plaintiff. Order setting aside the binding child support agreement dated 16 August 2012 (pursuant to s 136(2)(d) CSA Act) as at the date of the Orders; order that within 12 months each party pay $5,642.60 to...
Key principles
The COVID-19 pandemic can amount to 'exceptional circumstances' under s 136(2)(d) of the Child Support (Assessment) Act 1989 where it caused a post-agreement deterioration in a...
A court must be satisfied both that exceptional circumstances arose after the making of a binding child support agreement and that the applicant (or the child) will suffer...
Where exceptional circumstances and resultant hardship are established, the court may set aside a binding child support agreement; suspension for a closed period is an available...
Section 80CA(1) of the CSA Act precludes variation of a binding child support agreement; the court therefore cannot use s 141 to retrospectively vary the agreement to extinguish...
Issues before the court
Whether a binding child support agreement dated 16 August 2012 should be set aside under s 136(2)(d) of the Child Support (Assessment) Act 1989...
Plain English Summary
The father ran a business supplying international clients and had a binding child support agreement from 2012 requiring monthly payments. The COVID-19 pandemic in 2020 sharply reduced his company's activity (about 90% fall) and his income. The court accepted that COVID-19 constituted 'exceptional circumstances' arising after the agreement and that the father would suffer hardship if bound by the agreement. The court therefore set the 2012 binding child support agreement aside as at the date of the Orders. The father asked also to have past arrears wiped; the court refused because the law prohibits varying binding child support agreements retrospectively. The court ordered that each party pay half of the Independent Children's Lawyer's costs (total $11,285.20), but allowed payment within 12 months given their financial positions.
AI-generated legal information, not legal advice. Zoe can make mistakes. Check the cited source, and for advice about your situation consult a qualified Australian lawyer.
Whether the court should extinguish or retrospectively reduce the arrears that accrued under the Agreement prior to the date the Agreement was set...
Whether, as an alternative to termination, the court should suspend the Agreement for a closed period.
Whether the parties should be ordered to each pay half the costs of the Independent Children's Lawyer, and whether such orders would cause financial...
Cited legislation
3 cited instruments linked from this judgment.
Deep Dive
1,926 words · generated 17/09/2026
What happened
Facts in brief
The parties entered a binding child support agreement on 16 August 2012 obliging the father to pay a specified monthly amount (initially $1,350 indexed thereafter). The father stopped making full payments from September 2016; arrears accumulated (about $31,928.22 as at May 2020). Orders made by Judge Henderson in 2017 stayed collection and required the father to pay $580 per month pending further order.
The father later became owner/manager of F Pty Ltd, a manufacturing business serving predominantly international clients. The company experienced periods of financial stress prior to 2020 (flood loss in 2017, tax liabilities, creditor pressure) but reported a substantial turnover in some years.
The COVID-19 pandemic (2020) led to cancellations of international orders, a circa 90% reduction in the company's production and revenue, staff stand-downs and reliance on JobKeeper payments. The father contended this produced a post-agreement change amounting to exceptional circumstances and caused him hardship, rendering him unable to meet the payment obligations under the binding child support agreement.
The father applied to set aside the binding child support agreement under s 136(2)(d) of the Child Support (Assessment) Act 1989 (CSA Act) and sought extinguishment of arrears. The mother opposed those orders. The Independent Children's Lawyer sought that each party pay half its costs.
Procedural posture and outcome
The Family Court (McClelland DCJ) heard the matter in June 2020 and delivered reasons 1 July 2020. The court accepted that the COVID-19 pandemic constituted exceptional circumstances arising after the agreement and that the father would suffer hardship if bound to the agreement. The court set aside (terminated) the binding child support agreement as of the date of its Orders. The court refused the father's application to extinguish arrears on the basis that s 80CA prohibits variation of a binding child support agreement. The court ordered each party to pay half the ICL costs ($5,642.60 each), with payment permitted within 12 months.
Why the court decided this way
Statutory framework
The controlling statutory provision for setting aside binding child support agreements is s 136(2)(d) CSA Act. The court must be satisfied that exceptional circumstances relating to a party or the child have arisen since the agreement was made and that the applicant (or the child) will suffer hardship if the agreement is not set aside. The decision drew upon judicial gloss on the phrases "exceptional circumstances" and "hardship" from authorities such as Balzano & Balzano and Masters v Cheyne.
Application to the facts
The court accepted the mother's concession and the father's unchallenged evidence that the COVID-19 pandemic had materially and unexpectedly reduced his company's business by approximately 90%. That fact was judged to be an "exceptional" event because it was out of the ordinary and arose after the 2012 agreement.
On the second limb (hardship), the court accepted evidence the father's income had fallen to levels inconsistent with meeting the contractual amount (indexed sum about $1,550/month), and that his weekly income and assets were limited relative to liabilities; therefore the father would face hardship if required to continue paying under the agreement.
Having both limbs satisfied, the statutory preconditions in s 136(2)(d) were met and the court exercised its power to set aside the binding agreement.
Why the court did not suspend the agreement
The father had proposed suspension as an alternative, and previous cases (e.g. Venson & Venson (No 2)) had shown courts may suspend for discrete periods. The judge assumed, without deciding, such power exists. However, on the facts (uncertainty about the duration and depth of pandemic-related economic disruption), the court concluded it could not identify a suitable closed period for suspension and therefore chose termination instead.
Why the court did not extinguish past arrears
The father sought extinguishment of arrears built up before the date when exceptional circumstances were found. The judge observed s 80CA(1) CSA Act forbids variation of a binding child support agreement. To extinguish arrears retrospectively would effectively vary the Agreement back to a lower payment for a period predating the date when exceptional circumstances were found to exist; that would conflict with s 80CA. Although s 141 provides broad remedial powers (including retrospective orders), the court declined any exercise of that power that would be inconsistent with Parliament’s express restriction on variation.
ICL costs
The court applied s 117 Family Law Act 1975 principles. Neither party was legally aided; both claimed financial hardship. The court accepted each faced financial pressure but, considering that the ICL had performed an important public function and the costs were reasonable, the court ordered each party to pay 50% of ICL costs, but allowed a 12-month window for payment given the parties' financial circumstances. The court relied on prior authorities (e.g. Nada & Nettle) that impecuniosity does not automatically bar a costs order.
Evidentiary points
The court accepted that letters from accountants or business advisers are admissible as business records but noted they do not carry the weight of expert opinion under s 79 Evidence Act unless tendered as such. The court weighed available company financial statements, tax returns and correspondence but declined to treat business-record letters as definitive expert insolvency conclusions.
Before and after state of the law
Before:
Section 136(2)(d) had long stood as a narrow gateway to disturb binding child support agreements, with authorities emphasising the word "exceptional" and Parliament's intent to restrict court intervention (see Balzano & Balzano; Masters v Cheyne).
Courts had recognised they could, in principle, suspend agreements for a closed period as an alternative to setting aside, but that remained fact-sensitive (Venson & Venson (No 2)).
After (practical takeaways from Martyn & Martyn):
Martyn confirms that a systemic economic shock such as the COVID-19 pandemic may meet the "exceptional circumstances" limb when it causes a substantial, post-agreement diminution in a payer's income. The Court accepted the pandemic's demonstrable, business-specific impact as sufficient exceptional circumstances.
The decision reiterates that both the exceptional-circumstance limb and the hardship limb must be satisfied.
The judgment underscores that s 80CA prevents retroactive variation of binding agreements to extinguish arrears that pre-date the exceptional circumstance finding; parties cannot use s 141 to circumvent s 80CA.
It clarifies that suspension remains a possible remedy but that courts require evidentiary basis to set an appropriate closed suspension period.
Key passages with plain-English translation
Court's acceptance of COVID-19 as exceptional:
"I respectfully agree ... The COVID-19 pandemic has impacted on international and domestic economic activity." Plain English: The judge accepted that the pandemic is not routine and has substantially affected business, so it can be the kind of unusual event s 136 contemplates.
Finding of exceptional circumstances and hardship:
"I am, therefore, satisfied that the outbreak of the COVID-19 pandemic is an exceptional circumstance and, further, I am satisfied that the father would suffer hardship if the Agreement is not set aside." Plain English: The court found both required elements: the pandemic happened after the agreement and it makes it too hard for the father to keep paying.
Refusal to extinguish arrears because of s 80CA:
"That course of action is specifically precluded by s 80CA ... 'a binding child support agreement must not be varied'." Plain English: The law says binding child support agreements cannot be changed, so the court could not wipe out earlier unpaid sums by changing the agreement retrospectively.
On suspension vs termination:
"I decline to exercise a discretion to suspend ... because there is an understandable absence of evidence as to the likely duration and impact ..." Plain English: The court thought suspension might be possible in some cases, but here it could not fairly pick how long to suspend payments because nobody could reliably forecast how long the pandemic effects would last.
On ICL costs:
"I am satisfied that the costs ... is logical, fair and reasonable ... each of the parties to pay 50% ... specify that the amount can be paid within a period of 12 months." Plain English: The judge found the ICL's fees reasonable and made a practical order for equal contribution, but allowed time to pay given both parties' money problems.
What fact patterns trigger this precedent
This decision will be most relevant where:
A binding child support agreement was entered before a major, unforeseen systemic economic shock (e.g., pandemic, trade embargo, sudden collapse of a key export market).
The payer's income or business has demonstrably and substantially declined as a direct consequence of that shock (evidence of cancelled orders, turnover fall, reliance on government wage support).
The decline clearly post-dates the agreement and the payer lacks alternative resources sufficient to meet contractual payments, creating a real prospect of hardship.
There is insufficient evidence to enable the court to sensibly pick a finite suspension period (i.e., recovery timeline uncertain), making termination of the agreement the more practicable remedy.
Parties seek to extinguish arrears that accumulated prior to the date when exceptional circumstances first arose, Martyn suggests such retroactive relief will be constrained by s 80CA.
How later courts have treated it
(As at the judgment date this is a fresh 2020 decision; further treatment by later courts post-dates the judgment and is not contained in the document. From this judgment itself, the court engages with and follows prior authorities: Balzano & Balzano; Masters v Cheyne; Venson (No 2); and cost authorities such as Nada & Nettle and Stoian & Fiening. Practitioners should watch subsequent decisions for how courts refine treatment of pandemic-related exceptional circumstances and whether suspension or termination becomes the preferred remedy.)
Still-open questions
Suspension power: The court assumed but did not decide definitively whether it has power to suspend a binding child support agreement for a closed period. This remains a point that future appellate decisions could authoritatively resolve.
Temporal boundary for exceptional circumstances: Martyn relies on the pandemic's contemporaneous impact; future cases will test how transient or protracted an event must be to count as exceptional, and how strong the evidentiary threshold is when consequences are partly sector-wide rather than strictly individual.
Interaction with arrears and enforcement: The court declined to extinguish pre-existing arrears because of s 80CA. It leaves open whether, in different fact patterns (for example, where exceptional circumstances arose earlier or where Parliament's other provisions permit), courts could craft retrospective relief without breaching s 80CA.
Evidence standard for business distress: The judgment notes business records are admissible but differ in weight from expert opinions under s 79 Evidence Act. Future litigants will need to consider whether independent expert evidence (e.g., forensic accounting or insolvency reports) will be necessary to prove insolvency or business collapse for s 136 applications.
Role of government support measures: The judgment records that the father received JobKeeper. There is an unresolved tension as to how receipt of government business support affects the hardship inquiry; courts will need to calibrate whether temporary subsidies negate or merely mitigate hardship for s 136 purposes.
Disclaimer and final note
This deep dive summarises and analyses the reasoning in Martyn & Martyn [2020] FamCA 526 as set out in the court’s published reasons. It is legal information only, not legal advice. I may make mistakes and my account cannot substitute for tailored advice from a qualified Australian lawyer. If you plan to rely on these materials, or to act (file, serve, sign, pay, or proceed) based on them, get a qualified Australian lawyer to check them first.
FAMILY LAW - CHILD SUPPORT - Binding child support agreement - Where the father seeks an order setting aside a binding child support agreement -Where the father seeks an order extinguishing the arrears payable under the binding child support agreement - Where the father owns a business that has been significantly impacted by the COVID-19 pandemic - Whether there are exceptional circumstances which relate to the father - Whether the father will suffer hardship if the binding child support agreement is not set aside - Orders made that the binding child support agreement be set aside - Application to extinguish arrears dismissed.
[3]
FAMILY LAW - COSTS - Costs of the Independent Children's Lawyer - Where the Independent Children's Lawyer seeks that the parties each pay half of the costs of the Independent Children's Lawyer - Where the parties each assert that they will suffer financial hardship if required to pay half the costs of the Independent Children's Lawyer - Orders made for the parties to pay, within 12 months, half the costs of the Independent Children's Lawyer.
(1) That, pursuant to s 136(2)(d) of the Child Support (Assessment) Act 1989 (Cth), the binding child support agreement between Mr Martyn ("the father") and Ms Martyn ("the mother") dated 16 August 2012 be set aside as of the date of these Orders.
[20]
(2) That within 12 months of the date of these Orders, the mother and father each pay to Legal Aid the sum of $5,642.60 as payment of the costs of the Independent Children's Lawyer in the proceedings.
[21]
Note: The form of the order is subject to the entry of the order in the Court's records.
[22]
IT IS NOTED that publication of this judgment by this Court under the pseudonym Martyn & Martyn has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
[23]
Note: This copy of the Court's Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).
[24]
At the hearing of this matter, the parties, Mr Martyn ("the father") and Ms Martyn ("the mother"), were able to reach agreement in respect to orders setting out future parenting arrangement for the parties' child, X born in 2008 ("the child"). This decision concerns determination of the remainder of the issues in dispute between the parties. Those remaining issues are whether a binding child support agreement between the parties should be set aside and whether an order should be made requiring the parties to pay the costs of the Independent Children's Lawyer in relation to the parenting proceedings.
The issue in respect to the costs of the Independent Children's Lawyer arises in circumstances where the final hearing, which commenced on 1 June 2020, was adjourned until 2 June 2020 to enable the parties to consider a Family Report which did not arrive until the morning of the first hearing date. After receiving the report, commendably, the parties were able to reach an appropriate agreement for suitable parenting arrangements for the child.
The issue in respect to child support arises from the father's Initiating Application filed 13 January 2020, in which the father seeks an order setting aside the binding child support agreement between the parties, dated 16 April 2012, under s 136 of the Child Support (Assessment) Act 1989 (Cth) ("the CSA Act").
The Application is made in circumstances where the father owns and operates a business that supplies products to international businesses. As a result of the current COVID-19 pandemic, in order to prevent further spread of the virus, travel restrictions have been implemented by the international community and State and territory Governments within Australia. It is common ground that, as a result of those cross-border restrictions and social distancing measures, international commerce has been functioning at a significantly reduced capacity. It is also not contested that the profitability of the sector will continue to be adversely affected for the foreseeable future.
The father's Application is, therefore, made in circumstances where his business and, consequently, his financial circumstances have been made significantly worse by the limitations on international commerce during the pandemic. On the same basis, the father opposes the Application by the Independent Children's Lawyer for the parties to share the costs of the Independent Children's Lawyer equally. The mother similarly opposes the Independent Children's Lawyer's application on the basis of her financial circumstances.
[25]
As noted, the parenting aspect of the proceedings has been finalised between the parties and this decision, accordingly, concerns only the issues of whether the father is in a position to comply with the binding child support agreement or to contribute half of the costs of the Independent Children's Lawyer. As such, the facts set out below relate, primarily, to the financial circumstances of the father.
In 1973, the father was born. He is currently aged 47 years.
In 1977, the mother was born. She is currently aged 42 years.
In 2005, the parties met and commenced a relationship. At that time, the father was employed as a Manager at B Company and was earning approximately $70,000 per year.
In May 2005, the parties commenced cohabitation.
In 2007, the parties were married.
In 2008, the child was born. She is currently aged 11 years.
On 5 July 2010, the father commenced employment at C Pty Ltd and was earning $140,000 per year after tax. He also received additional employment benefits, which included bonuses and offers of shares in the company based on performance. The father also attests to receiving a car allowance in the sum of $25,000.
The father identifies March 2012 as the month in which the parties "formally agreed to separate" and states that he left the former matrimonial home and moved into rental accommodation in May 2012. The mother attests to the parties' separation occurring on 26 May 2012. The difference in their positions has no bearing on this decision.
On 16 August 2012, the parties entered into a binding child support agreement ("the Agreement"). The Agreement provided for the father to pay the mother the sum of $1,350 per month and stipulated that the amount would increase by two per cent (2%) at the commencement of each calendar year starting 1 January 2014.
In October 2012, the father commenced a relationship with his current wife, Ms D, who had been working with the father at C Pty Ltd since June 2011. In November 2012, Ms D commenced cohabitating with the father in his rental accommodation.
In November 2013, the father was dismissed from his position as Senior Manager at C Pty Ltd. The father attests to a formal hearing taking place before the Fair Work Commission at which a settlement was reached with the effect of terminating the father's employment and the father relinquishing his shares in C Pty Ltd. The mother contends that the father received a "$60,000 payout". This was not disputed by the father who attests that those funds went towards his living expenses during his subsequent period of unemployment as well as additional payments that he was required to make under a binding financial agreement. Additionally, some remaining funds, according to the father, were used to establish his consulting company, G Pty Ltd.
[26]
70. [Ms D] pays [for] all of our rent in the amount of $2,120 per month. [Ms D] also pays for our private health insurance which [the child] is a member of, in the amount of $455.50 per month. [Ms D] contributes to groceries in the amount of $50 per week and spends on average $50 a week on [the child's] clothing, holidays, toys, household items etc. The E$50,000 debt which I accumulated as a direct result of my significant change in income since leaving [C Pty Ltd], is being paid by both [Ms D] and me although I pay the majority of the monthly minimum repayments from my small current salary. The debt will take some time to pay off given the interest payable on the amount outstanding.
[27]
71. At the commencement of the proceedings, I had the capacity to pay to [the mother] the following:
[28]
a. An amount of $580 per month or as assessed by the Child Support Agency;
[29]
b. All of [the child's] health fund premium each month including 50% of the gap payment for all medical expenses; and
[30]
c. 50% off [the child's] school fees, text books, uniforms, excursions and other school related expenses.
[31]
In 2017, the father and Ms D used personal loans from their family members, as well as a bank loan secured by Ms D's apartment, to raise capital for F Pty Ltd before relocating the business to Suburb H. The father states that, six (6) months after F Pty Ltd was relocated, a "catastrophic flood event [occurred] as a result of malfunctioning drainage and guttering system". The business sustained property and equipment damage equivalent to $600,000. While this amount was covered by insurance, the father deposes that the business lost clients due to the period of non-production.
On 4 April 2017, Judge Henderson, as she then was, made an Order for the appointment, pursuant to s 68L of the Family Law Act 1975 (Cth) ("the Family Law Act"), of an Independent Children's Lawyer.
On 1 August 2017, Judge Henderson, as she then was, made the following Order:
[32]
4.Pending further order, the collection of Child Support pursuant to the Child Support Agreement entered into by the parties on 16 August 2012 is stayed on the basis the [father] pays to the [mother] $580.00 per month by way of Child Support.
[33]
On 15 December 2017, an Order was made transferring the proceedings to the Family Court of Australia.
In 2018, F Pty Ltd was considered, by the companies' financial advisers, to be "technically insolvent". In that respect, a letter from Ms J of L Organisation dated 12 February 2020 (marked 'Exhibit 6' in the proceedings) states the following in summation of the financial position of F Pty Ltd in 2018:
On the 25th February 2018 I visited Mr Martyn at his office to discuss the financial position of [F Pty Ltd], and reviewed various financial information, including cashflow forecast, and creditor and debtor schedules.
Whilst a preliminary view, the information provided demonstrated significant indicators of insolvency, including net working capital deficiency, trading losses, creditor repayment arrangements, inability to access credit and lack of alternate sources of capital. Where there is concern regarding the solvency of a company, there is new legislation referred to as the "safe harbour" provisions whereby a director needs to satisfy themselves that by continuing to trade whilst insolvent there is a better outcome to creditors.
I provided some reading on 'safe harbour' process and maintained contact with the director by way of receiving financial reports for the coming months. I understand that the director managed to extend credit terms with suppliers and also entered into a repayment plan with the ATO to manage the significant tax liability that had accrued. This activity provided some time for the company to seek to stabilise and focus on repaying its debts.
I understand by the end of 2018 [F Pty Ltd's] financial position was still marginal, however had managed to address the immediate solvency concerns. There remains an outstanding tax liability under repayment arrangement.
In 2019, F Pty Ltd began to recover. The father states that the business was supported by the Research and Development ("R&D") tax incentive offered by the Australian Taxation Office ("ATO"), as well as smaller payroll tax rebates.
In 2020, the outbreak of the coronavirus termed "COVID-19" has significantly impacted on the functioning of F Pty Ltd due to the fact that the target demographic of the business is international businesses. At paragraph 81 of his Affidavit filed 29 May 2020, the father sets out how he has been impacted by the current COVID- 19 pandemic, as follows:
[34]
[The father's business] is a company which manufactures [products for international businesses]. 90% of the manufacturing is for [international businesses]. We also supply some [local businesses] via a distributor and contract manufacture for the same distributor, which makes up the other 10%. Since the outbreak of the Covid-19 virus we have effectively ceased all production for [international businesses] with all orders being cancelled from March 27th 2020. Total sales are reduced by around 90% and we [have products which are going out of date for international clients] unable to buy from us representing massive stock write-offs. We have stood down over 100 casual employees and all employees remaining are paid via the JobKeeper assistance, other than two overseas residents that are maintained on salary as we could not function without them; an accountant and a Technical Quality Assurance officer who are not eligible for JobKeeper or Jobseeker.
[35]
As a result of financial difficulties arising from the COVID-19 pandemic, the father and Ms D have received assistance from the Federal Government's JobKeeper Payment scheme. The father states that, although he may obtain "orders of 20,000 units", "the margin on each item is at most $0.20c per item". The father further states that, by September 2020, "the business will face the possibility of another insolvency event" unless the business either continues to receive government assistance or new clients can be engaged. The father was not challenged on his evidence that the business activity of F Pty Ltd has declined by 90% as result of the impact of the COVID-19 pandemic on the international businesses.
In April 2020, the father informed the mother of his current circumstances. The father attests to being incapable of affording the child support payments in the sum of $580 per month, being the payments made in accordance with the Orders of Judge Henderson, referred to above, and states that he is only able to make payments of $120 per month.
Although the father has been making payments of $580 per month in accordance with the Orders of Judge Henderson made on 1 August 2017, the father's child support liability, assessed in accordance with the Agreement, remained at $1,550.75 per month (being the original amount of $1,350 as indexed in accordance with the agreement).This has resulted in arrears accruing in the sum of $31,928.22 as of May 2020.
[36]
The father seeks the following order in accordance with his Amended Initiating Application filed 13 January 2020:
In his case outline document, the father also sought an order that "the outstanding liability in respect to the Binding Child Support Agreement be extinguished".
The mother opposes the father's Application in both respects.
[39]
Orders sought in respect of the Independent Children's Lawyer's costs
[40]
On 2 June 2020, I made Orders in accordance with the Minute of Order proposed by the Independent Children's Lawyer with the exception of order 26, which the father and mother objected to. For the purpose of this decision, the Independent Children's Lawyer seeks the following order in accordance with proposed order 26:
[41]
That within 28 days of the date of these orders the mother and father each pay to Legal Aid the sum of $5,642.60 as payment of the costs of the Independent Children's Lawyer in the proceedings.
[42]
The father relied upon the following documents:
[43]
Initiating Application filed 13 January 2020;
2. Affidavit of the father filed 29 May 2020; and
[44]
Financial Statement of the father field 2 June 2020.
The mother relied upon the following document:
Affidavit of the mother filed 25 May 2020.
The Independent Children's Lawyer relied upon the following documents:
Financial Report of F Pty Ltd for the financial year ending 30 June 2018 ('Exhibit 1');
2. ATO activity statement for F Pty Ltd for the period January 2020 to March 2020 ('Exhibit 2');
[46]
Letter from Lama Family Lawyers to the Child Support Agency dated 17 October 2016 ('Exhibit 3');
[47]
Tax returns of the father and F Pty Ltd for the financial years 2012 to 2019 ('Exhibit 4');
2. Financial Reports of F Pty Ltd for the financial years 2015, 2016 and 2019 ('Exhibit 5');
3. Letter from Ms J of L Organisation to the father dated 12 February 2020 ('Exhibit 6');
4. Letter from K Accounting to Lama Family Lawyers dated 14 February 2020 ('Exhibit 7'); and
5. ATO record of account transactions processed by the Tax Office during the period 1 September 2019 to 21 May 2020 ('Exhibit 8').
[48]
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 the following:
[49]
(2) 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:
[50]
(d) 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.
[51]
Accordingly, the CSA Act sets out three limbs that the applicant, seeking an order providing for a binding child support agreement to be set aside, must satisfy:
[52]
That there are exceptional circumstances which relate to a party to the agreement or a child in respect of whom the agreement is made;
2. That those exceptional circumstances arose after the agreement was made; and
[53]
That the applicant or the child will suffer hardship if the agreement is not set aside.
In Balzano & Balzano[2010] FamCAFC 11; (2010) FLC 98-048,Warnick J considered the expression "exceptional circumstances", in the context of Parliament's intention in legislating to limit the circumstances in which a binding child support agreement could be set aside. At [39]-[41], his Honour stated:
"85. Exceptional is defined by the New Shorter Oxford English Dictionary as follows:
[56]
Of the nature of or forming an exception; unusual, out of the ordinary; special; (of a person) unusually good, able, etc.
[57]
86. Accordingly, for circumstances to be exceptional, they must be unusual, out of the ordinary or special. In the child support context, in respect of an application for departure, Kay J held that 'special circumstances' were 'facts peculiar to the particular case which set it apart from other cases'. [see Savery & Savery[1990] FamCA 30; (1990) FLC 92-131
[58]
40. Some little assistance, perhaps more as to the "tenor" of the term "exceptional circumstances" rather than its meaning, might be gleaned from the explanatory memorandum in respect of the Bill introducing the present s 136...
[59]
As currently drafted, courts could set aside binding child support agreements (made with legal advice) in a range of circumstances, including circumstances that may have been completed and dealt with in the agreement. It is not intended that binding agreements should be set aside lightly. This amendment restricts the scope for the setting aside of binding child support agreements, by specifying that exceptional circumstances relating to one of the children or parties to the agreement must have arisen since the making of the agreement, and that the child or party would suffer hardship if the agreement were not altered or set aside." (emphasis added)
40. The statutory Object permitting parties to make private arrangements and to "limit interference with their privacy" is given particular force by reason of the necessity to show "exceptional circumstances" before a court will intervene in them and the additional requirement to prove "hardship" if the parties are held to their agreement.
[62]
41. The ordinary and natural meaning of each such expression must be seen within that statutory context.
[63]
The Meaning of "Exceptional Circumstances" And "Hardship"
[64]
42. The expression "exceptional circumstances" has frequently been interpreted in a number of different contexts. In ordinary usage the expression "exceptional" means "unusual or out of the ordinary" or "unusual or extraordinary". It has been said that:
[65]
We must construe "exceptional" as an ordinary, familiar English adjective, and not as a term of art. It describes a circumstance which is such as to form an exception, which is out of the ordinary course, or unusual, or special, or uncommon. To be exceptional a circumstance need not be unique, or unprecedented, or very rare; but it cannot be one that it is regularly, or routinely, or normally encountered.
[66]
As Watts J has pointed out, the Full Court has applied that statement.
[67]
43. The expression "hardship" has also been frequently interpreted in different contexts, primarily by reference to s 44(3) of the Family Law Act 1975 (Cth). The concept involves a "hardness of fate or circumstances; severe suffering or privation" or "a condition that bears hard upon one; severe toil, trial, oppression or need; to cause to suffer privations".
[68]
Similarly, in respect to the concept of "hardship", Aldridge J, referring to In the marriage of Whitford and Whitford[1979] FamCA 3; (1979) FLC 90-612, at 78,144 to 78,145, stated that the concept of hardship is "akin to such concepts as hardness, severity, privation, that which is hard to bear or a substantial detriment" and means "something more burdensome than 'any appreciable detriment'".
[69]
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 organistations. Unless the interstate and international borders open shortly, the father anticipates that he will have to liquidate F Pty Ltd and declare bankruptcy. The father also attests to relying on the allowance provided to him and his current wife, Ms D, under the Federal Government's JobKeeper Payment scheme. Counsel for the mother concedes that the current period, characterised by the COVID-19 pandemic, sufficiently constitutes exceptional circumstances that arose after the parties entered into the Agreement on 16 August 2012. I respectfully agree with and accept that concession that was appropriately and responsibly made by counsel for the mother. The COVID-19 pandemic has impacted on international and domestic economic activity. It is not disputed that international commerce has been one of the most heavily impacted sectors of the economy.
In addressing the third limb, 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 pursuant to the Agreement dated 16 August 2012. In that respect, counsel for the father, in demonstrating the disparity between the father's recent income and his income earned at the time he entered into the Agreement, summarised the father's taxable income, set out in his individual tax returns (marked 'Exhibit 4' in the proceedings), as follows:
2012: $174,999;
2013: $166,491;
2017: $18,100;
2018: $41,503; and
2019: $41,460.
Counsel for the father submits that the father is, therefore, unable to meet his obligation under the Agreement to pay approximately $1,550 per month, and has been unable to do so since September 2016. Counsel for the mother, however, contends that those financial records provided to the Court, being the individual tax returns for the financial years of 2012 to 2019, represent the "bare minimum" calculated for the purpose of reducing the amount of tax that the father is obliged to pay. As such, the mother contends that the financial picture created by counsel for the father is unreasonably pessimistic.
[70]
We have sighted an email from [F Pty Ltd's] bank stating that they will not provide additional finance until the debt with the ATO has been cleared...
[71]
Counsel for the mother, on the other hand, contends that, despite the financial difficulties that F Pty Ltd has faced, the father and Ms D have continued to derive a substantial income from the business when all aspects of their remuneration, drawings and loans from the business are considered.
While counsel for the mother acknowledges that the consequences of the COVID-19 pandemic amount to "exceptional circumstances" that will likely impact upon the father's business and result in financial insecurity for the foreseeable future, the mother contends that, ultimately, the current circumstances will pass. She contends that F Pty Ltd has, in the past, demonstrated an ability to remain solvent throughout challenging periods. As such, counsel for the mother submits that the mother should not be "cut out of the Agreement" by virtue of the temporary hardship faced by the father and his business on account of the current COVID-19 pandemic.
As noted, in addition to the order sought in the Application filed 13 January 2020, the father seeks an order extinguishing the arrears owing as a result of the reduced amount of child support paid since September 2016.
In seeking that order, counsel for the father referred the Court to s 141(1)(h), (n) and (p) of the CSA Act, which, relevantly provide: :
[72]
(1) In exercising its powers under this Act, a court may do all or any of the following:
[73]
(h) make an order expressed to be retrospective to such day as the court considers appropriate;
[74]
(n) make any other order (whether or not of the same kind as those referred to in paragraphs (a) to (m) (inclusive)) that the court considers appropriate;
[75]
I note, however, that s 80CA(1) of the CSA Act stipulates that a binding child support agreement must not be varied.
Finally, counsel for the father 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. The legislative power to do so, it was contended, existed in those provisions of s 141 of the CSA Act to which I have referred. It was also noted that, in Venson & Venson (No 2)[2010] FamCA 963 ("Venson (No 2)"), Austin J declined to set aside the child support agreement between the parties, on the facts before the Court in that case, but nonetheless 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. His Honour therefore, in effect, suspended the agreement for approximately three (3) years.
From the opposite side of the fence, counsel for the mother contended that, in the event that the Court was minded to accept the father's argument that exceptional circumstances existed such that the father would face a situation of hardship, in the event that the Agreement was not set aside, as an alternative to taking that course of action, the Court should consider suspending rather than terminating the Agreement. In so contending, counsel for the mother agreed that Venson (No 2) was authority in confirming the Court's power to do so.
[76]
As noted by counsel for the father, in Keane v Keane[2013] FamCA 332; (2013) 50 Fam LR 120, Watts J said, at [40.2], that "it may be that one circumstance alone cannot be described as exceptional but the whole of the circumstances, when looked at cumulatively, might be described as exceptional".
It was not disputed that, at the time the parties entered into the Agreement, the father was the Senior Manager of C Pty Ltd and earned, in that capacity, a salary of $140,000 per annum after deduction of taxation instalments and superannuation contributions. In addition, he was entitled to employment related bonuses. It was not disputed that, subsequent to being terminated from that employment in 2013, the father established a consultancy which included providing services for F Pty Ltd. The father decided that, while F Pty Ltd had its financial difficulties, by the application of his skills together with the assistance of his current partner, who had also worked with the father at C Pty Ltd, he would be able to improve the performance of the business such that it would become a profitable concern.
It was not disputed that, in 2017, the business was affected by a significant flood causing damage to property and equipment. While the father's evidence in respect to the impact of the flood was challenged, I am satisfied that the loss and damage amounted to approximately $600,000. The father acknowledged that, while the immediate loss and damage to property and equipment was covered by insurance, the ensuing period of non-production resulted in the loss of customers. Insufficient evidence was provided to the Court, however, to enable the Court to make an assessment of the resulting loss in business as a result of the flood and any consequent loss of customers.
Leaving aside the impact of the flood, the financial records of F Pty Ltd in the period prior to the start of 2020 are mixed. On the one hand, it is clear that the business had a substantial turnover in the order of $6 million per annum. To achieve that outcome, approximately 100 employees were engaged. At the same time, it is clear that the company had some difficulty satisfying its creditors, including, most significantly, the Commissioner of Taxation to whom the company now owes $442,960.72.
[77]
Section 117(1) of the Family Law Act provides that, subject to certain qualifications, each party to the proceedings shall bear his or her own costs. However, that does not apply to the Independent Children's Lawyer, because the Independent Children's Lawyer is not a party to the proceedings.
(3) To avoid doubt, in proceedings in which an independent children's lawyer for a child has been appointed, the court may make an order under subsection (2) as to costs or security for costs, whether by way of interlocutory order or otherwise, to the effect that each party to the proceedings bears, in such proportion as the court considers just, the costs of the independent children's lawyer in respect of the proceedings.
[79]
(4) However, in proceedings in which an independent children's lawyer for a child has been appointed, if:
[80]
(a) a party to the proceedings has received legal aid in respect of the proceedings; or
[81]
(b) the court considers that a party to the proceedings would suffer financial hardship if the party had to bear a proportion of the costs of the independent children's lawyer;
[82]
the court must not make an order under subsection (2) against that party in relation to the costs of the independent children's lawyer.
[83]
In this matter, neither party is legally aided. As will be discussed, the real question to be determined in this judgment is whether the parties would suffer financial hardship if the costs order sought by the Independent Children's Lawyer was made against them.
Having noted that the presumption set out in s 117(1) of the Family Law Act does not apply, it is necessary to consider whether a costs order is justified, having regard to s 117(2) of the Family Law Act, which provides:
[84]
(2) If, in proceedings under this Act, the court is of opinion that there are circumstances that justify it in doing so, the court may, subject to subsections (2A), (4), (4A), (5) and (6) and the applicable Rules of Court, make such order as to costs and security for costs, whether by way of interlocutory order or otherwise, as the court considers just.
[85]
The matters relevant to determining what order, if any, should be made for costs are set out in s 117(2A) of the Family Law Act, as follows:
[86]
(2A) In considering what order (if any) should be made under subsection (2), the court shall have regard to:
[87]
(a) the financial circumstances of each of the parties to the proceedings;
[88]
(b) whether any party to the proceedings is in receipt of assistance by way of legal aid and, if so, the terms of the grant of that assistance to that party;
[89]
(c) the conduct of the parties to the proceedings in relation to the proceedings including, without limiting the generality of the foregoing, the conduct of the parties in relation to pleadings, particulars, discovery, inspection, directions to answer questions, admissions of facts, production of documents and similar matters;
[90]
(d) whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the court;
[91]
(e) whether any party to the proceedings has been wholly unsuccessful in the proceedings;
[92]
(f) whether either party to the proceedings has made an offer in writing to the other party to the proceedings to settle the proceedings and the terms of any such offer; and
[93]
(g) such other matters as the court considers relevant.
[94]
It is incumbent upon the Court, in the exercise of its discretion, to consider and apply those provisions set out in s 117(2A) of the Family Law Act. However, there is nothing to prevent any factor being the sole foundation for any order for costs being made: Fitzgerald (as child representative for A (Legal Aid Commission of Tasmania)) v Fish[2005] FamCA 158; (2005) 33 Fam LR 123 at [130].
I have considered each of those paragraphs and have determined that the factors most relevant to my decision are those set out at paragraphs (a) and (g) of s 117(2A) of the Family Law Act.
[95]
In terms of s 117(2A)(a) of the Family Law Act, I note that a consideration of the parties' financial circumstances, pursuant to s 117(2A)(a), necessarily overlaps with the concept of financial hardship as referred to in s 117(4) of the Family Law Act, which I have set out. The father and the mother both substantially rely on that factor as the basis upon which they seek that neither of them should not be required to pay half of the Independent Children's Lawyer's costs.
In support of his argument, the father relies upon the financial circumstances of his business, to which I have referred above, as well as his Financial Statement filed 2 June 2020 which sets out the following:
His average weekly income - $750;
His total personal expenditure - $747;
The total value of his property - $11,000;
The total gross value of his superannuation - $112,807; and
The total of his liabilities - $ 154,895.
For reasons which I have set out above, I accept that the father is under financial pressure as a result of the impact of the travel restrictions imposed in response to the COVID-19 pandemic on his business.
I also accept that the mother is similarly faced with financial pressures as a result of costs that she has incurred in these proceedings in circumstances where she is the child's primary carer and her income, based on her part-time employment, is approximately $50,000 per year.
However, the financial circumstances of the parties is but one of the considerations listed in s 117(2A) of the . In ; , the Full Court held, "[t]hat a party is impecunious, even indigent, is not a bar to the making of a costs order if the Court is otherwise of the opinion that such an order ought to be made".
[96]
In terms of s 117(2A)(g) of the Family Law Act, the parties submit that had the Family Report been received prior to the commencement of the hearing the attendance of counsel for the Independent Children's Lawyer in the proceedings, for which costs have been incurred, would not have been necessary. This submission is made in circumstances where the parties were able to reach agreement in respect of the parenting aspect of their matter shortly after receipt of the Family Report on the morning of the first hearing date. However, as counsel for the Independent Children's Lawyer noted, the costs notice issued by the Independent Children's Lawyer makes clear that a substantial portion of the costs of the Independent Children's Lawyer were incurred prior to the commencement of the final hearing.
It is relevant that the role played by the Independent Children's Lawyer in parenting proceedings, including in this matter, is invaluable. The role of the Independent Children's Lawyer was summarised in the context of an application for costs in proceedings before the High Court of Australia in CDJ v VAJ (No 2) (1998) 197 CLR 172. Specifically, at 248 [11], Kirby J said:
[97]
The children's representative has a duty to "act in an independent and unfettered way in the best interests of the child". This duty carries over to an appeal. The interests of the children and their welfare is of concern to the public. Those interests extend beyond, and are separate from, the interests of the parents. The children are the children of both parties. They should share equally the costs of their children being separately represented in this Court.
[98]
It is in the public interest for the best interests of children to be represented in proceedings before this Court and the Court invariably receives substantial assistance, in that regard, from Independent Children's Lawyers appointed in parenting proceedings. Such assistance was, undoubtedly, provided by the Independent Children's Lawyer in this case.
(5)In considering what order (if any) should be made under subsection (2) in proceedings in which an independent children's lawyer has been appointed, the court must disregard the fact that the independent children's lawyer is funded under a legal aid scheme or service established under a Commonwealth, State or Territory law or approved by the Attorney-General.
[100]
Accordingly, it is my view that the Independent Children's Lawyer should be presumed to be unfunded and, having regard to authority, in those circumstances, the Court is generally inclined to order litigants to contribute to the Independent Children's Lawyer's costs: Gahen & Gahen (No 2)[2013] FamCA 936 and De Roma v De Roma(2013) 49 Fam LR 226.
I note that the Independent Children's Lawyer has sought an order for costs to be paid by the parties in the proportion of 50% each of a lump sum amount.
Pursuant to r 19.18(1)(a) of the Family Law Rules 2004 (Cth), the Court may make an order for costs of a specific amount. Having regard to the principles adumbrated by Kent J in Stoian & Fiening (Costs)[2014] FamCA 944 at [91] and upon considering the amount of work involved in this case, I am satisfied that the costs in the sum of $11,285.20 sought by the Independent Children's Lawyer, is logical, fair and reasonable. I will, therefore, make an order for costs as proposed by the Independent Children's Lawyer for each of the parties to pay 50% of that amount. For the reasons which I have set out, I will, however, specify that the amount can be paid within a period of 12 months from the date of these Orders.
[101]
For the above reasons, I make the Orders as set out at the commencement of my reasons for judgment.
[102]
I certify that the preceding ninety-nine (99) paragraphs are a true copy of the reasons for judgment of the Honourable Deputy Chief Justice McClelland delivered on 1 July 2020.
Legislation Cited (3)
Support (Assessment) Act 1989
Law Rules 2004
Law Act 1975
Cases Cited (5)
(2013) 50 Fam LR 120
(2016) 56 Fam LR 314
(1998) 197 CLR 172
(2013) 49 Fam LR 226
(2005) 33 Fam LR 123
AI Analysis
Outcomeplaintiff
Disposition:
Order setting aside the binding child support agreement dated 16 August 2012 (pursuant to s 136(2)(d) CSA Act) as at the date of the Orders; order that within 12 months each party pay $5,642.60 to Legal Aid for ICL costs. Application to extinguish arrears dismissed.
The father states that, while proceedings regarding his dismissal were being conducted with the Fair Work Commission, Ms D's employment was also terminated by C Pty Ltd. As a result of what the Fair Work Commission found to be an "unfair dismissal", an amount of compensation was awarded to her.
In 2014, the parties were divorced.
In 2015, the father commenced employment with F Pty Ltd, where he was tasked with changing the structure of the business. F Pty Ltd manufactures and supplies products to international businesses.
On 4 June 2015, the father and Ms D together purchased F Pty Ltd for $30,000. As part of the transaction, the liabilities of the business were also transferred to the father and Ms D with the business.
In 2015, the father and Ms D were married.
In the financial year of 2015, although the father had not earned a salary, he received a dividend payment of $80,000 from F Pty Ltd by way of "pro-rata employer's loan payments".
On 18 August 2016, the father instructed his solicitors to write a letter addressed to the mother advising that the father intended to apply to reduce the amount of child support he was required to pay under the Agreement.
On 1 September 2016, the father made the last payment to the mother, pursuant to the Agreement, in the sum of approximately $1,433 (this figure being the indexed amount of the specified payment). The mother then requested the Child Support Agency ("the CSA") to collect the child support payments due to her under the Agreement. They did so commencing November 2016.
On 7 October 2016, the father filed an Initiating Application commencing proceedings in the Federal Circuit Court of Australia. The Application included a proposed order that "pursuant to s136 of the Child Support (Assessment) Act1989, the Binding Child Support Agreement dated 16 April 2012 be set aside".
The father contends that, in 2016, F Pty Ltd continued "failing" and was accruing "significant company debt". The mother, however, contends that, until the impacts of the COVID-19 pandemic materialised in 2020, F Pty Ltd had been "turning over approximately $6 million dollars per year". She further attests to the father having been in a position to afford expenditures such as the child's private school fees, vehicles and holidays. The father, however, submits that his holidays with X have been paid for by either Ms D or members of his family, or, alternatively, by his and Ms D's frequent flyer points which he accumulated through work-related travel.
In respect to his financial circumstances in 2016, the father refers to his Financial Statement filed 7 October 2016 and states, at paragraphs 70 and 71 of his Affidavit filed 29 May 2020, that:
In that respect, counsel for the mother referred to the Financial Report of F Pty Ltd prepared by N Accounting for the financial year of 2018 (marked 'Exhibit 2' in the proceedings). Specifically, counsel for the mother cited references to fully franked dividends in the amounts of $60,000 in 2017 and $76,000 in 2018 and stated that those sums should be taken into account as being monies available to the father despite the assertion he made in 2016 that he was and remains incapable of continuing to meet his child support obligations under the Agreement.
The second order proposed by the father arises in the context of the Orders made by Judge Henderson, as she then was, staying the child support payments on the basis that the father pays $580 per month to the mother. Specifically, despite the obligation under the Agreement being stayed, the balance of the payments due pursuant to the Agreement has been accruing as arrears owing to the mother. Accordingly, counsel for the father submits that, if the Agreement is not set aside by this Court, the debt will continue to increase in circumstances where the father is not in a position to pay the child support payments due nor the arrears accruing. This is in addition to the debt that the father owes to the ATO in the sum of $442,960.72.
In respect of that taxation debt, counsel for the father referred to a letter from K Accounting to the solicitor for the father dated 14 February 2020 (marked 'Exhibit 7' in the proceedings), which states:
As evidence corroborating the decline in business profitability, counsel for the father referred to the reducing income declared by the father and his current partner over the last four financial years. In response to that argument, however, counsel for the mother noted the possibility of creative accounting to minimise the father's personal income tax liability.
Finally, counsel for the father relied on correspondence from Ms J of L Organisation dated 12 February 2020 (marked 'Exhibit 6' in the proceedings), to which I have earlier referred as evidence of the dire financial circumstances of the company. That letter is admissible as a business record, however, in terms of its weight in establishing that the company was, in 2018, technically insolvent, it is to be noted that the letter does not purport to be an expert opinion prepared in accordance with s 79 of the Evidence Act 1995 (Cth).
Accordingly, had it not been for the outbreak of the COVID-19 pandemic, the Court would not have been satisfied, on the basis of the evidence presented, that the father's business was in such dire financial circumstances that it established the existence of exceptional circumstances for the purpose of s 136(2)(d) of the CSA Act. However, the father was not challenged that, as a result of the impact of the COVID-19 pandemic, the business activity of F Pty Ltd has reduced by approximately 90%. It can reasonably be inferred that, consequently, the income derived by the father from the business will be significantly reduced below the amount which he received in the last financial year, being the sum of $41,460. It is clear that the reduction of the father's income below that level will not enable him to pay child support in the sum of $1,550 per month as required by the Agreement. I am, therefore, satisfied that the outbreak of the COVID-19 pandemic is an exceptional circumstance and, further, I am satisfied that the father would suffer hardship if the Agreement is not set aside.
The question becomes whether, in accordance with the decision of Austin J in Venson (No 2), rather than setting aside the Agreement, the Court should suspend the Agreement for a closed period of time. I note that in both Venson (No 2) and in this case, each of the parties accepted that the Court has such a power. Without deciding the issue, I will, in this decision, assume that such a power exists. Even making that assumption, however, I decline 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 not possible to determine, on the basis of 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 pursuant to the Agreement after any period of suspension.
In arriving at that decision, I note that the father's evidence, as set out in his Financial Statement, to which I will refer in greater detail below, satisfies the Court that the father does not have access to 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 those reasons, the Court will make an order terminating the Agreement as and from the date of this order.
The next question becomes the treatment of arrears payable pursuant to the terms of the Agreement which, as at the date of the hearing, totalled the sum of $$31,928.22.
I do not, however, with respect, agree with the submission of learned counsel for the father that s 141 of the CSA Act empowers the Court to make an order extinguishing "the outstanding liability in respect to the Binding Child Support Agreement". The making of such an order would be to, effectively, retrospectively vary the Agreement to reduce it from the amount of $1,550.75 per month, which is currently payable to the sum of $580 specified in the Order of Judge Henderson, as she then was, made on 1 August 2017.. That course of action is specifically precluded by s 80CA of the CSA Act which specifically provides that "a binding child support agreement must not be varied".
In the alternative, it was argued that s 141(1)(h) of the CSA Act empowers the Court to retrospectively set aside the Agreement. In the absence of a contrary argument being presented, I accept that power exists. However, on the facts of this case, to relieve the father of his obligation to pay arrears of child support pursuant to the Agreement would require the Court to make an order terminating the Agreement as of the date of the Orders made by Judge Henderson in respect of the Agreement. That date is a date considerably earlier than the date that the Court has determined that exceptional circumstances exist justifying the termination of the Agreement. Those circumstances, as explained, are as a result of the outbreak of the COVID-19 pandemic. In those circumstances, I would be acting contrary to the direction of Parliament as set out in s 136(2)(d) of the CSA Act which provides that the precondition to making such an order setting aside a binding child support agreement is a finding that exceptional circumstances exist.
Accordingly, I decline to make the second order sought by the father extinguishing his liability to pay the arrears of child support, pursuant to the Agreement, in the period prior to the date of these orders.
In this matter, I am, however, satisfied that the financial circumstances of both of the parties are such that an order for them to pay costs should be extended to a period of 12 months.