Is your Child Support Agreement binding?

In this closer look at Binding Child Support Agreements, let’s follow a real-life mum and dad on their journey to Federal Circuit Court and see if their agreement is actually legally “binding”

So, you thought your Child Support Agreement was binding… ?

Exactly what constitutes a “binding” Child Support Agreement was explored comprehensively in the Family Law case of Piper & Talbot in 2018. A summary of the pertinent facts in this case serves as a loud and clear reminder of the importance of ensuring your Child Support Agreement is prepared by a professional, right from the start.

The Background

• April 2015 – A mum and dad separate their de facto relationship and enter into a Financial Agreement which, among other aspects of the separation, addresses child support.
• March 2018 – The mum applies to the Child Support Register to have the agreement accepted as a “Binding Child Support Agreement”, in line with Section 80C of the Assessment Act.
• May 2018 – The Registrar accepts the agreement as a “Binding Child Support Agreement”.

The Action

• June 2018 – The dad lodges an objection to the Registrar’s decision.
• August 2018 – The objection is disallowed.
• September 2018 – The dad applies to the Administrative Appeals Tribunal (AAT) to have the objection decision reviewed.
• December 2018 – The AAT confirm they will uphold the original decision by the Child Support Register.
• January 2019 – The dad appeals the AAT upheld decision to the Federal Circuit Court, seeking Orders for a declaration that the original Financial Agreement did not constitute a “Binding Child Support Agreement” on the following grounds:

1. 1. The tribunal failed to determine whether there was an agreement between the parties in line with numerous sections of legislation;
   2. The Certificates of Legal Advice accompanying the Financial Agreement did not meet the required standards of the legislation;
   3. The tribunal failed to adequately consider the nature and extent of the legal advice provided to the parties in relation to the child support provisions; and
   4. The Financial Agreement did not comply with the provisions of the relevant child support legislation.

The Decision

The Federal Circuit Court upheld all four grounds of appeal put forward by the dad, with a resounding confirmation that the original Financial Agreement had no legal leg to stand on. An Order was made declaring the Financial Agreement was not legally binding on the following grounds:

1. Given the powerful nature of a Binding Child Support Agreement and the considerable impact it has on the rights of the parties, it is necessary for the parties to have intended that the component of the Financial Agreement which relates to child support be a Binding Child Support Agreement under the Assessment Act – which was not the case here.
2. There was no reference made to the governing Assessment Act in any of the legal advice documentation relating to the Financial Agreement, nor was there any evidence to show that the parties had been properly advised in relation to the legal requirements of the Assessment Act.
3. Legal advice given must be in relation to the effect of the agreement as it relates to the parties’ rights under the Assessment Act legislation, and the advantages and disadvantages of the agreement in the context of child support. At no time was the dad given that advice in relation to his rights, or the advantages and disadvantages of the agreement in the context of child support. The legal advice given only related to the document as a Financial Agreement under the Family Law Act, not the Assessment Act.
4. The original Financial Agreement failed to comply with numerous mandatory requirements of the relevant legislation, and there are no other provisions in the agreement relevant to child support. Therefore the Court ruled that there is no Binding Child Support Agreement.

The Conclusion

Even though there is legal provision to declare joint documents such as Financial Agreements as “binding”, it is clear that stringent requirements must be met, due to the considerable impacts that Binding Child Support Agreements have on the rights of the parties.

Antunes Lawyers specialises in the preparation of Binding Child Support Agreements. So, if you need an agreement that is binding and enforceable under the Assessment Act, talk to us today.