Tuesday 26 May 2015

Amalgamation of Tribunals

The Tribunals Amalgamation Act 2015, passed by Parliament on 13 May 2015, will come into effect on 1 July 2015. From that date the Social Security Appeals Tribunal, along with the Migration Review-Refugee Review Tribunal will join the Administrative Appeals Tribunal.

The amalgamation is expected to generate efficiencies and savings through sharing financial governance, IT and human resources.

For the large part the current processes for each Tribunal will be maintained and the legislation provides for the work of the existing Tribunals to be conducted by a special division within the Administrative Appeals Tribunal. Existing applicants will not need to submit a new application as all undecided reviews will automatically be transferred to the new Tribunal.

However, of note in family law matters is some changes in relation to child support matters - currently conducted by the Social Security Appeals Tribunal. Judicial reviews will now be to the Federal Circuit Court and the Federal Court rather than to the Family Court. 

Sunday 17 May 2015

Budget announces increase to Court fees

Last week's federal budget announced expected changes to the fees in the Family Court and Federal Circuit Court. The changes, likely to take effect from 1 July 2015, are expected to raise around $87 million in the federal courts.

While no specific fee changes have yet been announced media reported last week that the fee for divorce applications, currently $845, would rise to $1,200, and the fee for an Application for Consent Orders would rise from $150 to $240. According to the Sydney Morning Herald the Attorney General George Brandis confirmed that fees will increase but said that details would not be known until July.

The Australian quotes the head of the Law Council of Australia's family law section, Rick O'Brien, who said "We have not yet been told what the proposed fee increases will be, but we would be extremely concerned that any fee increases would severely restrict access to the courts by people most in need." The paper went on to quote the immediate past head of the section, Mr Sinclair, who expressed concern that the increase to the consent order fee would discourage parties from trying to resolve their dispute by proper process which could lead to problems later on.


Sunday 10 May 2015

When will a tax liability not be a joint liability?

The recent case of Adair & Milford [2015] addressed a number of issues, as is usually the way, but of particular interest was a question that arose in relation to the husbands tax liability.

In the first trial the Judge had found that the husband had an outstanding tax liability at the time of separation in 2012 of $220,000 and at the time of the trial in 2014 of $419,000. The husband had ceased to pay PAYG instalments in 2011. Despite this the husband had given evidence that he was paying PAYG instalments of $4,230 per week as well as $287 per week in withholding tax at the time of the trial. The effect of the husband's evidence was to mislead the wife and the Court and to wrongly inflate his expenses so that they exceeded his income - which was not the case. The trial Judge then went on to examine the husband's income and expenses and found that the husband did have the capacity to have been paying the tax liability. The Judge held: "I accept that he was making a significant contribution to the wife, the children and the mortgages but at the same time, he made no arrangement with the Australian Tax Office notwithstanding the Court was under the impression that amounts were being set aside on a weekly basis. In my view, it would not be fair now to attribute the debt to the wife."

On appeal the husband argued that the trial Judge was in error in concluding the amounts of tax owing. The Appeal Court noted that "it is beyond dispute that the husband's evidence on this topic [at the trial] was imprecise and that no criticism can be levelled at his Honour's decision to accept the husband's evidence that as at separation he was indebted to the ATO in that amount."

The Appeal Court noted that there is no principal of general application that merely because a taxation debt accrued prior to separation it must be brought to account as a joint matrimonial liability: Trustee of the Property of G Lemnos, a Bankrupt & Lemnos and Anor (2009). The Appeal Court went on to say that to their view the facts of the case amounted to "compelling circumstances" - as announced by the Full Court in Johnson and Johnson [1999] - which would enable the Court to leave one party solely responsible for his own taxation debt.

The Appeal Court stated that it would have been necessary, in order for the appeal to succeed, for the husband to have successfully challenged the weight which the trial Judge placed on the husband's misleading evidence concerning the payment of his outstanding tax and to the cavalier manner in which he conducted his finances post separation.

The Appeal Court said: "The wife having been unaware prior to separation of the husband's failure to pay his taxation liabilities as they fell due and then after separation misled into believing payments were being made, it was entirely reasonable for his Honour to focus on how after separation the husband approached this debt and to ultimately conclude that the husband could and should have paid his accrued debt and tax as it fell due."

The husband was wholly unsuccessful on his appeal. The husband was ordered to pay the wife's costs of the appeal.