Carran & Carran

[2022] FedCFamC2F 818

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)

Carran & Carran [2022] FedCFamC2F 818

File number:	LNC 804 of 2020
Judgment of:	JUDGE TURNBULL
Date of judgment:	24 June 2022
Catchwords:	FAMILY LAW – PROPERTY – financial agreement – where financial agreement during marriage made purportedly made under s 90B instead of s 90C – whether financial agreement’s terms are uncertain – whether there has been a material change of circumstances – whether financial agreement is void for uncertainty – whether there was unconscionable conduct
Legislation:	Family Law Act 1975 (Cth) ss 4, 90B(1), 90C(1), 90C(2)(a), 90DA(1A), 90G, 90K(1)(b), 90K(1)(d), 90K(1)(e), 90KA
Cases cited:	Beckstead & Beckstead [2021] FedCFamC2F 136 Briginshaw & Briginshaw (1938) 60 CLR 336, Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337 Cohen v Cohen (1929) 42 CLR 91 Commercial Bank of Australia v Amadio (1983) 151 CLR 447 Daily v Daily [2020] FamCAFC 304 DW & GT [2005] FamCA 161 Fewster v Drake [2016] FamCAFC 214 Fitzgerald v Masters (1956) 95 CLR 420 Frederick v Frederick [2019] FamCAFC 87 Graham v Squibb [2019] FamCAFC 33 Guild v Stasiuk [2020] FamCA 348 Hoult v Hoult [2013] FamCAFC 109 Hsiao v Fazarri (2020) 270 CLR 588 Jones v Padavatton (1969) 2 ER 616 Kaimal & Kaimal [2020] FamCA 971 Kostres & Kostres [2009] FamCAFC 222 Meehan v Jones (1982) 149 CLR 571 Metropolitan Gas Company v Federated Gas Employees’ Industrial Union (1925) 35 CLR 449 Muschinski v Dodds (1985) 160 CLR 583 Royal Botanic Gardens and Domain Trust v South Sydney City Council (2002) 240 CLR 45 Ruane v Bachman-Ruane [2009] FamCA 1101 Saintclaire v Saintclaire [2013] FamCA 491 Senior v Anderson [2011] FamCAFC 129 Simic v New South Wales Land and Housing Corporation (2016) 260 CLR 185 Sindel v Georgiou (1984) 154 CLR 661 Stanford & Stanford (2012) 247 CLR 108 Stubbings v Jams 2 Pty Ltd [2022] HCA 6 Sullivan v Sullivan [2011] FamCA 752 Whitford v Whitford [1979] FamCA 3
Division:	Division 2 Family Law
Number of paragraphs:	197
Date of last submission:	20 December 2021
Date of hearing:	20-21 September 2021
Place:	Heard in Launceston, delivered in Sydney
Counsel for the Applicant:	Mr M Trezise
Solicitor for the Applicant:	Ian Guest & Associates
Counsel for the Respondents:	Ms C Gibson
Solicitor for the Respondents:	Charmaine Gibson Barrister & Solicitor

ORDERS

LNC 804 of 2020

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)

BETWEEN:

MS CARRAN

Applicant

AND:

MR CARRAN

First Respondent

B PTY LTD

Second Respondent

ORDER MADE BY:	JUDGE TURNBULL
DATE OF ORDER:	24 JUNE 2022

THE COURT ORDERS THAT:

1.the agreement made between MS CARRAN (‘the Wife’) and MR CARRAN (‘the Husband’), dated 8 December 2006, is set aside under s 90K(1)(b) and (d) of the Family Law Act 1975 (Cth) (‘the Act’);

2.the following applications be dismissed:

(a)the Wife’s application at paragraph 3 of the terms of order sought in her application for final orders filed 30 October 2020; and

(b)the Husband and B Pty Ltd’s application at paragraph 1 of the terms of order sought in their response filed 21 December 2020; and

(c)the Husband and B Pty Ltd’s application at paragraph 2 of the terms of order sought in their response filed 21 December 2020, but only insofar as that paragraph says ‘pursuant to that Agreement’ on the first line; and

3.the application for final orders, filed 30 October 2020, be listed for directions on 28 June 2022 at 9:30am, to be conducted by way of Microsoft Teams.

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 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).

Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.

IT IS NOTED that publication of this judgment by this Court under a pseudonym Carran & Carran has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

REASONS FOR JUDGMENT

JUDGE TURNBULL

Overview

1. These Reasons concern a financial agreement purportedly executed on 8 December 2006 (‘the 2006 agreement’). The issues before me for determination are confined to, in essence, the nature, validity, and enforceability of that agreement.

2. The parties’ dispute with respect to the 2006 agreement arose from property proceedings initiated by Ms Carran (‘the Wife’) on 30 October 2020. The Wife initiated those proceedings against Mr Carran (‘the Husband’) and B Pty Ltd (‘B Pty Ltd’). The Husband, as the sole director and business operator of B Pty Ltd, engages in a mixed business.

3. The Wife seeks a property adjustment order under s 79 of the Family Law Act 1975 (Cth) (‘the Act’) and a declaration of equitable interest, to the extent of her entitlement under s 79, in all real and personal property of both respondents.

4. Herein lies the crux of these proceedings. Part VIII of the Act (in which s 79 is situated) does not apply to financial matters in which a financial agreement that is binding on the parties to the agreement applies.[1] The Wife asks this Court to find that the 2006 agreement is not binding or otherwise set it aside. The respondents, on the other hand, seek a declaration that the 2006 agreement is binding and should be enforced.[2] The consequences of these preliminary proceedings are important — if the 2006 agreement is binding and enforceable the Wife’s application under s 79 cannot continue.

   [1] Family Law Act 1975 (Cth) s 71A.

   [2] Ibid s 90G(1B).

5. This preliminary question reached final hearing on 20 September 2021. On this date the Court received evidence from the Wife and the Husband and, by consent of all parties, the trial was adjourned and I directed the parties to file written submissions before the return date. All submissions were received by 20 December 2021. The final judgment was there after reserved, again by consent and having not been relisted, on 24 January 2021.

   Documents relied upon

6. At trial the Wife relied upon her affidavit and updated financial statement, both filed 8 September 2021, and her case outline filed 10 September 2021. The Husband relied upon his case outline, affidavit, and updated financial statement, all filed 30 August 2021.[3] Both the Wife and the Husband swore or affirmed the contents of their affidavits and financial statements as their evidence in chief before being cross-examined.

   [3] The Husband’s affidavit, at [21], was subject to an objection from Mr Trezise during the Husband’s examination in chief on the basis that it included opinion evidence, and was struck out on this basis.

7. B Pty Ltd did not file any material for the purpose of the final hearing on the preliminary jurisdictional question. The company’s position is the same as that of the Husband.

8. The parties’ written submissions also refer to a number of case authorities in support of their client’s position. I will refer to those authorities as I come to address the parties’ submissions.

   The parties, their marriage, and their children

9. The Wife is 46 years old, lives in City C, and works as a salesperson.

10. The Husband is 51 years old, lives in Region D, and works as a farmer and business owner.

11. The parties commenced cohabitation in 2005 and were married in 2006 in City E, UK.

12. I note here, briefly, the parties’ children and the care arrangements in place pre and post-separation. The parties have two children together — X born in 2007 (‘X’), and Y born in 2008 (‘Y’). X and Y currently live with their mother and spend some weekend time with their father. The Husband currently pays child support in the amount of $1,346.00 per month.[4]

    [4] Affidavit of Mr Carran, 30 August 2021, [44]-[46]. The Wife also said under cross-examination that the Husband currently pays X and Y’s tuition fees at K School and that she meets all other educational costs and expenses.

13. Each party have, in addition to X and Y, two children from a prior relationship. The Wife’s other children, F and G, lived with her when the parties’ relationship commenced. F and G continued to live with the parties throughout most of the marriage. F now lives away from his mother. The Husband’s other children, H and J, lived with their mother for the majority of the parties’ marriage. The Husband, under cross-examination, confirmed that the Wife assisted with the care of H and J and agreed

14. H now lives with the Wife, together with G, X and Y. J continues to live with his mother.[5]

    [5] The Wife, under cross-examination, said that H and G currently live with her for $50.00 per week as board.

15. Neither party has filed an application for parenting orders in respect of X, Y, or any step-children.

16. The Wife and the Husband moved into O Street, Town M as their first matrimonial home, which the Husband purchased prior to the relationship. The Wife owned one property — N Street, Town M — prior to the relationship. She purchased the N Street, Town M property from her mother in late 2003 or early 2004, undertook renovations during her residence there, and ultimately sold it for $180,000.00 in 2006. She received just under $90,000.00 in sale proceeds of which $75,000.00, as agreed by the parties, was applied to reduce the mortgage on the O Street home.

17. It was only after the parties’ wedding, and the commencement of their married life at the O Street home, that the 2006 agreement was signed on 8 December 2006. These Reasons will shortly, commencing at paragraph 30, briefly explain the relevant law and the particulars of the parties’ disputes in relation to the 2006 agreement.

18. The Wife agrees that she knew of the Husband’s farming businesses, his managerial role at a factory, his partnership with Mr P & Mr Q in a factory at Town R, his business assets, the other properties owned by him, and his income from these ventures. She qualified her knowledge by saying that, at the time the agreement was signed, she relied wholly in what he told her in this respect. That included the Husband telling her that he had assets with a value in excess of $2 million. The Husband denies any failure to disclose material matters as of the agreement’s formation.[6] He did, however, appear to agree that there was some complexity to the parties’ financial arrangements due to his business ventures.[7]

    [6] The Husband said, under cross-examination, that the valuations included in his financial statement were estimations based on bank valuations and other valuations undertaken during the course of this litigation.

    [7] He did not contest during cross-examination that the parties’ joint account had at times been used by the parties for commercial operations.

19. The 2006 agreement, aside from issues of validity or enforceability, evidences the parties’ somewhat disparate financial circumstances upon commencing cohabitation. That is, at least, from taking the figures therein on their face. The Husband solely owned several real properties and held a half-interest in a property at Town S with his brother. He also held, in relation to his business activities, considerable plant and equipment and stock. The Husband’s net assets, based on the figures given in the 2006 agreement, equal $2,005,000.00.[8] The Wife’s net assets amount to a comparatively small sum of $75,000.00 in sale proceeds plus ‘minimal’ superannuation.[9]

    [8] 2006 Agreement, 8 December 2006, [14]. I note that the Husband’s total and net assets appear to have been calculated incorrectly in the Agreement. His total assets are stated as amounting to $3,865,000.00, though the figures listed actually amount to $3,655,000.00. Subsequently, his total net assets are listed as amounting to $2,215,000.00 instead of the net total which is calculable using the figures given, $2,005,000.00. The discrepancy between the actual and stated total assets is $210,000.00 — this leads me to believe, as a best guess, that the value of the O Street property was erroneously taken into account twice in the calculation of the Husband’s total assets.

    [9] Ibid [13].

20. At the time the 2006 agreement was signed the Wife was pregnant with X. F and G were also living with the parties at this time and did not spend time with their fathers. The Wife asserts that they did not contemplate having a second child and that Y, born 13 months after X, materially changed the circumstances anticipated by the 2006 agreement.[10] The Husband denies that there was any agreement or discussion between them that they would only have one child.[11] He did, however, agree that the Wife was a full-time parent during the marriage in addition to her contributions to his business.

    [10] Affidavit of Ms Carran, 8 September 2021, [12].

    [11] Affidavit of Mr Carran, 30 August 2021 (n 4), [25].

21. The parties intended that, within 12 months of 8 December 2006, a property owned by the Husband at T Street be transferred into both parties’ names as joint tenants. I note this aspect of the 2006 agreement not only as a relevant part of the chronology but also to foreshadow issues of enforceability. That intention is expressed at cl 19 of the 2006 agreement but did not take place at all. The Husband, conversely, argues that the agreement effectively conferred an equitable interest (albeit unregistered) upon the Wife in the T Street property. Whether the agreement has competently provided for either of these matters is an issue of construction.

22. A number of properties were purchased during the marriage, including at

    ·U1 Street, Town M, purchased in 2014 in joint names;[12]

    ·Town V (holiday home), purchased in approximately 2014 in joint names and sold a few years later;

    ·U2 Street, Town M, now sold with the Husband having received the sale proceeds, noting that this property was owned by B Pty Ltd and no evidence was adduced as to whether the company or the Husband holds the sale proceeds;[13]

    ·W Street, Town Z, now sold with the Husband having received the sale proceeds; and

    ·Town AB, including AC Paddock, AD Street, AE Street, and Location AF, all retained by the Husband or B Pty Ltd.[14]

    [12] The Husband proposes that this property be transferred, unencumbered, to the Wife in the primary proceedings.

    [13] F and his partner lived in the U Street property for a time in 2020 until it was sold. The Husband says that F lives there rent free, and the Wife says that she intended for F to pay $200.00 per week in rent but that the Husband sought half of the rental income.

    [14] The Husband agreed during cross-examination that these properties in Town AB had been purchased during the marriage. The documentation is at times unclear as to the specific identities of the Town AB properties but clarification on this issue is not required in these preliminary proceedings.

23. The Wife and the Husband separated, initially under one roof, on 11 November 2019. The Wife moved out of the O Street home on 27 November 2019.

24. The divorce became effective on 23 February 2021 pursuant to an order of Deputy Registrar Weidmann, as he then was, dated 22 January 2021. The relationship lasted for approximately fourteen years.

25. The Wife’s evidence at trial was that, currently, she pays $480.00 per week in rent and has to ‘watch every dollar’. She said that her daily expenses outweigh her income and that, while her savings balance is approximately $30,000.00 owing to recent tax returns and funds obtained from Centrelink, her bank account is ‘going backwards’. The Wife’s position in this respect is that the 2006 agreement, if enforced, causes hardship. The Husband, on the other hand, asserts that enforcing the agreement would not cause hardship to the Wife.

26. The parties also gave other evidence with respect to the Wife’s contributions to the Husband’s business,[15] alleged drinking problems and verbal abuse,[16] and other issues relevant to the primary proceedings.[17] I did not have any issue with either party’s evidence — both parties gave evidence directly and maintained the positions as expressed in their affidavits. I do note, however, that the question of the effect and enforceability of the 2006 agreement will not (for the most part) come down to issues of credit.

    [15] The Husband agreed that the Wife was a sounding board for his business decisions from time to time, including her assistance with removing an employee found to have been stealing from the business. The Husband did not appear to challenge the Wife’s description of her contributions to the business as described at [39] of her affidavit, including her role in his business often for no pay, making her unavailable to do other paid work as a result.

    [16] The Husband conceded that the Wife’s affidavit evidence (at [38]) was true to some extent, saying that her evidence was ‘exaggerated’. The Wife maintained under cross-examination that decisions as to property acquisition during the relationship (business or otherwise) were always made jointly, notwithstanding that some properties were purchased in the Husband’s sole name.

    [17] The Wife gave evidence about the $75,000.00 she contributed to the relationship from the sale of the N Street, Town M property, noting that the property was sold sometime between the commencement of cohabitation and the execution of the agreement, with the $75,000.00 paid from the Wife to the Husband following the sale thereof. She confirms in her affidavit (at [33]) that upon separation she and the Husband agreed that she receive $30,000.00 from the joint account and take ownership of her car, and that both of these agreed actions have occurred.

27. Having established the relevant facts and evidence for the preliminary question I will, before delving into the law with respect to financial agreements, set out the issues with which I am faced in these proceedings.

    ISSUES FOR DETERMINATION

28. The ultimate question in this case — the effect of the 2006 agreement upon the Wife’s actionable right under s 79 — rests upon multiple sub-issues arising from pt VIIIA of the Act. In essence this Court must determine

    (1)whether the 2006 agreement is a contract;

    (2)whether the 2006 agreement, stated to be made under s 90B of the Act, is ‘fatally defective’ because the parties executed the agreement after they were married;

    (3)whether the 2006 agreement is a ‘financial agreement’;[18]

    (4)whether, if issue 3 is answered in the affirmative, the 2006 agreement is a binding financial agreement;[19] and

    (5)whether, if issue 4 is answered in the affirmative, the 2006 agreement should nevertheless be set aside on the basis that:

    (i)it is void, voidable or unenforceable;

    (ii)since the making of the agreement, a material change in circumstances has occurred (being circumstances relating to the care, welfare and development of a child of the marriage) and, as a result of the change, the child or, if the applicant has caring responsibility for the child (as defined in subsection (2)), a party to the agreement will suffer hardship if the court does not set the agreement aside; or

    (iii)in respect of the making of a financial agreement—a party to the agreement engaged in conduct that was, in all the circumstances, unconscionable.[20]

    [18] Family Law Act 1975 (n 1) s 4 (definition of ‘financial agreement’).

    [19] Ibid s 90G.

    [20] Ibid s 90K(1)(b), (d), (e).

29. Each numbered issue shall be addressed throughout the course of these Reasons.

    THE LAW

    Part VIIIA financial agreements: creatures of statute, common law, and equity

1. It is beneficial to briefly explain the character of pt VIIIA of the Act before setting out the law with respect to each point of inquiry therein.

2. The Act establishes, in pt VIIIA, the legislative framework by which financial agreements are created and managed. Part VIIIA provides for how a financial agreement may become effective, binding, or terminated, and deals with various other matters intersecting with financial agreements under the Act.

3. The law with respect to financial agreements is not, however, confined to the statutory realm. By virtue of s 90KA, the question of the agreement’s validity, enforceability and effect is to be determined according to the principles of law and equity that are applicable in determining the validity, enforceability and effect of contracts and purported contracts.[21] This means that the inquiry under pt VIIIA is somewhat of a hybrid of common law, equity, and statute.

   [21] Ibid s 90KA.

4. The operation of s 90KA also means that, in relation to financial agreements, this Court’s powers are the same as the powers of the High Court of Australia in its original jurisdiction in relation to proceedings in connection with contracts or purported contracts. Namely, this Court ‘shall have the power to grant, and shall grant, either absolutely or on such terms and conditions as are just, all such remedies whatsoever as any of the parties thereto are entitled to in respect of any legal or equitable claim properly brought forward by them respectively in the cause or matter’.[22] Some issues in these proceedings arise not from pt VIIIA but from common law or equity. In dealing with this case I must, therefore, have power to grant relevant and appropriate remedies.

   [22] Ibid; Judiciary Act 1903 (Cth) s 32.

5. In the following sections of these Reasons I will set out the principles applicable under pt VIIIA noting that, through s 90KA, common law and equitable principles apply when determining an agreement’s validity, enforceability, and effect. I will first address general contractual principles of formation, construction, and severance, as they concern the validity and interpretation of the 2006 agreement. I will then set out the requirements of ss 90B, 90C, 90G, and 90K of the Act and the points of dispute between the parties in relation to those requirements.

6. With respect to all facts in issue in these proceedings — whether addressed under statutory, common law, or equitable principles — are to be proved on the balance of probabilities. That is, a fact in issue is ‘proved’ if I am reasonably satisfied, on the evidence, that it is more likely than not that the fact exists (or existed or occurred) in the manner ultimately determined.[23]

   Contract law: general principles

   [23] Evidence Act 1995 (Cth) s 140; Briginshaw & Briginshaw (1938) 60 CLR 336, 361-362 (Dixon J), noting the need for ‘actual persuasion of [the] occurrence or existence’ of any fact in dispute before the same can be found, and as necessarily affected by ‘[t]he seriousness of an allegation made, the inherent unlikelihood of an occurrence of a given description, or the gravity of the consequences flowing from a particular finding …’.

   Formation

7. A financial agreement under pt VIIIA of the Act is, at its core, just a contract. Consistent with Senior v Anderson [2011] FamCAFC 129 (‘Senior’), common law and equitable principles apply in determining whether

   (a) there is an agreement and (b) the application of s 90B, s 90C and s 90D to that agreement.[24]

   [24] Senior v Anderson [2011] FamCAFC 129, [105]-[107] (Strickland J). See also [88] (May J) at which the same principle is stated: ‘ … the Act refers to and defined a particular form of agreement called a “financial agreement”. Further, as s 4 makes plain, a “financial agreement” has two essential components. It must first be “an agreement”, and it must also be an agreement that is made “under s 90B, 90C or 90D.’

8. There must, therefore, exist a validly formed contract before that contract may be considered a ‘financial agreement’ under the Act.

9. Valid formation of a contract, at the most basic level, requires a coincidence of offer and acceptance, consideration, intent to create legal relations, certainty, the correct formalities, and that each party to it have capacity to make the contract.

10. I wish to foreshadow at this time the Wife’s submissions as to uncertainty, being that the 2006 agreement contains errors which ‘cannot and should not be cured by rectification’ and that it is ‘void … for uncertainty under s 90K(1)(b)’. Those submissions did not expressly refer to the formative requirement of certainty, which itself refers to three separate requirements — completeness, finality, and clarity.[25] In the absence of any submissions to this effect at the outset of the inquiry, and given the ground under s 90K(1)(b) includes ‘void’, I shall address the Wife’s submissions on uncertainty under issues 2 and 5. The effect of uncertainty, if found, will be the same regardless of whether that uncertainty is found here or later in my Reasons.

    [25] JD Heydon, Heydon on Contract: The General Part (Lawbook, 2019) 85 [3.10]. See also within the extract at paragraph 49 of these Reasons.

11. The parties did not explicitly seek an order, lead evidence, or submit to the effect that the 2006 agreement is not a properly formed contract, save of course for the Wife’s uncertainty arguments set out above. There was no contention that the relevant offer and acceptance did not coincide. The 2006 agreement also appears to be supported by consideration in the form of reciprocal executory promises to forego their rights under s 79 for the mutual benefit of avoiding litigation.[26] Various other promises within the 2006 agreement also seemingly attempt to attach corresponding consideration and, in any event, none of the parties submitted that the agreement is not supported by consideration. This is, as foreshadowed above, a matter to be addressed under s 90K(1)(b). There were also no submissions about formalities (except insofar as it concerns compliance with s 90C of the Act) or either party’s capacity to enter the agreement.

    [26] 2006 Agreement, 8 December 2006 (n 8), [3]-[4].

12. With respect to the intention to create legal relations there was no argument that, in making the agreement, either promisor’s behaviour would not have conveyed to a reasonable person in the position of either promisee an intention to create legally binding obligations. The 2006 agreement is, in my view, the product of the parties’ intention to create legal relations. The opening clauses of the 2006 agreement import a distinct legal flavour.[27] Furthermore, the Wife did not advance any argument that the agreement, as executed between married persons, remained subject to the presumption that relatives ‘intend to rely on family ties of mutual trust and affection’ instead of legally enforceable obligations.[28]

    [27] Ibid [3]-[4], noting that [4] specifically says that the agreement is intended to replace ‘all other rights’ of the parties under the Act.

    [28] Jones v Padavatton (1969) 2 ER 616, 621 (Salmon LJ). See also Cohen v Cohen (1929) 42 CLR 91, 96 (Dixon J), in which ‘[t]he parties did no more … than discuss and concur in a proposal for the regular allowance to the wife for a sum which they considered appropriate to their circumstances at the time of marriage’.

13. I note here that the concept of creating obligations which are ‘legally binding’, in the general contractual law sense, is not the same as creating a ‘binding financial agreement’ under s 90G. A contractual promise (an obligation) within any validly formed and enforceable contract is ‘legally binding’ because, upon breach of that promise, the non-breaching party is entitled to seek a remedy from a court with jurisdiction over that contract for that breach. That is, at common law, a contract is enlivened upon the parties’ intention to create legal relations, the offeree communicating their acceptance to the offeror, and the provision of consideration.[29] Under the Act, a financial agreement may well be a validly formed contract, and it may well comply with the requirements to be a ‘financial agreement’, but it will not bind the parties to its terms (by ousting the court’s jurisdiction) unless it complies with s 90G.[30]

    [29] Guild v Stasiuk [2020] FamCA 348, [67], noting that Wilson J refers to a number of texts including Heydon (n 25).

    [30] Manner & Manner [2015] FCCA 3043, [57]-[59], at which Judge Jarret (as he then was) sets out the process clearly; the financial agreement must first be a contract (citing s 90KA of the Act and May J’s remarks in Senior v Anderson (n 24)), then it must comply with ss 90B, 90C, or 90D (as defined by s 4), and finally it must meet the requirements of s 90G.

14. It is my view that, subject to the determination as to whether it is void for uncertainty, the 2006 agreement is prima facie a contract. Issue 1 is therefore determined in the affirmative.

    Construction

15. The task of a court in a case such as this is to attribute meaning to disputed contractual clauses through an objective approach to interpreting those clauses within the contract as a whole. A court cannot to morph the language of a contract according to its own imagination of the parties’ subjective understandings, intentions, or expectations. The objective approach, as the ‘traditional doctrine’, requires a court to be ‘astute to adopt a construction which will preserve the validity of the contract’.[31]

    [31] Meehan v Jones (1982) 149 CLR 571, 589 (Mason J), at which his Honour remarks upon the basis for an objective approach to contract interpretation — the terms of a contract represent the point, and the terms, upon which the parties ultimately reached agreement. Any other statement or action reflecting their actual subjective positions, as excluded by the parol evidence rule, is not to be used as an interpretive aid ‘except in so far as they are expressed in the contract’, but with some exceptions including where the parties have omitted a term consistent with their presumed intention.

16. Where an ambiguity arises we look, as stated by Mason J in Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337 (‘Codelfa’),

    not to the actual intentions, aspirations or expectations of the parties before or at the time of the contract, … but to the objective framework of facts within which the contract came into existence, and to the parties' presumed intention in this setting. We do not take into account the actual intentions of the parties and for the very good reason that an investigation of those matters would not only be time consuming but it would also be unrewarding as it would tend to give too much weight to these factors at the expense of the actual language of the written contract.

17. The presence of an ambiguity does not necessarily mean that the contract is unclear, incomplete, or lacking finality. I set out the ambiguities in the 2006 agreement later in these Reasons, commencing at paragraph 143.

18. Where parties have come to an agreement between themselves the courts must, regardless of any subsequent disagreement as to the contract’s scope or operation, respect the integrity of the written instrument to the greatest extent possible. As such, each term is to be read and interpreted

    not as if it were entirely divorced from its context, but as part of the whole instrument: Ex antecedentibus et consequentibus fit optima interpretatio.[32]

    [32] Metropolitan Gas Company v Federated Gas Employees’ Industrial Union (1925) 35 CLR 449, 455.

19. While the written contract must speak for itself, as dictated by the objective approach, evidence of the circumstances surrounding the negotiation and execution of the contract is not irrelevant. Where words or phrases in the contract are ambiguous or subject to two or more meanings, and where the relevant background facts are known to all parties, such evidence is admissible to assist the interpretation of that language.[33] The statements of principle in Codelfa are authority for the proposition that, while the parties’ subjective intentions are inadmissible as an interpretive aid, the written instrument is inseparable from the circumstances and commercial context in which it was made.[34] The Full Court confirmed as much in Kostres & Kostres [2009] FamCAFC 222 (‘Kostres’):

    [33] Codelfa Construction Pty Ltd v State Rail Authority (NSW) (1982) 149 CLR 337, 352 (Mason J), with his Honour further stating that such evidence ‘is not admissible to contradict the language of the contract when it has a plain meaning’ and that ‘[g]enerally speaking’ facts will need to be known to both parties to be admissible, although ‘if the facts are notorious knowledge of them will be presumed’. See also Ruane v Bachman-Ruane [2009] FamCA 1101, [62], at which Cronin J referred to Codelfa in the context of completeness and whether certain essential terms could be implied, extracting Mason J’s remarks above, and further extracting the remarks of Brennan J in which his Honour appeared to ‘tighten’ the test (referring to remarks at 401 of Codelfa): ‘[Brennan J] said that the meaning of a written contract could be “illuminated” by evidence of the facts to which the written document referred because the language conveyed meaning according to the circumstances in which they were used’ and, further, said that ‘the necessity for a term to be implied had to appear from and in, the express terms of the contract not from the extrinsic circumstances’.

    [34] Royal Botanic Gardens and Domain Trust v South Sydney City Council (2002) 240 CLR 45, 53 [10] (Gleeson CJ, Gaudron, McHugh, Gummow and Hayne JJ).

    In interpreting actual terms in a contract, the learned authors of Cheshire and Fifoot's Law of Contract (9th edition) explain …:

    The High Court has repeatedly emphasised that the court approaches the task of ascertaining the meaning of the parties' expressions objectively. It is not interested in their subjective understanding, but applies the meaning that an objective outsider would attribute to the contract in the circumstances. …

    Later … the authors quote from … Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165 …:

    References to the common intention of the parties to a contract are to be understood as referring to what a reasonable person would understand by the language in which the parties have expressed their agreement. The meaning of the terms of a contractual document is to be determined by what a reasonable person would have understood them to mean. That, normally, requires consideration not only of the text, but also of the surrounding circumstances known to the parties, and the purposes and object of the transaction.

    We also have regard to the contra proferentem rule. This rule, which may be applied where there is ambiguity in the terms of a contract, is resolved against the party seeking protection where that is appropriate.[35]

    [35] Kostres v Kostres [2009] FamCAFC 222, [113]-[115].

20. Construction naturally gives rise to issues of uncertainty — where the court can ascribe no meaning at all to an unclear contract term, or where a lack of finality or completeness cannot be cured by the implication of terms, the contract is infected with uncertainty. Whether such a result seals the fate of the agreement is, of course, subject to severance. These Reasons will address issues of uncertainty under issue 5, commencing at paragraph 142. In addressing issues of construction and uncertainty in the context of financial agreements I refer to Guild v Stasiuk [2020] FamCA 348 (‘Guild’) in which Wilson J, finding the financial agreement in that case void for uncertainty, comprehensively examined the law about uncertainty: [90]-[102]

    The High Court’s decision in Upper Hunter County District Council v Australian Chilling & Freezing Co Ltd is conventionally regarded as the starting point of Australian jurisprudence on the subject of uncertainty of contract. Yet two other decisions on point, both of the High Court, preceded that decision, namely McDermott v Black and O’Brien v Dawson. In Upper Hunter, Barwick CJ delivered the lead judgment. Preferring to examine the case as an issue of construction, the Chief Justice held as follows –

    But a contract of which there can be more than one possible meaning or which when construed can produce in its application more than one result is not therefore void for uncertainty. As long as it is capable of a meaning, it will ultimately bear that meaning which the courts, or in an appropriate case, an arbitrator, decides is its proper construction: and the court or arbitrator will decide its application. The question becomes one of construction, of ascertaining the intention of the parties, and of applying it. Lord Tomlin’s words in this connexion in Hillas & Co. Ltd. v. Arcos Ltd ought to be kept in mind. So long as the language employed by the parties, to use Lord Wright’s words in Scammell (G.) & Nephew Ltd. v. Ouston is not “so obscure and so incapable of any definite or precise meaning that the Court is unable to attribute to the parties any particular contractual intention”, the contract cannot be held to be void or uncertain or meaningless. In the search for that intention, no narrow or pedantic approach is warranted, particularly in the case of commercial arrangements. Thus will uncertainty of meaning, as distinct from absence of meaning or of intention, be resolved.

    Former High Court Justice the Honourable Dyson Heydon AC QC states in his academic treatise Heydon on Contract that three types of “uncertainty” exist at common law. Those are –

    a)        incomplete terms;

    b)        non-final terms; and

    c)        unclear terms.

    The decision of the High Court in Crown Melbourne Ltd v Cosmopolitan Hotel (Vic) Pty Ltd is the most recent authoritative statement of the test. Relevantly expressed it is in the following terms –

    The contractual intention required to provide contractual certainty ... is not the subjective intention of either or both of the parties but such a mutual contractual intention as the words and conduct attributed to the parties might convey to a reasonable person having the background knowledge reasonably available to both of them.

    The Honourable Dyson Heydon AC QC explained the problem of uncertainty being its production of two outcomes, despite the fact that the parties purported to reach agreement. The two outcomes were explained in the following manner –

    The first outcome is that the language they have used lacks any meaning at all. For example, unclarity was found in a provision that a “usual agreement for sale and purchase” was to be entered, that it should contain “the usual terms of sale” and that the terms of the agreement were to be in a form “satisfactory” to certain named persons. There was no evidence as to what the usual agreement was or what the usual terms were. The named persons could not “be compelled to agree to any particular terms and it is therefore clear that all the terms of the proposed transaction had not been finally agreed”.

    The second outcome is that the language has too many meanings in the sense that it is ambiguous in lacking any clear and single meaning and it is impossible for the court to select the correct one.

    Hence, on that analysis, uncertainty is produced where –

    a)the language used lacks any meaning at all; or

    b)the language used has too many meanings, it is lacking in any clear and single meaning and it is thus impossible for the court to select the correct meaning.

    So far as the impossibility of meaning approach is concerned, the agreement will only be void if the court is unable to put any definite meaning on the contract. Three key decisions of the High Court represent that proposition, namely Meehan v Jones, Upper Hunter and McDermott v Black. …

    The legal academic J. W. Carter has written that in the modern law of contract, arguments based on uncertainty have minimal attraction citing the decision of Ormiston J in Vroon BV v Foster's Brewing Group Ltd. In Nea Agrex SA v Baltic Shipping Co Ltd, Goff LJ described an argument about uncertainty as a “counsel of despair”.

    …

    From what I could tell, in this case the applicant did not cast her case on the basis that the agreement was incomplete. Had her case been cast in those terms, she would have enlivened the observations of the plurality of the High Court (Gibbs CJ, Murphy and Wilson JJ) in Booker Industries Pty Ltd v Wilson Parking (Qld) Pty Ltd where it was held as follows –

    It is established by authority, both ancient and modern, that the courts will not lend their aid to the enforcement of an incomplete agreement, being no more than an agreement of the parties to agree at some time in the future.

    An agreement will usually be regarded as uncertain for incompleteness where essential terms are missing from the agreement. J. W. Carter has written that “as an abstract matter, only three matters are essential”, namely –

    a)        parties;

    b)        price; and

    c)        subject matter.

    That said, J. W. Cater postulates that even if those essential matters are covered in a particular agreement, the circumstances relevant to that particular agreement may be such that four other matters must be included before an effective and binding agreement arises. Those four other matters are –

    a)an agreement cannot be said to be binding as a contract unless the parties have reached agreement on those terms which are necessary as a matter of law to constitute a contract;

    b)a rule of law or statute may make agreement on a particular term essential;

    c)as part of a market practice, a certain usage may make agreement on a particular term essential; and

    d)the parties themselves may have determined that agreement on a particular term is necessary because they have agreed that there is to be no agreement unless and until that particular term is agreed.

    If a conclusion is reached by the court that a particular provision of a contract is void for uncertainty (for example, for being unintelligible or incomplete) the agreement as a whole may nevertheless be upheld where the noxious provision can be severed. Two key High Court authorities stand for that proposition, namely Life Insurance Co of Australia Ltd v Phillips in the reasons for judgment of Knox CJ and Whitlock v Brew in the reasons for judgment of Taylor, Menzies and Owen JJ. The relevant statement of law is as follows –

    When a contract contains a number of stipulations one of which is void for uncertainty, the question whether the whole contract is void depends on the intention of the parties to be gathered from the instrument as a whole. If the contract be divisible, the part which is void may be separated from the rest and does not affect its validity.

    To enliven that legal principle, on the proper construction of the relevant agreement it must be evident that the parties intended that the offending portion was severable or that the whole agreement must fail if the clause in question failed. So much was held by the High Court in Fitzgerald v Masters.

    Some important concepts may be distilled from the survey of the law of uncertainty recorded above. In no special order they are as follows –

    a)as a starting point, the court must examine the impugned clause, clauses or the agreement as a whole to assess whether the relevant portion is, in fact and in law, uncertain for ambiguity or incompleteness;

    b)if two constructions of the agreement are equally open, the agreement will not be struck down for uncertainty but rather, the court will construe the agreement according to the presumed intendment of the parties;

    c)where the impugned portion of the agreement is said to be uncertain because it is impossible to give meaning to the clause, impossibility is not to be equated with difficulty of construction;

    d)despite the presence of the essential terms of parties, price and subject matter, certain types of agreements import their own special requirements necessitating the presence of those requirements before it can be said that the agreement is certain; and

    e)even if a particular clause of an agreement is said to be uncertain, it may be possible to sever the impugned clause thereby preserving the agreement so long as it is possible to discern from the agreement that the parties intended the offending portion to be severed.[36]

    [36] Guild v Stasiuk (n 30), [92]-[103]. Citations omitted. Emphasis in original.

1. His Honour’s remarks offer a holistic view of contractual construction and foreshadow many issues with which I am faced.

2. In construing the terms of the 2006 agreement I must, by virtue of s 90KA, utilise an objective approach. Any ‘intention’ of which I speak throughout these Reasons does not refer to any subjective intention before or at the time of execution. Instead the intention must be revealed by the text of the 2006 agreement as created, read, and understood in the context of the parties’ circumstances between 2005 and 8 December 2006. I undertake the inquiry as to the parties’ common intention in executing the 2006 agreement later in these Reasons, commencing at paragraph 100, as is relevant to issues 2, 3, and 5.

   Rectification

3. As foreshadowed earlier this Court, again by virtue of s 90KA, possesses jurisdiction to rectify written agreements. Rectification, by virtue of equity’s exclusive jurisdiction, can repair instruments which do not accurately reflect the agreement that they exist to record. The High Court in Simic v New South Wales Land and Housing Corporation (2016) 260 CLR 185 (‘Simic’) recently summarised the nature and availability of rectification:

   Rectification is an equitable remedy, the purpose of which is to make a written instrument “conform to the true agreement of the parties where the writing by common mistake fails to express that agreement accurately”. For relief by rectification, it must be demonstrated that, at the time of the execution of the written instrument sought to be rectified, there was an “agreement” between the parties in the sense that the parties had a “common intention”, and that the written instrument was to conform to that agreement. Critically, it must also be demonstrated that the written instrument does not reflect the “agreement” because of a common mistake. Unless those elements are established, the “hypothesis arising from execution of the written instrument, namely, that it is the true agreement of the parties” cannot be displaced.

   The issue may be approached by asking – what was the actual or true common intention of the parties? There is no requirement for communication of that common intention by express statement, but it must at least be the parties’ actual intentions, viewed objectively from their words or actions, and must be correspondingly held by each party.[37]

   [37] Simic v New South Wales Land and Housing Corporation (2016) 260 CLR 85, 117 [103]-[104] (Gageler, Nettle and Gordon JJ). Citations removed. See also Sullivan v Sullivan [2011] FamCA 752, [124]-[129], in which a summary is provided of the law of rectification and the development thereof, specifically noting the distinction drawn between common and mutual mistake, and the summary at [129] that it must be shown that ‘there is a concluded agreement or in the alternative a common intention that continued unaltered until the execution of an agreement, and the agreement does not express the parties true common intention’, noting also the onus as described in that paragraph: ‘[h]owever, the onus is on the husband to establish that, the Agreement signed by him on 16 April 2003 that refers to s 90B in cl 1 and recitals K, L and inferentially D, does not reflect the true intention of the parties, and he must provide clear proof that the parties intended to enter into a financial agreement under s 90C of the Act, not s 90B’.

4. In essence, a court may rectify a contract to ‘[cure] erroneous expression of the parties’ true intention’ behind the written instrument. A court of equity will not, however, rectify a contract to effect a consensus which has not been properly reached by the parties themselves.[38] The authorities recognise that written contracts are inherently subject to human error. Most often the error is a result of common mistake — that is, where all parties to the contract have come to a ‘meeting of the minds’ as to the nature of their bargain, but where all are under the same misapprehension in relation to one or more terms in the contract. Standard examples of common mistake include where parties hold a mistaken belief as to the true owner of a piece of property or the character (or even existence) of the subject matter of the contract.[39] Australian courts are reluctant to find contracts infected with common mistake void ab initio — a nullity, having never come into effect — at common law, even if the mistake is fundamental to the validity or enforceability of the contract. It seems that a contract will more often be voidable — not void— from which point a court may rectify or rescind the contract, or determine the applicability of other equitable remedies.[40] This trend reflects the flexibility of equity and the relative rigidity of the common law, as remarked upon by Kiefel J (as she then was) in Simic:

   Rectification is an equitable remedy which is concerned with a mistake as to an aspect of what an instrument records and with the conscience of the parties. The common law, on the other hand, deals with the interpretation of the words chosen by the parties to reflect their agreement and it does so pragmatically, by reference to considerations such as business efficacy.[41]

   [38] Sindel v Georgiou (1984) 154 CLR 661, 667 (Mason, Murphy, Wilson, Brennan and Dawson JJ), noting that that case concerned the exchange of counterpart documents which differed in their terms which, in their Honours’ view, went to the issue of offer, acceptance, and whether the parties had in fact concluded their agreement at the point of formation.

   [39] Nick Seddon and Rick Bigwood, Cheshire & Fifoot: Law of Contract (LexisNexis Butterworths, 11^th ed, 2017) 715 [12.9], noting the authors’ discussion of McRae v Commonwealth Disposals Commission (1950) 84 CLR 377 commencing at 719 [12.17] to distinguish ideas of common mistake and other kinds of mistake (including unilateral mistake and mistakes caused by the fault of one party’s negligence).

   [40] Ibid 568 [11.45] in relation to rescission causing a contract to be deemed void ab initio (although not making it in fact void ab initio) in the context of an actionable misrepresentation, and 1246 [24.7] in relation to refusal to grant specific performance where to do so would impose hardship to the extent that specific performance would not be a fair remedy.

   [41] Simic v New South Wales Land and Housing Corporation (n 38), 104 [48].

5. It is also to be noted that methods of contractual construction can at times resolve uncertainty without requiring formal recourse to the equitable remedy of rectification. Specifically I refer to ‘informal rectification’ and the implication of terms.

6. ‘Informal rectification’ — distinct from formal rectification — involves corrections of prima facie obvious mistakes and requires a ‘very strong level of conviction that a mistake has been made’. Leeming JJA in National Australia Bank Ltd v Clowes [2013] NSWCA 179 offers a fulsome explanation:

   The applicable principles are conveniently found in Noon v Bondi Beach Astra Retirement Village Pty Ltd [2010] NSWCA 202 at [46], where Giles JA said, with the agreement of Macfarlan JA:

   The process of construction may bring a marked divergence from the text. In Wilson v Wilson [1854] EngR 513; (1854) 5 HL Cas 40 “John” was read as “Mary” in a will. In Fitzgerald v Masters [1956] HCA 53; (1956) 95 CLR 420 “inconsistent” was read as “consistent” in a contract for sale. As a recent illustration in McHugh Holdings Pty Ltd v Newtown Colonial Hotels Pty Ltd [2008] NSWSC 542 ; (2008) 73 NSWLR 53 “lessor” was read as “lessee” in a lease. This is often because a mistake is obvious on the face of the instrument and in Chartbrook Ltd v Persimmon Homes Ltd [2009] UKHL 38; [2009] 1 AC 1101 Lord Hoffmann, with whom Lords Hope, Rodger and Walker and Baroness Hale relevantly agreed, accepted that there must be a clear mistake on the face of the instrument and it must be clear what correction ought to be made in order to cure the mistake. But in Fitzgerald v Masters at 437 it was explained “the rejection of repugnant words, the transposition of words and the supplying of omitted words” is a consequence of “the rule that the intention of the parties is to be ascertained from the instrument as a whole and that this intention when ascertained will govern its construction”. Ascertaining the intention of the parties, of course, is in accordance with the principles of contract construction abovementioned.

   …

   This principle is distinct from rectification in equity. As Lord St Leonards said in Wilson v Wilson (1854) 5 HL Cas 40 at 66–67; 10 ER 811 at 822:

   Now it is a great mistake if it is supposed that even a Court of Law cannot correct a mistake, or error, on the face of an instrument: there is no magic in words. If you find a clear mistake, and it admits of no other construction, a Court of Law, as well as a Court of Equity, without impugning any doctrine about correcting those things which can only be shown by parol evidence to be mistakes — without, I say, going into those cases at all, both Courts of Law and of Equity may correct an obvious mistake on the face of an instrument without the slightest difficulty.

   True it is that that principle requires a very strong level of conviction that a mistake has been made. To use the language of Dixon CJ and Fullagar J in Fitzgerald v Masters [1956] HCA 53; (1956) 95 CLR 420 at 426–427, it must be “clearly necessary in order to avoid absurdity or inconsistency”, and, as this Court said in Miwa Pty Ltd v Siantan Properties Pty Ltd [2011] NSWCA 297 at [18], the test of absurdity is not easily satisfied. But that demanding test is in my view satisfied in this case. The principle is not confined to linguistic errors such as “inconsistent” being read as “consistent” or “shorter” being read as “longer”. The principle extends to obvious conceptual errors, such as “lessor” being read as “lessee” as in McHugh Holdings Pty Ltd v Newtown Colonial Hotel Pty Ltd [2008] NSWSC 542 ; (2008) 73 NSWLR 53, or words denoting a mortgage of company title flat being read as a mortgage of the shares in the company which entitle their owner to that flat. In all those cases, it is perfectly clear what legal meaning is to be given to the literally absurd words.

7. The authorities describe informal rectification as a process by which a court may, while construing a contract, ‘rectify’ mistakes if they are appropriately ‘obvious’ on the face of the document. I intend to informally rectify the 2006 agreement where I am satisfied, in accordance with the authorities above, that it is appropriate to do so.

8. The act of implying a term during the course of contractual construction, while different from the act of rectifying a contract (either ‘formally’ or ‘informally’), is nonetheless described as a ‘competing’ doctrine.[42] Mason J in Codelfa explains the distinction from rectification as follows:

   The implication of a term is to be compared, and at the same time contrasted, with rectification of the contract. In each case the problem is caused by a deficiency in the expression of the consensual agreement. A term which should have been included has been omitted. The difference is that with rectification the term which has been omitted and should have been included was actually agreed upon; with implication the term is one which it is presumed that the parties would have agreed upon had they turned their minds to it — it is not a term that they have actually agreed upon. Thus, in the case of the implied term the deficiency in the expression of the consensual agreement is caused by the failure of the parties to direct their minds to a particular eventuality and to make explicit provision for it. Rectification ensures that the contract gives effect to the parties’ actual intention; the implication of a term is designed to give effect to the parties’ presumed intention.[43]

   [42] Seddon and Bigwood (n 40) 474 [12.42].

   [43] Codelfa Construction Pty Ltd v State Rail Authority (NSW) (n 34), 346.

9. Having regard to Mason J’s explanation above it is, from my reading of the 2006 agreement, not open to me to imply a term on the basis of a presumed intent (as opposed to actual agreement) for its inclusion. It is nevertheless important not only to explain rectification by reference to what it is but, further, to clarify the nature of rectification by reference to what it is not.

10. Before considering whether rectification is available I must determine the parties’ common intention (if any) for executing the 2006 agreement. As stated above, I undertake this inquiry later in these Reasons, commencing at paragraph 100, following the extracted text of the 2006 agreement. I cannot rectify an agreement to reflect a common intention without first identifying the intention sought to be reflected.

    Severance

11. Severance, foreshadowed above in the context of uncertain agreements, refers to the process by which a contract may be ‘saved’ from failure by severing uncertain terms, having exhausted other constructive means available. This doctrine is relevant to the various ambiguities (which, in the Wife’s case, amount to uncertainty) raised under issue 5.

12. As foreshadowed by Wilson J’s remarks in Guild severance will apply only if the parties intended that the term in question be severed. Alternatively, in the event that the parties intended the contract to exist only if the impugned term is operational, the whole agreement must fail.[44] Unfortunately the 2006 agreement does not expressly state the parties’ intentions in the event that one or more terms are void for uncertainty. Heydon on Contract lists a number of tests, drawn from the authorities, which may apply in the absence of an express term:

    [44] Fitzgerald v Masters (1956) 95 CLR 420, 437-438 (McTiernan, Webb and Taylor JJ).

    One is whether the operation of the contract apart from the unclear part was to be conditional on the efficacy of that part or whether it was to take effect despite the failure of that part.

    Another is whether the unclear part is “in substance so connected with the others as to form an indivisible whole which cannot be taken to pieces without altering its nature”.

    Another is whether elimination of the unclear part changes the extent of the contract only, but not its kind.

    Another is whether the parties did not intend to contract unless effect was given to the unclear provision.

    Another is whether the unclear part is so material and important that it is to be inferred that the parties did not intend to make a contract without it.

    Another is whether the severance of the unclear part would mean disregarding the main purport and substance of the relevant provision, or would alter entirely the scope and intention of the contract entirely.

    Another is whether the unclear part is of such substance and materiality in the whole bargain that it cannot be severed from the rest.

    Another is whether there is a reciprocity of obligation between the unclear promise and the other promise suggesting that legal validity of each promise is a condition of the operation of the other.

    The Full Court of the Supreme Court of Victoria summarised the considerations relevant to this process as follows:

    The process of construction will have regard to such considerations as the independence in form of the impugned part, any interdependence of that part in form or operation with the rest, the effect that severance would have on the operation or meaning of what is left, the nature of the subject-matter dealt with in the part and its relative importance in the setting of the whole bargain, whether the impugned part is one of several promises supported by different considerations or by a common consideration, or whether it is part of a single consideration supporting a promise or promises or whether it is one of several considerations, and, if so, whether it is a material or important part of the total consideration or merely subordinate.

    The considerations to which resort is had for the purpose of construction are not necessarily of the same force and effect, eg dependence in form or interdependence of operation or meaning would operate as a bar to severance, but interdependence in those respects may not be decisive in favour of severability.[45]

    [45] Heydon (n 25), 114-115 [3.480]. Citations omitted.

13. There are, evidently, a number of considerations which may arise in any assessment of severability. I will address questions of severance for each distinct term, or grouping of terms, under issue 5.

    ‘Financial agreement’ (ss 4, 90B, 90C, 90D)

14. The 2006 agreement was formed — or, in the Wife’s case, purportedly formed — on 8 December 2006 under s 90B of the Act. Section 90B, providing for financial agreements before marriage, states that

    (1)      If:

    (a)people who are contemplating entering into a marriage with each other make a written agreement with respect to any of the matters mentioned in subsection (2); and

    (aa)at the time of the making of the agreement, the people are not the spouse parties to any other binding agreement (whether made under this section or section 90C or 90D) with respect to any of those matters; and

    (b)the agreement is expressed to be made under this section;

    the agreement is a financial agreement. The people may make the financial agreement with one or more other people.

    …[46]

    [46] Emphasis added.

15. The parties did not, when they formed the 2006 agreement, contemplate entering into a marriage. They were already married. Section 90C of the Act, providing for financial agreements during marriage, states that

    (1)     If:

    (a)the parties to a marriage make a written agreement with respect to any of the matters mentioned in subsection (2); and

    (aa)at the time of the making of the agreement, the parties to the marriage are not the spouse parties to any other binding agreement (whether made under this section or section 90B or 90D) with respect to any of those matters; and

    (b)the agreement is expressed to be made under this section;

    the agreement is a financial agreement. The parties to the marriage may make the financial agreement with one or more other people.

    …[47]

    [47] Emphasis added.

16. The 2006 agreement does not prima facie satisfy the requirements of either s 90B or s 90C. The parties’ status as married contravenes s 90B(1)(a) and, absent any express reference to s 90C, it cannot satisfy s 90C(1)(b). This error in formalities affects whether the 2006 agreement is a ‘financial agreement’ as defined by the Act.[48] The Wife submits that it is a ‘fatal error’.[49] The Husband submits that, while the error undeniably exists, the 2006 agreement should be rectified so it may be deemed a ‘financial agreement’.[50]

    [48] Family Law Act 1975 (n 1) s 4, at which ‘financial agreement’ is defined by reference to ss 90B, 90C and 90D.

    [49] Wife’s Submissions, 8 November 2021, 3.

    [50] Husband’s Submissions, 20 December 2021, [3]-[10].

17. The submission that the erroneous reference to s 90B is ‘fatal’ is up against considerable authority. It is a small but significant human error to which, if available (that is, if an intention to enter a s 90C financial agreement is discernible from the contract), rectification is aptly suited to give effect to the parties’ intentions.[51] I will determine this question under issue 2, commencing at paragraph 106 of these Reasons.

    [51] Senior v Anderson (n 24), [106].

    Binding financial agreements (s 90G)

18. If there exists a financial agreement within the meaning of s 4 of the Act it will not bind the parties to its terms (and, in doing so, oust the jurisdiction of the court) unless it complies with s 90G. The Husband, as the party seeking to enforce the agreement, is burdened with proving that the 2006 agreement is binding under s 90G.[52]

    [52] Hoult v Hoult [2013] FamCAFC 109, [60].

19. The ‘elements’ of a binding financial agreement are, as set out in s 90G(1), interdependent and conjunctive. The current form of s 90G is, however, a culmination of multiple amendments. At the time the 2006 agreement was finalised s 90G was in force as set out at paragraph 69 below.

1. The items contained within the Federal Justice System Amendment (Efficiency Measures) Act (No. 1) 2009 (Cth) provide that some of the provisions in force from the date of effect of those amendments (being 4 January 2010) operate retrospectively to agreements made on or after 27 December 2000, though their specific retrospective operation differs according to whether the agreement was entered into before or after 14 January 2004. With the agreement being executed on 8 December 2006, the version of s 90G as it would have (or that which is deemed to have) applied at the time of the agreement is as follows:[53]

   [53] Provided there is no court order before 4 January 2010 to set the agreement aside, and that a court has not made a determination under s 79 or 83 on the basis that an agreement did not bind the spouses; items 8(2) and 8(3).

   90G     When financial agreements are binding

   (1)Subject to subsection (1A), a financial agreement is binding on the parties to the agreement if, and only if:[54]

   [54] Federal Justice System Amendment (Efficiency Measures) Act (No. 1) 2009 (Cth), item 1A.

   (a)the agreement is signed by all parties; and

   (b)the agreement contains, in relation to each party to the agreement, a statement to the effect that the party to whom the statement relates has been provided, before the agreement was signed by him or her, as certified in an annexure to the agreement, with independent legal advice from a legal practitioner as to the following matters:

   (i)the effect of the agreement on the rights of that party;

   (ii)the advantages and disadvantages, at the time that the advice was provided, to the party of the making of the agreement;

   OR

   before signing the agreement, the spouse party was provided with independent legal advice from a legal practitioner about:

   (iii)the effect of the agreement on the rights of that party; and

   (iv)whether or not, at the time when the advice was provided, it was to the advantage, financially or otherwise, of that party to make the agreement; and

   (v)whether or not, at that time, it was prudent for that party to make the agreement; and

   (vi)whether or not, at that time and in the light of such circumstances as were, at that time, reasonably foreseeable, the provisions of the agreement were fair and reasonable.[55]

   [55] Ibid item 8A(2).

   (c)either before or after signing the agreement, each spouse party was provided with a signed statement by the legal practitioner stating that the advice referred to in paragraph (b) was provided to that party (whether or not the statement is annexed to the agreement); and[56]

   [56] Ibid items 8(6), 8A(3), providing that s 90G(1)(c) is to be read as referring to all of the contents of s 90G(1)(b) as retrospectively deemed to apply.

   (ca) …[57]

   [57] Ibid item 8(6).

   (d)the agreement has not been terminated and has not been set aside by a court.

   (1A)A financial agreement is binding on all parties to the agreement if:

   (a)the agreement is signed by all the parties; and

   (b)paragraph (1)(b) is not satisfied in relation to the agreement; and[58]

   (c)a court is satisfied that it would be unjust and inequitable if the agreement were not binding on the spouse parties to the agreement (disregarding any changes in circumstances from the time the agreement was made); and

   (d)the court makes an order under subsection (1B) declaring that the agreement is binding on the parties to the agreement; and

   (e)the agreement has not been terminated and has not been set aside by a court.

   (1B)For the purposes of paragraph (1A)(d), a court may make an order declaring that a financial agreement is binding on the parties to the agreement, upon application (the enforcement application) by a spouse party seeking to enforce the agreement.

   (1C)To avoid doubt, section 90KA applies in relation to the enforcement application.

   (2)A court may make such orders for the enforcement of a financial agreement that is binding on the parties to the agreement as it thinks necessary.

   [58] Ibid item 8(7).

2. An agreement which effectively limits the parties’ recourse to apply pursuant to s 79 or other sections of the Act must, naturally, be an agreement with sufficient oversight as to fairness and intention that it is permissible for the court’s jurisdiction to be ousted. Alstergren CJ explored the issue with respect to s 90G(1)(b) in Kaimal & Kaimal [2020] FamCA 971, saying that:

   16.The requirement for legal advice is an important legislative safeguard. An effective binding financial agreement ousts the Court’s jurisdiction to make orders under Part VIII of the Act, allowing parties to deal with their assets without interference from the Court. Accordingly, the legal advice must be real and meaningful to satisfy s 90G(1)(b).

   …

   18.Importantly, s 90G(1)(b) contains a requirement for independent legal advice separately to the requirement of a signed statement of legal advice, which is found in s 90G(1)(c). Accordingly, evidence of the latter cannot have been intended to constitute determinative evidence of the former. If that were the case, the inclusion of a separate provision for each would be redundant.

3. The amendments to s 90G were enacted to prevent the implosion of otherwise binding financial agreements from miniscule error. Compliance with s 90G is, nevertheless, a matter of statutory compliance. A court cannot cure non-compliance with s 90G through rectification, or indeed any other equitable doctrine as sourced through s 90KA, despite even the most crystal-clear expression of intent to be bound by that financial agreement.[59]

   [59] This is, of course, having regard to the provisions at s 90G(1A)(c) which, while it does not preserve equitable doctrine through s 90KA, it appears to import a statutory relative thereof to afford courts some measure of discretion within the limits of s 90G, noting the remarks in Hoult v Hoult (n 53), [211] (Thackray J).

4. If the 2006 agreement is not a ‘financial agreement’, as the Wife contends, it cannot be a financial agreement which is binding under s 90G of the Act. The Husband and B Pty Ltd argue that, not only is the 2006 agreement a ‘financial agreement’, but it also complies with s 90G and is therefore a binding financial agreement. The onus of establishing that the 2006 agreement is binding therefore falls upon the respondents.[60]

   [60] Ibid [60].

5. Section s 90G is a statutory test of some complexity due to its legislative history, as evident from the extract above. Suffice to say — an agreement cannot emerge from s 90G as a binding financial agreement unless it first approaches s 90G as a ‘financial agreement’ within the meaning of the Act. This distinction ultimately determines the effect of the agreement upon a court’s jurisdiction.[61] Strickland J in Senior explains the consequences of compliance or non-compliance with s 90G:

   The Act in effect draws a distinction between agreements which are financial agreements (s 4, s 90B, s 90C, s 90D) and those financial agreements which are binding (s 90G). Financial agreements can, like any other agreement, govern the actions of the parties to them and bind the parties to obligations, but do not oust the jurisdiction of the court. Parties to an agreement that satisfies the definition of "financial agreement" are bound by its terms (or not bound as the case may be), just as they would be bound (or not bound) by any other agreement (s 90KA) …

   Section 90G is irrelevant to the contractual rights and remedies of the parties to an agreement that satisfies the definition of "financial agreement". That section only becomes relevant when the issue is whether an agreement that satisfies the definition of "financial agreement" is effective for a specific statutory purpose, namely to operate as a bar to claims by either party pursuant to Part VIII of the Act (s 71A). It will be so, if and only if, it is "binding" within the meaning of s 90G.

   If an agreement, including an agreement that satisfies the definition of "financial agreement" under the Act, fails to effectively bar Part VIII claims (because of its failure to comply with the requirements of s 90G and, as a result, is not "binding" within the meaning of that section) the financial agreement can nevertheless have an affect. However, an agreement's failure to be "binding" in the s 90G sense renders its use in Part VIII proceedings to be very limited; specifically it does not operate as a bar to orders made under that Pt …

   I consider this distinction to be … [i]n particular, … important with respect to the application of any remedies in contract or equity which might apply to a financial agreement, including, specifically, rectification …[62]

   [61] Family Law Act 1975 (n 1) s 71A.

   [62] Senior v Anderson (n 24), [94]-[97].

6. A financial agreement which fails to bind the parties and oust the jurisdiction of the court is not entirely irrelevant in proceedings under s 79 of the Act. Such an agreement would, however, be limited.

7. It is true that there is no ‘threshold test’ to determine whether an agreement provides for a ‘just and equitable’ property settlement. The assessment of whether it is just and equitable to make a property adjustment order is to be made at the time of trial and in accordance with s 79 of the Act.[63] A non-binding agreement of any kind may nevertheless enliven the issue remarked upon by Kiefel CJ, Bell and Keane JJ in Hsiao v Fazarri (2020) 270 CLR 588 — the parties may have expressly considered, and put into writing and effect, that their property interests remain unchanged regardless of the success or otherwise of their marriage.[64] There are no arguments to that effect in this case but, if the primary proceedings continue, the 2006 agreement may nevertheless be put before the Court for other permissible purposes.

   [63] DW & GT [2005] FamCA 161, [39]; Stanford & Stanford (2012) 247 CLR 108, 122.

   [64] Hsiao v Fazarri (2020) 270 CLR 588, 608.

   Grounds for setting a binding financial agreement aside (s 90K)

8. The last point of dispute — in the event that the 2006 agreement is binding under s 90G — concerns whether it should be set aside under s 90K of the Act. That section relevantly provides that

   (1)A court may make an order setting aside a financial agreement … if, and only if, the court is satisfied that:

   …

   (b)the agreement is void, voidable or unenforceable; or

   …

   (d)since the making of the agreement, a material change in circumstances has occurred (being circumstances relating to the care, welfare and development of a child of the marriage) and, as a result of the change, the child or, if the applicant has caring responsibility for the child (as defined in subsection (2)), a party to the agreement will suffer hardship if the court does not set the agreement aside; or

   (e)in respect of the making of a financial agreement—a party to the agreement engaged in conduct that was, in all the circumstances, unconscionable; or

9. The subsections extracted above are those upon which the Wife relies in her arguments to set aside the 2006 agreement. The operation of the onus of proof in relation to each is worth noting at this point.

10. The onus of proof under s 90K(1)(b) and (e) starts with the Wife — it is her task to raise sufficient evidence and submissions as to uncertainty and any purported unconscionability. If the Wife satisfies her onus, the onus of proof then falls to the Husband, as the party propounding the agreement, to demonstrate that it should nevertheless bind the parties.[65] With respect to s 90K(1)(d), however, the test for hardship does not require an applicant to ‘call all the evidence that would be called on a final property hearing such as formal valuations’.[66] It is therefore the task of the Husband to prove, with respect to s 90K(1)(d), that the 2006 agreement should remain binding and enforceable.

    [65] Kaimal & Kaimal [2020] FamCA 971, [62]; Guild v Stasiuk (n 30), [163], [175], [224], [237] (for comparison, the presumption of undue influence arising from fiduciary relationships casts the burden of proof upon the fiduciary, whereas a plaintiff alleging unconscionability first bears the onus to ‘enliven’ a special disadvantage which, if satisfied, shifts to the party defending the transaction to prove that no unconscionable conduct took place; see [321], [405]), [276], [334], [463].

    [66] Frederick v Frederick [2019] FamCAFC 87, [42].

    Void, voidable or unenforceable (s 90K(1)(b))

11. The Wife submits, as foreshadowed above, that a number of terms within the 2006 agreement are uncertain. Those arguments are put with respect to s 90K(1)(b) and I shall address them under issue 5 as a result. This is notwithstanding the technical disruptions that come with finding that a binding financial agreement is ‘void’ for uncertainty under s 90K(1)(b) — any financial agreement, whether binding under s 90G or not, must in theory already be a validly formed contract. Alas the result of a nullity, if found, is substantially identical whether it occurs under issues of formation or at s 90K(1)(b).

12. The Full Court in Kostres, considering the question of uncertainty as it applies to financial agreements, confirms the authorities on contractual construction and remarks upon their application to pt VIIIA:

    … the purpose of Part VIIIA is to permit parties to arrange their own affairs in the manner they choose, to give certainty, and to avoid delay and costly disputes on marriage breakdown.

    The legislature intended a financial agreement, if binding, would oust the jurisdiction of the court to adjust property, financial resources, and other matters the subject of the agreement. The practical effect of Part VIIIA is, (subject to the sections which permit a court in exercise of its discretion to set aside an agreement (s 90K), or to decline to enforce or test the validity, or effectiveness of the agreement (s 90KA)), to remove the provisions made in the agreement from the scrutiny of a court to ensure those provisions are just and equitable.

    The principle that words “may generally be supplied, omitted or corrected, in an instrument, when it is clearly necessary to avoid absurdity or inconsistency” is a well recognised principle in the law of contract (see Fitzgerald v Masters [1956] HCA 53; (1956) 95 CLR 420 at 426; Westpac Banking Corporation v Tanzone Pty Limited & Ors [2000] NSWCA 25)

    …

    We are of the view that, while common law principles of construction undoubtedly apply and can be used to avoid absurdity, the terms of the agreement must accurately reflect the intention of the parties at the time of the making of the agreement, and be unambiguous. In other words, the meaning to be given to expressions used in the agreement must be clear and their meaning certain. We note in this regard the discussion of Mason and Brennan JJ in Calverley v Green of the meaning to be attributed to the word “acquire”. Any term which a reasonable person would imply should be uncontroversial. These requirements are particularly important when the financial agreement is one made, as in this case, in contemplation of marriage, and deals with unidentified property or financial resources which may be acquired or contributed to by parties in the future and subsequently divided between them, or retained by one party, in the event their marriage breaks down irretrievably.

    We accept that in determining whether the agreement is valid, enforceable or effective, the general law relating to contracts, as well as principles of equity, are to be applied. That must be done to give effect to the parties’ intentions at the time of the making of the agreement, and in the context of the statute. The legislature has been careful to include strict requirements if a financial agreement is to be binding, including the requirement of independent legal advice. In those circumstances it is clear the legislature envisaged, because of the nature of these agreements and the removal of the Court’s supervisory role, that parties would receive legal advice about the necessity for their intentions to be accurately and clearly reflected in the actual terms of the agreement.

    While, for the purpose of construing the agreement a court should, as in the context of a commercial agreement, apply an objective test of a reasonable bystander to the construction of an agreement, it cannot give meaning to an agreement whose terms are so imprecise or ambiguous the parties’ intent cannot be discerned. This is particularly so when regard is had to provisions of Part VIIIA in the overall context of the Act.[67]

    [67] Kostres v Kostres (n 36), [122]-[129]. Emphasis added. In particular, I note their Honours’ remarks at [127] (emphasised above) that ‘the terms of the agreement must accurately reflect the intention of the parties at the time of the making of the agreement, and be unambiguous’. Their Honours are correct to say that a court cannot give meaning to a contract ‘whose terms are so imprecise or ambiguous the parties’ intentions cannot be discerned’ (at [129]). I do wish to note, perhaps as a semantic point, that in specifying the need for unambiguous terms to reflect the parties’ intentions, and in grounding such a need for clarity in pt VIIIA and the overall context of the Act, Kostres may be inferring that financial agreements under the Family Law Act inherently differ from ordinary contracts, but are nevertheless construed according to the ordinary objective test of a reasonable bystander to a commercial contract.

13. It is beneficial at this point to revisit the three varieties of uncertainty as mentioned at paragraph 39 and extracted in Guild at paragraph 49. A contract can be uncertain through either incompleteness, non-finality, or non-clarity. For each impugned term I will address the nature of the uncertainty alleged and whether, either through rectification, severance, or other available means, the 2006 agreement may survive.

    Material change in circumstances and resulting hardship (s 90K(1)(d))

14. Section 90K(1)(d), described in Guild as ‘a little involved’, requires me to investigate whether, subsequent to 8 December 2006—

    a)        [a] ‘material change in circumstances’ has occurred;

    b)        that material change relate[s] to the ‘care, welfare and development’ of a child of the marriage;

    c)        and, as a result of the change;

    d)        the child;

    e)        or, if the applicant has caring responsibility for the child, a party to the agreement;

    f)        will suffer ‘hardship’ if the agreement is not set aside.[68]

    [68] Guild v Stasiuk (n 30), [437].

15. The Husband concedes that there has been a material change in circumstances since the 2006 agreement was executed.[69] The birth of children since that time (X in 2007 and Y in 2008) can amount to a material change in circumstances. This is, in all likelihood, the basis upon which the Husband concedes the point.[70] The Wife maintains primary care of X and Y. The Husband spends little time with X but maintains regular contact with Y.[71]

    [69] Husband’s Submissions, 20 December 2021 (n 51), [43], noting that the Husband concedes a ‘change in circumstances’, not strictly a ‘material change in circumstances’, but nonetheless does not press the issue in favour of the question of hardship resulting therefrom. See also Guild v Stasiuk (n 30), [449], explaining the time of the agreement being ‘relevant only insofar as it fastens at a temporal level a point in time against which the word “since” may be reckoned’.

    [70] Fewster v Drake [2016] FamCAFC 214, [62] (Aldridge and Kent JJ).

    [71] Affidavit of Ms Carran, 8 September 2021 (n 10), [4], [37].

16. Other material changes since 8 December 2006 include:

    ·the Husband commencing a new business (Company AG) in which the Wife worked;[72]

    ·the Wife’s serious surgery in 2008 following an illness which, to this day, still causes her issues;[73]

    ·the Wife commencing work for Company AH in 2008 and, in 2011, commencing administrative work for the Husband’s business ‘Company AJ’;[74]

    ·the Wife undertaking a significant role in the prosecution of former Company AH employee, Ms AK, which burdened her with extra work;[75]

    ·the Wife’s 2018 diagnosis of a medical condition, since which time her health has not improved;[76] and

    ·the living arrangements of the children post-separation, including X spending little time with her father and H commencing living with the Wife.[77]

    [72] Ibid [14(c)].

    [73] Ibid [15(a)].

    [74] Ibid [15(c)].

    [75] Ibid [21(b), (d)], [39].

    [76] Ibid [24(b)], [32].

    [77] Ibid [37], [4(c)].

1. The text of the agreement includes only those remarks under the heading ‘INDEPENDENT LEGAL ADVICE’, extracted again below:

   The parties are aware of their right to obtain independent legal advice on the content of this Agreement.

   Mr Carran acknowledges that he has received independent legal advice prior to entering into this Agreement and has given due consideration to that advice.

   Ms Carran acknowledges that she has received independent legal advice prior to entering into this Agreement and has given due consideration to that advice.

   The parties acknowledge and agree the contents of this Agreement are true to the best of each of their knowledge, information and belief.

   The parties have signed each page of this Agreement.

2. Both parties’ solicitors provided, as annexed to the agreement, the certificates to which s 90G(1)(b) refers. The words of those certificates are the only place in which language consistent with that used in s 90G(1)(b)(i) and (ii) can be found. The certificates, however, are not contained within the agreement itself as required by s 90G(1)(b). The agreement itself, in unnumbered clauses before the parties’ signatures, confirms receipt of legal advice. The agreement does not, however, confirm that each party received independent legal advice from a legal practitioner as to the effect of the agreement on the rights of that party and the advantages and disadvantages, at the time that the advice was provided, to the party of the making of the agreement. The parties did not adduce evidence or submit to the effect that either of them failed to receive independent legal advice. This is save for the Wife’s possibly accidental allusion to the issue of independent legal advice by reference to Beckstead.

3. The 2006 agreement is nevertheless non-compliant with s 90G(1)(b) although, by recourse to s 90G(1A), the agreement is not yet out of the equation. Neither the Wife nor the Husband argued that I should, pursuant to s 90G(1A)(c) and (d), find it unjust and inequitable for the 2006 agreement to not be binding (disregarding any changes in circumstances since 8 December 2006) and declare that it bind the parties. Section 90G(1A)(c) is the only avenue through which the 2006 agreement may become binding. Its operation was considered in Hoult v Hoult [2013] FamCAFC 109 (‘Hoult’) with Ainslie-Wallace and Strickland JJ remarking as follows:

   … the fact that a party has not received the prescribed legal advice does not alone render s 90G(1A) inapplicable, and second, [Parker v Parker [2012] FamCAFC 33] is authority for the proposition that the operation of the discretion in para (c) is not confined to “technical” breaches. The trial judge here also adopted that interpretation and we find no error in that approach.

   However … the decision in Parker provides no assistance in understanding what the discretion does entail, and in particular in identifying the factors to be taken into account in exercising the discretion. It is to these issues that this aspect of this appeal is directed.

   The trial judge correctly identifies … that the plain words of s 90G(1A) “envisage a broad discretion vested in the court in circumstances where the pre-conditions to the exercise of that discretion prescribed otherwise in s 90G(1A)(a) to (e) are established”. His Honour continued, again correctly in our view, that “[O]nce that discretion is enlivened, nothing within the section suggests, in terms, any restriction on the matters that might inform it.”

   We are also ad idem with the trial judge that “the court is required to inquire into the facts and circumstances surrounding the agreement so as to arrive at a conclusion as to whether those facts and circumstances justify the court exercising the discretion inherent in para (c) of [s 90G(1A)]” … We would only add the necessary rider that it is the facts and circumstances surrounding the making and performance of the agreement which are relevant.[107]

   [107] Hoult v Hoult (n 53), [288]-[291]. Emphasis in original.

4. The language of s 90G(1A)(c) is a statutory test and does not rely upon unconscionable conduct, unjust enrichment, or other similar-sounding equitable doctrines. It is a creation of statute and is to be assessed in accordance with heir Honours’ remarks in Hoult above.[108] The approach to be followed in considering whether it would be unjust or inequitable if the agreement were not binding, while sourced from s 90G, appears to rely upon whether the agreement is to be set aside under s 90K, including by virtue of principles preserved by s 90KA. This was the approach taken by Ryan J in Saintclaire & Saintclaire [2013] FamCA 491:

   As to the proper interpretation of s 90G(1A)(c), there is a divergence of views about the meaning of the words “unjust and inequitable”. Namely whether it is limited to technical mistakes (per Strickland J in Senior v Anderson) or a more wide ranging provision (per Murphy J in Hoult v Hoult (No 2) [2012] FamCA 367). The paucity of argument on this issue means that it would be inappropriate to express an opinion about this interesting divergence in views.

   However, before relief pursuant to s 90G(1A) [can] be given … it would be necessary to consider the arguments made by each party in relation to s 90KA. That section brings into play principles of law and equity applicable to determining the validity, enforceability and effect of contracts. Because the wife has been able to establish grounds for equitable relief so as to set the financial agreement aside, then notwithstanding that the technical errors may no longer be fatal, because the financial agreement will be set aside the effect of s 90G(1A)(e) is that relief pursuant to s 90G(1A) would not be available.[109]

   [108] Ibid [177]-[183], noting Thackray J’s remarks with respect to the discretion in s 90G(1A) as not being limited to remedying mere ‘technical’ breaches of s 90G(1). See also Raleigh v Raleigh [2015] FamCA 625, [139]; Estate of Fan v Lok [2015] FamCA 300, [122]-[123].

   [109] Saintclaire v Saintclaire [2013] FamCA 491, [140]-[141]. See also Manner & Manner (n 31), [157], at which his Honour adopted the same approach.

5. It appears that, as a pragmatic approach, there is no point in determining the issue of ‘unjustness’ or ‘inequity’ under s 90G(1A)(c) where the agreement, if binding, will be set aside in any event. I intend to follow this approach given my determinations under issue 5, commencing at paragraph 143 of these Reasons.

   Each spouse party was provided with a signed statement by the legal practitioner stating that the advice referred to in s 90G(2)(b) was provided to that party (s 90G(1)(c))

6. The solicitors’ statements are annexed to the 2006 agreement and it was not argued that the agreement does not comply with s 90G(1)(c).

7. I therefore find s 90G(1)(c) satisfied.

   Agreement has not been terminated or set aside by a court (s 90G(1)(d))

8. The discussion with respect to s 90G(1A)(c) above foreshadows that, while it has not previously been terminated or set aside, whether the 2006 agreement is set aside (under s 90G(1A)(e)) affects the availability of s 90G(1A)(c)-(d) and (1B) to declare a financial agreement binding notwithstanding non-compliance with s 90G(1)(b).

9. For present purposes it is sufficient to say that, up until and during the final hearing, the 2006 agreement had not been terminated or set aside. None of the parties contended as such and, as a result, s 90G(1)(d) is satisfied.

   Issue 5: should the 2006 agreement, even if it is capable of being binding under s 90G(1A), be set aside?

10. Mr Trezise, on behalf of the Wife, submits two main grounds upon which the 2006 should be set aside even if it is found to be binding under s 90G — uncertainty amounting to a void, voidable, or unenforceable agreement, and hardship arising from the change in circumstances since 8 December 2006.

    Void, voidable or unenforceable? (s 90K(1)(b))

11. My Reasons, in the following sub-headings, dissect the ambiguous terms within the 2006 agreement. With respect to each term, or grouping thereof, I will set out the nature of the alleged uncertainty (whether it be incompleteness, non-finality, or non-clarity), whether I find it to be uncertain, and whether the term or terms nullify the 2006 agreement.

    Description and identification of assets

    The Husband’s assets (cl 6, 7, 11, 12)

12. Clause 11 lists the Husband’s assets and liabilities and, in doing so, refers generally to a number of named properties at Town AB, together with properties described only as ‘factory, Town R’, ‘plant and equipment’, and ‘stock’. The nature of the Husband’s ownership of, or interests in, such assets is not clear. Clauses 6 and 7 explain the Husband’s various corporate affiliations — B Pty Ltd (the second-named respondent, in which he and two others were shareholders and directors in unknown quantities), Company AL (in which he held a one-third interest, and in which he was one of three directors), Company AH (from which he derived his income), and another possibly separate factory businesses registered in his name. The extent of the Husband’s interest or shareholding in all of the ‘businesses registered in his name’ is also not listed in cl 11.

13. Clause 12 attempts to clarify the meaning attaching to ‘factory, Town R’ by saying that the Husband purchased the property and the factory business in half-shares between himself and the two other directors of B Pty Ltd at the time. It remains ambiguous, noting the contents of cl 6, whether B Pty Ltd was the owner of the Town R property and factory business. Whether the Husband himself or a corporate entity owns the other commercial properties (including the ‘property and factory business at AD Street, Town AB’ and the ‘1/2 interest … in property at AN Street, Town S) is also difficult to discern from the text of the agreement. Further, in relation to cl 15, it therefore cannot be determined from which properties ‘set out above’ (in cl 11) the Husband operates his businesses.

14. These ambiguities, in my view, amount to uncertainty for incompleteness. The agreement does not sufficiently identify all of the items of property at cl 11. Not only is the property itself vaguely defined but, more fatally, the agreement does not set out the way in which each item of property was connected to the Husband.[110] If the agreement cannot show the Husband’s legal or beneficial property interests it cannot, as is required by s 90C(2)(a), deal with the items of property sought to be dealt with.

    [110] Guild v Stasiuk (n 30), [128].

15. I cannot rectify the uncertain parts of 6, 7, 11, and 12 — there is no identifiable or obvious mistake, nor is there any correction to be made to make the document align with the parties’ common intention.

    The Wife’s assets (cl 13, 14)

16. Clause 13 lists, albeit briefly, the Wife’s assets. Mr Trezise submitted that cl 13 does not sufficiently 'describe [or] identify' those assets.[111]

    [111] Wife’s Submissions, 8 November 2021 (n 50), 4.

17. Neither party sought to define the Wife’s undefined ‘minimal’ superannuation holding, nor was the issue raised at trial or in the submissions. The Wife’s superannuation is arguably defined to the extent that it is necessary to do since, from the agreement as a whole, I cannot see an instance in which the lack of definition would prevent it from being ‘dealt with’.

18. A more notable discrepancy with respect to the Wife’s assets is the identification of the $75,000.00 sale proceeds. It appears that the nature of the Wife’s property interests has been affected by human error. Clause 13 says that the Wife owned the $75,000.00 sale proceeds from the N Street, Town M property but, contradictorily, cl 14 says that those proceeds have applied to reduce the mortgage on the O Street home — a property owned solely by the Husband himself. That said, the clauses may not actually contradict one another. If cl 13 is read first, it sets out that at the commencement of cohabitation (2005, over one year prior) the Wife held the sale proceeds. If followed by cl 14 the agreement appears to reveal, by way of recital, that those proceeds have since applied to reducing the O Street mortgage. Read together, as a sort of ‘history’ of the Wife’s property interests leading up to, and as at, 8 December 2006, clauses 13 and 14 paint a sufficiently clear picture of the Wife’s property interests.[112]

    ‘Joint assets’ (cl 32)

    [112] Family Law Act 1975 (n 1) s 90C(2)(a), noting that clauses 13 and 14, on this reading, sufficiently identify the Wife’s property for the purposes of ‘dealing with’ it, and describe her property holding as at 8 December 2006 (as opposed to her property holding as at commencement of cohabitation’, as opens cl 13).

19. Clause 32 provides that all ‘joint assets’ acquired during the period of cohabitation are to be divided by agreement or, failing agreement, sold with the proceeds to be evenly split. The agreement does not define what is to be considered a ‘joint asset’ and, beyond property being registered in joint names, the terms ‘joint asset’ or ‘joint assets’ are unclear.

20. Clause 24 reflects this obvious meaning of the term by saying that property registered in their joint names will be deemed ‘joint property’. Clause 25, however, appears to introduce the concept of ‘joint’ in opposition to ‘sole’ ownership, by requiring a party to communicate an intention of sole ownership for any real estate or valuable item purchased during their relationship. If the party seeking to hold property solely fails to communicate the intention under cl 25 does this, as a necessary opposite, make such property ‘joint’ notwithstanding it not being registered in joint names pursuant to the ordinary meaning applied in clauses 24 and 32?

21. I can construe ‘joint asset’ as either (1) referring only to property held in jointly registered names or, alternatively, (2) referring to property which is held in joint names or which is otherwise not established to be ‘sole’ property. I cannot sensibly apply either interpretation. The first option creates a loophole under cl 25. The second option negates the fact that, if they so wished, the parties would have expressly defined what they consider to be ‘joint assets’ if it falls outside the obvious meaning in option one.

22. I consider cl 32 to be unclear, amounting to uncertainty, and it is therefore void. Due to this uncertainty it also offends s 90C(2)(a) in that it does not allow property to be identified as ‘joint property’ or ‘joint assets’ (seemingly used interchangeably between cl 24 and 32). If one cannot say whether an asset is a ‘joint asset’, it cannot be dealt with in accordance with the agreement’s terms.

23. There is no express intention that uncertain terms be severable but, in any event, cl 32 cannot be severed. It seemingly attempts to address the fate of residual joint assets upon separation which, by including the term, the parties plainly wished to include in their agreement.

    How the agreement ‘deals with’ the parties’ property and financial resources (cl 15-17)

24. Clauses 15-17 attempt to establish reciprocal bars against claims being made in respect of the parties’ property as set out at clauses 11 and 13.

25. Clause 15 says that the Wife agrees and acknowledges that the Husband solely established the businesses he operates from the properties in cl 11 and that she has ‘no interest financially or otherwise’ in the same. From the outset, it is uncertain whether the Husband did solely establish, own, or operate the businesses set out at clauses 6 and 7. Regardless, cl 15 appears to clearly state that, whatever they are, the Wife has no interest therein. The reference to ‘businesses’ appears to cite those registered in his name but, from clauses 6, 7, and 11, it is not clear whether cl 15 also excludes any interest in any of the companies or businesses with which the Husband is stated to be involved. Further, the use of the word ‘and’ is conjunctive here. Does cl 15 refer only to the businesses operated by the Husband from the properties set out in cl 11 or, alternatively, does it intend to bar her claim to any interest in any business operated by the Husband? It is sufficiently clear in isolation to be an acknowledgement, in addition to cl 16, that the Wife has no financial or other interest in the Husband’s businesses as defined in clauses 6, 7, and 11 above. Unfortunately for cl 15, and as stated above, there is some difficulty in ascertaining the Husband’s connection with and interests in those businesses.

26. Clause 16, slightly differently, refers to cl 11 as being the Husband’s sole property (which is, again, uncertain), and says that she has ‘no claim to any proprietary interest unless otherwise stated in this Agreement or otherwise agreed in writing’.

27. Clause 17 uses the same phrasing as cl 16 in that it says the property at cl 13 (construed alongside cl 14) is the Wife’s sole property in respect of which he has ‘no claim to any proprietary interest unless otherwise stated in this Agreement or otherwise agreed in writing’. Clause 13 only included the Wife’s superannuation at the time the agreement was signed and, as such, cl 17 effectively relinquishes the Husband of any proprietary claim thereto upon the breakdown of their marriage.

28. The operation of clauses 15 and 16 are relevant to how the agreement deals with, or attempts to deal with, the $75,000.00 sale proceeds being applied to the O Street mortgage.

    The O Street property and the $75,000.00 sale proceeds from the N Street, Town M property (cl 14)

29. Clause 16 provides, importantly, that the Wife has no proprietary interest in the O Street property (as included in cl 11). In specifying that she has no proprietary claim cl 16 preserves a claim in equity.[113] This gives rise to some disquiet about whether this fulfils the parties’ intentions, as expressed at clauses 3 and 4, and as construed at paragraph 100 of these Reasons. The Wife asserts that the agreement fails to deal with her ‘indisputable equitable interest’ arising from the $75,000.00 sale proceeds.[114] The Husband, on the other hand, submitted that there is no reason why the agreement must provide a mechanism by which the Wife may recoup her $75,000.00.[115] No mention of equitable rights or claims appears in the text of the 2006 agreement.

    [113] Noting that any claim in equity on the basis of a constructive trust does not necessarily denote a proprietary claim to the extent of any interest therein; Muschinski v Dodds (1985) 160 CLR 583, 614 (Deane J), at which his Honour explains that the institution of a trust can be constructed as a remedy imposed by equity, regardless of actual or presumed intention, to preclude an unconscionable retention of beneficial ownership of property. A constructive trust is most often remedial in personam — that is, the beneficiary’s rights are against the trustee personally (for recovery of funds, injunction, accounting, or to fulfil other duties or compensate breach) and not against the property over which the trustee has legal title. Claims in rem under a trust (including the right to follow misused trust property, through the process of tracing, to recover the property) would, in theory, be excluded by cl 16 (assuming the 2006 agreement is valid and enforceable) if a constructive trust was imposed over the O Street home. See also Jones v Southall & Bourke Pty Ltd [2004] FCA 539, [55]-[65] with respect to equitable proprietary claims and legal proprietary claims; Wollumbin Horizons Pty Ltd (in liq) (no 3), Re; Staatz v Berry [2019] FCA 924, [149], [157]-[158], [166]-[167], in which Derrington J discusses the authorities with respect to the constructive trust, Muschinski v Dodds (1985) 160 CLR 583, and authorities since Deane J’s statement of principle therein, including Baumgartner v Baumgartner (1987) 164 CLR 137, West v Mead [2003] NSWSC 161, and Imam Ali Islamic Centre v Imam Ali Islamic Centre [2018] VSC 413.

    [114] Wife’s Submissions, 8 November 2021 (n 50), 5.

    [115] Husband’s Submissions, 20 December 2021 (n 51), [18].

30. It has been established that, as at 8 December 2006, the Wife’s property was limited to only her superannuation. She applied the $75,000.00 sale proceeds to the Husband’s property at O Street but, in her view, the agreement does not reconcile that being described as her ‘sole property’ but providing her no method of recovery or compensation. The question raised by this prima facie contradiction is how the Husband can have no proprietary claim to those proceeds (under cl 17), but nevertheless benefit from those funds to repay a mortgage on a property to which the Wife has no proprietary claim?

1. The only way to interpret cl 16 is to adhere to the words therein, having regard to the maxim generalibus specialia derogant — special words derogate from general words.[116] In turn, it seems to me that the explicit inclusion of one specific word, but the omission of another specific word within the same general category, necessarily implies the exclusion of the specific thing omitted. In specifying that the Wife does not have a proprietary claim cl 16 necessarily infers the preservation of an equitable claim in respect of the O Street property. If she has a claim, at least to the value of $75,000.00 (plus any interest chargeable thereon),[117] there is nothing in the agreement preventing her from making that claim under s 79 of the Act. This conflicts with the parties’ common intention as expressed at clauses 3 and 4 but, in specifically omitting any preclusion of equitable claims, the agreement nevertheless has this effect.

   The T Street property (cl 19-21)

   [116] Heydon (n 25) 286 [8.770].

   [117] Giumelli v Giumelli (1999) 196 CLR 101, 119 (Gleeson CJ, McHugh, Gummow and Callinan JJ).

2. In addition to the Wife’s cl 16 submissions above she also argued that the transfer of a half-interest in the T Street property cannot be interpreted as intending to compensate her for 'giving up' her $75,000.00 sale proceeds. The T Street property is also included in cl 11 as part of the Husband’s property against which the Wife cannot make any proprietary claim by virtue of cl 16.

3. The Husband says that the Wife has, in effect, lost the $75,000.00, but she has gained an equitable interest through the intention, expressed at cl 19, to transfer the property into the joint names of the parties within 12 months.[118] The text of the 2006 agreement does not at any point indicate that cl 19 was included for the purpose of compensating the Wife for her $75,000.00. At the same time, having regard to my remarks about recitals and operative clauses at paragraph 97, the clause itself is not without power. Further, in clauses 20 and 21, the agreement further clarifies the parties’ wishes for each of them to receive half of any sale proceeds, apparently on the assumption that they will have put into effect their intention to transfer the property into joint names. I may therefore read cl 19 as an obligation instead of an optional statement of intention.

   [118] Husband’s Submissions, 20 December 2021 (n 51), [17], [22].

4. The clauses with respect to the T Street property are not, in and of themselves, ambiguous.

   Husband’s use of sale proceeds to purchase ‘real estate and/or businesses’ (cl 23)

5. Clause 23 refers, relatively clearly, to the Husband selling or otherwise dealing with assets set out in clause 11. It provides that if the sale proceeds of such sale or dealing are used to purchase 'real estate and/or businesses', either solely or with persons other than the applicant, then the applicant has no claim or proprietary interest against such real estate and/or business. This phrasing is markedly different than that used in clauses 16 and 17 as it is capable of including all types of claim, legal and equitable.

6. Difficulty arises upon trying to reconcile cl 23 with cl 16. The Wife has no proprietary claim to the assets at cl 11, but maintains an equitable claim thereto, and yet cl 23 operates to preclude any claim (proprietary or equitable) in relation to assets purchased from proceeds of sale from assets listed in cl 11. The Wife’s equitable interest in the O Street property would, under cl 23, be extinguished by mere reason of the property being sold. This is inconsistent with the notion of equitable remedies operating in personam, as against the person, instead of in rem, in relation to property.

7. Clause 23 creates an absurd and legally illogical result. I cannot sensibly construe the clause in line with the ordinary meaning of the words therein and it is, therefore, uncertain.

   Purchase of real estate or other valuable items (cl 24-25)

8. Clauses 24 and 25, read together, refer to the purchase of real estate or other valuable items during the parties’ relationship. As foreshadowed earlier with respect to cl 32, these terms create some ambiguity.

9. The agreement does not define ‘other valuable item’. This phrase is so vague, so indiscernible, that I cannot ascribe any meaning to it. Those words form a significant part of clauses 24 and 25 and, absent any machinery to make the meaning certain, they are void and cannot be severed.

10. Further, the words ‘as a couple’ may be clear when referring to living arrangements, but what does it mean to purchase real estate or ‘other valuable items’ as a couple? It is not defined by the words that follow: 'then such real estate will be purchased and registered in the joint names of the parties'. Those words establish what must be done when real estate is purchased 'as a couple' — that is, it must be registered in joint names. This is confirmed by the remaining part of the clause which confirms the 'property' being 'deemed' to be the 'joint property of the parties regardless of which party contributed to the purchase price or percentage of the purchase price'. There is no clear meaning given for purchasing property ‘as a couple’ and I cannot construe the phrase with any measure of certainty.

11. The phrase ‘during the course of their relationship’ in cl 25 raises similar issues. The term ‘couple’ is not used but, like cl 24, it relies upon the undefined notion of ‘other valuable items’. I have found this term to be meaningless. Clause 25 then states that the real estate or ‘other valuable item’ will be deemed the sole property of the purchasing party if it is purchased ‘with the communicated intention of it being a distinct and individual purchase’. Nowhere else in the agreement does the phrase ‘communicated intention’ appear but, on an objective construction of the words, it could refer to words, actions, and/or deeds, which it is incumbent upon a purchasing party to complete (and possibly certify) to establish sole ownership. The clause is not at this stage devoid of meaning. It is confusing, however, to reconcile this clause with clauses 16 and 17. The property is ‘deemed’ to be the sole property of the purchaser, but there is no relinquishment of interest (proprietary or equitable) on the part of the non-purchasing party.

12. There is therefore a question as to whether such property is immune from a claim under s 79 and, as with cl 23, whether the parties intended (but omitted) to preclude legal, equitable, or all types of claim. The meaning (and therefore the operation) of clauses 24 and 25 is uncertain.

13. As for the availability of severance, these clauses affect cl 32, and in themselves evidence the parties’ intention to manage what items are deemed as ‘joint’ and ‘sole’ property. I cannot therefore sever these clauses.

    The Husband’s purchases of real estate or other valuable items ‘by virtue of his business ventures’ (cl 26)

14. Clause 26 is unique within the agreement but is nevertheless also infected with uncertainty. It refers to purchases of real estate or other valuable items 'by virtue of [the Husband’s] business ventures'. I have already ruled that references to 'other valuable items' are meaningless and incapable of severance. The phrase 'by virtue of his business ventures' is also difficult to discern.

15. If 'by virtue' is to mean 'because of' then all purchases of real estate must be encompassed by the clause. The Husband derives his income from his 'business ventures' — his employer, Company AH — and therefore any purchases made by him are because of his business ventures. Yet, other clauses confirm that real estate can be purchased jointly. Clause 26 goes onto state that such purchase shall not form part of the 'matrimonial pool' This term is not defined but usually refers to the pool of assets available for division pursuant to a claim made under s 79. Given the purpose of the agreement is to prevent any claim under the Act it is difficult to understand the meaning of this term or why it was included.

16. I have already determined that cl 26 is very unclear. It contains terminology such as 'business ventures' and 'matrimonial pool', that are not defined and do not appear elsewhere in the agreement. The term 'other valuable item' is meaningless. The term 'by virtue of' is not defined and its meaning cannot be discerned from the agreement.

17. Clause 26 is therefore void for uncertainty. It is not only difficult to understand its intended meaning but, at least insofar as it references the ‘matrimonial asset pool’, it operation generally is unclear. In line with cl 15, it appears to be the aim of cl 26 to exclude any claim by the Wife in subsequently acquired ‘business’ property. The term does not effectively do so and, as with clauses 24 and 25, other parts of the agreement depend on cl 26’s operation. Absent any express intention that the term be severed I cannot, given the substantive nature of the clause and its interaction with other terms, sever it.

    Indemnification in relation to Husband’s assets (cl 22)

18. Clause 22 reads clearly. The Husband indemnifies the Wife in relation to any liabilities attaching to assets listed in cl 11. This clause does not indemnify the applicant in relation to 'businesses' or assets falling out side clause 11, such as those captured by cl 15.

    Clothing, jewellery, personal effects and household items (cl 18)

19. Clause 18 reads clearly. Any items of jewellery, personal effects and household items owned by either party before cohabitation or purchased after cohabitation shall be the separate property 'partner' who purchased them or received them as a gift. The use of the word 'partner' is clearly a reference to one of the parties.

    Conclusion with respect to s 90K(1)(b)

20. As evident from the sub-headings above, the 2006 agreement is replete with uncertain clauses which cannot be rectified or severed. Clause 11, by insufficiently defining property items upon which much of the agreement rests, is particularly noteworthy. Clauses 23-26 and 32 are also uncertain and not severable. The incompleteness and lack of clarity goes to the heart of their agreement — in failing to properly deal with their property, as required by s 90C(2)(a), the agreement cannot effect a financial settlement between the Wife and the Husband.

21. The entire agreement must, therefore, be set aside on the basis that it is uncertain and thus void.

    Hardship resulting from a material change in circumstances? (s 90K(1)(d))

22. The Wife also submitted that the 2006 agreement should be set aside on the basis of hardship. Despite setting aside the agreement under s 90K(1)(b) I will, for the sake of completeness, address the grounds under s 90K(1)(d) as well.

23. The Wife sets out, in her affidavit, the extent and nature of her financial and non-financial contributions made throughout the marriage and post-separation. The Husband does counter some of the matters raised by the Wife as to her contributions in his affidavit material. Their relationship lasted 14 years and resulted in the two children of the marriage now living primarily with the Wife. The Wife also continues to have a caring role for the Husband’s daughter H. Assessing the Wife’s case at its highest, she has contributed in a real sense to the Husband’s various business ventures and activities, as well as being in paid employment and being the primary homemaker and carer of the children. She also has medical problems that impact her and earns significantly less than the Husband. She must, in her own words, ‘watch every dollar’ because her expenses outweigh her income.

24. To compare the Wife’s circumstances in accordance with the test set out at paragraph 87-88 above I must consider the net value of the parties’ assets. The best valuation evidence in relation to the parties’ assets and liabilities is found within their financial statements. I must then consider the adjustment (if any) that the Wife is likely to receive under s 79 as compared with the amount owing to her under the 2006 agreement. To undertake the latter assessment is difficult, given my findings of uncertainty above. I also note that in doing so I will use the values of the parties’ assets as contained in their financial statements as opposed to the values contained in the agreement.

25. The Husband submits that the 2006 agreement provides the Wife with assets worth an estimated total of $595,000.00 — namely, a half-interest in the T Street property, a half-share in the U Street property (unencumbered), and a motor vehicle.[119] The Wife holds other property in her own name with an estimated net value of $63,220.00.[120] Her entitlement is therefore, according to the Husband, valued at approximately $658,220.00.

    [119] Ibid [35] (U Street property), [40] (motor vehicle), noting also nil liabilities at [46]-[48]; Updated Financial Statement of Mr Carran, 30 August 2021, [35] (U Street property), [36] (T Street property).

    [120] Updated Financial Statement of Ms Carran, 8 September 2021, [37], [42], [45], noting that I have included the full value of the motor vehicle at [40], as the Husband intends to provide her with that motor vehicle.

26. The Wife argues that the 2006 agreement, on her construction, provides her with net assets with an estimated value of $378,220.00.[121] Alternatively, if the 2006 agreement also provides her a half-interest in the T Street property, she may under that agreement be awarded net property of approximately $723,220.00 in value.[122]

    [121] Consisting of the $75,000.00 equitable interest (not including any interest calculable thereon) in relation to the O Street property, her half interest in the U Street property, and the other assets in her possession ($63,219.00), noting that I have included her half-interest in the motor vehicle at [40] of her financial statement to calculate this amount, noting also the inclusion of the Wife’s equitable interest consistently with Stanford & Stanford (n 64), 120 [37], requiring the identification of legal and equitable interests of the parties under s 79.

    [122] Consisting of the $75,000.00 contribution, together with a half-interest in the T Street property, a half-interest in the U Street property, the other assets in her possession ($63,220.00), and the half-interest in the motor vehicle at [40] of her financial statement.

27. The uncertainties in the 2006 agreement’s operation therefore give rise to three scenarios in which I should address the question of hardship. For this purpose the parties’ total net property is valued at approximately $3,048,245.00.[123] This results in the following outcomes:

    (1)if the Wife’s entitlement under the 2006 agreement is worth approximately $658,220.00 (as submitted by the Husband) she will receive around 21% of the asset pool;

    (2)if the Wife’s entitlement under the 2006 agreement is worth approximately $378,220.00 (as submitted by the Wife) she will receive around 12% of the asset pool; or

    (3)if the Wife’s entitlement under the 2006 agreement is worth approximately $723,220.00 (calculated by me, in the event that the agreement affords the Wife the equitable interest in the O Street property and the half-interest in the T Street property) she will receive around 23% of the asset pool.

    [123] Calculated using the figures contained at part B of each party’s financial statement.

28. I note again that the figures and scenarios above are based on estimates only. Further, and importantly, the Wife’s entitlement (taking her case at its highest) exceeds her best case scenario under paragraph 189 above, noting that she submitted that her entitlement under s 79 should be 35%. Those scenarios are, in any event, and as already determined, too uncertain for any of them to be enforced.

    Conclusion with respect to s 90K(1)(d)

29. If the 2006 agreement were not set aside, the Wife’s best possible outcome may be that she retains assets amounting to 23% of the asset pool. The agreement could also, however, afford her with as little as 12% of the asset pool. The 2006 agreement itself makes it difficult to ascertain the value of assets which may be retained by the Wife and, as determined above, those uncertainties are sufficient to make the agreement a nullity.

30. In my assessment the Wife’s entitlement pursuant to a s 79 property adjustment order is likely to be higher than her best case scenario under the 2006 agreement. The impact upon her in dollar terms would plainly be significant in the current circumstances.

31. In all of the circumstances I am satisfied that s 90K(1)(d) has been established. Even if the 2006 agreement is binding under s 90G, valid, and enforceable, the Wife will suffer hardship under any possible interpretation of her entitlement under that agreement. She will, as a result, suffer hardship if it is not set aside. I will therefore also set aside the agreement on that basis.

    CONCLUSION

32. In accordance with the Reasons set out above I will order that the 2006 agreement, signed by the parties on 8 December 2006, be set aside.

33. As foreshadowed at paragraph 137 I therefore do not need to consider, pursuant to s 90G(1A)(c), whether it would be unjust or inequitable if the 2006 agreement were not binding upon the spouse parties thereto.

34. I will also order that some applications as made by the parties during these preliminary proceedings be dismissed.

35. The parties will also be invited to make submissions as the future disposition of the matter.

I certify that the preceding one hundred and ninety-seven (197) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Turnbull.

Associate:

Dated:       24 June 2022