Yeldel and Baker and Ors (SSAT Appeal)
[2009] FMCAfam 977
•15 September 2009
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| YELDEL & BAKER & ORS (SSAT Appeal) | [2009] FMCAfam 977 |
| CHILD SUPPORT – Formula assessment – element of formula – level of care – ‘Substantial care’ – agreement as to the level of care – operation of s.8(3) (now repealed) of CSAA. |
| Child Support (Assessment) Act 1989, ss.7A, 8, 31, 66, 73 Child Support (Registration and Collection) Act 1988, s.13 Child Support Legislation Amendment Act (No. 2) 1992 Child Support Legislation Amendment Act 1998 |
| Equuscorp Pty Ltd v Glengallan Investments Pty Ltd [2004] HCA 55; (2004) 218 CLR 471; (2004) 211 ALR 101; (2004) 79 ALJR 206 Gissing v Gissing [1970] UKHL 3; [1971] AC 886; [1970] 2 All ER 780; [1970] 3 WLR 255 Petelin v Cullen [1975] HCA 24; (1975) 132 CLR 355; (1975) 6 ALR 129; 49 ALJR 239 |
| Appellant: | MR YELDEL |
| First Respondent: | MS BAKER |
| Second Respondent: | CHILD SUPPORT REGISTRAR |
| Third Respondent: | SOCIAL SECURITY APPEALS TRIBUNAL |
| File Number: | MLC 11009 of 2007 |
| Judgment of: | Riethmuller FM |
| Hearing date: | 5 May 2009 |
| Date of Last Submission: | 5 May 2009 |
| Delivered at: | Melbourne |
| Delivered on: | 15 September 2009 |
REPRESENTATION
| Counsel for the Appellant: | The Appellant 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 Ryan, an officer of the Child Support Agency |
| Counsel for the Third Respondent: | There being no appearance by or on behalf of the Third Respondent |
ORDERS
That the appeal be allowed.
That the decision of the Social Security Appeals Tribunal of 27 October 2009 be set aside.
That the decision of the Objections Officer of 28 July 2008 be varied by replacing the date ‘27 July 2007’ with ‘17 August 2007’.
IT IS NOTED that publication of this judgment under the pseudonym Yeldel & Baker is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT MELBOURNE |
MLC 11009 of 2007
| MR YELDEL |
Appellant
And
| MS BAKER |
First Respondent
| CHILD SUPPORT REGISTRAR |
Second Respondent
| SOCIAL SECURITY APPEALSTRIBUNAL |
Third Respondent
REASONS FOR JUDGMENT
The Appellant appeals from a decision of the Social Security Appeals Tribunal made 19 February 2009.
Background
This case concerns the way that the level of care that each parent provided for their children from January 2007 to April 2008 is reflected in the child support assessment. The Tribunal decided that the child support assessment should be calculated on the basis that the children were in the ‘sole care’ of the Respondent (as that phrase was defined in the Act at the relevant time) for the period 22 January 2007 to 21 April 2008.
There appears to have been no real controversy that from January 2007 to some time in mid 2007 the appellant did not have ‘substantial care’ of the children. However, negotiations between the parties evidently led to a significant increase in the appellant’s time with the children, such that from mid 2007 the appellant had the children for more than 30% of the nights in a year. This led to telephone calls between the parents and the Child Support Agency with respect to the appropriate assessment details.
On 3 August 2007 the Child Support Agency decided to change the Appellant’s assessed liability from 27 July 2007 to reflect that the Appellant had ‘substantial care’ of the three children. On 31 October 2007 consent orders were made that formalised the parenting agreement apparently reached between the parties in late July 2007. There were also other disputes about child support during this time.
On 28 March 2008 the respondent objected to the Child Support Agency’s decision made 3 August 2007 with respect to ‘substantial care’. Despite the delay, on 13 May 2008 the Respondent was granted an extension of time to make the objection. On 28 July 2008 the Respondent’s objection was disallowed on the basis that the respondent had agreed that the appellant had ‘substantial care’ of the children from late July 2007.
The respondent applied to the Tribunal for review of the objection decision. The respondent attended the hearing but the appellant and Child Support Registrar did not. On 19 February 2009 Tribunal decided to set aside the objection decision and sent the matter back to the Child Support Registrar “for reconsideration in accordance with the direction that [the Respondent] had sole care of [the children] for the child support period from 22 January 2007 to 21 April 2008.” It is this decision of the Tribunal that is the subject of the appeal.
The relevant provisions of the Act
In 1992 changes were made to the child support scheme to provide for a different formula when a parent had ‘substantial access’, which was then defined as more than 30% but less than 40% of the nights ‘of the child support year concerned’: Child Support Legislation Amendment Act (No. 2) 1992.
In 1998, as part of the move to have flexible start and end dates for child support assessments, the concept of a ‘child support period’ was introduced. A child support period could start on any date, and ended no more than 15 months later. Ordinarily a period would end in the month following the tax office issuing a taxation assessment. This meant that child support assessments were no longer tied to financial years, and could use the most recent taxation information, rather than the tax assessment relating to a year two years before the child support assessment year.
The child support assessment is calculated in accordance with the Act: s.31(2). In discharging the functions under the child support scheme, the Child Support Registrar is required to determine the relevant facts and circumstances that must be entered upon the child support register: see s.13 of the Child Support (Registration and Collection) Act1988. The payer and payee are entitled to apply to the Registrar to vary the entries on the register: see s.35 of the Child Support (Registration and Collection) Act 1988.
Whilst the Registrar can act upon the basis of the information available to the Registrar, the Registrar may also seek information: s.66. As assessments usually relate to future dates the Registrar is entitled to assume that the state of affairs at the date of the assessment will continue into the future: s.73.
With the move away form financial years to ‘child support periods’ the definition of ‘substantial care’ was amended to include reference to the 12 months immediately following the assessment: Child Support Legislation Amendment Act 1998, Sch 16. At the time relevant to this appeal the definition of ‘substantial care’ that was contained in s.8 of the Act provided as follows:
8. [Interpretation—shared ongoing daily care and major and substantial contact] (1A) This section operates subject to section 8A.
…
(3) For the purposes of this Act, if:
(a) a person is the principal provider of ongoing daily care for a child; and
(b) either:
(i) another person has care of the child for at least 30%, but less than 40%, of the nights in the 12 months immediately after the start of the child support period concerned; or
(ii) another person has care of the child for less than 30% of the nights in the 12 months immediately after the start of the child support period concerned, but the principal provider of care and the other person agree that the other person has substantial care of the child;
then:
(c) the first mentioned person is taken to have care of the child for 65% of those nights, and is referred to in this Act as having major care of the child; and
(d) the other person is taken to have care of the child for 35% of those nights, and is referred to in this Act as having substantial care of the child.
There were two paths to an assessment on the formula for ‘substantial care’: that the number of nights is 30% or greater in the first 12 months of the ‘child support period’, or that the parties agree that one has ‘substantial care’.
Importantly, the definition of ‘substantial care’ in s.8(3) refers to ‘child support periods’. The Act provides for a new child support period to commence only in limited circumstances: see s.7A(3). A change in the level of care to ‘substantial care’ during the course of the year is not one of the events that triggers a new child support period under s.7A. As a result, even if there is a significant change in the number of nights of care during the course of the child support period, this does not trigger a new child support period.
For example, if a person has the care of a child under orders that provide for 62 nights per annum (one night per fortnight, and half of the school holidays) for the first three months of the period, and under new orders has the care of the child for 122 nights per annum (4 nights per fortnight and half of school holidays) for the remaining 12 months of the period, the total number of nights for the first 12 months could well be 104, and therefore below the threshold for a ‘substantial care’ assessment.
The Explanatory Memorandum for the Child Support Legislation Amendment Act 1998 that added s.8(3) to the Act explained:
Where parents agree to substantial care of a child
5.16 The proposed amendments will allow parents to agree that a parent, other than the principal provider of ongoing daily care, has substantial contact with a child and to have this care arrangement reflected in their administrative assessment.
5.17 The proposed amendments will provide that where parents are in agreement the Registrar will not be required to assess the level of care. Where parents agree, factors other than nights may be taken into account in determining substantial contact.
The Registrar must determine which formula to apply. This requires a finding as to whether the parties have agreed under s.8(3)(b)(ii), and if not a determination must be made as to how many nights the child will be spending with the payer in the first 12 months of the assessment. Clearly the focus of the legislation is to assess the parties on the actual arrangements, and if they are unable to agree on the precise terms of the care arrangements in place, s.8(3)(b)(i) provides a formulaic method for the administration of the Agency to determine the issue.
Thus, where the parties agree that there is ‘substantial care’ the assessment ought to be calculated in accordance with the ‘substantial care’ formula. Two further questions then arise: when should such agreements commence and when do they end. In this case the agreement alleged occurred part way through the period. In other cases agreements may start at the start of the period, but a party may choose to terminate the agreement part way through the period. It is difficult to conclude that the agreement referred to in s.8 was to be a single irrevocable event that could bind a person for 15 months. To interpret the provision in this fashion would give an oral agreement under s.8(3)(b)(ii) as great an impact as many agreements under Part 6. Clearly the intention of the Act is to provide for considerable formality before allowing for a binding agreement. As a result, s.8(3)(b)(ii) must be interpreted as allowing for a party to terminate their agreement to a ‘substantial care’ assessment at any time.
It can not have been Parliament’s intention to allow for a revocation of an agreement that the parties had ‘substantial care’ on the last day of a 15 month period to result in a retrospective calculation of child support for the whole of the period. This interpretation was also reflected in the Child Support Agency online document ‘The Guide’ (as of 16 October 2008), which discusses the possibility of assessments based on ‘substantial care’ for part of a child support period in cases involving agreements under s.8(3). Similarly, it can not have been Parliament’s intention to have an agreement about care reaching the level of ‘substantial care’ some ten months into a period to create a retrospective overpayment for the preceding ten months. Thus, an agreement under s.8 can start at any time during a period, and may end at any time during a period. This was approach adopted by the Objections Officer when deciding the objection in this case.
Decision of the Tribunal
When recounting the evidence before the Tribunal on this issue, the Tribunal said:
[22] The fundamental basis of [the respondent’s] submissions was that although she had agreed that as the result of the court orders made between her and [the appellant] in October 2007, [the appellant] would have substantial care of the children for the child support period which would commence on 22 April 2008, she had never agreed that he had substantial care of the children for the child support period form 22 January 2007 to 21 April 2008. [The respondent] stated that the reason that she had not agreed that [the appellant] had substantial care of the children for the child support period from 22 January 2007 to 21 April 2008 was because he had actual care of the children for less than 110 nights during the first twelve months of that child support period.
[23] [The respondent] also submitted that although she had advised the Agency on a number of occasions prior to the making of the court orders in October 2007 that [the appellant] had substantial care of the children, she did not mean to convey that she agreed that his care of the children would amount to substantial care until such time as the number of nights that his actual care of the children constituted substantial care.
…
[28] The Tribunal notes that according to the Agency records, [the respondent] told the Agency on a number of occasions that [the appellant] had substantial care of the children. [The respondent] gave evidence that although she would have advised the Agency that [the appellant] had substantial care of the children on these occasions, she did not intend at any time to advise that he had substantial care prior to him actually having substantial care of the children. She stated that she only ever agreed to changes in care as and when they had occurred. The Tribunal notes that [the respondent] gave evidence that she used the term ‘substantial’ when communicating with the Agency because that was the term the Agency used in its communications with her. She also stated that during the relevant period she was confused because there are a number of matters in dispute in relation to child support between her and [the appellant]. After carefully considering all the evidence, the Tribunal accepts [the respondent’s] explanation of the events as reasonable in the circumstances. Accordingly, the Tribunal is satisfied that she did not agree that [the appellant’s] care of the children was substantial at any time prior to the child support period which commenced on 22 April 2008.
[30] … the children stayed overnight with [the appellant] on the following nights during the relevant period:
March 2007 on the nights of 10, 23, and 24
April 2007 on the nights of 11 and 21
May 2007 on the night of 5
June 2007 on the nights of 2, 6, 16, 20, 29 and 30
July 2007 on the nights of 1, 2, 3, 4, 5, 13, 14, 18, 27, 28, and 29
August 2007 on the nights of 1, 10, 11, 12, 15, 24, 25, 26, and 29
September 2007 on the nights of 7, 8, 9, 12, 21, 22, 23, 24, 25, 26, 27, 28, and 29
October 2007 on the nights of 10, 18, 19 and 24
November 2007 on the nights of 2, 3, 4, 14, 16, 17, 18, 28 and 30
December 2007 on the nights of 1, 2, 12, 14, 15, 16, 27, 28, 29 and 30
January 2008 on the nights of 1, 9, 10, 11, 12, 13, 14 and 15
If the finding of the Tribunal was that there was error on the part of the Agency officer, then clear findings would be needed as to what the actual conversations were between the respondent and the officer. In this case I do not read the findings as showing any error on the part of the officers of the Agency in recording the substance of the calls with the respondent. Rather the findings appear to relate to the subjective intentions of the respondent that were unknown to the Agency officers.
The Appellant’s submissions focussed upon the argument that the Tribunal fell into legal error by applying a subjective test, rather than an objective test, in determining whether the Respondent ‘agreed’ that the Appellant had ‘substantial care’ of the children.
When determining whether there was an agreement an objective test must be applied. This is the law with respect to many areas of the law. In Petelin v Cullen [1975] HCA 24; (1975) 132 CLR 355; (1975) 6 ALR 129; 49 ALJR 239 The High Court discussed two competing policy considerations:
[11] … first, the injustice of holding a person to a bargain to which he has not brought a consenting mind; and, secondly, the necessity of holding a person who signs a document to that document, more particularly so as to protect innocent persons who rely on that signature.
More recently, in Equuscorp Pty Ltd v Glengallan Investments Pty Ltd [2004] HCA 55; (2004) 218 CLR 471; (2004) 211 ALR 101; (2004) 79 ALJR 206 The High Court unanimously confirmed that:
[33] Having executed the document, and not having been induced to do so by fraud, mistake, or misrepresentation, the respondents cannot now be heard to say that they are not bound by the agreement recorded in it … There are reasons why the law adopts this position. First, it accords with the “general test of objectivity [that] is of pervasive influence in the law of contract”. The legal rights and obligations of the parties turn upon what their words and conduct would be reasonably understood to convey, not upon actual beliefs or intentions.
In Gissing v Gissing [1970] UKHL 3; [1971] AC 886; [1970] 2 All ER 780; [1970] 3 WLR 255 the House of Lords said:
As in so many branches of English law in which legal rights and obligations depend upon the intentions of the parties to a transaction, the relevant intention of each party is the intention which was reasonably understood by the other party to be manifested by that party's words or conduct notwithstanding that he did not consciously formulate that intention in his own mind or even acted with some different intention which he did not communicate to the other party. On the other hand, he is not bound by any inference which the other party draws as to his intention unless that inference is one which can reasonably be drawn from his words or conduct.
Whilst the contract law cases deal with very different factual scenarios, the fundamental difficulty remains in all cases about agreements. If the Registrar of the Child Support Agency is not entitled to rely upon what is reasonably conveyed by a party to the Registrar, the whole of the child support scheme becomes almost impossible to administer. An objective assessment of the statements of the parties to the Registrar is necessary in order to determine if there has been an agreement within the terms of s.8(3)(b). The other parent inevitably relies upon any agreement and alters their affairs on the basis of the child support assessment that follows. Often, in cases of this type, the other parent is reliant upon an officer of the Child Support Agency to receive and record the agreement. Private views or secret intentions can not be the meanings to be adopted when determining whether agreements exist in this context. Notably, if the assessment that follows causes a person to reconsider their agreement, they can withdraw the agreement, losing only some days of the difference between an assessment at the sole care rate compared to the ‘substantial care’ rate.
The real difficulty that arose was that the respondent wished to rely upon a technical application of s.8(b)(b)(i) to delay the ‘substantial care’ assessment until the next child support period, even though the actual level of care had changed in July 2007 and she had agreed in telephone calls to the Child Support Agency at least by 17 August 2007. This led the tribunal to err in considering the subjective or secret views of the respondent in determining what she agreed as the level of care in the telephone conversations.
In this case it appears clear that the respondent did agree that the appellant had ‘substantial care’ (at least from 17 August 2007, in accordance with the file notes of the Child Support Agency, and the findings of the Tribunal at [23]).
The respondent’s desire to avoid the substance of what she agreed by reliance upon the technical effect of s.8(b)(i) appears to have led the Tribunal into failing to make an objective assessment of the statements of the respondent to the Agency.
Once one recognizes that this is not the effect of the Act, the difficulties in analysing this case fall away: there was an agreement that the appellant had ‘substantial care’ from 17 August 2007 (see para [28] of the decision and the Child Support Agency notes). This matches the realities of the care arrangements that were in place between the parties for the relevant months. Whilst the number of nights may have changed before 17 August 2007, the relevant date for s.8(3)(b)(ii) is the date on which the respondent agreed with the officer of the Agency .
Conclusions
In the circumstances of this case I therefore allow the appeal. The appropriate determination is apparent from the findings of the tribunal, and the notes of the telephone conversations which do not appear to be in dispute: that is, that the appellant be assessed as having ‘substantial care’ from 17 August 2007 to the end of the relevant child support period.
I therefore make orders allowing the appeal, and altering the start date of the ‘substantial care’ assessment to 17 August 2007.
I certify that the preceding thirty-one (31) paragraphs are a true copy of the reasons for judgment of Riethmuller FM
Associate: Tracey Jones
Date: 15 September 2009
0
4
4