Child Support Registrar v Afs19

Case [2021] FCAFC 207

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…

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AGLC
Child Support Registrar v AFS19 [2021] FCAFC 207
Case
[2021] FCAFC 207
Decision Date

CaseChat Overview and Summary

The appeal was brought by the Child Support Registrar against a decision of a primary judge of the Federal Circuit Court of Australia, which had dismissed an appeal against a decision of the Administrative Appeals Tribunal (AAT). The appeal concerned whether an agreement made between the parents of a child was a binding child support agreement (BCSA) under the Child Support (Assessment) Act 1989 (Cth). The Registrar had accepted the agreement as a BCSA, but the father of the child objected, and the AAT upheld the Registrar's decision. The primary judge subsequently declared that the agreement did not constitute a BCSA under the Act, and the Registrar appealed to the Full Court.

The court was required to determine whether the primary judge had erred in law by failing to properly apply the statutory scheme of the Child Support (Assessment) Act 1989 (Cth). The court needed to consider whether the Registrar had a discretion to disregard an agreement accepted as a BCSA and whether the Registrar had the power to inquire into the intention of the parties in entering into the agreement. The court also needed to consider whether the father's failure to receive independent legal advice invalidated the agreement.

The court held that the primary judge had erred in law by failing to properly apply the statutory scheme of the Assessment Act. The court held that the Registrar was 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. The court held that the Registrar was only required to act on the application made by one party alone, with no notice to the other party until the agreement was accepted. The court also held that the father's failure to receive independent legal advice did not invalidate the agreement, as the requirement for independent legal advice 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.

The appeal was allowed, and the order made by the primary judge was set aside. The appeal from the decision of the AAT was dismissed, and the first respondent was ordered to pay the appellant's costs of the appeal. The Court certified that it would be appropriate for the Attorney-General to authorize a payment under the Federal Proceedings (Costs) Act 1981 (Cth) 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.

Orders

Orders of the court

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.

Background

Background to the litigation

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.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

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.

Ratio Decidendi

Legal Principle Established

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.