Binding Child Support Agreements and the "exceptional circumstances" of COVID-19

Throughout this year, "unprecedented" has become something of a buzzword to describe the massive economic and social consequences brought about by the COVID-19 pandemic.

The effects of the COVID-19 pandemic can also be described as "exceptional circumstances" for the purpose of setting aside a Binding Child Support Agreement according to the Deputy Chief Justice of the Family Court in his decision of Martyn & Martyn [2020] FamCA 526.

Ordinarily, to set aside a Binding Child Support Agreement, the Court must be satisfied that the following three limbs are established:

1. That there are exceptional circumstances which relate to a party to the agreement or child in respect of whom the agreement is made;
2. That those exceptional circumstances arose after the agreement was made; and
3. That the applicant or the child will suffer hardship if the agreement is not set aside.

In Martyn & Martyn, the father sought to set aside a Binding Child Support Agreement (Agreement) which required him to pay the mother the sum of $1,350 per month, increasing by 2% each year.

The Court decided that the COVID-19 pandemic did amount to exceptional circumstances, and that by virtue of the father's business' sales falling by 90%, the father would suffer hardship if the Agreement was not set aside.

The Court further declined to suspend the Agreement (rather than terminate it) as there was an "understandable absence of evidence as to the likely duration and impact of the COVID-19 pandemic on international commerce."

What does this mean for other cases in light of of the COVID-19 pandemic?

The Court appears to have accepted that the economic effects of COVID-19 can amount to "exceptional circumstances" for the purpose of setting aside Binding Child Support Agreements entered into prior to the pandemic.

The Court was not prepared to accept that the deteriorating financial circumstances of one party were "exceptional circumstances" until those financial circumstances were exacerbated by COVID-19.

It is important to note, however, that in Martyn & Martyn the effect of the pandemic on the father's financial circumstances were extreme, leading to a reduction in his business' sales of 90%. Parents seeking to set aside a Binding Child Support Agreement due to exceptional circumstances related to COVID-19 will still need to satisfy the hardship criteria, and the Court will still analyse each individual case according to its own unique circumstances.

The Family and Relationship Law team at Lander & Rogers has extensive experience advising clients in relation to Binding Child Support Agreements.

Our team is actively monitoring and considering the implications of legal and regulatory developments in response to the COVID-19 pandemic. You can find our COVID-19 collection here.