The financial effects of COVID-19 are being felt far and wide in our community. Many people are finding they are no longer able to sustain financial commitments they made prior to the pandemic.
The Court has recently been required to consider whether a Father’s obligation pursuant to a Binding Child Support Agreement should be set aside as a result of the significant impact the global pandemic has had on his business and in turn his income.
Martyn & Martyn  FamCA 526
In the recent decision in Martyn & Martyn  FamCA 526 the Court was required to consider whether a Binding Child Support Agreement (“the Agreement”), entered into in 2012, should be set aside as a result of the detrimental impact that COVID-19 had had on the income of the Father.
The Father operated a business supplying product to international companies. The total sales of his business had reduced by 90% as a result of the COVID-19 pandemic. The Father submitted that both he and his current partner were now reliant on Job Keeper and the business they operated had laid off 100 casual workers. The international and domestic border restrictions the downturn and the Father anticipated an insolvency event by September 2020.
The Mother opposed the Agreement being set aside and argued that the Agreement should be suspended to allow the impacts of COVID-19 to pass, rather than terminating the Agreement.
Binding Child Support Agreements are not easily set aside or departed from without agreement. In order to set aside a Binding Child Support Agreement, the Court is required to be satisfied of the following three matters:
- That there are exceptional circumstances which relate to a party to the agreement or a child in respect of whom the agreement is made;
- That those exceptional circumstances arose after the agreement was made; and
- That the applicant or the child will suffer hardship if the agreement is not set aside.
In this matter the Court found that:
- The Father would be unable to pay child support as required by the Agreement due to his significantly reduced income;
- The COVID-19 pandemic was an exceptional circumstance; and
- If the Court did not set the Agreement aside the Father would suffer hardship.
The Court declined to exercise its discretion to suspend the Agreement rather than set it aside as was sought by the Mother. In doing so the Court said that there was an “understandable absence of evidence as to the likely duration and impact of the COVID-19 pandemic on international commence”.
This decision highlights the devastating financial effects that the COVID-19 related restrictions have had on individuals financial circumstances and in turn the effect this has and will continue to have on the ability of people to meet their financial obligations, including payment of child support.