Draper and Holloway (Child support)

[2022] AATA 1698

Draper and Holloway (Child support) [2022] AATA 1698 (3 May 2022)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2021/AC022407

APPLICANT:  Mr Draper

OTHER PARTIES:  Child Support Registrar

Ms Holloway

TRIBUNAL:Senior Member M Kennedy

DECISION DATE:  3 May 2022

DECISION:

The Tribunal sets aside the decision under review and, in substitution, decides that the binding child support agreement is accepted for registration.

CATCHWORDS

CHILD SUPPORT – child support agreement – whether a financial agreement meets the requirements of a binding child support agreement – 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

1. There is a single issue for the Tribunal to determine in this review: whether a binding child support agreement must be accepted by the Child Support Registrar (the Registrar).  This question must be determined by the legislative scheme in the Child Support (Assessment) Act 1989 (the Act).

   Background

2. Mr Draper and Ms Holloway are the parents of [Child 1] and [Child 2]. Amongst other arrangements surrounding the breakdown of their marriage, Mr Draper and Ms Holloway signed a document entitled ‘Binding Child Support Agreement’ (the Agreement).  Although the document is undated, I find that Agreement was entered into by the parents contemporaneously with the signing of certificates of legal advice on 10 August 2017. 

3. On 17 July 2017, Mr Draper provided an advance copy of the Agreement to the Department of Human Services (the Department) along with an application for acceptance of the Agreement in the prescribed form.

4. The Agreement is flawed in its drafting.  Paragraph 10 of the document is internally inconsistent.  I reproduce the problematic aspects below verbatim (emphasis added):

   [10] As of 1^st February 2018, by way of periodic child support payments, the father shall pay to the mother the sum of $200.00 per week being the amount of $100.00 per child, such sum to be paid fortnightly at the rate of $400.00 per fortnight per child until the children reach the age of 18 years or the completion of High School….

1. Apparently in light of the inconsistency in the text of the Agreement, on 11 October 2017, the Department decided the Agreement would not be accepted.  The reason for that refusal is not well explained, described in the notification letter of that date merely as ‘no allowable provisions made’. 

2. On analysis, this brief notation of reasons is best understood to mean that at that time the Department considered that the Agreement did not contain any of the provisions described in section 84 of the Act that may be included in a child support agreement, and so (pursuant to subsection 81(2) of the Act) it was neither a binding nor limited child support agreement, and therefore not a child support agreement at all.

3. In matter AC021206, the Tribunal set out in some detail communications between Mr Draper’s then representative around the decision to refuse to accept the agreement and what happened next in terms of communications, miscommunications and oversight in relation to the Department’s decision.  It is unnecessary in this review to set out all those events again.  Ultimately, an objection to the decision to refuse to accept the Agreement was lodged some years out of time on 16 December 2020. In matter AC021206 this Tribunal (differently constituted) set aside a decision to refuse to grant the extension of time and the extension of time was granted.  The objection process then proceeded.

4. On 18 August 2021, an objection officer disallowed the objection.  The objection officer revisited the history of the controversy, set out aspects of the legislative scheme for the acceptance of binding child support agreements, and identified the difficulties in comprehending clause 10 of the Agreement in particular.  The objection officer noted that no amended Agreement had ever been provided, and affirmed the decision under review.

5. Mr Draper applied to the Tribunal for review of the objection decision on 27 September 2021[1]. 

   [1] The Department’s records indicate that the decision was sent to Mr Draper by post and so the application for review is within the prescribed time.

6. Mr Draper was represented in relation to the review by [Ms A] of counsel.  Ms Holloway was self-represented.  The hearing of the review proceeded mainly by legal submissions on 3 March 2022. After reflecting upon the applicant’s submissions against the wider scheme of the Act, and noting the Child Support Registrar’s (the Registrar) position taken in the authority described below, I decided it was appropriate to invite the Registrar to make written submissions and convened a further hearing which took place on 3 May 2022.

7. Ms Holloway was invited to participate in the second hearing, but did not answer the Tribunal’s call. As I was satisfied Ms Holloway had reasonable notice of the further hearing arrangements, I decided to proceed in her absence at the second hearing, pursuant to paragraph 40(1)(b) of the Administrative Appeals Tribunal Act 1975.

Legislative framework

1. Section 92 of the Act requires the Registrar to accept an agreement if an application for acceptance of the agreement has been properly made. 

2. Section 88 of the Act provides that an application for acceptance by the Registrar of an agreement made in relation to a child is properly made if the application complies with certain formal application requirements and the agreement is a child support agreement.

3. Section 81 defines an agreement as a child support agreement if the agreement is either a binding child support agreement or a limited child support agreement.  The Act (at subsection 81(2)) provides that it will be a binding child support agreement or a limited child support agreement if it complies with section 82 to 85 of the Act.

4. Compliance with sections 82, 83 and 85 of the Act is not in issue.  The Agreement complies with those provisions.  Section 84 of the Act is in issue.  Section 84 requires that an agreement is a child support agreement only if it includes one or more of the provisions itemised in the paragraphs to that section.  Relevantly, the provisions include 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 (paragraph 84(10)(a) of the Act).

5. The Agreement purports to be a binding child support agreement. Section 80C of the Act defines a binding child support agreement by reference to satisfying subsection 81(2) of the Act and also subsection 80C(2) of the Act, dealing with the requirement for the certification if independent legal advice.  The Agreement is accompanied by a certificate in this case and otherwise meets all the necessary characteristics of a binding child support agreement.

   Child Support Registrar v AFS19

6. The Full Federal Court examined the legislative scheme for child support agreements in Child Support Registrar v AFS19 [2021] FCAFC 207. The observations of the Court in that matter are highly instructive and relevant to the resolution of this review.

7. The Court observed that the child support scheme provided for either an administrative assessment of child support through the use of a statutory formula in Part 5 of the Act, or through the use of consent arrangements in Part 6 of the Act.  Part 6 allows for parents and non-parent carers to agree between themselves the child support payable for a child, and to formalise this in a child support agreement: see [48]-[49]. 

8. Griffiths J examined the legislative history of Part 6 of the Act and noted that a proposal to introduce discretion to refuse to register a child support agreement had specifically not been adopted in amendments to the legislation, but instead provision was made for limited child support agreements and binding child support agreements, the latter with the safeguard of requiring legal advice to be obtained and certified.

9. The Court (through Lee J) observed that a binding child support agreement was a statutory creation for a specific purpose and its operation was closely regulated by the Act.  Importantly, the Court made it clear that the contemplated role of the Registrar is not to conduct inquiries, but rather on the basis of the documents provided, to assess whether the agreement has the characteristics identified by Part 6 of the Act.

10. The Full Court found error in the approach of the primary judge in that case who considered that principles of law and equity applied when deciding if a child support agreement was binding on the parties.

11. Griffiths J observed that the legislative process for finding that an agreement is a child support agreement which is acceptable under section 92 of the Act involved two steps: whether there is an agreement or contract and whether it is a child support agreement.

CONSIDERATION

1. In addition to the flawed paragraph 10 of the Agreement, it must be noted that paragraph 8 of the Agreement is a similar provision to paragraph 10 but for the period from the commencement of the Agreement to 31 January 2018.  The drafting of that provision does not share the flaws of paragraph 10.  It provides that the father is to pay the mother $335.00 per week being the amount of $167.50 per child, to be paid fortnightly at the rate of $335 per child.

2. The applicant contends that clauses 8, 10 and 11 ( the latter  a clause dealing with non-periodic payments, albeit merely recognising that such payments from the father to the mother might be agreed) each fall withing the terms of section 84 of the Act and thereby serve to characterise the Agreement as a binding child support agreement.

3. The Registrar accepts in written submissions that clause 8 is a provision for the purpose of paragraph 84(1)(a) of the Act (that is, a provision under which a party is to pay periodic child support to the other party), and so the Agreement can be accepted as a child support agreement in accordance with section 92 of the Act. 

4. I find that clause 8 of the Agreement is a clause meeting the characterisation of paragraph 84(1)(a) of the Act.  All other criteria for the acceptance of the Agreement as a binding child support agreement are satisfied, and so it follows that the decision under review must be set aside and substituted with a decision that the Agreement is accepted.

5. What happens next in relation to clause 10 presents further difficulty.  I note that upon accepting a child support agreement, the Registrar is obliged by section 94 of the Act to give effect to the agreement.  Indeed, it was noting this obligation of the Registrar under the legislative scheme after accepting a child support agreement that motivated me to invite the Registrar to make submissions in these proceedings.

6. In the written submissions, the Registrar contends that clause 10 is not a provision for the purpose of paragraph 84(1)(a) of the Assessment Act.  Potentially therefore, it may be that the Registrar ultimately gives effect only to clause 8.

7. In oral submissions at the second hearing, the Registrar recognised that as the Agreement was to be accepted whether or not clause 10 was a provision for the purposes of paragraph 84(1)(a), it may be outside the Tribunal’s function in this review to express an opinion or to reach a finding about whether clause 10 is such a provision or how it might be given effect to.

8. The applicant’s counsel contends that any finding or opinion I may reach about whether clause 10 can be given effect to and how, if at all, the terms of clause 10 might become a particular of the child support assessment is outside of the scope of this review.  Indeed, the applicant’s counsel raises one potential avenue of resolution where it may fall to a court to construe the Agreement, a mechanism that may be available through subsections 95(2) and 95(6) of the Act.

9. My conclusion is that the Agreement is to be accepted, and I will not offer any further direction as to whether or how clause 10 might be approached by the Registrar in giving effect to the Agreement under section 94.  I regret that this approach is unhelpful to the Registrar and also to Mr Draper and Ms Holloway in terms of resolving this disagreement but it is necessarily so. I am mindful of the limited role of the Registrar in deciding whether or not to accept a child support agreement as described in Child Support Registrar v AFS19 , and conscious that it is that decision only that is under review.  Certainly, it is not for me to take evidence and enquire into the underlying intentions of the parties in entering into the Agreement or to apply the provisions of the Agreement that provide for reading down and severability.

10. I consider that the review function of the Tribunal concludes upon my finding that the Agreement is a binding child support agreement and the subject of an application for its acceptance with the result that it must therefore must be accepted by the Registrar.

DECISION

The Tribunal sets aside the decision under review and, in substitution, decides that the binding child support agreement is accepted for registration.