Nettleship & Nettleship
[2016] FCCA 2947
•18 November 2016
FEDERAL CIRCUIT COURT OF AUSTRALIA
| NETTLESHIP & NETTLESHIP | [2016] FCCA 2947 |
| Catchwords: CHILD SUPPORT – Whether a Child Support Agreement is binding on the parties – if so, whether the husband owes arrears of child support and other sums pursuant to that Agreement. |
| Legislation: Child Support (Assessment) Act 1989, pts.6, 7, ss.4(3), 80(1), 80(2), 80(a), 80(b), 80(c), 80(d), 80D, 80C(2)(e), 80C(2)(f), 80C(1)(a), 80(1)(b), 81(2), 82, 83, 84, 84(d), 84(g), 80CA, 80D(1)(c), 136, 136(1), 136(1)(a)(b), 136(1)(c), 136(1)(d), 136A |
| Cases cited: Baker v The Queen (2004) 223 CLR 513 Keane & Keane [2013] FamCA 332; 50 Fam LR 120 R v Kelly (Edward) [2000] QB 198 |
| Applicant: | MS NETTLESHIP |
| Respondent: | MR NETTLESHIP |
| File Number: | MLC 5201 of 2011 |
| Judgment of: | Judge Small |
| Hearing date: | 31 May 2016 |
| Date of Last Submission: | 31 May 2016 |
| Delivered at: | Melbourne |
| Delivered on: | 18 November 2016 |
REPRESENTATION
| Counsel for the Applicant: | Ms Nettleship in person |
| Solicitors for the Applicant: | None |
| Counsel for the Respondent: | Mr Nettleship in person |
| Solicitors for the Respondent: | None |
ORDERS
THE COURT DECLARES THAT:
That the Binding Child Support Agreement signed by the parties on 8 June 2011 (“the Agreement”) is enforceable and remains in full force and effect.
AND THE COURT ORDERS THAT:
The application of the husband to have the Agreement set aside contained in his Response filed 8 April 2016 is hereby dismissed.
The husband shall pay to the wife sums representing :
(a)$3,246.23 minus $x, where $x is the sum already paid by the husband to the wife for the children’s private health insurance under the Agreement between 8 June 2011 and 31 May 2016;
(b)$450.00 plus half of any other sum incurred by the wife pursuant to paragraph 3(c) of the Agreement from 8 June 2011 to 31 May 2016 and remaining unpaid; and
(c)half of the children’s (omitted) expenses incurred between 1 April 2016 and 31 May 2016, including club membership, uniform and equipment expenses,
being arrears of child support owed to the wife under the Agreement, and such sums shall be paid with 90 days.
Within seven days, the wife shall provide to the husband the details of the account or accounts into which she requires payments to be deposited:
(a)in accordance with these orders;
(b)pursuant to the Agreement.
IT IS NOTED that publication of this judgment under the pseudonym Nettleship & Nettleship is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT MELBOURNE |
MLC 5201 of 2011
| MS NETTLESHIP |
Applicant
And
| MR NETTLESHIP |
Respondent
REASONS FOR JUDGMENT
Introduction
These are proceedings in relation to a Binding Child Support Agreement signed by Ms Nettleship (“Ms Nettleship” or “the wife”) and Mr Nettleship (“Mr Nettleship” or “the husband”) on 8 June 2011 (“the Agreement”).
Ms Nettleship seeks payment of $15,652.71 in arrears she says are owed under the Agreement, plus a total of $5,680.00 in costs.
Mr Nettleship seeks a declaration that the Agreement be set aside, and that child support matters between the parties be governed hereafter by the normal process of assessment undertaken by the Department of Human Services (Child Support).
Therefore the issues in these proceedings, agreed between the parties and the bench at the commencement of the trial, are:
A.Whether the Agreement is enforceable between the parties
B.If so, is it able to be set aside?
C.If it is enforceable and is not able to be set aside, whether any arrears are owed and if so, in what quantum?[1]
[1] Ms Nettleship was informed at trial that if she wished to pursue her costs application, the appropriate time to make that submission would be when judgement was handed down and orders made.
Background
Ms Nettleship was born on (omitted) 1977 and is 39 years old.
Mr Nettleship was born on (omitted) 1971 and is 44 years old.
The parties began living together in or about 2003 and were married on 17 December 2005. They separated in June 2010 and their divorce became final on 1 January 2012.
There are two children of the marriage, namely X born (omitted) 2004 (“X”) and Y born (omitted) 2006 (“Y”).
The children have lived with their mother since separation and have spent time with their father pursuant to court orders, the latest of which were final orders made by consent on 1 October 2015.
Mr Nettleship has remarried and lives with his wife and their three-year-old daughter in (omitted). He and his wife operate a holiday rental property known as “(omitted)”.
Ms Nettleship has repartnered and lives with her partner and the children in (omitted). Her partner’s children spend nine nights per fortnight with him. Ms Nettleship operates her own business.
The parties entered into what was intended to be a Binding Child Support Agreement on 8 June 2011. That Agreement has now become the subject of much disagreement and ongoing dispute between the parties.
Procedural History
These proceedings began when the wife filed an Initiating Application in relation to parenting orders only in the Family Court of Australia on 27 August 2014.
The Husband filed a Response on 30 October 2014 and the matter came before Registrar Field in chambers on 30 January 2015 when it was transferred to this court.
The matter first came before me on 28 April 2015 in the Duty List. On that day I made interim orders in relation to X and Y’s care, I appointed an Independent Children’s Lawyer to represent their best interests, and I then adjourned the matter for mention on 1 October 2015 and for final hearing on 13 April 2016.
On 1 October 2015, with the assistance of the Independent Children’s Lawyer, and to their great credit, the parties were able to enter into final parenting Orders by consent. On that date, I listed the remaining child support matters for trial on 13 April 2016 and issued Trial Directions.
The wife filed a Further Amended Initiating Application on 1 April 2016.
That Application sought orders for the payment of child support arrears pursuant to a Parenting Plan which had been signed by the parties in June 2010 (“the Parenting Plan”), payment of arrears pursuant to the Agreement, and the wife’s costs.
On 13 April 2016 the parties appeared before me but their matter was not reached and I set it down for a further hearing on 15 July 2016. The matter was later relisted for 31 May 2016 and it proceeded on that day.
The parties were self-represented at every hearing before me, including at trial.
The wife conceded at the beginning of the trial that her application in relation to arrears allegedly due under the Parenting Plan was flawed and that she could not proceed with that application. That left the court to deal with the application in relation to the arrears allegedly owed under the Agreement.
Witnesses were the parties alone and at the end of trial, judgment was reserved.
Issues and Evidence
Issue A: Whether the Agreement is binding on the parties and if not, why not?
The Agreement
As already stated the parties entered into a Binding Child Support Agreement on 8 June 2011. I will set out its salient terms for ease of reference.[2]
[2] I have set out here the Agreement as it was registered in the Family Court of Australia on 17 June 2011.
After setting out Recitals, which identify the children as X and Y and include the fact that there was at that time an administrative child support assessment in force, the Agreement states the following:
NOW THIS AGREEMENT WITNESSETH:
1. The terms of this Agreement are:
(a) operative from the date upon which this Agreement is executed by both parties as evidenced by the date appearing on the front of this Agreement; and
(b) In substitution of any administrative assessment of child support which would otherwise be payable by the parties in relation to the children.
1. PERIODIC CHILD SUPPORT
The parties agree that they will each be responsible for the financial support of the children whilst they are in their respective care in accordance with the Orders[3].
[3] “the Orders” are defined in the Recitals as the final consent orders signed by the parties on the same day that they signed the Agreement. Those orders were made before a Registrar of the Family Court of Australia on 17 June 2011.
2. NON PERIODIC CHILD SUPPORT
In addition to the financial support referred to in paragraph 2 hereof, the father and the mother will be responsible for and pay or cause to be paid for the support of the children for one half of each of the following expenses:
(a) Private health insurance for the children at the current level;
(b) All gap medical, optometry, dental, orthodontic, gynaecology, audiology and other agreed allied health expenses;
(c) All private school tuition fees, books, uniforms and other compulsory school expenses;
(d) Agreed extra-curricular activities.
(e) Any other expenses of the children as agreed.
4. MANNER OF PAYMENT
The father and the mother will pay or cause to be paid the child support as follows:
(a) In relation to the private health insurance, the wife will obtain a family cover to include herself and the children and the husband will pay to the wife on a monthly basis one half of the difference between the cost of family cover and the cost of the equivalent single cover with the same private health insurance provider;
(b) In relation to the child support referred to in paragraph 3(b) to (e) hereof the mother and father pay such expenses directly to the provider of the services where possible and where the mother or father meets the whole of the fees in the first instance, they are to be repaid one half of those fees by the other parent within 14 days of provision of a receipt for the relevant expense, such sum to be deposited directly into the account at a financial institution as nominated by the mother or the father as appropriate.
5. CREDIT AGAINST ASSESSMENT
The payments made by the father and the mother, respectively in accordance with this Agreement are to be credited as to 100% of the father’s or the mother’s liability, if any, under any relevant administrative assessment of child support now or any time in the future.
6. DURATION
The father’s and the mother’s obligations will continue for the children in accordance with the provisions of paragraph’s 2 and 3 hereof until the occurrence of the later of the following events:
(a) The child completing her secondary school education; or
(b) The child attaining the age of eighteen (18) years.
7. REGISTRATION
This Agreement is to be registered in the Family Court of Australia in Melbourne pursuant to the provisions of Rule 23.01 of the Family Law Rules and with the Child Support Agency pursuant to the provisions of Part 6 of the Child Support (Assessment) Act 1989.
8. ACKNOWLEDGEMENT OF LEGAL ADVICE
The parties acknowledge that before signing this Agreement that each received separate and independent legal advice as to the following:
(a) The effect of this Agreement on their respective rights; and
(b) the advantages and disadvantages at the time the advice was provided of making this Agreement.
The parties’ witnessed signatures are then shown at the end of the document, and lawyers’ certificates signed by each of the parties’ solicitors are annexed to it.
The Law
The law in relation to Binding Child Support Agreements is found in Parts 6 and 7 of the Child Support (Assessment) Act 1989 (“the Act”).
The principle behind such agreements is found in s.4(3) of the Act, which states:
4(3) [Private arrangements for financial support] It is the intention of the Parliament that this Act should be construed to the greatest extent consistent with the attainment of its objects:
(a) to permit parents to make private arrangements for the financial support of their children; and
(b) to limit interferences with the privacy of persons.
In analysing the law as to the operation of such private arrangements it is necessary to cross-reference multiple sections of the Act.
Section 80C states as follows:
Division 1A — Binding and limited child support agreements
Subdivision A —Binding and limited child support agreements
80C MAKING BINDING CHILD SUPPORT AGREEMENTS
80C(1) [Definition of binding child support agreements] An agreement is a binding child support agreement if:
(a) the agreement is binding on the parties to the agreement in accordance with subsection (2); and
(b) the agreement complies with subsection 81(2).
Subsection (2) states:
(2) For the purposes of subsection (1), an agreement is binding on the parties to the agreement if, and only if:
(a) the agreement is in writing; and
(b) the agreement is signed by the parties to the agreement; and
(c) the agreement contains, in relation to each party to the agreement, a statement to the effect that the party to whom the statement relates has been provided, before the agreement was signed by him or her, as certified in an annexure to the agreement, with independent legal advice from a legal practitioner as to the following matters:
(i) the effect of the agreement on the rights of that party;
(ii) the advantages and disadvantages, at the time that the advice was provided, to the party of making the agreement; and
(d) the annexure to the agreement contains a certificate signed by the person providing the independent legal advice stating that the advice was provided; and
(e) the agreement has not been terminated under section 80D; and
(f) after the agreement is signed, either the original agreement or a copy of the agreement is given to each party.
As can be seen by the form and content of the Agreement as set out above, the Agreement complies with s.80C(2)(a) to (d).
There is no evidence before the court that the Agreement has ever been terminated under s.80D, and I therefore find that it complies with s.80C(2)(e).
A copy of the Agreement is annexed to the affidavit of the wife sworn 31 March 2016, and while there is no similar copy annexed to the husband’s affidavit sworn 8 April 2016, no evidence was provided to suggest that he did not obtain a copy of the Agreement after it was signed. Indeed, he stated at trial that he had a copy of the Agreement in his possession. I therefore find on the balance of probabilities that the Agreement complies with s.80C(2)(f).
Therefore, as it complies with s.80C(2), the Agreement complies with s.80C(1)(a).
In order for the agreement to comply with s.80C(1)(b) of the Act, it must also comply with s.81(2).
S.81(2) refers to ss.82, 83 and 84 and states:
(2) An agreement is a Binding Child Support Agreement or a limited child support agreement if it complies with the following provisions:
(a) section 82 (children in relation to whom agreements may be made);
(b) section 83 (persons who may be parties to agreements);
(c) section 84 (provisions that may be included in agreements).
Section 82 states that an agreement is a child support agreement only if it relates to a child who is entitled to child support on the day the agreement is signed.
The Recitals to the Agreement clearly state the names and dates of birth of both X and Y, and, as already stated, there was an administrative child support assessment in force at the time the parties signed the Agreement.
Therefore the Agreement complies with section 81(2)(a).
Section 83 states that an agreement is a child support agreement only if it is made:
between two parents of a child who, under s.25, would be able to properly make an application for administrative assessment of child support for the child in relation to whom the agreement is made on the day on which the agreement is entered into
Clearly, as there was an administrative child support assessment in place for the children on 8 June 2011, the parties were parents who were able to properly make an application for such an assessment, and thus the requirements of s.83 are met.
Therefore the Agreement complies with section 81(2)(b).
Section 84 sets out the provisions that may be included in Binding Child Support Agreements, and an agreement is a child support agreement only if it includes one or more of those provisions, they being:
(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;
There is no provision in the Agreement for periodic payments of child support to be paid by one party to the other despite paragraph 2 being headed “PERIODIC CHILD SUPPORT”. That paragraph refers to each of the parents being responsible for the financial support of the children on a day-to-day basis while they are in their respective care.
(b) provisions under which the rate at which a party is already liable to pay child support for a child to another party in the form of periodic amounts paid to the other party is varied;
There is no such provision in the Agreement.
(c) provisions agreeing between parties any other matter that may be included in an order made by a court under Division 4 of Part 7 (departure orders);
On my reading of Division 4 of Part 7 of the Act, none of the matters set out therein are included in the Agreement.
(d) provisions (the non‑periodic payment provisions) that state:
(i) that a party (the liable party) is to provide child support for a child to another party otherwise than in the form of periodic amounts; and
(ii) that the annual rate of child support payable for the child by the liable party under any relevant administrative assessment is to be reduced, in the manner specified under subsection (6), by the amount of child support to be provided by the liable party;
Paragraphs 3 and 5 of the Agreement provide for non-periodic payments and for those payments to be credited as to 100% of either party’s child support liability. Therefore the Agreement complies with s.84(d).
Consequently the Agreement complies with s.81(2)(c) of the Act, as compliance with only one of the provisions set out in s.84 is necessary to satisfy that section.
However, for the sake of completeness, I find that the Agreement also complies with s.84(g) in that its paragraph 6 contains provisions under which “the liability of a party to pay or provide child support for a child to another party is to end from a specified day”.
As a consequence of its compliance with ss.82, 83 and 84 of the Act, the Agreement complies with s.81(2), and therefore, it complies with s.80(1)(b).
I have already found that the Agreement complies with s.80(1)(a), and thus it is a Binding Child Support Agreement under the Act and is therefore enforceable.
Issue B: If the Agreement is enforceable, is it able to be set aside?
If parties no longer wish to be bound by a Binding Child Support Agreement, it can only be terminated in compliance with s.80D of the Act. This is because s.80CA makes clear that once a Binding Child Support Agreement is in force, it cannot be varied, even with the consent of both parties, although it can incorporate provisions of a previous child support agreement between the parties.
Section 80D states:
80D TERMINATING BINDING CHILD SUPPORT AGREEMENTS
(1) [Method of termination] A Binding Child Support Agreement (the previous agreement) may be terminated only by:
(a) a provision being included in a new Binding Child Support Agreement made by the parties to the previous agreement to the effect that the previous agreement is terminated; or
(b) the parties to the previous agreement making a written agreement (a termination agreement):
(i) that is binding on the parties in accordance with subsection (2); and
(ii) to the effect that the agreement is terminated; or
(c) a court order setting aside the previous agreement under section 136.
In this matter, because the parties cannot agree to terminate the Agreement, it may only be terminated or set aside pursuant to s.80D(1)(c) - that is, if I make an order under s.136 of the Act.
Section 136(1) states that a court may only make such an order if it is satisfied as to one of the following matters:
(a) that the party’s agreement was obtained by fraud or a failure to disclose material information; or
(b) that another party to the agreement, or someone acting for another party:
(i) exerted undue influence or duress in obtaining that agreement; or
(ii) engaged in unconscionable or other conduct;
to such an extent that it would be unjust not to set aside the agreement; or
(c) in the case of a limited child support agreement:
(i) that because of a significant change in the circumstances of one of the parties to the agreement, or a child in respect of whom the agreement is made, it would be unjust not to set aside the agreement; or
(ii) that the agreement provides for an annual rate of child support that is not proper or adequate, taking into account all the circumstances of the case (including the financial circumstances of the parties to the agreement); or
(d) in the case of a Binding Child Support Agreement—that because of exceptional circumstances, relating to a party to the agreement or a child in respect of whom the agreement is made, that have arisen since the agreement was made, the applicant or the child will suffer hardship if the agreement is not set aside.
There is no suggestion of fraud or duress in the signing of the Agreement in this case, so s.136(1)(a) and (b) do not apply.
In addition, the Agreement being a Binding Child Support Agreement rather than a Limited Child Support Agreement, s.136(1)(c) is also inapplicable.
Therefore, if Mr Nettleship is to be successful in his application to have the Agreement terminated or set aside, the only possible subparagraph upon which he can hang his application is s.136(1)(d).
That is, he must prove that the Agreement should be set aside because exceptional circumstances have arisen since its signing which would cause him or the children to suffer hardship.
What “exceptional circumstances” means has been discussed in many cases before this Court and the Family Court of Australia.
61.In the recent judgement of Judge Henderson in this Court in the matter of Telama & Telama [2016] FCCA 2375, the law in relation to this issue was set out with great precision and comprehensiveness.
62.In that judgment, Her Honour referred extensively to the judgment of Watts J in Keane & Keane [2013] FamCA 332; 50 Fam LR 120. With respect, I concur with Her Honour’s description of the judgment in Keane as “a most thorough, helpful and masterful judgment traversing the meaning of the words ‘exceptional circumstances’ across a range of acts and judgments”.
In Keane, Watts J said, at paragraph 40, that when a court is considering whether or not exceptional circumstances exist under s.136:
40.1 the whole circumstances have to be taken into account;
40.2 it may be that one circumstance alone cannot be described as exceptional but the whole of the circumstances, when looked at cumulatively, might be described as exceptional (see Gallup & Gallup [2009] FMCAfam 839);
40.3 within a particular context whether something is exceptional is a matter of “fact and degree” (see Simpson & Hamlin (1984) FLC 91-576);
40.4 care must be taken to avoid placing any “gloss” on the word “exceptional” as used in legislation (see Garning & Director-General, Department of Communities, Child Safety and Disability Services & Anor [2013] FamCAFC 28);
40.5 the words “that have arisen since the agreement was made” in s 136(2)(d) CSAA direct the Court’s attention to the circumstances that existed at the date the agreement was made and towards an inquiry as to what exceptional circumstances have arisen since the date of the agreement which would result in the applicant or the child suffering hardship if the agreement was not set aside.
41. “Exceptional” can have nuanced meanings in different contexts and what is meant by “exceptional” is to be judged not in the abstract, but within the context in which that word is used in a particular piece of legislation. The phrase “exceptional circumstances” is used in different contexts within the CSAA and the FLA. The height at which the bar is set by the word “exceptional” can vary depending upon the legislative context.
42. The word “exceptional” creates a tough test when used in the context of setting aside final orders for alteration of property or in the context of an application to discharge a return order in Hague proceedings.
Further, at paragraph 48 of Keane, His Honour referred to the High Court’s decision in Baker v The Queen (2004) 223 CLR 513 where Callinan J referred[4] with approval to a statement of Lord Bingham of Cornhill CJ in the case of R v Kelly (Edward) [2000] QB 198 where Lord Bingham said:
We must construe ‘exceptional' as an ordinary, familiar English adjective, and not as a term of art. It describes a circumstance which is such as to form an exception, which is out of the ordinary course, or unusual, or special, or uncommon. To be exceptional a circumstance need not be unique, or unprecedented, or very rare; but it cannot be one that is regularly, or routinely, or normally encountered.
Mr Nettleship[4] At paragraph 173
The exceptional circumstance upon which the husband relies in this case is impossible to glean from his affidavit material which appears to address only the payments he has made and those he is alleged to owe under the Agreement.
Indeed this issue is not even mentioned in the husband’s Response filed 8 April 2016. In that document, the only order sought by the husband is stated as follows:
1. That the BINDING CHILD SUPPORT AGREEMENT dated 8th of June 2011 be removed,/struck out (sic) and replaced with a CSA assessment for the purposes of child support.
At trial, I made it very clear to the husband that his argument for having the Agreement set aside would need to be a legal argument, saying:
[…] there are specific things set out in the Child Support (Assessment) Act which set out the grounds upon which you can have a child support agreement set aside, and they are very strict, and if you don’t have one of those grounds, then I’m not going to set it aside.
The husband indicated that he understood that that was the case.
Nevertheless, having read the transcript of the proceedings on 31 May 2016, I can find no evidence, argument or submission of the husband that addresses this issue directly at all. There is certainly no statement or evidence or submission that any of the changes in his circumstances which have occurred since the Agreement was signed amounts to an “exceptional circumstance” under s.136(1)(d).
He did say at trial that he had been made redundant only a month or so after signing the Agreement in mid-2011, that he had received a significant redundancy payment, and that he had found new work in the (omitted) of Melbourne about eight months later. However, it was his evidence that when he became aware that a significant number of other employees who worked in his area had been made redundant, he realised that his position was not secure and therefore resigned from that position and began to work on a fledgling business he and his wife were establishing[5].
[5] I note that there is no provision in the Agreement for the circumstance of either party losing his or her job.
In that business, known as (omitted), he and his wife operate holiday apartments in (omitted). It was Mr Nettleship’s evidence that he and his wife draw a salary of $20,000 each from the business and that otherwise, all monies expended by the business are actual expenses incurred in running the business. His wife is the sole director and shareholder of the company in whose name the business is operated.
Under cross-examination, the husband said that while he was earning a minimal salary, he had travelled to the (country omitted) and (country omitted) at the expense of the business and that he and his wife use a (omitted) BMW and a (omitted) Mitsubishi (model omitted) owned by his wife’s company for business purposes.
It was his further evidence that he is hopeful that the business will build up to the point where he can pay more child support than he says he is currently able to pay.
In essence, that was his evidence about the issue of “exceptional circumstances”.
Otherwise, his arguments and evidence all appeared to begin and proceed from the position that the Agreement is enforceable, and to be directed at why he should not have to pay for certain categories of items, that being because either he had not agreed to pay them and therefore they did not fall within the specific terms of the Agreement, or because receipts had not been provided by the wife in timely fashion.
In addition, the husband made no submissions and produced no evidence in relation to any hardship he might suffer if the Agreement were not set aside, save to say in general terms that he could not afford to meet his obligations under the Agreement.
The loss of one’s job alone, especially in circumstances where a significant redundancy payment has been received, cannot be said to be an “exceptional circumstance” on its own.
In addition, it is the husband’s evidence that he was able to secure full-time employment, albeit some months later, and that it had been his decision to resign from that employment to work in his wife’s fledgling business.
When laid against the matters for consideration described in paragraphs 60 to 64 of these Reasons, I cannot find that any of the husband’s evidence or submissions is capable of leading the court to find that exceptional circumstances exist for the purposes of s.136 of the Act.
I will therefore dismiss the husband’s application to have the Agreement set aside.
Issue C: If the Agreement is enforceable and is not able to be set aside, whether any arrears are owed and if so, in what quantum?
The wife asserts that the husband owes her the sum of $15,602.00[6] in arrears of child support under the Agreement.
[6] This is the amount claimed by the wife in her opening submission to the court at trial. Mr Nettleship did not challenge that sum in itself.
When under cross-examination, Mr Nettleship said, in relation to what he has and has not paid:
All of the costs that I have paid for, I’ve done by the Agreement. My view is, anything that’s agreed I will pay for. Anything that’s not agreed I won’t pay for.
And later, when making submissions, he said:
In relation to the costs and expenses, I feel that I’ve met my obligations within the Binding Child Support Agreement. Where I’ve agreed to some of the expenses, I’m paying.
He does not believe he owes Ms Nettleship anything under the Agreement by way of arrears.
For the sake of convenience I shall deal with Ms Nettleship’s claim by category under the Agreement.
Health Insurance
The Agreement says, at paragraph 3:
[…] the father and the mother will be responsible for and pay or cause to be paid for the support of the children for one half of each of the following expenses:
(a) Private health insurance for the children at the current level;
And, at paragraph 4:
4. The father and the mother will pay or cause to be paid the child support as follows:
(a) in relation to the private health insurance, the wife will obtain a family cover to include herself and the children and the husband will pay to the wife on a monthly basis one half of the difference between the cost of family cover and the cost of the equivalent single cover with the same private health insurance provider;
It is the wife’s evidence[7], unchallenged by the husband, that between the signing of the Agreement on 8 June 2011 (“the Agreement date”) and March 2012, she had family cover for herself and the two children at the rate of $225.85 per month. Single cover for that period would have cost $135.60. Therefore, for that period, the husband should have been paying a monthly contribution of $45.13[8] under paragraphs 3 and 4 of the Agreement.
[7] Annexure “KLN-16” to the wife’s Affidavit sworn 31 March 2016 which was interrogated in some detail at trial
[8] ($225.85 - $135.60)/2 = $45.13
From April 2012 to 30 June 2013, the premium rose to $234.05 per month. Using the same calculation method, Mr Nettleship’s liability over that period would have been $49.23[9]
[9] ($234.05 - $135.60)/2 = $49.23
From 1 July 2013 Ms Nettleship changed health funds and arranged for the children to be covered under the family plan she now has with her new partner and his two children. To arrive at the amount she says Mr Nettleship ought to have paid for the period 1 July 2013 to 31 March 2014, she took the new premium of $325.85 per month, divided it by 6 (so that the amount was equally apportioned to each of her, her partner and the four children) and then again divided by 2, arriving at a figure of $27.13 per month.
However, that formula does not accord with the requirements of the Agreement as set out above. Even on its own assumptions, I think the calculation is wrong.
I am not aware of the single premium for that period and no evidence was adduced in relation to it. Therefore it is impossible to arrive at the correct figure as contemplated by the Agreement, but even on Ms Nettleship’s figures, I calculate Mr Nettleship’s liability as:
[($325.55 divide by 6) x 2]/2 = $54.26.
That is, averaged out, each member of that six-person family would have a liability to pay (or have paid for them) $54.26 per month. Therefore, the amount to be paid for X and Y each month would be $54.26 x 2, or $108.52. As Mr Nettleship is liable under the Agreement to pay for half the health insurance expenses for both of his children, his monthly liability would be half of their expenses, or $54.26[10] for that period.
[10] $108.56/2 = $54.26
There was a premium increase on 1 March 2014 and Mr Nettleship’s liability for the period 1 March 2014 to 31 August 2014, using the above method, is calculated to be $60.09 per month[11].
[11] [($360.55/6) x 2] /2 = $60.09
It was Ms Nettleship’s evidence that despite some fluctuations in premiums after 31 August 2014, she has held Mr Nettleship’s liability at the same rate as for 1 March 2014 to 31 August 2014. She had calculated that liability as $30.04 per month, but as I have shown above, I think the correct calculation is $60.09 per month.
That is, on Ms Nettleship’s unchallenged evidence, Mr Nettleship ought to have paid his share of the children’s health insurance under the Agreement as follows:
· 8 June 2011 to 31 March 2012 at $45.13 per month = $45.13 x 10 = $451.30
· 1 April 2012 to 30 June 2013 at $49.23 per month = $49.23 x 15 = $738.45
· 1 July 2013 to 29 February 2014 at $54.26 per month = $54.26 x 8 = $434.08
· 1 March 2014 to date of trial on 31 May 2016 at $60.09 per month = $60.09 x 27 = $1,622.43.
Therefore, Mr Nettleship ought to have paid $3,246.26[12] for the children’s health insurance between the Agreement date and the date of trial.
[12] $451.17 + $738.45 + $434.08 + $1,622.43 = $3,246.26.
It was the husband’s evidence that when he discovered that he could add the children to his own family’s health insurance for no extra cost, he had done so, and that therefore the children had been covered under both parents’ private health insurance for some time at the time of trial.
When I asked the parties why that was the case, neither could give me an answer, but the husband was clear that he thought that his decision to add the children to his family’s cover exonerated him from contributing to the wife’s family cover as envisaged in the Agreement.
I do not agree. The Agreement’s terms are clear: he is to pay half the difference between the wife’s family cover and single cover each month. If the wife had stuck to that formula, it is likely that Mr Nettleship would have been liable to pay even more, as there was no contemplation of Ms Nettleship’s partner and his two children being covered under the wife’s insurance at the Agreement date. If Ms Nettleship had stuck to the original formula, Mr Nettleship would have liability for at least some of the notional cover for Ms Nettleship’s partner and his children.
His liability for the children’s health insurance premiums under the Agreement to the date of trial is therefore set at $3,246.26.
Gap Payments
The second category is that of gap payments, about which the Agreement states, at paragraph 3:
[…] the father and the mother will be responsible for and pay or cause to be paid for the support of the children for one half of each of the following expenses:
(b) All gap medical, optometry, dental, orthodontic, gynaecology, audiology and other agreed allied health expenses;
And, at paragraph 4:
(b) in relation to the child support referred to in paragraph 3(b) to (e) hereof the mother and father pay such expenses directly to the provider of the services where possible and where the mother or father meets the whole of the fees in the first instance, they are to be repaid one half of those fees by the other parent within 14 days of provision of a receipt for the relevant expense, such sum to be deposited directly into the account at a financial institution is nominated by the mother or the father as appropriate.
The disputes in relation to this category revolve primarily around the words “and other agreed allied health expenses” in paragraph 3(b) and whether the wife has provided receipts for particular expenses pursuant to paragraph 4(b).
The “other agreed allied health expenses” in dispute primarily involve liability for payment of fees for X’s psychologist.
It is Mr Nettleship’s evidence that he never agreed to pay for psychologists’ fees for X and therefore he should not have to contribute to them. In addition, he says those these are not medical expenses otherwise caught by paragraph 3(b).
The wife argues that psychologists’ fees are medical expenses and therefore are part of Mr Nettleship’s liability under paragraph 3(b) of the Agreement.
I agree with the husband on this point. A psychologist, while professionally qualified and well skilled, does not have medical training, and therefore his or her fees fall under the category of “other allied health expenses” and not under “medical expenses”.
I note that the final parenting orders made by consent on 1 October 2015 provide for the parties to share parental responsibility for both children. That means that Ms Nettleship should have obtained Mr Nettleship’s consent for X to see the psychologist. She was unable to do so, but she cannot decide to take that step alone, however reasonable or necessary it might have been, and then expect Mr Nettleship to share the cost by saying he is liable to do so under the Agreement.
Mr Nettleship did not agree to those expenses and therefore Ms Nettleship must bear them alone. I note that for the purposes of these proceedings, the reason why the wife took X for psychological treatment is irrelevant.
For the sake of clarity, Mr Nettleship must pay half of the gap payments for those items specified in paragraph 3(b) of the Agreement, and for half of any other expenses incurred in the children’s treatment by a properly qualified allied health professional to which he has explicitly agreed.
In relation to the provision of receipts, while the wife’s evidence was that she had initially provided the husband with spreadsheets in relation to expenses incurred rather than receipts, Mr Nettleship acknowledged under cross-examination that he had been provided with receipts for all amounts claimed by Ms Nettleship under the Agreement.
His major grievance about the provision of receipts appeared to be that Ms Nettleship provided them in large amounts at various times so that he was presented with large sums that had to be paid within 14 days. He would prefer the receipts to be provided as soon as possible after the expense is incurred, but as the agreement is silent on that issue, I can take the matter no further.
School Expenses
The next issue in dispute is whether and if so how much Mr Nettleship is liable to pay for half of the children’s school expenses under paragraph 3(c) of the Agreement, which states:
(c) All private school tuition fees, books, uniforms and other compulsory school expenses;
It was Mr Nettleship’s evidence at trial that he had not agreed to the children attending (omitted) College, and that he would prefer that they attended (omitted) or (omitted) High School as he believed they were better schools. Later, under cross-examination he said:
I’m not a (religion omitted). I don’t want my children to be raised as (religion omitted). I never put them in the first (omitted) school to begin with, and I was never given a chance to go anywhere else (sic), and I don’t want them to continue with being in a (omitted) school, and I want them to go somewhere which has better results than (college omitted), that is cheaper than (college omitted).
The terms of the Agreement are clear. Pursuant to paragraph 3(c), Mr Nettleship is liable to pay half of all the children’s “private school tuition fees, books, uniforms and other compulsory school expenses”. There is no mention of any particular school, nor of there having to be agreement between the parties as to which school the children would attend.
At trial Ms Nettleship claimed that Mr Nettleship owed the sum of $450.00 in outstanding fees at (omitted) College. Mr Nettleship did not challenge that evidence in relation to the sum outstanding, although he did say that he was unable to afford to pay for his share of the children’s private education at (omitted) College.
I note that there is no mention in the Agreement of the parties’ capacity or otherwise to make the payments set out in the Agreement. It simply obliges them to make those payments.
I therefore find that Mr Nettleship is liable to pay for half of the children’s private school fees and expenses, although whether at (omitted) College or another private school is a matter for the parties. That question, of course, is a parenting issue rather than a child support issue.
In relation to the children’s school expenses other than tuition fees, Mr Nettleship says that he is not prepared to compensate Ms Nettleship for items which he has already purchased. For instance it was his evidence that he has purchased school shoes, sports uniforms, and sports shoes for the children, and that if Ms Nettleship has also purchased those items he should not have to pay for them.
Again, that is not what the Agreement says. The Agreement says, at paragraph 3:
In addition to the financial support referred to in paragraph 2 hereof the father and the mother will be responsible for and pay or cause to be paid for the support of the children one half each of the following expenses [...]
What that means, if the parties cannot agree, is that each should provide receipts to the other for items he or she has paid for under the various categories set out in paragraph 3, and the other should reimburse him or her for half of that cost. In other words, if the parties decide, in their wisdom, to buy duplicate sets of school uniforms and footwear for their daughters, then each should pay for half of the other’s incurred expense.
While that process would appear to be slightly ridiculous, if the parties cannot agree then they must abide by the terms of the Agreement, and when paragraph 3 is read in conjunction with paragraph 4(b), that is the process set out in the Agreement.
Extracurricular Activities
The next point of contention relates to the phrase “agreed extra-curricular activities” in paragraph 3(d) of the Agreement.
The same principle applies to this phrase as applied to the phrase “agreed allied health expenses”. That is, under the Agreement, Mr Nettleship is liable to pay for half of all extra-curricular activities which he has explicitly agreed for the children to attend.
Mr Nettleship says he agrees to pay for some of those expenses and not others. The question is, which extra-curricular activities is he actually liable to pay for the under the Agreement?
In order to get to the nub of this issue, I asked Mr Nettleship to provide a list of the children’s extra-curricular activities which he did not agree to pay for.
The list he provided was as follows:
· (omitted);
· (omitted);
· (omitted) (after school care); and
· (omitted).
In relation to some of these items, Ms Nettleship submitted that Mr Nettleship’s agreement to pay after the signing of the Agreement could be inferred by his willingness to pay for them before the Agreement date.
In other words, she argues that Mr Nettleship’s actions in paying for these items prior to the agreement date implied his agreement to paying for them after the Agreement date.
Mr Nettleship argues that only those items specified in the Agreement, or to which he specifically agrees as extra-curricular activities, are covered by the Agreement.
The purposes of the introduction of Binding Child Support Agreements into the child support system were first to allow parents to opt out of the child support assessment regime, and then to define with certainty expenses for which each would be liable once a Binding Child Support Agreement came into existence.
In that sense, the Binding Child Support Agreement constitutes a “line in the sand” whose date of signing defines with precision the obligations of each party after that date. The obligations of the parties before that date are essentially obliterated by the signing of the Binding Child Support Agreement.
It seems to me that to allow the contractual concept of implied terms to be applied to Binding Child Support Agreements would be to negate the very reasons for the introduction of those Agreements into the child support system.
I have been unable to find any decisions in relation to whether the doctrine of implied terms of a contract applies to Binding Child Support Agreements in the reported cases of Australian courts.
For the reasons above, I find that it does not.
I therefore find that Mr Nettleship is only liable to contribute to those extracurricular expenses for which he explicitly agrees to pay.
That is, he is only liable to pay half of X and Y’s netball expenses, as, insofar as far as I can glean from the list provided by him and his evidence under cross-examination at trial, that is the only extra-curricular expense to which he has agreed to contribute. In addition, he is liable for those expenses only from April 2016, which is the date when he agreed to that expense.
Other Expenses
The final category of expense for which the parties are each liable to pay half under the agreement is stated in paragraph 3(e) to be:
Any other expenses of the children as agreed.
In the list provided to the court, Mr Nettleship specifies the following as expenses to which he does not agree to contribute:
·Birthday party expenses;
·Target, Kmart and Woolworths items;
·Haircuts;
·Underwear; and
·Umbrellas.
Under cross-examination, Mr Nettleship stated that he considered birthday party expenses, haircuts and umbrellas to be ordinary day-to-day expenses for which each party should be liable when the children are with them pursuant to paragraph 2 of the Agreement.
While those expenses are more likely to fall on Ms Nettleship because of the distance between the parties’ homes and because she has the majority care of the children, I agree that they fall under paragraph 2 of the Agreement and that therefore Mr Nettleship is not liable to contribute to them.
It became obvious during the trial that the “Target”, “Kmart” and “Woolworths” expenses were almost all in relation to clothing Ms Nettleship had purchased for the children.
As Mr Nettleship’s evidence was that he too had purchased such items for the children, he submitted that he should not be liable to pay for half of those items as purchased by their mother.
Whether or not that is so, and I repeat here the comments made in paragraph 122 of these Reasons, the situation in relation to these expenses is exactly the same as for those incurred under paragraph 3(b), (c) and (d).
That is, unless Mr Nettleship specifically agrees to contribute to specific of the children’s expenses incurred by their mother under the “other expenses” category, he is not liable to pay for them.
Conclusion and Decision
These findings are no doubt unpalatable for Ms Nettleship. The evidence before me shows that she has incurred expenses in relation to the children’s extracurricular activities, counselling fees, clothing and other items in good faith, and in the belief that Mr Nettleship was liable to pay for half of those expenses under the Agreement.
The fact that, as a matter of law, he is not liable to do so because he does not agree to those activities and consequent expenses, will no doubt be difficult for her to accept.
On the other hand, Mr Nettleship will no doubt be disappointed to find that he owes any arrears under the Agreement, and if his evidence is to be believed, his future obligations may be difficult for him to meet. The outcome of these proceedings may even mean that he is forced to change the way in which he organises his work and his finances into the future.
Nevertheless, having decided that the agreement is a Binding Child Support Agreement, and that it is enforceable and not able to be set aside, and having found that only those items under paragraph 3(a) and (c), together with those to which Mr Nettleship has agreed to be liable under paragraphs 3(b), (d) and (e) are those for which any arrears might arise, I find that Mr Nettleship is liable to pay the following amounts, and I will make orders accordingly:
·$3,246.26 minus whatever he has paid to Ms Nettleship for the children’s private health insurance from 8 June 2011 to 31 May 2016;
·$450 in outstanding school fees to (omitted) College plus half of any other tuition fees, books, uniforms and other compulsory school expenses incurred by the children’s attendance at (omitted) College (or such other private school as the parties might agree); and
·half of Y and X’s netball expenses, including club fees, uniforms and equipment, from April 2016 for the duration of the Agreement.
I note that the evidence before me does not allow me to make orders with any more precision than that.
In addition to those amounts, Mr Nettleship is of course liable to pay for half the children’s expenses in each of those three categories from 1 June 2016 and for the duration of the Agreement as set out in paragraph 6.
I certify that the preceding one hundred and fifty-two (152) paragraphs are a true copy of the reasons for judgment of Judge Small
Date: 18 November 2016
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