Pearson and Pearson-Garrett
[2011] FMCAfam 858
•12 September 2011
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| PEARSON & PEARSON-GARRETT | [2011] FMCAfam 858 |
| CHILD SUPPORT – Allegations of hardship – allegations of unconscionable conduct – no pool – application dismissed. |
| Child Support (Assessment) Act 1989, s.137 |
| Wright v Gibbons [1954] HCA 17; (1954) 91 CLR 423 |
| Applicant: | MR PEARSON |
| Respondent: | MS PEARSON-GARRETT |
| File Number: | BRC 11342 of 2009 |
| Judgment of: | Coates FM |
| Hearing date: | 18 July 2011 |
| Date of Last Submission: | 18 July 2011 |
| Delivered at: | Brisbane |
| Delivered on: | 12 September 2011 |
REPRESENTATION
| Solicitors for the Applicant: | Self represented |
| Solicitors for the Respondent: | Dean Kath Kohler Solicitors |
ORDERS
That the Application filed by the husband on 6 June 2011 be dismissed.
That the Child Support Agreement be amended to include:-
“That if the child, [X] lives primarily with the father for a period of more than one (1) month, the father will not be required to pay child support during that time. The child support will be required to re-start after one (1) month if [X] returns to live primarily with his mother. For the purposes of this clause, “primarily” means more than four (4) days and five (5) nights a week on average.”
That the arrears in child support currently owed by the husband as at the date of date of judgment be paid in full to the wife within 60 days of the date of the Order.
IT IS NOTED that publication of this judgment under the pseudonym Pearson & Pearson-Garrett is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT BRISBANE |
BRC 11342 of 2009
| MR PEARSON |
Applicant
And
| MS PEARSON-GARRETT |
Respondent
REASONS FOR JUDGMENT
The husband brings an application to set aside a binding child support agreement; that any arrears and/or penalties accrued since 26 August 2010 pursuant to the Agreement be discharged; that upon the court not being satisfied that there are grounds of departure under the Child Support (Assessment) Act 1989 that the husband pay support as assessed by the Child Support Agency; that the applicant serve the Child Support Registrar with a sealed copy of such Orders and that there be liberty to relist the matter in the event there are difficulties in the implementation of these Orders by the Child Support Agency.
The wife seeks that the Application be dismissed or in the alternative, that if one child lives primarily with the husband for a period of more than one month the husband not be required to pay child support during that time, but, that child support begins again one month after the child returns to primarily live with the wife - which she says will be four days and five nights in a week; that arrears be paid from 18 July 2011 within 60 days of the date of any Order and that she be awarded costs according to this court’s schedule.
The husband was not represented but had been represented when his material was prepared. He sought leave to be represented or at least in relation to submissions by a person he described as a McKenzie friend but I was satisfied that he could adequately make his submissions.
The wife was represented.
The Law
Section 137 of the Child Support (Assessment) Act1989 states:
“Court may make orders consequential upon the discharge of orders etc.
(1) This section applies where an order under section 123A or 124 is discharged by a court under section 129 or ceases to be in force because of section 142 (Cessation of orders under Act).
(2) A court having jurisdiction under this Act may make such orders (including orders for the transfer of property) as it considers just and equitable for the purpose of preserving or adjusting the rights of the child concerned or a person who is or was a carer entitled to child support, or a liable parent, in relation to the child.
(3) An order under subsection (2) may be made in the proceeding in which the order is discharged or in another proceeding brought on the application of a person who is or was a carer entitled to child support, or a liable parent, in relation to the child concerned.
(4) In the exercise of its powers under this section, a court must have regard to the interests of, and must make any order proper for the protection of, a bona fide purchaser or other person interested.”
Facts
The husband was born [in] 1967 and is aged 44.
The wife was born [in] 1970 and is aged 41.
They married [in] 1996.
There are three children: [X] born [in] 1998 aged 12, [Y] born [in] 2000 aged 10 and [Y] born [in] 2002 aged 8.
The parties separated in mid-2008 after a 14-year relationship and divorced on 15 May 2010.
The parties executed a child support agreement on 28 October 2008, a copy of which was attached to the husband’s affidavit.
By clause 2 of that agreement, the husband agreed to pay the sums of $140 per week for [X], $130 per week for [Y] and $130 per week for [Z].
The agreement ends on the fifth anniversary of the commencement date so it is still in operation as at the date of hearing and will expire on 15 May 2013.
The husband stated that he paid $400 a week pursuant to the agreement from 28 October 2008 until 26 August 2010.
On 26 August 2010, he reduced the child support by $150 per week.
He said he has managed to pay $150 a week for most weeks since
26 August 2010. He said his last payment of $150 was made to the wife on 1 March 2011, with a payment of $100 on 21 March 2011 and
28 March 2011. He ceased payments in April 2011.
He also said from 19 August 2010 he paid $20 a week on average for the children’s [sport omitted] expenses and that he paid half of the costs associated with school books, school excursions and [omitted] lessons.
The husband seeks to have the agreement set aside for:
a)Exceptional circumstances which have arisen since the agreement was made which would cause him hardship; and/or
b)The wife exerted undue influence or duress in obtaining his consent to the agreement so that it would be unjust not to set the agreement aside; and/or
c)The wife engaged in unconscionable or other conduct such that it would be unjust not to set the agreement aside.
Exceptional Circumstances
As to exceptional circumstances, the husband gives evidence that his relationship status, his financial capacity and the parenting arrangements have changed since the agreement was made.
In mid-February 2009 he commenced a relationship with MS M and they have a child, [C] born [in] 2011.
The husband resided in New Zealand from 29 October 2008 to 10 June 2010.
On going to New Zealand, he said he borrowed $50,000 from his parents to support a business, of that he put $6,000 towards an Australian taxation liability and credit card liability which were joint marital debts and he paid $32,000 for his child support payments until April 2009. He said he was then able to sell a joint investment property although that achieved $15,000 less than anticipated.
He said, since his return to Australia, his financial capacity has been reduced making life difficult because the agreement was based on different figures.
He also said he retained $60,000 from the proceeds of the sale of the investment property. As at April 2009 to August 2010, he repaid his parents $15,000 and paid interest at the rate of $170 per month on the remaining $35,000 they had lent him. I should say there is no documentary or other evidence of that.
He operates as a sole trader in a [omitted] business and he said he estimates he takes $60,000 to $75,000 annually, although he does not have a profit and loss statement.
He said he now has the care of the child, [X], who has emotional disorders according to paediatrician, Dr A. That does not seem to be disputed.
There is a dispute about whether [X] will stay with the husband permanently but the evidence suggested that such is likely.
Of relevance to this application, the wife states she has allowed for a reduction in the child support paid under the agreement of $140 a week, unless [X] returns home, although the husband states the wife wanted him to sign an agreement to that effect.
The husband calculates that if the agreement is allowed to run its natural term he would owe $41,166 if it is not set aside now, although the wife disputed the figure because of changes in [X]’s residence.
The husband said there may be penalties imposed by the Child Support Agency if he did not pay.
His case is that both he and [X] would suffer financial hardship if I do not set the agreement aside.
With regard to the facts identified by the husband under the heading “Exceptional Circumstances”, he simply makes many assertions which if true may support his case, but he is dealing with figures for which there should be documentary evidence, and he produces nothing.
Unconscionable Conduct
The allegations in this category are baffling.
The husband alleges that, before the agreement was signed, the wife deliberately and fraudulently misrepresented the husband’s average income at a rate much higher than his actual income.
His evidence is to the effect that she controlled the books of his business.
As well, he asserts that the wife withheld information about the value of a [omitted] business she conducted and refused to assign a value to the family furnishings.
He alleges that threats were made to him at the same time that:
a)She would inform the Australian Tax Office of his “fraud”;
b)Seek restraining orders against his employer and friends;
c)Obtain a domestic violence order; and
d)Withhold the children if he did not pay extra money to her.
He also asserts his solicitors at the time let him down.
As against this, the wife relies on the agreement, stating it [the agreement] was prepared by the husband’s solicitors and both parties had independent legal advice – a submission which was not challenged.
She said that upon signing the agreement he told her next day he was moving to New Zealand.
She said he told her he earned between $90,000 and $100,000 that year and some was cash-in-hand money.
Importantly, the wife states the husband has not filed tax returns and if this is not the case, he has not produced any to support his application.
She said that he has another child which was a circumstance which could have been reasonably expected at the time he signed the agreement. I do not accept that submission as there could be an infinite number of circumstances which could be determined by hindsight, including future children from another relationship.
She said she agreed to [X] living with the husband in April 2011 and that child support be reduced by $140 a week.
She also states that he is working in a similar manner to that in which he worked when he signed the child support agreement, as a self-employed subcontract [omitted].
She also says, importantly, that the husband sought to change the child support agreement within days of his name being removed from the mortgage of the former matrimonial home (under a property settlement) and he had maintained payments until his name was removed.
As to the “fraud” elements relied on by the husband, the wife stressed that he wanted the agreement signed before he left Australia and he was paying twice as much before signing the agreement.
She also said that while he states he was not happy with his solicitor, he chose to go to a firm to draft the material for this application which had the same supervising partner as the firm which drafted the original agreement.
That is not explained by the husband and so I would have to conclude that the husband’s complaints are either not real or serious or he has not told the whole story.
Analysis of the evidence
The husband bears the onus of proving his case. The test is on the balance of probability. To meet that standard he must produce persuasive and cogent evidence of his claims.
It is not to the point that the husband considered the relationship between himself and the wife was strained at the time of signing the agreement, that is why legal advisers were between the parties so they would be aware of the rights and duties.
Whilst the husband complains that his solicitors did not serve him, that requires compliant to the Legal Services Commission, although if it is true that he recently used the services of a firm where the supervising partner was from the firm which drafted the agreement, then he may have some difficulty of explaining his now lack of faith in their services of drafting the agreement.
It is also relevant that the husband states in his affidavit that his solicitor stated at the time of the agreement that it was “a very good deal” for the wife.
Whatever was “a very good deal” for the wife, it is an admission that he was put on notice and made an informed decision. That he was suffering depression, that he said he did not have access to his own financial position, that the wife allegedly threatened him with all sorts of consequences is beside the point for these reasons:
a)There is no evidence that the depression was such where it could be said he lacked capacity to understand and make the decision to sign the agreement.
The husband’s solicitors, when preparing the application, obtained a psychologists report from a Mr T in New Zealand who treated him for anxiety and mild depression, but what is required was evidence to support his case that at the time he signed the agreement he did not have the capacity because of depression and stress to understand what he was doing. In Wright v Gibbons [1954] HCA 17; (1954) 91 CLR 423 where capacity to transfer land was questioned, at paragraph 7, Dixon CJ Kitto J and Taylor J, held that:
“The law does not prescribe any fixed standard of sanity as requisite for the validity of all transactions. It requires, in relation to each particular matter or piece of business transacted, that each party shall have such soundness of mind as to be capable of understanding the general nature of what he is doing by his participation”.
b)The actual [Mr T] evidence is also inadmissible because it is not sworn evidence, however even if it was sworn, it would be simply irrelevant to the claim made for not addressing the capacity question and so would be inadmissible on that basis;
c)That he was signing a far reaching agreement purporting to bind himself created, in my view, a duty to understand his own financial position. He was representing that he could afford the child support under the agreement and there is only an assertion that he did not understand his position, especially when he said he borrowed $50,000 from his own parents so he must have had an appreciation of his commitments;
d)Further, the husband did not produce his income tax assessments for relevant years, yet asserts figures as being true and correct of his income over various years. What could be easier evidence to obtain and evidence which surely would be difficult to question than income tax returns? Flooding the court with assertions of earnings over the years is to cause an immediate reaction – where is the evidence? Further, against an income tax return, allegations, like those made here, that cash-in-hand earnings were taken, is sometimes very hard to prove. It may be the case that the husband’s income dropped significantly in 2009 as he states, but the Act requires a case to be presented which show a change of circumstances, not an assertion of such; and
e)If the wife was acting in a manner which was threatening, where is the evidence of him taking action to ensure that his legal rights in relation to all aspects surrounding the children were protected?
There is one final circumstance which must be addressed and that is that the husband and his new wife now have a child, born in 2011.
This could be a real issue, but unfortunately, the costs of the new child are not set out, nor is there evidence given by his new partner of her income position. All that is before the court is a statement that she works part-time for $400 a week and that she intended taking three months leave from May 2011.
The Act requires the change of circumstances to be fully set out and unless it appears that such would not be necessary, documentary evidence of the financial circumstances of the applicant was necessary for the success of this case.
The husband has not paid child support pursuant to the agreement. The object of child support legislation is to secure the support of a party’s child or children, with specified circumstances set out in order to determine a change to arrangements put in place. The husband should bring his child support arrears for his children up to date from the time I deliver this judgment and I will give him time as sought by the wife, being 60 days. I will also dismiss his application for failure to produce supporting evidence.
I certify that the preceding fifty-eight (58) paragraphs are a true copy of the reasons for judgment of Coates FM
Date: 12 September 2011
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