Baudin & Lakatos
[2021] FCCA 1914
•26 August 2021
FEDERAL CIRCUIT COURT OF AUSTRALIA
Baudin & Lakatos [2021] FCCA 1914
File number(s): DGC 3631 of 2020 Judgment of: JUDGE BURCHARDT Date of judgment: 26 August 2021 Catchwords: FAMILY LAW – Property dispute after 19 years marriage – wife signing purported binding financial agreement
in 2005 – whether agreement vitiated by duress, undue inference and/or unconscionable conduct – wife not speaking or reading English – wife wholly incapable
of understanding the terms of the binding financial agreement and/or its effect – clearly appropriate to set agreement aside – husband owning matrimonial home unencumbered before the start of the marriage – just and equitable division being 80/20 in favour of the husband.Legislation: Family Law Act 1975 (Cth) s 91K Cases cited: Logan v Logan (2013) FLC 93-555
Thorne v Kennedy [2017] HCA 49
Corelli & Beroni [2019] FamCA 911
Stanford v Stanford [2021] HCA 52
In the marriage of Re Mallet (1984) 156 CLR 605
Number of paragraphs: 105 Date of last submission/s: 14 July 2021 Date of hearing: 14 July 2021 Place: Dandenong Counsel for the Applicant: Mr P Indivino Solicitor for the Applicant: Ressan Lawyers Counsel for the Respondent: Mr Glezakos Solicitor for the Respondent: Rigoli Lawyers ORDERS
DGC 3631 of 2020 BETWEEN: MS BAUDIN
Applicant
AND: MR LAKATOS
Respondent
ORDER MADE BY:
JUDGE BURCHARDT
DATE OF ORDER:
26 AUGUST 2021
THE COURT ORDERS THAT:
1.The matter be adjourned to this Court for mention before Judge Burchardt on 30 August 2021 at 9.30 am
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstance, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment under the pseudonym Baudin & Lakatos is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
JUDGE BURCHARDT
INTRODUCTORY
This is an unusual property dispute. The first issue raised is whether or not an agreement signed on 22 December 2005, and which purported to be a binding financial agreement entered into pursuant to section 90B of the Family Law Amendment Act 2000, is binding or not. If it is not binding, then there is further argument as to what percentage of the property pool, if any, the wife should receive, the husband’s position being that she should receive none.
For the reasons that follow, I have no doubt that the agreement made on 22 December 2005 should be set aside pursuant to section 90K of the Family Law Act 1975 (“the Act”) on the basis either that it is void, voidable or unenforceable (section 90K(1)(b)) or because the conduct of the husband was, in all the circumstances, unconscionable (section 90K(1)(e)). The primary reason for this conclusion can be stated shortly. The wife had no idea whatsoever what it was she was signing. The purport of the document was not explained to her. The document is in English, which she does not read. Her signature is not marked or accompanied by any indication of translation. Further, while the quality of the oral evidence given by both parties was generally poor in that they are both poor historians, I accept the general thrust of the wife’s evidence in any event.
Having determined that preliminary issue, I think that the property pool should be divided 80/20 in the husband’s favour. This will almost undoubtedly mean that the former matrimonial home will have to be sold.
AGREED OR UNCONTROVERSIAL MATTERS
The wife was born in 1962, and the husband in 1947. They were both born in City B, Country C. At some point, but it would appear prior to 1978, the husband was in Australia, because his chronology (unsupported by any actual affidavit evidence) asserts that, having married in 1975, he bought his first real property, one would infer in Australia.
Once again, and this is only taken from the chronology as to the details, in 1987, he bought the property D Street, Suburb E in joint names with his first wife for $95,000 with a mortgage of $40,000.
In 1996, the husband separated from his first wife, and in 1998, he purchased out her interest in the former matrimonial home for $84,000. He has deposed that the property was worth $150,000 at that time.
The husband’s assertion that he repaid the $84,000 he borrowed to pay out his first wife by the year 2000 is made entirely clear by annexure -1 to his trial affidavit filed 5 July 2021.
In 2001, the husband and the wife met in City B, where the husband had gone for what was clearly only a short period of time. Although there is some dispute as to whether the marriage was properly described as an arranged one, it is clear that they met through family members. They are both, it would seem, of Country F extraction, albeit that the wife speaks Country G, and the husband is sufficiently fluent to converse with her in that language.
The parties married in 2001, having come to Australia only shortly before. The wife made an application for permanent residency but was only granted a temporary stay subclass 801 visa, not a subclass 820 permanent residency. This decision was handed down, it would seem, from a decision of the Migration Review Tribunal (“MRT”) dated 27 November 2006, annexed as -3 to the wife’s trial affidavit, on 10 July 2002.
The parties’ son, Mr H, was born in 2002. He continues to live with his father in the former matrimonial home.
The husband appears to have worked as a transport worker for at least part of the time during the relationship (although there is a dispute as to its length and as to the reasons for its cessation). The wife did not work on any view of the matter until 2013 when she commenced work as a carer for an elderly Country C lady. She has deposed to earning some $20,000 in that endeavour over several years.
As earlier indicated, the agreement was signed in December 2005, although the particular circumstances of that will need much closer attention. It is clear from the MRT decision already referred to that a delegate refused the wife’s application for a permanent residency visa on 11 October 2005, which decision was reviewed to the then Migration Review Tribunal, where the wife obtained a favourable outcome.
Separation took place on 18 February 2020, and the wife moved out of the former matrimonial home. She now lives in a one-bedroom apartment in Suburb J and has some part-time work of approximately eight hours over two days per week.
Although there is some confusion about it, it would appear that the wife was given a course
at TAFE shortly after her arrival in Australia amounting to some 200 hours of English tuition, with the husband driving her to and from the TAFE to attend her classes.
THE PARTIES’ AFFIDAVITS
One of the striking aspects of this proceeding is how much the Court has simply not been told. As I have indicated, some important dates are only disclosed in the husband’s chronology, which I have accepted, not least because it was not put in issue. It is the best the Court can do in the circumstances.
The wife has filed two affidavits, the trial affidavit being largely a repetition of her first affidavit. As one would expect, much of the matters in it are paraphrased in the agreed section above. The wife’s affidavits depose to her having contributed to the household as best she was able given her lack of English. I notice that she asserts that she purchased furniture items, including mattresses and a TV unit costing $500, for the family home. It is immediately apparent that the majority of the chattels must have been provided by the husband.
The wife’s affidavits complain that the husband would not let her obtain Australian citizenship.
Given the importance of the evidence about the execution of the agreement, it is appropriate to set out paragraphs 33 to 45 of the wife’s affidavit filed 27 October 2020 as follows:
33. On 15 December 2005 (pursuant to the date of my signature), the Respondent Husband told me to go with him to see a lawyer. I did not know the name at the time and just listened to the Respondent Husband.
34. I had no involvement in the drafting the agreement and was presented with such document, for the first time at the time of my consultation with Mr K, Legal Practitioner.
35. I cannot recall whether the document was already signed by the Respondent Husband.
36. I have had no prior dealings with this solicitor and did not know him. I had never spoken to his office, nor did I make the appointment.
37. The Respondent Husband made all the appointments and arrangements to meet him.
38. Upon arriving to the office of Mr K, the Respondent Husband came into the office with me and remained with me during the whole time I was with Mr K. I was not able to say anything and just sat there and listened.
39. I recall Mr G spoke Country G but it was of a different dialect. There was no interpreter.
40. When I was presented the document, which I had never seen before and
he spoke to me in the presence of the Respondent Husband.41. I only had a limited understanding of what was happening.
42. I was never given time to read the document or have time to consider the contents of such document. Mr G stated “this document is about my share
of the property. If you don’t want to sign it then don’t.”43. I reluctantly signed the document believing that I would not be able to obtain permanent residency in Australia (and be near my son) if I refused to sign.
44. There were no other persons in the meeting save for Mr G, the Respondent Husband and myself.
45. There were two copies of the document, to which, the Respondent Husband retained them. I never saw the document again until my lawyer, Ms L provided me a copy that was sent to her.
The wife’s trial affidavit filed 17 June 2021 is in slightly different terms. These are paragraphs 31 and following:
31. Upon receiving correspondence from the Husband’s previous solicitors that there was a post-nuptial agreement, I instructed my solicitor to obtain such for review.
32. I recall that the Respondent Husband would not let me obtain Australian Citizenship, which I now believe was a tool to control me.
33. To this day, I still do not have Australian citizenship and only have permanent residency.
34. The Respondent Husband overheard a conversation with my sister, asking me why I hadn’t yet applied for or obtained Australian citizenship, and he became enraged, yelling at me for many hours and telling me I was not allowed to obtain citizenship.
35. There was growing suspicion that I was entitled to a residency visa as my family and a mutual friend Mr M), who is now deceased and another (choose not to disclose for safety reasons) would say to me that I was entitled to more and that
I could do things that the Husband always refused. I was reliant on what the Husband said and I was scared that if I questioned it or enquired it, he would accuse me of not trusting him.36. Throughout the relationship, I would often ask why the house was not in both names, he would always respond with “you don’t get anything.” I would make reference to Mr M and his wife and they have 50/50. His response was “the visa you have make you not eligible to my property” (said in Country G.) The husband would state I bought you here, you have no rights.
37. I felt that I did not have any rights in this country and I was completely reliant upon the Respondent Husband.
Otherwise, the version in the second affidavit is almost identical to that in the first one, save that the paragraph about Mr G speaking a different dialect adds the following words:
44. … He read the post nuptial form to me, I did not understand completely the terms or conditions of the agreement but understood that this form gave up my rights to the home, I thought signing this form was compulsory and was required for all persons looking to obtain permanent residency. I signed the form to please my husband and so that my husband would allow me to obtain my permanent residency in this country.
It is readily apparent that, in-between the time of the creation of the two affidavits, the wife had turned her mind in greater detail to her circumstances, and there is a clear emphasis in the second affidavit upon the alleged interrelationship of the wife’s understanding as to her visa status and desire to improve it with the alleged signing of the document.
The husband’s trial affidavit (an earlier one was read but does not require detailed consideration) puts in issue the amounts of housework performed by the parties (a matter I have not traversed but will return to when I consider contributions). As with the wife’s material, much of it is paraphrased in the agreed section above. The husband, however, has a different version of how the relationship commenced (paragraph 5.2). He said he was convinced by his sister and the wife’s aunt to go for a walk with Ms Baudin. He asserts that she asked him questions about his life and then started talking about marriage. Slightly surprisingly to my way of thinking, he deposed:
5.2 … Ms Baudin and I talked about matters such as if we were married whether she would want children, would she accept my current children and whether if we separated, would she make a claim against my house. I told Ms Baudin about myself and what I like in a relationship. I wanted Ms Baudin to be fully aware of the way I am before making any commitment.
At paragraph 5.4, he deposed:
Prior to Ms Baudin and I becoming engaged, I explained to Ms Baudin that I had previously been married and that whilst I would support her in Australia, I wanted to protect my home in the event that we separated in the future. I asked Ms Baudin words to the effect of “do you expect me to support you in the event that we separate?” Ms Baudin responded words to the effect of “no I am not interested in your property.”
The husband’s affidavit also deposed to an incapacity on the wife’s part to properly look after Mr H when he was young and two assaults on him in 2004, which were alleged to have given Mr H a problem wetting his pants until he was about 14 years old. He denied that the wife did not fully understand her rights to obtain permanent residency or citizenship in Australia and referred to the wife reading Mr H information she obtained from TAFE in 2004 about this. He deposed that on one occasion the wife came home from TAFE and said words to the effect that she had learned she could have him removed from the home and make a claim against him like his first wife did (paragraph 12.4).
The husband relevantly deposed at paragraph 13:
13. …
I deny that I did not talk to Ms Baudin about the Financial Agreement (“the Agreement”) prior to the Agreement being drafted and signed. Ms Baudin had regularly asked me to sell the house and move to Country C. I said to Ms Baudin words to the effect of “I have no connections in Country C, I do not want to live there”. I was concerned about Ms Baudin constantly asking me to sell my home as well as her aggression towards me and Mr H. Isaid [sic] to Ms Baudin words to the effect of “if you want to stay in Australia, then we need to have an agreement in relation to my property”.
13.1 Prior to attending upon my solicitor, I asked Ms Baudin if she was prepared to sign documents confirming that she would not make any claim on my home in the event of our separation. She told me that she would be prepared to do so.
13.2 On 15 December 2005, Ms Baudin and I attended upon my solicitor, Mr N, who had drafted a Binding Financial Agreement at my request. Whilst Ms Baudin and I were at Mr N’s office, he asked Ms Baudin what language she speaks and he made an appointment for Ms Baudin to see a solicitor namely Mr K. On the same day, I took Ms Baudin to her appointment with Mr K. When we arrived at Mr G’s office, Mr G came out to reception and we exchanged pleasantries. I had no reason at that time to believe that Mr G did not speak the same dialect as Ms Baudin.
13.3 After exchanging pleasantries, Mr G then took Ms Baudin into his office and I remained in reception with Mr Lakatos. When Ms Baudin’s meeting with
Mr G concluded, both Mr G and Ms Baudin exited the office laughing and exchanging pleasantries. Mr G passed to me the original signed Financial Agreement for me to sign in front of my solicitor. Mr G further said to me words to the effect of “if you are going to sell the house in the future, come and see me”.13.4 I was not in the conference when the Binding Financial Agreement was discussed between Mr G and Ms Baudin. I do not know what advice Ms Baudin was provided, save that the Binding Financial Agreement was signed by her accompanied by a Certification from Mr G as to the advice he provided to her. When Ms Baudin came out of the office with Mr G she said to me words to the effect of
“Mr G explained everything to me and told me that it was my choice whether I sign or not and I have chosen to sign”.…
14.1 Ms Baudin’s application for permanent residency was made on 10 December 2001. The Decision by Immigration to refuse Ms Baudin’s permanent residency application was made on 11 October 2005 and an application to review that decision was made on 11 October 2005. This was all done prior to the Agreement being signed.
The husband denied the assault in 2009 and otherwise put in issue aspects of the wife’s affidavit that were injurious to his case. He did, however, also assert at paragraph 17.2:
At the time of separation, Ms Baudin said to me words to the effect of “I should never have signed that Agreement, it cost me a million”.
THE AGREEMENT ITSELF
The document is described as a Post-Nuptial Agreement. It is dated 22 December 2005. By recital (F), it was noted that Mr Lakatos (the husband) “is the owner of, or otherwise entitled to, the assets and resources set out in the First Schedule” (the First Schedule was the matrimonial home and its title details). Recital (G) noted that each party may, in the future, receive gifts or inheritances, and then (H) set out the desire of the parties to enter into an agreement pursuant to section 90B. Recital (J) noted that, prior to signing the agreement, they had received independent legal advice and the matters that that advice would have covered.
The operative terms of the agreement included at paragraph 2 an agreement by the wife that she had made no contribution towards the matrimonial home and had no entitlement to it nor any inheritances Mr H might receive. Paragraph 3 was a mirror clause in relation to any inheritances that the wife might receive. Paragraph 4 noted the parties might contribute financially and non‑financially towards the acquisition of assets and resources other than those already excluded, and at paragraph 5:
Assets and resources acquired during the course of the marriage (other than those referred to in paragraphs 2 and 3 hereof) should be deemed to be owned by the parties in the proportions described in any document evidencing title, save and except for the sum of $400,000.00 which shall be treated as specified in paragraph 7 hereof.
Paragraph 7 provided:
The parties agree that as at the date of this agreement the value of the property
at D Street, Suburb E (“the property”) is $400,000.00. In the event that the property is sold, mortgaged or otherwise encumbered to acquire or purchase another property (“the other property”), the parties agree that Ms Baudin shall not be entitled to the first $400,000.00 value of the other property.Paragraph 8 went on to provide:
The parties agree that, at the time this agreement is made, the circumstances of each
of them is such that, taking into account the terms and the effect of the agreement, they are able to support themselves without the benefit of an income tested pension, allowance or benefit.
Whatever this clause was intended to achieve, it reads somewhat unusually given that the wife as at that date was not a permanent resident of Australia, had therefore no entitlement to any statutory benefits, and was utterly reliant upon the husband for her financial maintenance. The clause appears to be erroneous on its face.
The agreement also suffers from another obvious deficiency in as much as it seems to envisage that anything other than inheritances or the matrimonial home will be determined by documents evincing title. There is no particular reason why all chattels would necessarily give rise to the existence of documents evincing title in the first place, and certainly it is easily foreseeable that, with the lapse of considerable amounts of time (as did indeed occur as separation did not occur until 15 years later), this would have been a very unhelpful document to that extent.
It should also be noted that, if the property had been sold and another one bought, the agreement appears only to excise $400,000 of the next property (the other property), although, inconsistently with clause 5, if only one of them had been put on title, then arguably that would have been determinative.
It should further be noted that the document is in English, which it is common cause the wife cannot read, and there is nothing on it, as I indicated already, that suggests that the document was first translated, because one would have expected Mr G to put that on the document.
A Certificate of Independent Legal Advice signed by Mr G asserts that he gave independent advice as to the following matters:
1.The effect of the agreement on the rights of the parties to apply for an order under the provisions of the Family Law Act 1975, the Family Law Amendment Act 2000, and otherwise at law and in equity.
2.Whether or not at that time it was to her advantage, financially or otherwise, for him to enter into the agreement.
The evidence given and submissions made at Court
Mr G was called immediately before any other steps were taken.
The evidence of Mr G
Mr G, who appeared on subpoena from the wife, indicated that he was a legal practitioner in practice since March 2000. At the time he gave the certificate in this case on the 15th September 2005 he had been in practice for five years. He was familiar with the agreement. When asked who organised the appointment he said he had no recollection as it was fifteen and a half years ago. He actually had the original document but could not remember who organised the matter. He did not recall his fee and he did not know who paid. He did not know how long the consultation took place. He said his usual practice in dealing with binding financial agreements takes about half an hour to one and a half hours. He explains the documents first and makes sure the client understands them before they sign. He could not recall if he had given any letter to his client. He would usually explain the advantages and disadvantages.
Under cross-examination by counsel for the husband Mr G confirmed that only the client is allowed in the room. It is his usual practice to give a written letter as well. He is comfortable speaking in Country G. He had to make sure there was no duress.
In re-examination Mr G confirmed that he would normally ask questions about duress. He does not have a psychology degree. He does not have any notes. Files are destroyed after seven years. He agreed that there was no interpretation clause.
The opening and evidence of the applicant wife
Counsel indicated that the application was made pursuant to section 90K of the Act. He indicated that duress and unconscionability were raised as issues.
The wife was called first and adopted her trial affidavit and financial statement as true and correct. She was taken to a number of passages in the husband’s affidavit filed 5 July 2021. She was first asked about paragraph 5.4 and the words “do you expect me to support you in the event that we separate”. She said this was never said to her by the husband. There was no conversation about separation.
Counsel put paragraph 6.2 of the affidavit to her in which the husband had deposed that the husband paid all expenses and she had had her own money. The wife said she had something to save. She paid for furniture and shared household expenses. She bought clothes for the child. She bought things that she did not disclose to the husband because he did not allow her to buy things.
She was taken to paragraph 8.1 of the affidavit. She said she had worked but she does not speak English well. In respect of paragraph 8.2 the wife said that husband helped her to get to work. She relied on him totally. She started work in something like 2007.
In response to paragraph 11.5 she denied saying to the husband come back and look after the child otherwise you will find him dead. She likewise denied the contents of paragraph 11.7 of the husband’s affidavit in which violence against the child was alleged.
She further denied, as alleged in paragraph 12.4 saying, that she could have the husband removed from the home and the words in that affidavit. She further denied paragraph 13 of the husband’s affidavit. She denied the terms of paragraph 15.3 of the affidavit to do with her seeing another male on return to Australia. She had seen a male and waited for him to place his baggage in his car as he wanted her to help him. She denied visiting his house.
The wife also denied the words attributed to in paragraph 17 of the husband’s affidavit. When it was put to her in paragraph 17.4 that she had fought regularly with her son she said in English “oh my god no”.
Under cross-examination by counsel for the husband
The wife was asked what her level of English was. She said it was normal. She did not know much. It is not good enough to talk to the supermarket cashiers. She cannot read or write English, and her spoken English is very basic.
The mother was questioned about her education. She said she had been to high school. She spoke no other languages than Country G. She can read and write Country G. When asked how old she was when she left school, she said 19 or 20 when she finished school. She then went on to say perhaps it was 18.
When asked what English courses she had undertaken in Australia, she said she studied 200 hours when she first arrived. Then, she took a course before her current job. That was before she started her job. That was about five months ago, but she did not continue.
She was asked about learning English through Centrelink as described in paragraph 94 of her trial affidavit. She said she told Centrelink she could not study because she had started working. When asked when this was, she said it was lately but could not say exactly. When asked if she had filed two affidavits in the proceedings, she said she could not remember. She could recall going to her solicitor’s office in June 2021. She then said she started work five to six months ago, after Easter and before her birthday. This placed the matter in January to March. She had stopped her language course before she started work. When asked about the course in 2004 as well, she could not remember. She remembered a 200-hour course. When asked if this was at TAFE, she said “maybe”. She could not remember where. The husband drove her there. When asked if it was before or after her son was born, she said it was prior to the child’s birth in 2002. She had her child while studying. It started before and was continuing (the answers were hard to follow).
The mother agreed that she started at TAFE Suburb O in 2004. When asked about TAFE in 2005, she said, “Maybe. Yes.” She did not study after she signed the agreement in late 2005.
The wife was taken to the husband’s assertions as to the purchase of the property in 1987 for $98,000 and agreed she had read the husband’s affidavit. When asked about the marriage, she said they were introduced by family. His sister wanted to arrange a marriage. Her own aunt told her sister he could come and visit her niece. She agreed the husband was a transport worker for 10 years but could not remember if he stopped in 2003. She agreed that the husband had ceased work by the time of the Migration Tribunal and was on a Centrelink pension but was not sure when. The wife was taxed with having said she had started work in 2007 in her evidence. Paragraph 25 of her trial affidavit said she had started work in 2013. She could not remember when she started working for the Country C lady. The Country C lady passed away seven to eight years ago, and she worked for her for about two years. She had not started work with the Country C lady when she signed the agreement with Mr G. She agreed that paying for herself started when she started working. The husband had paid when she was not working. It was put that the earliest possible date for her starting work was 2007, and she said this was correct. When asked about cooking and cleaning and household chores, the wife responded with her own question and asked what was wrong with it. It was put that the husband shared these duties after he ceased working in 2003, but the wife said she used to do everything on her own. He cooked for himself and he taught her once to cook rice. When asked if the husband ever cooked for the family, she said “maybe once” but was then equivocal. She stuck to her assertions as to purchasing household items in paragraph 27 of her trial affidavit. She agreed the home was fully furnished when she arrived. She had bought these items after she started working.
Cross-examination turned to the issue of family violence. She said her son was two or three years old when she signed the agreement. When asked if she knew that the husband filed two affidavits, she said she did not know. She was asked if the husband’s affidavits had been read out to her, and she said “yes”. When asked if the affidavit of 21 January had been read to her, she said, “Honestly, no.” She did not know about the affidavit in June 2021 and would like her lawyer to answer.
When asked if the affidavit of 5 July 2021 had been read out to her, she gave contradictory answers and could not remember. She appeared finally to say that the affidavit had not been read to her.
Cross-examination proceeded about her son. She said she would do anything for her son. She stuck to her answer that the husband had committed acts of family violence on her. When it was put that there were no dates in her affidavit as to allegations of violence, there was no real answer. She agreed that the allegations she made about violence post-dated the 2005 agreement. She agreed that the accusations of multiple affairs were recent and before she left the house. When asked about a threat to kick her out, she said this was more than two to three years ago and that it was all the time. The 2010 shopping centre slap was after the agreement. Indeed, all violence was after 2005. It was put that the 2006 MRT decision made no mention of violence (although the wife did not really answer this proposition, it is clear that that is so). The wife confirmed she had applied for a spouse visa in 2001, soon after she came to Australia. She had married in 2001. He applied for everything as she could not remember. She was asked if she was saying the husband opposed her getting citizenship, and she said this was correct. It was put that, without speaking English, she would not have qualified, but she said, “Before, it was much easier. Now, there is a test.” It is not that old, he told her. When asked if she obtained permanent residency in 2006, she was not sure. It was put that she could have applied for citizenship after five years but said it was written somewhere on the papers. She knew about this before 2011. She relied on him to help her, but he did not. She was asked about the alleged conversation with her sister at paragraph 34 of her trial affidavit. She said this was a long time ago. It was a casual phone call with her sister. She could not remember when but thought it was before the Country C lady.
The wife was cross-examined about paragraph 36 of her trial affidavit and initially said she had not said this (it was clear she had not understood the question), “Mr M’s wife came and told
me their home was under both names.” So she went and asked him. She denied asking him often why the house was not in joint names. She knew the house was in his name before she came to Australia. When they were engaged, he told her he owned a house. He had not told her he had owned a house with his wife before that. He had told her he was previously married.
When asked about separation, the wife said they did not separate. There was nothing formally on paper. She left the matrimonial home, and her son was a few months off being 18. She packed up and left home. The husband was home at the time. She did not tell him she was leaving. He asked, “Where are you going?” When it was put that her son was scared at that time, she said her son knew earlier. She told her son. The husband was accusing her of having affairs. He gave her a paper to separate. He said sign it or he would take her to court. When asked why she had not taken her son with her, she said she said goodbye. She said she would get him with her when she gets a place. Her friends came in a car to get her things. Her son is studying, and the school is close to home. She could not take him. She cannot drive.
It was put that she had not seen her son for five months thereafter. She said it was a long time. She saw him once or twice. He calls her in the holidays, and she is now seeing him more often. When it was put that the husband had concerns about the son in her care, she said, “Who says so?” It was put that the husband stopped work when her son was very little, and she denied this. She denied that the son was wetting his pants until he was 14 and the husband went to school to change him and said this was incorrect.
The mother agreed that she was funded to take 200 hours of study at Suburb O TAFE. It was put that she had conversations with other students, but she said they did not speak her language. They just said hello. It was put that there were conversations with the teachers, but she denied this. She got materials to read, but they were not in Country G. They were audio. There were no booklets about citizenship, and she was not told that she could get permanent residency even if she was separated. She had not signed the spousal visa form.
She was asked what she thought going to see Mr G was for. She said she did not know. The husband said that, “Tomorrow, we’re attending a law firm in the city, and there is a form you have to sign.” When it was put that this was in Suburb P, she said she does not know the area. She remembered seeing Mr G. She remembered she and her husband at the office but was not sure if the husband followed her into the office. It was put to her that her affidavit said that the husband was with her. She said, when she entered the law firm, her husband was with her. When the lawyer called her in, she could not remember if he followed her. When it was put that she could not remember the appointment at all, she asked for the question to be repeated. Counsel asked if she remembered anything else. She said just that she went in to sign the document. When asked what she said to the lawyer, she said she entered into the office. First, he said there was a document. She was told she had an option to sign it or not. She said she asked, “If I sign, can I stay in the country, can I see my son? I love him. If I don’t sign, I can’t stay in the country”, (or words to that effect). The lawyer gave her an option to sign or not. She was thinking, if she did not sign, she would not be able to stay in the country. The lawyer did not tell her it was in her best interests to sign, nor did he tell her the advantages or disadvantages. He did not tell her the agreement was fair. They did not discuss her immigration status. She was sitting down, and the lawyer too. He was behind a desk. She could not remember other chairs, although she appeared to suggest in clarification to a question from the Court that the door was behind her on the left side and closed. It was a small room. Counsel asked if Mr G went through the document in a language she understood. He mentioned three points. Nothing else. There was proof of what she said.
She saw a paper with “divorce” on it. The husband said, “Don’t worry about it.” The lawyer said nothing about it. Her husband was organising his office, and she saw documents and asked him. He told her not to worry about it. This was lately, four, five or six years, maybe. Counsel put it that Mr G told her she would lose her right to make a claim against the house, but she said he did not tell her. He did not tell her she was losing her rights. When it was put that they had not disclosed migration matters, the wife said, “Never. Never.”
Counsel asked if the wife understood the MRT decision. She said he told her. She stayed with him for 14 years. She was not aware that she was entitled to apply to become a permanent resident if there was violence or she had a child. When asked if she had told the father this in 2004 when she was at TAFE, she replied, “What do I know? I don’t know.” When it was put that she said she should never have signed it and it cost her a million, she said she did not know anything about this. She confirmed that she thought she had to sign the pre-nup as it was necessary to become a permanent resident. She had not known that this was not compulsory. She had to sign the documents to give up the house to get permanent residency. She denied that the husband had told her there would be no marriage if she claimed over property.
There was no re-examination.
The evidence of the husband
The husband adopted his two affidavits as true and correct subject to one minor correction
of no moment. He bought the home in 1987 for $98,000 and separated from his first wife in 1996. He paid her out about a year after that.
Under cross-examination the husband confirmed he has been living in Australia for 50 years. When asked why he still required an interpreter he said he understands English, but legal terms are hard to understand. He reads and understands English. His first affidavit was filed without the assistance of an interpreter. An interpreter was present for the second affidavit. He was 24 when he came to Australia and drove a taxi for 10 to 12 years. That did not involve speaking very much. He had not gone to school. There were some words in the MRT decision he does not understand. When it was put that he was recorded in that decision as not allowing assets to be in joint names, he said he did not say that. He confirmed the wife did not have a bank account. He is on a pension, which is paid into his account, and he gave her money. When it was put the decision recorded him being stubborn about giving information to assist the wife, he said this was not correct. Whatever she asked for, he would supply. He had done everything for her. He denied the assault in 2010 at a supermarket. He denied being in total control of the wife. He said she found her own lawyer. He did not find the lawyer for her. His lawyer had found him. He agreed that the mother would not have been able to find a lawyer in 2005. It was put they went to a lawyer he knew. He said he did not know him. He asked around and asked some friends. They instructed him (Mr N) to draw the agreement. When asked what he had told Mr N, he said it was about the house he bought. That the house was his and so she would have no claim over the house. When asked if this was fair, he said yes, it is fair. It was discussed before marriage. She did not want anything. She wanted to be fed and to live with him. This document was only if they divorced. This is his fortune. She does not care for him or her son.
When asked why he had not left her many years ago, the husband said she mentioned many times she would leave, and he told her she was free to go. When asked what he thought the wife was good for if he did all the cooking and household duties, he said she did something, but he did most things. He would take a change of clothes (to the son). She had damaged him. He told Centrelink, who told him he could get the police involved. He did not report it to the police. They would have made her leave, and he did not want to harm her. This happened, 100 per cent.
He went to his solicitor, and that solicitor sent her to Mr G. He did not know a lawyer who spoke her language. They went together with their child. They went home together. He paid Mr G about $300. When asked if he had received a letter of advice after the agreement, he said that, about a week after she signed, he was advised by the solicitor to go in and see him. When asked if there were any negotiations, the only thing he asked was, if he sold the house, would he get everything. The agreement was she would have no claims on him, and he would have no claims on her. He said the wife spoke English. She read English. She could not do it well, but she could read and write. She knew some. When it was put that the wife signed because she was scared, he said she accepted the terms. The wife was not scared emotionally, physically or financially. When it was put that she was scared she could be deported away from her son, he said she never said anything about that. When asked how long he had seen the solicitor, he said about one hour. They were alone in the room, and the wife was not there. They went together when he prepared the document. He gave him the address and the documentation. He had gone alone first, and she knew he was going. He went there to get a prenuptial agreement.
There was no re-examination.
Final submissions by counsel for the husband
Counsel noted that a claim pursuant to section 90K(1)(d) had been abandoned. The wife attended the solicitor. Poor advice is not enough, and counsel referred to Logan v Logan (2013) FLC 93-555. There has to be no advice at all. Mr G relies upon his usual practice. The wife’s recollection was problematic. Counsel referred to Thorne v Kennedy in the High Court. The alleged violence post-dated the agreement. There was evidence of the solicitor’s usual practice. The Court should find that the applicant was told not to sign. Her rights under the Family Law Act had already accrued. If the wife was concerned about her visa status, she could have asked. The Department declined the wife’s application, and the MRT followed. The suggestion the wife had no free will would not be made out on the evidence. She stayed in the relationship for 14 years. In any event, the remedy is discretionary. The husband bought the house, and it was paid off in full by 2000. It was worth $400,000 in 2005, and any increase is simply the increase in property value. The wife worked for a couple of years. The husband says he gave up work for the son. The wife’s earnings would be modest, and the husband is unemployed on an aged pension.
It should be noted that I pointed out to the parties that the way the case had been run meant that the Court was minded to make a final determination of the matter if the agreement was set aside, and both counsel conceded there was nothing further they would wish to put in that regard other than their final submissions.
Final submissions of counsel for the wife
Counsel referred to the case law referred to by counsel for the husband (which I have not fully set out above) and said they were irrelevant. Unconscionability and duress were present. The wife was scared of losing her son, and the agreement was not the product of her free will. It was submitted that Mr G was unsatisfactory. He could only refer to his usual practice. He had not kept notes, and there was no letter of advice to encapsulate what he told the wife at the time. Counsel referred to Thorne v Kennedy and submitted that the advice would have been not to sign it if it was properly given. There was no advantage to the wife signing the document. There was no reference to the length of the relationship and no reference to further children or ill health. It would have been impossible in half an hour for this task of proper explanation to have been undertaken when the document was not in English. The husband was paying the fees. The agreement was void on the basis of undue influence or duress. Counsel referred to Corelli & Beroni [2019] FamCA 911 in this regard. If the agreement is not put aside, the wife will get nothing after a 20-year relationship. She should obtain 40 per cent of the pool on the basis of her contributions.
Should the agreement be set aside as the applicant seeks for duress, undue influence
or unilateral mistake? (see applicant’s written submissions, paragraph (4)).This case brings into direct application the observations of the High Court in Thorne v Kennedy [2017] HCA 49. I have, of course, had regard to the whole of that judgment. There are perhaps a number of short extracts it is worth remembering particularly, bearing in mind that the applicant’s oral submissions also raised the question of unconscionable conduct (section 90K(1)(e)).
In Thorne, the High Court described duress in the following terms at [26]:
The vitiating factor of duress focuses upon the effect of a particular type of pressure on the person seeking to set aside the transaction. It does not require that the person’s will be overborne. Nor does it require that the pressure be such as to deprive the person of any free agency or ability to decide. The person subjected to duress is usually able to assess alternatives and to make a choice. The person submits to the demand knowing “only too well” what he or she is doing.
At [30], the High Court noted the difficulties in defining undue influence. At [32],
the High Court noted:
… at the very least, the judgmental capacity of the party seeking relief must
be “markedly sub-standard” as a result of the effect upon the person’s mind of the will of another.At [38], the High Court observed, in relation to unconscionable conduct:
A conclusion of unconscionable conduct requires the innocent party to 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”. The other party must also unconscientiously take advantage of that special disadvantage.Finally at [41], the High Court observed:
In any case where a transaction is sought to be impugned by the operation of vitiating factors such as duress, undue influence, or unconscionable conduct, it is necessary for a trial judge to conduct a “close consideration of the facts … in order to determine whether a claim to relief has been established”.
In order to undertake the exercise of a close consideration of the facts as the High Court indicated, it is appropriate to say something at this point about the credit of the parties. The wife was in many ways an unsatisfactory witness. A number of her answers involved changing her evidence, as it seemed to me, on the run. Even bearing in mind the reality of interpretation and the natural nervousness that was quite evident in her demeanour, the wife was not a satisfactory historian. I think I commented more than once about the fact that she was unable to remember her age when she finished secondary school. The end of secondary schooling is a momentous episode, one would have felt, in anyone’s life. It is the point at which, so to speak, you embark upon adulthood. The fact that she was unable to remember it to within even three years is very striking. This answer was redolent of her evidence generally and went to confirm what I formed as a very strong impression that she was a woman of relatively limited intelligence. She was certainly defensive. She was certainly keen not to give any answers that she perceived to be damaging to her case. She denied at times even the terms of her own affidavits. One must applaud the no doubt heroic efforts of her solicitors to obtain a coherent narrative from her in the first place. One has to approach aspects of her evidence with considerable caution.
The husband, I regret to say, did not impress me that much better. While I can understand why he needed an interpreter to help him answer some matters, his insistence upon the full interpretation of all questions and answers sits, as counsel put to him squarely, very uneasily with his 50 years of residency in Australia.
One area of his evidence, however, I should record that I found convincing, because of what he said and how he said it, was his allegation of assaults upon the child by the mother. It should be noted that his allegations did not rise to significant actual assaults, although there were some, but I found his description of that aspect of the relationship convincing.
What, then, is one to make of the factual narrative? The parties met through relatives in Country C in 2001. For whatever reason, they decided to get married. I have no difficulty in inferring that the change from Country C to Australia was an attractive one to the wife. She would never have uprooted herself to this extent and left all her family in Country C behind if it were not. I do not accept that the husband said what he now says he said to the wife about his property in those brief discussions in early 2001. In his 27 January 2021 affidavit, he said:
6. … I told her that I had a property in Australia and asked her to be honest with me and tell me whether she wants to marry me in order to move to Australia or to claim my property. She assured me that she did not have any motives and just wanted to be in a relationship with me.
In his second affidavit filed 5 July 2021, it was put:
5.2 … Ms Baudin then started talking about marriage. Ms Baudin and I talked about matters such as if we were married whether she would want children, would she accept my current children and whether if we separated, would she make a claim against my house.
This was then expanded on in paragraph 5.4, where it was asserted:
Prior to Ms Baudin and I becoming engaged, I explained to Ms Baudin that I had previously been married and that whilst I would support her in Australia, I wanted to protect my home in the event that we separated in the future.”
The wife was said to have said that she was not interested in his property by way of response.
Not only do I not accept the husband’s evidence in this regard, having seen and heard it; it is, in my view, inherently improbable. The other matters he was discussing with the wife were exactly what you would expect a courting couple to discuss. What would they expect from each other in a relationship? What was to be made of his prior marriage, and would she accept his children? Did she want to have children of her own? As a matter of ordinary human experience, to then be told, “If we separate, do you guarantee not to make a claim against me”, is scarcely the stuff of a person seeking to persuade somebody to become their partner. I appreciate that the husband puts this on the footing that he was, as it were, upfront and to‑the‑point about it, but when you take a step back, it really beggars belief.
In either event, and setting aside for the moment exactly what was said, the wife certainly came to Australia in 2001, and they did not separate until 2020. I do not accept the husband’s evidence that he did all the housework or virtually all of it. He worked for at least part of the relationship. The wife undoubtedly did the cooking for herself and her son and for the husband. She did the housework. That is what she says, and I believe her. There is nothing in the husband’s materials to suggest what else she could have done with her time, bearing her somewhat limited English.
I do not accept also his evidence that the wife, as it were, learned at TAFE about the domestic violence exemptions in the migration legislation. The wife would not have been able to read any documents in English, and it does not appear from what she said – and I accept this – that her fellow students were Country G speakers. Furthermore – and this is perhaps more determinative – the wife is simply not a woman of sufficient intellectual sophistication, first, to have read and understood the documents, and second, to have acted on them.
What is clear is the wife knew that her application for permanent residency had not been successful following the first application, made in late 2001. She was given only a temporary, and not a permanent, visa. That application took a long time to be processed, and a delegate came down with a decision against her in October 2005. Whatever her sophistication or otherwise, there is no logical difficulty in doing anything other than accepting the wife’s evidence that her visa status was a matter in the forefront of her mind. She knew that her son, by now approximately three, was an Australian citizen. She knew he would stay in Australia or could do so. Her asserted fear that her visa status might cause her to be separated from him is entirely understandable and believable in these circumstances. It is against that known factor that the visits to the solicitors come into play.
First, there is no doubt that the husband was deeply concerned to ensure that his matrimonial home (his home as he clearly saw it) remain his at all events. Quite what impelled this concern is not entirely clear. From what he told the Migration Review Tribunal, it appears that the experience with his former wife had been a somewhat searing one for him. He obviously felt that it was most inappropriate for him to have to make any form of matrimonial settlement should the marriage not succeed. He found a solicitor through acquaintances with whom he was obviously able to converse in Country F. That solicitor drew up the somewhat deficient agreement that was ultimately prepared. That solicitor gave him the agreement and sent him to a further solicitor he recommended; that, of course, was Mr G.
We know for certain that the husband took the wife to see Mr G. We do not know if Mr Lakatos accompanied the wife during the time he was talking to the wife. The wife’s evidence on this point, despite her certainty in her affidavits, was ultimately equivocal. Mr G says that it was his practice only to interview the one person. Doing the best one can, it would appear that that is more probable than otherwise in this instance.
It appears from concessions already referred to that the wife had some inkling that in signing the document she was contracting out of what she might have perceived conceivably to be some form of potential benefit to her, but one area where I am completely convinced is that the wife signed this document because she was terrified that her visa status might be revoked and she might lose her son. That possibility was plainly likely to have been in her mind following the rejection of her permanent residency application. She has been steadfast in her evidence about this particular matter even though she made a number of changes and contradictions in many other respects. As the High Court made plain in Thorne v Kennedy, these matters are partly a matter of clearly proved facts, but they were also matters that can be reached by inference and circumstance. I have no doubt that the husband was the dominant person in the relationship. He was the only one who could converse with anybody in English. He was the sole source of income, apart from the apparently two years or so of work that the wife did from 2013 (possibly) with a Country C lady.
More important even perhaps than these sort of inferences as to the power dynamic in the relationship and the wife’s overarching fear of her visa status is another particularly obvious fact. This agreement could never have been explained in any of the sort of timeframes that Mr G said were attained. It would have taken an hour and a half to translate the document if that was the maximum time available. The wife would have found large portions of it very difficult to understand. Indeed, parts of it are unintelligible even to a speaker of English and with some pretensions to understanding legal terminology. I have simply no doubt that the wife had no idea what she was signing. She had no understanding of what it meant. The only thing that Mr G said to her that made any sense was, “You don’t have to sign this if you want to.” That is not sufficient.
I have not felt it necessary to comment on Mr G’s evidence in any detail. He has no recollection of the events, and that is entirely understandable. In my view, he failed in any endeavours he made to try and interpret and explain this document to the wife. He has not kept any notes (although given the lapse of time, this is in my view unremarkable). He did not, however, send the wife a letter in English, let alone Country G, explaining the advantages and disadvantages of the agreement to her. Whatever loopholes it might be thought to have, it was a document stunningly adverse to the wife’s interests. It would seem all the more likely that, if Mr G had properly advised her, she would never have signed it. She may not be intelligent, and that makes her likely to have taken advice given to her by a professional person all the more seriously.
In my view, there can be no doubt that the agreement cannot stand. Was this duress, undue influence, or unconscionable conduct? Further, and in the alternative, was it none of these matters, but is the agreement void simply because the person who signed it did not understand its terms at all? A complete lack of understanding as to the terms of a document plainly would give rise to its being void.
First, I think that in the particular circumstances of this case, the test for duress can be met. This was a relationship in which the husband’s will would have been overbearing on the wife at all times. As earlier indicated, he had the language, he had the money. The wife was unable to go anywhere unless he drove her. He may have been of limited education, but she is of extremely limited intelligence. To the extent that the wife did understand that the document she signed involved signing something away, she had no choice in any meaningful sense. She knew (that is to say, she thought she knew and believed) that, if she did not, there was a real risk she would lose her visa status and be separated from her son. This fits exactly with the definition earlier described of duress.
Was the agreement also, in the alternative, vitiated by undue influence? It is sufficient to say that, in the circumstances that I have described just above in relation to duress, it would plainly also give rise to a finding of undue influence. The wife’s state of mind as to her visa status can only have come from the husband, as she was utterly unable to read any of the documents that operated on it and can only have received that information from him.
Was the husband’s conduct, further, and in the alternative, unconscionable? The wife was plainly under a special disability in relation to her incapacity to speak English, let alone her economic and social dependence. Of course, in these circumstances, this satisfies the first part of the test as to unconscionable conduct. The second part is also satisfied. The husband was well aware of the wife’s disadvantages and disabilities and was committed to getting the result that he wanted in his own interests and against hers. This took place in circumstances where the matter that led him to seek to exercise such advantage was a reasonably well understood appreciation of the operation of matrimonial law in Australia. He knew, or thought he knew, that if he did not have the supposed protection of the agreement, that he might be liable to a significant claim. Plainly in the circumstances, his conduct was unconscionable.
Further, and to repeat, I find that the wife had no understanding of what it really was she was signing. Such an understanding would be beyond her in circumstances where the document plainly had not been properly explained to her, albeit that to do so might be a monumental task on any view. The agreement will be set aside accordingly.
CONCLUSION ABOUT THE AGREEMENT
For all the above reasons, the agreement plainly cannot be allowed to stand as a bar to the claim the wife now brings. It will be set aside pursuant to section 91K of the Act.
STANFORD V STANFORD
Once the agreement is set aside, the property aspect of this dispute can be dealt with relatively shortly. The relationship between the parties is at an end. The notion that the wife should receive nothing after a 20‑year relationship only has to be articulated to be set aside. Of course, it is just and equitable that there be a property adjustment.
THE POOL
The pool, as both parties agree, consists of the former matrimonial home.
CONTRIBUTIONS
The husband already owned the matrimonial home unencumbered at the commencement of the relationship. Indeed, he had paid it off before that in 2000. The wife never contributed a single dollar to the house, to the mortgage while it existed or, as is quite clear from the materials taken as a whole, to any of the ancillary costs, such as rates, power bills, fuel bills and the like. The highest the wife’s case rises is the assertion that she bought some pieces of furniture and a television unit worth $500. These are wholly trivial in the circumstances. The parties lived off the pension that the husband received, with the exception of the $20,000 earned over two years between approximately 2013 and 2015.
So far as the household duties and the care of the son is concerned, the evidence is scarcely very fulsome. I accept that the husband, once he retired in 2003, did contribute more to the ordinary household chores than might otherwise have been thought likely. I note, however, the finding of the Migration Review Tribunal that the husband is a very conservative man with very definite views about the roles of parties in a marriage. My appreciation of the husband’s evidence would lead to the same conclusion. It seems to me more probable than otherwise that the wife did most of the household duties, albeit that the husband plainly did more than a wholly traditional husband would have, as even the wife concedes that he cooked on occasion. As I have indicated, the husband’s evidence about the wife’s difficulties in controlling herself in dealing with her son when young is evidence I accept, and I accept that it was he who did more than the wife to assuage the boy’s resultant fears.
In all the circumstances, and emphasising perhaps the fact that the only asset of the relationship is one entirely engendered by the husband, I would assess the contributions as being 80 per cent to the husband and 20 per cent to the wife. Doing this gives, in my opinion, appropriate weight to the contributions of the wife in household duties, a matter which the High Court made plain in In the marriage of Re Mallet (1984) 156 CLR 605 should not be dealt with
in a tokenistic way. In the circumstances, I repeat, 80/20 is an appropriate assessment.
FUTURE NEEDS
Both parties are asserted to be in good health. The husband is 73, and the wife is 58. Neither are likely to earn anything in the future, although there is some suggestion that the wife may have some low‑paid employment. There is nothing in the parties’ material that suggests either has any significant health issues.
I do not think that the future needs components of the parties require any adjustment in favour of either of them. Neither counsel sought to address me in any significant way about the future needs component. The wife is younger and will have longer to support herself, but the husband is older and is likely to have costs associated with increasing old age. There is nothing, in my view, sufficiently remarkable to suggest that there should be any adjustment under this heading.
CONCLUSION
Is an order that the wife receive 20 per cent of the value of the matrimonial home just and equitable? In the circumstances of this case as I have described them, I think it is. It gives weight to her contribution but also gives weight to the husband’s enormous contribution in providing what is, in effect, the totality of the property pool. I note that the parties have not been able to agree on a valuation for the property. There would be obvious and significant savings to them if they were able to agree on it. Nothing has been said as to whether the husband has resources available from third parties, for example, that might enable him to pay the wife out. Plainly, if he cannot, then the property will have to be sold. I will give the parties an opportunity to consider these reasons for judgment and hear from them further.
I certify that the preceding one hundred and five (105) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Burchardt. Associate:
Dated: 26 August 2021
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