Cheyne and Masters and Anor (SSAT Appeal)
[2014] FCCA 856
•19 May 2014
FEDERAL CIRCUIT COURT OF AUSTRALIA
| CHEYNE & MASTERS & ANOR (SSAT APPEAL) | [2014] FCCA 856 |
| Catchwords: CHILD SUPPORT – Application pursuant to s.136(2)(d) of the Child Support Assessment Act to set aside a binding child support agreement – where the mother’s percentage care of the child dropped from 64% when the agreement was signed to 16% in 2012 and 2% in 2013 – whether the change in arrangements constitutes exceptional circumstances – where after the agreement was signed s.12 of the Child Support (Assessment) Act which defined child support terminating events was amended – where prior to the amendment the payee ceasing to have at least shared care of the child would have terminated the agreement – whether the change in the law is relevant in determining whether exceptional circumstances have arisen since the agreement was signed – meaning of hardship in s.136(2)(d) – where the father is a high income earner – whether if exceptional circumstances which will result in hardship for the father if the agreement is not set aside are established the court should in the exercise of its discretion set the agreement aside. |
| Legislation: Acts Interpretation Act (1901), s.11 Child Support (Registration & Collection) Act (1988), ss.17, 39B, 110B, 111C |
| Carrigan & Fredericks (SSAT Appeal) (2011) 45 Fam LR 657 Christian & Donald (2008) FamCAFC 44 Commissioner of Stamps v Telegraph Investment Co Pty Ltd (1995) 184 CLR 453 Mickelberg v The Queen(1989) 167 CLR 259 Sandrk & Sandrk (1991) FLC 92-260 Servos v Repatriation Commission [1995] FCA 150 Whitford & Whitford (1979) FLC90-612 |
| Applicant: | MR CHEYNE |
| First Respondent: | MS MASTERS |
| Second Respondent: | CHILD SUPPORT REGISTRAR |
| File Number: | NCC 2311 of 2009 |
| Judgment of: | Judge Terry |
| Hearing date: | 9 October 2013 |
| Date of Last Submission: | 9 October 2013 |
| Delivered at: | Newcastle |
| Delivered on: | 19 May 2014 |
REPRESENTATION
| The Applicant: | In person |
| The First Respondent: | In person |
| The Second Respondent: | By written submissions prepared by B Kaplan of Counsel |
ORDERS
The applicant’s appeal against the decision of the Social Security Appeals Tribunal dated 23 October 2012 is dismissed.
Pursuant to s.136 (2) of the Child Support (Assessment) Act the binding child support agreement dated 31 July 2008 is set aside effective from 23 April 2012.
Subject to the right of any party to make an application for costs pursuant to rule 21.02 of the Federal Circuit Court Rules all outstanding applications are otherwise dismissed.
IT IS NOTED that publication of this judgment under the pseudonym Cheyne & Masters & Anor (SSAT Appeal) is approved pursuant to s.110X(4)(h) of the Child Support (Registration and Collection) Act 1988 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT NEWCASTLE |
NCC 2311 of 2009
| MR CHEYNE |
Applicant
And
| MS MASTERS |
First Respondent
| CHILD SUPPORT REGISTRAR |
Second Respondent
REASONS FOR JUDGMENT
Introduction
Mr Cheyne (“the father”) and Ms Masters (“the mother”) are the parents of 17 year old [X].
On 31 July 2008, when [X] was living with the mother and spending five nights per fortnight and half of the school holidays with the father, the parties signed a binding child support agreement which required the father to pay the mother $220.00 per week child support
On 23 April 2012 at the instigation of the mother [X] commenced living with the father for twelve nights per fortnight and the mother for two and in September 2012 the mother moved interstate and between January 2013 and July 2013 [X] spent only six nights with her.
The issue in dispute is whether in these circumstances the father should be required to continue paying child support to the mother.
Common sense suggests that he should not, but the mother said that common sense did not come into it and that because the father had signed a binding child support agreement he was required as a matter of law to keep paying her until the termination date in the agreement (which is [X]’s 18th birthday) regardless of how little time [X] spent with her.
The father has two applications before the court. The first is an appeal from a Review Decision of the Social Security Appeals Tribunal (SSAT) dated 23 October 2012 in which the SSAT set aside the decision of an objections officer that the binding child support agreement ceased to operate when [X] ceased to live with the mother for at least 35% of the time and ruled that the agreement remained valid and enforceable.
The second is an application for an order pursuant to s.136(2) of the Child Support (Assessment) Act that the binding child support agreement be set aside.
The mother seeks dismissal of both applications.
The Child Support Registrar is a party to the first application but not the second. Counsel for the Child Support Registrar submitted that the SSAT appeal should be dismissed and that if the father had a remedy at all it could only be pursuant to s.136(2).
The documents relied on at the hearing
The father filed a Notice of Appeal (Child Support) on 29 November 2012 and the mother filed a Response on 24 January 2013.
The mother also filed an affidavit on 24 January 2013. It contained submissions about the SSAT appeal and a mix of submissions and evidence referring to s.136 (2) of the Assessment Act although no application pursuant to that section had at that stage been filed by the father.
On 6 March 2013 the father filed an Initiating Application seeking an order that the binding child support agreement be set aside pursuant to s.136(2) together with a supporting affidavit.
The father filed a financial statement on 6 December 2013 in support of an application for a stay of child support payments pending the resolution of the SSAT appeal. The financial statement contains information relevant to the s.136 (2) application.
On 23 April 2013 the father filed an affidavit in which he referred to the SSAT appeal but it contained submissions rather than evidence.
On 29 April 2013[1] the mother filed a response to the s.136 (2) application and an affidavit in support.
[1] The mother e-filed a response and affidavit on 19 April 2013 but the e-filed affidavit did not have the annexures attached to it. The mother filed the same Response and an affidavit with the annexures attached on 29 April 2013.
On 1 May 2013 the mother filed an affidavit attaching a copy of an SSAT decision dated 7 March 2013 in which the SSAT ruled that a decision by the Child Support Agency to assess the mother to pay child support was ultra vires. There is no appeal against that decision but it is a relevant piece of background information.
On 2 May 2013 the father’s applications were listed for hearing on 6 September 2013 (later changed to 9 October 2013) and orders were made for the father, the mother and the Child Support Registrar to file written submissions.
The father was ordered to file submissions by 26 July 2013. On 19 July 2013, in purported compliance with that order, he filed an affidavit which contained submissions.
The mother was ordered to file submissions by 12 August 2013. On that day she filed a 53 page affidavit containing a mix of submissions relevant to both the SSAT Appeal and the s.136 (2) application and evidence relevant, if it was relevant at all, to the s.136 (2) application.
On 16 August 2013 the mother filed a 63 page document headed “Submissions” which contained a mix of submissions and evidence.
The Child Support Registrar filed written submissions on 19 August 2013.
On 9 October 2013 the father filed a document headed “Submission 2 for the Applicant” which referred to the SSAT appeal and which contained fresh evidence.
On 25 September 2013 Counsel for the Child support Registrar filed supplementary written submissions dealing with issues raised by the document filed by the father on 9 October 2013.
There were many problems with the documents filed by the self-represented mother and father. Submissions were included in affidavits, evidence which should have been in an affidavit appeared in unsworn documents headed submissions and the mother provided a vast amount of historical information both in her affidavit and in her document headed submissions which, leaving aside deficiencies as to form, was irrelevant.
A further problem was that father attempted to introduce fresh evidence (in a document headed “Submissions”) in the SSAT Appeal and as Counsel for the Child Support Registrar pointed out it was not appropriate for the parties to be allowed to rely on additional evidence in the SSAT appeal.
An appeal can only be made to this court from an SSAT decision on a question of law and to use slightly out of context a sentence from Mickelberg & the Queen which is referred to in Servos v Repatriation Commission[2] to which Counsel for the Child Support Registrar referred me:
In deciding whether there was error, the appellate court looks to the materials which were before the court below.
[2] Servos v Repatriation Commission [1995] FCA 150
Brown FM (now Judge Brown) put the matter this way in Carrigan & Fredericks (SSAT Appeal):
Essentially, this court, in its appellant jurisdiction from the SSAT, must be careful not allow evidence to be adduced in the hope advocated by any appellant that an error of law will thus be demonstrated.[3]
[3] Carrigan & Fredericks (SSAT) Appeal (2011) 45 Fam LR 657
On reflection it may have been preferable at the commencement of the hearing to go through the mish-mash of material filed by the mother and father, explain to them how the material in each separate document was likely to be treated and attempt to explain the objection process to them and invite objections to evidence. This would have been a very time consuming exercise indeed however, as I anticipate that both of the parties (the father is an [occupation omitted] and the mother a retired [omitted]) would have argued tenaciously for all the material they filed to be considered, and in reality the only factual issue in dispute was the extent if any to which the father’s attitude was impacting on [X]’s willingness to see the mother at present. I do not consider that failing to take a rigorous approach to the material compromised the hearing of the applications.
I have read all of the material filed by the parties and I have:
a)treated submissions wherever they were found as submissions only;
b)disregarded in determining the SSAT appeal anything in the nature of fresh evidence and in particular have disregarded the evidence about the use of a particular commercial term in another contract which is in the document headed Submissions 2 by the Applicant.
c)placed no weight on the extensive historical information about the parties’ relationship which the mother provided.
The hearing
The father and mother attended the hearing in person and cross-examined each other.
Counsel for the Child Support Registrar was excused from appearing at the hearing without objection by the mother and the father and relied on written submissions.
On the morning of the hearing the mother applied for an adjournment on the basis that the father had failed to provide her with a copious quantity of documents set out in a Notice to Produce . The mother was hoping through the Notice to Produce to obtain very detailed information about the father’s financial affairs going back several years. I refused to grant the adjournment as I was of the view that the documents were not relevant to the issues I had to decide.
Background
The father and mother commenced cohabitation in 1984 and married in 1995. They have four children: [A], born on [omitted] 1989, [B], born on [omitted] 1991, [C] born on [omitted] 1993 and [X], born on [omitted] 1996 and they separated on 6 January 2006 when the children were aged between 16 & 9.
Following separation [A] and [B] lived with the father for nine nights per fortnight and the mother for five and [C] and [X] lived with the mother for nine nights per fortnight and the father for five. The father was assessed to pay child support for all four children.
On 18 February 2008 the parties entered into a binding child support agreement which specified the amount of child support the father was to pay for [C] and [X]. [A] was by then 18 and no provision was made about payment of child support for [B], aged 16 ½. An administrative assessment remained in force for [B].
On 28 March 2008 consent parenting orders were made which provided inter alia for [X] to live with the father for five nights per fortnight during school terms and for half of the school holidays.
The continuing administrative assessment for [B] was a bone of contention between the parties and on 31 July 2008 they signed a fresh child support agreement which terminated the previous agreement.
Pursuant to the new agreement the father was required to pay $16.19 per week for [B], $103.00 per week for [C] and $220.00 per week for [X], with the amounts to be adjusted for inflation[4] and the termination date specified for each child was the date of their 18th birthday.
[4] The agreement also required the father to pay private health insurance for the children but this has no relevance to the current dispute.
The agreement was accepted by the Child Support Registrar and the father thereafter paid child support in accordance with the terms of the agreement.
Child Support ceased to be payable for [B] in 2009 and for [C] in 2011. By 23 April 2012 only [X] was still under 18 and the father was paying $239.66 per week for him.
On 23 April 2012 at the instigation of the mother [X] commenced living six nights per week with the father and one with the mother. The mother said that she did this as a trial because she intended to move to Melbourne but quite what the mother hoped it would achieve is unclear to me.
On 24 April 2012 the father contacted the Child Support Agency (CSA) to advise them of the change in care arrangements for [X].
The mother confirmed to the CSA that the change had occurred and on 30 April 2012 the CSA advised the parties that:
i)the mother was no longer an eligible parent for the purposes of child support as she had less than 35% care of [X] and the binding child support agreement would no longer be treated as active;
ii)the mother would become the paying parent under a formula assessment from 23 April 2012.
The CSA informed the father that he did not have to take steps to have the agreement set aside.
The father immediately ceased paying child support and the mother was assessed to pay the father $188.75 per month.
On 25 May 2012 the mother lodged an objection to the decision that she was no longer an eligible carer entitled to child support and to the assessment of child support naming her as the liable parent.
On 24 July 2012 the mother’s objections to both decisions were disallowed.
On 20 August 2012 the mother applied to the SSAT for a merits review of the objection decisions.
On 23 October 2012 the SSAT reviewed the decision concerning the status of the binding child support agreement. It overruled the objection decision and held that the agreement continued in force.
On 29 November 2012 the father filed a Notice of Appeal against the SSAT decision and on 6 December 2012 he applied pursuant to s.111C of the Child Support (Registration & Collection) Act (1988) for a stay on the collection of payments pending the hearing of the appeal. A stay order was made on 25 January 2013.
On 17 March 2013 the SSAT ruled that the decision by the CSA to issue a formula assessment against the mother was ultra vires. The father has not appealed that decision but if he is successful either with his SSAT Appeal or with his s.136 (2) application he could presumably make a fresh application to the CSA for a formula assessment to issue.
The mother relocated to Melbourne at the end of September 2012. She did not attempt to reach any agreement with the father before she went about future arrangements for [X] to spend time with her and [X] spent no time with her immediately after her relocation.
Following the 23 October 2012 SSAT decision the mother contacted [X] and proposed to him that she start coming to Newcastle for two week blocks on a regular basis and that [X] live with her during those two week blocks.
[X] initially agreed to the proposal in principal but shortly afterwards expressed concern about it. The mother proposed that she and [X] would live at [omitted] Caravan Park during the visits and [X] indicated that he was concerned about this and suggested stays with the mother of a shorter duration.
The proposed regular time in Newcastle never eventuated. It was common ground at the hearing that [X] had spent only six nights with the mother between January 2013 and July 2013 and in her affidavit filed on 12 August 2013 the mother conceded that she and [X] were currently estranged.[5]
[5] Mother’s affidavit filed 12 August 2013 paragraph 174
The law applicable to the binding child support agreement
Pursuant to amendments to the Child Support (Assessment) Act which came into force on 1 July 2008 parents can to take themselves out of the regime of formula assessments by entering into either limited or binding child support agreements.
The mother and father decided to enter into a binding child support agreement and they used a pro forma document prepared by the CSA to create the agreement.
The agreement they signed on 31 July 2008 satisfied the requirements of s.80C (2) of the Assessment Act necessary to make it a binding child support agreement. The agreement was in writing, it was signed by the parties, it contained a statement saying that the parties had received legal advice about the effect of the agreement on their rights and the advantages and disadvantages to them at the time the advice was provided of making the agreement, certificates of legal advice were annexed to the agreement and after it was signed a copy was provided to both parties.
The parties applied to the Registrar pursuant to s.88 of the Assessment Act for acceptance of the agreement and it was accepted pursuant to s.92.
Following acceptance of the agreement the Registrar was required by s.94 to immediately take such further action (if any) as was necessary to give effect to the agreement.[6] In the case of this particular agreement the Registrar was required by s.34B of the Assessment Act to assess the annual rate of child support for the children immediately after accepting the agreement and pursuant to s.95 was required in doing this to have regard to the terms in the agreement for the payment of periodic child support.
[6] Counsel for the Child Support Registrar explained in comprehensive submissions why s.93 had no application to this agreement but it is unnecessary for the purposes of this judgment to explain that in detail.
Weekly child support thus became payable for the children from 31 July 2008 as set out in the agreement.
The Registrar was also required by s.146B to make a provisional notional assessment in other words to make a formula assessment instead of an assessment in terms of the agreement. However as s.146A makes clear the provisional notional assessment was relevant only to working out eligibility for family tax benefit payments. It had no bearing on the amount the father was required to pay the mother.
The pro forma document the parties used to create their agreement asked them whether they wished to specify a date on which the agreement was to end for each child. The parties decided to specify a date and the date they used for each child was the date of their 18th birthday. In the case of [X] it was [date omitted] 2014.
That date has not yet arrived but that is not necessarily the end of the matter.
Pursuant to s.95 of the Assessment Act the provisions in the agreement which require the father to pay periodic child support have effect as if they were an order made by consent under Division 4 of Part 7 of the Act, and Counsel for the Child Support Registrar submitted that this meant that s.142 of the Assessment Act applied to the agreement.
S.142(1) provides that court orders cease to have effect among other things if:
(a)A child support terminating event happens in relation to a child; or
(b)If there is a carer entitled to child support a child support and a liable parent - a child support terminating event happens in relation to the carer entitled to child support, the liable parent or all three of them;
Child Support terminating events are defined in s.12 of the Assessment Act. Pursuant to s.12(4)(a) the termination date in the agreement is one such child support terminating event, but there are others, including a child dying or both parents ceasing to be eligible carers.
The mother submitted that s.12 had no application in this case because the agreement contained its own provision about the date of termination i.e. 14 December 2014. However I accept the submission of Counsel for the Child Support Registrar that s.12 applies. Any other interpretation would lead to an untenable situation such as that if a child died or commenced living away from home in a de facto relationship at the age of 17 the agreement would continue in force until the termination date in the agreement.
As s.12 stands today it makes no difference whether it applies or not, because there is no terminating event in s.12 applicable to the agreement except for the termination date specified in the agreement which has not yet arrived. However s.12 was amended effective 6 January 2009 and on 31 July 2008 it contained s.12 (2) (b) which provided that one parent ceasing to be an eligible carer was a child support terminating event.
“Eligible carer” is defined in s.7B of the Act as a person who has at least shared care of the child and s.5(3) of the Act provides that a person is taken to have shared care if they have at least 35% and not more than 65% care of a child.
The mother’s care of [X] dropped to about 16% on 23 April 2012 and if s.12 had not been amended the reduction in [X]’s time with the mother on 23 April 2012 would have terminated the agreement.
Counsel for the Child Support Registrar submitted that it was clear beyond doubt that s.12 as it stood on 23 April 2012 and not as it stood at the time the agreement was signed applied to the agreement because Item 29 of the amending legislation provided that the amendments applied in relation to child support terminating events which happened on or after the amendments.
In additional support for this submission Counsel for the Child Support Registrar referred to S.11(1)(b) of the Acts Interpretation Act (1901) and to the following passage in the judgement of Brennan CJ, Dawson & Toohey JJ in Commissioner of Stamps v Telegraph Investment Co Pty Ltd:
Both the Act which is amended and the amending Act are to be read together as a combined statement of the will of the legislature. Thus the effect of the amending Act may be to alter the meaning which remaining provisions of the amended Act bore before the amendment.
Whatever meaning s 24 of the South Australian Stamp Duties Act may have had before the amendment of s 23, it must now be construed in the light of that amendment. [7]
[7] Commissioner of Stamps v Telegraph Investment Co Pty Ltd (1995) 184 CLR 453:
I accept that the current version of s.12 applies to the agreement.
The final relevant matter to note is that the 2006 amendments which created binding child support agreements made it deliberately difficult for a party to escape from such an agreement because of a change of circumstances.
S.80CA provides that a binding child support agreement cannot be varied.
S.80D provides that the agreement can be terminated but only by a provision in a new binding child support agreement to the effect that the previous agreement is terminated or by a termination agreement.
S.136(2) provides that a court may on the application of a party set a binding child support agreement aside but only in limited circumstances.
The SSAT review decision
The SSAT conducted an inquiry into the mother’s application for a merits review of the decision of the objections officer concerning the continued applicability of the agreement.
The mother submitted to the Tribunal that the objections officer was in error because the agreement could only be ended by a written agreement, an order of the court pursuant to s.136(2) or a terminating event and that as none of those things had occurred the agreement remained enforceable.
The mother submitted that nothing in the legislation allowed the CSA to override the agreement and issue a formula assessment against her.
The father made no submissions to the Tribunal about the correct interpretation of the law.
The Tribunal agreed with the mother and held that:
i)the agreement had been accepted by the Child Support Registrar as a binding child support agreement;
ii)once the agreement was accepted child support had to be calculated in accordance with the agreement;
iii)s.80C of the Assessment Act provided that the provisions of the agreement could not be varied and that the agreement could only be terminated by a termination agreement, a new binding child support agreement providing for termination of the earlier agreement or an order of the court.
iv)None of the above had occurred and therefore the agreement continued to bind the parties.
The Tribunal considered the issue of whether s.12 applied to the agreement and was satisfied that it did. It noted that s.12 as it stood when the agreement was signed on 31 July 2008 meant that the mother’s care of [X] falling below 35% would have constituted a child support terminating event but it was satisfied that the current version of s.12 applied.
It referred to the fact that the amending legislation (Item 29 of the Families, Housing, Community Services and Indigenous Affairs and Other Legislation Amendment (Further 2008 Budget and Other Measures) Act 2008) provided that the amendment applied:
In relation to a child support terminating event that happens on or after the commencement of [the amending] items.
The change in [X]’s care arrangements on 23 April 2012 was not a child support terminating event pursuant to s.12 as it stood on that day and therefore consideration of s.12 did not alter the conclusion that the agreement remained enforceable.
The Tribunal rejected the validity of the reasoning of the objections officer which involved consideration of the provisional notional assessment carried out pursuant to s.146B. It said that while there was clearly a requirement in the legislation for a provisional notional assessment to be made s.146A made it clear that the purpose of that assessment was for family tax benefit purposes. There was nothing in the Assessment Act which suggested that the provisional notional assessment in any way affected payment of child support under a binding child support agreement.
The Tribunal asked itself whether s.39B of the Child Support (Registration & Collection) Act (1988) had any relevance. This section allows the payer and payee of an enforceable maintenance liability covered by s.17(1) of the Registration & Collection Act to jointly elect, in circumstances where the payee ceases to be the main provider of ongoing daily care for a child, to have so much of the liability as is attributable to the child no longer enforced during the period when the payee is not the main provider of ongoing daily care.
The Tribunal noted that there had been no joint application in this case and held that s.39B of the Registration & Collection Act did not apply.
The Tribunal set aside the decision of the objections officer and substituted a new decision that child support for [X] continued to be payable by the father to the mother in accordance with the terms of the agreement.
The father’s appeal against the SSAT decision
The father lodged an appeal against the SSAT decision as permitted by s.110B of the Child Support (Registration & Collection) Act (1988) which provides that:
A party to a review by the SSAT under Part VIIA may appeal to a court having jurisdiction under this Act, on a question of law, from a decision of the SSAT on that review under section 103S.
If the SSAT decision is considered in the context of the exposition of the law set out earlier then the decision is unimpeachable but the father attempted to argue something new and his arguments all involved an attempt to have s.12 as it was on 31 July 2008 apply to the agreement.
The father’s grounds of appeal were as follows:
i)Under common law the Binding Child Support Agreement (contract) as signed by the Appellant 31/7/2008 is governed by the legislation in force at the time the contract is made;
ii)under common law the contract can only be changed if agreed to by all signatories to the contract;
iii)the binding child support agreement as signed by the Appellant does not state that it is subject to future changes in Government Legislation nor was advice to this effect given from the legal advice received 14/8/2008;
iv)Amending legislation that came into effect 6/1/2009 repealing s.12(2)(b) did not consider the conflict created by removal of key mechanisms to binding child support agreements [contracts] signed prior to the amending legislation becoming law;
v)The SSAT decision of 1/11/2012 in parts 17-20 of the decision correctly interpreted the current Child Support Legislation in relation to subsection 12, but did not consider the issue in regard to the effect of common law on this contract.
vi)The binding child support agreement [contract] as signed by the Appellant 31/7/2008 has been changed by Government legislation without the agreement of all signatories to the contract thus making the contract invalid.
Out of what seems an excessive desire to be fair to the father Counsel for the Child Support Registrar extracted from the father’s affidavit filed on 19 July 2013 a possible additional ground of appeal namely that a note on page two of the pro forma document used by the parties was a fundamental condition of the agreement.
The note appears under the heading “Who is Eligible to Apply” and reads as follows:
The person who will receive the child support payments must have at least shared care of the children. This means they must care for the children at least 35% of the time.
The father’s submissions
The father’s submissions in respect of the SSAT Appeal were largely a re-iteration of his grounds of appeal with reference to a seminal case concerning the implication of terms into a contract.
The father relied on the contents of some of the pro forma document, because some of the words used in that document gave strength in the father’s eyes to his argument that the binding child support agreement was a contract.
Under the heading “IMPORTANT” at the start of the document the following appears:
A child support agreement is a contract between parents and a non-parent carer.
Under the heading “Agreement Notes” at the end of the document following appears:
an agreement is a contract
The mother’s submissions
The mother re-iterated the submissions she made to the SSAT and submitted that the Tribunal had not made any error of law.
The Child Support Registrar’s submissions
Counsel for the Child Support Registrar provided very comprehensive and helpful submissions which meticulously addressed each of the father’s grounds of appeal.
I do not intend to outline the submissions in relation to each of the father’s grounds of appeal in detail. It is enough to note that Counsel submitted that the agreement was a creature of statute, that the entire agreement was embodied in the document signed by the parties and that the various sections of Assessment Act were an environment in which the agreement existed and which bore on its interpretation but were not part of the agreement as such.
Counsel for the Child Support Registrar submitted that the amendment of s.12 did not alter the terms of the agreement because s.12 was never a term of the agreement.
Counsel for the Child Support Registrar submitted that the notes on the pro-forma agreement simply provided information about the legislative environment in which the agreement operated and did not constitute terms of the agreement.
Counsel for the Child Support Registrar submitted that the father had not demonstrated that the Tribunal had made any error of law and that the appeal had to be dismissed.
Conclusion about the SSAT Appeal
The Tribunal could hardly be blamed for failing to consider arguments which the father failed to make during the SSAT hearing and which the SSAT could not reasonably have anticipated and in any event creative as the father’s arguments are they must fail.
It is regrettable that the CSA chose to use the word “contract” in their pro forma document. Presumably they did so with a view to ensuring that parties understood the solemn and binding nature of the agreement they were about to sign but nowhere in the Assessment Act itself does the word “contract” appear.
S.90KA of the Family Law Act which deals with the validity and enforceability of binding financial agreements has no equivalent in the Assessment Act. S.90KA provides as follows:
The question whether a financial agreement or a termination agreement is valid, enforceable or effective is to be determined by the court according to the principles of law and equity that are applicable in determining the validity, enforceability and effect of contracts and purported contracts, and, in proceedings relating to such an agreement, the court:
(a)subject to paragraph (b), has the same powers, may grant the same remedies and must have the same regard to the rights of third parties as the High Court has, may grant and is required to have in proceedings in connection with contracts or purported contracts, being proceedings in which the High Court has original jurisdiction; and
The submission by Counsel for the Child Support Registrar that child support agreements are creatures of statute not of common law is absolutely correct, and this disposes of ground 1 of the father’s appeal.
I also accept the submission of Counsel for the Child Support Registrar that s.12 as it stood on 31 July 2008 did not form part of the agreement, rather it was part of the legislative environment in which the agreement operated, and this disposes of ground 2.
There was no requirement that the binding child support agreement should state that it was subject to future legislative changes, nor was the father’s legal representative required to advise him of this in so many words and this disposes of ground 3.
The Tribunal could not have been expected in any event to deal with an argument that the agreement was not valid because the father failed to receive the required legal advice when there was no evidence before it about any such issue.
Ground 4 is not a valid ground of appeal. It complains about the draftsman’s or perhaps the Government’s actions in amending the Assessment Act but this does not invalidate the amendments or change their effect on the agreement.
Ground 5, as Counsel for the Child Support Registrar pointed out, is a repetition of either ground 1 or ground 2.
Ground 6 is a repetition of Ground 2.
The additional ground extracted by Counsel for the Child Support Registrar also cannot succeed. The note was not part of the agreement, it was a statement to the parties about the law which existed at the time they entered into the agreement. The existence of this note may have relevance to the father’s s.136 (2)(d) application but it does not alter the fact that the agreement is a creature of statute and must be interpreted in the light of the statutory provisions existing at the time interpretation is required.
Conclusion about the SSAT Appeal
The SSAT decision contains no error of law and the father’s appeal against the decision must be dismissed.
The s.136 (2) application
The father’s second application was for the agreement should be set aside pursuant to s.136 (2) of the Assessment Act.
S.136 relevantly provides that:
(1)A party to either of the following agreements may apply to a court having jurisdiction under this Act for the court to set aside the agreement:
(a)a child support agreement that has been accepted by the Registrar under section 92 or 98U;
..................................
(2)If a party has applied under subsection (1), the court may set
aside the agreement in accordance with the application if the court is satisfied:
(a)that the party's agreement was obtained by fraud or a failure to disclose material information; or
(b) that another party to the agreement, or someone acting for another party:
(i)exerted undue influence or duress in obtaining that agreement; or
(ii) engaged in unconscionable or other conduct;
to such an extent that it would be unjust not to set aside the agreement; or
(c)(omitted as relevant only to limited child support agreements)
(d) in the case of a binding child support agreement--that because of exceptional circumstances, relating to a party to the agreement or a child in respect of whom the agreement is made, that have arisen since the agreement was made, the applicant or the child will suffer hardship if the agreement is not set aside.
s.136(2)(a)
In the affidavit which she filed on 24 January 2013 before the father filed his s.136 application the mother said that she was thinking about moving to Melbourne prior to signing the 2008 agreement and that she made the father aware of this.
In his affidavit filed on 6 March 2013 the father said that the mother had not made him aware of this and he seized on it to argue that the mother had failed to disclose material information (s.136(2)(a)).
The mother subsequently provided evidence that she did make the father aware prior to the agreement being signed that she was contemplating moving to Melbourne and she said that in any event they were thoughts only in 2007/8. She did not form a definite intention to relocate until five years later in 2012.
In his 19 July 2013 affidavit the father said that he now accepted that the mother had mentioned to him that she had thought of moving to Melbourne prior to the agreement being signed and that he no longer sought to rely on an argument that the mother had failed to make disclosure of material information.
s.136(2)(d)
The father’s case turns on whether s.136 (2) (d) is enlivened and in order to determine an application pursuant to s.136(2)(d) the court must consider:
i)Whether since the agreement was signed circumstances of an exceptional nature have arisen relating to a party to the agreement or a child in respect of whom the agreement is made;
ii)Whether as a result the applicant or child will suffer hardship if the agreement is not set aside;
iii)If so whether in the exercise of its discretion the court should set the agreement aside.
I will consider each of these matters in turn.
The parties submissions about whether circumstances of an exceptional nature had arisen since the agreement was signed
The father submitted that the change of living arrangements for [X] in April 2012 and the mother’s subsequent move interstate amounted to exceptional circumstances. The mother’s care of [X] dropped to 16% in April 2012 and was 2% in 2013, and there was no prospect of any return to the previous arrangements for [X]’s care.
The father also submitted that the amendment to s.12 of the Assessment Act was relevant.
When the parties signed the agreement on 31 July 2018 s.12 provided that a party ceasing to have shared care of a child (defined as less than 35% care) constituted a terminating event.
This was reinforced to the parties by the contents of the pro-forma document prepared by the CSA which stated prominently that in order for a parent to be entitled to child support they must have at least 35% care of the children.
This was the legislative environment in which the father committed to the agreement.
The mother submitted that the prime objective of the legislature in creating binding child support agreements was to allow parties to create certainty about what would happen in the future. She said that she signed the agreement to put an end to debilitating hassles over applications for change of assessment and pressure being exerted on the children about the number of nights they would spend with each parent.
The mother submitted that the change in [X]’s care arrangements including the change consequent on her moving interstate was foreseeable and was one of the ordinary vicissitudes of life. She said that:
In my opinion there is nothing exceptional in the circumstances that when a parent moves to a new city or interstate that teenage children of that parent will not want to go with them. This has happened with friends of both [C] and [X]. In my case I neither could, nor would, force my children to move. Again there is nothing exceptional about that choice.[8]
[8] Mother’s affidavit filed 12 August 2013 paragraph 177
The mother asked me to have regard to cases decided in applications under s.79A(1)(d) of the Family Law Act for final property orders to be varied or set aside.
S.79A(1)(d) provides that the court may in its discretion set aside or vary final orders on the grounds that in the circumstances that have arisen since the making of the orders being circumstances of an exceptional nature relating to the care welfare and development of a child of the marriage, the child or, where the applicant has caring responsibility for the child the applicant, will suffer hardship if the court does not vary the order or set the order aside and make another order in substitution for the order.
The similarities between s.136(2)(d) and s.79A(1)(d) are plain to see and the mother referred me in detail to a number of decisions in which the court had declined to set aside the property orders on the basis of children’s change of residence after the orders were made.[9]
[9] Christian & Donald (2008) FamCAFC 18 April 2008; Simpson & Hamlin (1984) FLC 91-576
Discussion about exceptional circumstances
The issue of what constitutes exceptional circumstances for the purpose of s.136 (2) (d) has been considered in many first instance decisions.
In Daley & Daley Federal Magistrate Brown (now Judge Brown) referred to the fact that using the dictionary definition of exceptional the circumstances must be “of the nature of or forming an exception; unusual, out of the ordinary; special; (of a person) unusually good, able, etc.”
Judge Brown expressed the view that changes which were part of the normal vicissitudes of life might not justify the parties asking the court to set aside the agreement.[10]
[10] Sandrk & Sandrk (1991) FLC 92-260 at 78,750
In Keane & Keane Watts J helpfully said as follows:
When considering whether or not “exceptional circumstances” exist:
40.1. the whole circumstances have to be taken into account;
40.2.it may be that one circumstance alone cannot be described as exceptional but the whole of the circumstances, when looked at cumulatively, might be described as exceptional (see Gallup & Gallup [2009] FMCAfam 839);
40.3. within a particular context whether something is exceptional is a matter of “fact and degree” (see Simpson & Hamlin (1984) FLC 91-576);
40.4.care must be taken to avoid placing any “gloss” on the word “exceptional” as used in legislation (see Garning & Director-General, Department of Communities, Child Safety and Disability Services & Anor [2013] FamCA 28);
40.5.the words “that have arisen since the agreement was made” in s 136(2) (d) CSAA direct the Court’s attention to the circumstances that existed at the date the agreement was made and towards an inquiry as to what exceptional circumstances have arisen since the date of the agreement which would result in the applicant or the child suffering hardship if the agreement was not set aside.
The mother’s arguments centred on the fact that it was entirely foreseeable that [X]’s living arrangements might change after the agreement was signed. She strongly submitted that it did not matter how or why the change had come about, it was foreseeable, and the s.79A(1)(d) cases made it plain that if a change was foreseeable (and a change in the care arrangements for children is almost always foreseeable) then the change could not amount to exceptional circumstances.
The mother referred to cases where children changed residence much sooner than [X] and where the applications to vary or set aside the property orders were not successful.
For a number of reasons I do not accept the mother’s arguments and am satisfied that exceptional circumstances have arisen since the agreement was signed and first arose on 23 April 2012.
I accept that a change in the care arrangements for a child after an agreement is signed is foreseeable, but that alone does not mean that such a change can never amount to exceptional circumstances.
The change in care arrangements for [X] in April 2012 did not amount to a change of one or two nights but to a radical revision in his care arrangements. The mother’s percentage care of him dropped to 16% on 23 April 2012 and since January 2013 has been 2%.
The change did not come about because of any behaviour by the father to inveigle [X] out of the mother’s care, let alone any undermining behaviour by him designed to impact on his child support obligations. The change was instigated suddenly by the mother.
It was the mother who moved interstate in September 2012 without making any arrangements with the father before she went to spend fixed and regular time with [X]. Her relocation was the catalyst for a further dramatic reduction in her time with [X].
The mother said that she did not walk away from [X] and was quite content to come back to Newcastle and live here in discrete periods sufficient to allow [X] to spend 40% of his time with her, but it was clear during the hearing that the mother’s plans in this regard were unrealistic and not focused on [X]’s needs.
The mother complained that the father caused difficulties by insisting on [X] spending the weekend of 15 December 2012 with him rather than the mother and insisting that [X] take his dog on visits with the mother but I do not accept that these issues were responsible for the mother spending almost no time with [X] thereafter. The mother’s proposal for spending time with [X] for blocks of two weeks in rented accommodation was unrealistic and it is not surprising at all that nothing came of this.
The s.79A(1)(d) cases to which the mother referred me can be distinguished because in those cases the phrase “exceptional circumstances” was considered in the context of whether it was appropriate to set aside or vary property orders, not whether it was appropriate to set aside a child support agreement.
The effect of the change which occurred in this case has to be considered in the context of the child support legislation and it was so dramatic that unless the agreement is set aside the financial arrangements for [X] will be completely out of kilter with the objects and principals of the Assessment Act.
S.3 of the Assessment Act provides that:
The parents (plural, my emphasis) of a child have the primary duty to maintain a child
S.4 the Assessment Act provides that:
Objects of Act
(1) The principal object of this Act is to ensure that children receive a proper level of financial support from their parents.
(2) Particular objects of this Act include ensuring:
(a) that the level of financial support to be provided by parents for their children is determined according to their capacity to provide financial support and, in particular, that parents with a like capacity to provide financial support for their children should provide like amounts of financial support
If the agreement is not set aside then even allowing for a small financial contribution by the mother if [X] spends time with her in the future the father will be providing almost 100% of the financial support for [X] and almost 100% of the care, and yet instead of the mother paying child support to the father as the objects and principals of the Assessment Act together with her income suggest would ordinarily occur the father will be required to pay the mother $236.63 per week for 2.8 years, equating to $30,000.00, in circumstances where she had made only a trifling outlay to the costs of supporting [X].
I also consider it relevant that the legislation changed after the agreement was signed.
There is a difference of opinion in the first instance cases about whether the fact that amendments to the Assessment Act which came into force on 1 July 2006 and turned certain then existing child support agreements into binding child support agreements and thus made them much more difficult to change is relevant to determining whether exceptional circumstances have arisen since the agreement was signed.
In Daley & Daley Judge Brown held that a retrospective legislative change could, when taken with other matters, combine to constitute exceptional circumstances. He said as follows:
I do not think that it can be conceivably possible that the parties, when they entered into the child support agreement in February of 2005, foresaw the possibility that the legislature would so radically modify the method of calculation and collection of child support in Australia or the extent of the changes made to the legislative provisions in respect of child support agreements.[11]
In my view, the combination of these factors takes this case out of the ordinary run of cases and make it an exception. The child support agreement, which the parties entered in early 2005 cannot be regarded as being strictly analogous to a binding child support agreement entered into after 1 July 2008, particularly in the absence of independent legal advice. Exceptional circumstances have arisen which justify it being set aside.
[11] Daley & Daley (2009) FLC 98-039
In Keane & Keane Watts J disagreed with this approach and said as follows:
I am of the view that if the legislature had intended that the court be able to take into account the fact that a child support agreement was not binding at the time the parties entered into it as a relevant circumstance when assessing whether exceptional circumstances existed, the legislation would have either:
72.1. indicated that that was a factor to take into account when making that determination;
72.2. or created a different test for transitional agreements (as they have done for transitioning State de facto financial agreements (see s 90UM(1)(k) and s 90UM(5) FLA)).
The legislature did neither of these things. When considering setting aside a binding child support agreement, the legislation draws no distinction arising from the method by which a child support agreement has become binding. I do not think the retrospective nature of the legislation is a relevant matter when considering the “exceptional circumstances” test.
I have to consider a different legislative change namely the removal of s.12(2)(b) from the Assessment Act after an agreement was signed but the same principals ought to apply in determining whether the change in legislation is something I can take into account in determining whether exceptional circumstances have occurred, and I prefer the reasoning of Judge Brown in this instance.
There can be no doubt that legislative change is a change of circumstances. The drafters of the Family Law (Family Violence) Amendment Act accepted this and made the following provision in that legislation to forestall applications to vary or discharge parenting orders made prior to the amendments:
The amendments made by this Schedule are taken not to constitute changed circumstances that would justify making an order to discharge or vary, or to suspend or revive the operation of, some or all of a parenting order that was made before commencement.
I accept that the legislative draftsman deliberately chose not to preserve s.12(2)(b) for existing child support agreements when the legislation changed on 6 January 2009, but I am not satisfied that this means that the change of legislation cannot be taken into account when considering whether exceptional circumstances have arisen. There is nothing to indicate that the legislative draftsman made a deliberate choice about how to deal with the situation and it is possible, if the draftsman turned his mind to it at all, that he considered that the “out” of exceptional circumstances would deal with the issue in any particular case.
In assessing whether the change in the legislation in this case is sufficient either by itself or combined with other factors to constitute circumstances of an exceptional nature I take the following into account.
The possibility that the law will change is foreseeable and it could be argued that this possibility in a general sense is something which a person weighing the risks and benefits of signing a child support agreement can be assumed to have taken into account, and that they cannot complain if the legislative change has an adverse impact on them.
However just as the impact in this case of a change in a child’s care arrangements has to be considered on its merits the impact of a change in the legislation in this case after the agreement was signed also has to be considered on its merits.
The father bought certainty for himself when he signed the agreement and this was potentially advantageous to him. It fixed the amount of child support he had to pay and if his income increased or [X] began to spend less time with him his child support would remain the same. Fixing the amount of child support also had an advantage for him in that it allowed him to make other financial decisions without needing to worry that the amount of child support might vary.
The father of course took a risk that the agreement might prove disadvantageous to him, for example if his income decreased or [X] began to spend more time with him but the mother also took a risk in signing the agreement. She sacrificed her right to have the payment regime change if circumstances changed.
Against that background it is entirely reasonable and just that it should be difficult for one party to get out of the agreement because of a change of circumstances.
The situation is somewhat analogous to one where a person decides to take out a fixed interest home loan rather than a variable home loan. Before making that decision the person weighs the risks. They decide that on balance there is a good chance that the decision will work to their advantage. There is a foreseeable risk that it will not and the person signing up for the fixed home loan well knows that they will not be able to get out of the loan if it does not.
In the context of binding child support agreements however there is an out if exceptional circumstances can be established, and in this case the father decided to take the risk of locking himself into a binding child support agreement against the background that the agreement would be terminated if the mother’s care of [X] reduced below 35%. He could not have anticipated a change of legislation which meant that the mother’s care could reduce to zero and his increase to 100% and yet he would remain locked into the agreement.
Not only that the pro-forma agreement which the parties signed included the following at the commencement of the agreement:
The person who will receive the child support payments must have at least shared care of the children. This means they must care for the children at least 35% of the time
A lay person reading something like this on a form prepared by the CSA could be forgiven for believing, no matter how much legal advice they received, that this plank would not be pulled out from under them after they signed the agreement and that a situation could not arise where they would be obliged to pay child support to the other party when there had been a major change in care arrangements.
I am satisfied that the radical change in [X]’s care arrangements instigated by the mother on 23 April 2012 when considered in the context of the purposes of the child support legislation was an exceptional circumstance in itself, and there has been no change in the care arrangements since then leading to the child spending more time with the mother rather the reverse has occurred and his time with his mother has steeply declined.
The additional factor of the change of the legislation in my view puts beyond doubt that circumstances of an exceptional nature have arisen in this case since the agreement was made.
Hardship
That is not the end of the matter however because s.136(2)(d) only allows the court in the exercise of its discretion to set the agreement aside if exceptional circumstances have arisen which would result in the applicant or the child suffering hardship if the agreement was not set aside.
The father is 56 and is an [occupation omitted] with an income of $192,088.00 per annum. His financial statement shows that he has net assets of about $1.16m and an excess of income over expenditure even once the payment he is supposed to be making to the mother is taken into account.
He submitted that he would suffer hardship if the agreement was not set aside because it would take him longer to pay off his house.
The mother argued that someone who was earning $198,000.00 per year, who had assets and superannuation worth of over $1.16m and whose financial statement indicated that he could pay the required child support of $236.00 per week without going into deficit could not possibly argue that he would suffer hardship or that the child would suffer hardship of the agreement was not set aside.
In support of her argument the mother referred me to Leonard & Leonard in which Federal Magistrate Lapthorn (now Judge Lapthorn) declined to set aside a binding child support agreement because he was not satisfied that the father would suffer hardship if the agreement was not set aside.[12]
[12] Leonard & Leonard [2010] FMCAfam 390
In that case a change of residence had resulted in a child spending two more nights a fortnight with the payee father. The agreement was signed before the change of legislation in 2006 and Judge Lapthorn was satisfied that the change in the number of nights when combined with the change in the legislation which the parties could not have foreseen meant that exceptional circumstances had arisen. However he was not satisfied that the father would suffer hardship if the agreement was not set aside and said as follows:
[The husband’s counsel] conceded that the husband’s circumstances were not desperate but argued that they were not unlimited. Maintaining the agreement may see the father paying around $100,000.00 more than he might have been required to pay if an administrative assessment issued. Such a sum is significant for most people including the father. However I have already found that his financial position is better now than when he entered into the agreement. When he entered into the agreement he had already consented to property orders that altered his assets and liabilities and would have had regard to his income at the time. Being satisfied that his financial position is better now than it was then and that the change in caring for the children amounts to only one day a week I am not persuaded that he will suffer hardship if the agreement is not set aside. Nor will the children.
Judge Lapthorn focused on financial hardship in this passage but he recognized earlier in his judgment that hardship meant more than that and the flaw in the mother’s argument is that it assumes that hardship means financial hardship.
The meaning of the word hardship has been considered on many occasions in the context of applications pursuant to s.44(3) of the Family LawAct for an extension of time to file property settlement proceedings and the Full Court has stressed in various cases that the word hardship is not to be so narrowly confined.
In Whitford & Whitford the Full Court said as follows:
Hardship may be caused to an applicant if leave is not granted to institute proceedings, although the applicant is not in necessitous circumstances. Whatever the financial situation of an applicant may be, his or her loss of a prospective entitlement to property including money, or his or her inability to have the financial and property relations of the parties adjusted or resolved, may constitute hardship.
.....
Where then circumstances make it just, that the financial or property interdependence of the parties be terminated, hardship may be caused to an applicant if leave to institute proceedings is not granted.[13]
[13] Whitford & Whitford (1979) FLC 90-612
I am satisfied that unless the agreement is set aside the father will suffer hardship in the sense of being required to make a payment to the mother in circumstances not contemplated by the child support legislation.
He will also suffer hardship in not being able to obtain a contribution from the mother to the costs of caring for [X]. This is not a financial hardship given his income but it is a hardship nevertheless because it is unjust that the mother should not make a contribution if she is capable of doing so.
Whether the court should in the exercise of its discretion set the agreement aside
Even if exceptional circumstances are established and hardship is established the court must still give real consideration to whether in the exercise of its discretion it should set the agreement aside.
The fact that the court must separately and carefully consider this issue was emphasised in Simpson & Hamlin, a s.79A case in which the wife made an application to set aside a final property order.
The Full Court said as follows:
As Mason J. made clear in the passage in Taylor v. Taylor (1979) FLC ¶ 90-674 at p. 78,595; (1979) 25 A.L.R. 418 at p. 429 :
What sec. 79A (1) does is to give the court a discretion to set aside an order when it has been obtained by false evidence. In such a case the court will be extremely reluctant to exercise its discretion in favour of setting aside the order unless something more appears than that false evidence has been given and has procured the making of the order.
The importance of bringing an end to litigation and the evil of allowing cases to be retried on the same evidence are powerful deterrents against setting aside a judgment whenever it appears that it has been obtained by false evidence without more. Where, however, more appears, as, for example, that the judgment was obtained ex parte without the benefit of the evidence to be given by one of the parties, then the court will the more readily exercise its discretion in favour of setting aside the judgment. Then the setting aside of the judgment will not result in a retrial on the same evidence but in a trial on the evidence given by both parties.
The importance of separately and carefully considering whether to exercise the discretion has also been emphasised in cases involving applications to extend time for filing an application. In those cases matters such as the delay in bringing the application, the prejudice to the respondent if leave is granted and the degree of hardship are some of the matters which it has been held ought considered in determining whether to grant leave although there is no closed list of matters which might be relevant.[14]
[14] Whitford & Whitford (1979) 90-612
In the context of setting aside a binding child support agreement matters relevant to the exercise of discretion might include any delay in making the application, the prejudice to the other party in granting the application and an assessment of the degree of hardship although as has been stressed in the “out of time” cases other matters may be relevant in a particular case.
One matter raised by the mother which might potentially be relevant here is that it was her evidence that in making a decision to move to Melbourne she factored in that she would continue to receive child support pursuant to the agreement and planned to use it to fund regular trips to Newcastle and accommodation in Newcastle so that she could continue to spend substantial and significant time with [X].
It was the mother’s evidence that she had committed to coming back to Newcastle regular so that [X] could spend 40% of the time with her and that the only reason this had not happened was because the father had cultivated an attitude in [X] which made [X] reluctant to spend this time.
The mother agreed that [X] was distressed by her decision to move to Melbourne and that [X] was “extremely hurt and vulnerable and emotionally distant” as a result, but she blamed the father for her continuing inability to spend time with [X] and made the following submission:
[X] and I have always been close and [X] is suffering due to what I perceive is Mr Cheyne’s agenda that my contact level with [X] remains at a heartbreaking low percentage in order for Mr Cheyne to boost his case in order to have any chance of success at the “exceptional circumstances” prerequisite of section 136(2)(d).[15]
[15] Mother’s affidavit filed 12 August 2013 paragraph 67
Elsewhere in her affidavit the mother put it slightly differently stating that:
It is my opinion that the current state of estrangement between [X] and I was initially my fault due [to] me making the decision to move.
It is my opinion that it has been compounded by
Mr Cheyne’s words and actions and it has been done by
Mr Cheyne for the purpose of bolstering Mr Cheyne’s changes of satisfying the “exceptional circumstances” criteria of section 136(2)(d).[16]
[16] Mother’s affidavit filed 12 August 2013 paragraphs 174 & 175
However the mother’s claim that the father was responsible for her not spending much time with [X] was not supported by the evidence and during cross-examination it emerged that there were some complex family dynamics at play and that at present [X] was not spending time with the mother of his own choice.
Another potentially relevant matter is that the father did not file his s.136 (2) application until nearly twelve months after the change of residence. However this delay has not resulted in anyone being lulled into a false sense of security or altering their financial positions to their disadvantage.
The father has not made any payments to the mother pursuant to the agreement since 23 April 2012 so this is not a case where setting the agreement aside retrospectively will mean that the mother is required to make repayment to the father.
The father can be excused for not filing his application promptly by the fact that the CSA told him on 30 April 2012 that he did not need to and that they would not enforce the agreement.
Setting the agreement aside effective from 23 April 2012 will leave the mother open to a child support assessment effective from 23 April 2012 however and as two years have passed this could well mean that she will owe arrears of something like $4,350.00. The mother is 56 and is a retired [occupation omitted]. She receives a [omitted] pension in a reasonable amount and there was no evidence that a requirement to part with $4,350.00 would cause her financial hardship but she will no doubt find it unpleasant to have to come up with this money.
However the mother has been on notice since 30 April 2012 that the father seeks to make her liable for child support so again she has not been lulled into any false sense of security.
The father is in a stronger financial position than the mother and balancing the interests of the parties if I could set the agreement aside effective from the date of the father’s s.136(2) application without the father being liable to pay child support for the preceding twelve months I would and this would in turn reduce the mother’s liability.
It is not open to me however to set the agreement aside subject to conditions, analogous to granting a stay subject to conditions and there is no justification for setting the agreement aside at a later date than 23 April 2012 if it will result in the father being required to pay twelve months worth of child support to the mother for a period when she spent very little time with [X].
S.136(4) of the Assessment Act allows the court to consider making a departure order pursuant to s.117(1)(b) of the Assessment Act if it sets an agreement aside but none of the grounds of departure seem to me to apply to the fact situation in the case, so even absent the problem of not having sufficient evidence to consider a departure application I cannot use that option to resolve the difficulty.
The mother must have been aware all along of the consequences of opposing the father’s s.136 application and although she might argue that she genuinely believed that the law was on her side applying common sense to the problem ought to have given her cause for reflection. I do not accept the mother’s contention that the application of common sense has no place in legal disputes.
Additional matters
In her responses to the SSAT Appeal and the s.136 (2) application the mother sought orders for the enforcement of the agreement but given my decision it is unnecessary for me to consider making those orders.
The mother also sought orders for costs and in her lengthy submissions filed on 16 August 2013 pressed for an order that the father pay some disbursements she had incurred.
I do not intend to deal with the issue of whether any party should pay the costs and disbursements of any other at this time. If any party seeks an order concerning this they have 28 days from the date of this decision to make an application in that regard pursuant to r.21.02 of the Federal Circuit Court Rules.
For all of the above reasons the orders of the court are as set out at the beginning of this judgement.
I certify that the preceding two hundred and six (206) paragraphs are a true copy of the reasons for judgment of Judge Terry
Associate:
Date: 19 May 2014