COVID-19 Unravels Binding Child Support Agreement

Parents often enter into Binding Child Support Agreements to give certainty regarding ongoing child support obligations. Binding Child Support Agreements can only be set aside in very limited circumstances.

A recent case before the Family Court (Martyn & Martyn) considered the impact of COVID-19 on the Husband’s business and whether that met the criteria for exceptional circumstances “to set aside the Agreement.” 

The Father gave evidence that he was unable to continue paying child support of $580 per month.  In part, the evidence before the Court was that the Father was in receipt of the Federal Government’s Job Keeper Payment Scheme and that his international business had declined by 90% as a result of the impact of the COVID-19 pandemic. A summation of the financial position of the Husband’s company was it was “technically insolvent.”

 The Court considered what the expression “exceptional circumstances” meant, noting that in decisions words such as “unusual or out of the ordinary, usual or extraordinary” had been used. With respect to the term hardship the Court said the concept involves such terms as “hardness of hate or circumstances; severe suffering or privation” or “a condition that is hard upon one; severe toil, trial, oppression or need; to cause to suffer privations.”

The Mother sought that the Agreement be suspended, however the Court in considering the impact of the COVID virus the His Honour said:-

“…I decline to exercise the discretion to suspend rather than set aside the Agreement because there is an understandable absence of evidence as to the likely duration of impact of the COVID-19 pandemic on international commerce. In other words, it is 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.” 

This will not be the first case that comes before the Court where a party is seeking an adjustment to their financial obligations due to the impact of COVID-19, which will have a flow on effect in all likelihood for many years.

By CE Family Law.