Moriarty and Smyrniotis (Child support)

[2024] AATA 3581

Moriarty and Smyrniotis (Child support) [2024] AATA 3581 (22 August 2024)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2024/PC027968

APPLICANT:  Mr Moriarty

OTHER PARTIES:  Child Support Registrar

Ms Smyrniotis

TRIBUNAL:Member M Martellotta

DECISION DATE:  22 August 2024

DECISION:

The decision under review is affirmed.

CATCHWORDS

CHILD SUPPORT – non-agency payments – sporting activities, school necessities and other costs – zero annual liability does not create a registerable maintenance liability – no liability at time of some payments, and no mutual agreement for others – decision under review affirmed

Names used in all published decisions are pseudonyms. Any references appearing in square brackets indicate that information has been omitted from this decision and replaced with generic information so as not to identify involved individuals as required by subsections 16(2AB)-16(2AC) of the Child Support (Registration and Collection) Act 1988.

REASONS FOR DECISION

BACKGROUND

1. This review is about whether all or part of an amount of $1,179 and an amount of $1,855 is to be credited as non-agency or prescribed non-agency payments against Mr Moriarty’s child support liability. Mr Moriarty and Ms Smyrniotis are the parents of [a child].

2. On 4 December 2023 and 5 December 2023 Mr Moriarty asked Services Australia – Child Support to credit payments he said had been made directly to Ms Smyrniotis. The application was refused on 11 January 2024. Mr Moriarty objected. On 4 May 2024 Child Support disallowed the objection.

3. Mr Moriarty lodged an application with the Tribunal on 20 May 2024. The Tribunal held a hearing on 16 August 2024. Mr Moriarty appeared in person and provided affirmed evidence and presented submissions.

4. Ms Smyrniotis did not appear at the hearing. Prior to the hearing she advised that due to work commitments she was unable to attend. She provided written submissions (B1) and requested that this be taken into consideration.[1] Mr Moriarty was provided a copy of Ms Smyrniotis’ written submission prior to the hearing.

   [1] Paragraph 40(1)(b) of the Administration Appeals Tribunal Act 1975.

5. Other evidence considered by the Tribunal included hearing papers prepared and distributed by Child Support (338 pages). The Tribunal deferred its decision to provide Mr Moriarty the opportunity to provide post hearing submissions (A1-A12).

ISSUES

1. The statutory provisions relevant to this review are contained in the Child Support (Registration and Collection) Act 1988 (the Act) and the Child Support (Registration and Collection) Regulations 2018 (the Regulations).

2. Child support legislation is interpreted by Child Support with the aid of the Child Support Guide (the Guide). The Tribunal may be guided by policy but is not bound to follow it.[2] The Federal Court[3] has observed that in the absence of any contrary statutory indication, lawful executive policy enacted to guide the exercise of a statutory power is a relevant factor for the Tribunal to take into account in performing its review task. A lawful approach allows the adoption of appropriate policy as a guide but not so as to control the making of the decision and the Tribunal adopts that approach.

   [2] Re Drake and Minister for Immigration and Ethnic Affairs(No 2) (1979) 2 ALD 634.

   [3] G v MIBP [2018] FCA 1229.

3. The issue which arises in this case is whether payments made by Mr Moriarty are to be credited against his child support liability.

CONSIDERATION OF EVIDENCE AND STATUTORY PROVISIONS

1. The Act provides that certain direct payments made by a payer can be credited against their child support liability.

2. Relevant to this matter, paragraph 71(1)(a) of the Act refers to the payee of an enforceable maintenance liability who receives from the payer an amount intended by both payer and payee to be paid in complete or partial satisfaction of an amount payable under the liability in relation to the child support enforcement period. These payments are referred to as non‑agency payments. Section 71A deals with payments made to a third person by the payer.

3. Section 71C of the Act and Regulation 19 of the Regulations allow the Agency to credit certain payments towards a payer’s child support liability regardless of the intention of the parents at the time the payment was made (that is, regardless of whether or not the payments were intended to be in lieu of child support), except if, at the time the payment was made, the payer had at least regular care of any of the children to whom the relevant administrative assessment relates to.[4] The Agency refers to these payments as “prescribed non-agency payments”. Such payments must be of the types specified under the Regulations.

   [4] As noted in the Guide at 5.3.1, since 1 July 2008, an amount cannot be credited as a prescribed non‑agency payment if at the time the payment was made the parent had at least 14% care of the child.

4. The Child Support Registrar (and on review, the Tribunal) may refuse to credit amounts under sections 71, 71A or 71C of the Act if satisfied that, in the circumstances of the particular case, the amount ought not to be credited (section 71D of the Act).

5. An enforceable maintenance liability is a registered maintenance liability enforceable under the Act.[5]

   [5] Section 4 of the Act.

6. A registered maintenance liability is a liability under sections , 17,17A, 18 and 18A of the Act a registered maintenance liability. Relevantly section 17 provides:

   Liabilities in relation to children that are registrable maintenance liabilities.

   (1) Subject to section 19, a liability is a registrable maintenance liability if:

   (a) it is a liability of:

   (i) a parent of a child to pay a periodic amount[6] to a parent or non‑parent carer of the child for the maintenance of the child; or

   (ii) a step‑parent of a child to pay a periodic amount to a parent or non‑parent carer of the child for the maintenance of the child; and

   (b) either of the following subparagraphs applies:

   (i) it arises under a court order or court registered maintenance agreement;

   (ii) it is a collection agency maintenance liability.

   (2) Subject to section 19, a liability is a registrable maintenance liability if it arises under a child support assessment.

   [6] Emphasis added

7. When a child assessment is made, it gives rise to a registerable maintenance liability. A payee may elect not have the liability registered at the time of making the application (private collect), but they can later elect to have it registered (Child Support collect).

8. Child support enforcement period in relation to a registered maintenance liability means:

   (a) the period commencing on the day on which the liability first becomes enforceable under this Act and ending on the day on which the liability first ceases to be so enforceable; and

   (b) if the liability ceases to be enforceable under this Act and again becomes so enforceable (whether on one occasion or more than one occasion)—each period commencing on a day on which the liability again becomes so enforceable and ending on the day on which the liability next ceases to be so enforceable.[7]

   [7] Section 4 of the Act

9. On 11 January 2024 the Child Support Registrar decided not to credit the following payments against Mr Moriarty’s child support liability:

Date of payment	Type	Amount
17/12/2018	Direct Payment	$130
20/12/2019	Direct Payment	$60
19/03/2019	Direct Payment	$220
19/12/2019	Direct Payment	$200
07/04/2021	Direct Payment	$150
09/08/2021	Direct Payment	$580
09/10/2021	Direct Payment	$400
09/11/2021	Direct Payment	$400
24/12/2021	Direct Payment	$115
28/04/2022	Direct Payment	$350
14/07/2022	Direct Payment	$255
18/10/2022	Direct Payment	$174

1. Mr Moriarty submitted that the payments he made ought to be credited against his child support liability. In written submissions which he confirmed at hearing Mr Moriarty stated:

   a)Ms Smyrniotis has admitted to receiving the payments.

   b)He would not be providing this money to Ms Smyrniotis unless it was for  their child’s needs.

   c)He has always met his child support obligations and the fact that there was a nil assessment in place for a period of time accurately reflected his circumstances. During that period, he was responding to requests as and when made by Ms Smyrniotis to cover the cost of sporting activities, school booklists and uniforms and other costs associated with their son.

   d)He believes that Child Support have formed a personal view against him in relation to which he has submitted a complaint with the Commonwealth Ombudsman.

Were direct payments made by Mr Moriarty to Ms Smyrniotis?

1. Mr Moriarty submits that he made the payments directly to Ms Smyrniotis by depositing the amounts into her bank account. Mr Moriarty provided Child Support screenshots of the following transfers ($1,735 in total) to Ms Smyrniotis:

   a)$150      Basketball  7 April 2021

   b)$580      School camp and Basketball             9 August 2021

   c)$400  9 November 2021

   d)$350      Basketball   28 April 2022

   e)$255      WABL  14 July 2022

2. Post hearing Mr Moriarty provided a screen shot of another transfer of $130 dated 17 December 2018 with the description “[the child] school’. Another screenshot showing a transfer of $90 made on 9 March 2018 did not form part of the application lodged by Mr Moriarty.

3. Mr Moriarty explained that he had transfers set up on his mobile phone and the fact that the transfers are described as sport‑related does not reflect that the direct payments to Ms Smyrniotis were for other expenses such as education‑related costs.

4. In discussions and in written submissions Ms Smyrniotis refers to payments which she states were made directly to her by Mr Moriarty between December 2018 to October 2022.

Enforceable maintenance liability

1. As noted, if Mr Moriarty wants payments credited then there needs to be an enforceable maintenance liability in place at the time of the payments.

2. According to the Child Support records the start date of the case was 13 November 2009. An active case was registered as Child Support collect from 1 February 2010. This meant that an amount payable under the assessment was a debt owed to the Commonwealth (Child Support).[8] These payments are usually paid or discharged by direct payments to Child Support but as noted, the non-agency payment provisions allow for certain direct payments made to a payee (or third party) to be credited against the amount payable despite section 30. As noted in the case of Strauss and Strauss:[9]

   It is clear that [sections 71 and 71A] relate only to payments which have been made either to the other party or to a third party in respect of a maintenance liability which is at that time registered under the Registration Act.

   [8] Section 30 of the Act provides that when a registrable maintenance liability is registered then any amount payable is a debt owed to the Commonwealth.

3. This is also not a case which on its face concerns an application for collection of arrears or unpaid amounts during a specified period.[10]

   [10] Section 28A of the Act.

4. Consistent with Ms Smyrniotis’ submission, the case liability screens reflect that for most of the child support periods from 2014 until September 2022, Mr Moriarty’s assessed annual rate of child support was $nil.[11] Specific to the dates Mr Moriarty made direct payments to Ms Smyrniotis (from 17 December 2018 to 18 October 2022) the case liability for the assessment were as follows:

   1 September 2018 – 31 August 2019                $0.00

   1 September 2019 – 31 January 2020               $0.00

   1 February 2020 – 10 July 2020             $0.00

   11 July 2020 – 31 August 2020  $0.00

   1 September 2020-31 July 2021  $0.00

   1 August 2021 – 31 January 2022  $0.00

   1 February 2022 – 3 September 2022               $446

   4 September 2022 – 31 October 2022               $446

   [11] Pages 290–291 of the hearing papers.

5. The question arises is whether for those periods in which there was a nil annual liability, there was an enforceable maintenance liability in relation to the child support enforcement period? The Guide[12] notes that an assessment for a zero annual rate does not create a registerable maintenance liability and therefore cannot be registered by the Registrar, if however, a liability does become payable in the future the Registrar must register the liability. In this case however, there was not a zero annual rate from the commencement of the child support case. It is arguable that on that basis there is still an enforceable maintenance liability – but given that there was a zero annual rate during the period of the payments then in the Tribunal’s analysis the non-agency payments are without application.

   [12] 5.1.2 and section 24A(1) of the Act

6. According to child support records at the relevant time, there was no outstanding child support liability owing.[13]as such a non-agency payment could not be applied to be paid in complete or partial satisfaction of an amount payable under the liability. In the absence of there being a child support liability, then the provisions in section 71 which would permit the crediting of direct payments to payee against the liability have no application.

   [13] Page 294

7. The Tribunal notes the payments made by Mr Moriarty in the period commencing 1 February 2022 to 31 October 2022. These are the payments dated 28 April 2022, 14 July 2022 and 18 October 2022.

8. According to Child Support records, at the time that these payments were made, there was a zero annual rate.[14]This changed following a care decision made on 12 March 2023 which resulted in the relevant period becoming Minimum Annual Rate (MAR) payable.[15] It is arguable that on that basis that section 71 continues to have no application.  However, even if accepting that there was a child support liability in place which would enliven the non-agency payment provisions, the Tribunal concludes that section 71 had no application as the Tribunal is not satisfied (for the following reasons) that the requirement of mutual agreement is not  made out.

Mutual agreement

[14] Page 68

[15] Page 174. The subsequent AAT decision on care made on 31 October 2023 changed the care percentages but this did not impact on the MAR

1. Mr Moriarty stated that in effect mutual intention that the payments were in lieu of child support is implicit in that he was responding to text messages from Ms Smyrniotis in which she was requesting assistance for various expenses associated with their child. If he were not making the payments for the child’s benefit and support, then what was the purpose of the payments? He stated that this was particularly the case given that some of the payments occurred during periods of a nil assessment.

2. In post hearing submissions Mr Moriarty re-iterated that he relies upon text messages as evidence of mutual intention.  He states that Ms Smyrniotis was regularly seeking financial assistance with costs associated with their son and he obliged despite there being an assessment in which he was assessed to pay a nil annual liability. He said that this evidenced that the payments he made were in lieu of child support.

3. Ms Smyrniotis’ evidence to Child Support and her written submissions to the Tribunal are:

   a)The transactions claimed by Mr Moriarty as non‑agency payments were intended to assist with mainly their son’s sporting cost; there was never an agreement that they were to be treated as payments in lieu of child support.

   b)Mr Moriarty’s child support liability from 2014 to 2022 was assessed at an annual nil rate so it was impossible for there to be mutual intent in such circumstances.

Conclusions

1. As noted, evidence documenting the transfer of direct payments was provided with respect to some but not all of the payments relied upon by Mr Moriarty. However Ms Smyrniotis in statements made to Child Support and in written submissions to the Tribunal confirms that she did receive direct payments from Mr Moriarty. So the Tribunal accepts and concludes that to be the case.

2. Accepting the proposition  that there was a relevant child support liability in place which could give rise to the provisions, the Tribunal is not satisfied that the amounts received were intended by both Ms Smyrniotis and Mr Moriarty to be paid in complete or partial satisfaction of an amount payable under the liability, in relation to the child support enforcement period.

3. Whilst Mr Moriarty submits that the context in which payments were made should give rise to the inference that they were intended to be in lieu of child support, there is no expression of this in any of the text messages. Ms Smyrniotis’s position is that the purpose of the payments was to assist with a range of sporting and other costs and there was no mutual agreement or intention that the payments were to be credited against Mr Moriarty’s child support liability.

4. The Tribunal concludes and finds that there was no mutual intention that the payments were to be in lieu of child support. This means that section 71 of the Act has no application.  The Tribunal is also satisfied that section 71A has no application.

Any other basis for the payments to be credited

1. The Tribunal further considered whether there was any basis for the payments to be considered prescribed non-agency payments. The payment must be a payment of the kind specified in section 19 of the Regulations (paragraph 71C(1)(b) of the Act). Section 19 specifies the following payments:

   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;[16]

   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.

   [16] This does not include payments for non-compulsory camps or excursions.

2. Mr Moriarty stated that whilst some of the transfers are described as relating to sporting and extra-curricular activities, he also made payments towards the child’s school uniform and booklist. He relies upon a text message exchange dated 9 November 2021 which references the booklist ($180). In another text message (undated), Ms Smyrniotis references basketball costs, swimming lessons and the child’s 2020 booklist ($120). Mr Moriarty, in response to that message, advises he would transfer money through, including for the booklist. Another text message dated 16 November 2020 references Ms Smyrniotis purchasing shirts and a jacket (for school) at a cost of $130. Mr Moriarty’s response is that he has transferred $400 to her.  In relation to these exchanges the Tribunal notes only the payment of $400 made on 9 November 2021 forms part of Mr Moriarty’s application which references the child’s booklist cost of $180.

3. The Tribunal is satisfied that payments made by Mr Moriarty for items or activities described as relating to extracurricular activities of the child’s participation in basketball are not prescribed by the Regulations. The only payment which could come within the regulations as a prescribed non-agency payment is the payment of $180 which formed part of the payment dated 9 November 2021.

4. Child Support records reflect that Mr Moriarty was recorded as having regular care of the child until 31 January 2022. From 1 February 2022 his care is recorded as 10%.

5. As noted, a prescribed non-agency payment describes the ability of Child Support to credit certain payments towards a payer’s child support liability regardless of the intention of the parents at the time the payment was made except if, at the time the payment was made, the payer had at least regular care of any of the children to whom the relevant administrative assessment relates.[17] At the time of the payment Mr Moriarty  was assessed as having at least regular care and for that reason the provision has no application.

   [17] Paragraphs 71C(1)(ba) and 71C(1)(d).

1. The Tribunal refuses to credit payments totalling $1,179 and $1,855 under sections 71,71A or 71C of the Act.

DECISION

The decision under review is affirmed.

[9] [1998] FamCA 2.