W and C - [2002] FMCAfam 166

FEDERAL MAGISTRATES COURT OF AUSTRALIA

W & C

[2002] FMCA fam 166

FAMILY LAW – Child support – registration of maintenance agreement – validity of registration and collection of child support pursuant to Child Support (Assessment) Act.

Applicant:

G B W

Respondent:

E M C

File No:

ZE 834 of 2002

Delivered on:

17 May 2002

Delivered at:

Melbourne

Hearing Date:

17 May 2002

Judgment of:

Bryant CFM

REPRESENTATION

Counsel for the Applicant:

Mr W appeared on his own behalf

Address for the Applicant:

Mr G W
30 S Street
F VIC

Counsel for the Respondent:

Ms Small

Solicitors for the Respondent:

Slater & Gordon
Solicitors
533 Little Lonsdale Street
MELBOURNE VIC 3000

ORDERS

IT IS DECLARED

That the registration of the Child Support Agreement between the parties and dated the 12^th day of July 1995 pursuant to the Child Support (Registration and Collection) Act 1988 is invalid.

IT IS ORDERED

That the Application the Husband filed on the 15^th day of April 2002 be otherwise dismissed.

IT IS DIRECTED

That the Applications be removed from the Pending Cases list.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
MELBOURNE

ZE 834 of 2002

G B W

Applicant

And

E M C

Respondent

REASONS FOR JUDGMENT

Background

In this matter the father and the mother are the parents of a child, B, aged 12. They separated in 1991 and entered into a child support agreement on 12 July 1995. The agreement set out the father's obligation to pay child support to the mother for the period 1 July 1995 to 1 January 2002. The father agreed to pay to the mother the following:
(a)in the year 1995-96 at the rate of $100 per week payable monthly in the sum of $434, and
(b)in each subsequent child support year at the previous annual rate increased by 5 per cent each year.
The agreement expired earlier this year.
Paragraph 5 of the agreement said:
“That each party shall do all things reasonably required to achieve acceptance of this agreement by the child support registrar pursuant to Part 6 of the Child Support Assessment Act 1989 and each party shall be at liberty to register this agreement at any time under the Family Law Act of 1975.”
The precise provision for payment in clause 2 said that:
“Commencing immediately and for the operation of this agreement the husband shall pay (a) in the child support year 1995-96 child support directly to the wife at a rate of $100 per week, and; (b) in each subsequent year child support directly to the wife at a rate in the previous year increased by 5 per cent so that the rate increases each child support year by 5 per cent on the previous year.”
Almost immediately the mother had the agreement accepted by the Child Support Agency (“the Agency”) and it was accepted on 24 July 1995 under the provisions of the Child Support Assessment Act. It was subsequently registered for collection by the Child Support Agency under the Child Support Registration and Collection Act 1988.
The father seeks to have the court determine that the registration of the agreement under the Registration and Collection Act is invalid and to order all moneys collected by the agency be refunded.
The requirements for the registration of a child support agreement are contained in Part 6, Divisions 2 and 3 of the Child Support Assessment Act. There is no disagreement in this matter that the formal requirements of the Assessment Act as to acceptance were complied with. This was an agreement in writing signed by the parties and provided for the payment of periodic child support for a child to whom the act otherwise applied, by a liable parent.
In 2001 the father sought to challenge the registration of the agreement under the Registration and Collection Act and it would seem from the correspondence perhaps also it’s acceptance under the Assessment Act. He was initially informed by the agency that he was out of time and would have to seek an extension. However, it was subsequently explained to him that the right to object to this decision only came into force on 1 July 1999 and he would have to make application to a court exercising jurisdiction.

The father’s case

The father relies upon two grounds as to the invalidity of the registration and collection of child support by the agency. The first is that the agreement was not registrable under the Registration and Collection Act and secondly, that the provisions of the agreement itself which required payment directly to the wife, precluded any such collection by the agency.
Section 17 of the Registration and Collection Act provides that:
“Subject to section 19 a liability is a registrable maintenance liability if (a) it is a liability of (1) a parent of a child to pay a periodic amount for the maintenance of the child; or (2) a step‑parent of a child to pay a periodic amount for the maintenance of a child, and; (b) either of the following subparagraphs applies: (1) it arises under a court order or court-registered maintenance agreement; (2) it is a collection agency maintenance liability.”
It is clear in this case that it is not a collection agency maintenance liability not does it arise under a court order. Therefore, to be registrable under section 17 it must be a court-registered maintenance agreement.
In section 4 of the Registration and Collection Act a court-registered maintenance agreement is defined. The definition provides that:
“A court-registered maintenance agreement means a maintenance agreement (a) that has been, (1) registered in or approved by a court under the Family Law Act 1975; (2) sanctioned by a court under paragraph 87(1)(k) of the Matrimonial Causes Act 1959; or (3) registered in or approved by a court under the law of a Territory; (b) that it has not been set aside and has not expired or otherwise ceased to be in force; and (c) the registration, approval or sanction of which has not been revoked or cancelled has not otherwise ceased to be in force.”
Having regard to the definition it is clear that for the agreement to be a court-registered maintenance agreement it must have been registered in a court under the Family Law Act 1975 or registered in a state or territory court.
The father asserts, and it is conceded by the Mother, that the agreement was not registered in a state or territory court, nor in a court under the Family Law Act 1975. That being the case it is clear that the registrar of the Child Support Agency was not entitled to register the agreement pursuant to section 17 of the Registration and Collection Act and I find that the agreement was invalidly registered. To that extent the first ground relied upon by the father is successful.
As to the second ground, that because the agreement provided the payments directly to the wife it could not be collected by the agency, there is no merit in my view in that argument. Most liabilities are expressed to be payable to the recipient of child support, whether they be an order, an agreement or an assessment. In collecting, the agency are acting as agent on behalf of the recipient who is the principal. Accordingly the use of the words "directly to the wife" in the agreement do not preclude in an appropriate case, collection by the agency under the Registration and Collection Act.
The next question is what flows from the finding that the agreement was invalidly registered. The father seeks relief on the basis that the Child Support Agency refund to him all moneys collected. The Full Court of the Family Court of Australia has recently dealt with a similar situation in the case of Child Support Registrar v Z and T (2002) FCA 182. This decision was handed down in March this year and involved a case in which the court found that the agency had assessed child support and then collected it in a case in which there was some doubt about the parentage of the child.
Subsequently it was established that the father was not the parent of the child and there was no liability and never had been a liability. At first instance, the trial judge determined that the Child Support Agency should refund the payment to the payer and the agency appealed the decision to the Full Court who overturned the decision of the trial judge. The Full Court heard that there was no legislative basis for an order against the agency for repayment of money when no liability existed and that the repayment if ordered must be made by the recipient of the money. Recovery of amounts paid where there is no liability is dealt with under section 143 of the Child Support (Assessment) Act.
At paragraph 44 of the judgment, the Full Court said as follows in relation to section 143:
“If the effect of subsection (4) is to deem moneys paid to the Commonwealth to be paid to the ultimate recipient for the purposes of section 143, then it seems to us that that deeming necessarily limits recovery under the section to recovery from the ultimate recipient since he or she is for the purposes of this section the only person to whom the moneys in question were paid.”
Section 143(4) to which they referred says:
“An amount paid to the Commonwealth under section 30 of the Child Support (Registration and Collection) Act 1988 is to be taken for the purposes of this section to have been paid to the person to whom, apart from that section, the amount would have been payable.”
At paragraph 46 the Full Court went on to say:
“The use of the expression "is to be taken" leaves no room for any exceptions or any exercise in discretion. To the contrary, that mandatorily obliges a court to which any application under the section comes, to treat the ultimate recipient as the person to whom the money was paid and therefore is the person from whom it may be recovered.”
They refer in the judgment to the relationship being one of principal and agent wherein the agency is the agent and the principal is the recipient of the funds.
Accordingly, in this case, even though no liability on the part of the father existed, he cannot obtain an order which requires the agency to refund moneys to him, but would of necessity need to obtain that order against the mother. However, having regard to section 143, that remedy is not, in my view, available in this case. Section 143 is headed “Amounts Paid When No Liability To Pay Exists.” Subsection (1) says as follows:
“Where (a) an amount of child support is paid by a person to another person, and (b) the person is not liable or subsequently becomes not liable to pay the amount to the other person, the amount may be recovered in the court having jurisdiction under this act.”
In this case, there was a liability to pay child support to another person. It is true that I have found that the agency were not entitled to collect, but the liability pursuant to the agreement between the father and mother, who was the principal, existed and has always existed and there is no challenge to that. That being the case, in my view, section 143 does not apply and this is not a case where there is no liability to pay.
If there are payments other than child support pursuant to the agreement, which the father has been required to pay, such as penalties and interest raised by the Agency, pursuant to the invalidly registered agreement then that is a matter that he will have to take up with the agency. There is no power under the legislation from where I could order that the penalties be remitted by the agency. That is a matter that he will have to make application to the agency about and if dissatisfied with their response, pursue his administrative law remedies. It is not, however, a matter that I can or should deal with.
That being the case, having indicated my finding that the agreement should not have been registered, I propose to declare the registration of the agreement to be invalid, but otherwise to dismiss the application.
I am satisfied that the father has served the agency with his Applications and that they decided to take no part in the proceedings, although to be fair to them, they have not seen his summary of argument and may not have appreciated what he is seeking. Given the application brought by the husband, that is, for the agency to repay moneys to him, I contemplated whether the matter should be further adjourned to allow the agency to appear. When, however, it became apparent to me that there would be no liability on the part of the agency, it did not appear to me to be necessary to adjourn the matter further and to hear anything from the agency.

I certify that the preceding twenty-five (25) paragraphs are a true copy of the reasons for judgment of Bryant CFM

Associate: Mardi Jarvis

Date: 2 July 2002