Blackburn and Marlow (Child support)

[2018] AATA 4352

Blackburn and Marlow (Child support) [2018] AATA 4352 (27 September 2018)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2018/MC014248

2018/MC014249

2018/MC014439

APPLICANT:  Mr Blackburn

OTHER PARTIES:  Child Support Registrar

Ms Marlow

TRIBUNAL:Member J Longo

DECISION DATE:  27 September 2018

DECISION:

The Tribunal sets aside the decision under review and, in substitution, decides that $7,965.32 of the total payments made by Mr Blackburn should be credited as prescribed non-agency payments against Mr Blackburn’s child support liability.

CATCHWORDS
CHILD SUPPORT – non-agency payments to third parties – no mutual intention that payments be in lieu of child support – prescribed payments – court order – discretion not to credit in particular circumstances – decision under review set aside and substituted

Names used in all published decisions are pseudonyms. Any references appearing in square brackets indicate that information has been removed from this decision and replaced with generic information so as not to identify involved individuals as required by subsections 16(2AB)-16(2AC) of the Child Support (Registration and Collection) Act 1988.

REASONS FOR DECISION

BACKGROUND

1. This application for review is about whether payments made by Mr Blackburn should be credited as payment towards his child support liability (such payments being known as non-agency payments).

2. Mr Blackburn and Ms Marlow are the parents of [Child 1]. A child support case was registered with the Department of Human Services – Child Support (the Department) on 16 May 2017 and is currently subject to collection by the Department. Mr Blackburn is the parent liable to pay child support to Ms Marlow.

3. Mr Blackburn made a number of payments to third parties in 2017. On 31 August 2017, 26 September 2017, 21 October 2017, 21 November 2017 and 9 April 2018 the Department credited these payments of mortgage, rates and utilities towards Mr Blackburn’s child support liability. The total of the non-agency payments was $9,072.86.

4. On 24 April 2018, Ms Marlow objected to the Department’s decision and applied for an extension of time. An extension of time was granted on 22 May 2018 and on 22 June 2018 a Departmental objections officer allowed Ms Marlow’s objection and refused to credit non-agency payments totalling $8,883.75.  

5. Mr Blackburn also made application on 12 December 2017 and 17 February 2018 for additional non-agency payments to be credited towards his child support liability totalling $4,791.55. On 20 February 2018, the Department refused to credit these non-agency payments. On 2 March 2018 Mr Blackburn objected to the Department’s decision and on 3 May 2018 a Departmental objections officer disallowed Mr Blackburn’s objection.

6. Mr Blackburn made further application on 13 December 2017 for additional non-agency payments to be credited towards his child support liability totalling $2,112.38. On 5 March 2018, the Department refused to credit these non-agency payments. On 23 March 2018, Mr Blackburn objected to the Department’s decision and on 22 May 2018 a Departmental objections officer disallowed Mr Blackburn’s objection.

7. On 4 June 2018 and 27 June 2018, Mr Blackburn applied to the Administrative Appeals Tribunal (the tribunal) for an independent review of this decision. On 7 September 2018, the tribunal conducted a hearing. Mr Blackburn spoke to the tribunal in person and gave sworn evidence. Ms Marlow spoke to the tribunal via conference telephone and gave sworn evidence. The tribunal received documents provided by the Department and Mr Blackburn[1] which were provided to Mr Blackburn and Ms Marlow prior to the hearing.

[1]Administrative Appeals Tribunal Act 1975 subsection 37(1) Statement and Documents provided by the Department numbered 1 to 251; 1 to 251; 1 to 268; and documents provided by Mr Blackburn numbered A1 to A12.

CONSIDERATION

1. The statutory provisions relevant to this review are contained in the Child Support (Registration and Collection) Act 1988 (“the Act”).

2. Section 71A of the Act states that if a payer makes a payment to a third party in satisfaction of a liability and it is intended by both to be in complete or partial satisfaction of the payer’s child support liability, the amount can be credited against the payer’s liability as a non-agency payment.

3. Mr Blackburn stated that the majority of the non-agency payments that are in dispute were being credited by the Department until January/February 2018. In March 2018, the Department stopped crediting these non-agency payments. The Department stated that there was no mutual intention and they could not credit these payments. Mr Blackburn stated that the Department based its decision on the Court Orders made in July 2017. Mr Blackburn stated that there was always an intention, when the Court Orders were made in July 2017, that these payments would be taken into account for the purpose of his child support liability but the Court Orders do not state this specifically. Mr Blackburn stated that prior to the Court Orders, he had been making these types of payments and the Department had accepted these payments as non-agency payments. Mr Blackburn confirmed that all the payments were either mortgage, utilities or rate payments. He is only claiming 50% of the mortgage payments; 50% of the telephone and 100% of the utilities.

4. The tribunal referred Mr Blackburn to a copy of the Court Orders made on [date] July 2017 provided by Mr Blackburn. The documents provided by the Department also contained copies of these orders. At clause 11 of the Orders, it states as follows:

   11. Until further Order, the Husband be solely responsible for, and pay as and when they fall due, the following:

   (a) all mortgage repayments and rates (including both principal and interest payments) with respect to the Rosanna property; and

   (b) utility bills (including the gas, water and electricity) with respect to the Rosanna property.

12.Mr Blackburn stated that his lawyer discussed these payments and it was agreed that he would continue to make these payments and continue to ask for the payments to be applied to the child support assessment as non-agency payments. The matter was also discussed with the other party’s lawyer. He would not have been able to afford to make these payments and pay child support if they were not accepted.

13.Mr Blackburn also referred to a conversation with Ms Marlow in February 2018 where they talked about the non-agency payments again. Mr Blackburn stated that Ms Marlow agreed to 50% of all the payments being considered as non-agency payments. Another similar discussion and agreement occurred in March 2018. He then called the Department and advised them that there was an agreement and that 50% of the payments should be taken as non-agency payments and this is evidenced in the documents. Mr Blackburn confirmed that prior to the discussions in February and March 2018, there had been no discussion with Ms Marlow about these payments and also that it was never discussed prior to the Court Orders being made.

14.Mr Blackburn stated that the payments should be accepted as it had been agreed and the purpose of making these payments was to ensure that his daughter could stay in the home and a safe environment and so the payments should be credited on this basis.

15.Ms Marlow stated that Mr Blackburn was living with his sister during this time and not paying rent, therefore he could afford to pay these amounts as stated in the Court Orders and also pay child support. Ms Marlow stated that there was no discussion by the lawyers about child support. When she did try to speak to the lawyer about this issue, she was referred to the Department. Ms Marlow acknowledged that she did initially state to the Department that she accepted these payments in lieu of her child support. However, she stated to the tribunal that she didn’t understand what she was accepting was being credited against the child support that Mr Blackburn was required to pay.

16.Ms Marlow stated that there had never been any conversation about child support and this included the non-agency payments. She did not accept Mr Blackburn’s offer for 50% of these payments being credited to his child support liability. She thinks Mr Blackburn can afford to make these payments and pay child support and does not think the payments should be credited.

17.The tribunal notes that the three objections decisions include a number of payments of mortgage, rates and utility payments by Mr Blackburn, totalling $15,930.64. These payments are as follows:

Paid	Amount ($)	Purpose
13,14,21,28,29/11/2017	229.14	utilities
5/12/1017	1000	mortgage
5/12/2017	90.40	utilities
11,12,14,19,29/12/2017	557.77	utilities
2,15,29/2/2018	235.07	utilities
1/11/2017	90.40	utilities
21/11/2017	2,140	mortgage
29/11/2017	375	rates
8/1/2018	2140	mortgage
19/1/2018	46.15	insurance
14/7/2017	580.24	mortgage
14/7/2017	59.99	TPG internet
31/7/2017	20	TPG internet
31/7/2017	74.47	Origin electricity
31/7/2017	26	Foxtel
31/7/2017	32.56	Origin gas
2/8/2017	45	Vodaphone
31/8/2017	74.47	Origin electricity
31/8/2017	32.56	Origin gas
15/9/2017	180.22	water
11/8/2017	1,160.48	mortgage
21/8/2017	40.14	insurance
25/8/2017	1,160.48	mortgage
4/9/2017	89.98	Vodaphone
29/8/2017	20	internet
29/8/2017	26	Foxtel
14/8/2017	59.99	internet
14/9/2017	59.99	internet
18/9/2017	180	water
19/9/2017	40.14	insurance
26/9/2017	20	internet
28/9/2017	26	Foxtel
26/9/2017	2,320.96	mortgage
12/10/2017	79.43	utilities
13/10/2017	30.28	utilities
16/10/2017	59.99	utilities
19/10/2017	2,140	mortgage
19/10/2017	40.14	utilities
30/10/2017	20	utilities
30/10/2017	26	utilities
12/2/2018	86.81	utilities
12/2/2018	59.99	utilities
12/2/2018	46.15	utilities
12/2/2018	20	utilities
12/2/2018	26	utilities
12/2/2018	62.25	utilities

18.It is clear from the evidence of both Mr Blackburn and Ms Marlow that there was never any discussion about the payments made by Mr Blackburn of mortgage, rates and utilities being credited towards Mr Blackburn’s child support liability. Mr Blackburn states that this was a consideration when the orders were made but the tribunal is not satisfied that there is sufficient evidence to support this contention. While there is evidence Ms Marlow did accept these payments as non-agency payments, it is also clear that she did not understand what it was she was agreeing to at the time. In any event, her consent to the payments being credited as non-agency payments occurred after the payments were made.

19.The tribunal determines that there was no mutual intention of the parties that the payments made to third parties, as itemised above, would be credited against Mr Blackburn’s child support liability. The tribunal has not accepted that Ms Marlow agreed to these payments being credited. There is nothing in the evidence before the tribunal that these amounts were agreed as payments by Ms Marlow in lieu of child support. Accordingly, the tribunal does not accept that they were intended to be credited against Mr Blackburn’s child support liability.

1. Section 71C of the Act also allows for some non-agency payments to be credited and it is not necessary for there to be mutual intention between the parties. The payments must meet the criteria as specified in the regulations under Regulation 5D. The regulation prescribes the payment of amounts payable for the payee’s home, including mortgage, rates and utility charges, as being able to be credited as a ‘prescribed non-agency payment’. There is no dispute that the payment of $15,930.64 were for these purposes. Thus, the payment by Mr Blackburn of $15,930.64 can be considered under section 71C of the Act.

2. In addition to the payments being prescribed under the regulations, the payer must have less than regular care of [Child 1] for the payment to meet the requirements under section 71C of the Act. In this case, Mr Blackburn has less than regular care of [Child 1] in accordance with Department information, therefore section 71C(1)(ba) of the Act is met. This means the amount can be credited as non-agency payment.

3. However, section 71D of the Act gives a discretion to refuse to credit an amount under section 71C in the circumstances of the particular case. This provision gives the tribunal discretion to refuse to credit the payments. The Tribunal could not locate any particular case law indicating the types of considerations in deciding whether to exercise the discretion under this section. The Agency policy guide provides little guidance other than to provide a list of examples which are of no relevance to this case.

4. In considering the discretion under section 71D, the Tribunal considered Mr Blackburn’s evidence of paying these items, including the court orders made by consent on [date]July 2017. Mr Blackburn has indicated that other payments of a similar type have been credited. The tribunal notes that Mr Blackburn does not wish all of the payments to be credited, in his discussions with the Department, but rather Ms Marlow’s portion, 50% of these payments, towards his child support liability. While the Court Orders require Mr Blackburn to pay these amounts, the tribunal notes that these are orders by consent and that the orders do not specify that the amounts paid cannot be considered for the purpose of Mr Blackburn’s child support liability.

5. The Tribunal is mindful that the legislative scheme intentionally provides for payments to third parties to be credited as child support unless the particular circumstances warrant another outcome. In the particular circumstances of this case, considering the factors set out above and the history of the matter, the tribunal was not persuaded to exercise its discretion under section 71D not to credit the fees payments totalling $7,965.32, or half the total amount paid by Mr Blackburn. In the circumstances, the tribunal has determined that the payments ought to be credited as prescribed non-agency payments.

DECISION

The Tribunal sets aside the decision under review and, in substitution, decides that $7,965.32 of the total payments made by Mr Blackburn should be credited as prescribed non-agency payments against Mr Blackburn’s child support liability.