Fryer and Fryer (Child support)

[2019] AATA 5019

Fryer and Fryer (Child support) [2019] AATA 5019 (31 October 2019)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2019/AC016831

APPLICANT:  Mr Fryer

OTHER PARTIES:  Child Support Registrar

Ms Fryer

TRIBUNAL:Member M Kennedy

DECISION DATE:  31 October 2019

DECISION:

The decision under review is affirmed.

CATCHWORDS

CHILD SUPPORT – non-agency payment - whether payments made to the payee were in lieu of child support - intention of both parents – mutual intention not established – payments not to be credited - decision under review affirmed

Names used in all published decisions are pseudonyms. Any references appearing in square brackets indicate that information has been removed 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. Mr Fryer and Ms Fryer are the parents of [Child 1] and [Child 2], in respect of whom a child support assessment is in place.

2. On 28 August 2018, Mr Fryer asked the Child Support Registrar (i.e. the Department) to credit 24 payments he had made directly to Ms Fryer between 7 April 2016 and 11 April 2018, totalling $11,499.50, against his child support liability.

3. After making enquiries with Ms Fryer, the Department decided to refuse Mr Fryer’s request to credit these payments.  In correspondence of 25 September 2018, the Department indicated that the reason the request had been refused for each of the 24 payments was that there was ‘no mutual intention’ that the payments be in lieu of child support.

4. Mr Fryer objected to the decision on 21 January 2019, outside the prescribed timeframe. Mr Fryer explained that he had been led to understand that the reason for the rejection was the absence of mutual intention that the payments be in lieu of child support, but in further discussions with the Department he had been led to understand that the reason was there was insufficient proof of the payments being made.  As it has transpired, Mr Fryer’s first understanding was accurate, and the latter understanding inaccurate.  Nonetheless, an extension of time was granted and the objection proceeded.

5. On objection, an objections officer noted that Ms Fryer had earlier expressly denied that she had agreed that the payments were to be in lieu of child support (although she did not deny receiving them) and had said the payments were intended to be in addition to child support. On this basis, the objection officer disallowed Mr Fryer’s objection on 25 June 2019.

6. Mr Fryer applied to the Tribunal for review on 27 June 2019.

CONSIDERATION

1. Direct payments to a payee may be credited towards a child support liability subject to one important criterion being satisfied (among others); namely, that the amount be intended by both the payer and payee to be paid in complete or partial satisfaction of an amount payable under the liability.   This is provided for by subparagraph 71(1)(a)(i) of the Child Support (Registration and Collection) Act 1988.

2. It is now clear that Ms Fryer does not dispute that she received the amounts the subject of Mr Fryer’s application, and so the determinative issue is whether there was mutual intention that the amounts be paid to meet the child support liability.  Ms Fryer’s evidence is that she had not agreed or understood that the payments were made in lieu of child support, but rather they were made in addition to the child support assessment.

3. Mr Fryer explained that he relied on past successful applications to have amounts credited in similar circumstances.  Mr Fryer explained that in the past the Department had identified underpayment of child support (as I understand it, upon reconciliation of income estimates), but had accepted his evidence of additional payments of child support he had made.

4. After the hearing, I asked the Department to provide evidence of previous applications to have non-agency payments credited. 

5. Mr Fryer confirmed that his position was that because Ms Fryer had previously accepted similar payments as being paid in satisfaction of the child support liability, that demonstrated that there had been mutual intention in relation to the payments the subject of this review.

6. Mr Fryer referred to an agreement struck in 2015.  He explained that the agreement was partly in writing and partly verbal.  Mr Fryer referred to email correspondence at T52-T54.  Mr Fryer acknowledged that the email doesn’t expressly refer to an agreement for amounts to be credited against the child support liability, but contends that the correspondence as a whole refers to Mr Fryer paying additional child support.  I observed however that the term ‘additional’ child support is not consistent with an intention to payments being credited against the liability – but to the contrary.  Mr Fryer explained his understanding was that the payments were to be credited.

7. Mr Fryer provided further background as to why he held this understanding.  He explained that at the time of the email correspondence, he was working as [an occupation 1] and had an investment property and found it very difficult to accurately estimate his income.  Mr Fryer explained that he was also paying half of other costs for the children.  Mr Fryer further mentioned that he had understood at the time that Ms Fryer was working long hours and required financial assistance so that she need not work such long hours.  Mr Fryer explained that he viewed the additional payments as a form of ‘safety net’.  He thought that if the Department ultimately decided he had been under-assessed, he would be able to rely on the additional payments he had made.  Mr Fryer however confirmed that he had not had any discussions with Ms Fryer to that effect, and these considerations were matters that had taken place in his own mind only.

8. Mr Fryer confirmed that his application to have the payments credited came about when his liability was adjusted following a reconciliation of his estimates.

9. I have considered carefully the further records provided by the Department in response to my request (C1-9).  I understand Mr Fryer’s contention to the effect that Ms Fryer’s previous attitude and conduct in relation to similar transactions may be relevant in assessing whether to accept her contention that there was no mutual intention for the additional payments to be credited against the child support liability.

10. I had made procedural provision for Mr Fryer to comment on the further records once obtained, but Mr Fryer did not provide any further submissions. Ms Fryer provided submissions restating her position that Mr Fryer’s payments were intended to be in addition to child support.

11. I note that in September 2016, Mr Fryer made a similar request to have payments credited, and provided a similar explanation to the Department as to his understanding that there was an agreement that these additional payments were for child support.

12. However, in file notes of 28 June 2016 and 30 June 2016, Ms Fryer is recorded to have indicated that she did not agree the payments were for arrears of child support or intended to be for child support.  Instead, Ms Fryer has described another arrangement where she had foregone arrears owing after discussions with Mr Fryer. 

13. The records provided by the Department are an imperfect record of exactly how the Department then approached the payments.  I note that the file notes record that calls with Ms Fryer dropped out, but I consider clear records were made that Ms Fryer’s position at that time cannot be seen as accepting a mutual intention for the additional payments to be credited towards the child support liability, and her position at that time is not inconsistent with her position now.

14. I have also taken into account the evidence of [Mr A], Ms Fryer’s partner.  As I understand it, [Mr A] would typically discuss child support-related matters with Mr Fryer on behalf of Ms Fryer.  I note he had been the addressee of the email at T53 for example.  [Mr A’s] evidence was to the effect that the understanding was that the payments were in addition to the child support liability.

    Assessment

15. In my assessment, Mr Fryer genuinely understood that the additional payments would serve as a form of ‘safety-net’ (his words) in the event that his liability was adjusted upwards upon reconciliation of an inaccurate income estimate.  I consider this is clear from the cogency of Mr Fryer’s evidence in giving the background context to the arrangements as he understood it, and the nature of his communication with the Department in 2016.

16. However, the legislation requires mutual intention.  In circumstances where the other parent categorically denies to the Department and to the Tribunal that there was any understanding that the payments were to be credited against the child support liability, I consider I must have very persuasive evidence of past positions and behaviour that is inconsistent with those denials, in order to reject them.

17. The evidence from the Department in C1-C9 is clear only to the extent that at that time Ms Fryer also did not accept the payments were to be credited against the liability.  The other email correspondence relied upon by Mr Fryer (T51 to T54) contains no clear record of an agreement that payments were to be credited against the child support liability.

18. This may well be a case of misunderstanding.  However, in light of Ms Fryer’s categorical denial of the existence of an agreement where payments would be credited against the child support liability, I have found insufficient persuasive evidence in other forms to find that there was a mutual intention that the payments be credited.

1. The legislative criteria for the payments to be credited are not satisfied.

DECISION

The decision under review is affirmed.