Which case won?

casea
The case for the father
  • The reason I entered into the BCSA and agreed to pay child support to my ex-wife was because she had the primary care of our youngest son, who was living with her 80% of the time.
  • She no longer has the primary care of that child except, perhaps, for two per cent of the year. This has been the case for more than 18 months.
  • If the BCSA is not set aside, it means that I will have to pay $31,200 in child support to my ex-wife. That payment does nothing to support our youngest son, it simply goes to supporting my ex-wife. That’s clearly not what the child support legislation was created for.
  • Further, if I have to make the child support payments it will cause me financial hardship and make it more difficult for me to support our son.
  • The radical increase in my time spent caring for the child, from 20% to 100%, is an exceptional circumstance and the BCSA should be set aside.
caseb
The case for the mother
  • Just because circumstances change and the original deal becomes less fair to one of the parties doesn’t mean that “exceptional circumstances” have necessarily arisen.
  • Before my ex-husband entered into the BCSA he received independent legal advice, so he knew there were potential risks and that the agreement was intended to be binding. The agreement had its benefits too for my ex-husband, because it provided him with certainty into the future.
  • A change in our son’s living arrangements so that he spent more time living with my ex-husband in future was reasonably foreseeable when we made the agreement, especially since it was an agreement intended to last for many years. There was nothing exceptional about this fact.
  • The evidence shows that even after payment of the child support my ex-husband will still have excess income, so his argument of financial hardship shouldn’t be accepted.
  • The BCSA should not be set aside and my ex-husband should pay me what we agreed.

So, which case won?

Cast your judgment below to find out
Case A Case B

Case B won. You were right!

How people voted
a81%
b19%

Expert commentary on the court's decision

“The court considered that a change in the son's living arrangements should have been reasonably foreseeable, especially when the BCSA was to last for many years and therefore, that the son living with the father rather than the mother was not an exceptional circumstance.”
Court’s discretion to set aside a binding child support agreement

This case was first before the court after the father commenced proceedings seeking to set aside the BCSA.  At trial, the judge commented to the mother: “the reason that a binding child support agreement was entered into for Mr Cheyne to pay you money was because you had the primary care of a child. You no longer have primary care of that child except, perhaps, for two per cent of a year.”

In May 2014, the BCSA was set aside. The mother appealed the decision to the Full Court of the Family Court. The mother’s appeal was allowed, which meant that the father had to pay the mother child support, even though she did not have care of their son. (See Masters & Cheyne [2016] FamCAFC 255.)

A court may set aside a binding child support agreement if it considers that exceptional circumstances exist relating to a parent or child which have arisen since the agreement was entered into and the applicant parent or the child will suffer hardship if the agreement is not set aside.

Dad fails to prove exceptional circumstances or hardship

The court considered that a change in the son’s living arrangements should have been reasonably foreseeable, especially when the BCSA was to last for many years, and therefore, that the son living with the father rather than the mother was not an exceptional circumstance.

As to the issue of hardship, the evidence showed that the father would have excess income after paying his expenses and after the weekly child support payment was made to the mother.

The mother’s submissions concerning the trial judge’s conduct were not accepted by the court.

Cessation of child support under Child Support Act

The legislative amendment to Section 12 of the Child Support Act relates to the cessation of child support. In this case, when the parties entered into the BCSA, Section 12 provided that a child support terminating event happens if the carer entitled to child support ceases to be an eligible carer.

The amended Section 12, which took effect in January 2009, provides that a child support terminating event happens if both of the parents are not eligible carers. Murphy and Aldridge JJ differed in their reasons concerning the application of this section.

Binding child support agreements can provide certainty but carry risks

Before parties enter into a binding child support agreement, they must each obtain independent legal advice as to the effect of the agreement on the rights of the party and the advantages and disadvantages of making the agreement at the time the advice was provided to the party.

In this case, at the time the BCSA was entered into, one such advantage for the father was certainty. The BCSA provided the father with certainty as to the amount of child support he was required to pay until the child’s 18th birthday. However, this advantage became a disadvantage after the child stopped living with the mother. This risk which the father took eventuated and the father was locked into paying child support to the mother.

Limited child support agreement more easily terminated and can be varied

An alternative to a binding child support agreement is a limited child support agreement, which may be entered into if an administrative assessment is in place. Once the limited child support agreement is entered into it must be registered. It will only be accepted for registration if the amount payable is not less than the assessed amount.

An advantage of a limited child support agreement is that it is more easily terminated and unlike a binding child support agreement, it may be varied. A limited child support agreement may be terminated if the assessed amount is varied by 15% or more. It may also be terminated at any time within three years after it was entered into.

Advantage of choosing flexible child support arrangements

In this case, the father’s obligation to pay child support to the mother notwithstanding care arrangements for the child, which had completely changed, arose from a binding child support agreement and not an administrative assessment by the Child Support Agency.

This case serves as a warning before entering into a binding child support agreement. At the time of making a binding child support agreement, the terms may be fair, but some future circumstance may mean that the agreement becomes unfair.

Consider other options which may provide flexibility for all parties as the child’s needs change.

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