Fenrich & Safor

[2021] FamCA 194

FAMILY COURT OF AUSTRALIA

Fenrich & Safor [2021] FamCA 194

File number(s):	BRC 7499 of 2020
Judgment of:	BAUMANN J
Date of judgment:	4 February 2021
Catchwords:	FAMILY LAW – CHILD SUPPORT – Application to set aside a binding child support agreement – Orders made for the binding child support agreement to be set aside effective 1 July 2020
Legislation:	Child Support (Assessment) Act 1989 (Cth), ss 116, 136(2)(d)
Number of paragraphs:	19
Date of hearing:	4 February 2021
Place:	Brisbane
Applicant:	Self-represented
Respondent:	Self-represented

ORDERS

BRC 7499 of 2020

BETWEEN:

MR FENRICH

Applicant

AND:

MS SAFOR

Respondent

ORDER MADE BY:	BAUMANN J
DATE OF ORDER:	4 FEBRUARY 2021

THE COURT ORDERS:

1.That the Binding Child Support Agreement entered into between the parties dated 27 November 2019 be set aside effective 1 July 2020.

Note:   The form of the order is subject to the entry in the Court’s records.

Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to 17.02 Family Law Rules 2004 (Cth).

IT IS NOTED that publication of this judgment by this Court under the pseudonym Fenrich & Safor has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

EX TEMPORE REASONS FOR JUDGMENT

BAUMANN J:

1. The parents in this matter come to the Court with a dispute over child support arising from a child support agreement entered into on 27 November 2019.  This new child support agreement was entered into during a trial for disputed parenting issues before me.

2. A three day parenting dispute resulted in a Judgment delivered 29 January 2020.

3. The child support relates to two children, X, born in 2007, and Y, born in 2009.  There is no doubt that these parents are capable, intelligent and very loving and caring of their children.  It is also, sadly, not in doubt that they have been separated for some time and that much of their history since separation, which appeared to have occurred on or about 4 October 2009, has been associated with conflict.

4. The father is professional and previously employed by K Company.  The mother is an educator who, at the relevant time, was employed and still remains employed in Suburb L.  Sensibly, the parents on or about, as I say, 27 November 2019, with the assistance of their lawyers, executed a binding child support agreement.  Although I have no evidence of its registration, I am satisfied that it has been registered.

5. The terms of the agreement are set out in an annexure to the father’s affidavit filed 17 June 2020 and in essence provides, at paragraph 3(i), that the agreement shall cease to operate in relation to the children:

   In the event the Liable Parent’s earning capacity, through no election, decision, conduct or misconduct whether by him or his agent causes his said earning capacity (excluding application of any taxation deduction, rental property or other offsetting losses or expenses), in the opinion of a Court has reduced below $179,000 per annum.

6. The agreement provided, at paragraph 7 for periodic support to be paid by the father to the eligible parent, being the mother, at a rate of $1,400 per fortnight if a school fee discount had been obtained or $1,500 per fortnight if no school fee discount had been obtained.  The payments are to be indexed annually by CPI.

7. Clause 10 of the agreement further provided that non-periodic support would be payable by the father to the mother, being 50% of extra-curricular expenses, music and the like; 100% of the private health insurance for the children and 50% of medical gap fees.

8. I am satisfied, on the evidence, that when the parties genuinely and faithfully entered into the binding child support agreement on 27 November 2019 they did so with the intention of, again, removing themselves from the administrative processes under the Child Support (Assessment) Act 1989 (Cth) (“the Act”). Such had been their position as early as 2010 when they entered into their first binding financial child support agreement. In fact, the agreement was still in force as at 27 November 2019 and the record reveals that, as at 29 November 2019, the parties had resolved, and I made an Order by consent relating to arrears payable under the former agreement such that the mother’s pending Application for enforcement of arrears was dismissed.

9. The Court well understands that the lack of child support that the father has been paying, which the mother says now is at a rate of $375 per fortnight whilst the father says is at $475 per fortnight, since, the mother says, March 2020, has created significant financial pressures upon the mother’s household.  I accept that to be the case, however, the father’s Application to the Court that he filed, and has finally found its way to me through a somewhat torturous pathway, is founded on the fact, not in dispute, that a global pandemic has affected the father’s employment in Australia since some time in March 2020 and that the father, as a longstanding K Company employee, has, to put it simply, had less work to do because there have been less demand for his skills.

10. There is no reason why the father or the mother could have anticipated in November 2019 the catastrophe to the Australian community, the economy and certain industries that the pandemic would wreak upon us all.  The mother, in her material, points to the fact, and it is not disputed by the father, that at least for the financial year ending 30 June 2020, the father’s gross income exceeded $179,000.  The mother says, relying, she says, on the payslip, that his income was $218,026.66.  I put to the father today, he being unrepresented, as is the mother, that I could anticipate that it is likely that income had tapered off from around about February or March 2020, but nonetheless, if the Court was minded to set aside the binding financial agreement, as the father’s Application seeks, the Court would only be minded to do so as and from 1 July 2020.

11. The father, in final submissions today accepts, in all of the circumstances, that would be a reasonable point to set aside the agreement. I made it clear to the father that before turning to the alternate ground for setting aside the agreement, under s 136(2)(d) of the Act, I would need clear evidence as to the actual income he has obtained since 1 July 2020. The father has produced and I have marked as Exhibit 1 in these proceedings, copies of his payslips and his summary. I accept this evidence. The mother has no real way of challenging it, and it would reflect that, at the current rate of income, he is not likely to achieve anything like, at the current time, an income of $179,000 gross per annum.

12. Whilst in these Reasons I talk about income, I am, of course, aware that the agreement the parties entered into talks about earning capacity.  The father, whilst he might have other investments (and says that to support himself he has had to sell his “toys” to create some capital to live off) there is no evidence before the Court nor does the mother seriously contend that there is a significant unused earning capacity for the father.  He is a professional; has been a professional for many years; is still employed by K Company and, I infer, when this situation improves, would hope to go back to something more like full-time employment.  If that occurs, of course, at that time, child support can be reassessed, administratively.

13. However, on the evidence before me today, I am satisfied that the basis for the agreement ceasing to have effect, set out in clause 3 of the agreement between the parties, has been satisfied. I propose to set aside the binding child support agreement effective 1 July 2020. The alternate ground urged upon the Court, under s 136(2)(d), does not necessarily need to be determined by the Court in view of the earlier finding. Section 136(2)(d) provides, inter alia, that the parties to a child support agreement may make an application to this Court to set aside the agreement:

    (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.

14. I do accept that the global pandemic and its effect on the industry in which the father has always been employed as a professional is an exceptional circumstance within the meaning of the Act. In my view, on the evidence before me, including the financial statement of the father, hardship to him if he is required to maintain payments at the level set out in the agreement if it was in force, was likely. I accept that if, for example, the non-payment of child support meant that these children, who have been used to a private school education, were unable to stay at the private school, that that would be a hardship to them as well, but that is not a basis upon which the father should be required, under the law, to maintain a payment which would cause hardship to him to pay.

15. The end result of this Application and Cross-Application is that the Order of the Court to set aside the binding child support agreement from 1 July 2020 will activate and/or trigger the right of the eligible parent, the mother, to immediately go to the Child Support Agency and seek that the father be administratively assessed. She should, in my view, absent some agreement between her and the father as to a lower amount that they could negotiate, do so immediately. I say the last statement because, as has been the case since 2010, the parties could enter into a new agreement and take themselves out of the child support administrative regime set up by the Act.

16. The regime, doing the best it can, meets the needs of some Australian parents much better than others.  Those with a fluctuating income, as the father’s may ultimately be over the years left that the children, X and Y, remain under the age of 18, could mean that these parties will be engaged in a very serious ongoing conflict with the Child Support Agency through objections, reviews and appeals.  No doubt, the parties were aware of these issues, and that is what encouraged them to enter into an agreement in the first place in 2010 and a new agreement in 2019.

17. With proper legal advice they may well be able to create a sensible agreement that sets out the capacity to review in some way, but in the absence of an agreement, the mother’s rights, as the eligible parent, to seek an administrative assessment is enlivened.  I should say, in conclusion, that the parties have, I think, been very sensible today.  I appreciate this has taken a long time to get to me.  It is not clear to me that they actually understood how the operation of orders would be.  There is a duty under Australian law for each parent to meet the needs of their children equitably.  Equitably is not necessarily equally.  Equitably raises questions of capacity.  It raises questions of the needs of children, including whether parties, as clear here, have at another time pursued private education for their children.  It can consider, in various cases, special needs of children.  There are many factors that parents know only too well that go to meeting the financial needs of their children who they chose to bring into the world and who their responsibility it is to support as best they can to adulthood.  My hope is that these two genuinely capable and loving, intelligent and sensitive parents could find a way to ensure that their children’s needs are met as best they can, however, the law does provide a remedy.

18. To the extent that there may have been an Application pending before the Court still pursued, under s 116 of the Act, such relief to come to the Court for assessment only arises once the administrative assessment has been made. There is no administrative assessment at this stage. Furthermore, that relief can only be considered, and there is a discretion whether it be granted, if there are other actions before the Court. That is because, as a matter of Parliamentary intent, parents in Australia have for many years now been diverted towards the administrative pathway for the assessment, determination and variation of child support rather than the legal pathway which has caused further delays and expensive legal costs to be incurred.

19. So I make the Orders I do, and that will bring the Application to an end.  You are both unrepresented.  There is no basis upon which I would, therefore, consider an application for costs.

I certify that the preceding nineteen (19) numbered paragraphs are a true copy of the ex tempore Reasons for Judgment of the Honourable Justice Baumann.

Associate:  

Dated:       5 May 2021