BRASH and BRASH

[2012] FCWAM 13

JURISDICTION : MAGISTRATES COURT OF WESTERN AUSTRALIA –

150 TERRACE ROAD

ACT : CHILD SUPPORT (ASSESSMENT) ACT 1989

LOCATION : GERALDTON

CITATION : BRASH and BRASH [2012] FCWAM 13

CORAM : KAESER A/M

HEARD : 3 NOVEMBER 2011

DELIVERED : 7 FEBRUARY 2012

FILE NO/S : PTW 2099 of 2000

BETWEEN : BRASH

Applicant Husband

AND BRASH

Respondent Wife

Catchwords:

TRANSITIONAL CHILD SUPPORT AGREEMENT - application to set aside - no exceptional change in circumstances - agreement not set aside

Legislation:

Child Support (Assessment) Act 1989 (Cth)

Category: Not Reportable

Representation:

Counsel:

Applicant : Self Represented Litigant
Respondent : Self Represented Litigant

Solicitors:

Applicant : Self Represented Litigant
Respondent : Self Represented Litigant

Case(s) referred to in judgment(s):

Daley and Daley (2009) FLC 98-039

WORDS IN SQUARE BRACKETS REPLACE WORDS USED IN THE ORIGINAL JUDGMENT - PARTIES’ NAMES AND IDENTIFYING DETAILS HAVE BEEN CHANGED

1 Mr [Brash] has applied to set aside a child support agreement. Agreement was

reached on 1 November 2007. The date of the agreement lodged with the Child

Support Agency was 25 March 2008.

2There is no direct evidence of the date the agreement was accepted by the Child Support Agency, but given the date on the agreement I can infer that it must have been accepted prior to 1 July 2008. This date is important for reasons I will explain in a moment.

3Mrs [Brash] says that either the child support agreement should remain in place or there should be a departure order increasing the current amount from $200 per month to $300 per month.

4Very little evidence was filed by each party. Neither party sought to cross- examine the other. Each simply relied on the evidence filed and made some brief submissions.

5Mr Brash is 44 years old and the children in question, [Mark] and [Susan] are 16 and 15 respectively.

6His case is that he was working at the time he signed the child support agreement. He stopped work on 29 June 2010, so seeks to set aside the agreement from that date.

7He has paid virtually no child support since that date so there are currently arrears owing. The agreement has been registered with the Child Support Agency so they have been collecting the arrears. There was no up-to-date evidence of the current arrears owing but in October 2010 the amount owed was just over $1,200. The amount accruing since then is $200 per month plus any interest and penalties. It is clear then that the agreement has continued to operate beyond 1 July 2008. Again this is significant.

8Mr Brash relies upon his medical condition to justify his lack of work. He says he has no earning capacity and therefore the agreement should be set aside.

9Mrs Brash says there is no medical evidence in support of the alleged medical problems. She does not accept that he has no earning capacity. She says that the amount of child support should reflect his earning capacity rather than his income. He has chosen not to work and be a “house husband” and rely upon his current wife to support him. In this way he is attempting to avoid his legal obligation to support his children.

The Law

10 A child support agreement cannot be varied, only set aside or terminated pursuant to s 80CA and 80F of the Child Support (Assessment) Act 1989 (“the Act”).

The court therefore has no power to make a departure order under s 117 if it considers the terms of the agreement should be varied.

11 The consequence of setting aside the child support agreement is that Mrs Brash would then be at liberty to lodge a child support assessment. The parties would then have the usual administrative processes available pursuant to the child support legislation.

12 If I were to leave the current child support agreement in place then the child support agency would continue to collate and attempt to collect the accruing arrears.

13 No doubt at some stage the agency would consider issuing an enforcement application against Mr Brash to recover the outstanding arrears.

14 The power to terminate or set aside a child support agreement is set out in s 136(2) of the Act:

“[Requirements that must be satisfied] 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:

(a) that the party’s agreement was obtained by fraud or a failure to disclose material information; or

(b) that another party to the agreement, or someone acting for another party:

(i) exerted undue influence or duress in obtaining that agreement; or

(ii) engaged in unconscionable or other conduct;

to such an extent that it would be unjust not to set aside the agreement; or

(c) in the case of a limited child support agreement:

(i) that because of a significant change in the circumstances of one of the parties to the agreement, or a child in respect of whom the agreement is made, it would be unjust not to set aside the agreement; or

(ii) that the agreement provides for an annual rate of child support that is not proper or adequate, taking into account all the circumstances of the case (including the financial circumstances of the parties to the agreement); or

(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.”

15 There is no suggestion that the original agreement was obtained by fraud or a failure to disclose material information. There was no undue influence involved, no duress and no unconscionable conduct involved in the agreement.

16 Mr Brash accepts that the agreement was appropriate at the time but says his circumstances have changed since then.

17 Different factors apply in considering an application to set aside an agreement depending on whether it is a limited or a binding child support agreement.

18 It is therefore necessary to determine what this agreement is.

19 A limited child support agreement is defined in s 80E as one which: (a) is in writing; and

(b) is signed by the parties; and

(c) complies with section 81(2); and

(d) either:

(i) it meets the conditions in subsections (2), (3) or (4); or

(ii) it has been accepted by the Registrar under section 98U.

20 Section 81(2) provides that the agreement must be about children in relation to whom agreements can be made, about persons who may be parties to such an agreement and must contain provisions allowed in such agreements.

21 Clearly this agreement meets the requirements of a valid agreement. These parties are people who may otherwise have applied for a child support assessment. The children are children who would otherwise be covered by a child support assessment.

22 The agreement itself complies with the requirements as to form, as it was completed on a form approved and published by the child support agency.

23 Child support was clearly payable on the day the Agreement was lodged with the

Registrar for acceptance.

24 This agreement satisfies the definition of a limited child support agreement.

25 A binding child support agreement is one in which legal advice has been obtained beforehand and that is clearly noted on the agreement itself.

26 This agreement does not have the appearance of a binding agreement.

Transitional arrangements were, however, put in place when the child support legislation was amended (with effect from 1 July 2008). Transitional agreements are those agreements that were made and accepted by the Child Support Agency prior to

1 July 2008. The process adopted by the Child Support Agency was that each such agreement was reviewed as to whether it should continue or be terminated. The agreements that continue (such as this one) took effect as if they were binding agreements. I consider that this agreement would have been deemed to continue as it has no clause that provides for termination of child support until each child reaches the age of 18.

27 This agreement is therefore a transitional agreement and the court must treat it as a binding child support agreement.

28 Section 136(2) then allows the court to consider setting aside such an agreement where, because of exceptional circumstances relating to a party or a child, that have arisen since the agreement was made, the applicant or the child would suffer hardship.

29 “Exceptional circumstances” is a fairly stringent test. In Daley and Daley (2009) FLC 98-039, Brown FM reviewed the existing authorities in relation to “exceptional”. I accept that for something to be “exceptional” it must be unusual or out of the ordinary or special.

30 Firstly then, have any exceptional circumstances arisen since this agreement was made?

31 Mr Brash was working at the time the agreement was signed. He is not working now. That on its own is a significant change in circumstances, although not necessarily exceptional.

32 He currently relies upon his wife to support him. His financial statement notes he has no assets or debts, as presumably whatever assets he enjoys the use of are in his wife’s name. I find it hard to accept that he does not even own any household chattels or personal property. Both entries in his financial statement read “nil” in relation to those items.

33 Mr Brash says he has a spinal condition that prevents him from working.

Mrs Brash says he has had that condition since well before this agreement was signed. In one sense this is acknowledged by Mr Brash as he says he had surgery on his back well prior to the agreement being signed. His affidavit says, “Due to severe pain from a spinal injury for which I had surgery on 28 April 2006, I had to cease paid employment on 29 June 2010”.

34 The link between the date of the surgery and the date he ceased work is tenuous.

The medical reports relied upon date between 2005 and April 2007. Despite the surgery in 2006 and the evidence in the various reports, he entered into this agreement in 2007.

35 He says that his present wife accepted his disability and given that she ran her own business, he decided to stop driving trucks as he normally did. He says that he

has “not ruled out that I may find gainful employment that I can undertake notwithstanding my spinal problems”. He gives no evidence however of any efforts to gain perhaps some sedentary employment that might not aggravate his condition.

36 There is no up-to-date medical evidence provided by Mr Brash.

37 There has been a history of non-compliance by Mr Brash in terms of his child support obligations. Enforcement action has been required.

38 There has clearly been a change in circumstances since the agreement was signed. Mr Brash has voluntarily decided to terminate his usual employment, for what he says are valid reasons. There is no evidence that he has even looked for another job. He has a pre-existing condition that he had when he signed the agreement. By setting aside the agreement I would stop any chance of Mrs Brash recovering any child support for the current period. That would be unjust to her and to the children.

39 In addition, paragraph 7(e) of the agreement provides that the agreed level of child support is not to be varied if the Payer is unemployed during the term of the agreement.

40 This is Mr Brash’s application and he must satisfy the test as described above. I consider he has failed to prove his case. The change in Mr Brash’s circumstances is not exceptional. In addition, I am not satisfied that Mr Brash will suffer hardship at all let alone as a result of any exceptional circumstances.

41 I therefore do not agree with Mr Brash that the child support agreement should be set aside.

42 I have already advised the parties that I would be making orders about costs submissions in writing, given that this matter was heard in the Geraldton Circuit.

Orders

1. The Form 1 application filed on 28 January 2011 and the Form 1A

response filed on 28 March 2011 be dismissed.

2.In the event that either party seeks an order for costs, that party is to file and serve written submissions within 28 days of the date of this judgment.

3.In the event that a party makes an application for costs, the other party has 14 days from service of the submissions to file and serve written submissions in response.

4.The issue of any costs arising is to be determined in chambers on the basis of the written submissions.

I certify that the preceding [42] paragraphs are a true copy of the reasons for judgment delivered by this Honourable Court

Secretary