Jantz and Pether (Child support)

[2022] AATA 633

Jantz and Pether (Child support) [2022] AATA 633 (8 February 2022)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2021/BC022710

APPLICANT:  Mr Jantz

OTHER PARTIES:  Child Support Registrar

Ms Pether

TRIBUNAL:Member S Letch

DECISION DATE:  8 February 2022

DECISION:

The decision under review is affirmed.

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 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. Mr Jantz and Ms Pether are the parents of [the child], born April 2016. Mr Jantz has been assessed by the Child Support Agency (CSA) as liable to pay child support to Ms Pether in accordance with the terms of a binding child support agreement (BCSA) made in October 2017, and received by the CSA on 19 February 2018 (see folio 28 of the CSA materials).

2. It is convenient by way of background to set out some extracts from the CSA objection officer’s statement of reasons dated 1 October 2021:

   …

   Ms Pether and Mr Jantz have had a registered child support case for [the child] from 30 January 2018.

   On 19 February 2018, we received a copy of the binding agreement signed by Ms Pether and
   Mr Jantz on 3 October 2017.

   On 23 February 2018, we accepted the agreement and sent letters to both parents notifying the
   decision and advising objection rights.

   On 22 March 2021, we made the decision to accept Ms Pether`s request to take over collection of
   ongoing child support payments for [the child].

   Other relevant facts:

   We made a decision on 4 March 2019 to reflect the care for [the child] as 51% to Ms Pether and 49% to Mr Jantz from 24 January 2019, reported on 24 January 2019.

   REASONS FOR THE DECISION

   The child support legislation allows parents to reach an agreement on the amount of child support to be paid. A child support agreement has to meet the requirements of the legislation and has to
   include matters that can be dealt with in a child support agreement. Once parents have made a child support agreement, either parent can apply to the registrar to have it accepted.

   Binding child support agreements allow parents to make binding financial agreements about child
   support. Binding child support agreements operate in a similar manner to financial agreements that separating parents might make in relation to property, superannuation and spousal maintenance.
   Each party to a binding child support agreement must have received independent legal advice
   before entering the agreement, and must receive independent legal advice before terminating the
   agreement.

   When the registrar accepts a child support agreement where child support is not already payable, the Registrar will make an administrative assessment of child support under CSA Act section 93(2) based on the agreement. In these circumstances, an administrative assessment under CSA Act section 31 does not occur because and application for administrative assessment has not been made.
   The child support assessment under CSA Act section 93 will start from the day on which the
   application for acceptance of the agreement was made to the Registrar (CSA Act section 93(1) (g)).
   The Registrar will make the administrative assessment in accordance with the provisions of the
   agreement (CSA Act section 93(3)).

   In this case, Mr Jantz states that we have not correctly interpreted the intent of Clause 8.6, which
   states:

   Subject to the agreements set out in paragraphs 8.4 and 8.5, the final payment for the child
   pursuant to paragraph 8.1 shall be made by the father when whichever of the following events

   occurs first:

   ( c) If the child is no longer in the care of the mother for 5 days or more per fortnight.

   …

   The care at registration of the assessment was 65% to Ms Pether…and then from 24 January 2019 50% being equivalent to 7 nights per fortnight.

   …

   As such we are satisfied that it is appropriate to not enact Clause 8.6( c).

   The objection is disallowed.

   …

3. Mr Jantz sought further review by the Tribunal on 11 November 2021. Mr Jantz and Ms Pether participated in the Tribunal’s hearing by conference telephone. Mr Jantz was represented by his lawyer, [Ms A]; Ms Pether was “self-represented”. In making its decision, the Tribunal took into account the CSA materials (numbered folios 1 to 195) and extra material submitted by Ms Pether (numbered B1 to B2). 

4. In summary, [Ms A] made the following submissions:

   -    there is no dispute that care of [the child] has been “50/50” since January 2019

   -    the argument is that the BCSA did not “terminate in its entirety”, rather that it should be interpreted differently

   -    there are contrary constructions to the contested clause (8.6(c)) – it is ambiguous, vague and “clunky” – there are 2 valid interpretations available

   -    the first, and preferred interpretation, is that the child was, in fact, away from the mother for more than 5 days (when the father had 7 consecutive days of care in the “week about” arrangement)

   -    the second is the CSA approach which interpreted the clause as considering whether the usual care arrangements for the child resulted in less than 5 days (or 35%)

   -    it was submitted that BCSA had not terminated as such - clause 8.6c had come to pass, and both parties had intended (and agreed) to the amount in clause 8.1 (which was submitted to have been at the “top of the range” with regard to the costs of the child) no longer applying given changes to care arrangements

   -    the intentions of the parties in relation to the interpretation of the agreement (that clause 8.1 no longer applied), and their respective agreed positions in January 2019, is evidenced by the fact that the first occasion the mother had agitated the matter was not until March 2021, and the fact of the father’s recorded surprise that the mother had approached the CSA

   -    it was submitted that the cessation of clause 8.1 would then result in liability to be calculated by reference to the child support formula

   -    the legislation was in “flux” when the BCSA was being formulated following the decision in Masters v Cheyne [2016] FamCAFC 255; (2 December 2016) – that decision led to Parliament introducing legislation in September 2017 leading to the current section 85 of the Assessment Act to cover scenarios where a parent had less than 35% care

   -    the decision in Masters was alive and concerning to the profession – the context is relevant as the draft included clause 8.6c, which is “clunky” – the high level of periodic amounts payable by the father had been calculated on the basis of the father having 4 or 5 nights of care a fortnight, and at the high end of the “costs of children table”, and there is now a genuine dispute as to interpretation of the contested clause.

5. Simply put, Ms Pether told the Tribunal she agrees with the CSA decision and considers the BCSA has not terminated, and that she is entitled to have the CSA enforce the terms of the agreement.

6. The Child Support Guide, at 2.7.1, provides a useful summary of the law as it relates to a BCSA:

   Binding child support agreements allow parents to make binding financial agreements about child support. Binding child support agreements operate in a similar manner to financial agreements that separating parents might make in relation to property, superannuation and spousal maintenance.

   …

   A binding child support agreement cannot be varied (CSA Act section 80CA). To change a binding child support agreement, the agreement must be terminated and replaced with a new binding child support agreement. For further information on how a binding child support agreement can be changed or terminated, see 2.7.5. For further information on how a binding child support agreement can be suspended, see 2.7.6.

7. The Guide at 2.7.5 provides the following:

   Child support agreements cannot be varied. However, child support agreements may be terminated and replaced with another child support agreement and can make reference to provisions in a previous child support agreement (CSA Act section 80CA and section 80F).

   Terminating a child support agreement

   A binding child support agreement can be terminated:

   ·by a subsequent binding child support agreement that includes a provision to the effect that the previous agreement is terminated (CSA Act section 80D(1)(a))

   ·by a binding child support agreement to the effect that the previous child support agreement is terminated, known as a termination agreement (CSA Act section 80D(1)(b))

   ·by a court order setting aside the child support agreement under section 136 (CSA Act section 80D(1)(c)) (see 4.3.2), or

   ·if a parent entitled to receive child support ceases to be an eligible carer under section 80D(2A) (CSA Act section 80D(1)(d)).

8. In simple terms, a BCSA is what it says it is – a binding agreement which cannot be varied with a view to giving certainty to its parties. It can only be terminated by consent and a new BCSA, or by order of a Court.

9. Here, it is not argued that the BCSA was terminated; rather, in contest is how Mr Jantz’s liability is to be calculated in accordance with the terms of the BCSA.

10. The Tribunal observes that the BCSA provides for Mr Jantz to be liable to a sum of $423 per week at clause 8.1. The only provision for that sum to change is for a “CPI uplift” (clause 8.2).

11. Clause 8.6(c) provides for a final payment in the event [the child] was “no longer in the care of the mother for 5 days or more per fortnight”. There is no specific provision to modify Mr Jantz’s liability under clause 8.1 to a different amount. The Tribunal respectfully agrees with [Ms A]’s submission concerning the “loose” drafting of that clause. [Ms A]’s submission that the clause was activated by the fact Ms Pether, from January 2019, did not have [the child] in her care for more than 5 consecutive days in the “week about” care arrangement, is arguable. An alternative interpretation – and that adopted by the CSA – is that the clause refers to the general pattern of care, usually calculated over a 12 month care period; if that interpretation prevails, there is no factual dispute in this case that Ms Pether’s general pattern of care has never fallen below 5 nights a fortnight (or 35% care, the threshold for a parent to an eligible carer: see section 7B and section 5 of the Child Support (Assessment) Act 1989 (the Act)).   

12. In the event that clause 8.6(c) was activated in January 2019, in the Tribunal’s view, that would bring Mr Jantz’s liability for weekly payments under clause 8.1 to an end. By the terms of the agreement, there is no basis for the agreement to continue with a reduction in Mr Jantz’s liability under clause 8.1; the agreement makes no provision for such an outcome. If the parties had intended for that amount to be varied in the event of changes in circumstances, specific provisions could have been made for Mr Jantz’s liability under clause 8.1 to be reduced. On one view, the “agreement” made in early 2019 (folio 97 of the CSA materials) was an informal agreement with no binding effect on the BCSA, which could not be varied; rather, the agreement could be characterised as Ms Pether making a non-binding commitment to not enforce the BCSA and accept lower instalments of child support, and that she was always at liberty at any time to seek to have the BCSA enforced by the CSA.

13. The current section 85 of the Act came into force in May 2018 following the decision in Masters v Cheyne [2016] FamCAFC 255. As the Tribunal understands it, the 2018 amendments allowed for certain changes of circumstances to end an agreement in situations where previously, an agreement would have remained on foot (as was the case in Masters).  Prior to legislative change, there was a perceived risk to paying parents that they would be bound to keep paying in accordance with the terms of a BCSA even if the payee’s care of a child had drastically reduced.

14. Here, it appears to the Tribunal that clause 8.6(c) was likely drafted with the “eligible carer” threshold of 35% care at front of mind. To the extent it could be relevant, it is not likely that the parties, at the time the agreement was made, contemplated the interpretation of clause 8.6(c) in the way urged by [Ms A]. There is no factual dispute that Ms Pether’s pattern of care over any relevant care period ever fell below 35%. The “informal agreement” made in early 2019 had no binding impact on the existing BCSA. There is no suggestion that clause 10 of the BCSA has been activated to terminate the agreement in its entirety.

15. Whilst not without doubt given the potentially ambiguous drafting of the agreement, the Tribunal considers the better view is that clause 8.6(c) has not been activated as [the child] was never “no longer in the care of the mother for 5 days or more per fortnight”. Mr Jantz’s liability under clause 8.1 cannot be reduced, and can only be modified (increased) by clause 8.2.

16. Accordingly, the Tribunal finds that Ms Pether was at liberty in March 2021 to ask the CSA to collect child support in accordance with the BCSA, and collect arrears for the 3 month period prior to Ms Pether’s application.

17. As the Tribunal has reached the same conclusion as the objections officer, the decision under review will be affirmed.

DECISION

The decision under review is affirmed.