YBQB and Child Support Registrar (Child support second review)
[2024] AATA 888
•30 April 2024
YBQB and Child Support Registrar (Child support second review) [2024] AATA 888 (30 April 2024)
Division:GENERAL DIVISION
File Number(s): 2023/1011
Re:YBQB
APPLICANT
AndChild Support Registrar
RESPONDENT
AndPTYW
JOINED PARTY
DECISION
Tribunal:Emeritus Professor P A Fairall, Senior Member
Date:30 April 2024
Place:Sydney
The decision of the Social Services and Child Support Division (AAT1) dated 27 October 2021 is set aside and substituted with the objection decision dated 27 May 2021.
...........[SGD].............................................................
Emeritus Professor P A Fairall, Senior Member
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 (Cth).
Catchwords
CHILD SUPPORT – percentage of care – where notification given more than 28 days after change of care – where change of care occurred in 2016 – whether current provisions apply with retrospective effect – decision under review set aside and substituted
Legislation
Child Support (Assessment) Act 1989 (Cth)
Family Assistance and Child Support Legislation Amendment (Protecting Children) Act 2018 (Cth)
Cases
Coleman v Shell Co of Australia Ltd (1943) 45 SR (NSW) 27
MCKC and Child Support Registrar (Child support second review) [2021] AATA 4676
XWTH and Child Support Registrar (Child support second review) [2021] AATA 3240ZBYM; Child Support Registrar and (Child support second review) [2021] AATA 1034
Secondary Materials
Dennis Pearce, Statutory Interpretation in Australia (LexisNexis Butterworths, 10th ed, 2023)
Revised Explanatory Memorandum, Family Assistance and Child Support Legislation Amendment (Protecting Children) Bill 2018 (Cth)
REASONS FOR DECISION
Emeritus Professor P A Fairall, Senior Member
30 April 2024
INTRODUCTION
C1 is the child of separated parents. A child support case was registered under the Child Support (Assessment) Act 1989 (Cth) (the Assessment Act) with the Child Support Agency (CSA) established on 19 June 2006.[1] The case ended on 19 July 2021, the day before C1 turned 18.[2]
[1] T7/70.
[2] T76/293.
From 27 October 2011, care percentage determinations of 84% and 16% applied for the mother and father respectively. The mother notified the CSA on 12 February 2021 (the date of notification) that she had sole care of the child from 1 January 2016.
On 27 May 2021, the CSA found that a change of care had occurred and varied the care percentages.[3] The father objected to the varied assessment.
[3] T58, 229; T59, 231.
On 20 August 2021, the father’s objection was disallowed.[4] He then applied to the Tribunal for review of the decision.[5] The mother joined the application as the Other Party.
[4] T81, 309; T82, 310; T83, 311-313.
[5] T4, 62.
On 27 October 2021, the Social Services & Child Support Division of the Tribunal (AAT1) affirmed the objection decision, except in relation to the date of effect of the change of care for the father.[6]
[6] T2, 7.
The mother applied to the Tribunal for review of the AAT1 decision.
THE HEARING
The Tribunal conducted a hearing on 13 December 2023 and heard from both parents. The Child Support Registrar (Registrar) was helpfully represented by Mr A. Taverniti who, as is normal in these sorts of proceedings, took a neutral position on any factual disputes. In this matter there were no relevant factual disputes.
The father accepted that care had changed in 2016. The mother said she had not at any stage withheld the child and this was not disputed by the father. Neither party disputed the factual basis for the change of care percentages.
It was common ground that the existing care percentage determination should be revoked and that a new determination should be made according to which the mother had 100% care from 1 January 2016, and the father than 0% care from that date. The matter proceeded on the basis that the only issue for the Tribunal to determine was whether the change should take effect in accordance with the rule stated in paragraph 54F(3)(b), or in accordance with the law as it stood when the change of care occurred.
The date of effect of the revocation of a determination is governed by subsection 54F(3) of the Assessment Act. The mother notified the CSA of the change of care on 12 February 2021. Subsection 54F(3) provides:
(3) The revocation of the determination takes effect at the end of:
(a) if the Registrar or Secretary is notified, or otherwise becomes aware, of the [change] within 28 days after the change of care day for the responsible person--the day before the change of care day; or
(b) if the Registrar or Secretary is notified, or otherwise becomes aware, of that matter more than 28 days after the change of care day for the responsible person and:
(i) the responsible person's care of the child has increased--the day before the Registrar or Secretary is notified, or otherwise becomes aware, of that matter; or
(ii) the responsible person's care of the child has reduced--the day before the change of care day. (Emphasis added)
The notification occurred more than 28 days after the change of care took place, and the father’s care of the child reduced. Therefore, subparagraph 54F(3)(b)(ii) is relevant.
The provision, in its present form, came into effect in July 2018. It was clearly intended to reinforce the obligation to notify the Registrar in a timely manner of any change in care. The Explanatory Memorandum highlights the government’s view that a parent who fails to advise the CSA that their care of a child has reduced should not benefit from their omission.
The obligation to notify of a person’s increase or reduction in care applies to that person. If a person fails to comply with that obligation, they should not benefit from that failure. Where there is delayed notification of a care change, an increased care percentage will only apply from date of notification. The person with increased care will continue to not have the benefit of a backdated increase to the child’s care percentage. However, a reduced care percentage will be backdated to apply from the date of the care change. This means the child support assessment would reflect the costs associated with that person’s actual rather than an inflated level of care.[7]
[7] Revised Explanatory Memorandum to the Bill that became the Amending Act (at pp. 44-45).
This created a symmetry of sorts. Neither party would benefit from procrastination. The party who failed to advise that their care had increased would receive an increase only from the date of notification; conversely, a party who failed to advise that their care had decreased would not be entitled to retain any benefit flowing from that omission. In that way, a debt might, depending on the scale of the adjustment, arise if a person failed to advise that their care percentage had decreased. Under the previous law, the adjustment was made from the day before notification. The party who received more than the actual care percentages warranted was entitled to the benefit of the determination, even if calculated on an incorrect factual basis.
DOES THE CURRENT PROVISION APPLY?
The current version of section 54F came into force on 1 July 2018.[8]
[8] Family Assistance and Child Support Legislation Amendment (Protecting Children) Act 2018 (Amending Act).
Item 183 of Schedule 1 of the Amending Act provides that the new subsection 54F(3) applies in relation to (i) change of care days that occur on or after 1 July 2018, and (ii) change of care days that occur before 1 July 2018 if the Registrar or Secretary is notified, or otherwise becomes aware, of the change of care more than 26 weeks after 1 July 2018. (Emphasis added)
Previous decisions of the General Division of the Tribunal suggest that subsection 54F(3) applies ‘retrospectively’.[9] For example, in XWTH and Child Support Registrar (Child support second review) [2021] AATA 3240, Senior Member Poljak stated:
[9] ZBYM; Child Support Registrar and (Child support second review) [2021] AATA 1034; XWTH and Child Support Registrar (Child support second review) [2021] AATA 3240; MCKC and Child Support Registrar (Child support second review) [2021] AATA 4676.
18. As a matter of statutory construction, where a statute is amended, the statute and the amending statute are to be read together. There should also be a harmonious construction of legislature and amendments…
19. Clause 183 makes it plain that the second amendments apply to this proceeding. The overall purpose and intent of the amendments was to provide a single set of date of effect rules in relation to all changes of care notified more than 26 weeks after 1 July 2018, namely after 30 December 2018. This is consistent with the explanation of the purpose of item 183 of Part 4 of Schedule 1 to the Protecting Children Act in the Revised Explanatory Memorandum for the Act (at p 46):
Item 183 provides that the amendments made by items 175 to 182 will apply in relation to changes of care days that occur on or after the day this item commences and changes of care days that occur before the day this item commences if the Registrar or Secretary is notified or otherwise becomes aware of the change of care more than 26 weeks after the day this item commences.
This provides parents who have delayed in notifying a change of care with a transitional 'grace period' of 26 weeks from commencement to notify of the change of care before they become subject to the new care percentage date of effect rules.
As a result, a parent who had reduced their care of a child before commencement but failed to notify of the change until more than 26 weeks later would have the reduced care percentage reflected in their child support assessment from the date of the care change. This could lead to a child support overpayment or arrears debt being raised against that parent in some cases. However, this is appropriate given the reduced care percentage is an accurate measure of the lower care costs incurred by that parent as the date of the care change, and the ability to notify within a timely manner, was within the parent's control.
20. This is also reflected in the Child Support Guide – Version 4.57, released 1 July 2021, which provides at 2.2.2 on page 7:
The parties have an obligation to notify the Registrar of increases or decreases in care. If they fail to comply with that obligation, neither party should benefit from that failure. Where there is a delayed notification of a care change, an increased care percentage will only apply from date of notification.
21. Additionally, the specific wording of clause 183 evinced a clear intent that it was to apply retrospectively. This is consistent with what Senior Member Furnell said in ZBYM; Child Support Registrar and (Child support second review) [2021] AATA 1034 at [56]- [58].
22. For these reasons, the second amendment should apply in these proceedings, pursuant to clause 183(b) of the Protecting Children Act, as the Registrar or Secretary was only notified of changes to care days that occurred before 1 July 2018, more than 26 weeks after 1 July 2018 (i.e. after 30 December 2018 on 7 August 2019 (the notification date)).
The AAT1 declined to follow this line of authority. The learned member stated:
20. In the absence of clear intention, the Tribunal in accordance with the common law principle of the presumption of no retrospectivity, the Tribunal is of the view that a person’s legal rights and obligations should not be adversely changed retrospectively unless clearly stated in the law, such that the Tribunal concludes that the previous date of effect provisions apply in relation to this matter. In reaching this conclusion, the Tribunal acknowledges the differing view taken by the CSA and by this Tribunal in its second review jurisdiction in ZBYM; Child Support Registrar and (Child support second review) [2021] AATA 1034 and XWTH and Child Support Registrar (Child support second review) [2021] AATA 3240. The Tribunal has considered these decisions and whilst persuasive the Tribunal exercising its jurisdiction in this Division is not bound by these decisions, and has formed a different view as to the operation of the differing date of effect provisions for the reasons canvassed. The Tribunal acknowledges the undesirability the differing interpretations of these provisions currently causes for parties such as the parties in this case, nevertheless, absent binding authority on the Tribunal, having regard to all matters concludes that the previous date of effect provisions should apply to the circumstances of this application.
21. Consequently, the Tribunal considers that the legislation pre-23 May 2018 is the appropriate law to apply in this case in determining the percentages of care and also the revocation of existing determinations of percentages of care and the relevant dates of effect.[10]
[10] T2, 10-11.
It is impossible to disagree with the AAT1’s assertion that ‘a person’s legal rights and obligations should not be adversely changed retrospectively unless clearly stated in the law’. It is somewhat more difficult to understand the basis for deciding that Parliament did not intend that the provision should apply retrospectively in the circumstances of the present case, especially in light of the clear words of clause 183 of Schedule 1 of the Amending Act. Under that provision, the provision applies to cases where the change of care occurred before commencement of the new provision (on 1 July 2018), but the Registrar became aware of the change more than 26 weeks after its commencement.
At the conclusion of the hearing, the Tribunal granted leave to the Registrar to file further submissions on the question of whether, properly construed, the amendments to section 54F of the Assessment Act introduced by Schedule 1 to the Amending Act are retrospective in their operation.
The Registrar’s submissions state:
5. The general rule of the common law, reflecting the “resistance of the law to retrospectivity in legislation” (Polyukhovich v The Commonwealth (1991) 172 CLR 501 at [17] (per Dawson J)), “is that a statute changing the law ought not, unless the intention appears with reasonable certainty, to be understood as applying to facts or events that have already occurred in such a way as to confer or impose or otherwise affect rights or liabilities which the law had defined by reference to the past events”: Maxwell v Murphy (1957) 96 CLR 261 at 267 (per Dixon CJ).
6. What is meant by retrospectivity can be ambiguous; it is a word that is not always used with a constant meaning. The word has a particular meaning when used to describe statutes that are caught by the general presumption against retrospectivity. As Jordan CJ observed in Coleman v Shell Co of Australia (1943) 45 SR (NSW) 27 at 30, an Act “is not retrospective because it interferes with existing rights. Most Acts do. There is no presumption that interference with existing rights is not intended; but there is a presumption that an Act speaks only as to the future.” An Act speaks to the future, and does not engage the common law presumption, if it creates future rights or liabilities by reference to past events. On the other hand, a statute that provides that the law at some point in the past shall be taken to have been something other than it was, is an example of a statute that is truly retrospective in the sense that it speaks to the past. Statutes of the latter kind are those that the common law seeks to avoid in the absence of a clear contrary indication: Coleman at 30-31; see also The Commonwealth v SCI Operations Pty Ltd (1998) 192 CLR 285 at [57]-[58] (per McHugh and Gummow JJ).
…
21. … Item 183 of Schedule 1 provides that new subsection 54F(3) applies in relation to (i) change of care days that occur on or after 1 July 2018, and (ii) change of care days that occur before 1 July 2018 if the Registrar or Secretary is notified, or otherwise becomes aware, of the change of care more than 26 weeks after 1 July 2018. It is by reference to these specific application provisions that one should consider whether s 54F(3) is truly retrospective.
22. In answering this, it is important to have regard to the general scheme of determining and revoking care percentages under the Assessment Act. The scheme operates reactively. The revocation provisions only operate upon the Registrar being notified or otherwise becoming aware of a change in care, and the determination provisions in turn only operate (relevantly for present purposes) after the revocation of an existing care percentage determination. For the current version of s 54F, Item 183 of the Amending Act stipulates that it only applies to changes of care that occur before commencement if the Registrar or Secretary is notified, or otherwise becomes aware, of the change of care more than 26 weeks after commencement, being 1 July 2018. That is, while the current version of s 54F can apply in respect of facts (i.e., changes of care) that occurred before the commencement of the amended section, that is only so if the triggering event for the revocation and determination decisions – being the Registrar’s notification or awareness of the change – happens more than 26 weeks after the commencement of the amended section.
23. In this way and applying the distinction in the authorities between statutes that speak to the past and those that speak to the future, the current version of s 54F, read together with the application provisions in Item 183 of the Amending Act, does not apply retrospectively in the relevant sense.
24. To illustrate, the commencement of the current version of s 54F did not change the parents’ existing rights or obligations. For example, the provision did not apply the new date of effect rules to revocations of care percentage determinations that had already occurred prior to commencement or to changes of care of which the Registrar had already been notified or become aware. However, for changes of care prior to commencement, where the Registrar was notified more than 26 weeks after the commencement date of 1 July 2018, the current version of s 54F was engaged. In that way, the amendments spoke only to the future.
25. In this case, as the change in care notification was made more than 26 weeks after 1 July 2018, questions of revocation of the existing care percentage determinations and the making of new determinations fell to be determined in accordance with the legislative provisions that were then in force. That does not, in the Registrar’s submission, involve the retrospective application of the current s 54F
CONSIDERATION
Section 54F was amended twice in 2018, the current form being adopted in July 2018. The previous law provided that if the Registrar was notified of a change of care more than 28 days after it took place, the change took effect on the day before the Registrar was notified or became aware of the matter. This rule was amended on 1 July 2018 by a new subsection 54F(3), to provide for different dates of effect, according to whether the responsible person’s care of the child had gone up or down. In terms of when the new provision was engaged, as noted by the Registrar:
21. … Item 183 of Schedule 1 provides that new subsection 54F(3) applies in relation to (i) change of care days that occur on or after 1 July 2018, and (ii) change of care days that occur before 1 July 2018 if the Registrar or Secretary is notified, or otherwise becomes aware, of the change of care more than 26 weeks after 1 July 2018. It is by reference to these specific application provisions that one should consider whether s 54F(3) is truly retrospective.
The lynchpin of the Registrar’s argument is that:
22. … [W]hile the current version of s 54F can apply in respect of facts (i.e., changes of care) that occurred before the commencement of the amended section, that is only so if the triggering event for the revocation and determination decisions – being the Registrar’s notification or awareness of the change – happens more than 26 weeks after the commencement of the amended section.
The Registrar argues that such a law is not inherently retrospective. It is a case of the future operation of the law operating on past events in certain defined circumstances.
The Registrar also argues in the alternative that the previous decisions of the Tribunal proceeded on the basis that paragraph 54F(3)(b) operated retrospectively, but that this was the clear intent of the legislature.
The trigger event for the operation of the amended provision is that more than 26 weeks after its commencement, the Registrar becomes aware – by notification or awareness of the change – of facts which conflict with the basis upon which a determination was previously made. Those facts lead to the revocation of the existing determination and the creation of new child support payment arrangements between the parents.
To the extent that the amended provision has a retrospective effect, I agree with the previous decisions of the Tribunal which are based on the identification of a clear Parliamentary intent that the provision should apply to antecedent events in certain circumstances. If, as argued by the Registrar, the application of the current provision does not involve the retrospective operation of section 54F, the result is the same. I do however consider it somewhat strained to suggest that the provision is not retrospective because the change of assessment is triggered by a state of affairs arising well after the advent of the new provision. The present circumstances appear to me to fall directly within the first of the two hypothetical situations identified by Jordan CJ in Coleman v Shell Co of Australia Ltd (1943) 45 SR (NSW) 27, at 31:
Upon a consideration of the authorities, I think that, as regards any matter or transaction, if events have occurred prior to the passing of the Act which have brought into existence particular rights or liabilities in respect of that matter or transaction, it would be giving a retrospective operation to the Act to treat it as intended to alter those rights or liabilities, but it would not be giving it a retrospective operation to treat it as governing the future operation of the matter or transaction as regards the creation of further particular rights or liabilities.[11]
[11] Cited by Pearce, Statutory Interpretation, 10th ed, at p. 421. See in general pp 420-425 for a full discussion of the cases.
The operation of the new provision means that there may be a change to the amount of child support owed by the father to the mother.
I prefer to base my decision on a finding that the provision under present circumstances has retrospective application and may alter accrued rights, but was intended by Parliament to have this effect. There is no basis for finding that the provision was not intended to apply under the present circumstances. I consider that this is consistent with previous decisions of the Tribunal.
The father’s child support obligations were previously calculated on a false assumption. He was at all times (including under the previous law) under a positive obligation to correct any factual errors relating to the childcare actually provided. Should it transpire that a monetary adjustment is required as a result of the changed percentages, a debt will arise. I cannot see that this results in any injustice to the father.
DECISION
The decision of the Social Services and Child Support Division (AAT1) dated 27 October 2021 is set aside and substituted with the objection decision dated 27 May 2021.
I certify that the preceding 30 (thirty) paragraphs are a true copy of the reasons for the decision herein of Emeritus Professor P A Fairall, Senior Member
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Associate
Dated: 30 April 2024
Date of hearing: 13 December 2023 Date final submissions received: 31 January 2024 Applicant: In person Solicitors for the Respondent: Mr A. Taverniti, Sparke Helmore Lawyers Other Party: In person
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