Balodis & Balodis

FAMILY COURT OF AUSTRALIA
Balodis & Balodis [2021] FamCA 499

File number(s): SYC 4140 of 2019

Judgment of: GILL J

Date of judgment: 9 July 2021

Catchwords: FAMILY LAW – PROPERTY SETTLEMENT – Financial agreements – Whether financial agreement is binding – Whether side agreement is binding – Where parties did not receive legal advice in relation to side agreement – Whether unjust and inequitable not to enforce both agreements – Whether side agreement a collateral contract – Whether wife should be estopped from refusing to comply with side agreement – Whether side agreement voidable due to misrepresentation – Whether side agreement vitiated by unconscionable conduct – Where financial agreement is binding but side agreement is not binding – Where parties did not intend to be bound by side agreement

Legislation: Family Law Act 1975 (Cth) ss 90C, 90G, 90K and 90KA

Cases cited:
Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447

Crown Melbourne Ltd v Cosmopolitan Hotel (Vic) Pty Ltd (2016) 260 CLR 1

Hoult & Hoult (2013) FLC 93-546

Thorne & Kennedy (2017) 263 CLR 85

Number of paragraphs: 140

Date of hearing: 3 and 4 September 2020

Place: Canberra

Counsel for the Applicant: Ms Gillies SC

Solicitor for the Applicant: Watts McCray

Counsel for the Respondent: Mr Lethbridge SC

Solicitor for the Respondent: Edwards Family Lawyers
ORDERS

SYC 4140 of 2019

BETWEEN:
MS BALODIS

Applicant

AND:
MR BALODIS

Respondent

ORDER MADE BY:

GILL J

DATE OF ORDER:

9 JULY 2021

THE COURT ORDERS THAT:
1.It is declared that the document titled “Section 90C Financial Agreement” executed by the parties on 6 September 2018 before Mr B and annexed to these orders as Annexure A constitutes the s 90C agreement between the parties and is binding upon the parties.
2.The wife shall forthwith obtain the discharge of any extant orders that prevent the implementation of the binding agreement referred to in Order 1 above.
3.The wife’s Further Further Amended Initiating Application filed 1 September 2020 is otherwise dismissed.
4.The husband’s Further Amended Response to Initiating Application filed 28 May 2020 is otherwise dismissed.
5.Any party seeking an order as to costs in this matter is to file and serve an application in a case in accordance with Rule 19.08 within 28 days of the delivery of this judgment.

Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to 17.02 Family Law Rules 2004 (Cth).
IT IS NOTED that publication of this judgment by this Court under the pseudonym Balodis & Balodis has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT

The parties to this matter are Ms Balodis, the applicant wife, and Mr Balodis, the respondent husband.
The proceedings concern whether the parties are bound by a financial agreement they signed on 6 September 2018 (the “second binding financial agreement”) and a side agreement they signed on 6 September 2018 (the “side agreement”).
INTRODUCTION
The primary position of the parties is that the second binding financial agreement entered into by them in September 2018 is binding. They, however, differ markedly as to the scope and terms of the agreement. The difference between them relates to what is described as the side agreement.
That side agreement deals with a number of matters, including, but not limited to, matters such as who will bear responsibility for the cleaning of a property of the husband’s at C Street, London (“the C Street property”), who will bear the expense for alcohol should they entertain guests, whether consents will be given for the sale of a particular item of jointly held real property, and whether the husband will lease out the C Street property, thereby excluding the wife from the property.
The wife seeks to enforce the second binding financial agreement without the side agreement, while the husband seeks that the parties also be bound by the side agreement.
ORDERS SOUGHT
The orders sought by the applicant wife are set out in her Further Further Amended Initiating Application filed 1 September 2020.
In summary, the wife seeks to enforce the provisions of the second binding financial agreement, and that it be enforced as if an order of the Court. She seeks a declaration that the second binding financial agreement is binding upon the parties.
The wife seeks that the husband be restrained from preventing the wife from entering or remaining at the C Street property. She further seeks that she be granted possession of the C Street property in accordance with the second binding financial agreement, noting that this does not prevent the husband exercising simultaneous possession.
The orders sought by the respondent husband are set out in Schedule 1 of his case outline filed on 2 September 2020. In summary, the husband seeks that the second binding financial agreement and side agreement be together declared binding.
The husband seeks for the wife to be estopped from refusing to comply with the side agreement.
The husband seeks that the wife discharge any orders that prevent the implementation of the agreements.
Further, the husband seeks that the wife vacate the C Street property. Although he also sought for the wife to pay the husband damages for loss of rental income from 15 December 2018, this was ultimately not pursued.
In the alternative, absent the side agreement being found to be binding, the husband seeks a declaration that the second binding financial agreement be declared non-binding or set aside pursuant to s 90K(1)(b) of the Family Law Act 1975 (Cth) (“the Family Law Act”).
Each party seeks that the other pay their costs.
LITIGATION HISTORY
On 1 November 2018, the wife applied for a Home Rights Notice in the United Kingdom for the C Street property, which was granted on 2 November 2018.[1]
[1] Wife’s affidavit filed 1 September 2020, paragraph 47; Husband’s affidavit filed 26 August 2020, paragraph 42.
The wife then commenced court proceedings on 4 February 2019 in the Family Court in London, seeking an Occupation Order for the C Street property.[2]
[2] Wife’s affidavit filed 1 September 2020, paragraphs 63–65; Husband’s affidavit filed 26 August 2020, paragraphs 55–57.
On 13 March 2019, a judge of the Family Court in London granted the wife an interim Occupation Order for the C Street property.[3] The wife’s UK solicitors noted it was not possible to resolve the UK occupation proceedings on a final basis until the Australian proceedings were finalised.[4]
[3] Wife’s affidavit filed 1 September 2020, paragraph 64 and pages 52–55 (Exhibit W-5).
[4] Ibid paragraph 64 and page 62 (Exhibit W-7).
The parties now agree that the resolution of the Australian proceedings will conclusively resolve the proceedings in the United Kingdom as well.
The proceedings in Australia concerning the validity and enforcement of the second binding financial agreement and side agreement were commenced by the wife by way of an Application for Final Orders on 27 June 2019.
The husband filed an Amended Response to Initiating Application on 24 October 2019. At that stage the husband sought for the second binding financial agreement and the side agreement to be not binding on the parties.[5] He stated that he signed both the second binding financial agreement and side agreement as part of one agreement. Given the parties did not receive legal advice for the side agreement, he asserted that the whole agreement should be regarded as not binding. In the alternative, the husband sought for the financial agreement to be set aside pursuant to ss 90K(1)(b) and (c) of the Family Law Act.
[5] Husband’s Amended Response to Initiating Application filed 24 October 2019, paragraph 1.1.
On 28 May 2020, the husband filed a Further Amended Response to an Initiating Application which incorporated his points of claim. He varied his position such that he sought that the second binding financial agreement and the side agreement to be declared binding on the parties pursuant to s 90G(1A).[6] In the alternative, he sought for the second binding financial agreement to be found not binding.[7] He also sought for the wife to vacate the C Street property and to pay him damages for loss of rental income on that property from 15 December 2018 to date.[8]
[6] Husband’s Further Amended Response to Initiating Application filed 28 May 2020, page 2.
[7] Ibid.
[8] Ibid.
On 26 August 2020, the husband filed a single consolidated affidavit.
On 1 September 2020, the wife filed a Defence to the husband’s Amended Points of Claim filed on 28 May 2020 and a Further Further Amended Initiating Application. She also filed an Affidavit in Reply to the husband’s consolidated affidavit.
On 2 September 2020, the wife and husband filed a case outline document, which identified the legal bases on which they sought relief.
MATERIALS RELIED UPON BY THE PARTIES
The wife relied upon the following:
(a)Further Further Amended Initiating Application filed on 1 September 2020;
(b)Defence to the Husband’s Amended Points of Claim filed on 1 September 2020;
(c)Wife’s affidavit filed on 1 September 2020;
(d)Wife’s affidavit filed on 27 June 2019; and
(e)Case outline filed 2 September 2020.
The husband relied upon the following:
(a)Further Amended Response to Final Orders filed 28 May 2020 containing amended points of claim;
(b)Husband’s affidavit sworn and filed 26 August 2020; and
(c)Case outline filed 2 September 2020.
A joint tender bundle was provided by the parties and marked as Exhibit C1.
HOW THE PARTIES PUT THEIR CASES
The husband
The husband seeks to enforce the second binding financial agreement, but for that agreement to be read in conjunction with the side agreement. If the side agreement is not upheld, the husband seeks that the second binding financial agreement to be set aside. The husband’s case is contained in his points of contention set out in his Amended Response to Final Orders filed on 28 May 2020, in oral submissions during the final hearing and in two sets of written submissions.
Relief per s 90G(1A) – binding despite non-compliance
Firstly, the husband contends that it was intended that the agreement the parties entered into for the purposes of resolving all financial matters in dispute between them comprised both the second binding financial agreement and the side agreement, and that both he and the wife understood and intended that they would be bound by both.[9] He asserts that the side agreement is a collateral contract to the second binding financial agreement.
[9] Husband’s Further Amended Response to Initiating Application filed 28 May 2020, Respondent Husband’s Amended Points of Claim, paragraph 20.
The husband asserts that, but for such an understanding he would not have entered into either agreement.
He argues that where the side agreement is non-compliant with s 90G(1)(b) and (c) of the Family Law Act, it would nevertheless be unjust and inequitable (pursuant to s 90G(1A)) if the second binding financial agreement and side agreement were not binding on the parties.
He observes that whilst the wife did not receive legal advice on the final form of the side agreement, she had received advice on a similar document, and had the option to seek further advice if she wished to do so.
The husband identified that this is not a case where the parties’ compliance with or performance of the terms renders it unjust and inequitable to treat the terms as other than binding,[10] but rather that consideration of the matters identified by Thackray J in Hoult & Hoult[11] would lead to a conclusion that the parties should be bound by the side agreement. Those factors include that the wife had received previous advice in relation to the clause, and had further advice available to her if she so desired.
[10] Ibid paragraph 21.
[11] (2013) FLC 93-546, [57].
In his summary of argument in relation to this issue the husband asserted the following six factual matters:
(i)There is no requirement that an agreement which satisfies the provisions of the Act as binding upon the spouse parties must be comprised in a single document;
(ii) The terms comprised in both documents were negotiated contemporaneously between the parties over a period commencing in or around early May 2018 and concluding on or about 5 September 2018;
(iii) Throughout the period of negotiation referred to in (ii) above, each party had the benefit of legal advice with respect to the resolution of financial matters in dispute between them;
(iv) It is common ground that the parties each sought legal advice and there was no impediment to the nature and extent of the legal advice each of the parties chose to obtain;
(v) The terms of the Side Agreement were by reason of the parties’ negotiations intended by each of them to be binding on the other and to regulate their behaviour consequent upon the settlement of their financial relationship; and
(vi) Each of the parties entered into the Side Agreement of their own free will.[12]
[12] Summary of Argument on Behalf of the Respondent Husband, paragraph 1.2.
Relief per s 90G – setting aside
In the alternative the husband argues that the agreement is not binding on the parties, on the basis that it is not compliant with the requirements contained in s 90G in respect of legal advice.
Relief per s 90K(1)(b) – estoppel
Secondly, the husband contends that if the second binding financial agreement is alone held to be an agreement compliant with s 90C of the Family Law Act, then the wife should be estopped from denying the contents of the side agreement.[13]
[13] Husband’s Further Amended Response to Initiating Application filed 28 May 2020, Respondent Husband’s Amended Points of Claim paragraph 25.
The husband identified the applicable principles as those discussed by the High Court in Crown Melbourne Ltd v Cosmopolitan Hotel (Vic) Pty Ltd (“Crown Melbourne”)[14] in relation to promissory estoppel.
[14] (2016) 260 CLR 1.
The husband asserts that the language of the agreement is clear and unambiguous, being as set out in the side agreement, and that the parties endeavoured to act upon the side agreement with respect to different aspects of it. He says that the wife created an assumption or expectation in the husband that she would be bound by the side agreement, and to avoid detriment to him she should be caused to adhere to it.
This issue focussed particularly on cl 12 of the side agreement. Failure to comply with this term deprives the husband from the ability to lease out the property. The husband asserts that he would not have entered into the second binding financial agreement except on the basis that the side agreement was binding, and that failure to now also comply with the side agreement will cause loss and damage to the husband.
Relief per s 90K(1)(b) – misrepresentation
Thirdly, the husband asserts that the wife misrepresented to him that she would be bound by the side agreement as part of the resolution of financial matters with the husband, that he relied upon those representations and that he would not have entered into either agreement but for the misrepresentation.
The husband points to the wife’s evidence that she never intended to be bound by the side agreement as evidencing the misrepresentation.
He says both that he has now suffered detriment and that the agreement is thereby voidable at his election.
Relief per s 90K(1)(c) – impracticability
The husband initially asserted that, due to circumstances arising since the making of the agreement it is now impracticable to carry it out. In particular he identified that due to the degradation of their relationship they cannot now jointly occupy the property.
In his final oral submissions, the husband conceded that this relief was not supported. He accepted that although the joint occupancy of the parties, as anticipated by the agreement, would be unpleasant given the current state of their relationship, such unpleasantness falls short of impracticability as dealt with by s 90K(1)(c).
Damages
The husband also sought damages, but conceded that he was not in a position to pursue such in these proceedings, lacking any evidence to support such claim.
The wife
The wife seeks to enforce the second binding financial agreement, and for the side agreement to be set aside. The wife’s points of contention are detailed in her defence to the husband’s amended points of claim, filed 1 September 2020, and her Case Outline Document filed on 2 September 2020, and in oral submissions during the final hearing.
Firstly, the wife contends that the side agreement was signed by the parties in circumstances that did not satisfy the statutory requirements in s 90G(1)(b) and (c) of the Family Law Act which render it an invalid financial agreement.[15]
[15] Wife’s case outline filed 2 September 2020, page 4.
She submitted that both parties knew that for the side agreement to be binding, they needed to receive legal advice, and for that advice to be evidenced by a s 90G certificate. In answer to each of the husband's claims the wife points to the husband entering into the agreements knowing that the side agreement was not binding as disentitling him from the various forms of relief that he seeks.[16]
[16] Ibid page 3.
Secondly, the wife contends that the court cannot declare the validity of the side agreement if it does not comply with the statutory provisions, as to do so would equate to making property orders where the court could not consider that they were just and equitable. This was ultimately not a matter emphasised by the wife.
Thirdly, if the side agreement complies with the statutory requirements, the wife contends the side agreement should not be binding in on her in any event. She asserts that the husband engaged in unconscionable conduct towards her in inducing her to sign the side agreement.[17]
[17] Ibid pages 5–6.
The wife also observes that the husband has not complied with the side agreement in respect of the proposed sale of D Street Suburb E. The wife has requested its sale, which has not been agreed to by the husband.
FACTUAL BACKGROUND
The parties to the proceedings commenced living together on or about mid to late 2003, and subsequently married in 2006 in Sydney.
The parties subsequently separated in April 2017, and a Divorce Order was granted by the Family Court in August 2019.
After separating, the parties signed a purported binding financial agreement in April 2018 (the first binding financial agreement). They subsequently concluded that the first binding financial agreement was not binding, as they had not received the requisite legal advice. They entered into another purported binding financial agreement (the second binding financial agreement) and an associated side agreement (the side agreement) on 6 September 2018.
Circumstances of the execution of the first binding financial agreement
Following separation, the parties started negotiation in about April 2018 in relation to the settlement of their property by entry into a binding financial agreement. On 12 July 2018 they each executed a document that they then considered to be a binding financial agreement. It was uncontroversial that subsequent to executing this document they each concluded that it was not in fact binding, by virtue of their failure to obtain the requisite legal advice and certificates of legal advice as to the effect of the agreement.[18]
[18] Transcript 3 September 2020, page 69 lines 22–26.

At cl 7 of this first agreement the parties dealt with the husband’s ability to lease out the C Street property, and the wife’s rights of occupancy when it was not leased out, along with obligations upon the wife should she do so.
Although they had also negotiated a side agreement at this time, such agreement was not executed by them.
The parties then recommenced negotiations both as to the terms of a new binding financial agreement and also as to the terms of the side agreement.
Circumstances of the execution of the second binding financial agreement and side agreement
Ultimately, after the circulation of various drafts, the parties settled on terms of the second binding financial agreement, at a time when they were both in the United Kingdom. They made an appointment with a UK lawyer and executed the second binding financial agreement on 6 September 2018 before him in order that it might be appropriately witnessed.
The husband asserted that he took care to ensure that the requisite advice was received prior to the execution of the second binding financial agreement, in order for it to be binding.[19] He accepted that there was nothing that prevented him from including the side agreement in the second binding financial agreement.
[19] Ibid page 73 lines 12–14.
The second binding financial agreement also contained terms in relation to the occupation of the C Street property by the wife which differed markedly from those contained in the first binding financial agreement. Those terms, at cl 9 provided as follows:
9. That whilst ever Mr Balodis continues to own the property at C Street, London (‘the C Street property’) and Ms Balodis is able to continue to travel to London:
(a) Mr Balodis shall permit Ms Balodis to occupy the C Street property at times and for periods nominated by Ms Balodis;
(b) Mr Balodis shall not permit any paying tenant to occupy the C Street property, pursuant to a lease or any other arrangement; and
(c) Ms Balodis shall pay to Mr Balodis the sum of £5,200 per year, such amount to be paid on a pro rata monthly basis, in advance, on or before the first day of each calendar month, in the sum of £433 per month, the first such payment to be made on the first day of the calendar month following the date of this Agreement, to an account nominated by Mr Balodis to Ms Balodis in writing. Both Mr Balodis and Ms Balodis acknowledge this sum to represent a contribution by Ms Balodis to the following expenses of the C Street property:
i.         Council rates;
ii.        Water rates;
iii.        Service fees and ground rent plus electricity;
iv.       Gas, BT, phone and internet;
v.        TV Licence; and
vi.       Building and contents insurance.
and Mr Balodis shall otherwise pay all expenses for the C Street property for that year.
In particular, the wife’s right of occupation of the London property was not expressed as contingent upon whether there was a tenant, and the husband was, in fact, restrained from tenanting the property.
In the lead up to the execution of the second binding financial agreement the parties engaged in negotiation in respect of the side agreement. That side agreement initially consisted of eleven terms. A twelfth term was inserted shortly prior to the execution of both the second binding financial agreement and the side agreement on 6 September 2018 that purported to retain the right of the husband to lease out the C Street property, and modified the obligations imposed upon the wife in respect of that property.
The second binding financial agreement contains no direct reference to the side agreement. Rather the second binding financial agreement states at cl W:
W. This Agreement contains the entire understanding and agreement of the parties. Each party specifically acknowledges, represents and warrants that no representations, agreements, undertakings, or warranties outside this Agreement have been made to either party to induce the making of this Agreement. No other document or oral agreement has any force or effect except for any document required to be executed for the purposes of this Agreement.
The executed second binding financial agreement is found at pages 1–27 of Exhibit C1.
The side agreement is found at pages 28–29 of Exhibit C1.
The side agreement deals with various matters including the ownership of a painting, the payment of various ongoing expenses (including for jointly entertaining persons and attending events, responsibility for cleaning a property, giving agreement for the sale of a property at Suburb E, and the occupation and leasing out of the C Street property). A number of its provisions are inconsistent with the terms of the second binding financial agreement dealing with the same subject matter, such as the wife's right to occupy the C Street property.
The circumstances of the preparation and execution of these documents was a matter of central importance to the trial.
The parties agreed that they each retained the services of lawyers, and negotiated either through their lawyers or directly in the period from about April 2018 until September 2018 in order to resolve their financial matters.
On or about 18 May 2018 the parties travelled to the United Kingdom together and both stayed at the husband's London premises.
On 26 June 2018 the husband sent to the wife an email constituting the side agreement. The parties were in negotiation as to the terms of the side agreement for some time. The wife asked the husband to include a term requiring each party to agree if one wanted to sell a property at D Street Suburb E in Sydney. The parties disagree as to whether there was further discussion regarding the inconsistency of this with the terms of the second binding financial agreement, the husband asserting that there was, the wife that there was not.
On 28 August 2018 the parties reached agreement as to the terms of the side agreement, in respect of the first eleven clauses of the side agreement, and the wife received the second binding financial agreement in its final form, along with the side agreement, as reproduced at page 31 of Exhibit C1. It was identical to the side agreement in its final form save that it did not contain cl 12, which dealt with the occupation of the C Street property, this being the most contentious clause between the parties.
The parties agree that the wife hand wrote cl 12 into the side agreement document. The parties disagree as to both the circumstances and timing of the insertion of cl 12 into the side agreement.
The husband asserts that this occurred on 5 September 2018, the day prior to the execution of the two documents. The husband asserts that the following conversation took place between the husband and the wife:
The Husband said, “As my asset and income base is going to be reduced once we divide the assets as we have agreed in the Financial Agreement, I’ll need to lease out C Street as I will need to be able to earn income from it.”
The Wife replied, “I understand. I’ll agree to that for any period when we are not both here, but if you do that I can’t be required to contribute towards it.”
The Husband then said, “That’s fine. When the flat is leased out you’ll not be required to contribute to outgoing costs. When we complete the side agreement we will phone F Lawyers for appointment to sign and witness the agreements.”
(b) After further conversation as to a term to reflect these agreements:
The Wife said, “I’ll write that out to make sure that it reflects both of our intentions.”[20]
[20] Husband’s Further Amended Response to Initiating Application filed 28 May 2020, Respondent Husband’s Amended Points of Claim, paragraph 11.
The husband asserts that he said to the wife that cl 12 of the side agreement was inconsistent with the second binding financial agreement at cl 9. While at first he denied that the terms of the side agreement, if binding, were detrimental to the wife, ultimately, he accepted this to be the case, acknowledging that the side agreement restricted her capacity to occupy the C Street property in a manner contrary to the second binding financial agreement.
The husband asserted various conversations with the wife whereby it was said that they had each agreed, following the insertion of cl 12 into the side agreement, that there was no need for legal advice in respect of the side agreement. The husband asserts conversations as follows:
(a) On 5 September 2018, following the Wife in her handwriting adding Clause 12 to the Second Part Agreement and in relation to their agreement as a whole, the following conversation took place:
The Husband said, “This goes against the binding financial agreement.”
The Wife replied, “Yes, I know. This updates our intentions and we will be signing it at the same time as signing the binding financial agreement. We will not need legal advice as we have experience in real estate and know the effect of real estate related clause and therefore legal advice won’t be necessary.”
The Husband said, “I agree. A side agreement makes sense to both of us. We won’t need legal advice on the side agreement as long as we both agree with it.”
(b) More specifically, and in particular having regard to Recital ‘W’ in the First Part Agreement, the following conversation took place:
The Husband said, “The s.90C Financial Agreement requires legal advice. It appears entirely appropriate that further documents, being the side agreement, dealing with personal matters, peripheral to the primary financial agreement within the s.90C Financial Agreement would not require legal advice.”
The Wife said, “I agree, we do not need to seek legal advice with respect to Clauses 7 and 12 and the side agreement. These clauses don’t affect the distribution of assets.”
The Husband said, “It is essential that both agreements are signed together or not at all as these are our updated intentions and understanding.”
The Wife said, “I agree.”[21]
[21] Ibid paragraph 17.
The wife did not accept that such conversations had taken place.
On the husband’s account the side agreement was finalised prior to the wife making the appointment with Mr B, the solicitor, at about 10:30 am on the morning of 6 September for the execution of the documents at around 5:30 pm on 6 September 2018.
The husband agreed that this meant that there was both the opportunity to include the matters covered in cl 12 within the second binding financial agreement prior to its execution, and the opportunity to incorporate the handwritten cl 12 into a typewritten electronic form, as the wife and he both had access to an electronic version of the side agreement, although without cl 12 being incorporated.[22]
[22] Transcript 3 September 2020, page 78 lines 34–38.
The wife gives a significantly different account as to the drafting of cl 12. She asserts that cl 12 was inserted into the side agreement on 6 September 2018, almost immediately prior to attending at the solicitor’s office to execute the document. She says that it was inserted by the husband dictating its terms to her as she wrote, whilst he displayed anger and hatred toward her on her expression of objection to its terms. She denies any conversation taking place between the parties prior to the husband’s dictation of the terms.
On 6 September 2018 the parties attended upon a solicitor and executed the second binding financial agreement and the side agreement.
The parties differ as to whether they then regarded the side agreement as binding, the wife asserting that neither did, the husband asserting that they both did.
The parties each accept that they received the advice and certificates as required by s 90G in relation to the second binding financial agreement, but not in relation to the side agreement.
Despite accepting that he was aware that the July 2018 agreement failed due to the lack of requisite advice, the husband denied that he knew, at the time of signing the side agreement, that absent advice there “was a real concern that it wouldn’t be binding on the two of you”.[23]
[23] Ibid page 94 lines 1–3.
The husband’s position is that he would not have executed the second binding financial agreement absent the side agreement.
It was suggested to the wife that, if she was concerned about the side agreement, it was open to her not to attend for the signing of the documents, to which she responded:
I didn’t believe the side agreement was legally binding. I hadn’t received legal advice and neither had Mr Balodis. This was an agreement just between he and I. This had nothing- no impact on the financial – the 90C financial agreement at all.[24]
[24] Ibid page 56 lines 22–25.
The wife further said that:
I was hoping that it would bind Mr Balodis and I, but subsequently it hasn’t at all. Mr Balodis hasn’t complied with most of the items ... I was hoping that he and I would carry out 1 to 11.[25]
[25] Ibid page 56 lines 29–31 and lines 36–7.
The wife said that, despite having executed cl 12 there was never mutual agreement regarding the leasing out of the C Street property, because she did not agree, and because she did not regard the side agreement as binding.
PRINCIPLES
These proceedings concern contest over agreement(s) entered into by the parties to both resolve the adjustment of their property interests and to exclude the court from doing so, in the context of the breakdown of their relationship.
In Thorne & Kennedy the High Court set out the general background against which such agreements, absent statutory intervention, operate:
In 1929, the House of Lords held that an agreement could not exclude the power of the courts, which had existed since 1857, to make financial adjustment between the parties following the breakdown of a marriage. The agreement might be taken into account when the court quantifies the amount of maintenance but it would not be binding.[26]
[26] Thorne & Kennedy (2017) 263 CLR 85, 94 [16].
Part VIIIA provides a statutory scheme whereby past, present or future parties to a marriage may contractually bind themselves in respect of property adjustment (or no property adjustment) in a manner that ousts the jurisdiction of the court under Part VIII, pursuant to s 71A.
Section 90G imposes strong protective conditions that govern when such an agreement will be binding. The provision provides for limited amelioration of the conditions insofar as they deal with legal advice at ss 90G(1)(b), (c) and (ca), where it would be unjust or inequitable for the agreement not to be binding despite non-compliance with those provisions.
However, the validity of financial agreements is not assessed merely by reference to s 90G.
Where questions arise more generally as to the setting aside of, or validity, enforceability and effect of the purported agreement(s) such issues are answered by reference to ss 90K and 90KA, as identified by the plurality in Thorne & Kennedy.[27]
[27] Ibid 95 [21].
Specifically, s 90K sets out the circumstances in which the court may set aside an agreement. A number of statutory grounds are set out, some of which pick up principles of law and equity, as they relate to whether a contract is void, voidable or unenforceable (s 90K(1)(b)), or whether the agreement was made in circumstances of unconscionability by a party (s 90K(1)(e)). As recognised by the plurality of the High Court in Thorne & Kennedy the operation of s 90K is directed to the setting aside of a financial agreement:
Section 90K(1) provides that a court may make an order setting aside a financial agreement if the court is satisfied of matters including, in s 90K(1)(b), “the agreement is void, voidable or unenforceable” and, in s 90K(1)(e), “a party to the agreement engaged in conduct that was, in all the circumstances, unconscionable”.[28]
[28] Ibid 95 [21].
Other issues related to the construction and enforcement of the agreement(s) are dealt with by application of s 90KA. Again, as observed by the plurality in Thorne & Kennedy:
Section 90KA provides, in part, that the question whether a financial agreement is valid, enforceable or effective “is to be determined by the court according to the principles of law and equity that are applicable in determining the validity, enforceability and effect of contracts and purported contracts”.[29]
[29] Ibid 95–6 [21].
This forms the statutory framework for the agreement to both bind the parties and to oust the jurisdiction of the court to determine the property arrangements between the parties.
It is necessary to consider how the parties put their cases.
Non-compliance with the requirements for a binding agreement
The first relief sought by the husband is reliant upon a conclusion that the side agreement and the second binding financial agreement together form the financial agreement for the purposes of s 90C. If so, despite non-compliance with the provisions relating to legal advice, the husband seeks that, on the basis that it would be unjust and inequitable to do otherwise, the parties be bound by the combination of the second binding financial agreement and side agreement together.
The wife asserts that the second binding financial agreement should be construed without the side agreement.
Whether the side agreement is construed as a part of the financial agreement is a matter to be determined by the application of s 90KA, on the application of the principles of law and equity.
The husband contends that it was intended that the agreement the parties entered into for the purposes of resolving all financial matters in dispute between them comprised both the second binding financial agreement and the side agreement.[30] This is a claim, firstly, that the parties should be bound by the side agreement as a collateral contract to the second binding financial agreement.
[30] Husband’s Further Amended Response to Initiating Application filed 28 May 2020, Respondent Husband’s Amended Points of Claim, paragraphs 18–20.
Regarding the formation of a collateral agreement, French CJ, Kiefel and Bell JJ observed in Crown Melbourne:
In Hospital Products Ltd v United States Surgical Corporation Gibbs CJ explained that a representation made in the course of negotiations may result in an agreement collateral to the main agreement if it can be concluded that the parties intended that the representation be contractually binding. It may be so concluded if the representation has the quality of a contractual promise, as distinct from a mere representation. The question of intention is adjudged by reference to the words and conduct of the parties, but it is an objective test – of what a reasonable person in the position of the parties would necessarily have understood to have been intended.[31]
[31] Crown Melbourne (n 14) 12 [22] (citations omitted).
The issue then rests upon the words and conduct of the parties, and whether a reasonable person would understand that in executing the side agreement the parties intended that it be contractually binding. This involves, as explained in Crown Melbourne, the court arriving at both factual and legal conclusions:
It is certainly the case that the question as to what was actually agreed between the parties, which is to say the terms of the consensus reached, is a question of fact. That is what is meant by the reference in those cases to the “construction” of the contract. Questions as to the terms of any offer and any consensus reached, including the subject matter of any agreement, are questions of fact. But questions whether a statement has a quality which the law requires and whether, objectively, it could be said to be intended to be contractually binding are questions of law.[32]
[32] Ibid 14 [27].
To establish the status of the side agreement as a collateral contract the husband relied on a mutual intention to resolve all financial matters between them by virtue of both the second binding financial agreement and the side agreement. In aid of this he asserted particular circumstances of the preparation and execution of the side agreement.

As to establishing those circumstances, the parties were each critical of the credibility of the other in the manner of their giving of evidence. It may be observed that each gave evidence in the difficult circumstances of the proceedings being conducted by video link, with the wife giving her evidence in the middle of the night United Kingdom time. Both impressed as highly intelligent, robust individuals, with a strong grasp of the minute detail of their cases. However, neither was a particularly impressive witness, each defensive and strongly advocating their own cases as they were questioned, and neither being prepared to limit himself or herself to the answering of questions.
Some criticism was levelled at the husband in respect of movement in his evidence as to sale or listing prices of property. This feature of his evidence does not detract from the overall assessment that he had a strong grasp of the detail of the case and of his dealings with the wife, but does lead to some concern that his evidence was tailored to improve his case.
These issues of credibility become significant in relation to the conflicting evidence given by each as to the circumstances of the preparation and signing of the side agreement.
The first contentious issue was as to the timing of the insertion of cl 12. As noted above, the parties are at odds over whether cl 12 was inserted on 5 or 6 September. There is a matter that leads to the wife’s account as to timing as being the preferable conclusion. That is the circumstance that whilst each had access to an electronic version of the side agreement (allowing cl 12 to be reduced to typewritten form consistently with the other clauses), the version ultimately executed by the parties bore the handwritten cl 12. This is suggestive of the insertion of cl 12 as being at the last minute, as described by the wife, rather than, as suggested by the husband, being prior to the making of the appointment to see the solicitor in London.
A second contentious matter is that the husband asserts that a conversation took place in which both parties differentiated between the second binding financial agreement and the side agreement. He asserts that they both observed a lack of a need for legal advice and that the side agreement, despite being inconsistent with the second binding financial agreement, updated their intentions. The wife denies that such a conversation took place.
I am uncertain that such a conversation would actually support the husband’s case that the side agreement would form a part of the financial agreement. However, to the extent that this might be argued to support the husband’s contention that both agreements would constitute together the s 90C agreement, where the parties contest the conversation I am unable to prefer the husband’s evidence to the wife’s. This is particularly so given the reservations expressed above regarding the husband’s evidence as to the timing of the insertion of cl 12. Accordingly, it is not established that such a conversation took place.
A further contentious matter is that each asserts other conversations and behaviour surrounding the insertion of cl 12 into the side agreement. The husband asserts that the wife expressed her ready agreement to the terms. The wife asserts that the husband was aggressive and hostile in insisting the insertion of cl 12. I am again unable to accept the husband’s description of the wife’s response, over her denial. Similarly, despite my concerns regarding the husband’s evidence, I am unable to accept the wife's description of the husband’s aggression over his denial. Accordingly, to the extent that each called in aid these particular circumstances relating to the preparation of cl 12, neither was able to establish such circumstances.
More importantly to the resolution of the matter, the actions of the parties occur against a mutual understanding that if advice as required by s 90G was not obtained, a financial agreement would not be binding. This is demonstrated by their previous attempt at entry into a s 90C financial agreement, which both conceded was frustrated by their failure to obtain the requisite advice. They each concede this to have been their understanding, and each acted consistently with this in negotiating a new binding financial agreement. It was uncontentious that the parties received the legal advice (s 90G(1)(b)), and the statement from a legal practitioner (s 90G(1)(c)) in relation to the second binding financial agreement, after failing to do so for the first binding financial agreement. At the same time, they negotiated a side agreement for which they did not obtain the requisite legal advice.
Under those circumstances, there can be no satisfaction that either of the parties intended that the side agreement would be contractually binding upon them. The parties knowingly entered into the side agreement devoid of that which they each knew was necessary to render it binding. They could not thereby reasonably be taken as having intended the side agreement to be contractually binding. Nor could it be concluded that a reasonable person in the position of the parties would have understood that the representation contained in the side agreement had the quality of a contractual promise, in the absence of the legal advice that the participants knew to be necessary to render the agreement binding.
The wife asserts that she did not regard the document as binding because of the lack of legal advice. This may be accepted to be the case.
The husband asserts that he regarded the side agreement as binding in spite of the absence of the legal advice. His evidence on this point should not be accepted.
While the terms executed by the parties in the side agreement evidence their agreement as to the various matters contained therein, the husband has not established either an actual consensus on the part of the husband and wife to legally bind themselves in such a manner. Nor do the circumstances, words and conduct of the parties establish that they intended to be contractually bound by the side agreement.
At best, the arrangements set out in the side agreement, whether they be as to who might clean, or who might bear the alcohol expenses of their entertaining of guests, or how occupation of the C Street property might be conducted by the wife, are no more than mere representations.
Accordingly, the side agreement should not be taken to form a contract collateral to the second binding financial agreement, nor as a component of the s 90C financial agreement.
Estoppel
The husband contends that if the second binding financial agreement is alone held to be an agreement compliant with s 90C of the Family Law Act, then the wife should be estopped from denying the contents of the side agreement.[33] The husband asserted that he would not have entered into the second binding financial agreement without the parties having also executed the side agreement. This should be accepted to be the case. Even if the wife’s description of the circumstances of the preparation of the side agreement were established (being the circumstances least favourable to the husband) it would lead to the conclusion that the husband would not have entered into the second binding financial agreement without the side agreement.
[33] Husband’s Further Amended Response to Initiating Application filed 28 May 2020, Respondent Husband’s Amended Points of Claim, paragraph 25.
The husband identified the estoppel discussed by the High Court in Crown Melbourne.[34] The estoppel arising from Crown Melbourne was a promissory estoppel. The plurality there identified that promissory estoppel requires that:
Not only must the representation be such as to be able to create the assumption of expectation in question, it must be shown that that assumption was in fact acted upon. This derives from the basal purpose of the doctrine of estoppel, which is to avoid a detriment by compelling the party who has created such an assumption, or expectation, on which the innocent party has acted, to adhere to it.[35]
[34] Transcript 4 September 2020, pages 154–155.
[35] Crown Melbourne (n 14) 17 [39] (French CJ, Kiefel and Bell JJ).
That is, the representation must be both capable of misleading a reasonable person in the manner asserted by the husband, and to have in fact mislead the husband in that manner, to his detriment.
Although the circumstance that the husband would not have entered the second binding financial agreement without the side agreement points toward a conclusion that the representation of the wife contained therein was misleading, and that it was relied upon, there is a stronger matter pointing away from a conclusion that an estoppel should arise. That matter is the conclusion reached above that the husband understood that the side agreement would not be binding.
While he required the entry into the side agreement, it should not be accepted that he considered that either he or the wife would be bound to it as a matter of law. It may be accepted that each of the parties hoped that there would be compliance by the other with the side agreement or portions thereof, but not the understanding that it would be binding upon either. If it was to be binding, they were both aware of the necessity to obtain legal advice to cause it to bind. However, both knowingly negotiated and executed the side agreement understanding that it would not bind them.
Perhaps illustrative of such, but not determinative, it may be observed that the husband has not complied with another term of the side agreement, being the failure to give agreement to the sale of the D Street property, despite the wife’s seeking such from the husband.
Given the mutual understanding that the side agreement would not be binding, the wife should not be held to it as though it was, and so should not be estopped from departing from it. If the wife were to be bound then that in itself would be a departure from what was the common understanding of the parties in relation to the side agreement.
Contractual misrepresentation
The husband contends that the second binding financial agreement should be set aside pursuant to s 90K(1)(b) of the Family Law Act on the ground that it is voidable (at his election) due to the wife’s contractual misrepresentation.[36]
[36] Husband’s Further Amended Response to Initiating Application filed 28 May 2020, Respondent Husband’s Amended Points of Claim, paragraphs 33–35.
What is alleged against the wife by the husband is that she represented that she would be bound by the side agreement. As observed above, this was not the case. The parties well understood that the side agreement would not be binding upon them. Given that any misrepresentation was made in that context it does not justify the grant of relief.
Setting aside of the agreement as non-compliant
The alternative position of the husband is that the agreement, absent the side agreement, be set aside, either as non-complaint with s 90G, or otherwise. The conclusions reached above do not support such a relief being granted. In particular, given that the parties did not intend to be legally bound by the side agreement, it did not form a part of the s 90C agreement, and so absence of advice in relation to the side agreement does not render the second binding financial agreement non-compliant with s 90G.
Unconscionable conduct
The wife also argued that the side agreement should not form a part of the s 90C financial agreement on the basis that the husband engaged in unconscionable conduct in the procuring of the side agreement.
In Thorne v Kennedy, Kiefel CJ, Bell, Gageler, Keane and Edelman JJ outlined the three-stage enquiry to consider whether a financial agreement should be vitiated by the unconscionable conduct of a party to such an agreement.[37]
[37] Thorne & Kennedy (n 26) 103 [38].
First, the innocent party must be “subject to a special disadvantage ‘which seriously affects the ability of the innocent party to make a judgment as to [the innocent party’s] own best interests.’”[38] Second, the “other party must also unconscientiously take advantage of that special disadvantage”.[39] Third, the other party must also know “or ought to have known of the existence and effect of the special disadvantage”.[40]
[38] Ibid.
[39] Ibid.
[40] Ibid.
A party will be at a “special disadvantage” where they are affected by “illness, ignorance, inexperience, impaired faculties, financial need or other circumstances affect [their] ability to conserve [their] own interests”.[41]
[41] Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447, 459 (Gibbs CJ), quoting Blomley v Ryan (1956) 99 CLR 362, 415 (Kitto J).
Further, a party takes unconscientious advantage of a special disadvantage where the conduct involves victimisation, unconscientious conduct, or exploitation.[42]
[42] Thorne v Kennedy (n 26) 103 [38].
The wife relied upon the late insistence of the addition of cl 12 to the side agreement, along with the demeanour and hostility expressed by the husband in insisting that the wife execute the side agreement, at risk of undoing protracted negotiations to reach the terms of the second binding financial agreement.
These circumstances do not disclose a relevant special disadvantage on the part of the wife that was exploited by the husband. They are circumstances indicative of discomfort and frustration, but they do not go to the extent of special disadvantage, particularly where the wife has failed to establish that the husband presented in the manner described by her.
CONCLUSION
The second binding financial agreement is binding upon the parties. The side agreement is not binding upon the parties. A declaration will issue as to the binding effect of the second binding financial agreement. Such a declaration renders further relief, such as injunctive relief as to the occupation of the C Street property, or that the second binding financial agreement be enforceable as if an order of the Court, unnecessary. No particular matter has been advanced demonstrating the necessity for such orders on resolution of the terms of the s 90C agreement.
Whilst each of the parties sought injunctive relief in relation to the occupation of the London premises, the second binding financial agreement governs those rights of occupation by each of the parties. The injunctive relief sought by the husband, being that the wife vacate the premises, would trespass upon the rights agreed by them in entering the second binding financial agreement. The second binding financial agreement permits the wife to occupy the London premises without being a paying tenant being permitted upon the premises. It does not prevent the husband from also occupying the premises at the same time.
There are extant proceedings between the parties in the United Kingdom in relation to the occupation of the C Street property. The parties appeared to be of one mind that the resolution of these proceedings would also resolve the proceedings in the United Kingdom. Given such representations, the wife should be compelled to obtain the discharge of any orders preventing the implementation of the s 90C agreement.
Costs
Each party sought that their costs be paid by the other party. They, understandably, did not address this issue in the absence of the determination of the substantive issues between them. Under those circumstances, should a party pursue costs in relation to this matter, that party is to comply with r 19.08 and file such application in a case within 28 days.

I certify that the preceding one hundred and forty (140) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Gill.
Associate:
Dated: 9 July 2021
ANNEXURE A
SECTION 90C FINANCIAL AGREEMENT
SECTION 90C FINANCIAL AGREEMENT
BETWEEN:
Mr Balodis
AND:
Ms Balodis
Watts McCray (NSW) Pty Ltd
FINANCIAL AGREEMENT
UNDER FAMILY LAW ACT 1975, SECTION 90C
THIS DEED IS MADE ON THIS 6^TH DAY OF SEPTEMBER 2018
BETWEEN:
Mr Balodis
AND:
Ms Balodis
INTERPRETATIONS
A. In this Agreement
(i) "[Mr Balodis]" means Mr Balodis;
(ii) "[Ms Balodis]" means Ms Balodis;
(iii) ''The Act' means the Family Law Act 1975 (Cth)
(iv) "The Court" means the Family Court of Australia or the Federal Circuit Court;
(v) "Agreement' or "Financial Agreement" means this Financial Agreement;
(vii) "Child of the Marriage" has the meaning set out in Sections 60F(1) or (2) of the Family Law Act at the date of execution of this Agreement and "children of the marriage" means children who are all individually a "child of the marriage".
(vii) "Separation Declaration” means a separation declaration in accordance with the provisions of s.90DA of the Act

RECITALS
A. Mr Balodis was born in 1946 in Australia. Mr Balodis is an Australian citizen.
B. Mr Balodis is retired.
C. Ms Balodis was born in 1951 in England. Ms Balodis is a UK citizen and an Australian Permanent Resident.
D. Ms Balodis is retired.
E. Mr Balodis and Ms Balodis commenced living together in or about mid to late 2003.
F. Mr Balodis and Ms Balodis were married in late 2006 at Sydney Australia.
G. Mr Balodis has the following children:
(i) Ms Y.
(ii) Mr Z.
Both of the above are adults end live independently.

H. Ms Balodis does not have any children from any prior relationship.
I. Mr Balodis and Ms Balodis do not have children together.
J. The parties acknowledge that their marriage has irretrievably broken down with separation occurring in or about April 2017 and each has signed a Separation Declaration executed together with and dated the same day as this Agreement. The parties are not yet divorced.
K There are no other Financial Agreements in existence under Sections 90B, 90C or 90D of the Act In respect of the parties. For the sake of clarity, the document signed by the parties, dated 12 July 2018 and entitled "Financial Agreement" is agreed by the parties not to constitute a Financial Agreement for the purposes of the Act However, In the event there is any disagreement in this regard, this Agreement constitutes a Termination Agreement pursuant to Section 90J of the Act
L. As at the date of this Agreement the assets, liabilities and financial resources owned by Mr Balodis, with the exception of bank accounts end savings at bank, are as set out in Schedule 1 to this Agreement
M. Subject to the exception contained in Recital L above, Mr Balodis confirms that Schedule 1 fully and adequately discloses the identity and nature of his separate assets, financial resources and liabilities as at the date of this Agreement, and his reasonable estimate of their value.
N. As at the date of this Agreement the assets, liabilities and. financial resources owned by Ms Balodis, with the exception of bank accounts and savings at bank, are as set out in Schedule 2 to this Agreement.
O. Subject to the exception contained in Recital N above, Ms Balodis confirms that Schedule 2 fully end adequately discloses the identity and nature of her separate assets, financial resources and liabilities as at the date of this Agreement, and her reasonable estimate of their value.
P. Mr Balodis and Ms Balodis have satisfied themselves independently that the estimates as given in Schedules 1 and 2 are accurate to the extent that they wish to do so.
Q. Each of Mr Balodis and Ms Balodis has declined to exercise the option to have the assets and resources of the other valued by an Independent Valuer with appropriate expertise, or to sight documentation verifying the extent of the liabilities. Each of Mr Balodis and Ms Balodis has declined to enquire as to the extent of, nor sight documentation in respect of, bank accounts and savings at bank in the name of the other. This decision made by both Mr Balodis and Ms Balodis, independently of the other, is agreed by both Mr Balodis and Ms Balodis not to constitute a failure to disclose nor to constitute non-disclosure of a material matter for the purposes of the Act.
R. Each of Mr Balodis and Ms Balodis recognise that valuation in many cases is a matter of opinion and that opinions may legitimately differ as to the value of some assets. Such differences shall not affect the enforceability of this Agreement.

S. It is intended that this Agreement shall apply to the whole of the property and financial resources of the parties and to the maintenance of the parties now and in the future.
T. The parties wish to enter into a Financial Agreement to preclude claims of any nature relating to financial matters, both in relation to property and financial resources as well as spousal maintenance that either has, or may have against the other pursuant to the Act and otherwise at law and In equity.
U. The parties acknowledge that:
i. There is· an original and there will be a certified copy of this Agreement;
and
ii. After this Agreement is executed it is intended that Ms Balodis will take the original Agreement and Mr Balodis will take the certified copy.

V. Each of Mr Balodis and Ms Balodis acknowledges:
I. That he and she has made and entered this Agreement
(a) After mature consideration and judgment, of his and her own free will and volition, without any coercion, force or undue Influence, on the part of the other Partner or by any other person or persons;
(b) With full understanding and appreciation of its terms, conditions and provisions;
(c) With the opinion that the terms of this Agreement are fair, just and reasonable; and
(d) Not relying upon any representation or promise except those expressly stated herein; and

II. That the other has not sought to advise, guide, direct, control or pressure him or her into accepting the terms of this Agreement, nor sought that he or she rely upon the trust or confidence of the other in that respect.

W. This Agreement contains the entire understanding and agreement of the parties. Each party specifically acknowledges, represents and warrants that no representations, agreements, undertakings, or warranties outside this Agreement have been made to either party to induce the making of this Agreement. No other document or oral agreement has any force or effect except for any document required to be executed for the purposes of this Agreement.
X. In the knowledge of that advice the parties freely end willingly enter into this Agreement.
OPERATIVE PARTS
What this Agreement covers and the powers of the Court it excludes
1. This Is a Financial Agreement under Section 900 of the Act and it is agreed by the parties to cover all financial matters between them including but not limited to a division of their property and financial resources as well as their maintenance. To the extent necessary, it is also a Termination Agreement pursuant to Section 90J of the Act.
2. It is intended that this Agreement shall exclude the power of the Court from having jurisdiction to make any order relating to financial matters between the parties including In relation to the maintenance, property and financial resources of the parties to this Agreement
Spouse Maintenance
3. (a) Mr Balodis shall pay to Ms Balodis the sum of $1 and Ms Balodis shall at no time in the future make a claim for spousal maintenance against Mr Balodis;
(b) Ms Balodis shall pay to Mr Balodis the sum of $1 and Mr Balodis shall at no time in the future make a claim for spousal maintenance against Ms Balodis;
(c) Pursuant to Section 90E of the Act the party for whose provision maintenance is made pursuant to this Clause is Ms Balodis and the amount provided for the maintenance of Ms Balodis is $1;
(d) Pursuant to Section 90E of the Act the party for whose provision maintenance is made pursuant to this Clause is Mr Balodis and the amount provided for the maintenance of Mr Balodis is $1;
(e) The payments required by this Clause shall be offset against each other such that all amounts due stand paid; end
(f) Taking Into account the terms and effects of this Agreement, the parties agree that as at the date of this Agreement, and the Separation Declaration annexed hereto, Mr Balodis and Ms Balodis are each able to support himself and herself respectively without an Income tested pension, allowance or benefit.

Property Settlement
4. That within six (6) weeks of the date of this Agreement each party shall do all things necessary to cause the following simultaneously:
(a) Transfer of the property situated at and known as 1 G Street, Suburb E being the whole of the land contained In Folio Identifier … ('the 1 G Street property') to the sole name of Mr Balodis at Mr Balodis's cost, such that Ms Balodis shall sign all documents presented to her by Mr Balodis and Mr Balodis shall do all other things necessary for such transfer;
(b) Transfer of the property situated at and known as 2 G Street, Suburb E being the whole of the land contained in Folio Identifier … ('the 2 Street property”) to the sole name of Ms Balodis at Ms Balodis's cost, such that Mr Balodis shall sign all documents presented to him by Ms Balodis and Ms Balodis shall do all other things necessary for such transfer;
(c) Transfer of the property situated at and known as D Street, Suburb E being the whole of the land contained in Folio Identifier … ('the D Street property’) from Joint tenancy, to the parties as tenants in common In equal shares, at Ms Balodis's cost, such that Mr Balodis shall sign all documents presented to him by Ms Balodis and Ms Balodis shall do all other things necessary for such transfer;
(d) Discharge of any mortgages and/or encumbrances which may be registered over the 1 G Street property at the cost of Mr Balodis such that Ms Balodis shall sign all documents presented to her by Mr Balodis and Mr Balodis shall do all other things necessary to cause such discharge;
(e) Discharge of any mortgages and/or encumbrances which may be registered over the 2 G Street property at the cost of Ms Balodis such that Mr Balodis shall sign all documents presented to him by Ms Balodis and Ms Balodis shall do all other things necessary to cause such discharge; and

5. That Mr Balodis shall Indemnify and keep Indemnified Ms Balodis in respect of all liabilities in relation to the 1 G Street property whenever and however arising.
6. That Ms Balodis shall Indemnify and keep Indemnified Mr Balodis in respect of all liabilities in relation to the 2 G Street property whenever and however arising.
7. That during any period when neither Mr Balodis nor Ms Balodis occupy the D Street property, Mr Balodis and Ms Balodis shall each pay one half of all expenses associated with the D Street property, including but not limited to mortgage repayments, council and water rates, strata and management fees and any utility expenses, as and when such expenses fall due, and each shall be entitled to one half of any rent received from any tenant of the D Street property, unless other arrangements in respect of expenses and rent are agreed in writing by the parties.
8. That during any period when either Mr Balodis or Ms Balodis occupy the D Street property, he or she shall pay all expenses associated with the D Street property; including but not limited to mortgage repayments, council and water rates, strata and management fees and any utility expenses, as and when such expenses fall due.
9. That whilst ever Mr Balodis continues to own the property at C Street, London ('the C Street property') and Ms Balodis Is able to continue to travel to London:
(a) Mr Balodis shall permit Ms Balodis to occupy the C Street property at times and for periods nominated by Ms Balodis;
(b) Mr Balodis shall not permit any paying tenant to occupy the C Street property, pursuant to a tease or any other arrangement; and
(c) Ms Balodis shall pay to Mr Balodis the sum of £5,200 per year, such amount to be paid on a pro rate monthly basis, In advance, on or before the first day of each calendar month, In the sum of £433 per month, the first such payment to be made on the first day of the calendar month following the date of this Agreement, to an account nominated by Mr Balodis to Ms Balodis in writing. Both Mr Balodis and Ms Balodis acknowledge this sum to represent a contribution by Ms Balodis to the following expenses of the C Street property:
i. Council rates;
ii. Water rates;
iii. Service fees and ground rent plus electricity;
iv. Gas, BT, phone and Internet;
v. TV Licence; and
vi. Building and contents Insurance.

and Mr Balodis shall otherwise pay all expenses for the C Street property for that year.
10. That In the event Mr Balodis sells the C Street property, during his lifetime and the net proceeds of such sale, after selling costs, including Real Estate commissions and Capital Gains Tax applicable to the sale are deducted, exceed £2,000,000, then the net amount over £2,000,000 is to be shared equally between Mr Balodis and Ms Balodis and, for this purpose, Mr Balodis shall pay to Ms Balodis the amount due to her pursuant to this Clause, within one (1) month of the completion of the sale of the C Street property.
11. That upon sale of the C Street property, should that occur during Mr Balodis's lifetime, or upon the death of Mr Balodis, or upon the death of Ms Balodis, whichever occurs first, Mr Balodis (or a representative of Mr Balodis's estate nominated by his beneficiaries if applicable) and Ms Balodis (or a representative of Ms Balodis's estate nominated by her beneficiaries if applicable) shall divide the furniture, furnishings and effects contained at the C Street property, excluding intimate personal effects such as clothes, shoes, toiletries and the like, equally and by agreement between them. In the event there is disagreement between the parties in respect of such division, then such items shall be divided by the parties, using an alternate choice method which shall involve:
(a) The parties tossing a coin to determine who goes first;
(b) The parties taking turns, in alternating sequence, to identify and select one specific item of furniture, furnishings, artwork and contents that he or she wishes to retain from the property;
(c) Such sequence to continue until all of the furniture furnishings, artwork, contents and personal effects held within the property have been allocated to one of Mr Balodis or Ms Balodis.

12. That, as between Mr Balodis and Ms Balodis, and subject to any other provisions in this Agreement, Mr Balodis shall retain all interest in and entitlement to:
(a) The C Street property;
(b) 1 & 2 H Street, Suburb J;
(c) K Street, London UK (‘the K Street property');
(d) His British Motor Vehicles;
(e) His German Motor Vehicle;
(f) His Italian Motor Vehicle;
(g) The furniture, furnishings and effects contained in the 1 G Street property;
(h) All other personal property now in his possession or control;
(i) All shares, debentures, units in unit trusts, bank, building society or credit union accounts standing in his sole name; and
(j) All interests in life insurance policies and superannuation funds standing in his sole name.

13 That, as between Mr Balodis and Ms Balodis, and subject to any other provisions in this Agreement, Ms Balodis shall retain all interest in and entitlement to:
(a) L Street, Suburb M;
(b) N Street; Suburb O;
(c) Her German Motor Vehicle;
(d) Furniture, furnishings and effects contained in the 2 G Street property;
(e) All other personal property now in her possession or control;
(f) All shares, debentures, units in unit trusts, bank, building society or credit union accounts standing in her sole name; and
(g) All Interests In life Insurance policies and superannuation funds standing in her name.

14 That Mr Balodis shall, subject to any other provisions in this Agreement, be responsible for:
(a) All loans, debts, leases, hire purchase and other liabilities standing in his sole name;
(b) All liabilities attaching to the real property he is to receive pursuant Clause4 above;
(c) All credit cards in his sole name;
(d) Any and all taxation liabilities in his sole name; and
(e) Mr Balodis shall indemnify and keep indemnified Ms Balodis in respect of any and all such liabilities.

15. That Ms Balodis shall, subject to any other provisions in this Agreement, be responsible for:
(a) All loans, debts, leases, hire purchase and other liabilities standing in her sole name;
(b) All liabilities attaching to the real property she is to receive pursuant Clause 4 above;
(c) All credit cards in her sole name;
(d) Any and all taxation liabilities in her sole name; and
(e) Ms Balodis shall indemnify and keep indemnified Mr Balodis in respect of any and all such liabilities.

16. Each of Mr Balodis and Ms Balodis agree they will share equally the costs incurred in respect of the preparation of this Agreement and the Implementation of it, and that they will communicate directly with one another to facilitate this occurring.
17. Both Mr Balodis and Ms Balodis hereby release the other from all actions, proceedings, claims, demands, costs and expenses whatsoever and howsoever arising which either of them had or may have against the other for or by reason of or in respect of any act, cause, matter or thing.
Miscellaneous
18. Each party shall keep this Agreement confidential and will not at any time, whether or not this Agreement is in force or has been terminated divulge its existence or contents or discuss it or the financial affairs of the other party with any other person, except under compulsion of law, or for the purposes of enforcement of this Agreement, or for the purpose of seeking confidential professional advice.
19. Each agrees not to damage, dispose of or encumber the jointly owned assets without the consent of the other party and not to withdraw any more than one half of the then current balance in any bank account/a held In Joint names.
20. In the event that one party withdraws more than one half of the then current balance in any joint bank account, the amount In excess of one half shall be a debt payable to the other party.
21. Mr Balodis and Ms Balodis agree to execute all documents necessary to give meaning and effect to this Agreement in the time periods specified in this Agreement and if no time period is specified then within a reasonable time (which failing other agreement, shall be sixty (60) days).
22. Both Mr Balodis and Ms Balodis desire and intend this Agreement to be a means of minimising all possible friction in the future end should not be a source of additional friction between them. In particular, Mr Balodis and Ms Balodis desire and intend the terms of this Agreement be given effect by any Court called upon to adjudicate on all financial matters (property and maintenance) in issue between Mr Balodis and Ms Balodis pursuant to the Act
23. Stamp duty and tax (including Capital Gains Tax and Goods and Services Tax) arising or accruing upon or by virtue of the transfer or alienation of particular property or financial resources (which may arise by virtue of this Agreement becoming operative) shall be borne by the party who takes such property or financial resource and if charged or levied against the other party, that party shall be indemnified by his/her spouse or former spouse to the extent of the charge or levy (and any penalties arising from such levy or charge).
24. This Agreement is binding and enforceable on each party respectively and his/her heirs, personal representatives, legal representatives, trustees, executors, administrators, successors and assigns, save that nothing In this financial agreement shall prevent either party from leaving any or all of his/her respective property to his/her spouse under his/her respective Wills.
25. All Recitals and Schedules to this Agreement are part of this Agreement and are enforceable as Clauses of this Agreement.
26. If any part of this Agreement is held to be invalid, unlawful or unenforceable for any reason whatsoever by a Court of competent jurisdiction, this Agreement shall be read as if that part of the Agreement was omitted. The remainder of this Agreement shall remain in full force and effect.
Enforcement
27. Both Mr Balodis and Ms Balodis agree that In the event either falls to comply with any part of this Agreement then the enforcement provisions of the Act and of the Family Law Rules 2004, as amended from time to time, shall apply and either shall be entitled to apply to the Court for enforcement of this Agreement.
Future claims after the death of a party
28. Mr Balodis and Ms Balodis hereby acknowledge as follows:
(a) Subject to the approval of the Supreme Court of New South Wales pursuant to the Succession Act 2008 (New South Wales) Mr Balodis and Ms Balodis each severally releases his or her rights to make an application In relation to the whole or any part of the estate or notional Estate of the other before or after the date of death of the other under the said Succession Act 2008;
(b) Mr Balodis and Ms Balodis each give that release In consideration of the other terms of this Agreement;
(c) Mr Balodis and Ms Balodis each acknowledge that it is to his or her advantage financial or otherwise, in the light of the terms of this Agreement to grant the release:
(d) Mr Balodis and Ms Balodis acknowledge that the terms of the Agreement have taken into account the position of the other in the event of the death of the other party;
(e) Mr Balodis and Ms Balodis each accept that for the purpose of the said Succession Act 2008, the provisions of this Agreement including this release are fair and reasonable;
(f). At any time after the date of this Agreement either Mr Balodis and Ms Balodis or his or her legal personal representative may request the other party or his or her legal personal representative to join in an application to the Supreme Court for the approval of this Agreement or relinquish all claims under the Succession Act 2006. If such a request is made the other covenants to comply with such request and to do all things reasonably necessary to obtain the approval of the Supreme Court. Each of Mr Balodis and Ms Balodis will bear his or her own costs of any such application; and
(g) Mr Balodis and Ms Balodis acknowledge that they have received independent legal advice prior to entering into this Agreement including as per the Certificates of Independent Advice attached to this Agreement, including the provision for release, and each has given due consideration to that advice.

29. If a release of claims under the Succession Act 2006 as sought pursuant to Clause 28(f) is not approved of by the Supreme Court of New South Wales for any reason whatsoever then the rest of this Agreement is to remain valid and enforceable.
30. Mr Balodis and Ms Balodis further agree that he or she each severally releases his or her rights to make an application in relation to the whole or any part of the Estate or notional Estate of the other, before or after the date of death of the other, under the law of any Jurisdiction which might otherwise be empowered to deal with such an application, howsoever described.
Independent legal advice
31. Each of Mr Balodis and Ms Balodis acknowledge that, before the Agreement was signed by him or her, he or she has been provided, as certified in an annexure to this Agreement, with Independent legal advice from a legal practitioner as to the following matters:
(a) The effect of the Agreement on the rights of that party; and
(b) The advantages and disadvantages, at the time that the advice was provided, to the party of making the Agreement.

IN WITNESS WHEREOF each of the Parties has duly executed this Agreement as a
Deed on the day appearing at the commencement of this document.
SIGNED SEALED & DELIVERED by     )
Mr Balodis  )
in the presence of:  )          …………………………….
.....................................
Signature of witness
SIGNED SEALED & DELIVERED by     )
Ms Balodis  )
In the presence of:  )          …………………………….
........................................
Signature of witness
Schedule 1

Assets

Description Ownership Valuation
(Mr Balodis’s
Share)

1. 2 G Street, Suburb E Ms Balodis Mr Balodis & Ms Balodis E $5,000,000

2. 1 G Street, Suburb E Mr Balodis & Ms Balodis E $5,000,000

3. D Street, Suburb E Mr Balodis & Ms Balodis E $1,350,000

4. 1 & 2 H Street, Suburb J Mr Balodis E $1,450,000

5. C Street, London Mr Balodis E $3,505,000

6. K Street, London Mr Balodis E $2,380,000

7. British (2) motor vehicles Mr Balodis E$60,000

8. German and Italian motor vehicles Mr Balodis

9. Furniture, furnishings and effects in 1 G street, Suburb E Mr Balodis E$240,000

Total Assets E $18,965,000.00

Superannuation

Description Ownership Valuation

1.

Total Superannuation $ 0.00

Total Gross Assets (including superannuation)
E $18,985,000.00

Liabilities

Description Ownership Valuation

1.
Mortgage secured on title to the C Street property
Mr Balodis E$963,000

2.
Mortgage secured on title to the West Crescent street property
Mr Balodis & Ms Balodis E$500,000

Total Liabilities
E $1,463,000.00

Total Net Assets (Including superannuation) E $16,152,000.00
Financial Resources

Description
1. All values provided above are provided In Australian dollars, unless shown otherwise.
Schedule 2

Assets

Description Ownership Valuation
(Ms Balodis’s
Share)

1. 2 G Street, Suburb E Ms Balodis Mr Balodis & Ms Balodis E $5,000,000

2. 1 G Street, Suburb E Mr Balodis & Ms Balodis E $5,000,000

3. D Street, Suburb E Mr Balodis & Ms Balodis E $1,350,000

4. L street, Suburb M Ms Balodis E $3,800,000

5. N Street, Suburb O Ms Balodis E $900,000

6. German motor vehicle Ms Balodis E $50,000

7. Furniture, furnishings and effects at 2 G Street, Suburb E Ms Balodis NK

Total Assets E $16,100,000.00

Superannuation

Description Ownership Valuation

1. Ms Balodis E $800,000

Total Superannuation E $800,000.00

Total Gross Assets (including superannuation) E $16,900,000.00

Liabilities

Description Ownership Valuation

1. Mortgage to Australia and New Zealand Banking
Group Limited secured on the title to the Suburb M property Ms Balodis E$450,000

2. Mortgage to Australia and New Zealand Banking
Group Limited secured on title to the Suburb O property Ms Balodis
E$200,000

3. Mortgage to Perpetual Limited secured on title to
the D Street property Mr Balodis & Ms Balodis E$500,000

Total Liabilities E $1,150,000.00

Total Net Assets (Including superannuation) E$ 15,750,000.00
Financial Resources

Description
1. All values provided above are provided In Australian dollars, unless shown otherwise.
STATEMENT FOR THE PURPOSES OF SECTION 90G OF THE FAMILY LAW ACT
1975
I, Matthew Shepherd,of Shepherds Family Law, …, Sydney, NSW being a Solicitor of the High Court of Australia/Supreme Court of NSW and being Independently consulted by Mr Balodis certify the following:
1. This statement is an annexure to the Binding Financial Agreement entered into between Mr Balodis and Ms Balodis.
2. I provided my client with Independent legal advice prior to entering into this Agreement as to the following matters:
(a) The effect of this Agreement on the rights of my client; and
(b) The advantages and disadvantages at the time that the advice was provided, to my client of making the Agreement.

DATED: this 6th day of September 2018
STATEMENT FOR THE PURPOSES OF SECTION 90G OF THE FAMILY LAW ACT
1975
I, Jacqueline Vincent of Watts McCray (NSW) Pty Ltd, …, Sydney,
NSW being a solicitor of the High Court of Australia/Supreme Court of NSW and being
Independently Instructed by Ms Balodis certify the following:
1. This Statement is an annexure to the Binding Financial Agreement entered into between Ms Balodis and Mr Balodis.
1.I provided my client with Independent legal advice prior to entering into this Agreement as to the following matters:

(a) The effect of this Agreement on the rights of my client; and
(b) The advantages and disadvantages at the time that the advice was provided, to my client of making the Agreement.
DATED: this 17th day of September 2018
Jacqueline Vincent
RECEIPTS
I, Mr Balodis acknowledge that after the Financial Agreement between myself and Ms Balodis dated the 6 day of September 2018, was signed by me and by her and a copy of the said Agreement was given to me.
Dated: the 6 day of September 2018
…………………………..
Mr Balodis
RECEIPTS
I, Ms Balodis acknowledge that after the Financial Agreement between myself and Mr Balodis dated the 6th day of September 2018, was signed by me and by him, and the original of the said Agreement was given to me.
Dated: the 6th day of September 2018
……………………………
Ms Balodis
SEPARATION DECLARATION
I, MR BALODIS hereby declare pursuant to Section 90DA of the Family Law Act 1975 that:
1. I separated from MS BALODIS on or about April 2017.
2. In my opinion, there is no reasonable likelihood of cohabitation being resumed.
Declared by the said Mr Balodis      )
in the presence of:  )          ……………………………
……………………………….
(Witness - Signature)
……………………………….
(Witness - Print Name)
SEPARATION DECLARATION
I, MS BALODIS hereby declare pursuant to Section 90DA of the Family Law Act 1975 that:
1. I separated from MR BALODIS on or about April 2017.
2. In my opinion, there is no reasonable likelihood of cohabitation being resumed.
Declared by the said Ms Balodis      )
in the presence of:  )          ………………………………
……………………………….
(Witness - Signature)
………………………………
(Witness - Print Name)

[2021] FamCA 499

9 July 2021

Key Legal Topics

Areas of Law

Family Law

Contract Law

Equity & Trusts

Legal Concepts

Contract Formation

Estoppel

Intention

Remedies

File number(s):	SYC 4140 of 2019
Judgment of:	GILL J
Date of judgment:	9 July 2021
Catchwords:	FAMILY LAW – PROPERTY SETTLEMENT – Financial agreements – Whether financial agreement is binding – Whether side agreement is binding – Where parties did not receive legal advice in relation to side agreement – Whether unjust and inequitable not to enforce both agreements – Whether side agreement a collateral contract – Whether wife should be estopped from refusing to comply with side agreement – Whether side agreement voidable due to misrepresentation – Whether side agreement vitiated by unconscionable conduct – Where financial agreement is binding but side agreement is not binding – Where parties did not intend to be bound by side agreement
Legislation:	Family Law Act 1975 (Cth) ss 90C, 90G, 90K and 90KA
Cases cited:	Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447 Crown Melbourne Ltd v Cosmopolitan Hotel (Vic) Pty Ltd (2016) 260 CLR 1 Hoult & Hoult (2013) FLC 93-546 Thorne & Kennedy (2017) 263 CLR 85
Number of paragraphs:	140
Date of hearing:	3 and 4 September 2020
Place:	Canberra
Counsel for the Applicant:	Ms Gillies SC
Solicitor for the Applicant:	Watts McCray
Counsel for the Respondent:	Mr Lethbridge SC
Solicitor for the Respondent:	Edwards Family Lawyers

ORDER MADE BY:	GILL J
DATE OF ORDER:	9 JULY 2021

Assets
Description	Ownership	Valuation (Mr Balodis’s Share)
1.	2 G Street, Suburb E Ms Balodis	Mr Balodis & Ms Balodis	E $5,000,000
2.	1 G Street, Suburb E	Mr Balodis & Ms Balodis	E $5,000,000
3.	D Street, Suburb E	Mr Balodis & Ms Balodis	E $1,350,000
4.	1 & 2 H Street, Suburb J	Mr Balodis	E $1,450,000
5.	C Street, London	Mr Balodis	E $3,505,000
6.	K Street, London	Mr Balodis	E $2,380,000
7.	British (2) motor vehicles	Mr Balodis	E$60,000
8.	German and Italian motor vehicles	Mr Balodis
9.	Furniture, furnishings and effects in 1 G street, Suburb E	Mr Balodis	E$240,000
Total Assets			E $18,965,000.00

Superannuation
Description	Ownership	Valuation
1.
Total Superannuation			$ 0.00

Liabilities
Description	Ownership	Valuation
1.	Mortgage secured on title to the C Street property	Mr Balodis	E$963,000
2.	Mortgage secured on title to the West Crescent street property	Mr Balodis & Ms Balodis	E$500,000
Total Liabilities			E $1,463,000.00
Total Net Assets (Including superannuation)		E $16,152,000.00