FATHER SEEKS FOR THE SETTING ASIDE OF THE BINDING #ChildSupport AGREEMENT AND EXTINGUISHMENT OF ARREARS IN CHILD SUPPORT DUE TO IMPACT OF THE COVID 19 PANDEMIC TO HIS BUSINESS
MARTYN & MARTYN
FAMILY COURT OF AUSTRALIA
[2020] FamCA 526
This case is an Application for orders to set aside the binding child support agreement and to extinguish arrears of child support.
FACTS:
Mr. Martyn (the father) filed an Initiating Application seeking an order setting aside the binding child support agreement between Ms. Martyn (the mother) and him under s136 of the Child Support (Assessment) Act 1989 (Cth) (the CSA Act). In addition to the order sought in the Application filed 13 January 2020, the father sought an order extinguishing the arrears owing as a result of the reduced amount of child support paid since September 2016.
The father filed the Application as the business he owns and operates, which, as a result of the current COVID-19 pandemic, have been made significantly worse by the limitations on international commerce. The father submits that the abrupt closure of international commerce resulted in the loss of 90% of his business, which, as previously noted, manufactures and supplies products to international organisations. The counsel for the father contends that the father would face hardship as a result of the exceptional circumstances effectuated by the COVID-19 pandemic because of his incapacity to afford the child support payments payable according to the Agreement dated 16 August 2012 and submits that the father is unable to meet his obligation under the Agreement to pay approximately $1,550 per month, and has failed to do so since September 2016. The counsel for the father also argued that, in the event that the Court was not satisfied that the Agreement should be set aside, the Court would, nonetheless, suspend the Agreement.
ISSUES:
Whether the Court should set aside or suspend the Agreement for a closed period of time.
Whether or not the Court should extinguish the arrears of child support in the period before the date of the orders.
HELD:
The power for this Court to set aside a binding child support agreement is conferred by s 136(2)(d) of the CSA Act which states If a party has applied under subsection (1), the Court may set aside the Agreement in accordance with the Application if the Court is satisfied, in the case of a binding child support agreement, that because of exceptional circumstances, relating to a party to the Agreement or a child in respect of whom the Agreement is made, that have arisen since the Agreement was made, the applicant or the child will suffer hardship if the Agreement is not set aside.
Also, in Venson & Venson (No 2) [2010] FamCA 963 (“Venson (No 2)”), it was held that the decrease in the profitability of the applicant’s company did warrant the child support agreement being set aside for a closed period of time.
The Court declines to exercise a discretion to suspend rather than set aside the Agreement because there is an understandable absence of evidence as to the likely duration and impact of the COVID-19 pandemic on international commerce. In other words, it is not possible to determine, based on the evidence before the Court, whether it is likely that the father’s business would recover to the extent that he is capable of satisfying the obligation imposed upon him according to the Agreement after any period of suspension. Further, the father’s evidence satisfies the Court that the father does not have access to a property or an alternative financial resource, other than his business, such that it would enable him to meet the obligation prescribed in the Agreement. For these reasons, the Court made an order terminating the Agreement.
However, the Court declines to make the second order sought by the father extinguishing his liability to pay the arrears of child support, according to the Agreement, in the period before the date of these orders. To relieve the father of his obligation to pay arrears of child support according to the Agreement would require the Court to make an order terminating the Agreement as of the date of the Orders made in respect of the Agreement, which is a date considerably earlier than the date that the Court has determined that exceptional circumstances exist justifying the termination of the Agreement. It is contrary to s 136(2)(d) of the CSA Act which provides that in the case of a binding child support agreement, that because of exceptional circumstances, relating to a party to the Agreement or a child in respect of whom the Agreement is made, that have arisen since the Agreement was made, the applicant or the child will suffer hardship if the agreement is not set aside.