Birth of child and setting aside agreement

Birth of child and setting aside agreement

Fewster & Drake

Can the birth of a child, of itself, engage s 90K(1)(d)? (Ground 1.1)

60. The husband submitted that the birth of a child, of itself, cannot be a material change relating to the care, development and welfare of a child. Rather, he submits the material change in circumstance must be directed to the care, welfare and development of a child and not to his or her birth. This is said to be so because the ordinary expectation of married life is the birth of a child.
61. It may immediately be observed that if the birth of a child is within the ordinary realms of expectation of a marriage so is the care, welfare and development of a child.
62. The birth of a child leads inexorably to his or her care, development and welfare. We do not see why a birth cannot be a material change in circumstances for the purpose of s 90K(1)(d). Whether it in fact is such a change will depend on all of the circumstances.
63. The primary judge did not err in finding that the birth of the second child and the mother having the overwhelming care of the children physically and financially after separation constituted a material change in circumstances that had arisen since the agreement was entered into.

Did the primary judge err in his interpretation of “hardship” within s 90K(1)(d)? (Ground 1.2)

64. As developed in both the written and oral submissions, this ground became the vehicle for three separate challenges to the primary judge’s reasons. The first is that the section requires the Court to consider whether the hardship arose from the changed circumstance and not from the agreement itself. The second is that the answer to the first finding cannot be made by reference to the agreement alone but requires a comparison between what is provided for by the agreement and the present circumstances of the child or carer. Finally, it was submitted the Court must find hardship and not merely unfairness for s 90K(1)(d) to apply.
65. The husband correctly submits that the words “as a result of the change” indicate that the relevant hardship with which the section is concerned is the hardship which is caused by the change in circumstances. It is the changed circumstances which must give rise to the hardship, and not the agreement itself. It is to be recalled that, subject to compliance with the statutory requirements, people are free to enter such binding financial agreements as they see fit. There is no statutory provision which enables a binding financial agreement to be set aside merely because it is unfair: Hoult & Hoult (2013) FLC 93-546 at 87,283 and 87,296 – 87,298.
66. The primary judge referred, at [98] of his reasons, to the changed circumstances (the birth of the second child) and to the agreement failing to contain any provision for the increased responsibility for the child. His Honour concluded at [99] that the agreement “inevitably creates ‘hardship’ for the wife”. That is to pose an incorrect test, as identified above.
67. We turn now to the second aspect of this challenge. The concluding words of s 90K(1)(d) are “if the court does not set the agreement aside”. Logically and inevitably those words require the court to undertake some comparison between the position of the child, or the person with caring responsibility, if the agreement remains in place and the position of that child or person if the agreement is set aside. It is only by doing so that the court can place itself in a position to determine whether there will be hardship if the agreement is not set aside. The primary judge did not undertake such a comparison.
68. Finally, we accept the husband’s submission that the hardship required by the section is something more than unfairness. In In the Marriage of Whitford (1979) FLC 90-612 (“Whitford”) at 78,144-78,145 the Court said that hardship is:

…akin to such concepts as hardness, severity, privation, that which is hard to bear or a substantial detriment…
…
In ordinary parlance, hardship means something more burdensome than “any appreciable detriment’”. We consider that in subsec. 44(4) the word should have its usual, though not necessarily its most stringent, connotations.

69. Although Whitford was a case dealing with s 44(4) and applications for leave to institute property proceedings, these passages are relevant to s 90K(1)(d), as they discuss ‘hardship’ in the context of its ordinary meaning. There is nothing in the terms of s 90K that suggests a different approach should be taken.
70. It is convenient to repeat the findings made by the primary judge in Pascot, which were adopted by the primary judge in this matter in relation to hardship:
    378. If the Agreement is set aside, the wife would be able to make an application for orders under secs 72 and 79 of the Act. It is safe to say that the outcome of such an application is likely to be very different to that brought about by the Agreement.
    379. In light of this, I would find that hardship on the part of the wife is established, and that setting the Agreement aside is the only remedy.
71. Those findings do not establish hardship as it is correctly understood.
72. This ground of appeal has been established.