Kenyon and Marcello (Child support)

[2022] AATA 4994

Kenyon and Marcello (Child support) [2022] AATA 4994 (10 November 2022)

DIVISION:Social Services & Child Support Division

REVIEW NUMBERS:  2022/PC024023

2022/PC024032

APPLICANT:  Mr Kenyon

OTHER PARTIES:  Child Support Registrar

Ms Marcello

TRIBUNAL:Member M Martellotta

DECISION DATE:  10 November 2022

DECISION:

The decisions under review are affirmed.

CATCHWORDS

CHILD SUPPORT – particulars of the administrative assessment – whether the application for an administrative assessment was correctly accepted – decision under review affirmed

CHILD SUPPORT – non-agency payment - payment correctly refused - 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

1. Mr Kenyon seeks review of two decisions made by the Child Support Agency (the Agency). The first decision relates to the Agency’s decision to register an international child support assessment as from 14 October 2021. The second decision was to refuse to credit a prescribed non-agency payment. Mr Kenyon’s objections to both decisions were disallowed by the Agency.

2. The tribunal held a hearing on 10 November 2022. Mr Kenyon and Ms Marcello participated by conference telephone and each provided evidence on affirmation. In addition to documents provided by the Agency, Ms Marcello also provided some written submissions (B1-B2).

ISSUES

1. The statutory provisions relevant to this review are contained in the Child Support (Assessment) Act 1989 (the Act); the Child Support (Registration and Collection) Act 1988 (the RC Act) and the Child Support (Registration and Collection) Regulations 2018 (the Regulations).

2. Child support legislation is interpreted by the Agency with the aid of the Child Support Guide (the Guide). The Federal Court has provided guidance in relation to the consideration of Agency policy when making decisions.[1]

   [1] See Re Drake and Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634.

3. The issues which arise in this case include:

   ·Whether the international child support assessment application is to be accepted for registration?

   ·Whether loan repayments made by Mr Keane are to be credited against his child support liability.

CONSIDERATION OF SUBMISSIONS, EVIDENCE AND STATUTORY PROVISONS

Issue 1 – The international child support assessment application

1. Mr Kenyon confirmed that his son is an Australian citizen by descent. His son lives with his mother Ms Marcello in [Country 1]. Mr Kenyon stated that he had initially objected to the decision to accept Ms Marcello’s application to register a child support assessment on the basis that she was not an Australian citizen or resident.

2. At hearing, Mr Kenyon conceded that he did not have a basis to maintain his objection to the decision because of the legislative provisions. The Act provides that where a payee resides outside of Australia, either parent can apply for an administrative assessment if the payer resides in Australia and (amongst other things) the child is an Australian citizen on the day the application is made (subsection 24(1)(b) of the Act).

3. At hearing Mr Kenyon confirmed and the tribunal finds that his son became an Australian citizen on 9 April 2019 and that Ms Marcello made her application to the Agency on 14 October 2021. On the basis of these facts, the decision to accept the application was consistent with the provisions of the Act and as such is the legally correct decision.

Issue 2 – The prescribed non-agency payments

1. Provisions of the Act provide that certain direct payments made by a payer can be credited against their child support liability.

2. Payments made by a payer to a third party may be credited against the payer’s child support liability if the intention of both parties was that the payments, or part of the payments, be credited against the payer’s child support liability in relation to the child support enforcement period (section 71A of the Act). The Agency refers to these types of payments as “non-agency payments.”

3. Section 71C of the Act and Regulation 19 of the Regulations allows the Agency to credit certain payments towards a payer’s child support liability regardless of the intention of the parents at the time the payment was made (that is, regardless of whether or not the payments were intended to be in lieu of child support), except if, at the time the payment was made, the payer had at least regular care of any of the children to whom the relevant administrative assessment relates to. The Agency refers to these payments as “prescribed non-agency payments” (PNAPs). Such payments must be of the types specified under the Regulations.

4. The Child Support Registrar (and on review the tribunal) may refuse to credit amounts under sections 71A or 71C of the Act if satisfied that, in the circumstances of the particular case, the amount ought not to be credited (section 71D of the Act).

5. In this matter the following facts are not in contention and the tribunal finds that:

   a)There is a registered child support assessment registered as Agency collect since 14 October 2021.

   b)Mr Kenyon has 0% care of the child.

   c)On 27 December 2021 Mr Kenyon claimed a PNAP of $440 paid to a third party which he said was a mortgage payment for a property where Ms Marcello and their child reside.

6. Mr Kenyon provided the following evidence:

   a)During the course of his marriage to Ms Marcello he decided to invest in some property in [Country 1]. He and Ms Marcello were living in [Country 1].

   b)As he is not able to legally own real property in [Country 1] he took out a personal loan secured against his home in Australia. He used this money to purchase land and build a villa in [Country 1].

   c)The property is registered in Ms Marcello’s name. In order to secure his interest he and Ms Marcello entered into a deed prepared by an [Country 1] notary in which Ms Marcello gave Mr Kenyon a power of attorney to deal with the property on her behalf.

   d)The villa was initially going to be an investment but then he and Ms Marcello decided to live in the property.

   e)Their relationship started to deteriorate and following a visit to Australia Ms Marcello told Mr Kenyon that she wanted a divorce. She returned to [Country 1] with their son and Mr Kenyon remained in Australia.

   f)Ms Marcello continued and still resides in the property. He continues to meet the repayments on the personal loan. Ms Marcello is not a co-borrower for the personal loan.

   g)Ultimately he considers the villa to be his property and he and Ms Marcello are engaged in legal proceedings that he has initiated in [Country 1] to have his interest recognised.

   h)Mr Kenyon stated that it is in his personal interest to continue meeting the repayments on the loan because the loan is secured against his Australian property. He would like to retire in [Country 1] and wants to do so in the villa.

7. Ms Marcello told the tribunal that she agrees that Mr Kenyon took out a personal loan in his name to build the villa. She said, however, that under [Country 1] law the property legally belongs to her. When Mr Kenyon threatened her with legal action she returned to live in the villa. Prior to that for about 12 months she was living in another property. She now maintains both properties and resides between the two.

8. A copy of a lease agreement entered into between Ms Marcello and two other parties was included in the papers. This shows a 10-year lease commencing 4 July 2020. Ms Marcello stated that under the agreement she was able to build a property which she has self-financed and that she was living there on a full time basis before returning to live part time to the original villa.

9. In this matter it is apparent that the parties are in dispute regarding the legal ownership of the villa. The parties, however, agree and the tribunal finds that:

   a)Mr Kenyon took out a personal loan secured against his home in Australia to finance the purchase of land and the building of a villa located in [Country 1].

   b)Ms Marcello is the legal owner of the property under [Country 1] law.

   c)Ms Marcello resides in the villa currently on a part time basis.

   d)Mr Kenyon continues to meet the monthly repayments on the personal loan.

   e)The parties have not entered into an agreement regarding the repayments Mr Kenyon meets on the personal loan being offset against his child support liability.

10. The tribunal is satisfied that this is not a case in which there was any mutual intention that the repayments made by Mr Kenyon were to be in complete or partial settlement of any amount payable under a relevant maintenance liability. The tribunal concluded that the requirements of section 71A of the Act do not have application.

11. The tribunal next considered whether there was any basis for the payments to be considered PNAPs. The Regulations prescribe that specified payments may be credited including:

    ·the payee’s share of repayments on a loan that financed the payee’s home;

12. The Guide[2] provides relevant policy in this regard, it notes:

    Prescribed payments can only be made in relation to a home in which the payee lives and for which the payee is jointly or solely responsible… Prescribed payments can only be made for repayments on a loan that financed the payee’s home where the payee is named on the mortgage documents and is liable for repayments on the loan.

    [2] The tribunal was satisfied that policy set out at 5.3.1 of the Guide is consistent with relevant legislation.

13. In this case, even accepting that Ms Marcello is resident in the property from time to time, because Ms Marcello has no responsibility for any repayments on the personal loan Mr Kenyon took out to finance the build, the loan repayments he makes on that personal loan cannot be credited as PNAPs pursuant to section 71C of the Act.

DECISION

The decisions under review are affirmed.