CURRAN & ROPER
[2011] FMCAfam 859
•25 August 2011
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| CURRAN & ROPER | [2011] FMCAfam 859 |
| CHILD SUPPORT – Whether child support agreement “limited” or “binding” – whether “exceptional circumstances” – whether “significant change in circumstances” – “exceptional circumstances” defined. |
| Child Support (Assessment) Act 1989, ss.3, 80C, 80E, 98U, 136 Child Support Legislation Amendment (Reform of the Child Support Scheme – New Formula and Other Measures) Act 2006, item 74 sch.5 Health Insurance Act 1973 (Cth), s.106KA(5) Health Insurance (Professional Services Review) Regulations1999, reg.11 Federal Magistrates Act 1999, s.14 Federal Magistrates Court Rules 2001, r.16.01 |
| Appleton & Appleton [2011] FamCA 70 Balzano & Balzano [2010] FamCAFC 11 Cogswell & Calvery [2010] FMCAfam 172 Daley & Daley [2009] FMCAfam 398 Hatcher v Cohn [2004] FCA 1548 In the Marriage of Gyselman (1992) FLC 92-279 Leonard & Leonard [2010] FMCAfam 390 Sandrk & Sandrk (1991) FLC 92-260 Savery & Savery (1990) FLC 92-131 Simpson & Hamlin (1984) FLC 91-576 United Mexican States v Cabal (2001) 209 CLR 165 |
| Applicant: | MR CURRAN |
| Respondent: | MS ROPER |
| File Number: | MLC 13635 of 2007 |
| Judgment of: | F. Turner FM |
| Hearing date: | 5 August 2011 |
| Date of Last Submission: | 5 August 2011 |
| Delivered at: | Melbourne |
| Delivered on: | 25 August 2011 |
REPRESENTATION
| Counsel for the Applicant: | Mr Strum |
| Solicitors for the Applicant: | Tolhurst Druce & Emmerson |
| Counsel for the Respondent: | Ms Buchanan |
| Solicitors for the Respondent: | Michael Smith & Associates |
ORDERS
The Child Support Agreement entered into by the parties on 27 June 2005 is not a binding child support agreement.
THE COURT DIRECTS THAT:
The parties submissions on 16 September 2011 are to include submissions on s.80E(1)(d)(ii) and s.98U of the Child Support (Assessment) Act 1989, insofar as they are relevant as to whether the child support agreement is a “limited child support agreement” within the Act, or is not an agreement covered by the Act.
IT IS NOTED that publication of this judgment under the pseudonym Curran & Roper is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT MELBOURNE |
MLC 13635 of 2007
| MR CURRAN |
Applicant
And
| MS ROPER |
Respondent
REASONS FOR JUDGMENT
The parties in this matter entered into a child support agreement
(a “SA”) on 27 June 2005 (Annexure “D” to the affidavit of the husband sworn 7 July 2011) in relation to their two children. The SA was registered with the Child Support Agency (the “CSA”) on
22 August 2005 (Ibid Annexure “E”).
The children are [X] (born [in] 1992), and [Y] (born [in] 1995).
The issues covered by this decision are first, whether the SA is a “limited” or a “binding” child support agreement? and secondly, whether developments since that time are “a significant change in” or “exceptional circumstances” within s.136 of the Child Support (Assessment) Act 1989 (the “CSA Act”).
Mr Strum appeared for the husband and Ms Buchanan for the wife.
Mr Strum stated that the application relates to [Y] only (Transcript “T” 5 August 2011 p.10, l.7).
The husband seeks orders from the Court as follows:
(1)That, in so far as may be required, the Child Support Agreement between the Applicant Husband, Mr Curran, and the Respondent Wife, Ms Roper, made on 27 June 2005 be set aside.
(2)That period child support payable by the Respondent Wife to the Applicant Husband for the child [Y] for the period from 15 December 2009 until the conclusion of the 2013 academic year be in the sum of $350.00 per week or, alternatively, as administratively assessed from time to time by the Child Support Agency for that period.
(3)Further, that pursuant to sec. 124(1) of the Child Support (Assessment) Act 1989, the Respondent Wife additionally be liable for and pay one half of all school fees and associated expenses for [Y] at [W] School (or such other private school as the Applicant Husband and Respondent Wife may agree in writing) until the conclusion of the 2013 academic year.
(4)That the Respondent Wife pay the Applicant Husband’s costs of and incidental to these proceedings in a sum to be agreed by the Applicant and the Respondent within 21 days or failing such agreement as taxed by the Registrar of the Court on a lawyer and client basis.
(5)Such further and other orders as the Court deems fit and proper.
This decision deals in part with the first order sought.
Relevant, but Contested Facts
The relevant provisions of the SA require each of the parties to provide for the day to day maintenance or support of the children when the children live with each of the parties [clause 2(a)] and otherwise bear half of certain expenses including schooling, medical insurance, other medical and dental expenses, and extra curricular activities [clause 2(b)]. Clause 3 provides that the payments for child maintenance and support:
“continue until the children become financially independent or cease secondary education, upon first attaining the age of 18 years of age, whichever of the said events occurs first”.
The parties married [in] 1990, and separated in May 2004 (Recital (a) of the SA).
The operative Court orders at the time the SA was signed, were made on 23 November 2004 and provided that the children live with the wife nine nights out of fourteen, and with the husband five nights out of fourteen, with school holiday time to be shared equally. However, the SA provides that the children “reside with the wife” [Ibid recital (c)]. Mr Strum acknowledged that it was not envisaged that the children live with the wife solely, but that the parties have shared care of their children (T p.65, l.43).
The orders of 23 November 2004 were discharged by orders made on
8 February 2006, which provide for a week about arrangement during school terms, with school holidays divided equally between the parties (Ibid Annexure “F”, although the annexed orders are incomplete).
From around 30 March 2006 [X] moved to live solely with the husband.
The orders sought in the proceedings relate to [Y] only, as [X] is 19 years old and is self supporting with an income of $50,000.00 – $60,000.00 per annum from his deceased maternal grandfather’s estate. [Y] is 15 years old, and in year 10 at [W] School.
Submissions for the Applicant Husband
Between 30 March 2006 and when he turned 18, [X] lived solely with the husband, and spent very little overnight time with the wife.
From 8 February 2006 until December 2009, [Y] spent alternate weeks during school terms with each parent, and spent the bulk of the long summer holidays with the husband.
In December 2009 [Y] moved to live solely with the husband, and has spent virtually no overnight time with the wife since then. This is contested by the wife.
Since December 2009 both children have lived solely with the husband, which is again contested by the wife.
Mr Strum referred to s.80C of the CSA Act which is as follows:
Making binding child support agreements
(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.
Mr Strum submits that the SA is not a “binding” agreement within s.80C because the requirement in s.80C(2)(c) has not been met. He submits that the SA does not contain the required statements and certifications as to legal advice.
A signed copy of the SA is in Annexure “A” to the affidavit of the husband sworn on 23 February 2011. The SA was made on 27 June 2005. However, s.80C(2)(c) was not enacted until Act No. 146 of 2006, and Schedule 5 Item 5 to which, commenced on 1 July 2008.
Mr Strum objected to paragraph 10 of the affidavit of the wife sworn on 25 July 2011 as being hearsay. The Court upheld the objection and deleted the words after the word “affidavit” (T p.15, l.41).
Mr Strum submits that even if the CSA has deemed the SA to be “binding”, that is to no effect, as the CSA does not determine the law.
Mr Strum referred to s.136 of the CSA Act and that “exceptional circumstances” are required for the Court to set aside a “binding” child support agreement; whereas the lesser test of “significant change in circumstances of one of the parties, or a child in respect of whom the agreement is made”, is required for the Court to set aside a “limited” child support agreement.
Section 136 provides as follows:
Power of court to set aside child support agreements or termination agreements
(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;
(b)a termination agreement, or a written agreement referred to in paragraph 80G(1)(b), that has been accepted by the Registrar under section 92.
(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)in the case of a limited child support agreement:
(i)that because of a significant change in the circumstances of one of the parties to the agreement, or a child in respect of whom the agreement is made, it would be unjust not to set aside the agreement; or
(ii)that the agreement provides for an annual rate of child support that is not proper or adequate, taking into account all the circumstances of the case (including the financial circumstances of the parties to the agreement); or
(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.
(3)Subject to section 145 (Registrar may intervene in proceedings), the parties to a proceeding under subsection (1) are the parties to the agreement.
(4)If:
(a)the court sets aside a child support agreement under this section; and
(b)the court is satisfied as mentioned in paragraph 117(1)(b) (departure orders);
the court may make an order under Division 4 of Part 7 without an application having been made under section 116.
(5)If:
(a)the court sets aside a child support agreement under this section; and
(b)the court is not satisfied as mentioned in paragraph 117(1)(b) (departure orders); and
(c)the payee has received or will receive benefits pursuant to the agreement;
the court may still make an order that departs from the administrative assessment where it is just and equitable to do so, having regard to the benefits that the payee has already received pursuant to the agreement.
Mr Strum submits that it is a “significant change” in circumstances [as required in s.136(2)(c)] that, when the SA was entered into, the parties had shared residence of [Y], but now [Y] lives solely with the husband. Mr Strum does not submit that the SA provided that the children were to reside with the wife for the entirety of the time, only that, at the time, it was a 9 day/5 day shared care arrangement (T p.65, l.43).
Mr Strum submits that if the Court holds that the agreement is a “binding child support agreement” he would then have to establish “exceptional circumstances… have arisen since the agreement was made” [s.136(2)(d)]. He submits that there are “exceptional circumstances” in changing from the shared care that existed at the time the SA was entered into, to the current situation where [Y] lives solely with the husband.
Mr Strum submits that the agreement is a “limited child support agreement” within s.136(2)(c).
The Court referred the parties to the decision in Hatcher v Cohn [2004] FCA 1548 where Kiefel J decided that the words “exceptional circumstances” in s.106KA(5) of the Health Insurance Act 1973 (Cth) as defined in reg.11 of the Health Insurance (Professional Services Review) Regulations 1999:
“… in general terms, are those circumstances which are unusual or out of the ordinary. But the term is also one which may have a wide operation. Factors affecting a person and which set them apart from other persons in a comparable situation may amount to exceptional circumstances”. (Ibid 49)
The Court notes that the decision continues:
“Speaking in the context of extradition, Gleeson CJ, McHugh and Gummow JJ have held that ‘special circumstances’ need to be ‘extraordinary and not factors applicable to all defendants facing extradition’… several factors in combination could constitute special circumstances: United Mexican States v Cabal (2001) 209 CLR 165”.
Her Honour continued:
“The words ‘exceptional circumstances’ may apply to a variety of circumstances and no definition which limits their application should be adopted, unless the limitation appears from the words of the relevant statutory provision”. (Ibid 50).
In that case the words were limited by the provisions in reg.11.
Mr Strum referred to the decision in Daley & Daley [2009] FMCAfam 398 where Brown FM referred to the meaning of “exceptional circumstances” in various contexts and stated:
“83. Section 136(2)(d) of the Act (the CSA Act) speaks of “exceptional circumstances”. In Simpson & Hamlin (1984) FLC 91-576 the Full Court indicated that whether circumstances were exceptional in any particular case was “very much a question of fact and degree”.
84. In the different context of an application to set aside property orders, Gee J indicated the question of whether a change of circumstances was exceptional or otherwise may turn on whether the change which had occurred was one not “within the reasonable contemplation or expectation of the parties” concerned (Sandrk & Sandrk (1991) FLC 92-260). In these circumstances, it was said that the ordinary circumstances and normal vicissitudes of life ought not be allowed to justify the return of a party to court to seek further property orders.
85. Exceptional is defined by the New Shorter Oxford English Dictionary as follows:
“Of the nature of or forming an exception; unusual, out of the ordinary; special; (of a person) unusually good, able, etc.”
86. Accordingly, for circumstances to be exceptional, they must be unusual, out of the ordinary or special. In the child support context, in respect of an application for departure, Kay J held that “special circumstances” were “facts peculiar to the particular case which set it apart from other cases” Savery & Savery (1990) FLC 92-131.
87. In the Marriage of Gyselman (1992) FLC 92-279, the Full Court of the Family Court said as follows of the phrase “special circumstances”:
“Whilst it is not possible to find with precision the meaning of that term, as a generality it is intended to emphasise that the facts of the case must establish something that is special or out of the ordinary. That is, the intention of the legislature is that the Court will not interfere with the administrative formula result in the ordinary run of cases.” (Ibid 225)
88. I am not persuaded that there is any significant qualitative difference between “special” circumstances and “exceptional” circumstances. In my view, what is required, in the case concerned, is for it to be out of the ordinary run of cases and to be marked by some characteristic which render it unusual or something other than commonplace”.
The Court raised the question with Mr Strum as to “whether it is exceptional that children get older and move from one parent’s home to another parent’s home?” (T p.17, l.44). Mr Strum responded that it is a matter of degree and it is exceptional that [X] lived solely with the husband from the end of March 2006, and [Y] has lived solely with (the husband) since December 2009, without spending one overnight with the wife. The Court accepts that response. Having regard to the fact that at the time the SA was made the children were living in a shared care arrangement, and to the fact that the wife has not had shared care of the children since as least December 2009, the Court finds that the circumstances would not have been within the reasonable contemplation of expectation of the parties when they made the agreement and are not within the normal vicissitudes of life Sandrk (supra). The changes are “exceptional circumstances” within s.136(2)(d) of the CSA Act.
Being “exceptional circumstances” within s.136(2)(d), the Court finds that they also comprise “a significant change in the circumstances” within s.136(2)(c).
Mr Strum referred to the passages in Daley (supra) where it is stated at [22]:
“It is common ground between the parties that neither of them had any formal legal advice prior to entering the child support agreement. At the time, there was no requirement that the parties to such an agreement required any legal advice prior to entering such an agreement and before it could become enforceable”.
Mr Strum referred to the passages in [57] to [62] (Ibid) about the child support agreement being accepted there by the Court as “binding” after the Registrar of the CSA reviewed the agreement and determined it would remain in force after 1 July 2008.
The Court notes that in Daley there was no legislative requirement to obtain legal advice before entering into the agreement, and that therefore the legislation was complied with in that case.
Similarly here, s.80C(2)(c) had not been enacted when the SA was entered into (supra).
However for the Court to find now that a child support agreement is “binding” [s.80C(2)], the agreement must contain a statement that legal advice was provided before the agreement was entered into and, have certifications by legal practitioners attached.
The decision in Daley relates to a “limited child support agreement” where there is no requirement for legal advice, or certification by legal practitioners. (Ibid 74).
Mr Strum referred to [74] of Daley which outlines the requirements for a ‘limited child support agreement” as follows:
·As previously indicated, (they) do not require the provision of legal advice;
·(They) must be for an amount which is either equal to or greater than the amount of child support administratively assessed; [s.80E(1)(d)(i)]
·(They) must be in writing and signed by each party to it [s.80E(1)(a)].
The Court notes the provision in s.80E(1)(d)(ii) that as an alternative criteria to the existence of an administrative assessment of child support, the agreement can be a “limited child support agreement” if “it has been accepted by the Registrar under s.98U”.
Section 98U provides:
Decision on child support agreement
(1)Subject to subsection (2), if the Registrar is satisfied that an agreement entered into by the parties to proceedings is a child support agreement, the Registrar must accept the agreement.
(1A) In working out whether an agreement is a limited child support agreement for the purposes of subsection (1), disregard:
(a)paragraph 80E(1)(d); and
(b)subsections 80E(2) to (5).
(2)For an agreement (other than a binding child support agreement), the Registrar must not accept the agreement unless he or she is also satisfied that it would be just and equitable, as regards the child, the liable parent and the carer entitled to child support, to accept the agreement.
(3)Subsections 117(4) to (9) (inclusive) apply to the Registrar in the exercise of his or her functions under subsection (2) as if:
(a)any reference in those subsections to the court were a reference to the Registrar; and
(b)any reference to the making of a particular order under Division 4 of Part 7 were a reference to the acceptance of an agreement.
(4)If the Registrar accepts the agreement:
(a)whichever of sections 34B and 93 is appropriate applies; and
(aa)sections 95 and 96 apply; and
(a)the Registrar may not make a determination under this Part in relation to the proceedings.
(5)If the Registrar is not satisfied as required by subsections (1) and (2), the Registrar must refuse to accept the agreement.
(6)If the Registrar refuses to accept the agreement:
(a)section 96 applies; and
(b)the Registrar must proceed to make a determination under this Part.
The SA was accepted by the Regional Registrar of the Child Support Agency on 22 August 2005 (Annexure “E” to the affidavit of the husband sworn 7 July 2011). It may be that the requirements for a “limited” child support agreement were met. The Court notes that the parties did not refer to s.98U in their submissions. The provisions of s.14 of the Federal Magistrates Act 1999 and r.16.01 of the Federal Magistrates Court Rules 2001 are as follows:
Section 14 - Determination of matter completely and finally
In every matter before the Federal Magistrates Court, the Federal Magistrates Court must grant, either:
(a)absolutely; or
(b)on such terms and conditions as the Federal Magistrates Court thinks just;
all remedies to which any of the parties appears to be entitled in respect of a legal or equitable claim properly brought forward by him or her in the matter, so that, as far as possible:
(c)all matters in controversy between the parties may be completely and finally determined; and
(d)all multiplicity of proceedings concerning any of those matters may be avoided.
Rule 16.01 - Court may make any judgment or order
The Court may, at any stage in a proceeding on the application of a party, give any judgment or make any order even if the claim was not made in an originating process.
Instead of the Court reaching a conclusion on the material now before it, the Court directs the parties make submissions on s.80E(1)(d)(ii) and s.98U at the hearing on 16 September 2011, in order for the Court to determine if the SA is a “limited child support agreement” within the CSA Act, or not a SA covered by the Act.
Mr Strum submits that the threshold to set aside a “limited” child support agreement is lower than to set aside a “binding” child support agreement [s.136(2)(c) and s.136(2)(d)]. The Court agrees; a “significant change” is a lower test than “exceptional circumstances”.
Mr Strum submits that as there were no requirements for “significant changes” or “exceptional circumstances” when the SA was entered into, the law cannot have the retrospective effect of now requiring such to obtain before an agreement can be set aside. The Court rejects that submission. Section 136 is not being given retrospective effect by requiring it to be met in order to set aside a child support agreement. To the contrary, it is being given prospective effect by applying it to applications to set aside agreements which come before the Court after the provision was enacted.
Mr Strum submits that when the parties entered the SA, under the laws that then applied, they could have changed the SA relatively easily. Be that as it may, that circumstance has no affect on the resolution of this matter.
Mr Strum referred to the decision in Simpson & Hamlin (supra) on whether the changes that occurred were within the “expectation or contemplation of the parties” when they signed the agreement.
Mr Strum referred to the duty of the parents to maintain their children set out in s.3 of the CSA Act, which provides:
Duty of parents to maintain their children
(1)The parents of a child have the primary duty to maintain the child.
(2)Without limiting subsection (1), the duty of a parent to maintain a child:
(a)is not of lower priority than the duty of the parent to maintain any other child or another person; and
(b)has priority over all commitments of the parent other than commitments necessary to enable the parent to support:
(i)himself or herself; and
(ii)any other child or another person that the parent has a duty to maintain; and
(c)is not affected by:
(i)the duty of any other person to maintain the child; or
(ii)any entitlement of the child or another person to an income tested pension, allowance or benefit.
Mr Strum submits that the only issue presently before the Court for decision is whether the SA is a “binding” or “limited” agreement; and that whether the husband “meets exceptional circumstances or hardship or significant change of circumstances” are matters that can only be determined after all the evidence is heard, however he seeks a finding on that issue if the Court is able to make a finding on the material before it (post).
Mr Strum submitted that the husband is relying also on s.136(2)(c)(ii) (supra).
Mr Strum submits, as to the decision in Cogswell (post), that
Ms Buchanan did not identify where the legislation provides that “child support agreements that terminate when the child attains the age of 18”, must be “binding” agreements.
Mr Strum submits that nowhere in the wife’s evidence does she deny that [Y] has lived with the husband since December 2009. That is correct, although she raises the issue of [Y] staying with her in October 2010 (post).
Mr Strum submits that the husband is not seeking to set the SA aside at this stage, but is seeking to “classify what type of agreement it is” (T p.78, l.40), unless the Court finds that the change in circumstances is “exceptional”.
Submissions for the Respondent Wife
Ms Buchanan tendered a letter from the CSA to Ms Roper dated
8 February 2008 (Exhibit R1), which states that the child support agreement “has been reviewed by the Child Support Agency and will continue after 30 June 2008” (Exhibit R1). The Court notes that the letter does not state whether the SA was deemed to be a “limited” or “binding” agreement.
Ms Buchanan referred to Annexure “E” to the affidavit of the husband sworn on 7 July 2011, in particular to the statements dated
17 December 2007, 11 May 2008 and 22 June 2010, as evidence of the transition of the SA. Again, those statements say nothing about whether the SA is considered by the CSA to be “limited” or “binding”.
Ms Buchanan referred to page 14 of the Legal Practitioners Guide distributed by the CSA. Ms Buchanan referred to a passage on p.14 (Exhibit R2) where the CSA stated that “child support agreements that are made and accepted before 1 July 2008 will be treated as a special class of binding agreement after 1 July 2008…” Ms Buchanan states that she does not place emphasis on the word “binding”. There is no explanation of what a “special class of binding agreement is”, and the Court finds no provision for a “special class” of “binding” agreements in the CSA Act. The content of Exhibit R2 is of no assistance in this matter.
Ms Buchanan referred to s.80C (supra) and concedes, properly, that the agreement does not contain the statements as to legal advice, that are required by s.80C(2)(c). Ms Buchanan then makes the broad assertion that none of the transitioned agreements comply with s.80C(2)(c) because the requirement was not in the Act before the amendment (which commenced) on 1 July 2008. Be that as it may, it does not mean that, as a matter of law, the agreements now comply with s.80C(2).
Ms Buchanan referred to the decision of Altobelli FM in Cogswell & Calvery [2010] FMCAfam 172 at [42] where his Honour accepted that a child support agreement was deemed by the legislation to be a “binding child support agreement”, because “it was expressed to conclude when each of the children referred to therein attains the age of 18, and makes no other provision for any other terminating event”. That statement distinguishes the case from the present where clause 3 of the SA provides that it will continue “until such time as the said children become financially independent or cease secondary education upon first attaining the age of 18 years of age, whichever of the said events occurs first”.
His Honour continued:
“I wish to emphasise that, technically, the child support agreement in question does not meet the requirements of s.80C(2) of the Act because of the absence of independent legal advice. Nonetheless it is deemed to be a binding child support agreement because of the transitional provisions of the Act”.
As stated above, the facts in Cogswell differ from those here and the decision is not a relevant authority in this matter.
Ms Buchanan referred to the decision of Lapthorn FM in Leonard & Leonard [2010] FMCAfam 390 where his Honour found at [30] that:
“Item 74 of Schedule 5 required the Child Support Registrar to review all child support agreements that were made prior to 1 July 2008 and determine in writing whether each such agreement was to be taken to be a binding child support agreement or to be terminated”.
The Court accepts that Item 74 of Schedule 5 to the Child Support Legislation Amendment (Reform of the Child Support Scheme – New Formula and Other Measures) Act 2006 required the Registrar to review all agreements before 1 July 2008 and determine whether it is to be taken to be a “binding child support agreement” or to be terminated.
Ms Buchanan stated that:
“In Leonard there was an exhibit which contained a letter from the Child Support Agency to the mother advising her that the agreement was considered to be a ‘binding child support agreement’, which is lacking in this case”. (T p.45, l.40).
The Court finds that to be a distinguishing fact and that the decision in Leonard is not a relevant authority in this matter. Further,
Ms Buchanan stated that the issue of whether the child support agreement in Leonard was “binding” did not arise in that case (T p.52, l.24).
Ms Buchanan referred to the Explanatory Memorandum to the Child Support Legislation Amendment (Reform of the Child Support Scheme – New Formula and Other Measures) Act 2006, which is set out in the decision of Justice Warnick in Balzano & Balzano [2010] FamCAFC 11. Ms Buchanan referred to that Memorandum in the context of whether the Court was required first to determine if the SA is “limited” or “binding”. Because the Court is proceeding to do that, the Court is not required to consider content of the Explanatory Memorandum on that issue.
Ms Buchanan referred then to Annexure “A” to the husband’s affidavit filed on 7 July 2011 (supra), and to the property orders of 27 June 2005 in which “there was virtually no division of matrimonial property”. Ms Buchanan referred to the s.90C Financial Agreement made on 27 June 2005 (Ibid Annexure “C”) which includes Recital P that the parties had obtained independent legal advice. After considering the decision in Appleton (post) the Court finds that decision to be irrelevant to the issue for decision here, as it is not established that any advice given related to the SA, and the agreements are not stated to be inter-dependent (post).
Ms Buchanan contests that [Y] has lived with the husband solely since December 2009, and says that [Y] stayed with the wife in October 2010 (Affidavit of the wife sworn on 5 April 2011 at [9]). It is not contested that since December 2009, [Y] has lived predominantly with the husband.
Ms Buchanan referred to the consideration in Daley (supra) at [109] as to what “hardship” is within s.136(2)(d).
Ms Buchanan referred to the decision in Appleton & Appleton [2011] FamCA 70 and to the finding there that “the father’s financial pain has been of his own making” [at 39]. That is not relevant to the issue to be determined by this decision. The Court notes that the decision [at 39] contains a summary of the test of “exceptional circumstances” in s.136(2)(d).
Ms Buchanan referred to the husband taking the children on holidays. That submission is not relevant to the issue for decision.
Ms Buchanan referred to [35] of Appleton (supra) where Justice Austin stated:
Notwithstanding the absence of need for legal advice when the subject child support agreement was struck in September 2007, the father did receive independent legal advice about both the child support agreement and the binding financial agreement, which agreements were expressly inter-dependent upon one another. Both agreements were executed by the father on the same day in the presence of his solicitor”.
That finding is of no relevance here as the s.90C Financial Agreement is not stated to be “inter-dependent” on the SA, which in turn is not stated to be “inter-dependent” on the financial agreement (Annexures “C” and “D” to the affidavit of the husband sworn on 7 July 2001).
Ms Buchanan referred to the consideration of “exceptional circumstances’ in Sandrk (supra).
Ms Buchanan referred to the decision of Justice Kay in Savery (supra) that for circumstances to be “exceptional” they must be unusual, out of the ordinary and special. In the child support context in respect of an application for departure they must be “facts peculiar to the particular case which set it apart from other cases” (Ibid p.77,897).
Is the Child Support Agreement “limited” or “binding”?
The Court finds that the CSA has not deemed the SA to be a binding child support agreement. Even if it had, it is for the Court to determine whether, as a matter of law, under the current legislation, the agreement meets the requirements to be “limited” or “binding” within the CSA Act.
The Court finds that because of the non-compliance with s.80C(2)(c) the agreement is not a “binding child support agreement”.
Are there “exceptional circumstances”?
The Court finds that the circumstances that have occurred since the agreement was made would not have been contemplated by the parties at the time the agreement was made, especially as a recital to the agreement provided for the children to “reside with the wife”. The Court recognises that it was not intended that the children reside solely with the wife; however that recital shows that it was certainly not contemplated that they would not live with her at all during the operation of the agreement, and would live solely with the husband.
The Court finds that, as a question of fact and degree in this case, there are exceptional circumstances within s.136(2)(d). They also comprise “a significant change in the circumstances” within s.136(2)(c)(i) (supra).
I certify that the preceding sixty-three (63) paragraphs are a true copy of the reasons for judgment of F. Turner FM
Date: 25 August 2011
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