Marsden and Saunders
[2016] FCCA 1557
•28 June 2016
FEDERAL CIRCUIT COURT OF AUSTRALIA
| MARSDEN & SAUNDERS | [2016] FCCA 1557 |
| Catchwords: CHILD SUPPORT – Stay – Application for stay – application to set aside Child Support Agreement – one child – where child has lived with Applicant since September 2012 – child formerly lived with respondent when parties entered into binding child support agreement. |
| Legislation: Child Support (Assessment) Act 1989 (Cth), ss.12, 80C, 80D, 136 Child Support (Registration and Collection) Act 1988 (Cth), s.111C |
| Cases cited: Cheyne & Masters (SSAT Appeal) [2014] FCCA 856 Daley & Daley [2009] FMCAfam 398 Keane & Keane (2013) 50 Fam LR 120; [2013] FamCA 332 Simpson & Hamlin (1984) 9 Fam LR 1040; FLC 576 |
| Applicant: | MR MARSDEN |
| Respondent: | MS SAUNDERS |
| File Number: | SYC 500 of 2014 |
| Judgment of: | Judge Scarlett |
| Hearing dates: | 14 April & 23 June 2015 |
| Date of Last Submission: | 23 June 2015 |
| Delivered at: | Sydney |
| Delivered on: | 28 June 2016 |
REPRESENTATION
| Counsel for the Applicant: | Mr Graham |
| Solicitors for the Applicant: | Nash Allen Williams & Wotton |
| Counsel for the Respondent: | Mr Blank (direct brief) |
ORDERS
IT IS DECLARED THAT the Child Support Agreement made between the parties on 19 July 2002 is no longer in force with effect from 14 December 2010.
The Binding Child Support Agreement between the parties of 14 December 2010 is set aside with effect from 5 September 2012.
All other Applications for orders under the Child Support (Assessment) Act 1989 or the Child Support (Registration and Collection) Act 1988 are dismissed.
The Application for Orders under the Family Law Act 1975 contained in the Further Amended Response of 13 April 2015 is transferred to the docket of Judge Kemp for mention on 5 December 2016.
IT IS NOTED that publication of this judgment under the pseudonym Marsden & Saunders is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT SYDNEY |
SYC 500 of 2014
| MR MARSDEN |
Applicant
And
| MS SAUNDERS |
Respondent
REASONS FOR JUDGMENT
Application
This is an Application by the Father of a child named X who was born on (omitted) 2001 for orders setting aside all existing child support agreements in respect of the child with effect from 5th September 2012, the date when he asserts the child commenced living permanently with him.
The Mother opposes that Application and seeks that the end date of the Agreement should be extended to 27th September 2019. She also seeks to recover an amount of arrears in the sum of $$8,709.49 as at 10th September 2014.
Orders Sought
The Applicant, by his Further Amended Initiating Application of 9th April 2015, seeks the following Orders:
1. That under Section 136(2)(d) of the Child Support (Assessment) Act 1989 the Child Support Agreement in relation to the child X born (omitted) 2001 made on 3 September 2010 be set aside from 5 September 2012.
2. That under section 136(2)(d) of the Child Support (Assessment) Act 1989 the Child Support Agreement in relation to the child X born (omitted) 2001, made on 14 December 2010 be set aside from 5 September 2012.
3. That under Section 136(2) of the Child Support (Assessment) Act 1989, the Child Support Agreement in relation to the child, X born (omitted) 2001, made on 19 July 2002 be set aside from 5 September 2012.
4. That under Section 136(2)(d) of the Child Support (Assessment) Act 1989, all child support agreements heretofore made between Mr Marsden and Ms Saunders in relation to the child, X born (omitted) 2001, be set aside from 5 September 2012.
5. That from 5 September 2012 the Child Support Case be calculated by the usual provisions of an administrative formula under the Child Support (Assessment) Act 1989 until the date of these Orders on the basis that the child, X born (omitted) 2001, has lived with the father, Mr Marsden since 5 September 2012.
It is doubtful that the Court has power to order that child support should be calculated “by the usual provisions of an administrative formula”. Where child support is calculated in that way, it is an administrative process and the Court has no jurisdiction to make such an order.
By her Further Amended Response dated 13th April 2015, the Respondent seeks the following Orders:
1. That the Applicant do all things and sign any documents necessary to ensure that the Child Support Agreement signed and dated 7 September (the CSA)2010 reflect the end date in the appropriate place as 27 September 2019.
2. That the Court order the Child Support Agency to recover debt amount of $8,709.49 as at 10 September 2014 alternatively a declaration that as at 10 September 2014 the Applicant owed an amount of $8,709.49 due under the Child Support Agreement.
It is doubtful that the Court has the power to order the Child Support Registrar to recover any child support debt.
The Further Amended Response also seeks final parenting orders, including:
1. That the child, X, born (omitted) 2001 (“X”) reside with the father.
2. That the father and mother have joint responsibility for making decisions about the long term care, welfare and development of X.
3. That each of the parties has the responsibility for the day to day care, welfare and development of X during the period that X is in that parent’s respective care.
The Further Amended Response also seeks final orders that the child spend time with the Respondent on a week about basis during the school term and for one half of the school holidays, along with other ancillary orders.
The Further Amended Response also seeks the following interim or procedural orders:
1. That the Court order a detailed family report as a matter of urgency, where X has the opportunity to express himself without fear of being under duress, to a Court appointed qualified professional to establish what is in X’s best interest with regards to parenting orders.
2. That X is allowed weekend visits at least once a month until final parenting orders are made and he can enjoy these without consequences.
Background
The Background facts are taken from the Short History set out in the Case Outline of the Applicant, prepared by his counsel, Mr Graham.
The Applicant was born on (omitted) 1961.
The Respondent was born on (omitted) 1968.
The parties commenced living together on (omitted) 1999 and were married on (omitted) 2000.
The child X was born on (omitted) 2001.
The parties separated for a period of about three months in 2002 during which time, on 19th July 2002, they entered into a child support agreement.
They reunited in October 2002 but subsequently separated on 20th June 2004.
The parties entered into a fresh child support agreement dated 3rd September 2010, although the Applicant did not receive independent legal advice about the document until 14th December 2010.
In late August or early September 2012 the child X commenced living with the Father on a full time basis.
On 9th December 2014 interim Orders were made by consent in this Court providing that (inter alia):
Pending further order and by consent:
1. All existing orders in relation to the child X born (omitted) 2001 (“X”) are hereby vacated.
2. The child X shall live with the father Mr Marsden (“the father”).
3. The father and the mother Ms Saunders (“the mother”) shall have equal shared parental responsibility for X.
The Consent Orders also provided that the child would spend time with the Mother on the second weekend of each month and during school holidays.
Evidence
The Applicant relied on his affidavit of 27th March 2015 in which he deposed that he and the Respondent entered into consent parenting and property orders on 8th August 2002. Those Orders provided that the child X would live with the Respondent.
The parties reconciled about three months later, but again separated.
On 19th June 2006 the parties entered into Consent Orders in the Federal Magistrates Court at Newcastle. Those Consent Orders:
a)discharged the orders of 8th August 2002; and
b)provided that the child would reside with the Mother and would have contact with the Father at defined times.
The parties also entered into a Child Support Agreement on 19th July 2002. The Consent Orders of 19th June 2006 dealt only with parenting matters and made no reference to child support.
On 30th November 2010 the parties entered into further Consent Orders, noting an agreement in principle to decrease the current child support payments by 8.5% and to enter into a further Child Support Agreement to be registered with the Child Support Agency.
The parties then completed a new Child Support Agreement, which forms Annexure “E” to the Applicant’s affidavit. The document shows that it was made on 3rd September 2010 but the relevant legal practitioners who gave independent legal advice to the parties appear not to have completed their certificates until 10th and 14th December 2010. The document shows at paragraph 16 that the parties wished the Part A agreement to end on “27.9.2016”.
Annexure “F” to the Applicant’s affidavit is a memorandum from a Delegate of the Child Support Registrar saying “I have accepted a Binding Child Support Agreement between the parties named below”. The memorandum notes that the first payment was for the period starting 3rd September 2010 and the agreement ends on 27th September 2016.
The Applicant deposed that in March 2012 the child X commenced spending “at least 50% of the time” with him and by August of that year was living with him “almost all of the time”. He further deposed that on 6th September 2012 the mother told him that the child wanted to live with him and she agreed to that course.
The Applicant further deposed at paragraphs [60] and [61] of his affidavit that:
60.In September 2013 Ms Saunders contacted the Child Support Agency and made an application that the Child Support Agency collect child support for her for X over the preceding 15 months, even though X had been living with me the whole time for at least the preceding 12 months and he had been living with me for most of the time for several months before that.
61.In September 2012, Ms Saunders had contacted the Child Support Agency and advised the Agency that X was living with me and that she did not require Child Support anymore. After that notification by Ms Saunders, the Child Support Agency did not collect any child support from me, nor request any child support from me during the period from September 2012 until October 2013.[1]
[1] Affidavit of Mr Marsden 27.3.2015 at paragraphs [60]-[61]
The Applicant deposed that his financial situation had steadily worsened since 2010 and from about 2011 or 2012 his liabilities have exceeded his assets.
On 14th April 2015, the Applicant was cross-examined by Mr Blank of Counsel, who appeared for the Mother and denied that he had actively encouraged the child X to stay away from his mother. He said that he did not want to pay child support if he did not have to.
The Respondent relied on her affidavits of 18th July and 10th September 2014 and her affidavit of 30th March 2015. In her affidavit of 18th July 2014, the Respondent asserted that the Applicant had altered the end date on the Child Support Agreement of 14th December 2010:
49.In 2010 Mr Marsden initiated an application in this Court to have said binding child support agreement set aside. It was agreed before Magistrate Monahan that there would be a 8.5% in child support. No other changes were agreed to. I completed that application and sent to Mr Marsden to sign and lodge with the CSA. A copy of the Court Order noting that change, and a part copy of the document I completed and sent to Mr Marsden for lodgement attached marked Annexure “A” and “B”.
50.I was advised by the CSA that the new agreement had been registered, with an end date of 2016. This was incorrect, as the end date should’ve remained unchanged, being 2019. I checked my copy and realized my mistake.
51.It became apparent that I had written the end date of the agreement in the wrong place, and that Mr Marsden had realized my error, used white out to remove the end date and record a new end date in the correct position on the document, however decreasing the term by 3 years. A copy of the CSA agreement confirming 2019 end date and then 2016 end date attached. Annexure “C”.[2]
[2] Affidavit of Ms Saunders 18.7.2014 at paragraphs [49]-[51]
In her affidavit of 10th September 2014 at paragraphs 29 to 35 the Respondent reiterates her claim that the end date was 27th September 2019 and there was no agreement to change the end date to 27th September 2016. She accuses the Applicant of fraud, giving a definition of fraud taken from Wikipedia.
The Respondent also referred to the recent decision of this Court in Cheyne & Masters (SSAT Appeal)[3] in support of her claim that the child support agreement should not be set aside.
[3] [2014] FCCA 856
In her most recent affidavit, that of 30th March 2015, the Respondent deposed that she had difficulty seeing and spending time with X. She also deposed that on 9th December 2014 she had received a text message from the child “saying I wasn’t being fair to his dad or himself, and to ‘just get rid of the child support agreement’”.[4]
[4] Affidavit of Ms Saunders 30.3.2015 at paragraph [10]
When the Respondent went into the witness box to be cross-examined, Counsel for the Applicant took the point that she had not completed or filed a Financial Statement.
The proceedings were adjourned part heard to 23rd June 2015 and orders were made that:
a)the Respondent was to file and serve a Financial Statement within 21 days;
b)the Applicant’s costs were reserved; and
c)until further Order, a stay of enforcement of the payments of child support was granted under the provisions of s.111C of the Child Support (Registration and Collection) Act 1988.
When the matter returned to Court on 23rd June 2015, the Respondent’s cross-examination by Mr Graham of Counsel continued. It was put to her that she had been collecting child support for X whilst he had been living with his father since August 2012. The Respondent conceded that the child had been living with the Applicant but said that this was not with X’s consent or hers.
Submissions
It was submitted on behalf of the Applicant that the Child Support Agreement of 14 December 2010 satisfied the requirements of s.80C(2) of the Child Support (Assessment) Act 1989 (Cth). This Agreement replaced the agreement made by the parties in 2002, which is, for historical purposes, irrelevant, unless the 2010 Agreement is void “ab initio”, as the Respondent appeared to be suggesting.
Whilst the Respondent disputed the end date of the Agreement, saying it should really be 27th September 2019, the Applicant submitted that it was, as it appeared to be, 27th September 2016. However, for the purposes of the Applicant’s Application, the end date is irrelevant.
The child X had been living with the father since late August or early September 2012 and spent little time with his mother. This arrangement was formalised by way of a Consent Order of this Court of 9th December 2014. Nothing was done by either party to vary the child support arrangements and the Child Support Registrar remained ignorant of the child’s living arrangements.
It was submitted that s.136(2)(d) of the Child Support (Assessment) Act applies and the Court must consider whether:
a)circumstances of an “exceptional nature” have arisen to a party to the agreement, with the child in respect of whom the agreement was made;
b)as a result, the Applicant or the child will suffer hardship if the agreement is not set aside; and
c)if so, whether in the exercise of its discretion, the Court should set aside the agreement.
The Applicant’s Counsel submitted that X coming to live with his father at the age of eleven, having lived with his mother up until August 2012, fits well within the definition of “exceptional” as described by Watts J in Keane & Keane[5]and that the context in this case is exceptional as for “fact and degree” (see Simpson & Hamlin[6]).
[5] (2013) 50 Fam LR 120; [2013] FamCA 332
[6] (1984) 9 Fam LR 1040; FLC 576
It was further submitted that the father has filed a Financial Statement and an extensive affidavit. His financial circumstances are described in paragraphs 74 to 90 and paragraphs 104 to 120 of his affidavit. The child X is in the Father’s full time care and the Father is not receiving any child support from the Mother.
Further, unless the agreement is set aside from August 2012 the financial arrangements for the child would be “completely out of kilter” with the objects and principles of the Child Support (Assessment) Act.
Mr Blank of Counsel, for the Mother, referred to the decision in Cheyne & Masters[7]but said that it should be distinguished, noting paragraphs [143] and [145] of the decision. He further submitted that it would be premature to terminate the Binding Child Agreement until final orders were made in respect of where the child was to live.
[7] supra
Conclusions
Both Counsel for the Applicant and Counsel for the Respondent referred to s.12 of the Child Support (Assessment) Act, which refers to terminating events, but in my view the section does not assist. As Judge Terry held in Cheyne & Masters [68], s.12 does apply but:
it makes no difference whether it applies or not, because there is no terminating event in s.12 applicable to the agreement except for the termination date specified in the agreement which has not yet arrived.[8]
[8] Cheyne & Masters at [69]
That is the situation in this case.
In my view, the relevant law can be found in s.136(2)(d) of the Child Support (Assessment) Act, which provides:
(2)If a party has applied under subsection (1), the court may set aside the agreement in accordance with the application if the court is satisfied:
(d)in the case of a binding child support agreement – that because of exceptional circumstances relating to a party to the agreement or a child in respect of whom the agreement is made, that have arisen since the agreement was made, the applicant or the child will suffer hardship if the agreement is not set aside.
The first matter to consider is which of the two child support agreements applies. There is no doubt that the evidence clearly shows that the Binding Child Support Agreement of 14th December 2010 is the agreement that is in force. It clearly superseded the earlier agreement of 19th July 2002. The 2010 agreement complies with the requirements of s. 80C(2) of the Child Support (Assessment) Act in that:
a)it is in writing;
b)it is signed by the parties to the agreement;
c)it contains a statement that each party has been provided with independent legal advice;
d)the annexure to the agreement contains a certificate signed by the persons who provided the independent legal advice; and
e)it has not been terminated under s.80D.
Whilst the Respondent commented in her affidavit evidence that an end date had been “whited out” and accused the Applicant of fraud, I am not satisfied that those contentions have been made out.
The evidence is that as from late in August or early in September 2012 the child X, who had been spending more and more time with his father from about March 2012 on, moved to living full time with his father and spending very little time with his mother. I am not satisfied that the evidence shows that the child was coerced or inveigled into this arrangement and I accept the Father’s evidence that this was an arrangement initiated by the child himself.
What has to be decided is whether this constitutes “exceptional circumstances” relating to the child. The decision of Cheyne & Masters at paragraphs [142] to [145] supports a finding that this change in care arrangements can be described as “exceptional circumstances”. Her Honour Judge Terry held:
142.For a number of reasons I do not accept the mother’s arguments and am satisfied that exceptional circumstances have arisen since the agreement was signed and first arose on 23 April 2012.
143.I accept that a change in care arrangements for a child after an agreement is signed is foreseeable, but that alone does not mean that such a change can never amount to exceptional circumstances.
144.The change in care arrangements… in April 2012 did not amount to a change of one or two nights but to a radical revision in his care arrangements. The mother’s percentage care of him dropped to 16% on 23 April 2012 and since January 2013 has been 2%.
145.The change did not come about because of any behaviour by the father to inveigle [the child] out of the mother’s care, let alone any undermining behaviour by him designed to impact on his child support obligations….
The facts in Cheyne & Masters are almost on all fours with those in the present case, except that the radical change in care arrangements appears to have been instigated by the child himself.
I note that in coming to her decision, her Honour followed the decisions of Brown FM[9] in Daley & Daley[10] and Watts J in Keane & Keane[11].
[9] As his Honour then was
[10] [2009] FMCAfam 398
[11] supra
I am satisfied that the Applicant has established that exceptional circumstances have arisen relating to the child and the Applicant.
The next matter to be considered is whether the Applicant or the child will suffer hardship if the Agreement is not set aside.
There is unchallenged evidence in the Applicant’s affidavit of 27th March 2015 that:
a)The Applicant has been trying to sell a business called (omitted) but has not had any offers for it[12];
[12] Affidavit of Mr Marsden 27.3.2015 at paragraph [75]
b)Whilst he had hoped that the business would be worth at least $150,000.00 it is now only worth $100,000.00 at most and may only be worth the value of its stock in trade and other items, being about $70,000.00[13];
[13] ibid
c)He had to sell some business equipment in November 2014 to reduce his debts[14];
[14] Ibid at [76]
d)In June 2014 he increased his business loan by another $20,000.00 to take his debt up to $82,000.00[15];
e)He is indebted to the (omitted) bank in the sum of $75,000.00[16];
f)He has reduced his (omitted) Bank business loan to $76,000.00 but still has personal credit card debts of approximately $150,000.00[17];
g)He has had to sell his home at (omitted) and will lease it back from the purchaser[18];
h)He estimated his total debts after the sale of the home to be $352,000.00[19];
i)His business pays him a wage of $40,000.00 per annum and after paying that amount the business runs at a loss[20]
j)He purchased an Audi A4 motor car which is currently worth about $20,000.00 but upon which there is a debt of approximately $30,000.00, and he cannot afford to keep the car[21];
k)He has purchased a (omitted) Holden Commodore for $4,700.00 to replace the Audi[22];
l)X has been living with him full time since August 2012 and has spent very little time with his mother[23]; and
m)As at 19th July 2002 he had no significant debts except for a mortgage.[24]
[15] Ibid at [77]
[16] Ibid at [78]
[17] Ibid at [79]
[18] Ibid at [80]
[19] Ibid at [84]
[20] Ibid at [88]
[21] Ibid at [89]
[22] Affidavit of Mr Marsden 27.3.2015 at [89]
[23] Ibid at [104]
[24] ibid
It is a matter for the Court’s discretion to decide whether the Binding Child Support Agreement should be set aside. I am satisfied that it is proper to set aside the agreement. The child has been living with the Applicant Father on a full time basis since August or September 2012 and has spent very little time with the Mother. The Father is responsible for the child’s upkeep and the evidence is that the Mother is not contributing to his support. It would be absurd and unjust for the Applicant Father to pay child support to the Respondent Mother when the parties’ child is living with him and he is bearing the responsibility to support the child.
To allow such an arrangement to continue would be to fly in the face of s.3 of the Child Support (Assessment) Act, which provides that the parents of a child have the primary duty to maintain the child.
I will make a declaration that the child support agreement between the parties dated 19 July 2002 is no longer in force with effect from 14 December 2010, the date of the later Binding Child Support Agreement.
The Binding Child Support Agreement of 14th December 2010 will be set aside with effect from 5th September 2012. That date appears to have been chosen by the Applicant as a date when there was no doubt that the child was living permanently with him.
There still remains an Application for parenting Orders under the Family Law Act, as the Respondent sought such orders in her Further Amended Response of 13th April 2015. The Father should file and serve a Reply dealing with parenting matters with a supporting affidavit.
As I no longer have any time left in my docket before I retire, I will transfer the remaining family law matter to his Honour Judge Kemp to be mentioned before his Honour with a view to the progressing the matter further.
I certify that the preceding sixty-four (64) paragraphs are a true copy of the reasons for judgment of Judge Scarlett
Date: 28 June 2016
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