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SSAT - Round two on the same issue

Hi…I will be attending via phone a SSAT hearing this coming Thursday 15th Sept.  The crux of the issue was the payee didn't file his 2005-06, 2006-07 or 2007-08 tax returns until June 2009.  The child went to live with him in September 2006.  The period under review this round is September 2006 to June 2007.

The other party applied in September 2007 for a COA. The period under review initially was for Jun 2007 onwards, however, on objection of the COA, C$A decided that the since the other party did not lodge his tax returns, then his cs amount was set at his prevailing salary from Sept 06.  My cs amount did not change for the Sept 06 to Jun 07 period, however, I was still not happy and so I applied to the SSAT. This issue was resolved in December 2008.

The then SSAT assertained that there were no merits to depart from the administrative assessment for the period September 2006 to May 2010. Therefore the assessments were set under the formula in the Act.

As I alluded to in the begining, when the series of tax returns were lodged, the C$A applied the income details as a result of this wash up $3,000 in arrears was applied to the Sept 06 to Jun 07 cs period.  Some 2.5 years later in Jun 2009. (His child support income was deemed as $83,000 in Sept 06 but tax return was for $38,000 in 2005-06 - because he decided not to work for nine months of that year).

Unfortunately I was advised that the only way for me to rectify this was to make an application to the FMC and I did this as soon as I could in July 2009.  In Feb 2010, the matter was heard.  The other party crossed claimed that if the court were to grant a reopening of  Sept 2006 to Jun 2007 period, then he too should be allowed to reopen the next period from June 2007 to June 2009. He was unable to demonstrate a point of law to support his application or bring forward any new compelling evidence and inaddition the FMC clearly suggested that he was out of time to appeal the SSAT Dec 2008 decision.

I was given leave to make my application to the Registrar of the CSA.  The Magistrate awarded me costs in relation to my application…needlesstosay, I am still waiting for him to pay and it is now subject to another contravention/enforcement application in the FMC…

I proceeded with my application for COA on the basis my income was reflected in my income tax returns for either period (only $100 difference between 2005-06 or 2006-07) and for his 2006-07 income tax return amount to apply instead of the 2005-06 income tax amount.  I tried to make the correction process as simplistic as possible.

Yes, in August 2010 the COA agreed with my application.  However, he still pressed for the period after (June 2007 to June 2009) to also be reviewed.  His application for a review of that period was denied.

Then the other party objected because he still feels that the respective tax return income should be applied, that the CSA is bound by the decision of the SSAT in December 2008 and that CSA do not have the authority to overturn a prior SSAT decision for the same period under review.  Further that the FMC Feb 2010 orders were incorrect by not firstly departing from an administrative assessment.

His objection was refused because there was more up-to-date financial information which reflects the parent's financial circumstances during the period under review. The objection decision was notified to the parties in January 2011.

He is still not happy…in March 2011, he applied to the SSAT on the grounds that the FMC did not make a departure order from the administrative assessment, that the C$A went beyond its powers to change the prior SSAT decision, that the SSAT had all the information before them in Dec 2008, that each party's tax return information should be used, that there was no new evidence and that if there was a review then the period following i.e. June 2007 to June 2009, should also be reviewed.

The SSAT, had a pre-hearing on a pre-hearing, in June 2011 - that is, they sought submissions from all parties, C$A, him and I as to whether the matter was too complex for it to be heard in the SSAT forum, or should the matter be referred back to the FMC for determination.  Well no guesses what his lordship wanted…Yes another day in court.  However, the SSAT finally saw some sense and they decided to retained carriage of the matter. The hearing now is set for next Thursday.

My worries now stem from the effects this SSAT review has on my mother and my family.  My mother has been ordered to produce documents in relation to her finances.  Even though all through the last decade of C$A COA's, and two child support FMC hearings this issue was raised and determined not relevant.  From the onset he has sought to obtain details of my mother's financial affairs, because he feels he has been duped out of financial advantage.  We were never together, but this sense of entitlement seems to preoccuply him. (The child was a result of a one night stand, no marriage or domestic relationship has ever occurred.)  So I conclude that in his eyes it is not about the child's best interests but his.

I am a trustee, for the family trust which was settled out of my grandparents estates before the child was born.  My mother has life interest of the net income of the trust estate.  I have not had any financial benefit whatsoever from my mother in this regard. However he has made scathing allegations to the SSAT and they have ordered my elderly mother to provide her personal financial information to the Tribunal.

I have had the opportunity to review all the 1000's of pages of documents, and my findings are:

His 2006-07 tax return - (the period 2005-06 & 2006-07, he provided bank statements and credit card statements, full tax return and superannuation accounts for the Feb 2010 hearing.)

1. His car lease payments are overstated in his tax return by $1,500 (his bank statements show the direct debts to the lease company of the actual amount at monthly intervals)

2. Fuel costs are unsubstaniated in the tune of $1,800

3. Superannuation remitted by his employer (as employer contributions) to his super fund relate to an additional $3,500 of income that is not declared.

4. that $725 worth of "depreciation" of various IT equipment - I consider this should not be allowable for the purposes of child support income.

It is my submission that the father's taxable income be revised upwards to $95,000 based on the above adjustments.

Now the question I wish to guage with my audience is how concerned should I be that the SSAT will find that I am entitled to use the trust assets as a financial resource for the purposes of Child support? 

I am very reluctant to just sit back and make a supercilious statement as "prove it"  and place the onus on the other party to demonstrate that my financial resources in 2006-07 are unfair, because my supposed role as a Trustee.

Is it not the same fiduicary duty empannelled to a solicitor of client trust funds…is it not the same thing?  From all my reading, the arrogant manner usually annoyes the SSAT panel and results in an adverse finding by them, even if it the evidence is to the contrary.

So I am looking at precedent definitions, in relation to percieved access to equity of the trust. - Predominatly under tax law rather than state based equity law.

I have reviewed numerous Federal Court and High Court decisions in relation to the meaning of Trust income - the cases were Commissioner of Taxation v's Clark [2011] FCAFC 5 (21 January 2011) (on appeal to the High Court refused special leave) and the Federal Commissioner of Taxation v's Bamford (2010) 240 CLR 481 - each of these cases the Commissioner failed because of the construction of the trust deed and its consititutional definition of what net income of the trust was.  This took away from the Commissioner's view, because, the trust deed established what income was and who was entitled (i.e the beneficiary).  And by default, who had vested interest, legal entitlement and whose hands income was to be taxed, ie the beneficiary or was it taxed in the hands of the Trustee on behalf of the Trust.

Further, in a recent case Foster & Child Support Registrar & Anor (SSAT Appeal) [2011] FMCAfam 808 (11 August 2011)  FM Halligan rejected the SSAT's interpretation of apportionment because the SSAT had an obligation to consider income from the base line of what income is lodged (or likely to) under the Income Tax Assessment Act 1997.

Finally, the other party still asserts that I have benefited from the trust monies by transfering funds back against my credit card debt.   I have provided copies all credit card statements and bank statements showing all transactions between these accounts are derived from my wages.  Further during the period under review less than $1,000 was transferred out of the trust bank account.  I did not recieve these funds.

I am just so exhausted of this mess…Or am I overthinking it all!  I would welcome some commetary and ideas.
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