Child Support Registrar v Afs19
[2021] FCAFC 207
•19 November 2021
FEDERAL COURT OF AUSTRALIA
Child Support Registrar v AFS19 [2021] FCAFC 207
Appeal from: Federal Circuit Court of Australia File number: VID 182 of 2021 Judgment of: GRIFFITHS, LEE AND WHEELAHAN JJ Date of judgment: 19 November 2021 Catchwords: FAMILY LAW AND CHILD WELFARE – where parents of a child entered into binding child support agreement pursuant to Child Support (Assessment) Act 1989 (Cth) – where father then objected to the agreement – where objection disallowed both by a delegate of the Child Support Registrar and by the Administrative Appeals Tribunal – where primary judge declared the agreement did not constitute a binding child support agreement pursuant to the Act – consideration of the statutory scheme – scheme concerned with ascertaining the agreement objectively entered by the parties – no role for the Registrar to conduct inquiries or investigations into agreement reached between the parties other than to its form – appeal allowed Legislation: Administrative Appeals Tribunal Act 1975 (Cth) s 44AAA(1)
Child Support (Assessment Act) 1989 (Cth) Pts 4, 5, 6, 6A, 7; ss 4, 35C, 66(8), 78, 79, 80C, 80E, 81, 84, 88, 89, 91, 92, 93, 95, 142, 150A; Sch 1
Child Support Legislation Amendment (Reform of the Child Support Scheme – New Formula and other Measures) Act 2006 (Cth) Sch 5
Child Support (Registration and Collection) Act 1988 (Cth)
Family Law Act 1975 (Cth) ss 71A, 90B, 90C, 90D, 90G, 90KA, 90UB, 90UC, 90UD, 90UJ, 90UN, 105(2A), Pt VII
Federal Circuit and Family Court of Australia Act 2021 (Cth) s 8
Federal Proceedings (Costs) Act 1981 (Cth) s 6
Explanatory Memorandum, Child Support Legislation Amendment (Reform of the Child Support Scheme – New Formula and other Measures) Bill 2006 (Cth)
Cases cited: Black v Black [2008] FamCAFC 7; 38 Fam LR 503
Pascot v Pascot [2011] FamCA 945
Senior v Anderson [2011] FamCAFC 129; 45 Fam LR 540
Woodland and Todd [2005] FamCA; 33 Fam LR 77
Division: General Division Registry: Victoria National Practice Area: Administrative and Constitutional Law and Human Rights Number of paragraphs: 96 Date of hearing: 16 November 2021 Counsel for the Appellant: Mr C Lenehan SC with Mr J Grant Solicitor for the Appellant: Sparke Helmore Counsel for the First Respondent: Dr R Smith Solicitor for the First Respondent: Kenna Teasdale Lawyers Counsel for the Second Respondent: The second respondent appeared in person ORDERS
VID 182 of 2021 BETWEEN: CHILD SUPPORT REGISTRAR
Appellant
AND: AFS19
First Respondent
AFT19
Second Respondent
ORDER MADE BY:
GRIFFITHS, LEE AND WHEELAHAN JJ
DATE OF ORDER:
19 NOVEMBER 2021
THE COURT ORDERS THAT:
1.The appeal be allowed.
2.The order made by the primary judge on 18 March 2021 be set aside and in lieu thereof it be ordered that the appeal from the decision of the Administrative Appeals Tribunal made on 5 December 2018 in relation to whether a Financial Agreement made on 8 April 2015 between the respondents contained a Binding Child Support Agreement for the purposes of Pt 6 of the Child Support (Assessment) Act 1989 (Cth) be dismissed.
3.The first respondent pay the appellant’s costs of the appeal.
4.The Court certifies for the purposes of s 6 of the Federal Proceedings (Costs) Act 1981 (Cth) (Costs Act) that, in the opinion of the Court, it would be appropriate for the Attorney-General to authorise a payment under the Costs Act to the first respondent in respect of such part as the Attorney-General considers appropriate of any costs incurred by that party in relation to the appeal.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
GRIFFITHS J:
I have the considerable advantage of reading the draft reasons for judgment of Lee J. I respectfully agree with his Honour’s reasons and proposed orders. I also gratefully adopt his Honour’s description of the relevant legislation and facts.
I wish to make some additional observations with a view to explaining why the primary judge erred in the manner identified by Lee J. In particular, I wish to highlight how the primary judge’s analysis and findings are not supported by the statutory scheme of the Child Support (Assessment Act) 1989 (Cth), nor with the legislative history of that scheme.
The statutory scheme summarised
The principal object of the Assessment Act is to “ensure that children receive a proper level of financial support from their parents” (s 4(1)). The Assessment Act seeks to ensure that, when parents divorce or separate, child support costs are shared between in accordance with the financial capacity of the parents, the costs of rearing the children, who provides daily care and any changes in the standard of living of both parents post-separation (s 4(2)). However, s 4(3) provides that it is Parliament’s intention to ensure that the attainment of these objects is to greatest extent consistent with enabling the Assessment Act:
(a)to permit parents to make private arrangements for the financial support of their children; and
(b)to limit interferences with the privacy of persons.
To achieve those objects, the Assessment Act provides two principal ways in which a carer of a child who is entitled to receive child support from a liable parent can apply to the Child Support Registrar to have this liability protected and enforced. They are:
(a)an application for an administrative assessment under Pt 4 of the Assessment Act (Div 1 of Pt 4); or
(b)an application for the acceptance of a child support agreement under Pt 6 of the Assessment Act (Div 3 of Pt 6).
If an application for an administrative assessment is accepted under Pt 4, the amount of child support payable by a liable parent is worked out in accordance with formulas in Pt 5, which in part rely upon The Costs of the Children Table published by the Secretary each year and which is contained in Sch 1 of the Assessment Act. These formulas consider matters such as the income of each parent and the percentage of care for the children by each parent.
Under an administrative assessment, the liable parent is liable to pay child support for the daily rate worked out in accordance with the assessment under Pt 5. This is due and payable 30 days after notice of the assessment is given to the liable parent, and thereafter on the seventh day of each following calendar month (s 78). If unpaid, this amount becomes a debt due and payable by the liable parent to a carer, and may be sued for and recovered in courts with jurisdiction for the recovery of such debts or a court having jurisdiction under the Assessment Act (s 79).
In contrast, Pt 6 of the Assessment Act allows the parents of a child to agree between themselves the child support payable for a child under a child support agreement. Under the statutory scheme, to be a child support agreement, an agreement must be a “binding child support agreement” or a “limited child support agreement” (s 81).
A binding child support agreement is defined in s 80C:
(1) An agreement is a binding child support agreement if:
(a)the agreement is binding on the parties to the agreement in accordance with subsection (2); and
(b)the agreement complies with subsection 81(2).
(2)For the purposes of subsection (1), an agreement is binding on the parties to the agreement if, and only if:
(a)the agreement is in writing; and
(b)the agreement is signed by the parties to the agreement; and
(c)the agreement contains, in relation to each party to the agreement, a statement to the effect that the party to whom the statement relates has been provided, before the agreement was signed by him or her, as certified in an annexure to the agreement, with independent legal advice from a legal practitioner as to the following matters:
(i)the effect of the agreement on the rights of that party;
(ii)the advantages and disadvantages, at the time that the advice was provided, to the party of making the agreement; and
(d)the annexure to the agreement contains a certificate signed by the person providing the independent legal advice stating that the advice was provided; and
(e)the agreement has not been terminated under section 80D; and
(f)after the agreement is signed, either the original agreement or a copy of the agreement is given to each party.
Note:For the manner in which the contents of a binding child support agreement may be proved, see section 48 of the Evidence Act 1995.
A limited child support agreement is defined in s 80E(1):
80E Making limited child support agreements
(1) An agreement is a limited child support agreement if:
(a)it is in writing; and
(b)it is signed by the parties to the agreement; and
(c)it complies with subsection 81(2); and
(d)either:
(i)it meets the conditions in subsection (2), (3) or (4), as the case requires, (assuming the agreement is accepted by the Registrar); or
(ii)it has been accepted by the Registrar under section 98U.
Note:In addition to the requirements in this section, there must be an administrative assessment in force in relation to the child in respect of whom the agreement is made (see subsection 92(3)).
…
Importantly, s 84(5) provides that nothing in Pt 6 of the Assessment Act is taken to prevent the same document being both a child support agreement and a “parenting plan”, a “maintenance agreement or financial agreement under the Family Law Act 1975”, or “a Part VIIIAB financial agreement”. An agreement under s 90UD of the Family Law Act 1975 (Cth) is a Pt VIIIAB financial agreement.
Once an application is made to the Registrar for acceptance of a child support agreement, the Registrar must accept the agreement if it has been properly made (s 92(1)). An application is properly made if it is in the manner specified by the Registrar (ss 89 and 150A) and the relevant agreement is a child support agreement (s 88). Pursuant to s 93(1), the acceptance of an agreement, where child support is not already payable for a child, has the same effect as the acceptance by the Registrar of an application for an administrative assessment of the child under Pt 4 and means that child support is payable for the child by the liable parent from the day on which the application for acceptance was made.
Where a child support agreement has been accepted by the Registrar and provides for periodic payment of amounts of child support, the provisions have effect, for the purposes of Pt 5 and s 142, as if they were an order made by consent by a Court under Div 4 of Pt 7 of the Assessment Act (s 95(2)). Div 4 of Pt 7 provides for a Court to make “departure orders”, namely orders departing from the provisions of the Assessment Act in relation to an administrative assessment of child support of a child. The practical effect of this is that s 35C provides that any administrative assessment under Pt 5 of the Assessment Act is subject to departure orders or “any provisions of a child support agreement that have effect, for the purposes of this Part, as if they were such an order made by consent” (see also s 66(8)).
Primary judgment and financial agreements under the Family Law Act
The primary judge at [123]-[124] relied upon the distinction drawn by the Full Court of the Family Court of Appeal in Senior v Anderson [2011] FamCAFC 129; 45 Fam LR 540 between a “financial agreement” under ss 90B, 90C and 90D of the Family Law Act and a financial agreement that is binding within the meaning of s 90G of the Family Law Act. Where a financial agreement is binding under s 90G, Pt VIII of the Family Law Act (which applies to property interests, spousal maintenance and maintenance agreements) do not apply to financial matters covered by such an agreement (s 71A). This means a spouse cannot apply for maintenance orders or declarations of interest in property under that Part where it is otherwise covered by a financial agreement which is binding under s 90G. Where a financial agreement is not binding, it is not a bar to orders being made under Pt VIII (see Woodland and Todd [2005] FamCA; 33 Fam LR 77). A similar distinction is made between financial agreements and financial agreements which are binding under Pt VIIIAB of the Act in relation to de facto relationships (see 90UJ).
In Senior, Strickland J stated at [97] (as quoted by the primary judge at [124]), that:
97I consider this distinction to be important to the issues in this appeal. In particular, the distinction is important with respect to the application of any remedies in contract or equity which might apply to a financial agreement, including, specifically, rectification.
As a result, the Court in Senior allowed rectification of aspects of the financial agreement which were not binding, but did not allow rectification of those aspects of the agreement that were binding under s 90G.
Drawing upon this distinction identified from Senior, the primary judge stated at [128] that a binding child support agreement operates similarly to the removal of a parties’ right of access to a Court to seek orders under Pt VIII or Pt VIIIAB of the Family Law Act with respect to binding financial agreements under ss 90G and 90UJ.
Other features of financial agreements under the Family Law Act are the provisions in s 90KA and 90UN, which provide that the validity, enforceability and effectiveness of financial agreements are to be determined according to principles of law and equity. The primary judge noted at [129] the absence of comparable provisions in the Assessment Act, but her Honour stated that this did not preclude her view that principles of law and equity do and must apply when determining whether a child support agreement is binding on the parties.
The primary judge concluded that the Tribunal had erred in finding there was no requirement for a “specific and expressed intention that an agreement be a binding child support agreement”. Her Honour stated at [134]:
In the rare instances that a party seeks to argue before the Registrar and/or the Tribunal that there was no intent by one or both of the parties to enter into a Binding Child Support Agreement under the Assessment Act, then it is incumbent upon the Registrar and/or Tribunal to consider such matter in determining whether the purported agreement is a Binding Child Support Agreement.
The legislative history to binding child support agreements under the Assessment Act
The legislative history to Pt 6 of the Assessment Act provides important context in understanding the concept of a binding child support agreement under the statutory scheme.
Before the amendments introduced by the Child Support Legislation Amendment (Reform of the Child Support Scheme – New Formula and other Measures) Act 2006 (Cth) (2006 Amendment Act), the Assessment Act did not contain the concepts of “binding child support agreements” and “limited child support agreements”. Rather, an agreement was a child support agreement if it complied with ss 82 to 85, which were in substantially similar terms to those in the current Act.
Schedule 5 of the 2006 Amendment Act introduced the concepts of “binding child support agreements” and “limited child support agreements”, which substantially adopted the recommendations of the 2006 Report of the Ministerial Taskforce on Child Support entitled “In the Best Interests of Children – Reforming the Child Support Scheme” (Report). According to the Explanatory Memorandum to the 2006 Amendment Bill (EM), the purpose of these reforms was to:
… provide more flexible arrangements, with better legal protection, for parents who want to make agreements between themselves about the payment of child support, will detail how lump sum payments are treated, and will provide for the effect of agreements on family tax benefit payments. It will also provide a simplified process to allow parents to suspend child support payments for a period of six months if they reconcile, and then resume the payments should they separate again, without having to apply anew. (p 150).
The EM described the concept of “binding agreements” as follows:
Each party to the agreement must have received legal advice before entering the agreement, and must also receive legal advice before terminating the agreement. This change brings the child support arrangements in relation to binding agreements into harmony with financial agreements concerning property division and spousal maintenance under the Family Law Act. Placing these amendments into the child support legislation means that separated parents who were not married, as well as those parents who were married, can make binding agreements about their child support arrangements. The amount agreed on by the parents may be more or less than the amount that the payer would be assessed as paying under the notional assessment. (p 150).
The EM described what constitutes “limited agreements” as follows:
Parents who have not had legal advice about the effect of a child support agreement can enter a limited child support agreement. In order to provide safeguards on parents’ interests, in the absence of legal advice, limited agreements are of limited duration and can be terminated or set aside by the courts, in certain circumstances. Limited agreements can also be terminated by either parent if the notional amount of child support payable changes by more than 15%, or after three years.
An administrative assessment must be in place before a limited child support agreement can be accepted by the Registrar. The annual rate of child support payable under the agreement must be at least the annual rate of child support payable under Part 5, or otherwise payable as a result of a change of assessment, court order or prior agreement. (p 151).
A related purpose of the reforms was to ensure that each party to a binding child support agreement received independent legal advice on such an agreement in order for a valid application to be made under the Assessment Act for its acceptance by the Registrar. This corresponds with the following concern identified by the Ministerial Taskforce at p 207 of the Report:
A further problem with the current arrangements about child support agreements is the lack of even the most basic safeguards to ensure that agreements that have long-term financial consequences for the parents and children are freely and fairly made. The law on child support agreements stands in marked contrast to the family law rules on agreements concerning property division and spousal maintenance. The extent of the difference is surprising, for child support agreements dealing with the support of children until 18 may be of much greater financial significance in the long term than agreements about property.
The Ministerial Taskforce also noted that the Registrar had no discretion to refuse to register a child support agreement that has been made in the proper form (p 211) and, as such recommended that the Registrar be given such a discretion where one or both parties had not certified as to having received legal advice (recommendation 17.2).
Significantly, however, the 2006 Amendment Act did not introduce such a discretion. Rather it introduced the concept of a “limited child support agreement” where one or both parties had not received legal advice (see [22] above).
Consideration
Against this background, and with respect to the primary judge, it is important to identify some key elements of the statutory scheme and important distinctions between financial agreements under the Family Law Act and child support agreements under the Assessment Act, which key elements were overlooked in the primary judge’s analysis.
First, s 92 of the Assessment Act provides that the Registrar must accept a child support agreement if it has been properly made, which requires the application to meet the formal requirement in s 89 and to meet the description of a “child support agreement” (s 88). An application for acceptance of a child support agreement can be made by only one parent of a child. Furthermore, the ambit of the Registrar’s statutory task in deciding whether or not to accept a child support agreement is governed by s 91 of the Assessment Act (emphasis added):
In determining whether an agreement made in relation to a child is an agreement referred to in paragraph 88(a), the Registrar may act on the basis of the application made to the Registrar for acceptance of the agreement, the documents accompanying the application and the agreement itself, and is not required to conduct any inquiries or investigations into the matter.
This manifests a clear legislative intention that the Registrar is not required to consider whether both parties had a specific intention to enter into a binding child support agreement under the Assessment Act in determining whether an agreement meets the statutory test for a binding child support agreement. This would be contrary to the Registrar’s power under s 91 to act on the application by one party alone with no notice to the other party until the agreement is accepted (see s 96), and that the Registrar is “not required to conduct any inquiries or investigations into the matter”. Importantly, these provisions pre-dated the enactment of the 2006 Amendment Act, which did not contain the safeguards concerning independent legal advice, and were not commented on by the Ministerial Taskforce.
This can be contrasted with the Family Law Act, where the binding status of a financial agreement for the purposes of that Act only becomes relevant for the purposes of that Act if a party to the agreement seeks to invoke a provision of Pts VIII or VVIIAB which is ousted by a binding financial agreement. A binding financial agreement does not need to be registered for the Court to make orders under s 90KA(c) or 90UN(c) that a binding financial agreement is enforceable (see s 105(2A) of the Family Law Act).
Secondly, the Assessment Act essentially creates a binary choice between administrative assessments and child support agreements as to the administrative process for assessing the liability and amount for child support of a liable parent. The introduction of the requirements for independent legal advice for a binding child support agreement, as demonstrated by the legislative history above, was to introduce further protection for parents entering into agreements which meet the description of a child support agreement. It was not intended to create a new legal requirement that both parties must have had the intention specifically to enter into a binding child support agreement.
In contrast, a financial agreement made under the Family Law Act, but which is not binding under ss 90G or 90UN, is still a financial agreement within the terms of other sections of the Act (for instance ss 90B or 90C) and may be relevant to the exercise of the Court’s discretion to make certain orders under that Act (see Senior at [96] per May J, citing Woodland at [37]-[39] per Finn, May and O’Reilly JJ). In this sense, the operation of the Family Law Act does not create a binary choice between a binding financial agreement and another form of administrative process for assessing liability for spousal maintenance or interests in property. Rather, s 90G and 90UJ essentially oust the jurisdiction of the Court to make certain types of orders if a financial agreement is binding for the purposes of the Family Law Act.
This is to be contrasted with the position of a liable parent under the Assessment Act, who will be liable for child support payments under either an administrative assessment or a child support agreement (subject to a Registrar’s determination under Pt 6A subsequent to an administrative assessment or a court order). The Assessment Act does not empower the Registrar to take into account a child support agreement in making an administrative assessment under Pts 4 and 5 which does not meet the requisite definition of a binding child support agreement or limited child support agreement under Pt 6. Indeed, this would also be contrary to the statutory scheme. Where an agreement does not meet the description of a child support agreement in s 81, it has no legal operation or effect for the purpose of the Assessment Act.
Thirdly, as described by Le Poer Trench J in Pascot v Pascot [2011] FamCA 945 at [19] (referring to Senior), to find an agreement is a binding financial agreement under the Family Law Act is essentially a three-step process, namely:
(a)Is there an agreement (contract) between the parties?
(b)Is there an agreement which qualifies as a “financial agreement”? In this case that requires compliance with s 90C of the Act.
(c)Is the “financial agreement” binding on the parties and the court as set out in s 71A(1)? To qualify for that description the financial agreement must comply with s 90G.
For a particular agreement to fall within the definition of a “financial agreement” under ss 90B to 90D and ss 90UB to 90UD of the Family Law Act under step (b), each requires that the “agreement is expressed to be made under this section” (see, for example, s 90B(2)(b)).
It was in this context, in considering an agreement which had been expressed to be under the wrong section of the Family Law Act, that the Court in Senior found that the doctrine of rectification could apply to financial agreements where it was the common intention of the parties that it was intended to be a financial agreement under a particular section. The Court held that the strict compliance test pronounced by Black v Black [2008] FamCAFC 7; 38 Fam LR 503, which required a financial agreement correctly to identify the relevant section to fall within the statutory definition, only applied to binding agreements under s 90G (see also s 90G(1A) which was introduced in response to Black v Black). Otherwise, the common intention of the parties could overcome the mere technical error through application of common law and equitable principles concerning rectification.
In contrast, the legislative process for finding that an agreement is a child support agreement which is acceptable under s 92 of the Assessment Act involves only two steps, namely:
(a)Is there an agreement (a contract)?
(b)Is there a child support agreement (i.e., either a binding child support agreement or limited child support agreement)?
With respect, the primary judge has incorrectly sought to rely upon the references to general principles of contract and equity in Senior to impute a requirement that the parties not only had to have an intention to enter into a binding agreement (as required by general principles of contract law), but also under step (b) required a common intention to enter into a binding child support agreement (primary judgment at [131] and [134]). In particular, her Honour has failed to recognise that there is no requirement equivalent to the Family Law Act for a child support agreement to express that it is made under a particular provision of the Assessment Act. Indeed, s 84(5) provides that the same document may be both a child support agreement and a financial agreement under the Family Law Act.
Fourthly, in contrast with the consequences of a finding that a financial agreement is binding under ss 90G or 90UJ of the Family Law Act (namely that the Court’s jurisdiction is ousted in certain respects), the importance of the Registrar accepting a child support agreement extends beyond the enforceability of certain provisions of the Assessment Act. In particular, once a child support agreement is accepted, the Registrar must complete a “notional assessment”, using the provisions of Pt 5 for an administrative assessment, of the annual child support payable by a liable parent under the Act as if a child support agreement had not been accepted (see Pt 7A). This notional assessment was introduced by the 2006 reforms and is conducted to enable the entitlement to Family Tax Benefit Part A (FTB Part A) for both parents, which in part relies upon the concept of maintenance income, to be accurately calculated. Prior to the 2006 reforms, each parent’s split of FTB Part A was worked out on the basis of the agreement the parents made between themselves. To protect government revenue, Centrelink would only approve such an agreement if the amount or value was equal to or more than the amount of liability that would result if there had been an administrative assessment. This was found to discourage parents from making agreements, particularly agreements which provided for non-periodic payments of child support, such as a lump sum payment (see EM to 2006 Amendment Bill at p 152).
For these additional reasons, I respectfully agree with the orders proposed by Lee J.
I certify that the preceding thirty-nine (39) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justices Griffiths. Associate:
Dated: 19 November 2021
REASONS FOR JUDGMENT
LEE J:
A INTRODUCTION
The appellant, the Child Support Registrar (Registrar), appeals from orders by which a judge of the Federal Circuit Court (as it then was) made an order in the nature of a declaration, which had the practical effect of allowing an appeal from a decision of the Administrative Appeals Tribunal (Tribunal). The Tribunal had affirmed an earlier decision of an authorised officer of the Registrar to accept an agreement (Agreement) between the first respondent (Father) and the second respondent (Mother) for registration as a binding child support agreement (BCSA) pursuant to the Child Support (Assessment) Act 1989 (Cth) (AssessmentAct).
The appeal is a relatively confined one and for reasons that follow, when the statutory scheme created by the Assessment Act is properly understood, the appeal must be allowed.
B FACTUAL BACKGROUND
The relevant facts are largely undisputed and are in a narrow compass.
In April 2015 the Father and Mother entered into the Agreement. Recital H of the Agreement was in the following terms:
H. The parties have agreed further as follows:
(i.)they will have shared care of [the child] as agreed between them and in the best interests of the child;
(ii.)Until [the child] turns 18 years old, [the Father] will pay child support for [the child] in the sum of $900 per week, to be indexed annually on 31 December in accordance with variations in the consumer price index for Melbourne. The amount of child support will be reviewed annually on 1 April, with the first review on 1 April 2016;
(iii.)[the Father] will pay [the child]’s school fees, uniform, books and tuition at a private school to be agreed between the parties until [the child] turns 18 years old;
(iv.)[the Father] will pay [the child’s] medical and dental costs, including private health insurance at the top level with ancillary benefits until he turns 18.
Clause 1 of the Agreement expressly provided that Recital H (and the other recitals) and the schedules to the Agreement were incorporated in, and formed part of, the Agreement. The Agreement additionally contained statements of independent legal advice in relation to the Agreement, completed by a solicitor for each of the Father and the Mother. Further, Recital I recorded that the Father and Mother had received that legal advice.
In May 2018, an authorised officer of the Registrar accepted the Agreement for registration as a BCSA pursuant to the Assessment Act. The next month, the Father objected to the delegate’s decision. In August 2018, an authorised officer of the Registrar disallowed the objection and the Father then applied unsuccessfully to the Tribunal for review of the decision disallowing the objection.
In affirming the decision under review, the Tribunal found that the Agreement met all the requirements of a BCSA as provided for by s 80C of the Assessment Act: see Tribunal decision (at [41]).
It is well to commence by identifying those requirements, and the broader statutory scheme of which they form a component part.
C CONSENT ARRANGEMENTS FOR CHILD SUPPORT AND THE STATUTORY SCHEME
The Assessment Act (together with provisions of the Family Law Act 1975 (Cth) and the Child Support (Registration and Collection) Act 1988 (Cth)) forms part of the Child Support Scheme. Part 5 of the Assessment Act provides for an “Administrative Assessment of Child Support” and includes the formulas used for assessing child support (other than in cases where that rate is worked out in accordance with: (a) a child support agreement; (b) a Registrar’s determination under Pt 6A; or (c) a court order: see s 35A).
Relevantly for present purposes, Pt 6 of the Assessment Act deals with “Consent Arrangements”. As is made clear from the simplified outline (s 80A), the Part relevantly allows the parents (and non-parent carers) of a child, using a child support agreement, to agree between themselves the child support that is to be payable for the child. In this way, it allows the relevant parties to make a “child support agreement” (as defined in s 81 of the Assessment Act as being either a BCSA or a “limited child support agreement”) and have that arrangement the subject of a determination by the Registrar.
Part 6, Div 1A deals with the making, inability to vary, and the termination of child support agreements (with Subdivision A dealing with BCSAs); Div 2 with “Child Support Agreement Requirements”; and Div 3 with “Applications to Registrar for Acceptance of Child Support Agreements”.
Importantly, Div 4 deals with “Decisions on Applications” and provides that there is no requirement for the prior notification of an intention to make a decision, and that in determining whether an agreement made is a child support agreement, the Registrar “may act on the basis of the application made to the Registrar for acceptance of the agreement, the documents accompanying the application and the agreement itself, and is not required to conduct any inquiries or investigations into the matter”: see s 91 (emphasis added).
Returning to Div 1A and what constitutes a BCSA, s 80C(1) provides that an agreement is a BCSA if:
(1)the agreement is binding on the parties to the agreement in accordance with s 80C(2) (see s 80C(1)(a)); and
(2)it complies with various provisions in Div 2 being: s 82 (which deals with children in relation to whom agreements may be made); s 83 (which deals with persons who may be parties to agreements); s 84 (discussed in detail below); and s 85 (which provides that the agreement must not provide for a person who is not an eligible carer to be paid child support) (see s 80C(1)(b)).
Section 80C(2) provides that, for the purposes of s 80C(1)(a), an agreement is binding on the parties “if, and only if” certain requirements are met, including:
…
(c)the agreement contains, in relation to each party to the agreement, a statement to the effect that the party to whom the statement relates has been provided, before the agreement was signed by him or her, as certified in an annexure to the agreement, with independent legal advice from a legal practitioner as to the following matters:
(i)the effect of the agreement on the rights of that party;
(ii)the advantages and disadvantages, at the time that the advice was provided, to the party of making the agreement; and
(d)the annexure to the agreement contains a certificate signed by the person providing the independent legal advice stating that the advice was provided …
Further, s 84(1) provides that an agreement is a child support agreement only if it includes one or more of the kinds of provisions set out in s 84(1)(a)–(g). The following provisions are of present relevance:
(a)provisions under which a party is to pay child support for a child to another party in the form of periodic amounts paid to the other party;
…
(d) provisions (the non-periodic payment provisions) that state:
(i)that a party (the liable party) is to provide child support for a child to another party otherwise than in the form of periodic amounts; and
(ii)that the annual rate of child support payable for the child by the liable party under any relevant administrative assessment is to be reduced, in the manner specified under subsection (6), by the amount of child support to be provided by the liable party …
(Emphasis in original).
In relation to “non-periodic payment provisions” (being those of the kind referred to at s 84(1)(d)), s 84(6) further provides:
(6)If an agreement includes provisions of the kind referred to in paragraph (1)(d), the statement referred to in subparagraph (1)(d)(ii) must specify either:
(a)that the annual rate of child support payable under the administrative assessment is to be reduced by a specified amount that represents an annual value of the child support payable; or
(b)that the annual rate of child support payable under the administrative assessment is to be reduced by 100% or another specified percentage that is less than 100%.
Part 6 does not contemplate that the statutory construct of a child support agreement must be the only consensual arrangement contained in the instrument or document in which it is contained. Indeed, if the document also includes provisions of a kind not referred to in s 84(1)(a)–(g), those provisions do not have effect for the purposes of the Act (s 84(3)), but their operation for other purposes is unaffected by the Assessment Act (s 84(4)). Moreover, s 84(5) provides that nothing in Pt 6 prevents a document from being both a child support agreement and, inter alia, a parenting plan, or a maintenance or financial agreement under the Family Law Act.
Hence, importantly for what follows, it can be seen from Pt 6 of the Assessment Act generally that: (a) a BSCA is not only a creature of the statute, it is a statutory creation for a specific purpose with necessary characteristics and its operation, non-variation and termination is closely regulated by the Assessment Act; and (b) the contemplated role of the Registrar is not to conduct inquires, but rather, on the basis of the documents provided to them, to assess whether the agreement has the characteristics identified by Pt 6 of the Assessment Act.
D THE THREE RELEVANT CONTENTIONS OF THE FATHER
Before the Tribunal the Father advanced three contentions which remain of significance:
(1)the parties had not intended the Agreement to be a BCSA;
(2)the parties were not provided with legal advice in relation to the Agreement as a BCSA and therefore the requirement identified (at [53]) above was not met; and
(3)the Agreement did not contain “non-periodic payment provisions” of a certain type and therefore the requirement identified (at [54]) above was not met.
Each of these contentions was, in effect, accepted by the primary judge who, following a lengthy judgment, then made a form of a declaration that the Agreement could not be a BCSA.
E THE APPEAL
The Registrar advances five grounds of appeal. Somewhat simplified, they are as follows:
(1)the Court erred in holding that the principles of law and equity apply when determining whether a child support agreement is binding such that it is necessary for the parties to evince a specific and expressed intention that an agreement be a binding child support agreement (Ground One);
(2)the Court erred in considering whether, on the face of the Agreement (including the certificates annexed (Certificates)), there were reasons to infer that legal advice had not been provided to the parties in relation to the Agreement as a BCSA (Ground Two);
(3)alternatively to Ground Two, the Court erred in finding that the Certificates did not comply with s 80C(2)(c) and s 80C(2)(d) of the Assessment Act (Ground Three);
(4)the Court erred in finding that the Tribunal erred by failing to consider whether the Father and Mother had actually received legal advice regarding the matters set out in s 80C(2)(c)(i)–(ii) of the Assessment Act (Ground Four); and
(5)the Court erred in holding that where provision is made for both periodic payments and non-periodic payments, a failure to comply with s 84(1)(d)(ii) and s 84(6) of the Assessment Act has the effect of rendering both provisions incapable of being included in a BCSA (Ground Five).
It is convenient to deal with the reasoning of the primary judge in the context of addressing each of the grounds of appeal.
E.1 Ground One
Relevantly, the primary judge’s reasoning proceeded by reference to the following steps (see [117], [130]–[133]):
(1)the effect of ss 80C and 81 of the Assessment Act is to require that there be an agreement;
(2)the “principles of law and equity” as to contractual formation apply;
(3)the law of contract requires an intention to create legal relations; and
(4)it follows, for the purposes of ss 80C and 81, that there needs to be a “specific and expressed intention that an agreement be a [BCSA]”.
With respect, this line of reasoning breaks down at a basic level and, in any event, step four involves a non sequitur.
As noted above, a BCSA is a statutory creation. The “consent arrangement” recorded in a document is only a BCSA if it:
(1)is “binding on the parties to the agreement in accordance with” s 80C(2) (which in turn provides that such an agreement is binding “if, and only if” it meets the requirements set out in that subsection) (see s 80C(1)(a)); and
(2)complies with the Pt 6 Div 2 “Child Support Agreement Requirements” (see ss 80C(1)(b) and 81(2)).
Given s 80C specifies when an agreement is “binding on the parties” by exhaustively (“if, and only if”) regulating when it is binding, this statutory design points to Parliament’s intention to determine the issue as to when an agreement is a BCSA by reference to the requirements specifically identified in, and mandated by, Pt 6 of the Assessment Act.
As should already be evident, such a conclusion is consistent with the scheme of Pt 6 more generally, including that the Registrar may act on the basis of the application and accompanying documents (including an agreement), and if the Registrar is satisfied that the application has been properly made, it must be accepted: see s 92(1). When this aspect of the statutory context is kept in mind, the requirements set out in s 80C(2)(a)–(f) can be seen as the necessary requirements to be identified from the application and accompanying documents by the decision maker in determining whether the requisite child support agreement exists. In this way Parliament can be taken to have chosen to only make a child support agreement “binding on the parties” in specified and restricted circumstances. If those specified and restricted circumstances exist, so does the BCSA.
Further, the suggestion (see step (4) above) that one imports from the general law a notion that the parties to a paction must have turned their minds to its proper legal characterisation for it to be binding is plainly wrong. It is trite that for a contract to exist there must be a meeting of the minds (an agreement or consensus ad idem) and the parties must, of course, hold an intention to create legal relations. But if ever the element of intention is in issue (which would not be before a Registrar who makes an assessment on the basis of the consensual arrangement recorded in the documents provided), it is to be determined objectively having regard to the content of the agreement, the language and conduct of the parties, the relationship between the parties, and the context of the agreement as a whole. The intention is one that is focussed on whether legal relations are to be created: not a subjective intention that it be legal relations of a particular character, statutory or otherwise. During the course of oral submissions this argument was refined somewhat to a contention that what must be present and ascertained is the objective manifestation of an intention to enter into a BCSA, but this refined argument remains inconsistent with the role to be performed by the Registrar (and again, in any event, misapprehends the nature of any relevant inquiry at law as to contract formation).
With respect, the reasoning of the primary judge summarised (at [62]) is erroneous and Ground One is made out.
E.2 Grounds Two and Three
The issue the subject of these grounds arose because the Certificates annexed to the Agreement were headed (like the rest of the Agreement) “Section 90UD Financial Agreement”. As the primary judge found (at [23]), each of the parties and their solicitor signed a Certificate which was in the following terms:
I, [solicitor name] of, [address], solicitor, hereby certify that in relation to an agreement in writing proposed to be entered into between [the Father] and [the Mother] (hereinafter called “the parties”) I have advised [relevant party] (hereinafter called “my client”) independently of the other party and before the time at which my client signed the agreement, as to the following matters:
1. The effect of the agreement upon my client’s rights.
2.The advantages and disadvantages, at the time the advice was provided to my client, of signing the agreement.
[Solicitor’s signature]
NOTATIONS
A.My client stated to me that [he/she] understood the nature and effect of the document and the obligations and risks involved in signing it. It appeared to me that [he/she] did have such understanding.
B.My client stated to me that [he/she] was signing the document freely, voluntarily and without pressure from the other party to the agreement or from any other person.
Confirmation and Acknowledgement:
I, [relevant party] do hereby confirm and acknowledge that before I signed the deed of agreement, I received the advice from [solicitor’s name] as described in the above statement, which statement was provided to me and annexed to this deed of agreement.
[Party’s signature]
Because of the heading, the primary judge found (as the Father submits on appeal) that read as a whole, and in particular when read in conjunction with the Agreement, the Certificates state that advice was given in relation only in relation to s 90UD of the Family Law Act (and the Certificates do not purport to state that advice was given in relation to the effect and/or advantages and disadvantages of a child support agreement): see [173]. It follows, it is said, that the Agreement does not comply with s 80C(2)(c) and (d) requiring a BCSA to contain a statement to the effect that particular legal advice has been given to the parties, and that the person giving that advice certifies in writing that it has been given.
This reasoning (accepted by the primary judge) is asserted by the Registrar to have two difficulties.
The first is that it is said the primary judge trespassed into an impermissible review of the Tribunal’s factual findings beyond the scope of an appeal under s 44AAA(1) of the Administrative Appeals Tribunal Act 1975 (Cth). Specifically, it is asserted that by reference to authorities concerning the evidential weight of certificates of legal advice in relation to binding financial agreements under s 90G of the Family Law Act, the primary judge found that there were sufficient reasons for the Tribunal to have found the requisite legal advice had not been given and by embarking upon that factual enquiry and reaching that finding, error is demonstrated (that is, Ground Two is made out).
The second (alternative submission) is that if what the primary judge did was rather addressed to the legal question of whether the facts found (in this case, being the Certificates annexed to Agreement) fell within the statutory provision (in this case, s 80C(2)(c) and (d)), her Honour nevertheless erred (that is, Ground Three is made out).
Although there are textual indications that the primary judge may have been engaging in a review of a factual finding, it is sufficient to proceed on the basis identified in Ground Three.
It is convenient to again set out the requirement in s 80C(2)(c) and (d) that an agreement is binding on the parties “if, and only if”:
…
(c)the agreement contains, in relation to each party to the agreement, a statement to the effect that the party to whom the statement relates has been provided, before the agreement was signed by him or her, as certified in an annexure to the agreement, with independent legal advice from a legal practitioner as to the following matters:
(i)the effect of the agreement on the rights of that party;
(ii)the advantages and disadvantages, at the time that the advice was provided, to the party of making the agreement; and
(d)the annexure to the agreement contains a certificate signed by the person providing the independent legal advice stating that the advice was provided …
As can be seen from its terms, this is precisely what the Agreement did contain; that is, a Certificate incorporated into the agreement in the terms required by s 80C(2)(c) and (d). If the Registrar was satisfied that the application was properly made (by including this and complying with the other requirements), the Registrar must accept it: see 92(1).
It is unnecessary to deal with Ground Two, and Ground Three is made out.
E.3 Ground Four
Connected to the previous grounds, it is contended the primary judge erred in holding that the Tribunal is required to be satisfied that parties to a BCSA have actually received legal advice of the nature set out in s 80C(2)(c).
The Father submits a proper construction of s 80C(2)(c) and (d) (so that it is consistent with the language and purpose of all the provisions of the Assessment Act) requires the parties to obtain the requisite legal advice, not merely evidence of it. In limited circumstances this is said to require the “Registrar (or thereafter the Tribunal) to consider whether there is a proper basis for the statement within the agreement and the certificate of legal advice annexed to it”. The BCSA is a document of significant effect and import that can be potentially long lasting and yet only be terminated in limited circumstances. It is submitted that seen in its proper context, the requirement for legal advice cannot be seen as a mere administrative provision as to when the Registrar will accept an agreement as a BCSA, but rather is a protective provision to ensure that parents entering into such an agreement are advised adequately by legal practitioners as to their rights and obligations, to ensure (in accordance with the principal object of the Assessment Act) that the children of separated families receive a proper level of financial support. In this way, the focus of the provision is on safeguarding the parties to the BCSA, not the administrative convenience of the Registrar.
These submissions must be rejected. As should already be evident from the above, they misapprehend the way a decision of the Registrar is to be made as provided for in s 91 and, in particular, the fact the Registrar is not required to conduct any inquires or investigations.
Contrary to the conclusion of the primary judge (at [152]), the Assessment Act provides for an administrative process determined by the presence of objectively determinable matters that are set out in ss 80C(2) and 81(2). The Registrar is to accept an otherwise compliant agreement as a BCSA on the basis of a certificate of legal advice, without having to be satisfied that the advice has in fact been given, or that the BCSA was obtained without a party understanding its significance. While it may be readily accepted that s 80C(2)(c) and (d) reflect a legislative intention that parties actually receive legal advice, the mechanism deployed by Parliament to ensure that end is to require a statement in the agreement that the advice has been given, and a certification.
When the legislative scheme as a whole is appreciated, this does not give rise to the difficulty of a party being bound by a BCSA remaining in place when, notwithstanding the certificate of legal advice, the BCSA was obtained in circumstances which could be regarded as objectionable. If the BCSA was procured by fraud or want of disclosure, unconscionable conduct, undue influence, or duress, the Assessment Act contains a specific mechanism by which a court having jurisdiction under the statute, in the exercise of judicial power, can set aside a BCSA that has been accepted administratively by the Registrar: see ss 80D(1)(c) and 136.
The primary judge was incorrect in holding that the Tribunal was required to be satisfied that parties to a BCSA have actually received legal advice and Ground Four is made out.
E.4 Ground Five
The argument advanced before the primary judge was that the Tribunal erred in failing to consider that the provisions relating to child support as set out in the Agreement failed to comply with ss 84(1)(d)(ii) and 84(6) of the Assessment Act, and accordingly the child support provisions ought not to have been determined to constitute a BCSA. The relevant provisions are reproduced (at [53] and [54]) above.
This argument below was canvassed at considerable length but the relevant reasons of the primary judge can be summarised as follows (see [214]–[220]):
(1)that ss 84(1)(d)(ii) and 84(6) impose “mandatory requirements”;
(2)where an agreement contains a non-periodic payment provision which does not comply with ss 84(1)(d)(ii) and 84(6), this renders that provision “incapable of being included” in a BCSA; and
(3)it is not open to excise a “non-complying” non-periodic payment provision from periodic payment provisions otherwise contained in an agreement.
In support of this reasoning the Father submits that s 84(1)(a) provides that a child support agreement can include provisions that child support be paid in periodic amounts. Where a child support agreement includes a provision for the periodic payment of child support, it is said that pursuant to s 95(2)(a) of the Assessment Act, that provision has effect for the purposes of Pt 5 and s 142 as if they were orders of the Court. Once a child support agreement is accepted by the Registrar, due to the interaction of the relevant sections, it is said that the provisions for the payment of child support periodically becomes the “administrative assessment” (“administrative assessment” being defined in s 5 as an assessment under Pt 5). When it is understood that any provision for periodic child support in a child support agreement becomes an administrative assessment, or if there is no such periodic provision that upon registration of the agreement the Registrar must make an administrative assessment under the formula, it is said the import of the additional requirements in s 84(1)(d) and (e) is identified. Indeed, the significance of this, it is submitted, is that the acceptance and registration of a BCSA causes the creation of an administrative assessment (either in terms of a specific provision in the agreement, or in accordance with the formula).
Further, it is said that although a document which is a child support agreement can also include other provisions, such as those dividing property or dealing with maintenance under the Family Law Act, these will not have any impact upon the Assessment Act. It is upon this foundation that the Father submits here the provisions that relate to child support will not have any effect for the purposes of the Assessment Act, and the primary judge correctly concluded that absent the relationship between the periodic child support provision and the non-periodic child support provision, the agreement could not be validly recognised as a BCSA.
These submissions cannot be accepted.
Starting with the text, it is clear that s 84(1) provides that an agreement will be a child support agreement “only if it includes one or more of the following kinds of provisions” then specified in s 84(1)(a)–(g). That necessarily means a BCSA may include “non-periodic payment provisions” (a term defined in s 84(1)(d)), or it may not.
The effect of s 84 is that if an agreement contains provisions under which a party is to provide child support “to another party otherwise than in the form of periodic amounts and that are not non-periodic payment provisions or lump sum payment provisions” the result will be that the provision may be of a kind as listed in s 84(1)(f); or alternatively, it will not have effect for the purposes of the Assessment Act (in the sense that that Assessment Act will not attach to it any legal consequences) but will continue to be operative for other purposes: ss 84(3) and 84(4).
Subsections 84(1)(d)(ii) and 84(6) should not be construed as somehow operating at large in relation to any provision which may (in some sense) be characterised as a non-periodic payment provision but which is not a defined “non-periodic payment provision”.
As to purpose, as the Registrar correctly submits, the mischief to which s 84(6) is directed may be characterised as requiring that an agreement containing a non-periodic payment, which is expressed to reduce an administrative assessment, also provide for how it will do so. If a payment, which is in some sense “non-periodic”, is not expressed to reduce an administrative assessment (and so not within the definition) – say, because there is no administrative assessment already in place, then there is no need for it to state how it would do so. Rather, the provision will likely fall within s 84(f) and require the party to make the payment without a reduction to their administrative assessment as part of the registrable BCSA. Alternatively, it will not form part of the BCSA registrable by the Registrar, and will have effect (or not) according to its terms: see ss 84(3) and 84(4).
The conclusion of the primary judge that the child support provisions in the Agreement ought not to have been determined by the Registrar to constitute a BCSA was, with respect, erroneous.
F CONCLUSION AND ORDERS
The appeal should be allowed. The orders made by the primary judge should be set aside and, in lieu thereof, orders should be made that the Father’s appeal from the Tribunal’s decision be dismissed. Costs of this appeal should follow the event.
One final point should be mentioned. After the hearing was adjourned, counsel for the Father emailed the Court noting that, in the event the appeal was allowed, he was instructed to seek an order for a costs certificate pursuant to s 6(1) of the Federal Proceedings (Costs) Act 1981 (Cth) (Costs Act) on the basis that the appeal would succeed on a question of law. The appellant neither opposed nor consented to such an order. In all the circumstances, I am satisfied that the Court should issue a certificate of the kind described in s 6(3) of the Costs Act. For completeness, I note this appeal falls within the definition of a “federal appeal” in s 3(fa) of the Costs Act by operation of s 8(2) of the Federal Circuit and Family Court of Australia Act 2021 (Cth).
I certify that the preceding fifty-six (56) numbered paragraph are a true copy of the Reasons for Judgment of the Honourable Justice Lee. Associate:
Dated: 19 November 2021
REASONS FOR JUDGMENT
WHEELAHAN J:
I have had the privilege of reading in draft the reasons of Lee J and of Griffiths J. I agree that the appeal should be allowed for the reasons given by Lee J. I also agree with the additional observations of Griffiths J.
I certify that the preceding one (1) numbered paragraph is a true copy of the Reasons for Judgment of the Honourable Justice Wheelahan. Associate:
Dated: 19 November 2021
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