LUTON v LESSELS & ANOR

Judges: Gleeson CJ

Gaudron J

McHugh J
Kirby J
Hayne J
Callinan J

Court:
Full High Court of Australia

MEDIA NEUTRAL CITATION: [2002] HCA 13

Judgment date: 11 April 2002

Gaudron and Hayne JJ

30. The questions for consideration of the Full Court concern the validity of the Child Support (Registration and Collection) Act 1988 (Cth) (``the Registration and Collection Act'') and the Child Support (Assessment) Act 1989 (Cth) (``the Assessment Act''). The plaintiff contends that the former of these Acts is a law imposing taxation which, contrary to s 55 of the Constitution, does not ``deal only with the imposition of taxation''. The plaintiff further contends that both Acts, impermissibly, purport to vest the judicial power of the Commonwealth in the Child Support Registrar (``the Registrar''), an office established by s 10 of the Registration and Collection Act. Both contentions should be rejected.


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31. The questions reserved are couched in the present tense and, therefore, invite attention to the Acts in the form in which they now stand. Since their enactment, both Acts have been amended several times but it was not submitted that anything turned on those amendments or on the particular form that the Acts took at the date of the various events described in the case stated. It is, therefore, convenient to refer to the principal features of the Acts as they now stand.

The Registration and Collection Act

32. The Registration and Collection Act (originally enacted as the Child Support Act 1988) commenced operation on 1 June 1988. Its principal objects [18] Registration and Collection Act, s 3(1). include ensuring:

  • ``(a) that children receive from their parents the financial support that the parents are liable to provide; and
  • (b) that periodic amounts payable by parents towards the maintenance of their children are paid on a regular and timely basis.''

33. Part III of the Registration and Collection Act (ss 17-42B) provides for the registration of certain liabilities of a parent, or step-parent, of a child to pay a periodic amount for the maintenance of the child. A person liable to make such payments is referred to in the Registration and Collection Act as ``the payer''. Section 17 identifies what is a registrable maintenance liability and Div 2 of Pt III (ss 20-32) provides for the registration of such liabilities. Section 30 of the Registration and Collection Act provides that, if a registrable maintenance liability is registered, first, the amounts payable ``are debts due to the Commonwealth by the payer in accordance with the particulars of the liability entered in the Child Support Register'' and, secondly, ``the payee is not entitled to, and may not enforce payment of, amounts payable under the liability''. Registered maintenance liabilities that are enforceable under the Registration and Collection Act are called ``enforceable maintenance liabilities''. [19] s 4. An amount that is a debt due to the Commonwealth under s 30 is called a ``child support debt''. [20] s 4.

34. Part IV of the Registration and Collection Act (ss 43-65) provides for the collection of amounts due to the Commonwealth for enforceable maintenance liabilities. If the payer is an employee, the general rule is that, as far as practicable, the amount will be collected by deduction from the payer's salary or wages. [21] s 43. Provision is made for the Registrar to give notice to the employer of such a payer [22] s 45. instructing the employer to make periodic deductions from salary or wages paid by the employer to the payer. Section 46 obliges the employer to make the necessary deductions; s 47 requires the employer to pay to the Registrar the amounts deducted. An amount payable to the Registrar under Pt IV of the Act (including, therefore, an amount payable under s 47) is a debt due to the Commonwealth. [23] s 64. Until the amendment of the Registration and Collection Act in 2001, [24] Child Support Legislation Amendment Act 2001 (Cth), Sched 5, Item 38. the Registrar was the Commissioner of Taxation [25] Registration and Collection Act, s 10(2). and each Second Commissioner and Deputy Commissioner of Taxation was a Deputy Child Support Registrar. [26] s 12. The amending legislation provided that the Registrar was to be ``the person who holds, or is acting in, the position known as the General Manager of the Child Support Agency'', or if there is no such position, the person holding, or acting in, a position specified by the Secretary of the Department of Family and Community Services.

35. Part VI of the Registration and Collection Act (ss 73-79A) provides for payments to payees. (The Act defines [27] s 4. the ``payee'' in relation to a registrable maintenance liability as the person who is entitled, or would but for the registration of the liability under the Act be entitled, to receive payments under the liability.) By s 76 it is provided that every payee of a registered maintenance liability is entitled to be paid, each month, an amount equal to the aggregate of amounts deducted by an employer under Pt IV during the previous month, amounts received by the Registrar otherwise than under Pt IV during the payment period and, to the extent they have not previously been paid, any amounts deducted or received in respect of prior periods (in each case excluding any amount not due and payable by the payer on the seventh day of the current month).

36. Because the payment is to be made by the Registrar, and because both the amounts due under a registered maintenance liability and the amounts that employers have deducted on this account are debts due to the Commonwealth, provision is made in Pt VI for the treatment of receipts and payments.

37. When the Registration and Collection Act was first enacted, payments were to be made from the Child Support Trust Account. That account, established under the Registration and


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Collection Act, was a trust account for the purposes of s 62A of the Audit Act 1901 (Cth). [28] Registration and Collection Act, s 73. To give effect to new Commonwealth financial management arrangements (made under the Financial Management and Accountability Act 1997 (Cth)) the Child Support Trust Account was replaced, in 1998, [29] Audit (Transitional and Miscellaneous) Amendment Act 1997 (Cth), Sched 2, Items 605-620. by the Child Support Reserve, a component of the Reserved Money Fund. Provision was made in the Registration and Collection Act for transfers into [30] s 74. and payments out of, [31] s 75. that fund.

38. All of the amounts received by the Registrar (as payment of child support debts or deductions made by employees, as voluntary payments, or as refunds of amounts that should not have been paid) were ``public money'' under the Financial Management and Accountability Act [32] s 5, definition of ``public money''. and therefore had to be credited to the Consolidated Revenue Fund. [33] Financial Management and Accountability Act 1997 (Cth), s 18. Transfers into the Reserve came from the Consolidated Revenue Fund. Section 74 of the Registration and Collection Act required the transfer to the Reserve, from the Consolidated Revenue Fund, of amounts equal to amounts that the Registrar received in payments of child support debts, whether by payers or employers of payers, together with amounts equalling payments made voluntarily by payers and refunds of amounts that should not have been paid out of the Reserve. Moneys standing to the credit of the Reserve were to be applied in making payments to payees of registered maintenance liabilities. [34] s 75(a). (It is not necessary to notice other ways in which moneys standing to the credit of the Reserve could be applied.)

39. By the Financial Management Legislation Amendment Act 1999 (Cth) (``the Financial Amendment Act''), the Financial Management and Accountability Act was amended in a number of ways. The definition of Reserved Money Fund was repealed. [35] Financial Amendment Act, Sched 1, Item 13. Components of the Reserved Money Fund became Special Accounts and each component was renamed as an ``Account'' rather than a ``Reserve''. [36] Financial Amendment Act, s 5(5). References to amounts being transferred from the Consolidated Revenue Fund to a Reserve were to be read as references to crediting the relevant account [37] Financial Amendment Act, s 5(6)(a). and references to amounts being transferred to the Consolidated Revenue Fund were to be read as debiting the relevant account. [38] Financial Amendment Act, s 5(6)(b).

40. For present purposes, however, the essence of the arrangements reflected in Pt VI of the Registration and Collection Act remained unaffected by these changes. Amounts equal to amounts received by the Registrar in payment of child support debts (including amounts received from employers who had deducted amounts from salary or wages) are to be credited to the Child Support Account. [39] Registration and Collection Act, s 74. Moneys standing to the credit of the Child Support Account are to be applied in making payments to payees of registered maintenance liabilities. (Again, other ways of applying moneys standing to the credit of the Account need not be noticed.)

41. Because the amount which is to be paid to a payee is calculated by reference (among other things) to amounts deducted by an employer (as distinct from amounts deducted and remitted ) provision is also made (by s 77) for an amount equal to any unremitted deduction to be credited to the Child Support Account. The total amounts credited to the Child Support Account equal the total amounts actually paid out to payees and they equal the total amounts paid or given up by payers. If employers' obligations to remit deductions made from salary or wages were all met, total payments into the Consolidated Revenue Fund would equal the total payments made out of the Child Support Account.

The Assessment Act

42. The Assessment Act commenced operation on 1 October 1989 (16 months after the Registration and Collection Act came into force). The Assessment Act records [40] s 3(1). that `` [ t]he parents of a child have the primary duty to maintain the child''. This duty is said, by the Assessment Act, [41] s 3(2). (a) to be not of lower priority than the duty of the parent to maintain any other child or another person; (b) to have priority over all commitments of the parent other than commitments necessary to enable the parent to support himself or herself and any other child or another person the parent has a duty to maintain; and (c) to be not affected by the duty of any other person to maintain the child or any entitlement the child or another person may have to an income tested pension, allowance or benefit. Like the Registration and Collection Act, the principal object of the Assessment Act is said [42] s 4(1). to be ``to ensure that children receive a proper level of financial support from their parents''.

43. Part 5 of the Assessment Act (ss 35-79) provides for the administrative assessment of child support. ``Child support'' is defined [43] s 5. as


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``financial support under [ the Assessment] Act, including financial support under [ the] Act by way of lump sum payment or by way of transfer or settlement of property''. An administrative assessment of child support requires the application of one or more of the several statutory formulae that is, or are, apposite in the particular circumstances. Section 79 of the Assessment Act provides that `` [ a]n amount of child support due and payable by a liable parent to a carer entitled to child support is a debt due and payable by the liable parent to the carer''.

44. Part 6 of the Assessment Act (ss 80-98) provides for the parents of eligible children to make consent arrangements between themselves or with an eligible carer about the child support payable for the child. Those arrangements can be varied by subsequent agreement. Application can be made to the Registrar for acceptance of a child support agreement. [44] ss 88-89. Upon acceptance of the agreement, the person by whom child support is to be paid or provided under the agreement becomes a ``liable parent''. [45] s 93(1)(e). The provisions governing consent arrangements need not be noticed further.

45. Where there has been an administrative assessment both the liable parent and the carer may lodge with the Registrar an objection against the assessment. [46] ss 98X, 98Y. A person aggrieved by a decision on the objection may, pursuant to s 110 of the Assessment Act, appeal to a court having jurisdiction under that Act.

46. Again, where there has been an administrative assessment, both the liable parent and the carer may apply to the Registrar for a determination that there be a departure from the provisions of the Assessment Act relating to administrative assessment of child support. [47] s 98B. Determinations of this kind are usually referred to as ``departure determinations''. The Registrar can also initiate the making of a departure determination. [48] s 98K. The decision to make or refuse a departure determination is subject to the same objection [49] s 98X(1)(d). and similar appeal [50] s 116. procedures as administrative assessments.

Laws imposing taxation?

47. Although the plaintiff's statement of claim alleged that both the Registration and Collection Act and the Assessment Act are invalid, only the Registration and Collection Act was alleged to be an Act imposing (or, as the statement of claim put it, ``dealing with'') taxation. The plaintiff submitted that `` [ t]he actual imposition of this `child support tax' is achieved by ss 17, 24A and 30 of the Registration and Collection Act while the specification of persons who are liable to taxation and the definition of their liability are to be found in the Assessment Act''. Of the various provisions of Div 2 of Pt III which provide for registration of registrable maintenance liabilities, particular reference was made by the plaintiff to s 24A because it was under that section that the assessment of his liability to pay child support was registered.

48. It is clear that the Registration and Collection Act provides for the compulsory exaction of money which is to be paid to the Commonwealth. It is equally clear that it is inappropriate to speak of the exaction being in payment for any services rendered by the Commonwealth. Further, it may readily be assumed that the scheme for which the Registration and Collection Act provides is a scheme which is seen as being of public benefit, even though its principal focus can also be seen as being on the performance of each individual's obligation to provide child support for his or her child or children, and the satisfaction of the need, and the right, of that child or those children to that support. It by no means follows, however, that the Registration and Collection Act as a whole, or particular provisions of it, are properly described as a law imposing taxation.

49. All of the features which Latham CJ identified in Matthews v Chicory Marketing Board (Vict) [51] (1938) 60 CLR 263 at 276. as typical of a tax - compulsory exaction, by a public authority, for public purposes, enforceable by law, and not being payment for services rendered - are important. The presence or absence of none of them, however, is determinative of the character of the legislation said to impose a tax. It is necessary, in every case, to consider all the features of the legislation which is said to impose a tax.

50. As was said in the joint judgment of the whole Court in Air Caledonie International v The Commonwealth : [52] (1988) 165 CLR 462 at 467.


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`` [ T]here is no reason in principle... why the compulsory exaction of money under statutory powers could not be properly seen as taxation notwithstanding that it was by a non-public authority or for purposes which could not properly be described as public.''

Secondly, as the Court also pointed out in Air Caledonie , [53] (1988) 165 CLR 462 at 467. the reference to ``payments for services rendered'', as an antonym for ``tax'', is only one example of various special types of exactions of money which are not taxes. Charges for the acquisition or use of property, fees for a privilege, and fines or penalties for criminal conduct are some other examples of what are unlikely to amount to forms of tax.

51. Thirdly, in Australian Tape Manufacturers Association Ltd v The Commonwealth , [54] (1993) 176 CLR 480. the majority of the Court concluded that the better view is that it is not essential to the concept of a tax that the exaction be by a public authority because it was ``scarcely to be contemplated'' [55] (1993) 176 CLR 480 at 501 per Mason CJ, Brennan, Deane and Gaudron JJ. that the character of an impost as a tax depends upon whether the authority is a public authority. Nonetheless, as the majority also noted, [56] (1993) 176 CLR 480 at 501. the character of the authority concerned may bear upon whether the purposes on which moneys raised are to be expended are themselves public. These matters were seen as significant in Tape Manufacturers because the impost then under consideration was to be paid directly to a collecting society designated under the relevant legislation; it was not to be paid into the Consolidated Revenue Fund.

52. Here, as has been noted earlier, amounts due from payers, and from the employers of payers, are debts due to the Commonwealth. When received, the amounts are paid into the Consolidated Revenue Fund. Amounts equal to what is received and amounts equal to deductions, made but not remitted, are then credited to the Child Support Account from which amounts payable to those entitled are paid. What is the significance of the fact that the amounts exacted are paid into the Consolidated Revenue Fund?

53. Section 81 of the Constitution provides that:

``All revenues or moneys raised or received by the Executive Government of the Commonwealth shall form one Consolidated Revenue Fund, to be appropriated for the purposes of the Commonwealth in the manner and subject to the charges and liabilities imposed by this Constitution.''

54. In Tape Manufacturers , it was said [57] (1993) 176 CLR 480 at 503. that `` [ i]n Australia, the fact that a levy is directed to be paid into the Consolidated Revenue Fund has been regarded as a conclusive indication that the levy is exacted for public purposes''. Support for this proposition was found primarily in what was said by Isaacs J in R v Barger ; The Commonwealth v McKay : [58] (1908) 6 CLR 41 at 82.

`` [ T]he imposition of a tax on any person or thing for the benefit of the Consolidated Revenue is taxation, and taxation within the meaning of the Constitution''

and in what was said by Latham CJ in Moore v The Commonwealth : [59] (1959) 9 ATD 283 at 286; (1951) 82 CLR 547 at 561.

``... The moneys collected are paid into consolidated revenue... The moneys can then be spent for any purpose for which the Commonwealth may lawfully appropriate money.''

55. The destination of money that is exacted may well be significant in deciding whether it is exacted for public purposes. A requirement that a sum which legislation requires is paid be paid into the Consolidated Revenue Fund does not conclude the issue of characterising the law as one imposing taxation .

56. Both ss 55 and 81 must be understood having regard to their constitutional purpose. They form part of the means of effecting the legislative, as distinct from executive, control of the raising and expenditure of public moneys. Section 53, dealing with the powers of the Houses of Parliament in respect of proposed laws appropriating revenue or moneys, or imposing taxation, s 54 dealing with proposed laws which appropriate revenue or moneys for the ordinary annual services of the Government, s 56 about messages recommending the purpose of any appropriation, s 82 about expenditure charged on the Consolidated Revenue Fund and s 83 about the need for an appropriation made by law for the drawing of money from the Treasury of the Commonwealth, all have their own part in that scheme.

57. Sections 81, 82 and 83, taken together, give effect to the proposition described by Durell in his work on Parliamentary Grants: [60] Durell, The Principles and Practice of the System of Control over Parliamentary Grants , (1917) at 3. See also The Commonwealth v Colonial Ammunition Co Ltd (1924) 34 CLR 198 at 224 per Isaacs and Rich JJ; New South Wales v Bardolph (1934) 52 CLR 455 at 475-478 per Evatt J.

``The prohibition of raising taxes without parliamentary authority would be nugatory if the proceeds, even of legal taxes, could be expended at the will of the sovereign. The right, therefore, of appropriation was a logical consequence of the right of levying supplies.''

In particular, the constitutional requirement of s 81, for legislative appropriation of the Consolidated Revenue Fund formed of `` [ a]ll revenues or moneys raised or received by the


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Executive Government of the Commonwealth'', is both the consequence of, and a necessary step in the effecting of, parliamentary control over taxation.

58. It follows that every tax that is raised must be paid into the Consolidated Revenue Fund. But the converse is not universally true. Not every sum that statute requires to be paid to the Commonwealth, and which is paid into the Consolidated Revenue Fund, is a tax. Perhaps so much would follow inevitably from the statement in s 53 that ``a proposed law shall not be taken... to impose taxation, by reason only of its containing provisions for the imposition... of fines or other pecuniary penalties, or for the demand or payment... of fees for licences, or fees for services under the proposed law.'' Whether or not that is so, it is a proposition that is now well established and not challenged.

59. What marks the present exactions apart from other exactions that have been held to be taxes is that in every case the sum exacted under the Registration and Collection Act is, when the maintenance liability is first registered, the amount which otherwise would be due and payable by the payer in satisfaction of an existing obligation owed by that payer to the carer of a child as maintenance for the child.

60. There is, therefore, under the Registration and Collection Act, more than the mere earmarking of a compulsory exaction for a particular application. Imposing a financial burden on one group in society for the benefit of another group in society will often constitute a tax. Pointing to some identifiable relationship between the group of payers and the group of recipients or even to some relationship between a particular payer and a particular recipient will not usually require some different conclusion. Under the Registration and Collection Act, however, the obligation to make a payment to the carer of the child is replaced by the obligation to pay the same amount to the Commonwealth. That obligation is coupled with the creation of a new right in the carer to have the Commonwealth pay the carer whatever the payer thereafter gives up - whether by making a payment to the Commonwealth or by suffering a compulsory deduction from salary or wages. The combination of these features - the substitution of a new obligation to the Commonwealth equal to an existing obligation which is terminated, coupled with the substitution of new rights in the carer against the Commonwealth equal to the extent to which the payer performs his or her obligation to the Commonwealth - takes this compulsory exaction outside the description of ``taxation''.

61. The fact that the original liability may later be varied requires no different conclusion. Subsequent variation of the amount for which a payer is liable does not diminish the significance of the fact that, when first registered, the liability owed by a payer to a carer is brought to an end and replaced by an obligation, in the same amount, owed to the Commonwealth. All that is changed by registration is the identity of the party to whom the liability is owed. Neither the existence nor the exercise of the power to make changes to the amount of the liability, in response to changed circumstances, alters the character of the exaction. The exaction not being a tax, the Registration and Collection Act is not a law imposing taxation. The first challenge to the Registration and Collection Act fails.

Judicial power

62. The plaintiff submitted that provisions of the Assessment Act, and the Registration and Collection Act, purport to confer the judicial power of the Commonwealth on the Registrar. Particular reference was made to departure determinations made by the Registrar under Pt 6A of the Assessment Act, but the plaintiff's submissions were not confined to the validity of that part of the Act. Rather, it was submitted that both Acts provided for the Registrar to exercise the judicial power of the Commonwealth first, because the Registrar's decisions under the Acts are binding, authoritative and conclusive and, secondly, because the Registrar's decision fixed the extent of, or varied the extent of, existing rights and duties respecting the maintenance of children.

63. That the Registrar's determinations, if made within statutory power and otherwise made according to the requirements of the relevant Acts, are binding and authoritative may be readily accepted. So much follows from the terms of the Acts. Account must, of course, be taken of the various provisions for ``appeal'' against, or review of, determinations but, subject to that caveat, it may also be accepted that the determinations are conclusive. It does not follow, however, that the Acts confer judicial power on the Registrar.

64. The plaintiff submitted that the rights and duties respecting maintenance of children are


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now found in the Family Law Act 1975 (Cth) and are not rights and duties derived from the Assessment Act or the Registration and Collection Act. It was submitted that the Assessment Act and the Registration and Collection Act fixed the extent of, or varied the extent of, rights and duties which were to be found in s 66C of the Family Law Act . That section provides that, subject to Div 7 of Pt VII of that Act, `` [ t]he parents of a child have... the primary duty to maintain the child''.

65. No doubt it is right to say, as the plaintiff submitted, that under English common law a parent owed no duty to maintain a child that was a duty enforceable by court action. [61] Mortimore v Wright (1840) 6 M & W 482 [ 151 ER 502 ] ; Shelton v Springett (1851) 11 CB 452 ; [ 138 ER 549 ] ; Bazeley v Forder (1868) LR 3 QB 559 at 565 ; Coldingham Parish Council v Smith [ 1918] 2 KB 90 at 96-97 ; National Assistance Board v Wilkinson [ 1952] 2 QB 648 at 657 . Cf the position under the common law of Scotland noted in Coldingham Parish Council v Smith [ 1918] 2 KB 90 at 97 . But, in England, statute intervened in that regard as early as the first Poor Law . That obliged parents, on pain of penalty, to maintain their poor children. [62] The Poor Relief Act 1601 (UK), s 7 (43 Eliz c 2). So, too, in Australia, legislation in one form or another has, for many years, obliged one or both parents of a child to provide some maintenance for the child. [63] Wives Act 1840 (NSW) (4 Vict No 5). And often, such legislation has provided for the curial determination of the amount that was to be paid as maintenance. [64] See, for example, Wives Act 1840, s 7. It may be doubted, however, that s 66C of the Family Law Act , or the other provisions of subdiv B of Div 7 of Pt VII of that Act which set out ``statements of objects and principles relevant to the making of child maintenance orders'', [65] Family Law Act , s 66A(a). can be understood as creating a duty, the terms or content of which are different from, or wider than, the particular obligations which arise under the other provisions of the Family Law Act which deal with maintenance of children and orders made under that Act.

66. If orders for the maintenance of children are made under the Family Law Act , those orders may give rise to a registrable maintenance liability under the Registration and Collection Act. [66] s 17. The Registrar's exercise of the power to register either a liability of that kind, or any other form of registrable maintenance liability, does not constitute the exercise of the judicial power of the Commonwealth. It is an entirely administrative act which requires the Registrar to decide whether the statutory criteria for registration are met. Very many administrative tasks for which legislation provides require decisions of that kind. In the end, it appeared that the weight of the plaintiff's argument did not rest on this aspect of the Registration and Collection Act. Rather, the plaintiff's submissions focused more upon the powers of the Registrar under the Assessment Act than upon the Registrar's duty to register certain kinds of liability under the Registration and Collection Act.

67. It is, therefore, necessary to notice some further aspects of the Assessment Act. Of those, there is one to which reference has already been made but which is of particular importance. Section 79 of the Assessment Act provides that an amount of child support under the Act, which is due and payable by a liable parent to a carer, is a debt due and payable by the liable parent to the carer. It may be sued for and recovered in a court. What is important for the purposes of the present inquiry is, first, that the Registrar can take no step to enforce an assessment made under the Act - that is a matter for those who have the benefit or burden of the assessment and it is to be done by recourse to the courts in the same way as any other debt is enforced. There is not that capacity (so often found when judicial power is exercised) to make a decision enforceable by execution. [67] Brandy v Human Rights and Equal Opportunity Commission (1995) 183 CLR 245 at 268 per Deane, Dawson, Gaudron and McHugh JJ. See also FC of T v Munro (1926) 38 CLR 153 at 176 per Isaacs J; Rola Co (Australia) Pty Ltd v The Commonwealth (1944) 69 CLR 185 at 198-199 per Latham CJ. Secondly, the assessment creates and quantifies the debt. It does not determine a question about the existence of any right or obligation. [68] R v Trade Practices Tribunal ; Ex parte Tasmanian Breweries Pty Ltd (1970) 123 CLR 361 at 374 per Kitto J. It is the factum on which other provisions of the Assessment Act and the Registration and Collection Act operate, thereby creating new rights and new obligations which are to govern the future. [69] Tasmanian Breweries (1970) 123 CLR 361 at 378 per Kitto J.

68. An administrative assessment of child support under Pt 5 of the Assessment Act requires [70] s 31(2). the Registrar to ``assess under [ the Assessment Act] the annual rate of the child support payable by the liable parent to the carer entitled to the child support for the child for the days in the child support period that starts on the day the application was made''. This assessment requires the application of relevant formulae. The basic formula [71] s 36. requires the multiplication of a ``Child support percentage'' (fixed by s 37 according to the number of children) and what is called the ``Adjusted income amount''. The adjusted income amount is determined by reference to the amount of the liable parent's taxable income for the previous year of income, adjusted [72] s 38A. to take account of some other amounts - exempt foreign income, rental property loss and reportable fringe benefits total - amounts which, it might be thought, would increase the liable parent's capacity to pay child support.


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69. The Assessment Act provides for some modifications of the basic formula in certain cases. [73] Pt 5, Div 2, subdivs C and D (ss 42-46). It provides for cases in which the care of children is shared or divided between parents, [74] Pt 5, Div 2, subdiv E (ss 47-49). for cases where there are two liable parents, [75] Pt 5, Div 2, subdiv F (ss 50-52). for cases where there are two or more carers entitled to child support, [76] Pt 5, Div 2, subdiv G (ss 53-54). and for cases where care of the child is modified or affected by a court order or parenting plan. [77] Pt 5, Div 2, subdiv H (ss 54A-54B). The detail of those provisions is not important. What is important is that all of them require the application of relevant formulae.

70. None of the provisions requiring administrative assessment of child support permit, let alone require, the Registrar to make any decision other than one attributing the circumstances disclosed by the application to one or other of the various statutory classes we have just mentioned, followed by a mathematical calculation of the monetary consequences that the Assessment Act prescribes. And because ``the Registrar may act on the basis of the application and the documents accompanying the application, and is not required to conduct any inquiries or investigations into the matter'' [78] s 29(1). there is no requirement for the Registrar to engage in any processes of fact finding. [79] R v Hegarty; Ex parte City of Salisbury (1981) 147 CLR 617 at 627 per Mason J.

71. The Registrar may make a departure determination on the application of a liable parent or carer only if satisfied of certain matters. [80] Departure determinations initiated in this way are regulated by Pt 6A, Div 2 (ss 98B-98JA). They are [81] ss 98C and 117(2). that, in the special circumstances of the case, the capacity of either parent of the child to provide financial support for the child is significantly reduced for one of several specified reasons, [82] s 117(2)(a). or the costs of maintaining the child are significantly affected by one of several matters, [83] s 117(2)(b). or the application of the provisions of the Act for dealing with administrative assessments ``would result in an unjust and inequitable determination of the level of financial support to be provided by the liable parent for the child'', [84] s 117(2)(c). again, for one or other reason identified in the Act.

72. Similarly, the Registrar may initiate the making of a departure determination under Pt 6A [85] Departure determinations initiated by the Registrar are regulated by Pt 6A, Div 3 (ss 98K-98R). if, among other things, he or she is satisfied that the application of the provisions relating to administrative assessment ``would result in an unjust and inequitable determination of the level of financial support to be provided by the liable parent for the child because of the income, earning capacity, property and financial resources of either parent''. [86] s 98L(1)(a).

73. Obviously, the provisions governing both kinds of departure determination, with their reference to what would be ``unjust and inequitable'' require the making of a judgment about which opinions may differ in a particular case. And because the circumstances that may touch a decision about what would be unjust and inequitable may vary so widely, provision is made for the Registrar to refuse to make a departure determination, whether initiated by a liable parent or carer or by the Registrar, where ``the issues involved are too complex to be dealt with'' under Pt 6A. [87] ss 98E and 98R. In such a case, the Registrar may recommend that application be made to a court having jurisdiction under the Act for an order under Div 4 of Pt 7.

74. Part 7 of the Assessment Act (ss 99-146) deals with the jurisdiction of courts under the Act. In particular, provision is made [88] Pt 7, Div 2 (ss 106-109). for applications to a court for a declaration about the applicability of the administrative assessment provisions. Provision is made [89] Pt 7, Div 3 (ss 110-113). for what are called ``appeals'' against incorrect administrative assessments and [90] Pt 7, Div 4 (ss 114-120). for orders for departure from administrative assessment. (The reference to ``appeal'', although similarly used in other contexts, [91] For example, Administrative Appeals Tribunal Act 1975 (Cth), s 44. may mislead. The proceeding which is so described is the first application of judicial power; it is an exercise of original, not appellate jurisdiction.) An order by a court for departure from an administrative assessment may be made on the grounds on which the Registrar may make a departure determination. [92] s 117. The other provisions of Pt 7 of the Assessment Act are not immediately relevant to the present question.

75. Finally, and no less importantly, it is necessary to notice the provisions made for objection to the Registrar's assessment of child support, whether by way of administrative assessment or departure determination. Part 6B of the Act (ss 98W-98ZJ) provides for objections to and internal reconsideration of decisions of the Registrar, including those decisions that are reviewable by a court having jurisdiction under the Act. The decisions reviewable by a court include decisions to accept or not accept an application for administrative assessment, [93] s 98X(1)(a) and (b). decisions as to the particulars of an administrative assessment [94] s 98X(1)(c). and decisions to make or refuse to make a departure determination, whether initiated by the liable parent or carer, or by the Registrar. [95] s 98X(1)(d). A person may not appeal to a court against the


ATC 4324

particulars of an administrative assessment unless the person has objected under s 98X, and the objection has been disallowed or allowed only in part. [96] s 110(1A). Similarly, an application for a declaration about an administrative assessment may be made only if the objection procedure has first been exhausted. [97] ss 106(1A), 106A(1A), 107(1A).

76. Several points emerge from an examination of these features of the Assessment Act. First, as mentioned at the outset, the Registrar's assessment, whether as an administrative assessment or as a departure determination, is the factum by reference to which the statute creates rights for the future which then are to be enforced by resort to the courts; the assessment does not adjudge existing rights. Secondly, the Registrar's assessment, again whether as an administrative assessment or as a departure determination, is not final. It is open to the processes of objection and then ``appeal'' to a court. Thirdly, so far as administrative assessments are concerned, the statutory processes are wholly administrative. So far as departure determinations are concerned, the Registrar may make such a determination, but need not if the issues are ``too complex''. If the Registrar does make a departure determination, the party dissatisfied can object and if still dissatisfied go to a court; if the Registrar does not make such a determination, again the party dissatisfied can object and then go to court. In either event the Court will decide the question afresh, without regard to what the Registrar has done.

77. Neither the Registration and Collection Act nor the Assessment Act vests the judicial power of the Commonwealth in the Registrar.

78. The questions reserved should be answered as follows:

Question 1  Is the scheme established by the Child Support (Registration

            and Collection) Act 1988 (Cth) and the Child Support (Assessment)

            Act 1989 (Cth) for the collection and payment by the second

            defendant of money otherwise payable to or receivable by the

            first defendant a tax?



Answer      Neither Act is, within the meaning of s 55 of the Constitution,

            a law imposing taxation.



Question 2  If ``yes'' to question 1 are the Acts invalid as being contrary

            to s 55 of the Constitution?



Answer      Unnecessary to answer.



Question 3  Do the Acts in purporting to authorise the second defendant to

            make the assessments and the determinations, to enter the

            particulars, to issue the notices, and to collect and apply

            payments in the way in which the second defendant did involve

            the purported exercise of judicial power by the second defendant

            contrary to Ch III of the Constitution?



Answer      No.



Question 4  What orders for the further disposition of the action should be

            made in the light of the answers to these questions?



Answer      There should be judgment for the defendants in the action, with

            costs, including the costs of the case stated under s 18 of the

            Judiciary Act 1903 (Cth).
      


Footnotes

[18] Registration and Collection Act, s 3(1).
[19] s 4.
[20] s 4.
[21] s 43.
[22] s 45.
[23] s 64.
[24] Child Support Legislation Amendment Act 2001 (Cth), Sched 5, Item 38.
[25] Registration and Collection Act, s 10(2).
[26] s 12.
[27] s 4.
[28] Registration and Collection Act, s 73.
[29] Audit (Transitional and Miscellaneous) Amendment Act 1997 (Cth), Sched 2, Items 605-620.
[30] s 74.
[31] s 75.
[32] s 5, definition of ``public money''.
[33] Financial Management and Accountability Act 1997 (Cth), s 18.
[34] s 75(a).
[35] Financial Amendment Act, Sched 1, Item 13.
[36] Financial Amendment Act, s 5(5).
[37] Financial Amendment Act, s 5(6)(a).
[38] Financial Amendment Act, s 5(6)(b).
[39] Registration and Collection Act, s 74.
[40] s 3(1).
[41] s 3(2).
[42] s 4(1).
[43] s 5.
[44] ss 88-89.
[45] s 93(1)(e).
[46] ss 98X, 98Y.
[47] s 98B.
[48] s 98K.
[49] s 98X(1)(d).
[50] s 116.
[51] (1938) 60 CLR 263 at 276.
[52] (1988) 165 CLR 462 at 467.
[53] (1988) 165 CLR 462 at 467.
[54] (1993) 176 CLR 480.
[55] (1993) 176 CLR 480 at 501 per Mason CJ, Brennan, Deane and Gaudron JJ.
[56] (1993) 176 CLR 480 at 501.
[57] (1993) 176 CLR 480 at 503.
[58] (1908) 6 CLR 41 at 82.
[59] (1959) 9 ATD 283 at 286; (1951) 82 CLR 547 at 561.
[60] Durell, The Principles and Practice of the System of Control over Parliamentary Grants , (1917) at 3. See also The Commonwealth v Colonial Ammunition Co Ltd (1924) 34 CLR 198 at 224 per Isaacs and Rich JJ; New South Wales v Bardolph (1934) 52 CLR 455 at 475-478 per Evatt J.
[61] Mortimore v Wright (1840) 6 M & W 482 [ 151 ER 502 ] ; Shelton v Springett (1851) 11 CB 452 ; [ 138 ER 549 ] ; Bazeley v Forder (1868) LR 3 QB 559 at 565 ; Coldingham Parish Council v Smith [ 1918] 2 KB 90 at 96-97 ; National Assistance Board v Wilkinson [ 1952] 2 QB 648 at 657 . Cf the position under the common law of Scotland noted in Coldingham Parish Council v Smith [ 1918] 2 KB 90 at 97 .
[62] The Poor Relief Act 1601 (UK), s 7 (43 Eliz c 2).
[63] Wives Act 1840 (NSW) (4 Vict No 5).
[64] See, for example, Wives Act 1840, s 7.
[65] Family Law Act , s 66A(a).
[66] s 17.
[67] Brandy v Human Rights and Equal Opportunity Commission (1995) 183 CLR 245 at 268 per Deane, Dawson, Gaudron and McHugh JJ. See also FC of T v Munro (1926) 38 CLR 153 at 176 per Isaacs J; Rola Co (Australia) Pty Ltd v The Commonwealth (1944) 69 CLR 185 at 198-199 per Latham CJ.
[68] R v Trade Practices Tribunal ; Ex parte Tasmanian Breweries Pty Ltd (1970) 123 CLR 361 at 374 per Kitto J.
[69] Tasmanian Breweries (1970) 123 CLR 361 at 378 per Kitto J.
[70] s 31(2).
[71] s 36.
[72] s 38A.
[73] Pt 5, Div 2, subdivs C and D (ss 42-46).
[74] Pt 5, Div 2, subdiv E (ss 47-49).
[75] Pt 5, Div 2, subdiv F (ss 50-52).
[76] Pt 5, Div 2, subdiv G (ss 53-54).
[77] Pt 5, Div 2, subdiv H (ss 54A-54B).
[78] s 29(1).
[79] R v Hegarty; Ex parte City of Salisbury (1981) 147 CLR 617 at 627 per Mason J.
[80] Departure determinations initiated in this way are regulated by Pt 6A, Div 2 (ss 98B-98JA).
[81] ss 98C and 117(2).
[82] s 117(2)(a).
[83] s 117(2)(b).
[84] s 117(2)(c).
[85] Departure determinations initiated by the Registrar are regulated by Pt 6A, Div 3 (ss 98K-98R).
[86] s 98L(1)(a).
[87] ss 98E and 98R.
[88] Pt 7, Div 2 (ss 106-109).
[89] Pt 7, Div 3 (ss 110-113).
[90] Pt 7, Div 4 (ss 114-120).
[91] For example, Administrative Appeals Tribunal Act 1975 (Cth), s 44.
[92] s 117.
[93] s 98X(1)(a) and (b).
[94] s 98X(1)(c).
[95] s 98X(1)(d).
[96] s 110(1A).
[97] ss 106(1A), 106A(1A), 107(1A).

 

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