Child support – Full Court considers s 103X(3)(b) of the Child Support (Registration and Collection) Act 1988 as to the extent of reasons to be provided by the SSAT when making a decision – Whether appeal to the Court from the SSAT was on a question of law
In Child Support Registrar & Crabbe and Anor [2014] FamCAFC 10 (6 February 2014) the Full Court (Bryant CJ, Finn & Kent JJ) considered an appeal brought by the Child Support Registrar where Coates FM had set aside a decision of the SSAT. The SSAT’s decision “set Mr [Crabbe’s] adjusted taxable income at $367,097 from 1 July 2008 to 30 June 2009 and $158,177 from 1 July 2009 to 30 June 2010”, the SSAT “assum[ing] an increase of 4% per annum thereafter” (para 36).
The effect of the SSAT decision was that the father’s child support liability was increased from $339 per annum to about $38,634 “for 2008/09” and about $33,550 “for 2009/2010” (para 36).
The SSAT said that “in 2005 Mr Crabbe and [his de facto partner] Ms W started a business partnership…” (para 28); “[i]n 2006/07 the partnership had a gross income of $291,364”; “[i]n January 2008, the partnership acquired a lucrative training contract with [Department E]… the [Department E] contract provided income of $635,787, which was in addition to the company’s other training income of $722,594, making a total gross income of $1,358,381”; “ … the business structure was changed from a partnership to a company…” and Mr Crabbe “gifted his interest in his partnerships’ business to [a] company which was controlled by [Ms W]” (paras 29 and 31). The Full Court said “the SSAT went on in the following paragraphs to find that “the legal structure created by Mr [Crabbe] and Ms [W] is a sham” (para 32).
As to Coates FM’s reasons for setting aside the decision, the Full Court (para 41) noted that s 103X(3)(b) of the CSR&C Act provides:
“(3) The SSAT must, within 14 days after making the decision, either:
a) ( … )
b) Give to each party a written notice (whether or not as part of the notice under paragraph 1(a)) that:
i. sets out the reasons for the decision; and
ii. sets out the findings on any material questions of fact; and
iii. refers to evidence or other material on which the findings of fact are based.”
The Full Court said at para 42:
“His Honour observed with reference to s 103X(3)(b):
‘18. Because of the wording requiring reasons, findings on questions of fact and the evidence supporting the findings, it is not only important that the Tribunal provides adequate reasons, it must do so as a matter of law. If it does not, then such is, in my view, an error of law because the Act mandates that the SSAT act in accordance with s 103X(3)(b).
( … )
19. I accept the general proposition that there does not have to be exhaustive reasons, but they have to be presented in such a way to show how the decision was arrived at because of the mandate to show findings on questions of fact and a reference to the evidence supporting the findings. … ’
(Emphasis in original)
The Full Court said from para 46:
“[46] … senior counsel for the Registrar identified the critical issue in the appeal as being the manner in which the Federal Magistrate treated the obligation of the SSAT to give reasons under s 103X in that his Honour treated s 103X as allowing a review of the adequacy of the SSAT’s reasons when no more is required than a setting out of the reasons. In doing so, his Honour had transgressed, it was submitted, ‘the dichotomy between an appeal on a question of law and an assessment of the merits of the case’ …
( … )
[54] The following principles emerge from these authorities and have relevance to our decision as to whether the Federal Magistrate erred in his review of the SSAT decision in a manner which requires our intervention:
- The question of whether there is evidence to support a finding of fact or an inference drawn from findings of fact is a question of law (Al-Miahi) [Minister for Immigration and Multicultural Affairs v Al-Miahi [2001] FCA 744]);
- The making of a finding of fact or the drawing of an inference in the absence of evidence is an error of law (Al-Miahi);
- A wrong finding of fact is not an error of law (Al-Miahi);
- A finding of fact based on reasoning that is ‘demonstrably unsound’ or an ‘illogical course’ or a ‘faulty process’ of reasoning is not an error of law (Al-Miahi);
- Judicial review is not to be over-zealous in seeking to find inadequacy of reasoning by an administrative decision maker; the review of the reasons of an administrative decision maker must not be turned into a reconsideration of the merits of the decision (Wu Shan Liang) [Minister for Immigration and Ethnic Affairs v Wu Shan Liang [1996] HCA 6];
- Section 103X(3)(b) of the Registration and Collection Act (by analogy with s 430 of the Migration Act) requires the SSAT to do no more than set out the findings which it did make on facts which it considered material to the decision which it made (Yusuf) [Minister for Immigration and Multicultural Affairs v Yusuf (2001) 206 CLR 323].”
The Court said (from para 71):
“… It was submitted that … his Honour was ‘concerned to assess whether the SSAT’s pathway to the finding’ (presumably the finding of a sham) ‘was sound’, when, as was further submitted, there is no obligation on the SSAT under s 103X(3)(b) to disclose the process of reasoning leading to its decision, nor the adequacy of the reasoning process, but rather only the basis of the decision.
[72] This submission must be correct in light of the authorities referred to above, and thus this … ground of appeal has merit.
( … )
[74] There is little doubt that his Honour’s reasons could be read as requiring a greater level of satisfaction on the part of the SSAT for its conclusion that a sham existed because of the nature of that finding. We agree with the Registrar that nothing in s 103X(3)(b) required that approach. ( … )
( … )
[76] ( … ) We agree that [the Court’s judgment] can … be read as requiring an analysis of the evidence. The passages from the authorities cited above, particularly from Yusuf, indicate that an analysis of the evidence is not required. Section 103X(3)(b) requires only that the SSAT ‘refers to the evidence … on which the findings of fact were based’. His Honour can thus be said to have misdirected himself in this regard …”
The Full Court said further at para 87:
“We agree with his Honour that the SSAT’s assumption of a four per cent increase in the income of the company, and thus of Mr Crabbe’s share of that income, after 30 June 2010, was indeed an error of law. This is because there was no evidence to support that finding of fact. … ”
The Full Court allowed the Child Support Registrar’s appeal and allowed Mr Crabbe’s appeal against the SSAT’s decision to the extent necessary to set his adjusted taxable income at $158,177 for the period from 1 July 2010 to the end of the child support case.