KEY WORDS: Child Support; Social Security Appeals Tribunal; unreasonableness, WednesburyUnreasonableness, financial resources

In Baylden & Anor [2015] FCCA 2886 (29 October 2015), the father appealed against a Social Security Appeals Tribunal (“SSAT”) decision on various grounds, one of which was that the SSAT made an erroneous finding that its decision was unreasonable and/or an offence to logic.

The father was self-employed and received $15,000 per month by way of repayment of loans to him under a loan agreement. As such, the Child Support Registrar reflected the father’s income with the receipt of loans for the purpose of child support assessment.

Decision at the SSAT

The Tribunal found that Mr Baylden had an annual resource being the terms of loan of $180,000 per annum tax free, or $287,000 grossed up. Although the loan agreement may be acceptable to the Commissioner of Taxation, the benefits under the loan have a different treatment for the purposes of child support.

According to the Tribunal it could not be argued that Mr Baylden was receiving $15,000 per month under a ‘loan’ contract yet not receiving any wages despite the fact that he was responsible for the operation of the business. Furthermore, evidence from Mr Baylden that he cannot be paid a salary whilst the business was in its  growth stages was unconvincing, especially given that he employed 10 staff and the company turnover was in the vicinity of $2 million per annum.

Reason for Decision

Counsel for the Child Support Registrar argued that it was reasonable for the Tribunal to find that the money that was received under the loan agreement was a financial resource as it was clearly a financial benefit that enhanced the Appellant’s capacity to provide proper level of financial support to his children.

Furthermore, the SSAT’s decision was not ‘unreasonable’ to the extent of being an error of law because there is no error of law in making a wrong finding of fact, as stated in Tasman & Tisdall (SSAT APPEAL) [2010] FMCAfam 425.

Mr Baylden argued that the tribunal’s decision was so unreasonable that no reasonable decision-maker could have reached it. This is known as the Wednesbury unreasonableness test (Associated Provincial Picture houses Limited v Wednesbury Corporation [1947] EWCA Civ 1; [1948] 1 KB 223 at 230). However, Katzmann J stated that the tribunal’s decision was not unreasonable, let alone so unreasonable that no reasonable decision-maker could have reached it.

As such, the Court agreed with the submission that the Tribunal was entitled to find from the Appellant’s evidence at the hearing that he received $15,000 per month from the business. The Court was not satisfied that it was unreasonable of the Tribunal to make the finding that it did, which was that the Appellant’s annual income and financial resources should be used in the child support formula set out in the Child Support (Assessment) Act. As such, the father’s appeal was subsequently dismissed.

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