MNR & MEA - [2004] FMCAfam 619

FEDERAL MAGISTRATES COURT OF AUSTRALIA

MNR & MEA

[2004] FMCAfam 619

CHILD SUPPORT – Interpretation of Child Support Agreement – interpretation of the words or expression “$140.00 per week or 18% of the payer’s net weekly income, whichever is lower” – declaration as to meaning and effect of clause in Child Support Agreement – validity of Child Support Agreement – whether Child Support Agreement properly accepted by Child Support Registrar – power of Court to make declaration as to meaning of provisions in Child Support Agreement – whether Agreement sufficiently certain – variation of periodic payment provisions of Child Support Agreement – whether special circumstances demonstrated – whether just and equitable to make orders sought by father.

Child Support (Assessment) Act 1989
Child Support (Registration and Collection) Act1988

Gilmour (1995) FLC 92-591

Liesert v Nutsch (1996) FLC 92-665
Bryant (1996) FLC 92-690
Wild v Ballard (1997) FLC 92-771
D’Ortenzio (1998) FamCA 419
Sakoua (2001) FamCA 1157
Ashton v Harvey-Sutton & Newnham (unreported decision of the Family Court of Australia at Sydney in proceedings no. SY59/1982
Gikas v Papanayioto [1977] 2 NSWLR 944
Cawood v Green (Unreported, NSW Court of Appeal, 26 June 1974)
Lawrie v Lees (1881) 7 App Cas 19
Downes-Brydon & Brydon (2003) FMCAfam 386
Upper Hunter County District Council v Australian Chilling and Freezing Co (1968) 118 CLR 429
Australian Broadcasting Commission v Australian Performing Right Association Limited (1973) 129 CLR 99

Locke v Dunlop (1888) 39 Ch.D.387
Bottomley (1880) 16 Ch.D.681
Hillas & Co Ltd v Arcos Ltd (1932) 147 L.T. 503

Luton v Lessels (2001) FLC 98-015
Gyselman (1992) FLC 92-279
Hides v. Hatton (1997) FLC 92-759
Ross & McDermott (1998) 23 FamLR 613
Hallinan v. Witynski (1999) FLC 98-009
Savery (1990) FLC 91-131
Sheahan (1993) FLC 92-375

Applicant:

MNR

Respondent:

MEA

Other Party:

CHILD SUPPORT REGISTRAR

File No:

MLM 10139 of 2002

Delivered on:

10 November 2004

Delivered at:

Melbourne

Hearing date:

11 March 2003

Judgment of:

Walters FM

REPRESENTATION

Counsel for the Applicant:

Dr Ingleby

Solicitors for the Applicant:

Roger O’Halloran & Co

Counsel for the Respondent:

Mr Devries

Solicitors for the Respondent:

Palmer Stevens & Rennick

Counsel for the Other Party :

Mr Bahlen

Solicitors for the Other Party:

Australian Government Solicitor

ORDERS

That the father’s form 63 application filed 10 December 2002 be dismissed.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
MELBOURNE

MLM 10139 of 2002

MNR

Applicant

And

MEA

Respondent

REASONS FOR JUDGMENT

Introduction

This case concerns, at its heart, the interpretation of a provision contained in a contract entered into between a de facto husband and a de facto wife. The contract is a particular sort of contract. It is a child support agreement, and it deals with the amount of child support that the de facto husband is to pay to the de facto wife for the support of their only child.
The case has come before the Court because the parties disagree about the meaning of a very important term in the child support agreement — namely, the term which is intended to define the amount of child support that the father must pay.

Background

The father and the mother commenced living together in January 1990. They separated on 28 October 1994. They have one child — a daughter named S, who was born on 5 July 1991.
S lives with the mother. She has done so since the mother and the father separated.
The father was born in December 1961. He is now aged 42. The mother was born in November 1963, and is now aged 39.
The father has repartnered. He lives in Geelong with his wife and two step-sons.
The mother has also repartnered. She lives in Kyneton with her de facto husband (B), their two young children and S.

Child Support Agreement

The parties were living in Boulder, Western Australia, when they separated in October 1994. The father was then working for a mining company (Kalgoorlie Consolidated Gold Mines Pty Ltd) as a diesel operator.
S was then three years old.
The parties attended upon a local Solicitor (Mr Don McManus) in November 1994 — in other words, approximately one month after the date of separation — and signed a child support Agreement prepared by Mr McManus.
In paragraph 2 of his affidavit sworn 5 December 2002, the father said that “ … the mother and I … instructed (Mr McManus) to prepare a child support agreement to reflect our agreement regarding my liability for child support.” In the mother’s affidavit sworn 15 February 2003, however, the mother said that Mr McManus was the father’s solicitor, and that the child support agreement was prepared solely on the father’s instructions — although she voluntarily signed it after having read it at the solicitor’s office.
I find that the mother’s description of events is more likely to be accurate than that of the father. Annexure CPR – A to the affidavit of the witness Carmel Patricia Ryan sworn 5 March 2003 contains a letter dated 25 January 1995 from Mr McManus to the Child Support Agency (“CSA”). The letter begins as follows:
We enclose for registration by you a child support agreement entered into by our client (the father) with the mother of his child, (the mother).
Ms Ryan is an officer of the CSA, and was authorised to swear her affidavit on behalf of the Child Support Registrar.
Clearly, Mr McManus was acting for the father. It follows that the mother appears to have entered into the child support agreement without the benefit of independent legal advice.
The child support agreement (“the Agreement”) is annexure NRM1 to the affidavit of the father sworn 5 December 2002. Recitals A, B and C of the Agreement provide certain formal details. The remaining Recitals are as follows:
DThe parties desire to make formal provisions for the maintenance of (S).
EIt has been agreed that (the father) shall pay to (the mother) the sum of $140.00 per week or eighteen (18) per cent of his net weekly income whichever is lower.
FThe said maintenance of $140.00 per week or eighteen (18) per cent of the (father’s) net weekly income as the case may be shall on the anniversary date of this Agreement be reviewed in line with the rise in the Consumer Price Index (all Groups) for Perth.
The Operative Part of the Agreement is as follows:
1.That from the date hereof maintenance payable by the (father) to the (mother) for the support of the child S born the 5^th day of July 1991 shall be in the sum of $140.00 per week or eighteen (18) percent of the (father’s) net weekly income whichever is lower.
2.The amount of maintenance payable pursuant to the terms of this Agreement shall be varied on and from the instalment of maintenance next due after the 23^rd day of November 1995 and in each year thereafter in accordance with the variation in the Consumer Price Index (all Groups) published by the Commonwealth Statistician for Perth by comparison of the Consumer Price Index as it stands on the 30^th day of September immediately preceding the date of variation as compared with the same index at the same date 12 months prior thereto.
3.The (mother) is to provide to the (father) as soon as possible after the Consumer Price Index for the September quarter is announced in each year a calculation as to the variation to be made consequent upon the change in the Consumer Price Index. If the (father) desires to contest the accuracy of the calculation he should give notice of such contest of the calculation within 14 days of receipt of the calculation from the (mother). In the event that the (father) and the (mother) are unable to agree on the variation in accordance with the Consumer Price Index then the (father) and the (mother) acknowledge that the other may apply to the Family Court of Australia for a variation for maintenance.
4.The maintenance payable by the (father) may be paid by the (father) to the (mother) by direct bank transfer from the (father’s) account to the (mother’s) account. For that purpose the (mother) shall supply to the (father) sufficient particulars of her account to enable payment to be made by the (father) and shall inform the (father) of any change in those particulars.
5.It is intended that this Agreement be registered as a Maintenance Agreement with the Child Support Agency.
6.For the purposes of Clause 1 the sum of $140.00 mentioned therein shall vary in line with the rise in the Consumer Price Index as provided for in Clause 2 hereof any variation in the amount payable by operation of Clause 2 shall automatically vary the sum of $140.00 mentioned in Clause 1.
The Agreement was signed by both parties, and appropriate stamp duty was paid on 21 December 1994. The Agreement was filed with the Clerk of Courts in Kalgoorlie on the same day.
A form 102 (being a form used to lodge a child support agreement with the CSA) was signed by the father on 22 November 1994. It was signed by the mother on 23 November 1994.
The form 102 was forwarded to the CSA by Mr McManus (on behalf of the father) under cover of his letter dated 25 January 1995.
The form 102 was received by the CSA on 30 January 1995. The Agreement was accepted by the Child Support Registrar, and on 16 March 1995, the CSA notified both parties that the Agreement had been accepted and the liability registered.
The Agreement did not require the CSA to collect the payments of child support, and the form 102 included a statement by the mother that she did not want the CSA to collect them.
On 16 March 1995, the CSA advised the parties that the Agreement had been accepted and the liability registered. Copies of the letters forwarded by the CSA comprise annexure CPR-B to Ms Ryan’s affidavit. Each of the letters contained a document setting out “the full details of the accepted agreement”. That document is in the following terms:
As a delegate of the Child Support Registrar, I have accepted a Child Support Agreement between the parties named below. The provisions of the agreement, as accepted, are set out below. …
Child Support Agreement
This is an agreement about child support between (the father) and (the mother) made on 30 January 1995.
Periodic amounts
It is agreed that (the father) pay periodic support to (the mother). The agreed payments are:
Name of child: S
Date of birth: 5 July 1991
Agreed payment: $140.00 per week
The first payment is for the period starting 23 November 1994
The amounts shown above are to be automatically adjusted on 1 July each year by the inflation factor given in the Child Support (Assessment) Regulations. …
It is apparent from the above document that the Child Support Registrar effectively ignored the “alternative” to the $140.00 per week figure contained in the Agreement — being 18% of the father’s “net weekly income”. In other words, from the date of acceptance of the Agreement, the father’s liability pursuant to the Agreement was assessed to be $140.00 per week as adjusted annually for CPI. According to paragraph 8 of Ms Ryan’s affidavit:
(The father’s) liability pursuant to the Agreement was calculated using the reference to $140.00 as stated in the Agreement. When the Agreement was received by the Agency, no information was provided to the Agency in relation to (the father’s) income.

The Father Ceases Employment in Kalgoorlie

From the commencement of the Agreement until September 1998 (a period of approximately four years), the father paid child support for S at the rate of $140.00 per week. The father said in paragraph 4 of his first affidavit that these payments were “adjusted annually for CPI”, in accordance with the Agreement. The mother denied that the father ever paid any increase to take account of CPI. She said that he made fortnightly payments of $280.00 into her bank account until late 1998, and attached to her affidavit a small selection of bank statements to demonstrate that the payments were as she had deposed.
I accept the mother’s evidence to the effect that the father did not pay the appropriate increases according to CPI.
In paragraph 5 of her affidavit, the mother said:
From the first anniversary of the Agreement, I had asked (the father) to pay the increases according to the CPI, but he simply ignored me. I did not take the matter further as I was very scared of (the father). There had been an extensive history of domestic violence which I suffered at the hands of (the father), up until the time we had separated. As we were still living in the same small town, I did not wish to inflame the situation any further. As I could manage financially on the $140.00 a week he was paying, I did not press the issue.
The mother was not cross examined in relation to the above paragraph, and I accept her evidence as contained in it.
According to the father, he was “retrenched” from his employment in Kalgoorlie in September 1998, and remained unemployed until March 1999. During the course of cross examination, however, it became clear that the father, in fact, accepted a voluntary redundancy arrangement offered by his employer. Exhibit M1 comprises a letter dated 16 September 1998 from the father’s then employer (Kalgoorlie Consolidated Gold Mines Pty Ltd) to the father. The letter commences:
I regret to inform you of the decision by KCGM and its owners to implement changes to our Mount Charlotte operation. We are pleased to be able to advise you that your services are required and we would like to continue the working relationship.
This decision to implement the new operating plan has not been made lightly. We have explored every possible avenue, but are faced with extremely difficult conditions that require us to significantly change the way we operate or be faced with the immediate suspension of operations at Mount Charlotte.
The operating plan allows us to provide a significant proportion of the work force with continued employment for a maximum of twelve months.
The effect of the correspondence from the father’s employer was to provide him with the option of either continuing to work (for a maximum period of one year) on the basis of less satisfactory conditions, or accepting certain redundancy entitlements.
The father said that he accepted the redundancy entitlements because the effect of the employer’s work offer was that he would have to work a significant number of additional shifts for a comparatively modest additional payment.
If the father had continued to work for his employer, he would have earned approximately $98,000.00 per annum. By accepting the redundancy package, he received a lump sum of approximately $52,000.00 (comprising annual leave entitlements, long service leave entitlements and a “wages redundancy package”). The $52,000.00 figure was net of tax. In addition, the father was entitled to approximately $28,000.00 held on his behalf in his employer’s superannuation fund. Obviously, those funds were not immediately available to him.
In his affidavit sworn 3 March 2003, the father said:
… I deny I had a real choice about my redundancy. My employer … proposed to cut back nine shifts from four crews to three crews being 25% of the workforce. That is, there would be few employees working on a more intense roster. It was a term of the industry enterprise agreement that the employer, in order to do so was required to offer affected employees the opportunity of voluntary redundancies first. As an affected employee I was offered and took such a redundancy. In addition, at the time (the mother) had taken up permanent residence in Victoria with (S). If I had remained in Kalgoorlie, I knew I would have little opportunity to see my child grow up. It is open to question if I wished to remain at Kalgoorlie Mines, whether and for what period I would have retained employment. In addition, underground work was having a detrimental effect on my health, in that driving machinery jolted my back, regular use of sledge hammers affected mobility of elbows and wrists and diesel fumes and underground dust affected my airways. I have undergone chiropractic treatment for consequent back problems. The mine I worked is now closed. …
I accept that the father agreed to take the redundancy offer for the reasons set out above.
It does not follow, however, that the father’s health continued to be affected in the manner he described after he left Kalgoorlie. In cross examination, he said that he had last been treated for back pain approximately four and a half years ago (when still working underground). He had not received any other medical treatment since that time. Similarly, any respiratory problems that he suffered only occurred during the period that he worked underground. He received no treatment for such problems before commencing to work underground, and has received no such treatment since leaving the mine.
After receiving his voluntary redundancy package, the father relocated from Kalgoorlie to Geelong.

Effect of Changed Circumstances on Child Support Arrangements

After the father received his redundancy package, he ceased paying child support to the mother. She said, and I accept, that she “stopped receiving child support from (the father) in or about November 1998, and … didn’t receive another payment until 18 May 1999 when she received a cheque from (the CSA) for $2,428.63.”
Ms Ryan described the relevant sequence of events as follows:[1]:
On 27 January 1999, (the mother) requested (the CSA) to collect the liability on her behalf. The liability was registered for collection by (the CSA).
On or around 11 March 1999, (the father) contacted (the CSA) and advised it that his financial circumstances had changed. (The father) was advised by (the CSA) that because his liability was determined pursuant to the Agreement, the Agreement would need to be reviewed in order to establish whether there was any provision for his liability to be varied as a result of changed financial circumstances. (The father) was also advised by (the CSA) that as an alternative, a new Agreement could be made between the parties.
During March, April and May 1999, (the CSA) had discussions with both (the mother and the father) in relation to how the liability pursuant to the Agreement should be calculated. During the course of the discussions (the father) provided (the CSA) with information in relation to his income. On 2 June 1999, (the CSA) calculated the liability of (the father) pursuant to the Agreement by reference to 18% of his net income.
[1] See paragraphs 10, 11 and 12 of her affidavit.

The Father Works with his Brother

In March 1999, the father and his brother “began a company in Geelong” called Leopold Glass and Aluminium Pty Ltd (“LGA”). According to the father, the income that he derived from his involvement in LGA was modest. During cross examination, the father said that it took him three years to realise that working in LGA “is a waste of time”. At the time of the trial, he was working for LGA for approximately eighteen hours per week on a paid basis and approximately twenty hours per week on an unpaid basis. He said that he was earning just over $200.00 per week.

Catalyst for Current Proceedings

From mid 1999 to mid 2002, the father paid very modest child support (amounting to approximately $40.00 per week) — on the basis that such payment equated to 18% of his net income.
In June 2002, the CSA sent a notice to the father advising him that his liability pursuant to the Agreement for the child support period commencing 24 May 2002 was $260.00 per annum (or approximately $5.00 per week). The father was assessed by reference to the child support formula as applied to his 2000/2001 taxable income (which the records of the CSA indicate was $8,645.00)[2].
[2] See paragraph 14 of Ms Ryan’s affidavit.
In June 2002, the father contacted the CSA and expressed discomfort with the assessment that it has issued. According to Ms Ryan, the CSA then:
… reviewed the Agreement and determined that (the father’s) liability pursuant to the Agreement (was) $140.00 per week as adjusted annually for CPI.

On 28 June 2002, the CSA advised the father that his liability pursuant to the Agreement was to be assessed at $140.00 per week (as adjusted annually for CPI) for the entire duration of the Agreement.
The assessments issued by the CSA at that time indicated that the father was obliged to pay child support at the rate of $727.08 per month (for the period 24 May 2002 to 23 August 2003), together with arrears of $19,598.30.
After endeavouring to dispute the approach adopted by the CSA through his legal advisors, the father commenced proceedings in this Court.

The Parties’ Cases

Although the father is the applicant before this Court, his application can only be properly understand if an explanation of the approach adopted by the CSA is first provided. The CSA was represented in the hearing before me, and presented evidence through its authorised officer, Ms Ryan.
The mother supported the approach adopted by the CSA. The only order that she sought was to the effect that the father’s application be dismissed.

The CSA’s Case

The CSA’s case is summarised in exhibit F5, which comprises a letter dated 29 May 2002 from the CSA to the father. The relevant part of the letter is as follows:
Paragraph 1 of your agreement gives provision for a one off calculation of an amount of maintenance payable — either $140.00 or 18% of your net weekly income. The reason we say “one off” is that there is no reference to this changing from time to time. There is no reference to you providing us with your income every three months as a mechanism to change the maintenance payable. Calculating the amount every three months does not give rise to a periodic payment.
Paragraph 2 allows us to vary the amount determined in paragraph 1 every twelve months by CPI.
Paragraph 4 states that the payee is to provide you with a calculation based on the increase in CPI every twelve months. There is no mention of an increase, nor decrease to be calculated based on your income.
The CSA also argued that the two “alternatives” are inherently different. The payment of $140.00 per week clearly comprises a periodic amount. The payment of 18% of the father’s “net weekly income” is not a payment of child support in the form of periodic amounts — it is a provision of child support “otherwise in the form of periodic amounts”. That is so because, to the extent that it might be possible to calculate what the father’s “net weekly income” actually is, the provision is clearly one that provides for amounts that vary from period to period. As such, the relevant figure (if it can be calculated at all) cannot be determined in advance.
Section 84(2) of the Child Support (Assessment) Act 1989 (“the Assessment Act”) is as follows:
If (a child support agreement) includes provisions under which (the liable party) is to provide child support for a child to another party otherwise than in the form of periodic amounts paid to the other party, the agreement must also state whether the child support is to be credited against the liable party’s liability under any administrative assessment… of the child support payable by the liable party to the other party that relates to the period, or a part of the period, for which the provisions have effect. (emphasis added)
Section 84(3) of the Assessment Act is as follows:
If:
(a)the (child support agreement) includes provision as mentioned in subsection (2); and
(b)the agreement states that the child support is to be credited against the liable party’s liability under any relevant administrative assessment;
the agreement must also state either:
(c)that the child support has an annual value of a specified amount and that the annual rate of the child support payable under any relevant administrative assessment is to be reduced by that amount; or
(d)that the child support is to count for a specified percentage of the annual rate of child support payable under any relevant administrative assessment.
Section 84(8) provides as follows:
If the agreement includes provisions as mentioned in subsection (2) but the agreement would not, apart from this subsection, comply with subsections (2) and (3), the agreement is to be taken to state that the child support … is not to be credited against the liable party’s liability under any relevant administrative assessment.
The effect of s.84(2), (3) and (8) in the present case is that, if the second “alternative” calculation contained within the Agreement is adopted, then — because the Agreement does not state that relevant payments are to be credited against the father’s liability under any relevant administrative assessments of child support (and does not state the additional matters required in s.84(3)(c) and (d)) — then any amounts paid by the father pursuant to that “alternative” are not to be credited against the father’s liability under any relevant administrative assessment of child support.
The thrust of the CSA’s submissions in relation to this subject is that the Agreement appears to create two different child support regimes. The first “alternative” ($140.00 per week linked to CPI) is clear and unambiguous. The second “alternative” (18% of the father’s net weekly income”) is uncertain, and in any event would have to be paid in addition to the father’s liability under any relevant administrative assessment.
Even if the meaning of “net weekly income” could be clarified, any attempt on the part of the CSA to implement the terms of the Agreement in the manner contended for by the father would result in an administrative nightmare.

The Father’s Case

Dr Ingleby (for the father) argued that the CSA’s interpretation of the agreement “makes no sense”. He argued that the “alternatives” referred to in recitals E and F and clause 1 of the Agreement must be read in conjunction, and understood to be subject to and qualified by the expression “whichever is lower”. Only one of the “alternatives” can apply at any one time.
Dr Ingleby also argued that the CSA had found a suitable method of applying the second “alternative” (18% of the father’s “net weekly income”) during the period from May 1999 to May 2002.[3] There is no reason, therefore, why the CSA cannot continue to accommodate what, in Dr Ingleby’s submission, was the parties’ clear intention as set out in the Agreement.
[3] See paragraph 12 of Ms Ryan’s affidavit.
As I understand Dr Ingleby’s submissions, his “fallback” position was that, if the Court does not agree that the father’s interpretation of the provisions of the Agreement is proper, then the Agreement should be set aside and the father should be assessed for child support in accordance with the normal administrative provisions of the Assessment Act.
Paragraph 3 of the orders sought by the father suggests that, if the Agreement is to be set aside, and if the father is to be assessed for child support in accordance with the normal administrative provisions of the Assessment Act, then such assessment should only take place with effect from the time that the father ceased his employment in Kalgoorlie, and his financial circumstances altered.

Is the Agreement a Valid Child Support Agreement?

The first question that arises is whether the Agreement is a valid child support agreement.
Section 81 of the Assessment Act states that an agreement is a child support agreement if it complies with sections 82, 83, 84 and 85.
The Agreement clearly complies with s.82 (in that it is made in relation to S — and an application for administrative assessment could have been made on the date on which the Agreement was entered into).
The Agreement also complies with s.83. The mother and the father are appropriate parties to the Agreement.
Because the Agreement is in writing and is signed by both parties, it clearly complies with s.85.
Section 84(1) provides as follows:
An Agreement is a child support agreement only if it includes provisions of one or more of the following kinds:
(a)provisions under which a party is to pay child support for a child to another party in the form of periodic amounts paid to the other party;…
(d)provisions under which a party is to provide child support for a child to another party otherwise than in the form of periodic amounts paid to the other party. …
Paragraphs (b), (c) and (e) of s.84(1) do not appear to be relevant in the context of the present case.
The first “alternative” ($140.00 per week) is a provision under which the father is to pay child support for S to the mother in the form of periodic amounts. The second “alternative” (18% of the father’s “net weekly income”) is a provision under which the father is to provide child support for S to the mother otherwise than in the form of periodic amounts paid to the mother. Even if Dr Ingleby’s submission is accepted, and clause 1 and the relevant Recitals are read together and qualified by the expression “whichever is lower”, it is clear that the Agreement does “include provisions” as envisaged in paragraphs (a) and/or (d) of s.84(1). The fact that one provision may be clear and capable of enforcement, whilst the other provision may be uncertain and incapable of enforcement, does not change the fact that the provisions themselves are contained within the Agreement.
It follows from the above that, in my opinion, the Agreement is indeed a child support agreement for the purposes of the Assessment Act.

Was the Agreement Properly Accepted by the Child Support Registrar?

Paragraph 1 of the father’s application seeks a declaration (pursuant to s.32 of the Assessment Act) to the effect that the Child Support Registrar “was wrong to accept (the Agreement) for registration, either wholly or in part”.
Section 88 of the Assessment Act states that an application for acceptance by the Child Support Registrar of a child support agreement is properly made if:
a)the Agreement is a child support Agreement; and
b)the application complies with the formal requirements set out in s.89.
I have already found that the Agreement is a child support agreement. The application for acceptance of the Agreement (form 102) is attached to Ms Ryan’s affidavit. It is unexceptionable in form.
It follows that the application for acceptance by the Child Support Registrar of the Agreement was properly made.
Section 91 of the Assessment Act provides that, in determining whether an agreement is a child support agreement, the Child Support Registrar may act on the basis of the application made to him for acceptance of the agreement, the documents accompanying the application and the agreement itself. He is not required to conduct any inquiries or investigations into the matter.
Section 92(1) of the Assessment Act states that, subject to s.92, if the Child Support Registrar is satisfied that an application made to him for acceptance of an agreement has been properly made, then he must accept the agreement. The section does not contain any provision which, in my opinion, would justify the Child Support Registrar in refusing to accept the Agreement in the present case.
It follows from the above, that the Child Support Registrar had no alternative but to accept the Agreement, and to proceed to give it effect.[4].
[4] See s.93 of the Assessment Act.

Can this Court Interpret the Agreement?

Section 95 of the Assessment Act deals with the effect of certain provisions of a child support agreement. Section 95(1) states that the section only applies in relation to a child support agreement that has been accepted by the Child Support Registrar.
Section 95(2) of the Assessment Act provides that periodic payments due under a child support agreement are to be treated as if they are due pursuant to an order made by consent under Division 4 of Part 7 of the Assessment Act.
Section 95(3) of the Assessment Act states that provisions in a child support agreement under which child support is to be provided in a manner otherwise than in the form of periodic amounts to be paid to the carer entitled to child support are to have effect as if they were an order made by consent under s.124 of the Act.
Section 98 of the Assessment Act states that the provisions of a child support agreement may be “discharged, suspended, revived or varied by the court in the same manner and in like circumstances as the Court could discharge, suspend, revive, or vary an order of that kind made by it”.
In order to vary a consent order made under the provisions of Division 4 of Part 7 of the Assessment Act, a Court must be satisfied that a ground for departure mentioned in s.117(2) of the Act exists, and that it would be “just and equitable” and “otherwise proper” within the meaning of s.117(4) and (5), to make an order changing an existing order.[5]
[5] See Gilmour (1995) FLC 92-591.
The law in relation to the variation of the periodic payment provisions of a child support agreement is set out in Liesert v Nutsch (1996) FLC 92-665, Bryant (1996) FLC 92-690 and Wild v Ballard (1997) FLC 92-771. After referring (somewhat cynically, it seems) to fans, fogs, dust and horizons[6], the Full Court in Bryant observed that it is now:
…beyond doubt that it is necessary for the Court in determining an application to vary the periodic payment provisions of a child support agreement, to proceed according to the provisions of s. 117(2) of the Assessment Act, and that no regard is to be had to other statutory provisions…which require a change of circumstances to be established before an order for child or spousal maintenance, or child support in a form other than periodic cash, can be varied.[7]
[6] See the passage from Liesert v Nutsch at p. 83,163 of Bryant.
[7] See Bryant (1996) FLC 92-690 at 83,164.
But the Full Court (in Bryant) continued as follows[8]:
It must however be recognised that once an order has been made departing from an administrative assessment, before there can be a variation of (or “departure” from) that existing order, it must be established to the Court’s satisfaction, that since the making of the existing order circumstances have arisen as a result of which the financial capacity of either party is now significantly reduced (s. 117(2)(a)), or the costs of maintaining the child have been affected (s 117(2)(b)) or the existing order now results in an unjust and inequitable determination of child support (s. 117(2)(c)). There is nothing in Gilmour to suggest to the contrary.
In the case of a child support agreement which has been accepted by the Registrar, and which provides for the payment of periodic child support, such an agreement takes effect as a departure order made by consent (s. 95(2)), and before the agreement can be varied by the Court, the Court must, again in our view, be satisfied that there has been some change which would give rise to one of the grounds for departure in paragraphs 117(2)(a),(b) and (c). Again, there is nothing in Liesert v Nutsch to the contrary.
If the situation was not as we have just proposed in the last two paragraphs, there would be nothing to stop a party who did not accept the terms of a departure order from immediately approaching the Court to have the matter re-heard, or to stop a party who thought better of the agreement which he or she had made, immediately seeking to vary the agreement. (Emphasis added)
[8] See page 83,169-70.
Thus, when dealing with an application for variation of an obligation to pay periodic child support as required by the terms of an agreement, the Court must determine at the outset whether, by reason of a change of circumstance, a ground for departure exists. The Court must then determine whether it would be just and equitable, and otherwise proper, to make an order varying the arrangement described in the agreement.[9]
[9] See Wild v Ballard at pp 84,492-3
To the extent that s.117 speaks of concepts such as “grounds for departure” and “administrative assessment of child support”, the Full Court in Bryant[10] confirmed that s.117 must “…be interpreted and applied uniformly and consistently in all cases…”. It does not matter whether the application before the court is for an initial variation from administrative assessment, or for a variation from an existing departure order, or for a variation of the periodic payment provisions of a child support agreement. Relevantly, the reference to “administrative assessment” in s.117(2)(c) does not preclude that sub-section from operating where an application is made to vary periodic payment provisions of a child support agreement.[11]
[10] At page 83,169
[11] See Bryant at page 83,168
Section 95(6) of the Assessment Act provides as follows:
Where any difficulty arises in the application of this section in or in relation to a particular proceeding, the Court exercising jurisdiction in the proceeding may, on the application of a party to the proceeding or of its own motion, give such directions, and make such orders, as it considers appropriate to resolve the difficulty.
The precise scope of s.95(6) is unclear. In D’Ortenzio (1998) FamCA 419, Forbes JR was asked to interpret the provisions of a child support agreement. After referring to s.95(6) (and s.100(3) — which is not relevant in the present context) Forbes JR said:
These provisions are each cast in broad terms, but to interpret them as the wife would suggest (namely, that they enable the Court to exercise its powers to consider the true meaning of the agreement) would be to overlook what would seem to be a specific intention evidenced in part 6 (of the Assessment Act) to require that parties exercise their rights as to an agreement as follows:
·    Section 132 applies as to appeals against acceptance or non-acceptance of an agreement;
·    Section 136 applies to the Court’s powers to set aside an agreement for fraud or undue influence;
·    Section 98 enables the Court to discharge, vary, revive or suspend an agreement registered with the Court in the same way as the Court would exercise these powers in respect of an order; and
·    Section 97 which enables an agreement to be varied by a subsequent agreement.
In the face of these provisions, I believe that it was not intended that s.95(6) … would be construed so as to create a remedy not otherwise specified in the legislation.
In Sakoua (2001) FamCA 1157, Johnston JR was also pressed for “a Court interpretation of a child support agreement”. The problem had arisen as a result of a provision in a child support agreement to the effect that a husband was to pay child support for four children in the sum of $100.00 per week. The agreement did not apportion the payment amongst the children, or otherwise indicate what was to occur as each child ceased to be eligible for child support.
The CSA had interpreted the provisions in the agreement to the effect that the father’s obligation was to pay $100.00 per week as indexed until the youngest child attained the age of eighteen years. The father argued that such an interpretation was inconsistent with the intention of the parties at the time that they entered into the agreement. He asked the Court to make “some sort of declaration” which would give effect to or make clear what the intention was — namely, that the liability for child support under the provisions of the agreement was $25.00 per week per child and that it was to terminate upon the eighteenth birthday of each of the children.
After referring to s.95(6) of the Assessment Act, Johnston JR said:
The father submits that (s.95(6)) is sufficient power to enable the Court by way of a Court order to make it clear that the agreement is to be interpreted in a particular way. I cannot dismiss completely the possibility that what the father says might be right and that it might provide such a power. However, in all the circumstances of this case such as they present on the limited material that is before the Court, it seems to me that to do that would be quite inconsistent with the objects of the Act. Those objects are set out in s.4(1) and s.4(2). Section 4(1) provides that the principal object of the Act is to ensure that children receive a proper level of financial support from their parents. Section 4(2) goes on to provide for particular objects. It says that those include ensuring that the level of financial support shat should be provided by parents for their children is determined according to their capacity to provide financial support, and that it should be determined in accordance with the legislatively fixed standards and it should ensure the children share in changes in the standard of living of both of their parents and certain other objects.
It seems to me that simply to go ahead now and, in effect, vary that provision in the manner which is suggested by the father on the basis of what he said is a provision which would give power to do this, in my view, would be inconsistent with those objects. Whichever way I look at what the father is seeking it really requires a variation of the provisions of the agreement. …
… It seems to me that the only proper basis, bearing in mind the objects to which I have referred, to change provisions of the agreement is the variation provisions. That, of course, then requires a determination as s.117(2), s.117(4) and those requirements that require the Court if it varies an agreement to arrive at a position which is just and equitable in effect to both of the parties and the children. There is no material before the Court to enable that exercise to be done, the father having approached this on the basis on an exercise in legal interpretation.

With the greatest of respect to both Judicial Registrars, I have had considerable difficulty following the logic that each has applied. I am unable to see how the application of s.95(6) could be construed so as “to create a remedy not otherwise specified in the legislation”. Nor do I understand how the references to the objects of the Assessment Act might be relevant to a proper understanding of the use and effect of the provision.
Although the father has sought a variety of final orders (some of which may be regarded as the equivalent of an application pursuant to s.98 of the Assessment Act to discharge or vary the provisions of the Agreement), the essence of the issue now before the Court is the proper interpretation of the relevant provisions of the Agreement. After all, the Court cannot fairly consider whether a provision in a child support agreement should be discharged, suspended or varied if it is unable to properly understand the provision itself. Similarly, a provision in a child support agreement cannot be enforced unless its meaning is clear. For example, a provision in a child support agreement to the effect that a party is to pay “school fees and associated expenses” might require the Court — in the context of enforcement proceedings — to interpret the breadth of the expression used.
In Ashton v Harvey-Sutton & Newnham (unreported decision of the Family Court of Australia at Sydney in proceedings no. SY59/1982 — Judgment delivered 29 June 1996), Chisholm J was asked to make a declaration as to the meaning of the words “school fees” in an order made by a different Family Court judge in September 1985. His Honour said:
… In my view the court has an inherent jurisdiction to explain the meaning of orders where it is satisfied that it is appropriate to do so. This jurisdiction is, in my opinion, part of the court’s inherent jurisdiction to exercise such further powers, in addition to the express jurisdiction conferred by the Act, as are necessary for it to perform its functions with justice and efficiency.[12] There is authority that a court may make orders interpreting the meaning of its own orders. Thus in Lawrie v Lees Lord Penzance said:[13]
I cannot doubt that under the original powers of the Court quite independent of any order that is made under the Judicature Act, every Court has the power to vary its own orders which are drawn up mechanically in the registry or office of the Court – to vary them in such a way as to carry out its own meaning, and where language has been used which is doubtful, to make it plain, I think that power is inherent in every Court.
This passage was quoted, along with numerous authorities, in Gikas v Papanayioto.[14] Although most of the cases deal with the “slip rule”, under which orders can be corrected, it cannot matter whether the remedy sought is a correction or a clarification by way of declaration. Thus in Cawood v Green[15] Hardie J held that where there was a bona fide question whether conduct did or did not breach an injunction, the proper procedure was for a declaration rather than moving for an attachment. Of course, this jurisdiction, whether used to correct or clarify orders, is strictly limited to correcting errors or clarifying the meaning of orders and cannot be used to determine rights afresh.
A declaration or other ruling explaining the meaning of a rule or set of rules is in my opinion a discretionary relief. …
[12] Taylor v Taylor (1979) 145 CLR 1.
[13] Lawrie v Lees (1881) 7 App Cas 19; quoted by Needham J in Gikas v Papanayioto [1977] 2 NSWLR 944 (emphasis added).
[14] Gikas v Papanayioto [1977] 2 NSWLR 944.
[15] Unreported, NSW Court of Appeal, 26 June 1974.
In relation to the issue of whether the Court should exercise its discretion to make the declaration sought, Chisholm J said:
I have already said that the making of a declaration is a matter for discretion. In the present case, there is a real difference between the parties as to the meaning of the order. If that difference can be resolved by the making of a declaration, it would seem that this is likely to help identify what further proceedings, if any, would be appropriate. On the face of it, a declaration should be made.
In Downes-Brydon & Brydon (2003) FMCAfam 386, I was requested to interpret a clause contained in a child support agreement — relevantly, the meaning of the expression “all compulsory tuition charges”. Although the Court’s jurisdiction to interpret the clause was not questioned, I dealt with the subject (and the question of whether a declaration should be made) as follows:
The Court’s jurisdiction to interpret the clause is not in issue. To the extent that some framework is required, however, I refer to the provision of sections 95 and 98 of (the Assessment Act). Relevantly, section 98(2) provides that:
…where any difficulty arises…in relation to a particular proceeding, the Court exercising jurisdiction in the proceeding may…make such orders as it considers appropriate to resolve the difficulty.
It is clear beyond argument that a difficulty has arisen in these proceedings. This Court has power to resolve that difficulty — and I propose to do so by interpreting the clause, and by making a declaration as to its meaning.
Because of the provisions of section 95(3) of the Assessment Act, clause 3 of the Agreement is deemed to have effect as if it were an order made by consent by a court. The court has an inherent jurisdiction to explain the meaning of orders where it is satisfied that it is appropriate to do so. It is no different, it seems to me, where it becomes necessary to explain the meaning of a clause in a child support agreement. In this regard, I refer to the decision of his Honour Justice Chisholm in Ashton v Harvey-Sutton & Newnham. …
Whether or not I should make a declaration is a matter for my discretion. As in Ashton’s case, however, it is clear that there is a real difference between the parties as to the meaning of the clause. The resolution of that difference is likely to cause the proceedings commenced by the enforcement summons to be resolved by agreement. Further, the making of a declaration will prevent similar enforcement proceedings in the future — as both parties will understand their respective obligations pursuant to the clause.
I propose to make a declaration. It is proper that I do so. It is appropriate to resolve the difficulty relating to the interpretation of the clause.
That the core issue in the proceedings now before me is the interpretation of the relevant provisions of the Agreement is apparent when it is understood that the father is, in reality, endeavouring to prevent the CSA from enforcing the terms of the Agreement as it understands them to be. Although the father is the applicant, he could just as easily have been the respondent to an enforcement application. In my opinion, the form of the application should not be determinative of the jurisdictional issue. The parties disagree as to the interpretation of the relevant clause. It must, therefore, be interpreted (or alternatively, the Court must attempt to interpret it).
In my opinion, the combined effect of s.95(6), s.98(2) and s.141(1)(n) of the Assessment Act is to grant to the Court jurisdiction to clarify the meaning of the Agreement — by declaration, if necessary. Section 95 is relevant because the Agreement has been accepted by the Child Support Registrar, and because it includes provisions as to periodic and non-periodic payments (indeed, the two forms of payment are “alternatives” within the one set of provisions). Section 98 may be relevant because the father has applied to discharge or set aside the Agreement, and because the orders sought by the father can arguably be regarded as having the effect of discharging or varying the relevant provisions of the Agreement. Section 141(1)(n) is relevant because it empowers the Court to “make any other order that the Court considers appropriate” whilst it is exercising its other powers under the Assessment Act.

Is the Agreement Sufficiently Certain?

A contract must be sufficiently certain if it is to bind the parties to it. In other words, the essential elements of the contract must be “both clear and complete”[16] If a contract is not sufficiently certain, then it may be held to be void (unless the uncertain part can be severed).
[16] See Cheshire & Fifoot Law of Contract (8^th Australian Ed) p 241.
A contract can only be affected by uncertainty if the terms that are uncertain or lacking are essential terms. Terms that are not essential can, to the extent that they may be unclear, be interpreted by the Court (or ignored or severed).
Traditionally, courts have been astute to adopt a construction of a contract which will enable its validity to be preserved:
The decisions on certainty reveal a clear dilemma: the courts are on the one hand reluctant to strike down bargains that people have made in good faith; on the other hand, the parties themselves must determine their rights and obligations and it is not for the court to write the agreement for them. Courts, at least in modern times, do their utmost to resolve this dilemma in favour of upholding bargains, particularly when the parties have acted on the basis of the agreement.[17]
[17] See Cheshire & Fifoot Law of Contract (8^th Australian Ed) p 242 — footnotes deleted.
Further:
If a contract contains contradictory provisions, the court’s task is, so far as possible, to resolve the conflict by looking at the contract as a whole …
Although the courts have in the past sometimes taken a strict approach to the problem of uncertainty, the modern approach is … generally to uphold contracts despite lack of clarity.[18]
[18] See Cheshire & Fifoot Law of Contract (8^th Australian Ed) pp 244-5.
In Upper Hunter County District Council v Australian Chilling and Freezing Co (1968) 118 CLR 429, Barwick CJ said:[19]:
But a contract of which there can be more than one possible meaning or which when construed can produce in its application more than one result is not therefore void for uncertainty. As long as it is capable of a meaning … the Court … will decide its application … No narrow or pedantic approach is warranted ….
[19] At pp 436-7.
It is clear from the discussion of the subject of uncertainty in chapter 6 of Cheshire & Fifoot Law of Contract (8^th Australian Ed) that courts have very broad powers to interpret provisions in agreements which are less than clear. Machinery provisions which do not work and formulae that may be uncertain have been interpreted by courts in much the same way as other types of clauses are interpreted. At the end of the day, the question appears to be one of degree.
The Court’s task must be to construe a contract according to the ordinary rules of construction, and then to determine whether the agreement (as the Court has interpreted it) is void for uncertainty.[20] One of the rules of construction of contracts is to the effect that “the reasonableness of the result of any particular construction is a relevant consideration in choosing between rival constructions”.[21]
[20] See Lewison The Interpretation of Contracts (Third Ed) (2004) at p 261.
[21] See Lewison The Interpretation of Contracts at p 234.
In Australian Broadcasting Commission v Australian Performing Right Association Limited (1973) 129 CLR 99, Gibbs J said [22]:
It is trite law that the primary duty of a court in construing a written contract is to endeavour to discover the intention of the parties from the words of the instrument in which the contrct is embodied. Of course the whole of the instrument has to be considered, since the meaning of any one part of it may be revealed by other parts, and the words of every clause must if possible be construed so as to render them all harmonious one with another. If the words used are unambiguous the court must give effect to them, notwithstanding that the result may appear capricious or unreasonable, and notwithstanding that it may be guessed or suspected that the parties intended something different. The court has no power to remake or amend a contract for the purpose of avoiding a result which is considered to be inconvenient or unjust. On the other hand, if the language is open to two constructions, that will be preferred which will avoid consequences which appear to be capricious, unreasonable, inconvenient or unjust, ‘even though the construction adopted is not the most obvious, or the most grammatically accurate’, to use the words from earlier authority cited in Locke v Dunlop,[23] which, although spoken in relation to a will, are applicable to the construction of written instruments generally; see also Bottomley’s Case.[24] Further, it will be permissible to depart from the ordinary meaning of the words of one provision so far as is necessary to avoid an inconsistency between that provision and the rest of the instrument. Finally, the statement of Lord Wright in Hillas & Co Ltd v Arcos Ltd,[25] that the court should construe commercial contracts ‘fairly and broadly, without being too astute or subtle in finding defects’, should not, in my opinion, be understood as limited to documents drawn by businessmen for themselves and without legal assistance. …
[22] At p 109-10.
[23] (1888) 39 Ch.D.387 at 393.
[24] (1880) 16 Ch.D.681 at 686.
[25] (1932) 147 L.T. 503 at 514.
I am conscious that the mother entered into the Agreement without first having obtained legal advice, and that the Agreement was prepared by the father’s solicitor. Further, the father conceded that he told the mother that he “ … would not work in the mine, with the dust and the dirt, if he had to pay the full amount of child support”. The father also conceded that he told the mother — in relation to the issue of child support — that “ … she had to take it or leave it”.
Having regard to the fact that the father was then earning something in the order of $70,000.00 per annum or $80,000.00 per annum, there can be no doubt that the child support to be paid by the father pursuant to the “formula” (as it were) contained in the Agreement is significantly lower than the child support that the father would have been obliged to pay at that time if an administrative assessment had been made. That is so because 18% of the father’s “net weekly income” (however that expression might be interpreted) must necessarily generate a lower figure than 18% of the father’s adjusted income amount calculated using the child support formula at that time.[26]. The parties also agreed that $140.00 per week was the lower of the two “alternatives” in the “formula” contained in the Agreement.
[26] A payer’s adjusted income amount is calculated using the formula: child support income amount minus exempted income amount (see s. 36(2) of the Assessment Act
The expression “net weekly income” is undefined and, in my opinion, unclear. Does it mean net after income tax or net after the deduction of other amounts? If it relates to the father’s income after tax, then should account be taken of tax refunds at a later stage? What does “income” include? Does it include benefits that the father may have obtained from (for example) LGA?
Even if the expression “net weekly income” were to be defined, the effect of s.84(8) of the Assessment Act is that any amounts paid by the father pursuant to this method are not to be credited against the father’s liability under relevant administrative assessments of child support.
Prima facie, the effect of the Agreement might be that the quantum of child support payable by the father could change from week to week. In some weeks the child support would be fixed in the sum of $140.00 per week (as adjusted according to CPI,) and credited against the father’s liability under any relevant administrative assessments of child support. At other times, the “18% of net weekly income” formula would apply, resulting in payments made pursuant to that arrangement not being credited against the father’s liability under relevant assessments.
In my opinion, the parties could not have intended the result referred to in the previous paragraph.
Recitals E and F of the Agreement refer to a choice between two figures. Recital F, in particular, says that whichever of the two figures is chosen “shall … be reviewed in line with the rise in the CPI for Perth”. Clearly, an ever changing amount which may be equivalent to 18% of the father’s “net weekly income” could not be so reviewed. Clauses 1 and 2 (and the subsequent clauses of the Agreement — apart from paragraph 7) do not take the matter any further. If clauses 1 to 6 and Recitals E and F are to be construed “so as to render them all harmonious one with another”, then the CSA’s contention that the Agreement provides for a “one off calculation” of an amount of either $140.00 or “18% of the father’s net weekly income” at that time must be correct. Such an interpretation is neither capricious nor unreasonable, and it avoids consequences which are both inconvenient (to the extent of rendering the agreement effectively unworkable) and arguably unjust.
In my opinion, clause 7 of the Agreement — to the extent that it can be understood — is extraneous. It is clearly not an essential term of the Agreement, as it adds nothing to clauses 1 and 2. It adds nothing to them because of the manner in which the Agreement as a whole has been construed. As indicated above, the Court’s task is “ … to construe the document according to the ordinary canons of constructions and then to determine whether the document as so construed is void for uncertainty.”[27]
[27] See Lewison The Interpretation of Contracts (3^rd ed) p 261.
Once it is accepted that the core provisions of the Agreement require a one off calculation (as described above), and when regard is had to the fact that the words “ … any variation in the amount payable by operation of clause 2 shall automatically vary the sum of $140.00 mentioned in clause 1”are incomprehensible and seem to render the clause circular in effect, it is clearly appropriate to treat clause 7 in the manner that I have described. As it is a non-essential term that is vague, it can either be ignored or formally severed from the Agreement.

Conclusion — Effect of the Agreement

It follows from the above that, in my opinion, the interpretation given by the CSA to the arrangements reflected in the Agreement is correct and appropriate. I am not prepared to discharge the Agreement, or to set it aside.

Variation of Child Support Obligation for the Period 1 March 1999 to 30 June 2003

Having concluded that the CSA’s method of assessment is correct (and bearing in mind that there was no — or no effective — challenge to the quantum of the assessments, or to the amount of the arrears resulting therefrom) it is now necessary to consider whether the assessments should be departed from for the various periods referred to by the father in his application.

The Law

The Commonwealth’s legislative scheme for assessment and enforcement of child support liabilities is contained in the Child Support (Assessment) Act 1989 (which I shall call the “Assessment Act”) and the Child Support (Registration and Collection) Act1988. Certain aspects of this scheme were considered by the High Court in Luton v Lessels (2001) FLC 98-015. In that case, Gaudron and Hayne JJ said (at page 95,659):
The Assessment Act records that the ‘parents of a child have the primary duty to maintain the child’. This duty is said, by the Assessment Act, (a) to be not of lower priority than the duty of the parent to maintain any other child or another person: (b) to have priority over all commitments of the parent other than commitments necessary to enable the parent to support himself or herself and any other child or another person the parent has a duty to maintain: (c) to be not affected by the duty of any other person to maintain the child or any entitlement the child or another person may have to an income tested pension, allowance or benefit. …The principal object of the Assessment Act is said to be ‘to ensure that children receive a proper level of financial support from their parents’.
Part 5 of the Assessment Act (ss 35-79) provides for the administrative assessment of child support. “Child support” is defined as “financial support under [the Assessment] Act, including financial support under [the] Act by way of lump sum payment or by way of transfer or settlement of property”. An administrative assessment of child support requires the application of one or more of several statutory formulae that is, or are, apposite in the particular circumstances. Section 79 of the Assessment Act provides that ‘an amount of child support due and payable by a liable parent to a carer entitled to child support is a debt due and payable by the liable parent to the carer’…
Where there has been an administrative assessment, both the liable parent and the carer may lodge with the Registrar an objection against the assessment. A person aggrieved by a decision on the objection may, pursuant to section 110 of the Assessment Act, appeal to a court having jurisdiction under that Act.

In the same case, Gleeson CJ said (at page 95,653):
The objects of the Assessment Act are set out in section 4. The principal object is to ensure that children receive a proper level of financial support from their parents. To that end, the Act provides for a level of support to be determined in accordance with legislatively fixed standards, and permits carers of children to have the level readily determined without the need to resort to court proceedings.
…It may be observed that, although the legislation is enacted in furtherance of a clearly defined public policy, it creates a distinctly personal liability. The natural and moral obligation of the parent to support a child becomes, by force of the legislation, a legal obligation reflected in a debt, calculated in accordance with the Assessment Act, owing by a parent to a carer of the child.
Gaudron and Hayne JJ continued (at page 95,663):
Part 7 of the Assessment Act (ss 99–146) deals with the jurisdiction of courts under the Act. In particular, provision is made for applications to a court for a declaration about the applicability of the administrative assessment provisions. Provision is made for what are called “appeals” against incorrect administrative assessments and for orders for departure from administrative assessment. (The reference to “appeal”, although similarly used in other contexts, may mislead. The proceeding which is so described is the first application of judicial power; it is an exercise of original, not appellate jurisdiction.) An order by a court for departure from an administrative assessment may be made on the grounds on which the registrar may make a departure determination…
The process involved in the consideration of an application for departure from an administrative assessment of child support was explained by the Full Court in Gyselman (1992) FLC 92-279 at 79,064-5, under the heading “Division 4 – Orders for Departure from Administrative Assessment in Special Circumstances”. The Full Court said (inter alia):
Section 117 is the critical provision.
The structure of that section is that s.117(1)(b) identifies concisely the matters about which the Court must be satisfied and those components are then expanded in subsections (2) to (9). Section 117(1)(b) identifies a clear three-step process:
1.Whether one or more grounds of departure in s.117(2) is established.
2.Whether it is ‘just and equitable’ within the meaning of s.117(4) to make a particular order.
3.Whether it is ‘otherwise proper’ within the meaning of s.117(5) to make a particular order.
It is clear from the careful way in which s.117 has been structured that the Court must address each of those three separate issues...
…Each of those grounds (in s.117(2)) is prefaced by the words, "in the special circumstances of the case". Whilst it is not possible to define with precision the meaning of that term, as a generality it is intended to emphasise that the facts of the case must establish something which is special or out of the ordinary. That is, the intention of the Legislature is that the Court will not interfere with the administrative formula result in the ordinary run of cases. (It has been held) that "special circumstances" were "facts peculiar to the particular case which set it apart from other cases". The approach to the interpretation and application of the particular grounds in s 117(2) must be guided by that qualification.
In Hides v. Hatton (1997) FLC 92-759, the Full Court said (at 84,352):
It was also made clear in Gyselman that when the Court is considering whether it is just and equitable within the meaning of s.117(4) to make a particular order, the Court is required to undertake the task of considering the matters set out in paragraphs (a) to (g) of that sub-section, and in this regard the Full Court said as follows (at 79,078):
‘However, some of the matters listed in sub-section (4) may overlap with matters already considered under sub-section (2) and some of the paragraphs in sub-section (4) may be more significant in one case than they would be in another or of little relevance in a particular case. It is an essential part of the s.117 exercise to carry out the obligation under sub-section (4). However, that does not mean that it is necessary in each case to slavishly go through each of the paragraphs. The extent to which it is necessary to do so will depend upon the facts and conduct of the individual case and the analysis already performed under sub-section (2).’
The Full Court also made it clear in its decision in Gyselman that similar considerations apply to the Court’s determination as to whether it is ‘otherwise proper’ within the meaning of s.117(5) to make a particular order (see at 79,080), and furthermore and very relevantly for present purposes the Full Court emphasised the importance of trial Judges providing adequate reasons for judgment in order to ensure a proper exercise of the discretion under s.117 (see at 79,080).
In the same vein, a differently constituted Full Court in Ross & McDermott (1998) 23 FamLR 613 at 623-4 (paragraph 39) said:
... a practical and flexible approach should be adopted to the task of considering these s 117(4) and (5) matters, that is an approach similar to that which this court has long adopted to the ‘s 68F(2) matters’… in child-related proceedings under the Family Law Act 1975 (Cth), and to the ‘s 79(4) matters’ and ‘s 75(2) matters’ in property settlement proceedings under that Act. Accordingly, we consider it is unnecessary to make any reference to those s 117(4) and (5) matters which have no real relevance in the circumstances of the particular case. We also consider that it would be permissible to group together and consider as a whole, those relevant matters which by their nature lend themselves to such an approach in the circumstances of the particular case, and in the case of those matters which are required to be considered under more than one subsection of s 117, to examine such matters only once, although they may need to be taken into account under more than one subsection.
In Hallinan v. Witynski (1999) FLC 98-009, the Full Court said:
... (The) reasons for answering the two questions posed by s.117(1)(b)(ii) need not be elaborate, but the task of considering, at least broadly, the matters referred to in s.117(4) and 117(5), respectively, and then making a finding as to satisfaction or otherwise in relation to the relevant matter, must be undertaken as a necessary part of the exercise of discretion imposed on the Court by s.117(1).
I have already explained that, when dealing with an application for a variation of the father’s obligation to pay periodic child support as required by the terms of the Agreement, the Court must determine at the outset whether — by reason of a change of circumstance — a ground for departure exists. The Court must then determine whether it would be just and equitable, and otherwise proper, to make an order varying the arrangement described in the Agreement.

Change of Circumstances

Clearly, the parties’ circumstances have altered since the time that they entered into the Agreement. Both have relocated from Kalgoorlie. Both have repartnered, and the mother now has two children with her present de facto husband. The father left his employment in Kalgoorlie in the circumstances already described and commenced working with his brother in Geelong. In my opinion, such changes warrant the Court proceeding to deal further with the father’s application.

“Special Circumstances” — Section 117(2)

As I understand the father’s case, he asserts that an ongoing obligation to pay child support pursuant to the provisions of the Agreement (as construed by the CSA, and now this Court) would result in an unjust and inequitable determination of the level of financial support to be provided by him for S because of his overall financial position. He argues that the inappropriate level of child support has adhered since he moved from Kalgoorlie to Geelong.
In order to bring himself within s.117(2), the father must demonstrate that the ground set out in the previous paragraph arises “in the special circumstances of the case”. “Special circumstances” has been held to mean facts peculiar to the case which set it apart from other cases.[28] Put another way, special circumstances may be demonstrated if failure to take into account the relevant facts of the particular case would result in injustice or undue hardship to the payer of child support, the recipient of child support or the child or children the subject of the Child Support Assessment or arrangement.[29]
[28] See Savery (1990) FLC 91-131; Gyselman (1992) FLC 92-279.
[29] Sheahan (1993) FLC 92-375.
As I understand the father’s case, he argues that his retrenchment/redundancy in late 1998, and his subsequent (unsuccessful) venture with his brother in LGA, together constitute “special circumstances” in the relevant sense.
I am not persuaded that the events or circumstances described in the previous paragraph can fairly be described as “special circumstances”. That is so because the criteria in s.117(2) do not stand alone. Not only must there be “special circumstances”, but those circumstances must also result in an unjust and inequitable determination of the level of financial support to be provided by the father for S. In some senses, this consideration is the corollary of the second Gyselman step — namely that the Court must be satisfied that it would be just and equitable (as regards S, the mother and the father) to make the orders sought by the father.
Although I am not persuaded that special circumstances exist in this case (within the meaning and contemplation of that term in s.117(2)) I shall proceed to deal with the next matter of which the Court must be satisfied — namely, whether it would be just and equitable to make the orders sought by the father.

“Just and Equitable” — 117(4)

Section 117(4) of the Assessment Act sets out the matters to which the Court must have regard in determining whether it would be just and equitable (as regards S, the mother and the father) to make the particular orders sought by the father.
I am aware of and take into account the nature of the duty of a parent to maintain a child as specified in s.3 of the Assessment Act.
I am unable to determine S’s needs, or other aspects of her financial position, due to the fact that no such evidence was placed before the Court. Nor am I able to have regard to the overall financial position of the mother — as no evidence was presented to the Court in relation to this subject either. Indeed, the mother did not file a Financial Statement.
The lack of financial information presented in support of the mother’s case makes it very difficult to determine whether it would be just and equitable to make the orders sought by the father — and almost impossible to make such a determination for each of the relevant child support periods.
Dr Ingleby argued that the father has presented all relevant evidence (from his perspective) and that — in effect — the Court should be able to proceed to make the orders sought by the father on something akin to an undefended basis. I do not agree. The Court must be satisfied that it is just and equitable to make the orders sought by the father. That is an integral part of the three step process referred to in Gyselman. It is also enshrined in the Assessment as itself (see S. 117(1)(b)(ii)(A)). If there is insufficient evidence before the Court to enable it to reach any firm conclusions in relation to the matters set out in s.117(4), then the options available to it are limited.
If the Court were to be satisfied that the father has made a full and frank disclosure of his financial position (for the whole of the period covered by the assessments which he seeks to vary), and that the mother has deliberately or otherwise inappropriately failed or refused to provide details of her and the child’s financial position. (and the child’s proper needs), then it might be minded to proceed as suggested by Dr Ingleby. In all the circumstances, however, I am not satisfied that the father’s financial position is now, or was at any relevant time, such as to justify a determination that it would be just and equitable to vary the terms of the child support Agreement.
I have reached the conclusion contained in the previous paragraph for the following reasons:
a)The father did not say — in his first or second affidavits, or at any other time — that he does not (or at any time, did not) have the capacity to pay child support in accordance with the provisions of the Agreement.
b)The letter from Geelong Community Legal Service Inc (being annexure NRM3 to the affidavit of the father sworn 5 December 2002) does not suggest that the father is unable to pay child support in accordance with the terms of the Agreement. It simply argues that the CSA has erred in its interpretation of the Agreement.
c)The father did not disclose details of the redundancy payment that he received upon the termination of his employment in Kalgoorlie until the trial.
d)I do not accept the father’s evidence to the effect that he is prepared to work for eighteen hours per week on a paid basis and twenty hours per week on an unpaid basis for a company in which he has no interest, and from which he earns a minimal amount.
e)I do not accept the father’s evidence that it took him three years to realise that working in LGA was a waste of time.
f)The mother said, and I accept, that the father “has always been very astute about money”. I do not accept that the father would continue to work in LGA on the terms and conditions that he has described.
g)I do not understand, and do not accept, the father’s evidence to the effect that he borrowed $30,000.00 to “buy into” LGA, and that it “repaid” him $400.00 per month in respect of the loan.
h)The father said that he has not looked for alternative employment. The health problems that he suffered at the time that he was working in Kalgoorlie do not seem to have troubled him since he left Western Australia. I can see no reason why the father should not have been able to obtain and maintain employment which would have been considerably more remunerative than his employment with LGA (if the father’s description of the financial consequences of that employment is to be accepted).
i)The father conceded that his assessment of the value of his superannuation in his Financial Statement was inaccurate, and that it had been understated.
j)The father conceded that he had not attempted to improve his financial position since commencing work with his brother — or, relevantly, since realising that working with his brother was “a waste of time”.
Given that I am unable to determine that it is just and equitable (within the meaning of s.117(4)) to make the orders sought by the father, it is unnecessary to proceed further with the three step process described in Gyselman.
I would add that I am aware the Court must follow the three step process in Gyselman in respect of each year (or other assessment period) for which a departure order is sought (see Hides v Hatton (1997) FLC 92-759). In my opinion, the result must be the same for all relevant periods the subject of the father’s application.
In so far as the father’s involvement in LGA is concerned, it is important to understand that the Court is entitled to focus on the father’s earning capacity, as much as on his actual (or asserted) income from time to time.
The concept of “earning capacity” was discussed at length in DJM & JLM (1998) FLC 92-816, where the Full Court said (at page 85,272):
Child support and child maintenance orders are governed by legislation which emphasises and prioritises the obligation of parents to support their children and seeks to ensure that the level of financial support is to be measured according to the parents’ “capacity to provide financial support”.
Property adjustment orders have far less focus and are arrived at on the basis of what is “appropriate” after weighing up many competing factors. Spousal maintenance is governed by a test of what is proper and having regard to the reasonable ability of the liable spouse to meet the needs of the other.
In our view, there can be different answers to the same question about earning capacity — depending upon which head of power is sought to be exercised.
A judge might reasonably say that a parent should be working longer hours or in more lucrative employment to meet child support obligations. A spouse is only required to support the other spouse to the extent that he or she is reasonably able to do so. This requirement does not impute the same degree of compulsion about it that the child support and child maintenance tests express …
In a similar vein, the Full Court in Scott 1994 FLC 92-457 said[30]:
… Whilst … in some circumstances an unemployed parent without income may be held to have an earning capacity or financial resources sufficient to justify an order that he or she contribute to the support of his or her children, (it is not the case that) in all such circumstances, such a conclusion must or should be reached. If (there is) any principle of general application, it is only that being unemployed and without income is not of itself necessarily an answer by a parent to an application for child maintenance. The circumstances in which the parent became unemployed or without income, the reasons for it, the nature of his/her previous employment and the efforts (if any) which he or she has subsequently made to obtain employment are all relevant matters for consideration by the court in deciding whether the parent has any and what earning capacity such as to justify an order for child maintenance. Even in the absence of any current income or earning capacity, a parent may be required to pay maintenance for his/her children if he/she has property or financial resources which are or ought reasonably to be available for that purpose.
It is ultimately a question of fact in each case, whether an unemployed parent without income or financial resources has any earning capacity, and if so, the extent of it. However, we are of the view that such an unemployed parent with no particular qualifications or skills for employment could not be held, at least in times of high unemployment … to have a current earning capacity sufficient to support an order for maintenance unless he/she has recently given up, without good reason, secure remunerative employment, or unless having become involuntarily employed he/she has made no reasonable efforts to obtain employment for at least a significant period of time.
[30]At page 80,739.
I have already dealt with the circumstances in which the father left his employment in Kalgoorlie, and my dissatisfaction with his evidence in relation to his involvement in LGA. I have also made findings regarding the father’s failure to seek alternative employment in a timely fashion (if, indeed, he ultimately reached the conclusion that his involvement in LGA was a waste of time) and his failure to make any genuine attempt to improve his financial position. He has made no effort to obtain the sort of employment that he could have obtained if he was truly motivated to earn an income.
Given that I have found that the Agreement is valid and enforceable (and that the interpretation given to it by the CSA is correct and appropriate), this is not a case in which the father’s earning capacity can be considered “at large”, as it were. The father’s application is an application to discharge or vary the provisions of the Agreement. It is in that light that the husband’s case must be seen.

Conclusion

As the father has failed to demonstrate (even on his own case) that it would be just and equitable to make the orders that he seeks varying the quantum of the assessments issued by the CSA, his application must be dismissed. I would add that the father also failed to establish a ground for departure (or variation) order s.117(2).

To the extent that it may be required, I am prepared to make a declaration to the effect that the Agreement is to be interpreted in the manner described by the CSA in its letter comprising exhibit F5.
I shall now hear from Counsel as to the Orders that are considered appropriate to give effect to these Reasons.

I, Barbara Mendleson, certify that the preceding one hundred and forty-four (144) paragraphs are a true copy of the reasons for judgment of Walters FM

Deputy Associate:

Date: 10 November 2004