Mayhall and Baily (Child support)

Mayhall and Baily (Child support) [2021] AATA 5208 (9 November 2021)

DIVISION:Social Services & Child Support Division
REVIEW NUMBER:  2021/SC022247 & 2021/SC022326
APPLICANT:  Mr Mayhall
OTHER PARTIES:  Child Support Registrar
Ms Baily

TRIBUNAL:Senior Member R Ellis
DECISION DATE: 09 November 2021
DECISION:

2021/SC022247

The Tribunal sets aside the decision under review and, in substitution, decides that:

(a) the payment of $364 made by Mr Mayhall on 7 March 2020 to [Company 1] for water costs should be applied as a prescribed non-agency payment under section 71C of the Child Support (Registration and Collection) Act 1988;

(b) the payments of $50 each made by Mr Mayhall on 2 April 2021, 9 April 2021, 16 April 2021 and 23 April 2021 to [Company 1] for water costs should be applied as prescribed non-agency payments under section 71C of the Child Support (Registration and Collection) Act 1988; and

(c) the payments totalling $1,073.29 made by Mr Mayhall on 16 April 2020, 16 May 2020, 16 June 2020, 16 July 2020, 16 August 2020, 16 September 2020, 16 October 2020, 16 November 2020, 16 December 2020, 16 January 2021, 16 February 2021, 16 March 2021, 16 April 2021, 16 May 2021 and 16 June 2021 to [Company 2] for car insurance costs should be applied as prescribed non-agency payments under section 71C of the Child Support (Registration and Collection) Act 1988.

2021/SC022326

The Tribunal sets aside the decision under review and, in substitution, decides that:

(a) the payment of $700 made by Mr Mayhall on 3 July 2020 to [Company 3] for electricity costs should be applied as a prescribed non-agency payment under section 71C of the Child Support (Registration and Collection) Act 1988; and

(b) the payments of $50 each made by Mr Mayhall on 8 January 2021, 15 January 2021, 22 January 2021, 29 January 2021, 5 February 2021, 12 February 2021, 19 February 2021, 26 February 2021, 5 March 2021, 12 March 2021, 19 March 2021 and 26 March 2021 to [Company 1] for water costs should be applied as prescribed non-agency payments under section 71C of the Child Support (Registration and Collection) Act 1988.

CATCHWORDS

CHILD SUPPORT – prescribed non-agency payment - whether utility payment should be credited – whether car insurance should be credited – whether other payments should be credited – no mutual intention – condition for crediting as prescribed payment partially satisfied – some credited as prescribed non-agency payments under s71C – decision under review set aside and substituted

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

Mr Mayhall and Ms Baily are the parents of [Child 1] (born April 2009) and [Child 2] (born July 2011). There has been a child support assessment in place since 30 January 2020 with collection by the Child Support Agency from the same date. Mr Mayhall is currently the parent liable to pay child support under the assessment.
From 8 November 2019 the child support assessment reflected that [Child 1] and [Child 2] were in the 100 per cent care of Ms Baily.
On 11 July 2021 Mr Mayhall applied to the Child Support Agency for credit of 57 payments for rates, utilities and power totalling $3,868 as non-agency payments.
On 19 July 2021 the Child Support Agency made the decision to refuse to credit the 57 payments made by Mr Mayhall as non-agency payments.
On 3 August 2021 Mr Mayhall objected to this decision and on 7 September 2021 the Child Support Agency disallowed the objection (the first objection decision).
On 11 July 2021 Mr Mayhall also applied to the Child Support Agency for credit of 66 payments for a home mortgage, rates, utilities, bank fees, car insurance and home insurance totalling $11,153.19 as non-agency payments.
On 20 July 2021 the Child Support Agency made the decision to refuse to credit the 66 payments made by Mr Mayhall as non-agency payments.
On 3 August 2021 Mr Mayhall objected to this decision and on 7 September 2021 the Child Support Agency disallowed the objection (the second objection decision).
On 8 September 2021 Mr Mayhall applied to the Administrative Appeals Tribunal (the Tribunal) for a review of the second objection decision. On 16 September 2021 Mr Mayhall applied to the Tribunal for a review of the first objection decision.
The Tribunal conducted hearings into the two applications on 9 November 2021. Mr Mayhall and Ms Baily gave evidence on affirmation by conference telephone. The Child Support Agency provided the Tribunal and the parties with papers relevant to the two reviews (281 pages).

ISSUES

The statutory provisions relevant to this review are contained in the Child Support (Registration and Collection) Act 1988 (the Act).
When a child support liability is registered under the Act for collection, the amount payable is a debt due to the Commonwealth and must be paid to the Child Support Agency, not the payee.
In some circumstances the Child Support Agency may credit payments made directly to a payee or to a third party against a child support liability that is registered for collection (sections 71, 71A or 71C of the Act). The Child Support Agency refers to the credits under sections 71 and 71A as ‘non-agency payments’. Credits under section 71C are known as ‘prescribed non-agency payments’ as this section applies to payments of the kind specified in section 19 of the Child Support (Registration and Collection) Regulations 2018 (the Regulations).
Section 71C of the Act provides a mechanism whereby payments made by a liable parent to the payee or to another person for items specified in the Regulations may be taken into account in partial satisfaction of the liable parent’s child support liability. A number of specific criteria must be satisfied for this provision to apply. Even where all the criteria are met, there is still a discretion in section 71D of the Act to refuse to credit amounts that would otherwise be able to be credited against the liability.
The issue which arises in this case is whether or not any of the payments made by Mr Mayhall can be accepted as non-agency payments and credited against his child support liability.

CONSIDERATION

Mr Mayhall told the Tribunal all the payments under review were made to third parties and related to expenses he was meeting for a home mortgage, rates on two homes including the family home, utilities on two homes, home insurance and car insurance for the vehicle Ms Baily was driving. Mr Mayhall explained that Ms Baily and the children were living in the family home and he was meeting these costs as well as paying child support.
Mr Mayhall said there was no formal agreement that he would meet these various costs in lieu of child support, however, Ms Baily and the children were living in the family home. Mr Mayhall said it was always his understanding that he would not pay these costs in addition to child support as that would be unfair. Mr Mayhall pointed out that while the children were living in the home he was unable to sell it or rent it and this had placed him in extreme financial hardship.
The Tribunal notes in evidence from the Child Support Agency the following 57 payments totalling $3,868 made by Mr Mayhall claimed as non-agency payments:
·     one payment of $700 made on 3 July 2020 to [Company 3] for electricity;
·     13 payments of $50 each made on 13 August 2020, 8 January 2021, 15 January 2021, 22 January 2021, 29 January 2021, 5 February 2021, 12 February 2021, 19 February 2021, 26 February 2021, 5 March 2021, 12 March 2021, 19 March 2021 and 26 March 2021 for rates on [Address 1];
·     29 payments of $50 each made on 6 June 2020, 11 June 2020, 12 August 2020, 30 August 2020, 2 September 2020, 8 January 2021, 8 January 2021, 15 January 2021, 15 January 2021, 22 January 2021, 22 January 2021, 29 January 2021, 29 January 2021, 5 February 2021, 5 February 2021, 12 February 2021, 12 February 2021, 19 February 2021, 19 February 2021, 26 February 2021, 26 February 2021, 5 March 2021, 5 March 2021, 12 March 2021, 12 March 2021, 19 March 2021, 19 March 2021, 26 March 2021 and 26 March 2021 to [Company 1] for water costs; and
·     one payment of $418 made on 7 May 2020 and 13 payments of $50 each made on 13 August 2020, 8 January 2021, 15 January 2021, 22 January 2021, 29 January 2021, 5 February 2021, 12 February 2021, 19 February 2021, 26 February 2021, 5 March 2021, 12 March 2021, 19 March 2021 and 26 March 2021 to [Council] for rates.
Mr Mayhall told the Tribunal the payment to [Company 3] was for a quarterly electricity bill at the family home in [Address 1] where Ms Baily and the children were living. Mr Mayhall said Ms Baily and the children continued to live in the family home after the parents separated until it was sold which was around July 2021. He confirmed the property was in his name only and Ms Baily was not on the mortgage documents.
Mr Mayhall explained he had only been able to pay the rates on [Address 1] on a weekly basis due to financial hardship. Mr Mayhall said he thought the 29 payments to [Company 1] were for [Address 1] only but conceded the double payments listed on the same day could be for an investment property located at [Address 2] where Ms Baily’s parents were living. Mr Mayhall said, upon reflection, it was likely the payments to the [Council] for rates were for the property in [Address 2]. He pointed out that Ms Baily’s parents paid their own electricity costs and so the [Company 3] bill was for the [Address 1] property and not for the [Address 2] property.
The Tribunal notes in evidence from the Child Support Agency the following 66 payments totalling $11,153.19 made by Mr Mayhall claimed as non-agency payments:
·     one payment of $415.85 made on 17 February 2020 and four payments of $50 each made on 2 April 2021, 9 April 2021, 16 April 2021 and 23 April 2021 for rates on [Address 1];
·     one payment of $335 made on 6 March 2020 to [Company 1] for water supply and wastewater services, one payment of $364 made on 7 March 2020 as well as seven payments of $50 each made on 2 April 2021, 2 April 2021, 9 April 2021, 9 April 2021, 16 April 2021, 16 April 2021 and 23 April 2021;
·     four payments of $50 each made on 2 April 2021, 9 April 2021, 16 April 2021 and 23 April 2021 to [Council] for rates;
·     15 payments of varying amounts totalling $1,073.29 made on 16 April 2020, 16 May 2020, 16 June 2020, 16 July 2020, 16 August 2020, 16 September 2020, 16 October 2020, 16 November 2020, 16 December 2020, 16 January 2021, 16 February 2021, 16 March 2021, 16 April 2021, 16 May 2021 and 16 June 2021 to [Company 2] for car insurance;
·     13 payments of $5 each totalling $65 for bank fees associated with [Address 2];
·     11 payments of $99.11 each made on 17 February 2020, 16 March 2020, 15 April 2020, 15 May 2020, 15 June 2020, 15 July 2020, 17 August 2020, 15 September 2020, 15 October 2020, 16 November 2020 and 15 December 2020 [for] Home Insurance as well as six payments of $101.64 each made on 15 January 2021, 15 February 2021, 15 March 2021, 15 April 2021, 17 May 2021 and 15 June 2021; and
·     two payments of $2,150 each for the mortgage on the [Address 2] property and one other payment of $2,150 also related to [Address 2].
Mr Mayhall told the Tribunal the payment of $335 to [Company 1] made on 6 March 2020 was for [Address 2] while the payment of $364 made on 7 March 2020 was for [Address 1]. He said the remaining payments of $50 each were for both properties. He said the payments to [Company 2] were a monthly direct debit for car insurance on the [car] Ms Baily was driving. He said as far as he was aware Ms Baily still had the car which was in the names of both parents. Mr Mayhall said the payments [for] Home Insurance were for insurance on the [Address 1] property where Ms Baily was living.
Ms Baily told the Tribunal there was no agreement between the parents that any of the payments claimed by Mr Mayhall were to be considered in lieu of child support. Ms Baily pointed out that the parents had not been communicating since around April 2020.
Ms Baily said she and the children lived in the [Address 1] property until it was sold which was in June 2021. Ms Baily agreed she was not on the mortgage documents for this home. She said the payments claimed by Mr Mayhall for rates on [Address 1] could have been for anything although she conceded the internet payment receipts provided in evidence did indicate these payments had been made. Ms Baily pointed out that rates had been levied by the [Council] for both properties.
Ms Baily told the Tribunal she had sole use of the [car] which was in the names of both parents. She said the car was owned outright. Ms Baily said she was not aware of which company the vehicle was insured with or if Mr Mayhall had been paying this insurance.
The Tribunal notes in evidence from the Child Support Agency [Bank] internet payment receipts for payments made by Mr Mayhall in the period from 10 November 2019 to 28 June 2021. There is a payment made to [Company 3] on 3 July 2020 of $700. The Tribunal cross-referenced the payments made to [Company 1] for water costs against the internet payment receipts and found that of the 29 payments of $50 those made on 8 January 2021, 15 January 2021, 22 January 2021, 29 January 2021, 5 February 2021, 12 February 2021, 19 February 2021, 26 February 2021, 5 March 2021, 12 March 2021, 19 March 2021 and 26 March 2021 are not marked as payments for [Address 2]. The payment made to [Company 1] on 7 March 2020 of $364 and the payments made of $50 each on 2 April 2021, 9 April 2021, 16 April 2021 and 23 April 2021 are also not marked as payments for [Address 2].
The Tribunal further notes in evidence from the Child Support Agency a tax invoice for $855.91 from [Company 2] for insurance on a [car] for the period from 16 January 2020 to 16 January 2021. A second tax invoice for $862.67 for the same motor vehicle is for the period from 16 January 2021 to 16 January 2022.
Section 71A of the Act provides for payments made by the payer of an enforceable maintenance liability to a third party to be credited against the amount payable under the child support liability. The amount paid by the payer to the third party must partially or completely satisfy a debt owed by the payee, the payer or both the payer and the payee (paragraph 71A(1)(a)). It must be the intention of both parties that the payments, or part of the payments, be credited against the payer’s enforceable child support liability in relation to the child support enforcement period (paragraph 71A(1)(c)).
The Tribunal is satisfied, based on the evidence provided by both parents, that the payments under consideration were not intended by both parents to be in lieu of child support. The Tribunal finds the 57 payments for rates, utilities and power totalling $3,868 and the 66 payments for the home mortgage, rates, utilities, bank fees, car insurance and home insurance totalling $11,153.19 made by Mr Mayhall cannot, therefore, be considered as non-agency payments under section 71A of the Act.
Where such payments cannot be credited under section 71A, they may be credited under section 71C even if there is no mutual intention between the parents. Section 71C provides, subject to section 71D, for an amount to be credited against a payer’s child support liability regardless of the intention of the parents at the time the payment was made. Under subsection 71C(1) of the Act the Child Support Agency must credit an amount when all the conditions set out in paragraphs 71C(1)(a) to 71C(1)(d) are met.
The payment to be credited must also be a payment of the kind specified in section 19 of the Regulations. This section states that for the purposes of paragraph 71C(1)(b) of the Act, specified payments are payments of the following kinds in relation to an enforceable maintenance liability:
(a) child care costs for the child who is the subject of the enforceable maintenance liability;
(b) fees charged by a school or preschool for that child;
(c) amounts payable for uniforms and books required by a school or preschool for that child;
(d) fees for essential medical and dental services for that child;
(e) the payee’s share of amounts payable for rent or a security bond for the payee’s home;
(f) the payee’s share of amounts payable for utilities, rates or body corporate charges for the payee’s home;
(g) the payee’s share of repayments on a loan that financed the payee’s home;
(h) costs to the payee of obtaining and running a motor vehicle, including repairs and standing costs.
The Child Support Guide, at 5.3.1, provides further clarification in relation to some of the terms of section 19. With regard to the payee’s share of amounts payable for the payee’s home it states this includes:
Payments for utilities include gas, electricity, water and telephone, including the home phone portion of any phone / internet / mobile package.
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. However, a bill for utilities does not need to be in the payee's name.
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.
Where the payer makes payments for the payee's home, for which they and the payee are jointly responsible, the Registrar will credit only the payee's share. In the absence of evidence to the contrary, this will be half the total amount.
Although not bound by policy as set out in the Child Support Guide, the Federal Court has held that a tribunal should take into account relevant government policy which is not inconsistent with the provisions or objects of the legislation.
Mr Mayhall has told the Tribunal the home in which Ms Baily was living with the children was in his name only. Ms Baily is, therefore, not liable for the repayments on any loan that financed the property in [Address 1] and nor is she liable for the council rates on the property. Payments made by Mr Mayhall for utilities, including power and water, for the home in which Ms Baily was living can be considered as prescribed non-agency payments even though the bills for these costs may not have been in her name. As Ms Baily has shared ownership of the [car] and was using this motor vehicle then running costs, including insurance, can be considered as prescribed non-agency payments.
The Tribunal finds that payments made by Mr Mayhall for utilities at [Address 1] and for car insurance on the vehicle driven by Ms Baily are payments of the kind specified under the Regulations. They may, therefore, be considered as non-agency payments under section 71C of the Act. The Tribunal finds that payments made by Mr Mayhall for council rates on the family home at [Address 1], for home insurance, for rates on the investment property at [Address 2], for utilities at [Address 2], for bank fees as well as mortgage and other payments associated with [Address 2] are not payments of the kind specified under the Regulations. These cannot be considered under section 71C of the Act.
The condition in paragraph 71C(1)(a) of the Act is that the payer of an enforceable maintenance liability in relation to a payment period or initial period has made one or more payments to the payee, or to another person. The Tribunal is satisfied this is the case.
The condition in paragraph 71C(1)(ba) is that at the time the payment is made, the payer does not have at least regular care of the child to whom the relevant administrative assessment relates. It is also a condition that the payer does not have at least regular care of the child at the time at which the Registrar applies section 71C (paragraph 71C(1)(d)). The Tribunal is satisfied that at the time the payments for utilities on [Address 1] and for car insurance were made Mr Mayhall had less than regular care of the children.

Where the conditions in subsection 71C(1) are met, the Registrar must credit any amount that has not already been credited against the amount payable under the payer’s liability for the period, up to a maximum of 30 per cent of the amount payable for that period.
The Tribunal finds, based on the evidence provided, that the following payments made by Mr Mayhall meet the conditions set out under the Act and must, therefore, be credited under section 71C:
·     the payment made to [Company 3] on 3 July 2020 of $700 for electricity costs;
·     the payments made on 8 January 2021, 15 January 2021, 22 January 2021, 29 January 2021, 5 February 2021, 12 February 2021, 19 February 2021, 26 February 2021, 5 March 2021, 12 March 2021, 19 March 2021 and 26 March 2021 to [Company 1] of $50 each (total $600) for water costs;
·     the payment made on 7 March 2020 to [Company 1] of $364 for water costs;
·     the payments made on 2 April 2021, 9 April 2021, 16 April 2021 and 23 April 2021 to [Company 1] of $50 each (total $200) for water costs; and
·     the 15 payments of varying amounts totalling $1,073.29 made on 16 April 2020, 16 May 2020, 16 June 2020, 16 July 2020, 16 August 2020, 16 September 2020, 16 October 2020, 16 November 2020, 16 December 2020, 16 January 2021, 16 February 2021, 16 March 2021, 16 April 2021, 16 May 2021 and 16 June 2021 to [Company 2] for car insurance.
The Tribunal does not consider the exercising of the discretion set out in section 71D of the Act is warranted in the circumstances of these particular payments.
The Tribunal is satisfied the application made by Mr Mayhall for credit of one payment of $700 made on 3 July 2020 to [Company 3] and for credit of 12 payments of $50 each made on 8 January 2021, 15 January 2021, 22 January 2021, 29 January 2021, 5 February 2021, 12 February 2021, 19 February 2021, 26 February 2021, 5 March 2021, 12 March 2021, 19 March 2021 and 26 March 2021 made to [Company 1] (the subject of the first objection decision) should be accepted as prescribed non-agency payments.
The Tribunal is satisfied the application made by Mr Mayhall for credit of one payment of $364 made on 7 March 2020 to [Company 1], for credit of four payments of $50 each made on 2 April 2021, 9 April 2021, 16 April 2021 and 23 April 2021 to [Company 1] and of 15 payments totalling $1,073.29 made on 16 April 2020, 16 May 2020, 16 June 2020, 16 July 2020, 16 August 2020, 16 September 2020, 16 October 2020, 16 November 2020, 16 December 2020, 16 January 2021, 16 February 2021, 16 March 2021, 16 April 2021, 16 May 2021 and 16 June 2021 to [Company 2] (the subject of the second objection decision) should be accepted as prescribed non-agency payments.

DECISION

2021/SC022247

The Tribunal sets aside the decision under review and, in substitution, decides that:

2021/SC022326

The Tribunal sets aside the decision under review and, in substitution, decides that:

[2021] AATA 5208

9 November 2021

Key Legal Topics

Areas of Law

Family Law

Administrative Law

Legal Concepts

Statutory Construction

Judicial Review

Remedies

Jurisdiction