Piper and Talbot and Anor
[2021] FCCA 511
•18 March 2021
FEDERAL CIRCUIT COURT OF AUSTRALIA
| PIPER & TALBOT & ANOR | [2021] FCCA 511 |
| Catchwords: HELD: All grounds of appeal upheld. Declaration made that the Section 90UD Financial Agreement entered into between the Appellant and First Respondent dated 14 April 2016 does not constitute a Binding Child Support Agreement pursuant to the Child Support (Assessment) Act 1989 (Cth). |
| Legislation: Family Law Act 1975 (Cth) |
| Cases cited: Nettleship & Nettleship [2016] FCCA 2947 |
| Applicant: | MR PIPER |
| First Respondent: | MS TALBOT |
| Second Respondent: | CHILD SUPPORT REGISTRAR |
| File Number: | MLG 146 of 2019 |
| Judgment of: | Judge Bender |
| Hearing date: | 2 October 2020 |
| Date of Last Submission: | 2 October 2020 |
| Delivered at: | Melbourne |
| Delivered on: | 18 March 2021 |
REPRESENTATION
| Counsel for the Applicant: | Dr. Robin Smith |
| Solicitors for the Applicant: | Kenna Teasdale |
| Counsel for the First Respondent: | Self-represented |
| Solicitors for the First Respondent: | Not applicable |
Counsel for the Second Respondent: | Mr Grant |
: | |
| Solicitors for the Second Respondent | Sparke Helmore |
ORDERS
The section 90UD Financial Agreement entered into between the Appellant and the First Respondent dated 14 April 2016 does not constitute a Binding Child Support Agreement pursuant to the Child Support (Assessment) Act 1989 (Cth).
IT IS NOTED that publication of this judgment under the pseudonym Piper & Talbot & Anor is approved pursuant to s.110X(4)(h) of the Child Support (Registration and Collection) Act 1988 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT MELBOURNE |
MLG 146 of 2019
| MR PIPER |
Applicant
And
| MR TALBOT |
First Respondent
| CHILD SUPPORT REGISTRAR |
Second Respondent
REASONS FOR JUDGMENT
Introduction
This is an appeal from a decision of the Administrative Appeals Tribunal (Social Services and Child Support Division) (“the Tribunal”) made on 5 December 2018 in relation to whether a Financial Agreement made pursuant to s 90UD of the Family Law Act 1975 (Cth) (“the Family Law Act”) on 14 April 2015 (“the agreement”) also contained a Child Support Agreement for the purposes of Part 6 of the Child Support (Assessment) Act 1989 (Cth) (“the Assessment Act”).
In April 2015, the parties entered into the agreement following the breakdown of their de facto relationship.
Pursuant to s 88 of the Assessment Act the First Respondent made an application to the Child Support Registrar on 13 March 2018, to have the agreement accepted as a Binding Child Support Agreement pursuant to s 80C of the Assessment Act.
On 14 May 2018, the Registrar accepted the agreement as a Binding Child Support Agreement.
On 14 June 2018, the Appellant lodged an objection to the Registrar’s decision to accept the agreement as a Binding Child Support Agreement. That objection was disallowed by an authorised officer of the Registrar on 23 August 2018.
The Appellant applied to the Tribunal on 27 September 2018 for a review of the objection decision.
On 5 December 2018 the Tribunal affirmed the decision under review.
The Appellant filed a Notice of Appeal on 17 January 2019.
With leave of the Court the Appellant filed an Amended Notice of Appeal on 19 September 2019.
In the Amended Notice of Appeal the Appellant seeks the following orders:
“1. The appeal be allowed.
2.The Court declare that the s90UD Financial Agreement entered into between the Appellant and the Respondent dates 14 April 2015 (“the s90UD Financial Agreement”) does not constitute a Binding Child Support Agreement pursuant to the Child Support (Assessment) Act 1989 (Cth).
3.IN THE ALTERNATIVE that the matter be remitted to the Administrative Appeals Tribunal for determination according to law.”
The Appellant’s amended grounds of appeal are:
“1. The Tribunal erred in principle in failing to determine whether there was an ‘agreement’ between the parties for the purposes of ss 81 and 90C of the Child Support (Assessment) Act 1989.
2.The Tribunal erred in principle in concluding that the Certificates of Legal Advice state to be Certificates meeting the requirements of to s90UD of the Family Law Act 1975 met the requirements of s 80C of the Child Support (Assessment) Act 1989.
3.The Tribunal erred in principle in failing to consider, or failing to adequately consider, the nature and extent of the nature and extent of the legal advice actually provided to the parties in relation to the provisions of the s 90UD Financial Agreement relating to child support.
4.The Tribunal erred in failing to consider that the provisions relating to child support as set out in the s 90UD Financial Agreement failed to comply with s 84(6) of the Child Support (Assessment) Act 1989, and accordingly the child support provisions ought not have been determined to constitute a Binding Child Support Agreement.”
In response to the Appellant’s Notice of Appeal the First Respondent filed a Response on 21 February 2019 seeking that the application be dismissed by the Court.
Background
The Appellant was born in 1963 and is aged 57 years. He is the Company Director of his own business “B Company”. The Appellant has re-partnered and lives with his current wife. They have one child together born in 2017. The Appellant’s wife was pregnant with their second child at the time the matter came before the Tribunal.
The Appellant has two adult children from previous marriages.
The First Respondent was born in 1981 and is aged 39 years. She is the sole trader of her own business. The First Respondent has not re-partnered.
The parties commenced living in a de facto relationship in 2011 and separated on 15 June 2014.
There is one child of that relationship, X, born in 2012, (“X”) who is currently aged 8 years.
X lives primarily with the First Respondent and spends time with the Appellant each weekend from 3:00pm Friday to 5:00pm Sunday during all school terms and for half of all school holidays.
As set out in paragraph [2] herein, the parties entered into a Financial Agreement in April 2015.
At the top of each page of the Financial Agreement is the heading “Section 90UD Financial Agreement”.
The Recitals to the Financial Agreement are as follows:
“A.This agreement is made under Section 90UD of the Family Law Act 1975 (Act)
B.Mr Piper was born in 1963. Ms Talbot was born in 1981. They have one child, X born in 2012.
C.Ms Talbot and Mr Piper commenced living together in a de facto relationship in 2011. They separated on 15 June 2014, at which time Ms Talbot moved out of the home at C Street, Suburb D into rented accommodation at E Street, Suburb F (“the E Street, Suburb F Property”).
D.Mr Piper is a Company Director. Ms Talbot is a professional.
E.Mr Piper has significant assets, financial resources and liabilities including the business known as B Company and real estate. He may also receive an inheritance from the estate of his late father.
F.Ms Talbot has minimal assets, financial resources and liabilities.
G.Mr Piper and Ms Talbot have agreed to divide, their assets, financial resources and liabilities in accordance with the terms of this agreement, namely:
(i.)Mr Piper will pay Ms Talbot AUD$1,000,000 (“the payment”), of which $5,000 has already been paid;
(ii.)Mr Piper will pay rent for the E Street, Suburb F property until 1 July 2015;
(iii.)Mr Piper will pay a portion of the rent on the E Street, Suburb F property from 1 July 2015 to 30 June 2016. The total rent is $42,180. Mr Piper will pay the difference between $42,180 and interest earned by Ms Talbot on AUD$1,000,000, provided that such amount is no more than $13,140 and no less than $9,180;
(iv.)Mr Piper will pay any tax due and payable by Ms Talbot to the Australian Taxation Office on the interest earned on AUD $1,000,000 for the financial year 1 July 2015 to 30 June 2016;
(v.)Ms Talbot will otherwise be responsible for the rent on the E Street, Suburb F property from 1 July 2015 and will indemnify Mr Piper in relation to same;
(vi.)Mr Piper will retain any interest he derives from the estate of his late father;
(vii.) Mr Piper will surrender any interest he has to Ms Talbot’s assets and financial resources, and the growth in value thereof;
(viii.)Ms Talbot will surrender any claim she has to Mr Piper’s assets and financial resources, and the growth in value thereof;
(ix.)each party will be solely responsible for their liabilities and indemnify the other in relation to those liabilities.
H. The parties have agreed further as follows:
(i.)they will have shared care of X as agreed between them and in the best interests of X;
(ii.) Until X turns 18 years old, Mr Piper will pay child support for X in the sum of $900 per week, to be indexed annually on 31 December in accordance with variations in the consumer price index for Melbourne. The amount of child support will be reviewed annually on 1 April, with the first review on 1 April 2016.
(iii.)Mr Piper will pay X’s school fees, uniform, books and tuition at a private school to be agreed between the parties until X turns 18 years old;
(iv.)Mr Piper will pay X’s medical and dental costs, including private health insurance at the top level with ancillary benefits until he turns 18 years old.
I.The parties have each had individual and independent advice from separate legal practitioners in relation to:
(i)the effect of this agreement on their respective rights; and
(ii)the advantages and disadvantages, at the time that the advice was provided to the party of making this agreement.
J. The parties desire:
(i)to sever their financial relationship and to finalise their financial rights and responsibilities in relation to each other;
(ii.)to exclude as far as is practicable the property adjustment and maintenance provisions of the Act; and
(iii.)to take advantage of the provisions of Part VIIIAB of the Act to finalise all financial issues arising from their de facto relationship.
K.With these intentions and the knowledge of the advice referred to in Recital I, the parties freely and willingly enter into this agreement.
L.There is no other agreement in force between the parties under the provisions of the Act.
M.Ms Talbot and Mr Piper both acknowledge should the other die the other will have no claim on their estate.
N.Neither Ms Talbot or Mr Piper are dependent on an income tested pension or benefit. Both are in good health.
O.Before executing the agreement each party has had regard to the possibility that one or both of them may be subject to a change of circumstance, inclusive of any or all of the following:
(i.)serious illness or injury;
(ii.)death;
(iii.)the loss of any of the property or financial resources they will receive under their property settlement;
(iv.)significant increase or decrease in value of such property; or
(v.)receipt by either or both of the parties of windfall benefits, including but not limited to, lottery winnings and inheritances.
The formal terms of the Financial Agreement are set out under the heading “THE PARTIES AGREE” and clause 1 reads:-
“1.The recitals to this agreement and schedules are incorporated in and form part of this agreement”
Under the heading “Statement of Independent Legal Advice” each of the parties and their respective legal representatives signed the following:-
“I, (legal practitioner name) of, (Address), solicitor, hereby certify that in relation to an agreement in writing proposed to be entered into between (Appellant’s name) and (Respondent’s name) (hereinafter called “the parties”) I have advised (party name) (hereinafter called “my client”) independently of the other party and before the time at which my client signed the agreement, as to the following matters:
1. The effect of the agreement upon my client’s rights.
2.The advantages and disadvantages, at the time the advice was provided to my client, of signing the agreement.
(signature of legal practitioner)
NOTATIONS
A.My client stated to me that (they) understood the nature and effect of the document and the obligations and risks involved in signing it. It appeared to me that (they) did have such understanding.
B.My client stated to me that (they) was signing the document freely, voluntarily and without pressure from the other party to the agreement or from any other person
Confirmation and Acknowledgement
I, (party name) do hereby confirm and acknowledge that before I signed the deed of agreement, I received the advice from (legal practitioner name) as described in the above statement, which statement was provided to me and annexed to this deed of agreement.
(signature of party)
The Tribunal decision
The Tribunal made its decision on 5 December 2018 and posted copies of the decision and its reasons to the parties on 17 December 2018.
At paragraph [8] of its decision the Tribunal quite properly notes that:
“The issue for the Tribunal in this case is whether the financial agreement made between the parties was correctly registered by the Department as a binding child support agreement”.
In considering the issue before it, the Tribunal was assisted by written submissions on behalf of the Appellant’s Counsel, which were summarised at paragraph [26] of the Tribunal’s decision as follows:
“…The first was that there was no intention between the parties that the agreement be a binding child support agreement, on the basis that it is a section 90UD Financial Agreement made under the Family Law Act; the child support is referenced in the recitals only; and the parties varied their private arrangements in relation to child support in October 2017 following mediation. Secondly, the representative submitted that the agreement does not comply with the Assessment Act given the parties were not provided with legal advice in relation to child support agreements; that no operative provision required under subsections 81(2) and 84(1) are included and there is no operative clause within the meaning of section 84 of the Assessment Act; and that the agreement requires the payment of no periodic amounts and does not specify the relationship between these payments and any child support assessment and therefore does not meet the requirements of subsection 84(6) of the Assessment Act. Thirdly, it was submitted that the legal advice provided was not sufficient on the basis that, “in the context of binding child support agreements, the parties must be given advice as to the effect of the agreement on their respective rights in relation to child support, and as to the advantages and disadvantages of making the agreement in relation to child support”. Mr Piper’s lawyer argued that the parties were given advice in relation to their rights and the advantages and disadvantages of the agreement as it related to the Family Law Act but not as they related to child support”
The First Respondent represented herself at the hearing and submitted that it was always her intention to make sure that the parties’ child was provided for. She accepted that she did not register the agreement as a Binding Child Support Agreement when it was signed in 2015, however did not understand why the Appellant did not view the agreement as a Child Support Agreement.
The First Respondent further submitted that with respect to the legal advice given in relation to the agreement, the appropriate interpretation of s 80C(2)(d) of the Assessment Act was that the appropriate advice had been given and the Tribunal should not look beyond that.
The Tribunal identifies the legislative requirements for the making of a Binding Child Support Agreement as set out in subsection 80C(2) of the Assessment Act which provides that an agreement is binding on the parties 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.
Note:For the manner in which the contents of a binding child support agreement may be proved, see section 48 of the Evidence Act 1995.
In relation to s 80C(2) of the Assessment Act the Tribunal sets out its findings in paragraphs [28] – [36] of its decision as follows:
“28. …The Tribunal was satisfied on the evidence before it that the agreement in question is in writing and is signed by both of the parties to the agreement. Paragraphs 80C(2)(a) and (b) are met.
29. Paragraph 80C(2)(c) of the Assessment Act requires that the agreement contains a statement that the individual has been provided, as certified in an annexure, independent legal advice from a legal practitioner as to the effect of the agreement on the rights of that party and the advantages and disadvantages, at the time that the advice was provided, to the party of making the agreement.
30. The Tribunal had before it copies of “Statements of Legal Advice” signed by Mr Piper and Ms G. Mr Piper’s Statement was as follows:
…
31. Ms G’s Statement was identically worded, apart from references to a different party and legal representative.
32. The statements each confirm that independent legal advice had been provided to each of the parties, from a legal practitioner, as to the effect of the agreement on the rights of the party and the advantages and disadvantages of making the agreement. The requirements set out in paragraph 80C(2)(c) are met.
33. Paragraph 80C(2)(d) of the Assessment Act requires the annexure to the agreement to contain a certificate signed by the person providing the independent legal advice stating that the advice was provided. The annexure signed by each of the legal advisors meets this requirement.
34. Paragraph 80C(2)(e) of the Assessment Act requires that the agreement has not been terminated under section 80D. The Tribunal was satisfied that, at the time the original decision was made in this matter, the agreement had not been terminated in circumstances set out in section 80D of the Assessment Act.
35. Finally, paragraph 80C(2)(f) of the Assessment Act requires that the original or a copy is given to each party. This aspect of section 80C was not in dispute and the Tribunal was satisfied that each party had been provided a copy of the agreement.
36. The requirements set out in subsection 80C(2) of the Assessment Act are met.
As to the issue of intention, the Tribunal could not find any requirement in the legislation or relevant case law requiring that there be a specific and expressed intention that an agreement be a Binding Child Support Agreement.
The Tribunal made specific reference to the matter of Nettleship & Nettleship [2016] FCCA 2947 in which the Court, when reviewing whether an agreement met the requirements of s 80C of the Assessment Act, “looked to the “form and content” of the agreement in determining whether it complied with paragraphs 80C(2)(a) to (d)”.
In considering the submission on behalf of the Appellant that the required legal advice had not been given, the Tribunal again adopted the approach in Nettleship (supra).
The Tribunal in paragraph [44] of its decision notes that it is not “appropriate to look behind the legal advice given, nor question the sufficiency of the legal advice provided to the parties about their respective rights and obligations.”
The Tribunal was also not persuaded by the submission on behalf of the Appellant that the agreement in so far as it related to child support was contained in the recitals only and not in the formal part of the agreement. Referring to clause 1 of the agreement the Tribunal notes that the “recitals to this agreement and schedules are incorporated in and form part of this agreement”.
The Tribunal then considered whether the Financial Agreement complied with subsection 81(2) of the Assessment Act, as is required by subsection 80C(1)(b).
Pursuant to subsection 81(2) of the Assessment Act, an agreement is a Binding Child Support Agreement or a limited Child Support Agreement if it complies with ss 82 to 85.
Section 85 of the Assessment Act was not in force at the time of the signing of the Financial Agreement and so properly did not form part of the Tribunal’s decision.
Section 82 of the Assessment Act provides:
(1)An agreement is a child support agreement only if it is made in relation to a child in relation to whom an application for administrative assessment is, under section 24, entitled to be made on the day the agreement is entered into.
(2)If the agreement is also made in relation to another child in relation to whom subsection (1) does not apply, the other child is to be disregarded for the purposes of this Act.
(3)Subsection (2) does not affect the operation of the agreement in relation to the other child for any other purpose.
When considering this section the Tribunal, at paragraph [38] of its decision, simply notes that “the agreement complies with section 82 of the Assessment Act as it is made in relation to a child to whom an application for administrative assessment is entitled to be made”.
Section 83 of the Assessment Act provides:
(1)An agreement is a child support agreement only if it is made between:
(a)2 parents of a child who, under section 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; or
(b)one or both parents of a child, and a non-parent carer of the child, who, under sections 25 and 25A, 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.
(2)If there is a party to the agreement in relation to whom subsection (1) does not apply, that party is to be disregarded for the purposes of this Act.
(3)Subsection (2) does not affect the operation of the agreement in relation to that party for any other purpose
Again, the Tribunal concludes at paragraph [39] of its decision that the agreement complies with s 83 as it is an agreement “made between two parents of a child who would be able to properly make 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 was entered into”.
The Tribunal then considered s 84(1) of the Assessment Act which provides:
Provisions that may be included
(1)An agreement is a child support agreement only if it includes one or more of the following kinds of provisions:
(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;
(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;
(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);
(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;
(e)provisions (the lump sum payment provisions) that meet the requirements of subsection (7) and that state:
(i)that a party (the liable party) is to provide child support for a child to another party in the form of a lump sum payment (including by way of transfer or settlement of property); and
(ii)that the lump sum payment is to be credited against the amount payable under the liable party’s liability under the relevant administrative assessment;
(f)provisions under which a party is to provide child support for a child to another party otherwise than in the form of periodic amounts and that are not non‑periodic payment provisions or lump sum payment provisions;
(g)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.
The Tribunal finds at paragraph [40] of its decision that:
“The agreement includes a provision for Mr Piper to pay child support to Ms G in the amount of $900 per week, to be indexed annually on 31 December in accordance with variations in the consumer price index for Melbourne. The agreement, somewhat confusingly in the Tribunal’s view, further provided for this amount to be reviewed annually on 1 April. However it is clear that the agreement provided for child support to be paid in the form of periodic amounts and therefore meets section 84 of the Assessment Act.”
The Tribunal summarised subsections 84(1)-(8) in paragraphs [16]-[20] of its decision under the heading “Legislative Framework”.
Having noted that subsection 84(1) of the Assessment Act only requires one of the stated provisions to be included for an agreement to be a Child Support Agreement, and therefore s 84 was met for the reasons outlined above, the Tribunal did not further consider ss 84(2)-(4) and 84(7)-(8).
Having set out its evidence and findings, the Tribunal concludes at paragraph [45] that:
“The Department’s decision to register the agreement as a binding child support agreement and apply this agreement to the child support assessment from 13 March 2018 is legally correct and is affirmed.”
The Law
Pursuant to the provisions of s 44AAA of the Administrative Appeals Tribunal Act 1975 (Cth) (“the AAT Act”) a party to the proceedings before the Tribunal may appeal to this Court in respect of a decision made by the Tribunal in a child support matter. However, the only ground on which such an appeal can be based is on “a question of law”.
In the matter of Bond v Child Support Registrar & Anor [2018] FCCA 422 Judge Brown quite properly noted that:
“an appeal to this Court from an administrative tribunal in a child support matter does not constitute a re-hearing of the case on its merits.”
In paragraph [84] of Bond v Child Support Registrar & Anor (supra) his Honour makes reference to what was said by the Full Court in Collector of Customs v Pressure Tanker Pty Ltd and Pazzolanic Enterprises Pty Ltd (1993) 43 FCR 280, as follows:
“…the distinction between the task of the Administrative Appeals Tribunal – a fact finding decision making tribunal – and a court, such as this one – judicial review on a question of law – was made as follows:
“…the nature of the task of this court is clear. It is to leave to the tribunal of fact decisions as to the facts and to interfere only when the identified error is one of law.””
His Honour then reiterated his findings in Henriques & Hatzis (SSAT Appeal) [2014] FCCA 1194 as to what amounted to an error of law, indicating that:
“an administrative tribunal exceeds its powers and thus commits a jurisdictional error, which is correctable on appeal in respect of a question of law if it:
·fails to construe properly the legislative provisions applicable;
·identifies the wrong issues or asks itself the wrong questions;
·ignores relevant material or relies on irrelevant material;
·fails to accord procedural fairness to the party before it or otherwise breaches principles of natural justice;
·makes an erroneous finding of such a magnitude that it goes to the very jurisdiction which it purports to exercise rendering its decision perverse or unreasonable or otherwise offending logic.”
In paragraphs [86]-[88] of his judgment, his Honour states as follows:
“86. The classical definition of jurisdictional error was provided by the High Court in Minister for Immigration & Multicultural Affairs v Yusuf. It described an error, which leads to the vitiation of the jurisdiction of an administrative body, in the following terms:
“What is important, however, is that identifying a wrong issue, asking a wrong question, ignoring relevant material or relying on irrelevant material in a way that affects the exercise of power is to make an error of law. Further, doing so results in the decision-maker exceeding the authority or powers given by the relevant statute. In other words, if an error of those types is made, the decision-maker did not have authority to make the decision that was made; he or she did not have jurisdiction to make it.”
87. Accordingly, it is the function of this court to determine whether the decision of the AAT was within its legal powers. That is what is meant by a question of law. It is not the function of this court to examine the merits of that decision if the decision was made within the parameters of jurisdiction. Essentially, it is not the function of this court to reappraise the evidence led before the AAT and re-determine the case, according to the conclusions it draws from the evidence available to the Tribunal.
88. As such, I should be cautious to approach the decision of the AAT with “an eye [which is] too keenly attuned to perception of error [or to read it] over-finely”. Rather I should take a common sense approach to what the ATT (sic) was saying in its decision and the reasons provided by it as to why it said what it said. The function of the AAT is not to produce reasons of “jurisprudential excellence”. It is to provide an informal and expedient level of independent review.
As was set out in the Second Respondent’s written submissions and by his Honour in paragraph [89] of his judgment in Bond v Child Support Registrar & Anor (supra), the Full Court of the Family Court in the matter of Child Support Registrar & Crabbe and Anor [2014] FamCAFC 10 at [54] provided a summary of the principles (and applicable authorities) which are relevant to the review of administrative decisions in the child support area and in particular, what matters can constitute an error of law and those which do not necessarily do so. His Honour (and the Second Respondent in paragraph [4] of their written submissions) sets those principles out as follows:
“a) The question of whether there is evidence to support a finding of fact or an inference drawn from a finding of fact is a question of law;[1]
b) The making of a finding of fact or the drawing of an inference in the absence of evidence is an error of law;[2]
c) A wrong finding of fact is not an error of law;[3]
d) Judicial review is not to be over zealous in seeking to find inadequacy or reasoning and so inadvertently turn the review of the reasons of an administrative decision maker into a reconsideration of the merits of the relevant decision;[4]”
[1] Minister for Immigration & Multicultural Affairs v Al Miahi [2001] 65 ALD 141 at [34].
[2] Al Miahi (supra).
[3] Al Miahi (supra).
[4] Minister for Immigration & Ethnic Affairs v Wu Shan Ling [1996] 185 CLR 259 at [271].
An appellant asserting a tribunal has made an error of law must state with sufficient precision that which identifies the alleged error in law, as a mere assertion will not enliven the Court’s jurisdiction (Haritos v Federal Commissioner of Taxation [2015] FCAFC 92 at [62]).
Written submissions
Pursuant to orders of this Court dated 16 May 2019 and subsequent orders dated 29 January 2020, the parties were required to file written submissions prior to the hearing of the matter.
The Appellant filed written submissions on 19 September 2019.
The Second Respondent filed written submissions on 25 September 2020.
The First Respondent is self-represented and did not file written submissions. At the hearing she adopted the written and oral submissions of the Second Respondent.
The grounds of appeal
As set out in paragraph [11] of this judgment, the Appellant listed four grounds of appeal in the Amended Notice of Appeal filed with the leave of the Court on 19 September 2019.
Ground of appeal (1): The Tribunal erred in principle in failing to determine whether there was an “agreement” between the parties for the purposes of ss 81 and 80C of the Child Support (Assessment) Act 1989.
Appellant’s submissions
The Appellant observed that ss 80C(1) and 81(1) commences with the words “the agreement is a binding child support agreement” and then sets out the factors relevant to it so being.
The Appellant therefore argued that the threshold requirement for a Child Support Agreement is for it to be “an agreement”.
The Appellant referred the Court to the decision of Justice Strickland in Senior & Anderson [2011] FamCAFC 129 where in the context of Financial Agreements his Honour stated as follows in relation to the term “agreement”:
[89] “Agreement” is also not defined [in the Family Law Act] and thus carries its ordinary and natural meaning. Accordingly, just as with any agreement, principles of law and equity will apply so as to vitiate the agreement if the relevant circumstances are made out. So it is, in my view, with an agreement that purports on its face, to be a “financial agreement”. That interpretation is reinforced by s 90KA, noting that this section referes to “financial agreements” as distinct from “agreements”.
Whilst conceding there is no equivalent in the child support legislation scheme to ss 90KA or 90UN of the Family Law Act (which provide that whether a Financial Agreement or a termination agreement is valid, enforceable or effective is determined by the Court according to the principles of law and equity), the Appellant argues that Strickland J’s definition that “the principles of law and equity will apply so as to vitiate “an agreement”” does not require equivalent sections to ss 90KA or 90UN of the Family Law Act in the Assessment Act for his Honour’s reasoning to be applicable to a Binding Child Support Agreement.
Having noted that the Courts have regularly applied contract law to determine the validity of a Child Support Agreement, reference was made to the matter of Sadler & Sadler & Anor (SSAT Appeal) [2011] FMCAfam 1335 and MNR & MEA [2004] FMCAfam 619, the Appellant argued that for an agreement to meet the requirements of a contract according to the principles of law and equity, the parties must have intended to enter into a binding legal agreement in order for it to be binding on the parties.
The Appellant properly noted that the question of whether the parties held an intention to enter into a binding legal agreement is an objective not a subjective test.
The Court was referred to the High Court decision of Ermogenous v Greek Orthodox Community of SA Inc [2002] 209 CLR 95 where the High Court stated:
“Although the word ‘intention’ is used in this context, it is used in the same sense as it is used in other contractual contexts. It describes what it is that would objectively be conveyed by what was said or done, having regard to the circumstances in which those statements and actions happened. It is not a search for the uncommunicated subjective motives or intentions of the parties.”
It is therefore submitted on behalf of the Appellant that it was incumbent on both the Registrar and then the Tribunal when the issue was raised to consider whether the agreement met the requirements of “an agreement” and in particular whether the agreement objectively conveyed that the parties intended to be legally bound to the child support provisions of the agreement.
The Tribunal found at paragraph [42] of their decision that:
“[42] The Tribunal could find no requirement in the legislation or relevant case law requiring that there be specific and expressed intention that an agreement be a binding child support agreement. The Tribunal had particular regard to Federal Circuit Court case of Nettleship & Nettleship [2016] FCCA 2947, where the Court, in reviewing whether an agreement met the requirements in section 80C of the Assessment Act, looked to the “form and content” of the agreement in determining whether it complied with paragraphs 80C(2)(a) to (d).”
The Appellant argues that the decision in Nettleship (supra) in no way suggests that “form and content” is a “legislative test” for determining whether the parties have entered into a Binding Child Support Agreement.
In Nettleship (supra) the Applicant was seeking to enforce their Binding Child Support Agreement and the Respondent was seeking to have it set aside. Neither party disputed that the agreement was a Binding Child Support Agreement under the Assessment Act. The Respondent did not argue the agreement should be set aside because the parties had not intended to enter into a Binding Child Support Agreement.
When considering the Respondent’s application to set aside the agreement, Judge Small started from the premise the parties had entered into a Binding Child Support Agreement. Judge Small however properly looked at whether the agreement signed by the parties met the requirements of the relevant sections of the Assessment Act. A failure of the agreement to meet those requirements would have meant the agreement was not a Binding Child Support Agreement under the Assessment Act and therefore could not be enforced by the Court.
The Appellant therefore argues the decision in Nettleship (supra) is of no assistance to this Court in determining whether the principles of law and equity apply to vitiate a Child Support Agreement and should not have informed the Tribunal’s reasoning on this issue.
The Appellant submits that an objective reading of the agreement does not support a conclusion that the parties intended the agreement to be binding upon them in relation to child support or that it be registered as a Binding Child Support Agreement pursuant to the Assessment Act. In support of this submission the Appellant puts forward six factors which were enumerated in the written submissions under paragraph [12] as follows:
12.1The Agreement makes no reference to being a binding child support agreement (or any type of child support agreement;
12.2The amount of child support payable was to be reviews annually on 1 April, with the first review on 1 April 2016 (Recital H(ii);
12.3The Agreement does not refer to the Assessment Act or the relevant provisions of that Act;
12.4Clause 13 of the Agreement specifically states that the Agreement:
…is made under section 90UD of the Act and is intended by the parties to define their rights and obligations to each other under the Act with regard to Property division and maintenance and to stand in relation to its subject matter in substation for the rights and entitlements of each party under the Act. [Emphasis added]
12.5Recital A defines ‘the Act’ as the Family Law Act
12.6 The only reference to child support are contained within the Recitals, not the clauses
The Appellant argues that the issue of child support being relegated to being included in the recitals was a relevant factor for the Tribunal to consider in its objective determination of whether the parties intended to be legally bound and therefore whether there is an agreement for the purposes of the Assessment Act.
Counsel made reference to the matter of Sunland Waterfront (BVI) Ltd & Anor v Prudentia Investments Pty Ltd & Ors(No 2) [2012] VSC 239 where the Court summarised the nature of recitals as follows:
“[109] In this context, it is helpful to consider the nature of recitals in some further detail. In broad terms, in the words of Sir Kim Lewison ‘[t]he function of recitals is to narrate the history leading up to the making of the agreement in question or to express in general terms the intention with which the agreement was made”. More particularly, Lewison continues:
“In Inland Revenue Council v Raphael, Lord Wright said:
‘The nature of recitals as statements of fact which are in the contemplation of the parties, is illustrated by the Scotch term “narrative”.’
In other cases recitals perform the function of:
‘…a preliminary statement of what the maker of the deed intended should be the effect and purpose of the whole deed when made’.
In Moon Ex p. Dawes, Re, Lopes LJ said:
‘There are several well-established rules applicable to the construction of deeds. One is this, that if the operative part of a deed is clear, and the recitals are not clear the operative part must prevail. Again, if the recitals are clear, but the operative part is ambiguous, the recitals control the operative part. If, again, the operative part and the recitals are both clear, but one is inconsistent with the other, the operative part must prevail.’”
Additionally, reference is made to the words of Lord Macnaughten in Orr v Mitchell where His Lordship says:
“When the words in the dispositive or operative part of a deed of conveyance are clear and unambiguous they cannot be corrected by reference to other parts of the instrument…”
Whilst conceding that clause 1 of the agreement purports to adopt the recitals as part of the agreement, the Appellant argues that the question for the Tribunal is whether on an objective basis the parties intended to enter into a binding legal agreement. It was submitted that because the reference to child support was contained in the recitals only the objective reading of the agreement was a factor that contributed to the only finding by the Tribunal that was open to them which was that the parties did not intend to enter into a legally binding agreement.
The Appellant notes that s 80C(a)(1) of the Assessment Act states that “a binding child support agreement must not be varied.”
The Appellant submits that in paragraph [40] of its decision the Tribunal notes that the agreement includes a provision for the Appellant to pay child support to the First Respondent in the amount of $900 per week to be indexed annually on 31 December in accordance with variations in the consumer price index for Melbourne, and then, “somewhat confusingly” in the Tribunals view, further provides for this amount to be reviewed annually on 1 April.
The Appellant argues that the Tribunal’s confusion at paragraph [40] arises not because of the difference in the dates in the agreement for an adjustment based on the consumer price index on 31 December and a review on 1 April, but rather because a review of the amount payable would be in conflict with s 80CA of the Assessment Act which clearly states that a Child Support Agreement cannot be varied.
It is therefore submitted on behalf of the Appellant that, from an objective view, the capacity to vary the child support as set out in the recitals clearly shows that the parties did not intend to be legally bound to a Child Support Agreement but rather were “recording” an informal arrangement between them.
The Appellant argues that the conduct of the parties after making the agreement can be taken into account in determining whether the parties intended to be bound by it. The Court was referred to the decision of Air Great Lakes Pty Ltd v K S Easter (Holdings) Pty Ltd (1985) 2 NSWLR 309.
The Appellant argues that in this matter the actions of the parties after the signing of this agreement supports the proposition that the parties did not intend to enter into legal relations with respect to child support.
The parties attended Family Dispute Resolution on 2 October 2017 where they reached agreement to vary the child support the Appellant was to pay for X from that which is set out in the 90UD agreement. An email was sent to the parties setting out their agreement by the Mediator. A copy of the email is annexed to the Appellant’s affidavit filed in support of the appeal sworn on 10 January 2019. That email reads as follows:
“[6] Mr Piper will pay 100% of all costs associated with X’s enrolment at H School (primary and secondary) (or other agreed private school).
…
[8] Commencing term 1, 2018 Mr Piper’s weekly payment to Ms Talbot will be reduced from $900 to $400.
[9] Mr Piper will pay for any agreed extra-curricular activities for X.
[10] Each of you will obtain legal advice as to whether you wish your agreement to be documented as a:
(a) Parenting plan; or
(b) Consent order;
(c) Binding child support agreement.
I congratulate you on reaching agreement about your parenting and child support issues and wish you all the best.”
The Appellant argues that the Tribunal clearly did not take into account the parties variation of their child support arrangements when considering the validity of the agreement.
The Appellant therefore argues that because a Binding Child Support Agreement cannot be varied pursuant to s 80CA of the Assessment Act, the variation by consent by the parties is inconsistent with the parties intending to be legally bound in relation to child support and rather leads to the objective conclusion that the parties intended to enter into an informal child support arrangement as reflected in the recitals of the agreement, which could be varied from time to time between them as indeed it was.
It is therefore argued by the Appellant that in failing to consider whether there was a valid “agreement” pursuant to the principles of law and equity before then considering whether the additional requirements of s 80C and 81 had been established, the Tribunal erred in principle.
Second Respondent’s submissions
Counsel for the Second Respondent commenced his submissions by working through what he termed the “statutory context” relating to Binding Child Support Agreements.
Counsel started at s 88 of the Assessment Act which provides that an application for acceptance by the Registrar of an agreement made in relation to a child is properly made if the agreement is a Child Support Agreement.
Counsel then took the Court to s 89 of the Assessment Act, being the formal requirements for applications, which says that an application for acceptance by the Registrar of an agreement made in relation to a child must be made in the manner specified by the Registrar.
Section 91 of the Assessment Act addresses how decisions are to be made by the Registrar to determine if an agreement referred to paragraph 88 as follows:
“In determining whether an agreement made in relation to a child is an agreement referred to in paragraph 88(a), the Registrar may act on the basis of the application made to the Registrar for acceptance of the agreement, the documents accompanying the application and the agreement itself, and it is not required to conduct any inquiries or investigations into the matter.”
Section 92(1) of the Assessment Act (Registrar to accept agreement where application properly made) reads:
“subject to this section, if the Registrar is satisfied that an application made to the Registrar for acceptance of an agreement made in relation to a child has been properly made, the Registrar must accept the agreement.”
Counsel for the Second Respondent then took the Court to s 81 of the Assessment Act which as has been set out in this Judgment reads:
“an agreement is a child support agreement if the agreement is a Binding Child Support Agreement”.
Counsel for the Second Respondent then submitted that the next step when considering the statutory context is to look at s 80C of the Assessment Act which says an agreement is a Binding Child Support Agreement if the agreement is binding on the parties to the agreement in accordance with subsection (2) and the agreement complies with subsection 81(2).
Section 80C(2) provides that for the purposes of subsection (1) an agreement is binding on the parties to the agreement if, and only if, the provisions set out in subsections (a) to (f) are met.
It is submitted therefore on behalf of the Second Respondent that the statutory language used at s 80C(2), being “if and only if”, sets out the minimum, mandatory and exhaustive requirements which an agreement must meet in order for it to be binding on the parties for the purposes of 80C(1)(a) of the Assessment Act.
Counsel for the Second Respondent then argued that ss 81(2) and 84(1)(a)-(g) are what can be described as the “mechanical descriptors” of the provisions that are to be contained in a Child Support Agreement in order for it to be a Binding Child Support Agreement. Counsel argues that what can be readily implied from this is that the legislative intention is that the factors set out in these sections are the minimum and exclusive requirements for the agreement to be binding on the parties.
The Second Respondent argues that a proper statutory construction of the provisions of the Assessment Act in relation to Binding Child Support Agreements is that it is an administrative process that requires a Registrar to accept an agreement that is a Child Support Agreement if the mandatory requirements as set out in the legislation are met and that Parliament should be construed as having intended to oust any applicable common law principles when determining when an agreement is binding on the parties.
Counsel submitted that there can be no dispute that the parties had entered into an agreement and therefore the only question for the Tribunal was whether the agreement met the requirements of ss 80C(2) and 81(2). Having found the agreement met those requirements the Tribunal did not err in its decision that there was an agreement. Therefore ground 1 of the Appellant’s appeal fails.
Finally, in support of that contention, Counsel for the Second Respondent highlighted that not only does the mandatory language of s 80C(2) and its administrative context mitigate against any implied requirements that the parties must intend the agreement to have had effect for the purposes of the Assessment Act, it must also be contrasted with the provisions of the Family Law Act in relation to Financial Agreements and in particular ss 90KA and 90UD, which expressly provide that a question as to the validity of a Financial Agreement is to be determined by the Court according to the principles of law and equity. Counsel argues such a provision is “expressly excluded from the Assessment Act”.
The Second Respondent’s Counsel argues that if Parliament had intended for it to be a requirement that the principles of law and equity be applied to the question of whether a Child Support Agreement was valid it would have enacted the same provision in the Assessment Act and particularly so in circumstances where the framework set up under Part 6 of the Assessment Act is clearly an administrative one.
Finally, Counsel for the Second Respondent argues that even if it is accepted that some principles of law and equity may be helpful when considering a Child Support Agreement under the Assessment Act, such as contractual principles of construction, it does not mean that the full ambit of the law of contract should be imposed on a constructive statute. It is therefore submitted by Counsel for the Second Respondent that the cases referred to by the Appellant’s Counsel in which principles of contract had been applied in relation to Child Support Agreements in which contractual construction applied, do not predetermine that Child Support Agreements are, in fact, contracts.
It was submitted that the administrative context of Part 6 of the Assessment Act together with the express words to s 80C(2) should be read as ousting the common law as to whether the agreement has binding legal effect. It is therefore argued that even if a Child Support Agreement is a contract, s 80C(2) ousts the common law relating to the doctrine of contractual intent so that the contract does not need to have intention behind it to be legally binding.
Rebuttal by the Appellant’s Counsel
Counsel for the Appellant argues that if the Court accepts the arguments put by the Second Respondent’s Counsel, and his construction of the word “agreement”, Part 6 of the Assessment Act would provide the parties with no protection under the law or the doctrines of equity. It is submitted that the Court should not accept that this was the intention of Parliament.
Counsel for the Appellant specifically referred the Court to the wording of ss91 and 92 of the Assessment Act highlighting that s 91 provides the Registrar with a discretion in determining whether an agreement made in relation to a child is a Child Support Agreement by the specific use of the word “may”. Further, Counsel argues that the wording of s 91 enables the Registrar to look beyond the application and the documents accompanying it in the exercise of that discretion.
Counsel for the Appellant further argued that s 92 of the Assessment Act also provides the Registrar with the capacity to make a decision as to whether an application for the registration of an agreement has been properly made.
It is submitted therefore that the Assessment Act enables the Registrar and subsequently the Tribunal to consider factors beyond the agreement and the documents supporting it in deciding whether an agreement is a Child Support Agreement that should be accepted.
Conclusion
In paragraph [42] of their decision the Tribunal held they:
“could find no requirement in the legislation or relevant case law requiring that there be a specific and expressed intention that an agreement be a binding child support agreement. The Tribunal had particular regard to the Federal Circuit Court case of Nettleship & Nettleship [2016] FCCA 2947, where the Court, in reviewing whether an agreement met the requirements in section 80C of the Assessment Act, looked to the “form and content” of the agreement in determining whether it complied with paragraphs 80C(2)(a) to (d).
As set out in paragraphs [70] and [71] of this judgment, neither party in Nettleship (supra) disputed the agreement was a Binding Child Support Agreement under the Assessment Act or that they had not intended to enter into such an agreement. Because there was an application to set aside the agreement, the Court looked at whether the agreement signed by the parties met the requirements of the relevant sections of the Assessment Act, as a failure of the parties’ agreement to meet those requirements would mean the agreement was not a Binding Child Support Agreement as defined by the Assessment Act and therefore could not be enforced by the Court.
The Appellant therefore argued that the decision in Nettleship (supra) does not stand for the principle that “form and content” is a “legislative test” for determining whether parties entered into a Binding Child Support Agreement and is further of no assistance in determining whether the principles of law and equity apply to vitiate a Child Support Agreement.
In Nettleship (supra), the parties agreed they had intended to and had entered into a Binding Child Support Agreement. The Respondent was seeking to have that Binding Child Support Agreement set aside. Judge Small appropriately examined the agreement to ensure its compliance with the relevant sections of the Assessment Act as if the agreement had not done so, it could not have been a Binding Child Support Agreement as defined in the legislation. Her Honour was required in the particular circumstances of that matter to ensure its “form and content” met the legislative requirements of the Act.
For these reasons I am in complete agreement with the Appellant that the decision in Nettleship (supra) is of no assistance or relevance to the issues that were being argued before the Tribunal. Nettleship (supra) does not stand for the principle that “form and content” is the test to determine whether an agreement is a Binding Child Support Agreement under the Assessment Act. Nor is Nettleship (supra) of any relevance on the question of whether the principles of law and equity apply to Binding Child Support Agreements as this was not argued in that case.
The Tribunal therefore erred when it had “particular regard” to Nettleship (supra) when it found there is no requirement in the legislation or the case law requiring that there be specific and expressed intention that an agreement be a Binding Child Support Agreement.
In Senior & Anderson (supra) Justice Strickland considered the legislative framework surrounding financial agreements. His Honour noted that the definition of Financial Agreement in s 4 of the Family Law Act was as follows:
“Financial Agreement means an agreement that is a Financial Agreement under sections 90B, 90C or 90D.”
His Honour then considered s 90D of the Family Law Act which provides that if after a divorce order is made and if at the time of making the agreement the parties are not already parties to another binding agreement, and the agreement is expressed to be made under this section, then the agreement is a financial agreement.
At paragraph [88] of his judgment his Honour noted that s 4 makes plain a Financial Agreement has two essential components. It must first be “an agreement”, and it must also be an agreement that is made under s 90B, 90C or 90D of the Family Law Act.
As has previously been set out in this judgment, at paragraph [89] his Honour held:
“agreement is also not defined and thus carries its ordinary natural meaning. Accordingly, just as with any agreement, principles of law and equity will apply so as to vitiate the agreement if the relevant circumstances are made out. So it is, in my view, with an agreement that purports on its face to be a financial agreement. That interpretation is reinforced by section 90KA noting that this section refers to financial agreements as distinct from “agreements,”
Section 5 of the Assessment Act states that a Child Support Agreement has the meaning given by s 81. Section 81(1) reads “an agreement is a Child Support Agreement if the agreement is a Binding Child Support Agreement”. As has been clearly set out, s 81(2) states an agreement is a Binding Child Support Agreement if it complies with relevant provisions of the Assessment Act being ss 82, 83, 84 and 85.
Analogous with the findings of Justice Strickland, I am of the view that a Binding Child Support Agreement has two essential components. First of all it must be “an agreement” and secondly it must then meet the requirements of ss 81(2), 82, 83, 84 and 85 of the Act in order to be a Child Support Agreement.
I agree that where parties intend to enter into a Child Support Agreement and more particularly a Binding Child Support Agreement, the requirements of that document and the process by which it is accepted by the Child Support Agency is very much an administrative one governed by the relevant sections of the Assessment Act. However, I do not accept the submissions made on behalf of the Second Respondent that the primarily administrative process set out under the Assessment Act lends itself to a statutory interpretation that the intention of Parliament was to oust the common law and the doctrines of law and equity.
Section 4(3) of the Assessment Act states as follows:
(3)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.
Many separated parties reach agreement between themselves as to the financial arrangements for their children. That agreement can be evidenced by private agreement between themselves either orally or in writing. The parties do not intend to have to resort to the Assessment Act to either have the level of support payable for their children determined by the formula set out under the Assessment Act or to register their agreement so that it becomes a Binding Child Support Agreement.
In B v B [2008] FamCAFC 7 the Full Court when considering the validity of a Binding Financial Agreement held at paragraphs [40] to [42] as follows:-
“[40]…Care must be taken in interpreting any provision of the Act that has the effect of ousting the jurisdiction of the court. The amendments to the legislation that introduced a regime whereby parties could agree to the ouster of the court’s power to make property adjustment orders reversed a long held principle that such agreements were contrary to public policy.
[41] …the Family Law Act 1975 (Cth) since that time, gave to parties of a marriage or former marriage certain rights of application in respect of property and maintenance. The parties could not by agreement outside the confines of that legislation contract themselves out of the right to institute such proceedings…
[42] The underlying philosophy that had guided the courts in enunciating that principle was seen to place too many restrictions on the right of parties to arrange their affairs as they saw fit. The compromise reached by the legislature was to permit the parties to oust the court’s jurisdiction to make adjustive orders but only if certain stringent requirements were met.”
In paragraphs [94] to [96] of Senior v Anderson (supra), Justice Strickland considered the distinction between a “financial agreement” under the Family Law Act (ss 9, 90B, 90C and 90D) as opposed to a “financial agreement” which is binding within the meaning of s 90G of the Family Law Act. The latter operates as a bar to orders being made under Part VIII of the Family Law Act.
His Honour held at paragraph [97]:-
“[97] I consider this distinction to be important to the issues in this appeal. In particular, the distinction is important with respect to the application of any remedies in contract or equity which might apply to a financial agreement, including, specifically, rectification.”
Whilst his Honour allowed rectification to those aspects of the Financial Agreement which were not binding, his Honour did not allow rectification of those aspects of the agreement which would have made it a “binding” Financial Agreement because the ousting of the Court’s jurisdiction requires strict compliance with the Family Law Act.
To enter into a Binding Child Support Agreement has considerable impact on parties’ legal rights in relation to child support. It:-
·ousts the parties capacity to have recourse to the Assessment Act to have the level of child support paid or recovered by them determined on the basis of an objective formula that is adjusted to reflect any change in their circumstances over time;
·does not allow a variation of their agreement;
·limits the circumstances in which an agreement can be terminated to where the parties agree to terminate the agreement, enter a new agreement or it is court ordered under s 136 of the Assessment Act;
·ousts recourse to the Registrar to review the level of child support; and
·limits the Court’s capacity under s 136 of the Assessment Act to set aside a Child Support Agreement to fraud or failure to disclose relevant information, undue influence or unconscionable conduct by a party or someone acting for a party, or “exceptional circumstances” after the agreement is made which causes a party or child “hardship”.
It can therefore be seen that entering into a Binding Child Support Agreement has considerable legal ramifications for the parties to that agreement.
Such is the level of those ramifications that I am of the view that they are similar to the removal of the right of parties to have access to the Court to make orders under Part VIII or Part VIII AB of the Family Law Act under a Financial Agreement which is binding.
The absence of a section in the Assessment Act in the same terms as ss 90KA or 90UN of the Family Law Act does not in my view lead to the conclusion Parliament intended to oust the contractual principles of law and equity from the Assessment Act. In Senior v Anderson (supra) Strickland J noted s 90KA to reinforce his interpretation that a Financial Agreement is firstly an agreement to which the principles of law and equity apply. The existence of s 90KA was not the basis upon which his Honour’s finding was formulated.
I am therefore of the view that the principles of law and equity do and must apply when determining whether a Child Support Agreement is binding on the parties.
For these reasons, I am of the view that the Tribunal erred when in paragraph [42] of its decision stated that there is “no requirement in the legislation or relevant case law requiring that there be a specific and expressed intention that an agreement be a binding child support agreement”.
It is therefore apparent, given my findings that the principles of law and equity apply to Child Support Agreements that I reject the argument of the Second Respondent that the proper construction of Part 6 of the Assessment Act is it is an administrative process and that the question of whether an agreement is a Binding Child Support Agreement is determined by the presence in the agreement of the objectively determinable matters that are set out in ss 80(2) and 81(2) of the Assessment Act.
As was noted by Counsel for the Second Respondent, s 84(5) of the Assessment Act states that the same document can be both a Child Support Agreement and a parenting plan, a Child Support Agreement and a Maintenance Agreement or Financial Agreement under the Family Law Act or a Child Support Agreement and a Part VIII AB Financial Agreement. Given my finding that the principles of law and equity are applicable to Binding Child Support Agreements, it will be necessary for the parties to have intended that the component of their joint document which relates to child support be a Binding Child Support Agreement under the Assessment Act.
In the rare instances that a party seeks to argue before the Registrar and/or the Tribunal that there was no intent by one or both of the parties to enter into a Binding Child Support Agreement under the Assessment Act, then it is incumbent upon the Registrar and/or Tribunal to consider such matter in determining whether the purported agreement is a Binding Child Support Agreement.
As set out in paragraph [73] of this judgment, the Appellant argues there are multiple matters which are of relevance when considering whether the parties intended to enter into a Binding Child Support Agreement.
Accordingly, I am of the view that ground 1 as set out in the Amended Notice of Appeal should be upheld.
It is agreed by all parties that if this ground is upheld then the matter should be remitted to the Tribunal for reconsideration. I agree with Counsel in this regard. Because of this I will not be addressing the merits of the matters raised by the Appellant in support of their argument there was no intention by the parties to enter a Binding Child Support Agreement other than to agree they are matters which the Tribunal should consider and give such weight to as they determine.
Ground of appeal (2): The Tribunal erred in principle in concluding that the Certificates of Legal Advice state to be Certificates meeting the requirements of to s90UD of the Family Law Act 1975 met the requirements of s 80C of the Child Support (Assessment) Act 1989.
Appellant’s submissions
For an agreement to be a Binding Child Support Agreement s 80C of the Assessment Act prescribes that:
80C Making binding child support agreements
(1) 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).
(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.
NoteFor the manner in which the contents of a binding child support agreement may be proved, see section 48 of the Evidence Act 1995.
Counsel for the Appellant referred the Court to the Full Court decision in B v B (supra) where in the context of a Financial Agreement made pursuant to the Family Law Act it was held that:
“[42] “The underlying philosophy that has guided the Courts in annunciating that principle seemed to place too many restrictions on the right of parties to arrange their affairs as they saw fit. The compromise reached by the legislature was to permit parties to oust the Court’s jurisdiction to make adjustive orders but only if certain stringent requirements were met.”
The Court was also referred to the decision of Federal Magistrate Scarlett as he then was in Garra-Marsh v Garra-Marsh No 3 [2012] FMCAfam 1144. Having considered the provisions of the Assessment Act in relation to Binding Child Support Agreements, His Honour held at paragraph [49] as follows:
[49] “It seems clear that, considering whether or not the agreement between the parties is a Binding Child Support Agreement, the Court should apply the reasoning in Black v Black and require that there should be strict compliance with the statutory requirements.”
It is therefore submitted on behalf of the Appellant that Binding Child Support Agreements require statements that the parties have received certain advice about what a Binding Child Support Agreement is and the advantages and disadvantages of entering into a Binding Child Support Agreement and that there be certification of such advice.
The Appellant submits that in this matter a reading of the agreement clearly show the Certificates of Legal Advice and Statements of Legal Advice do not on their face show that the parties were given advice as to the effect of the agreement and the advantages and disadvantages of the agreement as if it were a Binding Child Support Agreement. Rather they clearly state that the advice was given only in relation to s 90UD of the Family Law Act. This is because it says in bold at the top of every page including the page containing the Certificates of Legal Advice “Section 90UD Financial Agreement". Recital A and Clause 13 of the agreement expressly state it to be an agreement made pursuant to the Family Law Act and more particularly pursuant to s 90UD of the Family Law Act. The agreement is headed on every page “Section 90UD Financial Agreement”.
Whilst agreeing that the Tribunal is correct when it states in paragraph [43] of its decision that there is no requirement in s 80C and subsection 84(5) of the Assessment Act that the agreement expressly state that it is made pursuant to the Assessment Act, by having the agreement and the certificates expressly made pursuant to s 90UD of the Family Law Act, the Statements and Certificates of Legal Advice expressly exclude compliance with s 80C in that they do not give advice about a Binding Child Support Agreement.
If the Court accepts strict compliance with the Assessment Act is required of the parties when entering into a Binding Child Support Agreement it is submitted on behalf of the Appellant it was not open to the Tribunal to infer from the Statement of Legal Advice and/or certificates that such advice was given in relation to child support when no such reference existed in either of the certificates or in the agreement as a whole.
It is therefore submitted that as ss 80CC(2)(c) and 80CC(2)(d) have not been complied with, the document cannot be a Binding Child Support Agreement and the Tribunal erred in concluding that the Certificates of Legal Advice complied with the requirements of the Assessment Act.
Second Respondent’s submissions
The Second Respondent argues that the administrative context of ss 80CC(2)(c) and 80CC(2)(d) is relevant as it is readily apparent from their terms that those sections are evidential rather than substantive.
The Second Respondent argues that all s 80CC(2)(c) requires is “a statement to the effect” as is then set out in the subsection. It was then submitted that “the effect” refers only to the matters set out in s80C(2)(c)(i) and (ii) and does not require a statement to the effect that the relevant advice was given in relation to the agreement as a “Binding Child Support Agreement”.
Whilst accepting that the agreement had “Section 90UD Financial Agreement” printed on every page and that Recital A and Clause 13 reads “This Agreement is made under s 90UD of the Family Law Act”, the Second Respondent submits that the Statements of Legal Advice and certificates were not otherwise limited in their terms. It is further argued that the relevant advice is not only to “the effect” required by s 80C(2), but uses identical language to s 80C(2) of the Assessment Act.
It is submitted that to reach the construction of the statements and certificates urged by the Appellant, it would require reference to the agreement to which the statements and certificates refer, that a process of construction of the agreement be undertaken and that the agreement be construed as being an agreement for the purposes of s 90UD of the Family Law Act only. The Second Respondent argues that to impose such a requirement on the Registrar (or the Tribunal on review), when presented with an apparently confirming statement and certificate utilising the requisite statutory language would defeat the clear administrative intent of s 82(2) of the Assessment Act.
Finally, the Second Respondent highlighted that s 84(5) of the Assessment Act permits documents to be both a Binding Child Support Agreement and a Financial Agreement under the Family Law Act. Section 90UD(1)(c) of the Family Law Act requires that a Financial Agreement must state it is expressly made under s 90UD. There is no requirement under the Assessment Act that a Binding Child Support Agreement is expressly made under a section of the Assessment Act. It is argued therefore that every document that is both a Binding Child Support Agreement and a Financial Agreement under s 90UD must state that it is a Financial Agreement under s 90UD of the Family Law Act if it is to comply with the Family Law Act but no similar statement is required for a Binding Child Support Agreement to comply with the Assessment Act.
The Second Respondent argues that the practical consequence of accepting the Appellant’s construction would be to require every Binding Child Support Agreement that is also a Financial Agreement to specifically state that it is a Binding Child Support Agreement. The Second Respondent argues that this is not a requirement contained in the Assessment Act, i.e. that the agreement must specifically state that it is a Child Support Agreement, and that the Court should be slow to adopt the construction which implies that requirement.
Conclusion
As set out in paragraph [132] of this Judgment, the argument of the Second Respondent that the proper construction of Part 6 of the Assessment Act shows it to be an administrative process determined by the presence of objectively determinable matters that are set out in ss 80(2) and 81(2) of the Act is rejected.
Where the jurisdiction of the Court is to be ousted as is the situation in relation to a Financial Agreement or a party’s recourse to a legislatively determined formula to the assessment of child support and/or capacity to have variations on that assessment determined by recourse to the legislation is to be ousted, the Parliament clearly set out the requirement in both the Family Law Act and the Assessment Act that parties obtain independent legal advice before entering into any agreement that has that effect.
For these reasons, I reject the submissions of the Second Respondent that the Registrar (or the Tribunal on review) when presented with an apparently conforming statement and certificate utilising the language of s 80C(2) of the Assessment Act is not required to have reference to the agreement to which the statements and certificates refer in order to satisfy itself that the parties have received advice that specifically related to the impact on them of entering into a Binding Child Support Agreement.
In this matter the Appellant attempted to argue before the Tribunal that the parties were only given advice in relation to their rights and the advantages and disadvantages of the agreement as it related to the Family Law Act and not as they related to child support (see paragraph [26] of the Reasons for Decision, as set out in paragraph [26] of this judgment).
In paragraph [30] of its decision, the Tribunal set out the precise wording of the Statements of Legal Advice signed by the parties. The Tribunal made no reference to the heading of the document at the top of the page containing the Statements of Legal Advice which read “Section 90UD Financial Agreement”. Having noted that the statements accorded with the wording of ss 80C(2)(c)(i) and 80C(2)(c)(ii) they found that the requirements as set out in s 80C(2)(c) of the Assessment Act were met.
In paragraph [33] of its decision the Tribunal noted that the annexure signed by each of the parties’ legal advisors contained in the agreement met the requirement of s 80C(2)(d).
In paragraph [44] of their reasons the Tribunal acknowledges that the Appellant’s legal representatives submitted that the required legal advice under the Assessment Act had not been given as the legal advice given had been in relation to the Family Law Act only. The reasons state “the Tribunal did not consider it appropriate to look behind the legal advice given, nor question the sufficiency of the legal advice provided to the parties about their respective rights and obligations, again having regard to the approach taken in the matter of Nettleship (supra) referred to above.”
The Tribunal was of the view that the decision in Nettleship (supra) stands for the principle that the question of whether an agreement is a Binding Child Support Agreement under the Assessment Act is determined by looking at the “form and content” of the agreement. My finding that Nettleship (supra) does not stand for that proposition is set out in paragraphs [113-119] of this Judgment.
A certificate or Statement of Independent Legal Advice in the context of a Binding Financial Agreement was considered by the Full Court in the matter of Hoult v Hoult [2013] FamCAFC 109.
Justice Thackary at paragraph [96] of Hoult (supra) held that the certificate when read with Recital N (my emphasis) should have been treated as prima facie evidence of compliance with the legal advice component of s 90G(1).
Again in paragraph [98] his Honour held the inference properly to be drawn from the certificate read with the Recital (my emphasis) is that the advice required by s 90G had been given, even though there was no evidence of the content of that advice.
The Full Court in the matter of Logan v Logan [2013] FamCAFC 151 were, deciding whether a Binding Financial Agreement should be set aside on the basis that a party had not received the requisite legal advice. Their Honours cited with approval the Full Court decision in Hoult (supra). In paragraph [49] their Honours held that in relation to Hoult (supra):
“Their Honours were ad idem that the certificate given by the solicitor must be treated at least as prima facie evidence of compliance with the requirement to provide legal advice. Further, that is bolstered by the presence in a financial agreement of recitals such as appeared in the agreement in this case, namely in recitals O, P, Q and R, which in effect confirmed that the requisite legal advice was given.”
Their Honours then said in paragraph [50]:
“Applying the principles emanating from Hoult, what the reliance by the husband on the certificate, and the recitals, does is satisfy the initial onus on the husband (that the requisite legal advice has been given).”
In circumstances where I have found that the principles of law and equity apply to Binding Child Support Agreements and that the manner in which an agreement is accepted as a Binding Child Support Agreement is more than an administrative process, it was incumbent upon the Tribunal on review to look at the agreement as a whole, including the recitals, to satisfy itself that the legal advice given not only related to the effect of the agreement on the rights of the parties and the advantages and disadvantages of the agreement as a Binding Financial Agreement under Part VIII AB of the Family Law Act, but also related to the effect of the agreement on the parties’ rights and the advantages and disadvantages of the agreement as a Binding Financial Agreement under Part 6 of the Assessment Act as the parties’ rights and the advantages and disadvantages of the agreement are clearly very different depending upon which agreement the advice is being given for.
Whilst there is no statutory requirement under the Assessment Act that a Binding Child Support Agreement specifically state that it is made pursuant to Part 6 of the Assessment Act and that a Binding Child Support Agreement can be part of a Financial Agreement, the Tribunal had an obligation when this matter was raised by the Applicant to read the agreement as a whole to determine if on its face the Tribunal could be satisfied the advice given was the effects of the document as both a Financial Agreement under the Family Law Act and a Binding Child Support Agreement under the Assessment Act.
As was set out in paragraphs [161] and [163] herein, the Full Court in both Hoult (supra) and Logan v Logan (supra) held that a Certificate is prima facie evidence there has been compliance with the legislative requirements for legal advice under s 90G of the Family Law Act. However in both matters the Court specifically stated that this is bolstered/supported by the presence of recitals that support that conclusion.
Recitals A and J of the agreement signed by the parties read as follows:
A. This agreement is made under Section 90UD of the Family Law 1975 (Act);
…
J. The parties desire:
(i)to sever their financial relationship and to finalise their financial rights and responsibilities in relation to each other;
(ii)to exclude as far as is practicable the property adjustment and maintenance provisions of the Act; and
(iii)To take advantage of the provisions of Part VIIIAB of the Act to finalise all financial issues arising from their de facto relationship
Recital G sets out in full details the manner in which the parties had agreed to divide their assets, financial resources and liabilities.
Paragraph 1 of the body of the agreement incorporates the recitals and schedules in the agreement into the body of the agreement. Despite this, the body of the agreement reiterates and expands on the matters contained in Recital G.
In comparison the matters set out in Recital H relating to the care and support of the parties’ son are not again set out or expanded upon in the body of the agreement.
The document is clearly labelled “Section 90UD Financial Agreement”. Every page of the document is headed “Section 90UD Financial Agreement” including the pages containing each parties’ statement of legal advice.
When the document is read as a whole, and more relevantly when the recitals and the body of the document are read as a whole, I am of the view that there are more than sufficient reasons for the Tribunal to have found that the prima facie inference arising from the Certificates that the requisite legal advice had been given to the document as both a Binding Financial Agreement and a Binding Child Support Agreement had been overturned and that the legal advice given only related to the document as a Financial Agreement under the Family Law Act .
For these reasons, ground 2 of the Appeal is upheld.
Ground of appeal (3): The Tribunal erred in principle in failing to adequately consider the nature and extent of the legal advice actually provided to the parties in relation to the provisions of the agreement relating to child support
Appellant’s submissions
The Appellant referred the Court to the Full Court decision of Hoult (supra) in which it was held that whilst the correctness of the legal advice given to the parties pursuant to s 90G is not an issue for the Court, it is nevertheless required that the parties receive the advice listed in the Act. In paragraphs [100] and [120] of Hoult (supra) the Court held that the Court must be satisfied that the advice referred to in s 90G(1)(b) has actually been given.
The Appellant also referred to the Full Court decision in Logan (supra) where it was held in paragraphs [50] and [51] as follows:
“[50]Applying the principles emanating from Hoult, what the reliance by the husband on the certificate, and the recitals, does is satisfy the initial onus on the husband, and passes the evidentiary burden to the wife. The certificate gave rise to “an inference, a presumption of fact or a presumption hominis” (paragraph 97) that the requisite advice has been. The question then becomes whether the wife has adduced sufficient evidence to displace that inference.
[51]As was explained in Hoult in paragraphs 101 and 279, that does not then require an inquiry into the content of the legal advice, but just as to whether the advice was given”
It is submitted on behalf of the Appellant that in the context of Binding Child Support Agreements the agreement must include certificates of legal advice stating that advice was given to the parties as to the effect of the agreement on their respective rights and to the advantages and disadvantages at the time that the advice was provided to the making of the agreement.
As the agreement in question is a Binding Child Support Agreement under the Assessment Act, the advice given has to be in relation to the effect of the agreement as it relates to the parties’ rights under that Act and the advantages and disadvantages of the agreement in the context of child support.
It is submitted that as per Hoult (supra), certificates of legal advice provide a rebuttable presumption that the parties were provided the requisite advice. It is however open to a party to rebut that presumption by providing evidence that the requisite advice was not in fact given.
The Appellant submits that the Tribunal refused to consider whether the advice given to the parties related specifically to the agreement as a Binding Child Support Agreement under the Assessment Act. This is evidenced by paragraph [44] of the reasons of the Tribunal which are set out in paragraph [158] of this Judgment.
It is submitted in circumstances where the certificates do not purport to give advice pursuant to the Assessment Act, where they are expressly stated to be in relation to s 90UD of the Family Law Act and where the Appellant sought to place evidence before the Tribunal that he had not been provided with any advice as to his rights and the advantages and disadvantages of the agreement as a Binding Child Support Agreement under the Assessment Act, it was incumbent on the Tribunal to determine whether the nature and extent of the advice (but not whether the advice was correct) was in fact given.
The Appellant therefore argues that the failure of the Tribunal to make that factual determination on the issue is an error of law.
Second Respondent’s submissions
It is submitted on behalf of the Second Respondent, consistent with the submissions made in relation to appeal grounds 1 and 2, that s 80C(2)(a)-(f) of the Assessment Act sets out the minimum mandatory and exhaustive requirements that an agreement must meet in order to be binding on the parties for the purposes of s 80C(1)(a) of the Assessment Act. It is therefore argued there is no requirement under the Assessment Act that the parties be given advice of a particular nature or to a particular extent.
It is further submitted on behalf of the Second Respondent that the requirements of the provisions of s 80C(2)(a)-(f) of the Assessment Act are evidential and not substantive and that as far as legal advice is concerned, the certificate and statement are not only a mandatory requirement but a sufficient requirement to satisfy s 80C(2)(c).
The Second Respondent argues that reference to authorities in relation to Financial Agreements do not assist the Court in determining this issue because of the different wording relating to advice in the Family Law Act and the Assessment Act.
Somewhat pithily, in oral submissions, Counsel for the Second Respondent argued there is no requirement in the Assessment Act for the parties to “have actually received legal advice”. Counsel argues that this is evidenced by the absence of the specific requirement in s 80C of the Assessment Act that is contained in the Family Law Act that a Financial Agreement is binding on the parties to the agreement if and only if before signing the agreement each party was provided with independent legal advice of the type enunciated in the Family Law Act.
Appellant Counsel’s rebuttal
In response to the Second Respondent’s submissions, Counsel for the Appellant referred the Court to the Explanatory Memorandum that accompanied the Child Support Legislation Amendments (Reform of the Child Support Scheme – New Formula and Other Measures Bill of 2008). At the end of page 150 of the Explanatory Memorandum it states in relation to Binding Child Support Agreements:
“Each party to the agreement must have received legal advice before entering into the agreement and must also receive legal advice before terminating the agreement. This change brings the child support arrangements in relation to binding agreements into harmony with financial agreements concerning property division and spousal maintenance under the Family Law Act. Placing these amendments into the child support legislation means that separated parents who are not married as well as those parents who were married, can make binding agreements about their child support arrangements. The amount agreed on by the parties may be more or less than the amount that the payer would be assessed as paying under the notional assessment.”
Counsel for the Appellant then advised the Court that the Explanatory Memorandum said the following in relation to limited agreements.
“Parents who have not had legal advice about the effect of the Child Support Agreement can enter a limited Child Support Agreement. In order to provide safeguards on parents’ interests, in the absence of legal advice, limited agreements are of limited duration and can be terminated and set aside by the Court in certain circumstances. Limited agreements can only be terminated by either parent if the notional amount of child support payable changed by more than 15% or after 3 years.”
Counsel for the Appellant therefore submitted that the intention of Parliament is clearly analogous with that of the legislation relating to Financial Agreements and in particular that parties were not to enter into a Binding Child Support Agreement and forego their legal rights and entitlements under the Assessment Act without the benefit of appropriate advice as to the impact of any agreement that they were entering into as failing that legal advice they were only able to enter into a Limited Child Support Agreement.
Conclusion
I reject out of hand the submissions made on behalf of the Second Respondent that there is no requirement under s 80C(2) of the Assessment Act for the parties to actually receive legal advice and that all that is needed to comply with s 80(2)(c) is for there to be a Certificate in the correct form for compliance with the Assessment Act.
Not only does the Explanatory Memorandum make it very clear that it was the intention of Parliament that parties have the benefit of legal advice on the impact of the agreement on their entitlements under the child support legislation before entering into a Binding Child Support Agreement, this is also borne out in s 80A of the Assessment Act which sets out a simplified outline of Part 6 as follows:
· Parents and non-parent carers of a child can, using a child support agreement, agree between themselves the child support that is to be payable for the child.
· There are two sorts of agreements. The first is a Binding Child Support Agreement. Each party to the agreement must have received legal advice before entering the agreement…
· The second sort of agreement is a limited Child Support Agreement.
As has been set out in this judgment, I reject the submissions of the Second Respondent that Part 6 of the Assessment Act should be constructed on the basis that it is an administrative process and that the requirements are evidential and not substantive.
Whilst the wording of s 80C(2)(c) of the Assessment Act differs to the wording contained in ss 90G and 90UJ of the Family Law Act, I am satisfied both Acts require the provision of legal advice of the type enumerated that specifically relates to the legislation under which the agreement is made.
The decisions of the Full Court in Hoult (supra) and Logan (supra) make it clear that whilst it is inappropriate for a Court to make enquiries as to the quality of the advice given, the Court, if the matter is raised before it, must satisfy itself such advice was actually given.
In this matter, where the Appellant quite clearly raised with the Tribunal that at no time was he given advice in relation to the effect of his rights or the advantages and disadvantages of the agreement in the context of child support, the Tribunal had an obligation to hear evidence on that matter and make a finding of fact accordingly.
The Tribunal’s failure to do so was an error of law and as such this ground of appeal is upheld.
Ground of appeal (4): The Tribunal erred in failing to consider that the provisions relation to child support as set out in the Section 90UD Financial Agreement failed to comply with Section 84(6) of the Child Support (Assessment) Act 1989, and accordingly the child support provisions ought not have been determined to constitute a Binding Child Support Agreement
Appellant and Second Respondent’s written submissions
The written submissions of the Appellant and Second Respondent set out clearly and succinctly their arguments in relation to this ground. Any summary or attempted summary by me of those submissions would not do them service. Accordingly, in relation to this ground, I set out the written submissions of both the Appellant and Second Respondent in their entirety. They are as follows:
Appellant’s written submissions
35. Section 84 of the Assessment Act lists the provisions which may be included in a child support agreement. Section 84(1) relevantly provides as follows:
(1) An agreement is a child support agreement only if it includes one or more of the following kinds of provisions:
(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 (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;
36. Subsection 84(6) further provides that a non-periodic payment provision must include a statement that the annual rate of child support payable is to be reduced by a specified amount that represents an annual value of the child support payable; or by 100% or another specified percentage that is less than 100%.
37. Section 84(6) mirrors a requirement in s 125 of the Assessment Act for the Court to specify the relationship between periodic and non-periodic payments when making orders for non-periodic payments. The relationship between ss 84(6) and 125 is expressly noted by the legislature in a note to s 84(6). The note states that:
Note: Non-periodic payment provisions are taken to have effect as if they were a statement made by a court under section 125 in an order made under section 124 (see subsection 95(3)).
38. In Rankin & Rankin [2017] FamCAFC 29, the Full Court considered a failure by the trial judge to comply with s 125 of the Assessment Act. While the trial judge had ordered the payer to pay both periodic child support and non-periodic child support. The Full Court noted the mandatory nature of the section and held:
[88] The terms of the section have not been complied with. Thus, whilst this issue was not raised before the primary judge, we cannot ignore the mandatory nature of the section.
39. The Full Court considered whether it was possible to rectify the failure to include a s 125 order and considered that it was not open to resolve the matter in such a manner. The Full Court considered that both the orders in relation to the non-periodic payments and the periodic payments had to be set aside.
40. The requirement in s 84(6) in relation to non-periodic payments in child support is expressly akin to the requirement in s 125 in relation to orders of the Court. It follows that a failure to comply with s 84(6) of the Assessment Act will vitiate both any periodic payment provisions as well as any non-periodic payment provisions. It is not open for either the Registrar, the Tribunal, or the Court to rectify the Agreement to import how the non-periodic payments will relate to the periodic payments.
41. In the present case, the relevant recital of the Agreement provides for:
41.1. A periodic amount of $900 per week indexed ((Recital H(ii));
41.2. Non-periodic amounts for the child’s school fees, books and tuition ((Recital H(iii));
41.3. Non-periodic amounts for the child’s medical and dental costs ((Recital H(iv)).
42. Thus, if the Agreement were considered to be a child support agreement, as the purported Agreement includes non-periodic provisions, the agreement would need to meet the mandatory requirements of s 84(6). The Agreement does not do so.
43. The Tribunal erroneously separated the issue in relation to s 84(6) from the validity of the Agreement. At para 40 of the Reasons for Decision, the Tribunal sated:
[40] … As to the compliance
44. However, the validity of the Agreement in its entirety is directly relevant to lack of the s 84(6) provision and should therefore had been considered.
45. In such circumstances, the purported provisions (being Recital H(ii), (iii) and (iv)) are vitiated. As there are no other provisions which relate to child support, there are no valid provisions of the type listed in s 84 of the Assessment Act. The Agreement therefore fails to comply with the requirements of s 81(2)(c).
Second Respondent’s written submissions
46. The Registrar submits that the Appellant’s ground four, premised on non-compliance with s 84(6) of the Assessment Act, is not made out as s 84(6) was not engaged and had no application in the present case.
47. Section 84(6) of the Assessment Act imposes additional requirements in relation to a provision of the kind set out at s 84(1)(d) of the Assessment Act – a “non-periodic payment provision” – that is, a provision:
(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;
48. Although the provisions at recital H(iii) and (iv) of the Agreement provided for child support otherwise than in the form of periodic amounts (per s 84(1)(d)(i) of the Assessment Act), there was no provision for the annual rate of child support payable for the child under any relevant administrative assessment to be reduced in the manner specified under subsection (6) (per s 84(1)(d)(ii) of the Assessment Act).
49. The two requirements for a non-periodic payment provision at s 84(1)(d) of the Assessment Act are conjunctive. In the absence of the characteristics at s 84(1)(d)(ii) (incorporating s 84(6)), the provisions at recital H(iii) and (iv) simply were not non-periodic payment provisions.
50. It was only necessary for the purposes of s 84(1) of the Assessment Act that the Agreement contain one provision of the sort set out at s 84(1)(a)-(g) of the Assessment Act. The Tribunal found that the provision at recital H(ii) was such a provision.48 The Appellant does not challenge that finding specifically.
51. What then of the provisions at recitals H(iii) and (iv) of the Agreement? If the provisions at recital H(iii) and (iv) did not meet the description of one or more of the provisions at s 84(1)(a)-(g) (including s 84(6) for the purposes of the provision at s 84(1)(d)(ii)) then the consequence was simply that it was not a provision of a kind referred to in s 84(1), and it did not have effect for the purposes of the Assessment Act.49 It was then otherwise effective on its own terms.50
52. It is therefore submitted that ground four is not made out.
Appellant’s oral submissions
In his oral submissions, Counsel for the Appellant submitted that s 84 of the Assessment Act sets out the kinds of provisions that can be included in a Child Support Agreement. This includes provisions for both the payment of periodic amounts and non-periodic payments.
It is submitted that where there is a provision that provides for a non-periodic payment, s 84(1)(d)(ii) of the Assessment Act requires that there be a statement in the agreement that complies with s 84(6) of the Act. Section 84(6) requires that statement to set out how the non-periodic payment affects the annual rate of periodic child support set out in the agreement.
Counsel for the Appellant referred the Court to the Full Court decision of Rankin v Rankin [2017] FamCAFC 29. In that matter the Judge at first instance made orders that set the father’s income for the assessment of periodic child support. In addition, the Judge also made orders under s 124 of the Assessment Act for the father to make non-periodic payments of child support. The trial Judge however failed to make any orders under s 125 of the Assessment Act setting out the impact of the non-periodic payments on the periodic payments (it is noted s 84(6) of the Assessment Act is in the same terms as s 125).
In their decision the Full Court held that as the terms of s 125 are mandatory and had not been complied with by the trial Judge, the orders for both periodic payments and non-periodic payments had to be set aside.
Counsel for the Appellant therefore argued that the failure of the agreement to include provisions as required under ss 84(1)(d)(ii) and 84(6) means that in accordance with Rankin (supra) the provisions for periodic payment must also fail leaving no provisions in the agreement that comply with s 84(1). Therefore there is no Binding Child Support Agreement.
Second Respondent’s oral submissions
The Second Respondent walked the Court through the agreement and the requirements of s 84 of the Assessment Act. It was put to the Court that Recital H(ii) of the agreement meets the requirements of s 84(1)(a). Recitals H(iii) and H(iv) meet the requirements of s 84(1)(d)(i) but do not meet the requirements of s 84(1)(d)(ii). Therefore Recitals H(iii) and H(iv) do not engage s 84(1) of the Act. Accordingly, Recitals H(iii) and H(iv) cannot form part of the Child Support Agreement for the purposes of the Assessment Act.
Counsel for the Second Respondent submits that the consequence of this is that s 84(3) of the Assessment Act comes into play. Section 84(3) states “if the agreement includes provisions of a kind not referred to in subsection (1) those provisions do not have effect for the purposes of this Act”. Counsel for the Second Respondent then argues that s 84(4) comes into effect which says that “subsection (3) does not affect the operation of provisions of the kind referred to in that section for any other purpose”.
Counsel for the Second Respondent therefore argues that in these circumstances the Recitals H(iii) and H(iv) are excised from the agreement but Recital H(i) remains standing as s 84(1) of the Assessment Act provides that an agreement is a Child Support Agreement if it includes one of the provisions set out under s 81. As Recital H(ii) complies with the Assessment Act and is not excised then that Recital remains standing and the agreement can be registered as a Binding Child Support Agreement.
Therefore the finding of the Tribunal as set out in paragraph [40] of their Reasons for Decision that:
“…it is clear that the agreement provided for child support to be paid in the form of periodic amounts and therefore meets Section 84 of the Assessment Act”
is correct and that this ground is not made out.
Rebuttal by Appellant’s Counsel
In response to the Second Respondent’s oral submissions, Counsel for the Appellant specifically drew the Court’s attention to the notation to s 84(6) of the Assessment Act which reads:
“non-periodic payment provisions are taken to have effect as if they were a statement made by a Court under s 125 in an order made under s 124 (see subsection 95(3))”.
The Court asked the Counsel for the Appellant, given ss 84D(2) and 84(6) make reference to a requirement that there be a statement about the impact of the non-periodic payment on the annual rate of child support payable under the administrative assessment, how the $900.00 periodic payment in Recital H(i) is an administrative assessment given there was no assessment of child support when the agreement was signed. Counsel referred the Court to s 95 of the Assessment Act which under the heading “Effect of certain provisions of accepted child support agreements” reads:
“(1) this section applies in relation to a Child Support Agreement that has been accepted by the Registrar.
(2) If the agreement includes:
(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;…
the provisions have effect, for the purposes of Part 5 and section 142, as if they were an order made by consent by a court under Division 4 of Part 7.
Counsel for the Appellant therefore argues that the figure of $900 per week by way of periodic payment contained in H(ii) is an assessment under the Assessment Act for the purposes of ss 84(1)(d)(ii) and 84(6).
Counsel for the Appellant noted that in Rankin (supra) the Judge at first instance made orders that provided the basis upon which the assessment for the amount of periodic child support was to be paid by the husband. In addition the Judge made orders for the husband to make non-periodic payments pursuant to s 124 of the Assessment Act. Her Honour however made no order under s 125 of the Assessment Act. Counsel highlighted that s 125 is in very similar terms to ss 84(1)(d)(ii) and 84(6).
The Full Court in Rankin (supra) held that s 125 is mandatory and that because there was no statement by the Judge at first instance pursuant to s 125, it was impossible for the Full Court to determine the correlation between the order for periodic payments and the non-periodic payments and both those orders therefore had to be set aside.
Counsel for the Appellant therefore argues that it cannot be seen that it was the intention of Parliament by way of ss 80(3) and 80(4) of the Assessment Act to leave in place only one portion of an agreement that the parties reached without any exploration of the relationship between the excised provisions and the provisions of the agreement that comply with the Assessment Act as to do so would defeat the purpose of s 84(6).
Counsel for the Appellant argues that the decision of the Full Court in Rankin (supra) is binding on the Tribunal and the manner in which it deals with this issue. Having quite properly found that Recitals H(iii) and (iv) did not comply with ss 84(1)(d)(ii) and 84(6) of the Assessment Act as they did not specify how the annual rate of child support impacted the periodic payment provided for in Recital H(ii), the Tribunal was left with no option but to set aside the provisions for periodic payment contained in Recital H(ii). Having set aside Recitals H(ii), H(iii) and H(iv), there is no remaining provision in the agreement that complies with s 84(1) of the Assessment Act.
Conclusion
It is apparent from the Reasons for Decision of the Tribunal that they formed the view that the provisions of the agreement that did not comply with s 84 could be excised from the provisions of the agreement that did comply with the agreement such that the agreement could be accepted on the basis of that aspect of it which related to periodic payments only. This was on the basis that s 84 of the Assessment Act only requires one of the factors listed under s 84(1) to be contained in an agreement for it to be a Binding Child Support Agreement.
In paragraph [40] of their reasons, the Tribunal state:
“As to the compliance of the document with subsection 84(6) of the Assessment Act, the Tribunal noted that this aspect of the interpretation of the document is currently before the Department in the form of a claim for non-agency payments; the Tribunal accordingly considered that this is a separate decision by the Department that is not directly before the Tribunal in this matter, noting that subsection 84(1) of the Assessment Act only requires one of the stated provisions to be included for an agreement to be a child support agreement.”
What this paragraph means is unknown. Perhaps the First Respondent is pursuing the payment or non-payment of the non-periodic payments through other avenues available under the Assessment Act. The difficulty with the Tribunal saying it does not have to consider this aspect of the agreement because there is to be a separate decision of the Department is the Tribunal fails to understand the mandatory requirements of ss 84(d)(ii) and 84(6) and the consequences of non-compliance. If for example the Appellant was found not to be required to make the non-periodic payments set out in Recitals H(ii) and H(iv) under whatever this other process is, then the First Respondent would have no recourse to challenge or have set aside the amount of the periodic payment as being inadequate given the narrow provisions for the termination or the setting aside of a Binding Child Support Agreement that is provided for under ss 80D or 136 of the Assessment Act.
The failure to comply with ss 84(1)(d)(ii) and 84(6) is not remedied by excising those provisions of the agreement that do not comply with those sections and leaving the provision for periodic payments standing alone. Such interpretation would make ss 84(1)(d)(ii) and 84(6) unnecessary and contrary to their purpose.
As was decided in Rankin (supra) there is a requirement under s 125 of the Assessment Act for any orders that provide for both periodic and non-periodic payments to clearly set out the interrelationship between the two. That requirement is mandatory and a failure to comply with that provision requires the orders for both periodic and non-periodic payments to be set aside.
Where a Child Support Agreement has provisions for both periodic and non-periodic payments, ss 84(1)(d)(ii) and 84(6), like s 125, set a mandatory requirement that the agreement clearly set out the correlations between the two. As was held in Rankin (supra) a failure to do so results in those sections of the agreement that provide for both periodic and non-periodic payments to be excised from the agreement. Sections 80(3) and (4) should not be interpreted as was done by the Tribunal, to somehow override the requirements of ss 84(1)(d)(ii) and 84(6).
Where a Binding Child Support Agreement makes provision for both periodic payments and non-periodic payments a failure to comply with ss 84(1)(d)(ii) and 84(6) has the effect of rendering not only the paragraphs relating to non-periodic payments inappropriate for inclusion in the agreement but also has the effect of not only making those provisions of the agreement relating to non-periodic payment provisions in the agreement incapable of being included in a Binding Child Support Agreement, it also has the effect of making the provisions for periodic payment unable to be included in the Binding Child Support Agreement for the reasons set out in the decision of the Full Court in Rankin (supra).
For those reasons, ground 4 of the Appeal is upheld.
Orders to be made
Counsel for the Appellant and Second Respondent were in agreement that the Court has the power under both the AAT Act and the Federal Circuit Court of Australia Act 1999 (Cth) to make a declarative order that the agreement in this case could not be a Binding Child Support Agreement under the Assessment Act.
Further, both Counsel for the Appellant and Second Respondent agree that if either of grounds 2 or 4 of the Appeal are upheld there would be little utility in returning the matter to the Tribunal for reconsideration and rather the Court should make the declarative order as sought by the Appellant.
Having upheld all grounds of the Appeal including grounds 2 and 4, the Court will make the declarative order as sought by the Appellant and not remit the matter to the Tribunal for reconsideration.
I certify that the preceding two-hundred and twenty four (224) paragraphs are a true copy of the reasons for judgment of Judge Bender
Associate:
Date: 18 March 2021
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