Dahl and Dahl (Child support)

[2020] AATA 4410

Dahl and Dahl (Child support) [2020] AATA 4410 (23 September 2020)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2020/SC019593

APPLICANT:  Mr Dahl

OTHER PARTIES:  Ms Dahl

Child Support Registrar

TRIBUNAL:  Member S Cullimore

DECISION DATE:  23 September 2020

DECISION:

The decision under review is set aside and the Tribunal substitutes a new decision that the amount of $2,370.42 paid by Mr Dahl to Ms Dahl on 14 January 2020 be credited as a non-agency payment under section 71 of the Child Support (Registration and Collection) Act 1988.

This means that the application for review is successful.

CATCHWORDS

CHILD SUPPORT – non-agency payment – whether payment made to a third party in lieu of child support – intention of both parents – decision under review set aside and substituted

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

REASONS FOR DECISION

BACKGROUND

1. The following information is taken from the records of Services Australia – Child Support (“the CSA”) and is not in dispute, and the Tribunal finds each matter as fact.

2. Ms Dahl and Mr Dahl are the parents of three children, now aged twelve, nine and seven.

3. On 3 January 2020 Ms Dahl lodged an application for child support.[1] In that application she stated that she had sole care of the children and put the date of separation as 21 August 2019.[2]

   [1] C160 onwards

   [2] E.g. at C169

4. On 30 January 2020 a delegate decided to register a child support case between the parents, for the three children, with the case commencing from 3 January 2020. The delegate also decided that the case should be Registrar Collection from that date.[3]

   [3] C172

5. The initial rate of child support from 3 January 2020 was assessed as $35,370pa ($2,947.50pcm).[4]

   [4] C184

6. On or about 8 February 2020 Mr Dahl claimed credit for a “non-agency payment” (“NAP”).[5]

   [5] C62. See further below.

7. On 13 February 2020 a delegate decided to credit what were said to be two payments, one of $1,197.09 and the other of $1,173.33 (in total $2,370.42), against the child support liability of Mr Dahl. The decision stated that these payments were made on 15 January 2020 and 13 February 2020.[6]

   [6] C58

8. On 26 February 2020 a different delegate decision appears to have rejected a claim by Mr Dahl for the crediting of two further payments, each of $2,370.42, which that decision states were made by him on 14 December 2019 and 14 January 2020.[7]

   [7] C156

9. Ms Dahl promptly advised the CSA that she disagreed with the delegate’s decision of 13 February 2020, but she was treated by the CSA as not lodging a formal written objection to that decision until 9 May 2020.

10.She was granted an extension of time to object.

11.On 24 July 2020 an objections officer “allowed” her objection and decided that Mr Dahl’s claim for the amount of $1,197.09 should be rejected.[8]

[8] The objections officer does not refer to the other “payment” (i.e. the supposed $1,173.33) but that amount remained credited to his account.

12.On 3 August 2020 Mr Dahl sought a further review by this Tribunal of the objection decision.

DOCUMENTARY EVIDENCE AND HEARING

13.The Tribunal had before it the original bundle of documents provided by the CSA. This bundle is referred to in this decision as C1 to C155.

14.Further documents were requested from the CSA by the Tribunal. These are marked C156 onwards.

1. Mr Dahl attended the hearing on via teleconference and gave evidence and made verbal submissions.

2. Ms Dahl decided not to participate in the hearing.

3. Documents received from Mr Dahl before the hearing were marked A1 to A46.

ISSUES

18.The principal issues to be decided by the Tribunal are:

·Which matters (i.e. which payment or payments for which Mr Dahl has claimed NAP credits) are in fact before the Tribunal?

·Does any such payment or payments qualify as an “ordinary NAP” or as a “prescribed NAP”?

CONSIDERATION

The relevant child support law

Objections and AAT jurisdiction

1. The relevant law is contained in section 81 onwards of the Child Support (Registration and Collection) Act1988 (“the Act”).

2. These provisions state that a person may object in writing to a decision (other than a care decision) within 28 days of receipt of the written decision. If they are out of time they may seek an extension of time, which the CSA may grant or refuse.

3. The Tribunal is satisfied that Ms Dahl in fact objected in writing to the delegate’s decision of 13 February 2020 on 27 February 2020: see C69. She was therefore within time and never needed an extension of time.

4. There was therefore a valid objection, lodged within time, and so the Tribunal has jurisdiction to review the objection decision.

5. The delegate decision of 26 February 2020 appears to have been misconceived: see below.

Non-agency payments

1. The relevant law is contained in section 71 onwards of the Act.

2. These provisions state that a person can be given a “NAP credit” in various circumstances.

3. Firstly, there are so-called “prescribed NAPs”.

4. Section 71C of the Act provides that credit is given if the payer pays the payee an amount which is “of a kind specified in the regulations” and if other requirements are met.

5. Payments “of a kind specified in the regulations” include “the payee’s share of repayments on a loan that financed the payee’s home” and “costs to the payee of obtaining and running a motor vehicle including repairs and standing costs”.

6. The Tribunal is satisfied that Mr Dahl only ever claimed credit for one payment of “private child support” and not for any contribution by him to the joint debts of the household. In any event, none of these types of payment made by him to Ms Dahl were “of a kind specified in the regulations”.

7. Secondly, there are so-called “ordinary NAPs”.

8. These types of NAP are given a full dollar-for-dollar credit.

9. Section 71 of the Act provides that these NAPs are: (i) sums paid “to the payee of an enforceable maintenance liability” by the payer; and (ii) which are “intended by both the payer and the payee to be paid in complete or partial satisfaction of an amount payable under the liability in relation to the child support enforcement period” [my emphasis].

10. There is an overriding discretion to refuse to credit a payment, even though it meets all of the relevant requirements.

11. This is set out in section 71D of the Act, as follows:

    71DRegistrar may refuse to credit amounts in special circumstances

    The Registrar may refuse to credit an amount under section 71 ...(or) ...71C if satisfied that, in the circumstances of the particular case, the amount ought not to be credited.

12. There is no “reverse discretion” to include a payment as a NAP, although it does not strictly comply with all of the relevant requirements.

13. A further type of NAP is provided for under section 71A of the Act, but those NAPs involve the payer paying the amounts concerned to a third party. This was not the case here.

Registering a child support case

1. The child support case was registered on the application of Ms Dahl. In her application, dated 3 January 2020, she also sought Registrar Collection of child support.

2. The delegate’s decision of 30 January 2020 was to grant her application, from 3 January 2020, and to assess Mr Dahl’s child support liability as starting from that day, with no “discount” for any private child support payment.

3. A decision to register a child support case is a decision of a kind which is subject to objection (see section 80, Table, item 1 of the Act), but this decision has not been objected to by Mr Dahl.

4. Whether, in the complex circumstances, Mr Dahl was entitled to some form of “credit” for the private child support payment which he had made to Ms Dahl on 14 December 2019, which was for the period 14 December 2019 to 14 January 2020, or for any earlier payment of that nature, against his assessed liability, is not a matter before the Tribunal.

5. It may be a matter that needs to be dealt with in a change of assessment application.

DISCUSSION OF EVIDENCE, CONCLUSIONS AND REASONING

Which payment (or payments) made by Mr Dahl to Ms Dahl was he claiming a NAP credit for?

1. The Tribunal finds that what Mr Dahl was in fact claiming a NAP credit for was the “private child support” payment made on or about 14 January 2020, and only that payment. The CSA seems to have misunderstood this.

2. Mr Dahl did not make any claim for the 14 December 2019 private child support payment, and it is important to note that he did not make any payment of “private child support” in February 2020: that month he paid the CSA-assessed rate of child support to the CSA.[9]

   [9] See A25

3. In light of the above, the only matter before the Tribunal are the payments said to be of $1,197.09 and $1,173.33 (in total $2,370.42) the subject of the delegate’s decision of 13 February 2020.[10]

   [10] C58

Is Mr Dahl qualified for any NAP credits in this matter?

1. The Tribunal finds that each monthly payment made by Mr Dahl to Ms Dahl from September 2019 up to January 2020 included an amount of $2,370.42 intended by Mr Dahl as “private child support” for the following month, with each payment being made to Ms Dahl’s NAB bank account about the middle of the month.

2. Mr Dahl stated in evidence and the Tribunal accepts that he had worked out his potential liability for child support as $2,370.42pcm using the CSA Rate Calculator.

3. Mr Dahl submitted that these amounts of private child support (and all other amounts) were paid to Ms Dahl based on a detailed “Schedule” which he had put together and which the Tribunal finds that he supplied directly to Ms Dahl by email on 4 September 2019 (at A33).

4. The parents were trying to reach an “Interim Financial Agreement” via their lawyers in September 2019, but these attempts were abandoned following an attempted reconciliation (which failed, and court proceedings were then initiated).

5. To obtain a credit for this payment of private child support, as it is not a “prescribed” payment (see section 71C, above), it must fall under section 71 of the Act.

6. In order to qualify, therefore, the payment: (i) must be “received” by the “payee of an enforceable maintenance liability”; and (ii) there must be the requisite mutuality of intention.

7. A payment cannot be credited if no enforceable maintenance liability exists as at the date of payment, and in this case an enforceable maintenance liability (Registrar Collection) existed only on and from 3 January 2020.

8. The payment of $2,370.42 received by Ms Dahl on or about 14 January 2020 was received by Ms Dahl after the enforceable maintenance liability started (3 January 2020). That requirement is therefore met.

9. There is then the difficult issue of mutual intention.

10. Ms Dahl chose not to participate in the hearing and so the Tribunal could not ask her about her state of mind as at 14 January 2020 when she received the relevant payment. That non - participation was her choice.

11. The Tribunal has to therefore look at the surrounding circumstances and draw its own conclusions, without her evidence.

12. As stated above, the parents were notified by letter, dated 30 January 2020, that the case had been commenced from 3 January 2020 (i.e. the case was backdated).

13. Clearly, as at 14 January 2020, Ms Dahl was aware that the CSA was dealing with her application to register a child support case.

14. She was also aware that Mr Dahl was making substantial regular monthly payments to her of about $5,000 per month.

15. In a text message dated 9 December 2019 (at C118) Ms Dahl acknowledged to Mr Dahl that the “Interim Financial Agreement” would continue until a “final settlement” was reached. The Tribunal infers from that message and from the detailed contents of the Schedule of the monthly payments (A33), which very clearly refers to child support, that she was fully aware at all relevant times that about half of each monthly payment Mr Dahl was making to her was intended by him as child support.

16. Ms Dahl told the CSA that she was not aware that any part of these monthly payments represented any form of child support. She stated that she thought that they were “spousal maintenance”. That type of payment needs a court order and no such court order was ever made. She must have been aware of that. Her evidence to the CSA on this point was clearly disingenuous.

17. In these unusual circumstances, the Tribunal finds that Ms Dahl was fully aware of the fact of and the nature of the $2,370.42 payments being made to her each month, and, given the circumstances of the backdating of the case, must have intended, and did intend, that the payment of 14 January 2020 was in “partial satisfaction” of Mr Dahl’s child support liability to her, once that liability was finally assessed by the CSA.

18. Therefore, the required mutuality of intention did exist in respect of this payment.

19. Mr Dahl should therefore be credited with the amount of $2,370.42 paid by him to Ms Dahl on or about 4 January 2020 as an “ordinary NAP”.

DECISION

The decision under review is set aside and the Tribunal substitutes a new decision that the amount of $2,370.42 paid by Mr Dahl to Ms Dahl on 14 January 2020 be credited as a non-agency payment under section 71 of the Child Support (Registration and Collection) Act 1988.

This means that the application for review is successful.