Krout and Tipton (Child support)

[2021] AATA 4238

Krout and Tipton (Child support) [2021] AATA 4238 (21 September 2021)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2021/PC021519

APPLICANT:  Ms Krout

OTHER PARTIES:  Child Support Registrar

Mr Tipton

TRIBUNAL:Member P Jensen

DECISION DATE:  21 September 2021

DECISION:

The decision under review is affirmed.

CATCHWORDS

CHILD SUPPORT – non-agency payment – whether mutual intention existed – payment correctly credited – 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. Ms Krout and Mr Tipton are the parents of [Child 1] and [Child 2]. A child support case was registered in August 2015 with what is commonly called the Child Support Agency or CSA. Ms Krout elected to have the CSA collect the child support that was payable by Mr Tipton. 

2. Subsection 71A(1) of the Child Support (Registration and Collection) Act 1988 (“the Act”) relevantly provides:

   Subject to section 71D, if: 

   (a)the payer of an enforceable maintenance liability or carer liability pays a third party an amount that partially or completely satisfies a debt owed by: 

   (i)the payee of the enforceable maintenance liability or carer liability; or 

   (ii)the payer; or 

   (iii)both the payee and payer; and 

   (b)the payer or the payee applies to the Registrar, in the manner specified by the Registrar, to have the amount, or part of the amount, received by the third party treated as having been paid to the Registrar; and 

(c)the amount paid, or a part of the amount paid, was intended by both the payer and the payee to be paid in complete or partial satisfaction of an amount payable under: 

(i)the enforceable maintenance liability in relation to the child support enforcement period; or 

(ii)the carer liability; 

the Registrar must … credit the amount, or part of the amount, received by the third party against the amount payable under the enforceable maintenance liability or carer liability.

1. The children attend [a] Primary School. On 10 August 2020, Mr Tipton paid $6,150.46 to the school. On 27 January 2021 he applied to have the payment credited against his child support liability pursuant to section 71A of the Act. The CSA decided to grant his application. Ms Krout objected to that decision. An objections officer disallowed her objection. Ms Krout applied to the Tribunal for further review. I heard the matter on 21 September 2021. Ms Krout and Mr Tipton gave sworn evidence by conference phone. I also heard applications by Ms Krout and Mr Tipton for review of an objections officer’s departure decision dated 23 March 2021: 2021/PC021222 and 2021/PC021288. The payment of $6,150.46 was relevant to that decision too.

2. There is no dispute that at all relevant times, Mr Tipton was the payer of an enforceable maintenance liability; he was the parent assessed to pay child support and it was collectable by the CSA.

3. On Mr Tipton’s account of events, the parents agreed that they would each pay half of the school fees for 2018 and 2019, and he paid his half but Ms Krout did not pay her half; her shortfall was $6,150.46. At a directions hearing on 22 July 2021, Ms Krout said that prior to 2020, she paid all the school fees. She later said that she was pretty sure she paid all the school fees for 2019, and she could provide proof of the payments. I referred her to a document in the bundle of documents provided by the CSA (which constituted the hearing papers at that point in time) which suggested that Mr Tipton had made a payment to the school of $3,253.48 on 20 May 2019. Ms Krout confirmed that she had received that bundle of documents but she stated that she did not have them with her for the directions hearing and so she could not comment further on the issue.

4. The hearing papers included some documentation which supported Mr Tipton’s account of events. I explained that I would not direct Ms Krout to provide any evidence on the issue, but if she disputed Mr Tipton’s account of events, she could provide evidence in support of her account of events. It transpired that she did not provide any such evidence. At the full hearing on 21 September 2021, I asked Ms Krout whether she agreed that Mr Tipton had paid his half of the 2018 and 2019 school fees plus $6,150.46 of her half. She said she did not agree with his account of events. She said she had kept making payments to the school until she could not afford to make any more payments. She was unable to give any indication of when she stopped making such payments. She asked me if there was any evidence in the hearing papers on the issue. It was apparent, and Ms Krout acknowledged, that she had not prepared for the full hearing. She said she had been too busy attending to other matters including other legal proceedings involving Mr Tipton. She stated that she had suggested at the directions hearing that I obtain the relevant evidence from the school, and she had proceeded on the basis that I would obtain that evidence. I stated that the matter had not been left on that basis. She disagreed. She applied for an adjournment so that she could obtain the relevant evidence from the school. I refused her application and gave ex tempore reasons for my decision. Later during the hearing, Ms Krout said she had told Mr Tipton not to pay “my portion” of the debt but he did it anyway, i.e. he paid the debt of $6,150.46. I noted Ms Krout’s reference to “my portion”. Ms Krout replied that it had never been in dispute that the debt of $6,150.46 had been her debt. I find that Ms Krout and Mr Tipton were jointly liable for the debt vis-à-vis the school, and Ms Krout was liable for the debt vis-à-vis Mr Tipton pursuant to their agreement that they each pay half the school fees. Paragraph 71A(1)(a) of the Act is satisfied.

5. Mr Tipton applied to have the payment credited against his child support liability. Paragraph 71A(1)(b) of the Act is satisfied.

6. Prior to making the payment, Mr Tipton informed Ms Krout that he would be applying to have the payment credited against his child support liability. He intended to have the payment credited. The main issue in this case is whether Ms Krout also intended to have the payment credited against Mr Tipton’s child support liability.

7. On 30 June 2020 the Family Court of Western Australia (“the Court”) made orders with the consent of both parents which reflected an agreement that they had reached. The Court noted that each parent will “pay half of the costs of the children’s attendance at the said schools”, namely [the] Primary School and the secondary school that the children will attend in due course. The Court’s orders included the following:

27.An Order pursuant to section 124 of the Child Support (Assessment) Act 1989, that:-

a. to the extent that the Father pays more than half of compulsory school enrolment tuition and other fees, then to that extent the Father is to have a credit against his child support liability pursuant to section 125 of the Act; and

b.provided that the Father will give the Mother not less than 14 days [sic] notice of his intention to make a payment that could be the subject of a credit within the terms of this paragraph.

28.The parties be at liberty to vary these Orders provided any such variation is by consent and in writing and confirms the exact variation proposed.

1. On 3 July 2020 the school sent an email to Mr Tipton which included the following:

   It is also important to note that the [Health Care] discount cannot be applied to any past debt and the debt carried forward from 2018 and 2019 (a collective sum of $6,150.46), will need to be settled in full, in addition to the 2020 fees.

2. On 21 July 2020, Mr Tipton sent a message to Ms Krout which included the following:

   As you know we need to pay for the girls school fees. They are already late so I am planning on paying them on the 5th of August. I’m giving you the two weeks [sic] notice as I will pay for your portion and it will come out of child support. If you have a health card, your portion of the fees will be reduced quite significantly. In order for you to get the reduction you just need to supply the card to the school before the 5th and let me know.

3. On the same day Ms Krout replied, relevantly, with minor typographical errors in the original:

   You do not need to give me 2 week noticed nor will I accept your suggestion.

4. On 10 August 2020, Mr Tipton paid the $6,150.46. On 27 January 2021 he applied to have the payment credited pursuant to section 71A of the Act. On 15 February 2021 the CSA phoned Ms Krout and relevantly noted:

   Called Ms Krout to discuss [non-agency payment, i.e. Mr Tipton’s application to have the payment credited] for school fees.

   Ms Krout confirmed the payment had been made by [Mr Tipton].

   Ms Krout was aware of court order, mentioned that they have been in court many times regarding finances.

   Ms Krout confirmed [Mr Tipton] had made her aware of his intent to pay the fees.

   Ms Krout confirms she said she would pay the fees herself and [Mr Tipton] should not pay them.

   Ms Krout said that Mr Tipton paid them before she had the chance to, as she would have received a pension discount. I advised Ms Krout these fees were for 2018/2019, paid in August 2020.

   Ms Krout advised this has all been dealt with previously, prior to COA, that [Mr Tipton] had tried to have the fees covered however not [non-agency payment application] lodged for this amount/reason is visible on the record.

5. The reference to the issue having “been dealt with previously” appears to be a reference to a decision made in June 2019 to refuse a departure application (commonly referred to as a Change of Assessment). Mr Tipton had sought a reduction in his rate of child support payable on the basis that he was paying half the children’s private school fees and Ms Krout was not paying the other half.[1] In refusing his application, the decision-maker noted:

   [Ms Krout] has an outstanding balance payable to the school of approximately $6,150. This amount is reflective of 50% of the school fees for 2018 and 2019. Whilst I note [Ms Krout] states she has no financial capacity to meet this overdue balance to the school, the evidence available indicates that the school does hold her financially liable for the payment.

   [1]See pages 33 to 37 of the hearing papers in Review Numbers 2021/PC021222 and 2021/PC021288.

6. Ms Krout stated to the CSA, and she reiterated during the full hearing, that the orders provided that payments by Mr Tipton to the school in excess of his half of the fees could not be credited without her consent. I invited her to locate that provision in the orders. She said she did not have that portion of the hearing papers with her for the hearing. The orders do not contain such a provision.

7. In summary, Ms Krout agreed that if Mr Tipton paid more than half the school fees, the excess could be credited against his child support payable (provided the requisite notice was given). When she made that agreement, Mr Tipton had paid his half of the school fees for 2018 and 2019 and she had $6,150.46 owing in respect of her half. Further, she agreed that their agreement would remain in force unless both parents agreed, in writing, to a specific variation. Further, she (and Mr Tipton) applied to have the Court make orders that reflected their agreement, and those orders were made. I find that notwithstanding Ms Krout’s subsequent protestations to the contrary, she had made it clear that she intended the payment of $6,150.46 to be credited against Mr Tipton’s child support liability. Paragraph 71A(1)(c) of the Act is satisfied.

8. Subsection 71A(1) applies subject to 71D of the Act which grants a discretion to not credit a payment if it “ought not to be credited.” The parents agreed that payments such as the one in question should be credited, and it is appropriate that that occur.

DECISION

The decision under review is affirmed.