quoted McHugh J in Gallo v Dawson (1990) 64 ALJR 459 as follows:

   In order to determine whether the rules [imposing time limits] will work an injustice, it is necessary to have regard to the history of the proceedings, the conduct of the parties, the nature of the litigation, and the consequences for the parties of the grant or refusal of the application for extension of time ...

   When the application is for an extension of time …it is always necessary to consider the prospects of the applicant succeeding in the appeal …

9. In line with Wilcox J’s survey of cases in Hunter Valley Developments P/L v Cohen (1984) 3 FCR 344, the Tribunal proposes to consider the matters identified in Gallo v Dawson under the following heads:

   ·      the explanation for the delay;

   ·      the merits of the substantial application;

   ·      any prejudice to the other party including any prejudice in defending the proceedings occasioned by the delay; and

   ·      any public interest considerations that might flow from a successful application including “the unsettling of other people” (Ralkon v Aboriginal Development Commission(1982) 43 ALR 535 at 550) or of “established practices” (Douglas v Allen (1984) 1 FCR 287).

10. Mr Welch was clearly advised by the objection decision notice that if he wished to appeal the decision to the Tribunal he must do so within 28 days.  There is no evidence before the Tribunal that he was misadvised by the Commonwealth.

11. The Tribunal considered Mr Welch’s explanation for the reasons for the delay, which are set out in paragraph 6 of this Statement of Reasons. There is no evidence that there was an actual impediment to him making an application to the Tribunal within 28 days, even if he needed more time to produce the evidence of his tax returns.  The Tribunal weighed this heavily against granting the extension sought.

12. The objections officer’s decision is based on subparagraphs 117(2)(c)(ia) and (ib) that provide, in the special circumstances of the case, the child support assessment results in an unjust and inequitable amount of child support to be paid because of the income, property and financial resources of either parent or because of the earning capacity of either parent, which the CSA refers to as Reason 8A.

13. The Tribunal’s prima facie perusal of the evidence did not show a clear or confronting misunderstanding of the facts by the objections officer. For example, the objections officer had relied on the company’s 2020-21 business activity statements to determine total company income of $228,230.  The company’s 2020-21 tax return submitted with the application for an extension of time shows total company income of $254,667 which included other sources of income than sales.

14. While it is the case that [Ms A] would benefit if the appeal resulted in an assessment of Mr Welch’s financial resources which is higher than $68,469 the Tribunal notes that she did not choose to appeal that decision when it was made.

15. In the absence of prima facie evidence of factual errors giving rise to an injustice the Tribunal put less weight on the new evidence in deciding not to grant an extension of time.

16. Granting an extension of time would be prejudicial to the other party, [Ms A], given the burden of the appeals process for her.  The Tribunal gave significant weight to this in making its decision not to grant the extension of time.

17. In terms of public interest considerations, the Tribunal must also have regard to the cost to the Commonwealth of an appeal where one party is dissatisfied about a decision but has failed to establish grounds for an extension of time.  The Tribunal put some weight on this in deciding not to grant an extension of time.

18. This decision is reviewable by the Tribunal, pursuant to paragraph 92(4)(a) of the Registration Act.