Lainson and Milley (Child support)

[2021] AATA 2745

Lainson and Milley (Child support) [2021] AATA 2745 (9 June 2021)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2021/MC021169

APPLICANT:  Mr Lainson

OTHER PARTIES:  Child Support Registrar

Ms Milley

TRIBUNAL:Member M Baulch

DECISION DATE:  9 June 2021

DECISION:

The decision under review is affirmed.

CATCHWORDS

CHILD SUPPORT – child support agreement – binding child support agreement – whether unemployment clause can have effect – clause does not have effect – 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

BACKGROUND

1. The Child Support (Assessment) Act 1989 (the Act) provides for an administrative assessment of the child support payable by one separated parent to the other.  It uses a statutory formula which contains variables such as the parents’ adjusted taxable incomes, the ages and number of children and their percentages of care.

2. Mr Lainson and Ms Milley are the separated parents of one child.  A child support assessment, made under the Act, has applied since 5 December 2014.

3. On 20 July 2020, Ms Milley requested that Services Australia – Child Support (Child Support) accept a binding child support agreement she and Mr Lainson had signed on 17 February 2017.

4. On 14 September 2020, Mr Lainson requested that Child Support give effect to a clause in the agreement that was to apply in certain circumstances when he was unemployed and had no income.

5. On 7 October 2020, Child Support decided to accept the binding child support agreement signed on 17 February 2017 and, in doing so, decided that the clause providing for Mr Lainson’s unemployment would not be given effect (the decision under review).

6. Mr Lainson objected to that decision and, on 20 March 2021, that objection was disallowed.  Mr Lainson has now applied to this tribunal seeking an independent review of Child Support’s decision.

7. A hearing into the application for review was held by the tribunal on 9 June 2021. Mr Lainson and Ms Milley both participated in the hearing by conference telephone and both gave sworn evidence during the hearing. A representative of the Child Support Registrar did not participate in the hearing. The tribunal had before it relevant documents provided to it by Child Support pursuant to section 37 of the Administrative Appeals Tribunal Act 1975 (282 pages), copies of which both parties confirmed they had received prior to the tribunal hearing.

ISSUES

1. The statutory provisions relevant to this review are found in the Act.

2. The issue which arises in this case is whether or not clause 9 of the binding child support agreement made by Mr Lainson and Ms Milley on 17 February 2017 can be given effect.

CONSIDERATION

1. In the usual course, the Registrar uses a formula in Part 5 of the Act to assess child support in accordance with a statutory formula.  However, under Part 6 of the Act, parties may apply to the Registrar to accept binding or limited child support agreements that provide for a party to pay periodic amounts of child support.  If accepted, the Registrar must assess child support as if the terms of the agreement were contained in a court order varying the formula assessment of child support (sections 94 and 95 of the Act).

2. Section 80C sets out the requirements for a binding child support agreement.  That type of agreement must:

   ·      include a statement from each party that they obtained legal advice about the effect of the agreement; and

   ·      have an annexure with a certificate signed by the relevant lawyer confirming they provided that advice.

   A binding child support agreement must not be varied (section 80CA of the Act).  However, parties may terminate a binding child support agreement by making a new binding child support agreement (section 80DA of the Act).

3. I was satisfied that the agreement entered into by Mr Lainson and Ms Milley complied with the requirements of section 80C of the Act and was correctly accepted by the Registrar as a binding child support agreement.  The agreement provided that Mr Lainson was to pay child support of $300 per week (subject to the application of an indexation provision) or the amount of the administrative assessment, whichever is the greater.

4. On 20 March 2020, Mr Lainson ceased employment and he has since elected to have an estimate of his adjusted taxable income applied in the administrative assessment of child support.  From 1 July 2020, that administrative assessment required Mr Lainson to pay child support of $1,240 per annum, or $23.76 per week.  However, because a binding child support agreement has been accepted, Child Support has determined that Mr Lainson is required to pay child support from 20 July 2020 in the greater amount, pursuant to that agreement, which has been calculated to be $326.64 per week. 

5. A clause that the amount of child support payable is to be varied in the event that the liable parent is unemployed is a common term to be included in a binding child support agreement.  In this case, the agreement dated 17 February 2017 contained, at clause 9, the following:

   That in the event that:

   9.1 The businesses owned by the liable parent are placed into administration or receivership;

   9.2 The liable parent is otherwise unemployed for a continuous period of not less than two months during which time he receives NIL income; and

   9.3 Documentary evidence of 9.1 and 9.2 is provided by the liable parent to the eligible carer

   Then the periodic child support payable by the liable parent shall be paid in accordance with the administrative assessment of child support for a period of up to two months in the event that the liable parent remains unemployed and in receipt of NIL income.

   Mr Lainson has requested that the Registrar give effect to clause 9 and his child support liability be determined in accordance with the statutory formula.

6. I considered how clause 9 should be interpreted.  The absence of any conjunction at the end of clause 9.1, and the use of the accumulative conjunction, “and”, at the end of clause 9.2, suggests that the proper interpretation of the agreement is that clauses 9.1 and 9.2 must BOTH be satisfied for the clause to be given effect. 

7. My view on this is further reinforced by the wording of clause 9.3.  It requires that documentary evidence of clauses 9.1 AND 9.2 is required.  Clause 9.3 makes sense only if the clause, if read as a whole, requires both 9.1 and 9.2 to be satisfied.

8. Mr Lainson’s evidence was that when he entered into the agreement, he owned two businesses and was in employment.  While he has sold his interest in one of the businesses, he retains ownership of the second.  Mr Lainson stated that when he entered into the agreement, he interpreted clause 9.1 in the context of his second, much larger business, which he has now sold.  I noted that the agreement refers to “businesses”, in the plural, does not specify those businesses by name and that Mr Lainson retains ownership of one of the original two businesses.

9. Mr Lainson advised me that the business over which he retains ownership is not in receivership or administration.  As the remaining business owned by Mr Lainson has not been placed into administration or receivership, I concluded that clause 9.1 is not satisfied. 

10. I also noted that since there is no evidence of clause 9.1, then clause 9.3 is also not satisfied. 

11. Mr Lainson was also employed by a business he did not own.  An employment separation certificate indicated that this employment ended on 20 March 2020.  Mr Lainson submitted that clause 9.2 is satisfied.  He considered that his continued operation of the remaining business did not constitute employment, because that business made no income and he should therefore be regarded as unemployed. 

12. Mr Lainson stated that his remaining business made no profits, either in the past or within the two months following his loss of employment.  Ms Milley noted that she has been provided with no documentary evidence for clause 9.3, other than a copy of the employment separation certificate.

13. Mr Lainson submitted that a common-sense approach should be taken.  He is willing to pay child support, and has never shirked his responsibility, but that at the moment he has no means to meet the child support obligation prescribed by the agreement and stated that he should only be required to pay the amount assessed under the statutory formula.

14. A binding child support agreement applies in this case.  I determined that clause 9 cannot be given effect as clauses 9.1 and 9.3 are not satisfied.  Therefore, Mr Lainson is required to pay child support from 20 July 2020 at an amount determined under the agreement.  There is no provision within the Act which would provide me with the discretion to come to a different conclusion.

15. Therefore, and for these reasons, I decided to affirm the decision under review.

DECISION

The decision under review is affirmed.