Huckle and Harl (Child support) - [2018] AATA 4895

Huckle and Harl (Child support) [2018] AATA 4895 (5 December 2018)

DIVISION: Social Services & Child Support Division

REVIEW NUMBER: 2018/MC015122

APPLICANT: Mr Huckle

OTHER PARTIES: Child Support Registrar

Ms Harl

TRIBUNAL: Ms T Hamilton-Noy

Ms P Sperling

DECISION DATE: 5 December 2018

DECISION:

The Tribunal affirms the decision under review.

CATCHWORDS

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

BACKGROUND

This application relates to a decision by the Department of Human Services – Child Support (the Department) to implement a financial agreement between the parties as a binding child support agreement.
Mr Huckle and Ms Harl are the separated parents of [Child 1]. Ms Harl contacted the Department on 13 March 2018 to request that a financial agreement signed by the parties on 8 April 2015 be registered by the Department as a binding child support agreement.
On 14 May 2018 an employee of the Department made a decision to implement the financial agreement as a binding child support agreement.
On 14 June 2018 Mr Huckle lodged an objection to this decision.
On 23 August 2018 an objections officer of the Department disallowed the objection.
On 27 September 2018 Mr Huckle made application to the Administrative Appeals Tribunal for an independent review of the Department’s decision. The hearing was held on 16 November 2018 on which date Mr Huckle attended the hearing to speak to the Tribunal in person and Ms Harl participated by conference telephone. Mr Huckle was represented at the hearing by [a] barrister and instructing solicitors [Ms A and Ms B]. Both parties gave evidence on affirmation. The Tribunal was assisted in the matter by documents provided by the Department. A copy of the documents was provided to the parties prior to the hearing and they both confirmed receipt of the documents with the Tribunal.

CONSIDERATION

The statutory provisions relevant to this review are contained in the Child Support (Assessment) Act 1989 (the Assessment Act) and the Child Support (Registration and Collection) Act 1988 (the Registration and Collection Act).
The issue for the Tribunal in this case is whether the financial agreement made between the parties was correctly registered by the Department as a binding child support agreement.

Legislative framework

Division 1A of Part 6 of the Assessment Act provides for the making of binding and limited child support agreements.
Subsection 80C(1) of the Assessment Act states that an agreement is a binding child support agreement if the agreement is binding on the parties to the agreement in accordance with subsection 80C(2) and the agreement complies with subsection 81(2).
Subsection 80C(2) of the Assessment Act sets out the following requirements, and states that an agreement is binding on the parties 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.

Subsection 81(2) of the Assessment Act, as was in force at the relevant time, stated that an agreement is a binding child support agreement or a limited child support agreement if it complies with sections 82, 83 and 84 of the Assessment Act.
Section 82 of the Assessment Act provides for an agreement to be a child support agreement only if it is made in relation to a child in relation to whom an application for administrative assessment is, under section 24, entitled to be made on the day the agreement is entered into.
Section 83 of the Assessment Act provides, in relevant part, for an agreement to be a child support agreement where it is made between two parents of a child who, under section 25, would be able to properly make an application for administrative assessment of child support for the child in relation to whom the agreement is made on the day on which the agreement is entered into.
Subsection 84(1) of the Assessment Act states that an agreement is a child support agreement only if it includes one or more of the following provisions:
(a) 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;
(b) provisions under which the rate at which a party is already liable to pay child support for a child to another party in the form of periodic amounts paid to the other party is varied;
(c) provisions agreeing between parties any other matter that may be included in an order made by a court under Division 4 of Part 7 (departure orders);
(d) provisions (the non-periodic payment provisions) that state:
(i) that a party (the liable party) is to provide child support for a child to another party otherwise than in the form of periodic amounts; and
(ii) that the annual rate of child support payable for the child by the liable party under any relevant administrative assessment is to be reduced, in the manner specified under subsection (6), by the amount of child support to be provided by the liable party;
(e) provisions (the lump sum payment provisions) that meet the requirements of subsection (7) and that state:
(i) that a party (the liable party) is to provide child support for a child to another party in the form of a lump sum payment (including by way of transfer or settlement of property); and
(ii) that the lump sum payment is to be credited against the amount payable under the liable party's liability under the relevant administrative assessment;
(f) provisions under which a party is to provide child support for a child to another party otherwise than in the form of periodic amounts and that are not non-periodic payment provisions or lump sum payment provisions;
(g) provisions under which the liability of a party to pay or provide child support for a child to another party is to end from a specified day.
Subsection 84(2) of the Assessment Act states that the agreement may include more than one kind of provision in relation to different parts of a child support period and different child support periods. If the agreement includes provisions of a kind not referred to in subsection 84(1), subsection 84(3) provides for the provisions to not have effect for the purposes of the Assessment Act; however, subsection 84(4) then allows for subsection 84(3) to not affect the operation of provisions of the kind referred to in that subsection for any other purpose.
Subsection 84(5) of the Assessment Act states that, without limiting subsection 84(4), nothing in Part 6 of the Assessment Act is to be taken to prevent the same document being both a child support agreement and a parenting plan; or a maintenance agreement or financial agreement under the Family Law Act 1975 (the Family Law Act); or a Part VIIIAB financial agreement (within the meaning of that Act).
Where an agreement includes non-periodic provisions, subsection 84(6) of the Assessment Act states that the statement referred to in subparagraph 84(1)(d)(ii) must specify either: that the annual rate of child support payable under the administrative assessment is to be reduced by a specified amount that represents an annual value of the child support payable; or that the annual rate of child support payable under the administrative assessment is to be reduced by 100% or another specified percentage that is less than 100%. The Note to this subsection provides for non-periodic payment provisions to be taken to have effect as if they were a statement made by a court under section 125 in an order made under section 124 of the Assessment Act.
Where an agreement provides for lump sum payment provisions, subsection 84(7) of the Assessment Act states that the provisions meet the requirements of the subsection if the agreement is a binding child support agreement; and administrative assessment in relation to the child in respect of whom the agreement is made, is in force immediately before the application for acceptance of the agreement is made; and the amount of the lump sum payment is specified in the agreement and equals or exceeds the annual rate of child support payable for the child under the administrative assessment.
Subsection 84(8) of the Assessment Act states that an agreement that includes lump sum payment provisions may also state that the lump sum payment is to be credited against 100%, or another specified percentage that is less than 100%, of the amount payable under the liability.
Section 80D of the Assessment Act deals with the termination of a binding child support agreement and states, at subsection 80D(1), that a binding child support agreement may be terminated only by:
(a) a provision being included in a new binding child support agreement made by the parties to the previous agreement to the effect that the previous agreement is terminated; or
(b) the parties to the previous agreement making a written agreement (a termination agreement):
(i) that is binding on the parties in accordance with subsection (2); and
(ii) to the effect that the agreement is terminated; or
(c) a court order setting aside the previous agreement under section 136.
Subsection 80D(2) of the Assessment Act provides that, for the purposes of subparagraph (1)(b)(i), an agreement is binding on the parties only if the agreement is in writing, is signed by the parties to the agreement and contains, in relation to each party, a statement to the effect that the party to whom the statement relates has been provided, as certified in an annexure to the agreement, with independent legal advice from a legal practitioner as to the effect of the agreement on the rights of the party and the advantages and disadvantages, at the time the advice was provided, to the party of making the agreement. The annexure must contain a certificate signed by the person providing the legal advice. The agreement must not have been set aside by a court under section 136 of the Assessment Act. And, after the agreement is signed, the original or a copy must be given to each party.
Subsection 80D(3) of the Assessment Act provides for when a binding child support agreement is terminated by the making of a new binding child support agreement.

Evidence and findings

It was not disputed, and the Tribunal accepted, that in April 2015 the parties entered into a financial agreement under section 90UD of the Family Law Act. At Clause H of the agreement, the parties agreed on the following:
(i)They will have shared care of [Child 1] as agreed between them and in the best interests of [Child 1];
(ii)Until [Child 1] turns 18 years old, Mr Huckle will pay child support for [Child 1] in the sum of $900 per week, to be indexed annually on 31 December in accordance with variations in the consumer price index for [Australian city 1]. The amount of child support will be reviewed annually on 1 April, with the first review on 1 April 2016.
(iii)Mr Huckle will pay [Child 1]’s school fees, and for his uniform, books and tuition at a private school to be agreed between the parties until [Child 1] turns 18 years old;
(iv)Mr Huckle will pay [Child 1]’s medical and dental costs, including private health insurance at the top level with ancillary benefits until he turns 18 years old.
Clause I of the agreement noted that the parties had each had individual and independent advice from separate legal practitioners in relation to the effect of the agreement on their respective rights and the advantages and disadvantages, at the time that the advice was provided. In addition to this clause, each party had signed a “Statement of Independent Legal Advice” signed by their respective legal practitioner and stating they had provided advice to the client regarding the agreement.
The Tribunal had before it written submissions made by Mr Huckle’s legal representative, in which three main arguments were made. The first was that there was no intention between the parties that the agreement be a binding child support agreement, on the basis that it is a section 90UD Financial Agreement made under the Family Law Act; the child support is referenced in the recitals only; and the parties varied their private arrangements in relation to child support in October 2017 following mediation. Secondly, the representative submitted that the agreement does not comply with the Assessment Act given the parties were not provided with legal advice in relation to child support agreements; that no operative provision required under subsections 81(2) and 84(1) are included and there is no operative clause within the meaning of section 84 of the Assessment Act; and that the agreement requires the payment of no periodic amounts and does not specify the relationship between these payments and any child support assessment and therefore does not meet the requirements of subsection 84(6) of the Assessment Act. Thirdly, it was submitted that the legal advice provided was not sufficient, on the basis that, “in the context of binding child support agreements, the parties must be given advice as to the effect of the agreement on their respective rights in relation to child support, and as to the advantages and disadvantages of making the agreement in relation to child support”. Mr Huckle’s lawyer argued that the parties were given advice in relation to their rights and the advantages and disadvantages of the agreement as it related to the Family Law Act but not as they related to child support.
In response to the submissions made on behalf of Mr Huckle, Ms Harl stated that her whole intention had been to make sure [Child 1] was provided for. She agreed she had not registered the agreement as a binding child support agreement back in 2015, however, submitted that she was struggling to understand why Mr Huckle did not view the agreement as a child support agreement. She agreed that her signature was shown on the document. Ms Harl submitted that the appropriate interpretation of paragraph 80C(2)(d) of the Assessment Act was that the advice had been given and it was implied that appropriate advice was given; and that the Tribunal should not look behind the fact that advice was given.
As noted above, the legislative requirements for the making of a binding child support agreement are set out in subsection 80C(2) of the Assessment Act. The Tribunal was satisfied on the evidence before it that the agreement in question is in writing and is signed by both of the parties to the agreement. Paragraphs 80C(2)(a) and (b) are met.
Paragraph 80C(2)(c) of the Assessment Act requires that the agreement contains a statement that the individual has been provided, as certified in an annexure, independent legal advice from a legal practitioner as to the effect of the agreement on the rights of that party and the advantages and disadvantages, at the time that the advice was provided, to the party of making the agreement.
The Tribunal had before it copies of “Statements of Legal Advice” signed by Mr Huckle and Ms Harl. Mr Huckle’s Statement was as follows:
I, [Ms C], of, [address deleted], solicitor, hereby certify that in relation to an agreement in writing proposed to be entered into between Mr Huckle and Ms Harl (hereinafter called “the parties”). I have advised Mr Huckle (hereinafter called “my client”) independently of the other party and before the time at which my client signed the agreement, as to the following matters:
1.     The effect of the agreement upon my client’s rights.
2.     The advantages and disadvantages, at the time the advice was provided to my client, of signing the agreement.
Dated 8 April 2015
(signed by [Ms C])
NOTATIONS
A.    My client stated to me that he understood the nature and effect of the document and the obligations and risks involved in signing it. It appeared to me that he did have such understanding.
B.    My client stated to me that he was signing the document freely, voluntarily and without pressure form the other party to the agreement or from any other person.
Confirmation and acknowledgement:
I, Mr Huckle do hereby confirm and acknowledge that before I signed the deed of agreement, I received the advice from [Ms C] as described in the above statement, which statement was provided to me and annexed to this deed of agreement.
Dated 8 April 2015
(signed by Mr Huckle)
Ms Harl’s Statement was identically worded, apart from references to a different party and legal representative.
The statements each confirm that independent legal advice had been provided to each of the parties, from a legal practitioner, as to the effect of the agreement on the rights of the party and the advantages and disadvantages of making the agreement. The requirements set out in paragraph 80C(2)(c) of the Assessment Act are met.
Paragraph 80C(2)(d) of the Assessment Act requires the annexure to the agreement to contain a certificate signed by the person providing the independent legal advice stating that the advice was provided. The annexure signed by each of the legal advisors meets this requirement.
Paragraph 80C(2)(e) of the Assessment Act requires that the agreement has not been terminated under section 80D. The Tribunal was satisfied that, at the time the original decision was made in this matter, the agreement had not been terminated in circumstances set out in section 80D of the Assessment Act.
Finally, paragraph 80C(2)(f) of the Assessment Act requires that the original or a copy is given to each party. This aspect of section 80C was not in dispute and the Tribunal was satisfied that each party had been provided a copy of the agreement.
The requirements set out in subsection 80C(2) of the Assessment Act are met.
The Tribunal is also required to consider whether the agreement complies with subsection 81(2) of the Assessment Act, as required by paragraph 80C(1)(b). This subsection requires that the agreement complies with sections 82, 83 and 84 of the Assessment Act.
The agreement complies with section 82 of the Assessment Act as it is made in relation to a child to whom an application for administrative assessment is entitled to be made.
The agreement is made between two parents of a child who would be able to properly make application for administrative assessment of child support for the child in relation to whom the agreement is made, on the day on which the agreement was entered into. The agreement complies with section 83 of the Assessment Act.
The agreement includes a provision for Mr Huckle to pay child support to Ms Harl in the amount of $900 per week, to be indexed annually on 31 December in accordance with variations in the consumer price index for [Australian city 1]. The agreement, somewhat confusingly in the Tribunal’s view, further provided for this amount to be reviewed annually on 1 April. However, it is clear that the agreement provided for child support to be paid in the form of periodic amounts and therefore meets section 84 of the Assessment Act. As to the compliance of the document with subsection 84(6) of the Assessment Act, the Tribunal noted that this aspect of the interpretation of the document is currently before the Department in the form of a claim for non-agency payments; the Tribunal accordingly considered that this is a separate decision by the Department that is not directly before the Tribunal in this matter, noting that subsection 84(1) of the Assessment Act only requires one of the stated provisions to be included for an agreement to be a child support agreement.

All of the requirements for the making of a binding child support agreement, as set out in section 80C of the Assessment Act, are met with respect to the financial agreement entered into by the parties in April 2015. The Tribunal comments, for completeness’ sake, on the legal submissions made by Mr Huckle’s legal representative and makes the following observations:
The legal representative submits that the agreement is not a binding child support agreement as there was no intention between the parties to enter into a child support agreement. The Tribunal could find no requirement in the legislation or relevant case law requiring that there be a specific and expressed intention that an agreement be a binding child support agreement. The Tribunal had particular regard to the Federal Circuit Court case of Nettleship & Nettleship [2016] FCCA 2947, where the Court, in reviewing whether an agreement met the requirements in section 80C of the Assessment Act, looked to the “form and content” of the agreement in determining whether it complied with paragraphs 80C(2)(a) to (d). Nor was the Tribunal persuaded by the argument that the agreement was within the recitals only and not the operative part of the agreement, having regard to section 1 of the agreement which states that the “recitals to this agreement and schedules are incorporated in and form part of this agreement”.
The legal representative further submitted that the agreement does not “conform with” the Assessment Act, in part because it does not refer to the Assessment Act. This is not a requirement set out in section 80C of the Assessment Act and subsection 84(5) of the Assessment Act expressly contemplates that an agreement can be both a binding child support agreement and a financial agreement under the Family Law Act.
Finally the legal representative submitted that the required legal advice had not been given, as the legal advice given had been in relation to the Family Law Act. The Tribunal did not consider it appropriate to look behind the legal advice given, nor question the sufficiency of the legal advice provided to the parties about their respective rights and obligations, again having regard to the approach taken in the matter of Nettleship referred to above.
The Department’s decision to register the agreement as a binding child support agreement and apply this agreement to the child support assessment from 13 March 2018 is legally correct and is affirmed.

DECISION

The Tribunal affirms the decision under review.