Yip and Wreford and Anor (SSAT Appeal)
[2013] FCCA 2103
•13 December 2013
FEDERAL CIRCUIT COURT OF AUSTRALIA
| YIP & WREFORD & ANOR (SSAT APPEAL) | [2013] FCCA 2103 |
| Catchwords: CHILD SUPPORT – SSAT Appeal – no questions of law raised. |
| Legislation: Child Support (Assessment) Act 1989, ss.110B, 117(7B), 117(7A) |
| LDME v JMA (SSAT Appeal) [2007] 38 FamLR 132 Jordan & Verne (SSAT Appeal) [2012] FMCAfam 21 Tasman & Tisdall [2008] FMCAfam 126 |
| Applicant: | MR YIP |
| First Respondent: | MS WREFORD |
| Second Respondent: | CHILD SUPPORT REGISTRAR |
| File Number: | BRC 10087 of 2012 |
| Judgment of: | Judge Coates |
| Hearing date: | 17 June 2013 |
| Date of Last Submission: | 17 June 2013 |
| Delivered at: | Brisbane |
| Delivered on: | 13 December 2013 |
REPRESENTATION
| Solicitors for the Applicant: | Emerson Law |
| Solicitors for the First Respondent: | Self-represented |
| Solicitors for the Second Respondent: | Australian Government Solicitor |
ORDERS
That the Notice of Appeal filed 19 November 2012 be dismissed.
IT IS NOTED that publication of this judgment under the pseudonym Yip & Wreford & Anor (SSAT Appeal) is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT BRISBANE |
BRC 10087 of 2012
| MR YIP |
Applicant
And
| MS WREFORD |
First Respondent
| CHILD SUPPORT REGISTRAR |
Second Respondent
REASONS FOR JUDGMENT
This is an appeal from a decision of the Social Security Appeals Tribunal (the Tribunal) made on 9 October 2012.
The child support is payable for the children [X], born [in] 2005 and [Y], born [in] 2006.
The respondent mother has full-time care of the children.
The decision under appeal was made after a departure application was granted to the mother, increasing the appellant father’s child support.
The amended notice filed 3 June 2013 seeks Orders that:
a)That the decision fixing the adjusted taxable income for the Appellant Mr Yip at $217,000 per annum for the period from 4 July 2011 to 31 December 2013 be set aside; and
b)In lieu thereof the adjusted taxable income for the appellant be set as $100,000 (amount client contends he will earn).
The grounds stated are that:
(1) The decision of the Tribunal set out in paragraph 10 of the decision was in error and not supported by any evidence thereof:
In particular:
a)The conclusion of the Tribunal set out in paragraph 10 of the decision was in error and not supported by any evidence but appears to have been based on speculation on the part of the Tribunal;
b)The conclusion of the Tribunal set out in paragraph 11 of the decision (apparently) that as the letter from the [omitted] Hospital revealed he had not undergone a CT coronary angiograph therefore the evidence did not establish that the change in the appellant’s working pattern was justified on the basis of his state of health and was not open to the Tribunal;
c)The conclusions of the Tribunal in paragraph 12 of the decision that the appellant had not demonstrated that it was not a major purpose of his decision to change his pattern of work to affect the amount of child support payable was not open as a conclusion based on the matters set out in paragraph 12 and is contrary to the final decision the Tribunal made in any event;
d)The exercise performed by the Tribunal in paragraph 14 of the decision to determine the sum allegedly available to the directors and shareholders of the company was fundamentally flawed, not supported by any accounting evidence and contrary to basic company law;
e)The exercise performed by the Tribunal in paragraph 15 of the decision to determine the sum allegedly available to the appellant was fundamentally flawed, not supported by an accounting evidence and contrary to basic company law;
f)In the premises, the findings by the Tribunal in paragraph 16 of the decision was not open as a matter of law;
g)The exercise carried out by the Tribunal in paragraphs 22 to 27 inclusive is fundamentally flawed and not open to the Tribunal either as a matter of fact or a matter of law; and
h)The conclusions of the Tribunal in paragraph 36 are in error as a matter of law.
(2) In the present case the Tribunal:
a) Failed to afford procedural fairness to the appellant in proceeding with the hearing without providing the appellant the documents it had before it and relied upon and in relying on hearsay evidence from unknown sources;
b) Failed to properly construe the provisions of s.117(B)(b) & (c) [of the Child Support (Assessment) Act 1989];
b) Failed to have regard or proper regard to the provisions of s.117(7A);
c) Made erroneous finding in relation the respective ‘worth’ of the appellant and Ms L to the company [D] Pty Ltd;
d) Made erroneous findings in relation to the ability to apply the profit of [D] Pty Ltd to the appellant and Ms L without regard to whether or not paper profit equated with actual funds;
e) Misunderstood or deliberately erred in determining the effect of the evidence in relation to the appellant’s health;
f) Invented evidence to support its view that the proper needs of the children exceeded the amount stated to be their proper needs of the children;
g) Invented evidence in relation to the apportionment of expenses between the household of the appellant and Ms L on the one hand and the company on the other hand;
h) Demonstrated bias of failed to afford procedural fairness against the appellant by failing to give the appellant the opportunity to respond to propositions such as the proposition to add to his income a portion of the company ‘profit’; and
i) Failed to make enquiries in relation to the availability of the ‘profit’ to distribute to the appellant.
By way of general background, the decision addresses and makes findings on the income, capacity and resources of the father, from the time he quit one job and formed a company, which involves itself in [omitted].
THE LEGAL FRAMEWORK
The appeal is under s.110B of the Child Support (Registration and Collection) Act 1988, which states:
“A party to a review by the SSAT under Part VIIA may appeal to a court having jurisdiction under this Act, on a question of law, from a decision of the SSAT on that review under section 103S.”
The considerations for such an appeal have been referred to in a number of cases.
In LDME v JMA (SSAT Appeal) [2007] 38 FamLR 132, Halligan FM said:
“19. The Explanatory Memorandum accompanying the Bill that became the New Formula Act says of s.110B:
“Section 110B deals with appeals from decisions of the SSAT. It provides that a party to a proceeding before the SSAT may appeal to a court having jurisdiction, on a question of law, from any decision of the SSAT in that proceeding. This is consistent with how matters are currently appealed from the AAT to a court. The SSAT and AAT are tribunals which consider the merits of a case, whereas a court usually only considers matters which raise a question of law.”
20. The provision creating a right of appeal, on a question of law, from the Administrative Appeals Tribunal (the AAT) is s.44(1), Administrative Appeals Tribunal Act 1975 (the AAT Act), which is in the following terms:
“(1) A party to a proceeding before the Tribunal may appeal to the Federal Court of Australia, on a question of law, from any decision of the Tribunal in that proceeding.”
21. Section 110B and s.44(1) are identical provisions apart from the references to the tribunals whose decisions may be appealed and the court to which the appeal lies. And other provisions of Division 3, Part VII of the Registration Act are based on provisions in relation to appeals, on a question of law, from the AAT, including provisions as to the court’s powers on an appeal (cf. s.110F, Registration Act and s.44(4) and (5), AAT Act) and the limited power to make findings of fact on an appeal (cf. s.110G, and s.44(7), (8) and (9)). Thus, in determining the meaning and operation of provisions of Division 3, decisions as to the meaning and operation of equivalent provisions of s.44 will provide valuable guidance.”
Federal Magistrate Jarrett referred to that case in Jordan & Verne (SSAT Appeal) [2012] FMCAfam 21 and stated that the consistent decisions of this court have been informed by the approach “adopted when dealing with appeals pursuant to s.44(1) of the AAT Act: e.g. LDME & JMA (SSAT Appeal) (above), Tasman & Tisdall [2008] FMCAfam 126, Byrne & Graham (SSAT Appeal) [2010] FMCAfam 1116; Travers & Gibbon (SSAT Appeal) [2011] FMCAfam 543”.
At paragraph 7 he then said:
“7. As to the approach to be adopted on an appeal brought pursuant to s.44(1) of the AAT Act, the principles have recently been summarised by the Full Court of the Federal Court in Rana v Repatriation Commission [2011] FCAFC 124. In that case Kenny, Stone and Logan JJ said:
[11] The right of appeal conferred by s 44 of the AAT Act is a right to appeal to this court "on a question of law". The question of law is, as was emphasised by Gummow J when a judge of this court, the very subject matter of the appeal: TNT Skypak International (Aust) Pty Ltd v FCT (1988) 82 ALR 175 at 178 Recognising this, Ryan J in Australian Telecommunications Corporation v Lambroglou (1990) 12 AAR 515 at 524 highlighted the importance of stating a question of law in the notice of appeal. This importance has been repeatedly emphasised in recent years by the Full Court in cases such as Birdseye v Australian Securities and Investments Commission (2003) 76 ALD 321 at 324-325 (Birdseye); Australian Securities and Investments Commission v Saxby Bridge Financial Planning Pty Ltd (2003) 133 FCR 290 at 300-302 and Comcare v Etheridge (2006) 149 FCR 522 at 526-527. The need for a notice of appeal to specify a question of law is not just a matter of pleading. In the absence of a question of law there is no subject matter for the appeal and the court has no jurisdiction to entertain the proceeding.
[12] The respondent Repatriation Commission relied upon this line of authority as offering one reason why the appeal against the judgment below should be dismissed.
[13] The learned primary judge was plainly alive to the importance of the requirement that there be a question of law: see in particular para 41 of his Honour's reasons for judgment and the reference to Birdseye. At the time, 0 53 r 3(2) of the (now former) Federal Court Rules 1979 (Cth) required that a notice of appeal separately specify the question of law raised by the appeal and the grounds relied upon in support of the order sought on the appeal. In Birdseye at [18] Branson and Stone JJ drew attention to this rule and to a resultant expectation that the grounds specified in a notice should form a link between the specified questions of law and the orders sought. In effect, the grounds should detail why it is that the nominated questions of law should be answered in a way which entitles the applicant to the orders sought.
[14] The learned primary judge scrutinised the grounds which Mr Rana had specified in his notice of appeal to the end of determining whether there was any such link and also to the end of determining whether, read as a whole, a question of law was in substance revealed by the notice ...
[15] The end result of his Honour's scrutiny of these grounds were conclusions that Mr Rana's appeal from the Tribunal raised no question of law but was, instead, an impermissible endeavour to have the court to review on the merits the question of his pension entitlement. In so concluding, his Honour stated (at [88J-[89]), “This was a case quintessentially which had to be decided upon its facts. The Deputy President addressed all of the relevant evidence and decided the case factually adversely to the applicant ...”
Jarrett FM also stated that he agreed with Halligan FM in LDME v JMA where he quoted from that case at paragraph 8:
“8. Respectfully, I agree with Halligan FM in LDME & JMA (SSAT Appeal) (above) where his Honour said:
[30] Notwithstanding this ideal, in my view this Court must have regard to the statutory requirement binding it to “proceed without undue formality” and to “endeavour to ensure that the proceedings are not protracted” (s 42, Federal Magistrates Act 1999), reflecting the objects of the Federal Magistrates Court Act (see especially s 3(2)(a) and (b)). The eschewing of undue formality is particularly significant in matters, such as child support matters, where unrepresented litigants are a significant phenomenon. The lack of representation of a s 44 appellant has been recognised in this Court as justifying some amelioration of the usually strict requirement in such appeals for the question of law to be stated in the Notice of Appeal (Burgess v Centrelink and Ors [2006] FMCA 1952 at [5] and [6]).
[31] I am therefore of the view that an unduly legalistic or pedantic approach should not be taken in analysing the grounds of appeal stated in the Notice of Appeal. Especially with unrepresented litigants, the Court must strive to identify from the case presented whether a question of law arises that may justify the orders sought and strive, consistent with the requirements of procedural fairness, to deal with the substance of the case.
[32] Of even greater significance in my view is the guidance the above mentioned cases provide to the Court in deciding a section 110B appeal. They illustrate the analysis and process of reasoning required in deciding such an appeal.
[33] Thus, of relevance to s.110B appeals in my view are cases on s.44 appeals in relation to:
what is a “question of law” (for example, Collector of Customs v Pozzolanic Enterprises Pty Ltd (1993) 43 FCR 280 at 287; Collector of Customs v Agfa-Gevaert Ltd (1996) 196 CLR 389 at 394-399; Repatriation Commission v Hill [2002] FCAFC 192 at [59], (2002) 69 ALD 581; Clements v Independent Indigenous Advisory Committee [2003] FCAFC 143 at [6] – [8], (2003) 131 FCR 28, 37 AAR 309); Australian Securities and Investments Commission v Saxby Bridge Financial Planning Pty Ltd [2003] FCAFC 244 at [45] and [46] per Branson J, (2003) 202 ALR 450, 47 ACSR 649; Hartnett v Migration Agents Registration Authority [2004] FCA 50 at [50])
the centrality to the appeal on a question of law and its impact on the nature of the proceedings (for example, Birdseye above at [10] to [22] per Branson and Stone JJ, (2003) 76 ALD 321, 38 AAR 55: Saxby Bridge, above, at [107] per Jacobsen and Bennett JJ; Comcare v Etheridge above at [13] and [14] per Branson J, with whom Spender and Nicholson JJ agreed; Brown v Repatriation Commission [2006] FCA 914 at [7]);
the necessary connection between the question of law raised on an appeal and the relief sought (for example, Birdseye, above, at [18] per Branson and Stone JJ; Saxby Bridge, above, at [47] per Branson J).”
Federal Magistrate Brown, in Tasman & Tisdall [2008]FMCAfam 126, summarised issues as being:
36. The nature of an appeal to this court from a decision of the SSAT is governed by the provisions of Division 3 of Part VIII of the Child Support (Registration and Collection) Act 1988 (“the Registration Act”), in particular section 110B which reads as follows:
“110B 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.”
37. This court is authorised to hear such appeals from the SSAT by virtue of the provisions of section 110E of the Registration Act. Pursuant to section 110F of the Registration Act, having determined any such appeal, I am authorised to make any order, which I believe is appropriate but particularly may:
o affirm or set aside the decision of the SSAT; or
o remit the case to be heard again by the SSAT, either with or without the hearing of further evidence.
38. I do not have the explicit powers necessary to give effect to the first two orders sought by the appellant in his notice of appeal. In any event, the gravamen of the appellant’s case is that the decision of the SSAT should be set aside.
39. It also seems to be his case that the SSAT has fallen into legal error by reaching the conclusion that the respondent has believed, on reasonable ground, that her actions in assuming responsibility for the care of M were necessary to protect M’s health and safety.
40. The first question to consider is what is the nature of an appeal on a “question of law”? The provisions of the Child Support Legislation Amendment (Reform of the Child Support Scheme – New Formula and Other Measures) Act 2006 has significantly reformed the review process in respect of administrative decisions of the Child Support Registrar. The legislation has inaugurated an independent process of review through the SSAT. This process is external of the Agency’s processes and is administrative in nature.
41. Pursuant to the provisions of section 110B, any further appeal from the SSAT is limited in nature. It is limited only to an examination of how the SSAT applied or failed to apply the applicable principles of law, which were relevant to the determination of the appeal issue which came before it. As such, an appeal to this court, pursuant to section 110B, does not constitute a rehearing on the merits of the case nor should this court, other than in exceptional circumstances, challenge findings of fact made by the SSAT.[3]
42. Accordingly, this court should not be concerned as to whether or not it would have come to the same conclusion as the SSAT did, but only whether the SSAT erred in law,[4] as it is only in “exceptional circumstances” that the decision of the Tribunal should not be the final decision.[5]
43. It is the function of this court to determine whether the decision of the SSAT was within its legal powers. That is what is meant by a question of law. It is not the function of this court to examine the merits of that decision. As such, I should be cautious to approach the decision of the SSAT with “an eye [which is] too keenly attuned to perception of error”. [6] Rather I should take a commonsense approach to what the SSAT was saying in its decision and the reasons why it did said what it said.
44. An administrative tribunal exceeds its powers and thus commits a jurisdictional error, which is correctable on appeal in respect of a question of law, if it:
o fails to construe properly the legislative provisions applicable;
o identifies the wrong issues or asks itself the wrong questions;
o ignores relevant material or relies on irrelevant material;
o fails to accord procedural fairness to the party before it;
o makes an erroneous finding of such a magnitude that it goes to the very jurisdiction which it purports to exercise rendering its decision perverse or unreasonable or otherwise offending logic.[7]
45. As Gleeson C.J. pointed out in Re Minister for Immigration & Multicultural Affairs: Ex Parte Applicant S20/2002[8]:
“To describe reasoning as illogical, or unreasonable or irrational, may merely be an emphatic way of expressing disagreement with it. If it is suggested that there is a legal consequence, it may be necessary to be more precise as to the nature and quality of the error attributed to the decision maker, and to identify the legal principal or statutory provision that attracts the suggested consequence.”
The first challenge is of a general nature and one challenging procedural fairness afforded to the appellant generally on the basis that he said he had not received a set of documents.
The documents are not identified in the decision and it was submitted by Mr McGregor, of counsel, that it is simply unknown how the documents may have influenced the decision.
In my view this objection cannot stand.
As a question of law, what has to be identified is that the appellant was denied procedural fairness because he has not had an opportunity to address these documents or because the Tribunal relied on these documents without the appellant having addressed them.
There is simply no reference in the decision of such a nature.
If there was no evidence to make any particular decision then possibly a question of law has been raised, but that is a separate matter to making a general allegation that procedural fairness has been denied merely because the appellant said he had not seen documents.
These hearings are conducted on the basis that the parties supply the evidence they wish to rely on to propound their case and often not all of the evidence of either party would be or could be relevant or cogent.
There is a requirement that the Tribunal states the evidence it relied on to come to the decision and there is no statement referring to any evidence or documentary material relied on which the appellant can state he had not seen.
On that basis, the documents cannot be said to be in the position where they influenced the Tribunal decision.
In any case, this decision addressed capacity and resources of the appellant, and he addressed those specific issues in the best manner he could, without accountancy evidence, which he said he relied on as to the state of his business.
I dismiss that ground as not raising a question of law.
The next ground is based on paragraph 10 of the decision where it is claimed that a question of law arises because the Tribunal found the appellant had ample opportunity to work after resigning from a company, then he took a break before starting up his own company.
It is said that there is no evidence to support this statement.
The evidence before the Tribunal was that the appellant decided that he felt too stressed in remaining with the company he was employed with and so he decided to resign.
The Tribunal has described this as the appellant having “ample opportunity” to work “when he resigned from [E]”.
Keeping in mind the objects of the child support legislation which is to have parents pay for the support of their children, the statement in my view is one which simply refers to the obvious, which is the appellant either remained employed or for his own reasons, resigned. The words ample opportunity refer to his choice in either remaining at work and therefore earning a living to support his children or resigning and taking a break.
The appellant does not like the word “ample”, however, it merely adds to the appellant’s circumstances that he took a decision to quit work, take a rest and then start his own business. Factually then, the Tribunal has inferred a state of facts based on the appellant’s statements.
This chain of reasoning applied by the Tribunal to infer the “ample” opportunity, can be seen when the following paragraph 11 is read and understood, where the Tribunal decision refers to the appellant changing his work pattern, which he justified on the basis of his state of health.
I am told that there is a conclusion about his state of health – that it was not as serious as the appellant made out – because the appellant failed to attend at the [omitted] Hospital for an angiogram. Since the appellant relied on alleged heart problems, the onus is on him to establish the fact before the Tribunal.
The appellant’s claim was that he changed his working pattern by resigning from [E], having a break and stating his own company and part of this was justified because of the basis of his health.
As I said earlier it is up to the parties to supply that evidence which is required and a claim of changing a work pattern based on health is, no doubt, an important consideration in relation to child support commitments.
This is an administrative decision and such decisions do not examine in minute detail, as judicial decisions do, evidence relied on by a party in a particular case. But the person’s evidence still has to be assessed.
In answer to quite simple questions as to whether there was a medical reason causing his resignation, the appellant stated a simple answer, as can be seen at page 9 of the transcript:
“Yeah. I had a – well, I just had enough of the stress. I wasn’t looking after my things and just had enough. I had a bit of a shake-up with my heart and change of a career.”
In viewing that it would have to be said that the Tribunal member was seeking an explanation of what the appellant was relying on with regard to his claims of being stressed and a health scare. In plain ordinary terms a health scare can be understood if it is explained by reference to evidence – a medically based affidavit or admissible statement or documents particularising the nature of the medical issue and preventative treatment or measures for the future. The appellant’s explanation alone was not enough because it referred to health issues, which, even in lay terms, usually requires expert evidence.
No probative material was produced by appellant which satisfied the Tribunal, and in terms of the objects of the child support legislation, the Tribunal came to a conclusion of fact, a matter which is not open to review as an administrative decision.
Paragraph 11 is linked to the following paragraph 12 and is also challenged on the basis that a finding was made without evidence - that it was not a major purpose of his decision to change his pattern of work for the major purpose of affecting the amount of child support he was required to pay.
That confuses a finding based on no evidence, which may raise a question of law, with a finding based on the state of the claims and evidence, which raises a question of factual decision-making.
In paragraph 12 of the decision the Tribunal refers to the appellant’s statements recorded by Child Support Agency staff. There is complaint that the Tribunal in examining various notes recorded by Agency staff, may be relying on the appellant’s apparent statements that he would not be paying child support because the other parent was not complying, or that he would pay when he saw his children.
These allegations in the records were put to the appellant. That is a measure of procedural fairness.
He did not deny making statements to that affect.
He said he would have been “a bit wound up” as well as other statements, when he made comments which were recorded by Agency staff.
The appellant certainly made statements against his interest material to child support matters and those statements were recorded, appropriately, by public servants in the Child Support Agency when dealing with the appellant.
The Child Support Agency staff, working within their guidelines and working to apply the objects of the child support legislation, recorded statements material to the father’s payment duties, which they are entitled to record.
The Tribunal was required to afford the appellant procedural fairness. It did so by raising statements recorded at various times by the Child Support Agency and clearly from the transcript of what occurred at the Tribunal, it was on the basis that the appellant stated he would not pay child support or would not pay according to assessments. He had opportunity to address the issues raised, even if forced to address them with statements he would rather not have given.
The cumulative effect of this - resigning from his employment and taking a break, stating that he had health concerns, various statements made to the Child Support Agency and his declining to provide the Agency some months later with a profit and loss statement for his new company, on the basis that “he has been caught out before”, merely lead to a conclusion in the reasons stated at paragraph 12 that: “[t]he Tribunal concludes that Mr Yip has not demonstrated that it was not a major purpose of his decision to change his pattern of work to affect the amount of child support payable”.
Such a finding is open on the legislation.
To state that the conclusion of fact was not open impermissibly imports the judicial process into administrative decision-making of the kind undertaken by the Child Support Agency and the Tribunal itself.
No question of law arises here.
Consequently at paragraph 13 the Tribunal concluded that the requirements of s.117(7B) of the Child Support (Assessment) Act 1989 were satisfied as to the capacity of the appellant to earn money and income.
The next particulars said not to be supported by evidence was the conclusion in paragraph 14 concerning money available from the husband’s company. The Tribunal determination of the sum of money claimed to be available to the directors and shareholders was said to be fundamentally flawed because it was not supported by accountancy evidence and was contrary to basic company law. This is connected to the same complaint as to the finding in paragraph 15 as to the appellant’s legal entitlement to various income and financial resources.
It was said that this was a failure by the Tribunal to consider s.117(7A)(b)(i) whereby the decision-maker has to have regard to income, property and financial resources of a parent. The question of law raised is said to be that the Tribunal failed to disregard the income, earning capacity, property and financial resources of the appellant’s partner, Ms L, who is an equal shareholder in the company which the appellant started.
The error is said to be that the Tribunal set out from paragraphs 15 to 29 to actually rewrite the constitution of the company by determining that the appellant really played the greater role in earning money on the basis that Ms L came into the company with no experience and had only gained qualifications recently as a [omitted].
I was taken to a series of questions and answers whereby the appellant stated that the parties really did about the same amount of work and where the appellant rejected suggestions and contentions that but for him the company could not exist and that he was actually the qualified party.
The error here is said to be that because the appellant and Ms L are equal shareholders then it is against company law to determine that the appellant has a greater capacity to pay more money.
In my view that could be so, dependent upon the evidence.
However, what the Tribunal was faced with was a series of answers which seemed to be a statement by the appellant that he really did not understand the company and accountancy matters and that he was fully dependent on what he was told by his accountant.
Further, the actual issue here is one where the Tribunal found the appellant had gifted an amount or interest in the company to his partner, which brings into consideration the questions of his capacity to earn and his resources.
There was certainly no accountancy evidence supplied by the appellant so that his stated lack of understanding of the financial position could be understood. This act or omission of not supplying such financial information was challenged on the appellant’s own case on the basis that the Tribunal decision was flawed because there was no accounting evidence, as stated in ground (1)(d).
The Tribunal decision at paragraph 14 plainly examines the figures supplied by the appellant and comes to conclusions, including an adverse reference that the appellant and his partner listed as an expense the whole of the rent of the house they live in, yet they use only one room for the purposes of running the business.
As I said earlier, it is up to the parties to produce the material they intend relying upon and if a party, such as the appellant, does not produce all of the evidence he contends would support his case, or produces figures which are open to be used against him, then that is a matter for him. Further, if as he stated to the Tribunal he relied on his accountant to understand his financial position, then the accountant should have made an appropriate statement to the Tribunal.
The appellant put forward a case that the shareholding was equal because he and his partner put in the same amount of work, but it has to be kept in mind that he previously had well-paid employment with a company which he decided to resign from and he decided to start a new company. It could not be contended on the evidence considered that without him the company would have started anyway. He also had the capacity to structure distributions from the beginning, a clear finding by the Tribunal.
When he resigned his employment and started a new company he knew he had support obligations under the child support legislation for his two children.
He also knew that he had been in dispute with the mother with regard to child support and that there had been various positions recorded by the Child Support Agency.
While the Tribunal cannot restructure the makeup of the company, that is not what it is doing, it is merely finding that the appellant has a capacity to earn more money and that is the simple finding on the evidence stated. He had that capacity at the time he started the new company and at the time he decided how profits would be shared. Under the constitution of the company the appellant and Ms L are entitled to equal profits but that was a position he adopted knowing he had obligations under the child support legislation.
The Tribunal at paragraph 16 stated a truism - that when the respondent mother lodged her departure application the administrative assessment used the appellant’s estimate of income as being $0 and it is clear that he had otherwise a capacity to earn income which subsequently he went about doing, by forming a company and gaining appropriate contracts.
No questions of law are raised here.
The next challenge was said to be the exercise carried out by the Tribunal at paragraphs 22 to 27 - which again is a view of facts reached by the Tribunal on how the appellant structured the company after questions were asked as to his management capabilities.
Based on all of the evidence, especially the evidence that Ms L was not qualified and was without experience in [omitted], it could not be said that the decision that the appellant had the management skills attributed to him by the Tribunal was not open.
The Tribunal stated as a finding that the contributions between the appellant and his partner were not equal and said it conservatively valued the appellant’s contribution at 75 percent.
Whether such figure is correct or mistaken, the exercise was within the power of the Tribunal as a finding of fact and indicates the issue, that the appellant’s capacity to earn was greater than he made out.
The Tribunal also concluded that the circumstances supported a finding that that appellant had gifted to his partner income and financial resources.
These are questions of mere fact and are not open to review under s.110B.
It is contended that the Tribunal directed a series of questions as to the management skill of the appellant which caused the conclusions reached.
I raised very early whether there was bias being alleged and the reply was that there was not.
How the questions of law are raised in this regard is that it must be shown that a wrong question was asked.
In the reasons, what comes through clearly is that the Tribunal is guided by the objects of the child support legislation.
If a wrong question was asked then such has to be stated with precision.
That there may be other questions which could be asked is a different issue from a wrong question being asked.
However, if there are other questions which could be asked, if a precise formulation is not provided then the reasons refer to a consideration of the facts, not going to a question of law.
As repeatedly stated in the authorities, questions of fact are not open for challenge in the administrative decision-making process even if the decision-maker comes to a wrong conclusion on the facts.
There would be no end to litigation otherwise.
As no question of law has been clearly stated it appears to me that what the Tribunal has done is come to conclusions of fact with regard to the respective contributions of the owners of the company being the appellant and his partner Ms L. Also, based on the previous history I referred to, the appellant had employment which he resigned from, he took a break and then starting another company which is the company in question. His earning capacity comes from that company and in the manner he structured the company. There was no evidence that his partner had a hand in that.
It was also said that the conclusion at paragraph 36 of the reasons which set the apportionment of $217,000 over a full financial year as the appellant’s capacity was wrong and raised a question of law.
Apart from everything else I have referred to, it was said that the Tribunal mistakenly took into account undistributed profit and that the Tribunal had no evidence to base its decision upon.
There is a difference of having no evidence to base a decision upon and not being supplied with the appropriate evidence by a party and the inferences which can be drawn from each scenario.
The appellant presented a case of relying on his accountancy advice as to his decision-making and profit taking from the company.
I need to repeat, if that was the case then no doubt he would have relied on accountancy evidence to put before the Tribunal as to all of the commitments of his company structure.
He gave the clear impression through his statements that he just did not understand these issues, but the evidence is that he certainly had the capacity as a person [occupation omitted] to start a company which quickly had a turnover of about $500,000 per year.
If that is so then there is no reason not to conclude that he knew he was required to produce accountancy evidence of the figures which he knew the Tribunal would be examining to support his case.
Paragraph 36 of the reasons state:
“36. Mr Yip’s estimate of income of $0 took effect from 4 July 2011. A week later, he and Ms L started their business. A person’s working year usually includes some holidays and the Tribunal considers it appropriate to apportion the $217,000 figure over the full financial year. Mr Yip has been significantly under-assessed since 4 July 2011. Mr Yip lodged her (sic) departure application reasonably promptly. In those circumstances it is appropriate to set Mr Yip’s adjustable taxable income at $217,000 per annum from 4 July 2011. That will result in an increase in his child support arrears from 4 July 2011 to date (when compared to his liability pursuant to the senior case officer’s decision) of approximately $11,740, which is less than his share of the undispersed profits of [D] Pty Ltd. The increase in arrears will not cause Mr Yip undue hardship.”
As can be seen the Tribunal had always kept in mind that the appellant went from nil income to running a company which had the ability to turn over large sums of money. It appears to me that the reasons do address various provisions in s.117 of the Child Support (Assessment) Act 1989.
At paragraph 2 of the grounds, complaint is made that procedural fairness was not afforded because of the lack of provision of some documents and reliance on hearsay evidence [ground 2(a)]. The SSAT did supply the appellant with documents, although he complained about a particular set of documents about which I can see no reference to in the reasons. The only hearsay from unknown sources seemed to be the recording of the appellant’s comments to Child Support Agency workers, which in any case he did not deny. I have otherwise addressed this issue.
As to the complaint about properly construing s.117(7B)(b) & (c) [ground 2(b)], it was put that as the Tribunal did not rely on these grounds it did not have to take into account the considerations as the determination was not based on the appellant’s higher earning capacity. Even if that submission made by the Child Support Registrar was incorrect, which I do not find to be the case, the findings as to the appellant’s capacity and resources would not cause the decision to be overturned on that basis.
As to the claim that the Tribunal failed to have regard to the provisions of s.117(7A) [second ground 2(b)], that is not correct because the Tribunal, as I have referred to throughout these reasons, did have regard to income and assets benefitting the appellant, and did take into account the modest income of the respondent when assessing special circumstances.
As an erroneous finding is a question of fact going to the worth of the appellant, his partner and the company [ground 2(c)], as I have addressed, these are determinations of fact, not questions of law.
As to erroneous findings in relation to the ability to apply the profit of the appellant’s company [D] Pty Ltd [ground 2(d)], and the paper profit as compared with actual funds, there was no evidence from the appellant, who had the onus, to show how profit after tax was applied. This is a failure of the appellant to run his case, not a failure of the Tribunal to be raised as a question of law.
There was no failure to make enquiries as to the distribution of profit – there was a failure of the appellant to provide adequate material when he knew his answers would be to the effect that he relied on accountancy advice as to the distributions from earnings of the company.
As to the health [(ground 2(e)] there was a finding of fact based upon the evidence put forward by the appellant and there was not a misunderstanding or a deliberate erring by the Tribunal.
It was put that the Tribunal invented evidence to support its views of the proper needs of the children [(ground 2(f)], by not questioning the costs of the children or that the mother was either able or not able to estimate their costs. The requirement is that the Tribunal states the evidence it relies on, and at paragraph 34, the reasons state: “Ms Wreford’s expenditure on the children has necessarily been confined by the modest income she has been receiving. She is poorly placed to give reliable evidence of what the children’s costs might be if they were properly sharing in their parents’ incomes and financial resources”. The Registrar states, and I accept, that paragraphs 34 and 35 of the reasons are consistent with the evidence of the respondent mother’s income.
The paragraphs are findings of fact and cast in the way they are, they explain why the Tribunal decided this particular issue as it did. No question of law arises here.
I have addressed the evidence in relation apportionment of household expenses between the appellant and Ms L [(ground 2(g)] and I do not find any evidence to be invented. Findings of fact only have been made.
I was concerned with the allegation of demonstrated bias [ground 2(h)], that the Tribunal failed to give the appellant an opportunity to respond to propositions such as adding to his income a portion of company profit. This case is about his capacity and resources to pay child support, and such is tied up with the way the appellant structured his company. It was never said that his partner formed the company as such, and a conclusion about how undistributed profit is made is a reference to capacity and resources based on how the appellant’s evidence as to how he structured his business. Without particularising the complaint, I cannot address the issue in any other way. The Child Support Registrar sought for the ground to be struck out and that course would be open.
Otherwise the questions asked by the Tribunal gave the appellant opportunity to respond to propositions about his income and company structure and the appellant simply said words to the effect that he relied upon accountancy advice and that he did not really understand figures.
If a person in such a position does not understand figures then it is incumbent upon the person to produce figures in an evidential form which could be understood for the purposes of the Tribunal which is deciding the appellant’s matter. This is a basic proposition from which the appellant departs in order to cast the onus on the Tribunal to not make a decision because the appellant has not supplied all possible information. The appellant has to supply all information regarding his company and how profits would be distributed.
The last allegation said to raise a question of law is that the Tribunal failed to make enquiries [ground 2(i)] in relation to the availability of profit to distribute to the appellant. Actually, all of the reasons going to the makeup and operation of the company and expenses address this very general statement, particularly paragraphs 25 to 29 of the reasons. Further, the Child Support Registrar states there is no obligation on the Tribunal to undertake enquires – the obligation being that it has to offer procedural fairness when considering alleged facts. It did so by enquiring how management of the company was undertaken, because that includes the resources from profits shared between the appellant and his partner. No question of law is raised here.
The Child Support Registrar challenged the basis upon which the appellant appeals, referring to many of the disputed statements throughout the decision as being observations not relevant to the substantive findings.
To this extent, paragraph 35 of the reasons clearly indicates the underlying considerations of the Tribunal’s decision. It states: “Mr Yip’s legal obligation to provide for his children takes precedence over his election to effectively gift a portion of his ongoing income and financial resources to his partner. Setting Mr Yip’s adjusted taxable income for child support purposes at $217,000 would reflect the position he would be in had he not effectively made that gift…”.
The appellant’s case is one where he has failed to give supporting evidence for his decision-making which led to his resignation from employment, where he suggests that his partner equally contributed to the starting and running of a business capable of turning over hundreds of thousands of dollar a year and where he gives the impression he just does not understand figures. The substantive findings were made against this contextual background painted by the appellant, and I do not find that decisions were made on invented evidence or lack of evidence.
The onus of the production of the necessary evidence in support of a case lies on the person advocating that case. The Tribunal is restricted to the evidence, within terms of conducting the proceeding fairly, however, it could not be the case that the Tribunal cannot make inferential findings based on how a case is run.
The appeal must be dismissed.
I certify that the preceding one hundred and fourteen (114) paragraphs are a true copy of the reasons for judgment of Judge Coates
Associate:
Date: 13 December 2013
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