Chaffin & Chaffin - [2019] FamCA 260

FAMILY COURT OF AUSTRALIA

CHAFFIN & CHAFFIN

[2019] FamCA 260

FAMILY LAW – PROPERTY – Financial Agreement – Unconscionable Conduct – Where the wife seeks that a financial agreement between the parties be set aside under section 90K of the Act – Where consideration of applicable principles – Where the binding financial agreement was signed ten days before the parties married – Where the wife was pregnant and not working at the time the document was signed – Where the husband engaged in conduct that was unconscionable – Where the financial agreement is to be set aside.
FAMILY LAW – PROPERTY – Financial Agreement – Where the wife seeks that a financial agreement between the parties be set aside under section 90K(1)(d) of the Act – On the grounds that that there had been a material change in circumstances related to the care of the children which if the agreement was enforced would lead to the wife and children suffering hardship – Where there is a great disparity in wealth between the parties – Where the mother has been the sole carer for the children since they were born – Where the husband has not spent time with the children since October 2017 – Where the wife would suffer hardship if the agreement is not set aside – Where the financial agreement is to be set aside.
FAMILY LAW – PROPERTY – Financial Agreement – Misrepresentation – Where the wife seeks that a financial agreement between the parties be set aside under section 90K of the Act – Where the wife asserts material misrepresentation by the husband at the time of the agreement – Where consideration of applicable principles – Where ground not made out.
FAMILY LAW – PROPERTY – Financial Agreement – Abandonment – Where the wife seeks that a financial agreement between the parties be set aside under section 90K of the Act – Where the wife asserts that the parties have relevantly abandoned the agreement such that it should set aside – Where consideration of applicable principles – Where ground not made out.
FAMILY LAW – PROPERTY – Financial Agreement – Uncertainty – Where the wife seeks that a financial agreement between the parties be set aside under section 90K of the Act – Where the wife asserts that the agreement is tainted by uncertainty such that it should set aside – Where consideration of applicable principles – Where ground not made out.
FAMILY LAW – PROPERTY – Financial Agreement – Impracticability – Where the wife seeks that a financial agreement between the parties be set aside under section 90K of the Act – Where the wife asserts that the agreement is tainted by impracticability such that it should set aside – Where consideration of applicable principles – Where ground not made out.
FAMILY LAW – PROPERTY – Financial Agreement – Undue Influence – Where the wife seeks that a financial agreement between the parties be set aside under section 90K of the Act – Where the wife asserts that the agreement should be set aside by reason of undue influence – Where consideration of applicable principles – Where ground not made out.

Family Law Act 1975 (Cth) ss 90B, 90K, 90KA

Chaffin & Chaffin [2017] FamCA 1179
Commercial Union Insurance Company of Australia Ltd v Ferrcom Pty Ltd (1991) 22 NSWLR 389
Denning & Denning [2011] FamCA 160
Fewster & Drake [2016] FamCAFC 214
GWR v VAR [2006] FamCA 894
Jones v Dunkel (1959) 101 CLR 298
Nocton v Lord Ashburn [1914] AC 932
Redgrave v Hurd [1881] 20 Ch D 1
Ruane & Bachmann-Ruane and Anor [2009] FamCA 1101
Sanger & Sanger [2011] FamCAFC 210
Sze Tu v Lowe [2014] NSWCA 462
Thorne v Kennedy [2017] HCA 49
West v Government Insurance Office of New South Wales [1981] HCA 38
Zaccadri v Caunt [2008] NSWCA 202

APPLICANT:

Ms Chaffin

RESPONDENT:

Mr Chaffin

FILE NUMBER:

PAC

4341

2017

DATE DELIVERED:

26 April 2019

PLACE DELIVERED:

Parramatta

PLACE HEARD:

Parramatta

JUDGMENT OF:

Foster J

HEARING DATE:

4 and 5 February 2019 and 11 and 12 March 2019

REPRESENTATION

COUNSEL FOR THE APPLICANT:

Mr Campton SC

SOLICITOR FOR THE APPLICANT:

Dignan And Hanrahan Solicitors And Attorneys

COUNSEL FOR THE RESPONDENT:

Mr Richardson SC with him Mr May

SOLICITOR FOR THE RESPONDENT:

Pearson Emerson Meyer Family Lawyers

Orders

The Financial Agreement dated 13 August 2010 signed by Ms Chaffin and Mr Chaffin be set aside.

Note: The form of the order is subject to the entry of the order in the Court’s records.

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

Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).

FAMILY COURT OF AUSTRALIA AT PARRAMATTA

FILE NUMBER: PAC 4341 of 2017

Ms Chaffin

Applicant

And

Mr Chaffin

Respondent

REASONS FOR JUDGMENT

The applicant wife in these proceedings seeks an order setting aside a financial agreement entered into by her and her husband on 13 August 2010.
The agreement was entered into by the parties only one week before their proposed wedding at Church A in Sydney in … 2010.
Section 90K of the Family Law Act 1975 relevantly provides:
Circumstances in which court may set aside a financial agreement or termination agreement
(1)A court may make an order setting aside a financial agreement or a termination agreement if, and only if, the court is satisfied that:
(a)the agreement was obtained by fraud (including non-disclosure of a material matter); or
(aa)a party to the agreement entered into the agreement:
(i)for the purpose, or for purposes that included the purpose, of defrauding or defeating a creditor or creditors of the party; or
(ii)with reckless disregard of the interests of a creditor or creditors of the party; or
(ab)a party (the agreement party ) to the agreement entered into the agreement:
(i)for the purpose, or for purposes that included the purpose, of defrauding another person who is a party to a de facto relationship with a spouse party; or
(ii)for the purpose, or for purposes that included the purpose, of defeating the interests of that other person in relation to any possible or pending application for an order under section 90SM, or a declaration under section 90SL, in relation to the de facto relationship; or
(iii)with reckless disregard of those interests of that other person; or
(b)the agreement is void, voidable or unenforceable; or
(c)in the circumstances that have arisen since the agreement was made it is impracticable for the agreement or a part of the agreement to be carried out; 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
(f)a payment flag is operating under Part VIIIB on a superannuation interest covered by the agreement and there is no reasonable likelihood that the operation of the flag will be terminated by a flag lifting agreement under that Part; or
(g)the agreement covers at least one superannuation interest that is an unsplittable interest for the purposes of Part VIIIB.
(1A)For the purposes of paragraph (1)(aa), creditor , in relation to a party to the agreement, includes a person who could reasonably have been foreseen by the party as being reasonably likely to become a creditor of the party.
(2)For the purposes of paragraph (1)(d), a person has caring responsibility for a child if:
(a)the person is a parent of the child with whom the child lives; or
(b)a parenting order provides that:
(i)the child is to live with the person; or
(ii)the person has parental responsibility for the child.

Context

Primary proceedings were commenced by the applicant wife in her Initiating Application filed 30 August 2017.
In that application the wife sought orders as to property adjustment as between her and the husband, lump sum spousal maintenance and periodic spousal maintenance together with various orders as to implementation or enforcement. Further, the wife sought parenting orders in relation to the children of the parties’ marriage.
The husband in his Response filed 11 October 2017 to the wife’s application sought orders that her primary application be dismissed and that she pay his costs. That Response was subsequently amended on 8 August 2018 with the husband seeking parenting orders in relation to the subject children.
Interim proceedings in relation to the children and an interim financial provision for the wife were heard before Hannam J on 13 November 2017 and pending delivery of reserved judgment orders were made providing that the subject children live with the mother, that the mother be able to travel with the children to Country B for a holiday in January 2018, that the children spend defined time with the father and as to arrangements for changeovers.
On 13 November 2017 the Court noted:
“The husband agrees to continue to pay to the wife the sum of $5,000.00 per month by way of periodic child support, payable in the amount of $2,500.00 on each of the 1st and 15th days of the month… and the children’s school and pre‑school fees”.
On 6 December 2017 orders as to financial provision were made by Hannam J as follows:
(1)the respondent husband pay to the applicant wife the sum of $1,000.00 per week by way of periodic spousal maintenance, first payment to be made within seven days from the date of these orders;
(2)that within 28 days from the date of these orders the respondent husband pay or cause to be paid to the trust account of the solicitors for the respondent wife the sum of $130,000.00;
(3)that the sum referred to in the previous order be applied by the solicitors for the applicant wife in payment of the costs and disbursements incurred or to be incurred by the wife in the conduct of these proceedings including but not limited to the reasonable costs and disbursements:
(a)rendered by the solicitors for the applicant wife pursuant to their costs agreement;
(b)rendered by counsel engaged by the solicitor for the applicant wife pursuant to his/her fee disclosure;
(c)rendered by counsel engaged by the applicant wife or the solicitors for the applicant wife to report on and value the real and personal property of the parties and any company, partnership or trust in which they have an interest.
Subsequently on 14 June 2018 the Registrar noted the outstanding issue as to the validity or otherwise of the financial agreement signed by the parties in 2010.
On 13 August 2018 further interim orders were made by consent as follows:
(1)The children X born … 2011, Y born … 2012 and Z born … 2014 (“the children”) live with the Applicant mother.
(2)The children spend time with the Respondent father from time to time as agreed in writing between the parties.
(3)Within three days of the date of these orders the Applicant wife will provide to the husband’s solicitors all keys in her possession, custody or control to the motor vehicle 1 registration ….
(4)Within seven days of the date of these orders, the Respondent Husband shall do all acts and things in his capacity as director of Company C to cause the motor vehicle 2 registration number … with plates … attached, free of encumbrances by way of spousal maintenance.
(5)Within 14 days of the date of these orders, the Respondent Husband shall pay the Taxation Notice dated 27 April 2018 on behalf of the wife in the sum of $1,830.00 by way of spousal maintenance.
(6) Both the husband and wife be restrained by injunction from communicating via email, text message or any other form of written communication or via telephone other than by way of communication through the parties’ respective legal representatives save and except for communication between the parties as to the children’s time with the father as foreshadowed by orders made today with such communication to be by way of email, SMS communication or otherwise in writing only.
(7)The mother have sole use and occupation of the former matrimonial home situate at D Street Suburb E and that the father be restrained from approaching or entering upon that property save and except with the written consent of the mother such consent to be by way of email, SMS or other written communication only.
(8)The husband serve a request for further and better particulars as to the wife’s application to set aside the purported Binding Financial Agreement with such request to be administered by no later than Monday 27 August 2018.
(9)The wife respond to that request for further and better particulars by Monday 10 September 2018.
(10)The husband file and serve his affidavit evidence supporting the validity of the purported Binding Financial Agreement by no later than Friday 5 October 2018.
(11)The wife file and serve his affidavit evidence supporting his application to set aside the purported Binding Financial Agreement by Friday 19 October 2018.
(12)Otherwise all outstanding interim applications are dismissed.
(13)Leave is granted to either party to relist on short notice as to any issue arising as to the proposed Binding Financial Agreement hearing by application to the court in chambers in appropriate circumstances.
Proceedings as to the financial agreement were subsequently listed for hearing for two days commencing 4 February 2019. The hearing did not finalise on those days and the hearing was adjourned part heard to 11 March 2019 allocating a further two days for trial. On 12 March 2019 judgment was reserved.
At trial as to the issue of the financial agreement the wife relied upon the following documents:
a)her affidavit filed 25 January 2019;
b)her financial statement filed 25 January 2019;
c)affidavit of Mr F, solicitor filed 25 January 2019;
d)affidavit of Mr G filed 26 July 2018.
The husband relied upon the following documents at trial:
a)his affidavit filed 13 December 2018;
b)his further affidavit filed 31 January 2019;
c)affidavit of Mr H filed 31 January 2019;
d)affidavit of Mr J filed 3 February 2019.

The parties’ relationship in brief

The wife is presently 30 years of age and the husband 40 years of age.
The parties commenced a relationship in early 2009 and commenced cohabitation in the husband’s then home at Region K, west of Sydney, in April of that year. At the commencement of cohabitation the wife was just 20 years of age.
At the commencement of the parties’ cohabitation the wife was in full-time employment doing accounts and in reception work. The husband was engaged as general manager of his business trading as Company C.
The parties married at Church A in Sydney 2010. They separated a little over six years later in December 2016 and were divorced in 2018.
There are three children of the parties’ relationship X born in 2011, Y born in 2012 and Z born in 2014. The child Y has been diagnosed as being within the Autism Spectrum Disorder and having some developmental speech delay but is attending mainstream schooling at a local primary school.
It is common ground that the children reside in the primary care of the wife and the husband has had no time with the children since about October 2017.
The wife continues to reside in the parties’ jointly owned matrimonial home at Suburb E as provided for in interim orders.
At the commencement of the parties’ cohabitation the wife had a motor vehicle subject to a loan, some items of personalty and some superannuation accrued.
The husband had various assets and financial resources being:
a)his home at Region K subject to mortgage to the ANZ bank;
b)furniture and personal effects;
c)some money at bank;
d)a 100 per cent shareholding interest in Company L;
e)a 33 per cent shareholding interest through Company L in Company C. The Company C business was originally started by his father in 1976.. The husband has worked in this business since leaving high school;
f)an interest as a discretionary beneficiary in the M Trust established by his father in 1987;
g)an interest as a discretionary beneficiary in the N Trust .
The husband’s father died in 2008. Several years prior to his death the father had transferred his Company C business to the husband and his two siblings with their separate corporate entities holding the shares in Company C.
In January 2010 the wife ceased employment and thereafter was financially dependent upon the husband who paid her a wage from his company. The parties are at odds in relation to the circumstances of her ceasing employment; the wife asserting that she was encouraged to do so by the husband in him saying that he was financially well able to provide for her, and the husband asserting that the wife was disenchanted with the circumstances at work and keen to leave. Nothing turns on the reason why the wife left her employment. The reality is that subsequent thereto she was financially dependent upon the husband who had paid out her car loan.
In 2013 the husband acquired the shareholding interests of his brother and sister in Company C.

A note about the parties’ evidence

As often happens in matters such as this where the issues revolve around the nature of personal relationships, their interplay and conduct, the relevant evidence is often about events and or conversations that happened many years ago. The frailties of memory over time leads to omissions of relevant matters that are simply not recalled, inaccuracy as to timing of events or a firm belief that something did occur that in fact did not. This is so notwithstanding that a party may assert that a recollection is clear in his or her mind.
In such circumstances the Court will often look to objective evidence for assistance that supports or disproves a party’s contention. This can be in the form of objective documents or corroborating evidence from a witness if called to support the party with the onus of proof as to a particular issue. Otherwise, the Court will form an opinion as to the reliability of a witness’ oral evidence from the tenor and nature of responses in cross examination.
It was observed by the plurality of the High Court in Thorne v Kennedy [2017] HCA 49:
41.In any case where a transaction is sought to be impugned by the operation of vitiating factors such as duress, undue influence, or unconscionable conduct, it is necessary for a trial judge to conduct a "close consideration of the facts ... in order to determine whether a claim to relief has been established". On appeal, it is also essential for the appellate court to scrutinise the trial judge's findings and assess any challenge to the trial judge's conclusions in light of the advantages enjoyed by that judge.
42.In Kakavas v Crown Melbourne Ltd, quoting with approval from the judgment of Dawson, Gaudron and McHugh JJ in Louth v Diprose, this Court described how the "proof of the interplay of a dominant and subordinate position in a personal relationship depends, 'in large part, on inferences drawn from other facts and on an assessment of the character of each of the parties'". As Rich J said, in the context of a claim to set aside a transaction, the advantage of the trial judge "of seeing the parties and estimating their characters and capacities is immeasurable". These matters led Toohey J, in Louth v Diprose, to say that the "formidable obstacles" involved in an attack on findings of fact by a trial judge "may be enhanced where issues of undue influence and unconscionability are involved".
43.Related to the fact finding advantage of the trial judge is the evaluative nature of the judgment involved in determining whether the vitiating factors have been established. For example, in undue influence there will be questions of evaluative judgment involved in assessing whether the extent to which a person's will has been subordinated to another's is sufficient to characterise the person as lacking free will. The same evaluative exercise was described by this Court in Kakavas v Crown Melbourne Ltd in relation to unconscionable conduct, quoting from Dixon CJ, McTiernan and Kitto JJ in a passage from Jenyns v Public Curator (Q) which emphasised how the application of these equitable principles:
"calls for a precise examination of the particular facts, a scrutiny of the exact relations established between the parties and a consideration of the mental capacities, processes and idiosyncrasies of the [other party]. Such cases do not depend upon legal categories susceptible of clear definition and giving rise to definite issues of fact readily formulated which, when found, automatically determine the validity of the disposition. Indeed no better illustration could be found of Lord Stowell's generalisation concerning the administration of equity: 'A court of law works its way to short issues, and confines its views to them. A court of equity takes a more comprehensive view, and looks to every connected circumstance that ought to influence its determination upon the real justice of the case'".
(Footnotes omitted)

It is trite to say that the obligation to adduce relevant evidence is on the party who carries the evidentiary onus. In this matter it is the wife that seeks to impugn the financial agreement by reason of factual circumstances that are much in dispute between the parties. The nature of the relief sought by the wife is expected to frame a consideration of the relevant evidence that supports her case. Mostly the evidence focuses on the interplay of the parties’ relationship which to a significant extent the parties are at odds.
The wife did not seek to call her solicitor Mr F to give further evidence in chief with leave. His evidence may have touched upon the wife’s emotional state at the time of signing the agreement. On the other hand, Mr F was not required for cross examination by the husband.
The husband for his part did not call his solicitor who may have shed light on the pathway to the agreement that may have been supportive of the husband’s recollections.
Otherwise, the wife did not adduce evidence from her parents, particularly her father, which may have shed some light on her emotional state and her resolve to sign the agreement whatever the circumstances. But significantly it is the interplay between herself and her husband that is the crux of this matter.
The failure to call a witness expected to support one’s case invokes well settled principles: Jones v Dunkel (1959) 101 CLR 298. The “rule” in Jones v Dunkel was explained by the Full Court of the Family Court in GWR v VAR [2006] FamCA 894 at [29]:
“The decision of the High Court in Jones v Dunkel does little more than confirm what common sense suggests would be the case, namely that where it would be reasonable to expect a party to have called evidence from a witness in relation to an issue, the unexplained failure to do so can justify drawing the inference that the evidence of that witness would not have assisted that party’s cause.”
The Court cannot use an inference to fill in gaps that may exist in the state of the evidence before the Court: West v Government Insurance Office of New South Wales [1981] HCA 38; It remains at the discretion of the Court to determine whether inferences should, in all of the circumstances be properly drawn: Denning & Denning [2011] FamCA 160 at [76]-[78].
The availability of such inferences are problematic in the context of this matter where both parties’ evidence was to some extent incomplete.
Both the husband and wife gave oral evidence in the course of cross examination. The Court has had the opportunity to see and hear their oral evidence.
The wife’s evidence was invested with emotion in describing her dealings with the husband prior to the signing of the financial agreement. Yet the wife conceded that in other aspects of their relationship the husband mostly made her feel important and special. At times she was distressed in the witness box. There were clearly errors in her evidence as to timing and recollection, perhaps due to the passing of time or perhaps due to the emotional circumstance she found herself in some nine years ago. There were inconsistences to some extent with her historical affidavit material. Her evidence was found to be truthful but subject to the frailties of memory and emotion.
The husband, who said he suffered from depression and anxiety and asserted that he “had difficulty in general remembering”, was in oral evidence incongruously assertive as to some disputed factual matters pertaining to the parties’ historical relationship and interaction, yet unclear and uncertain as to factual matters of recent events that the Court would have expected him to have a particular knowledge of such as his taxation affairs, loan account transactions and his corporate and trust structures. Often his response to questions put to him was “ask my accountant”. His asserted lack of knowledge of his financial affairs and that of his related entities was bewildering. His manner of giving evidence was superficial, slow, ponderous and avoidant.
His affidavit evidence, sworn only months before trial, was strangely incongruous when compared to his difficulties in oral evidence. This is perhaps suggestive that his affidavit was the product of others. He swore an updating affidavit to correct errors in his primary affidavit after having access to the wife’s trial affidavit.
The husband’s evidence as to his engagement with his solicitor who prepared the various agreements was vague and of little assistance as to how various amendments came to be. There is no suggestion that the husband told his lawyer about his wife’s pregnancy. He failed to call evidence from his lawyer at all.
The parties’ evidence as to historical matters must be seen through the prism of time that may lead to failing and or reconstructed memories. The wife’s oral evidence has every appearance of being genuine. She was subjected to detailed and searching cross-examination and demonstrated a willingness and ability to recall events and circumstances from a time where she lacked maturity and sophistication.
Overall, the evidence of the wife, except as may be referred to below, is preferred over that of the husband where there is conflict between them.

The parties’ interpersonal relationship

The wife asserts that from the commencement of cohabitation the husband was “always volatile and controlling”. She says that there was conflict between herself and the husband as to her going to the movies with a girlfriend on Tuesday evenings or going out with friends every so often without the husband.
Otherwise, the wife asserts that in late 2009 quite some months after commencing cohabitation with the husband she was planning a trip to Europe with a girlfriend. The wife’s evidence as to the nature of these “plans” was vague and of little assistance. She complains that it was the husband’s view that he should go with her and not the girlfriend. It appears that the issue was resolved satisfactorily when the husband represented to her that if she travelled with him to Europe they would get engaged. The parties later travelled to Europe where the husband proposed marriage in City O in late 2009.
The wife further complains about the circumstances relating to her 21st birthday party in 2009. She had booked a hotel at Town P for her party to involve some 60 to 80 family members and friends. The husband suggested to her that the party be held at his home and not at “the pub”. The wife accepted his offer. The wife complains of conflict between him and her on the day of the party. Notwithstanding there is nothing to suggest that the party did not go ahead as planned.
Leaving aside circumstances relating to the period prior to the signing of the presently impugned financial agreement, the matters complained of by the wife as to the husband’s conduct do not alone establish the husband as being “volatile and controlling”. To describe his conduct as such is simply inappropriate where the issues between the parties, as young as they were, can be seen as issues that may often arise in interpersonal relationships where the parties are cohabiting and planning a life together and where both parties assert a deep love for each other.

The prelude to the financial agreement

The husband says that in June 2009 on “one occasion while driving” he mentioned a prenuptial agreement to the wife. He says he did so again on several occasions later.
In early 2010 after the parties’ trip to Europe and their engagement he asserts he said to the wife:
I should get the prenup sorted. I think this is how it will go – this house is worth $2 million and the mortgage is about $1 million or so, so I’ve got about $1 million in equity. If things don’t go right, I’ll sell the house and buy you another house for $1 million for you and the kids. I can then start over.
This conversation appears to be later reflected in amendments sought to the draft financial agreement by the wife’s solicitor as referred to below and is suggestive of the wife’s later understanding as to what had been earlier promised by the husband.
The husband says that he informed the wife in about March 2010 that he had attended upon his solicitor and provided instructions. It appears it was not until June 2010 that the first draft referred to below was forwarded to the wife’s solicitor.
The wife asserts that about two months prior to the wedding day, the husband first raised the issue of a prenuptial financial agreement, informing him that there would be an agreement sent to her solicitor Mr F. The wife asserts that the husband said “We can’t change anything on it. Dad made [Ms T] (his sister) have one and I’ve got to have the same one… Anyone who marries into our family has to sign it because that’s what dad wanted. It will be fine. It’s just a formality”. The wife replied “Yes, okay. Just send it to [Mr F]”.
The wife’s recollection of this seems to refer to the conversation asserted by the husband at about the time he consulted his solicitor and her different recollection of the conversation after returning from Europe. It is more probable than not that the parties in fact did have the earlier conversation after their return from Europe where the husband outlined in the most general terms his proposed terms in the financial agreement, otherwise there is little to explain the formulation of the terms in the early draft agreements.
The parties’ wedding was planned for a date in August 2010. As at June 2010 the wedding ceremony had been booked for Church A, the wedding reception booked, the wedding dress had been ordered, invitations issued and the bridal party photographer and videographer organised.
In June 2010 before the parties’ wedding they attended upon their priest Mr H who gave evidence in the proceedings as to his recollection of his conversation with the parties. His evidence is simply reflective of the parties’ agreement to enter into a financial agreement, although at a time when no document had been sighted by the wife.

The First Draft

The first draft agreement (Exh “J”) was forwarded to the wife’s solicitor under cover of a letter dated 18 June 2010 from the husband’s solicitor Ms V. The draft agreement was an agreement under section 90B of the Act being a financial agreement made in contemplation of marriage.
In substance the first draft agreement provides:
a)(Clause 45) that in the event that there is a child or children of the marriage the husband will purchase in the joint names of the husband and wife an appropriate home for the wife and child or children with the purchase price to be approximately $1 million and to be within a 50 kilometre radius of where the husband resides with such home to be the wife’s home until the youngest child attains 18 years of age and thereafter the husband will transfer to the wife his interest as joint tenant and that pending such transfer the husband and wife shall pay council rates in respect of the property equally,
b)(Clauses 46 and 47) that any real property acquired in the names of the parties jointly or as tenants-in-common during their relationship is to be sold and after selling costs and discharge of any mortgage:
i)there be refunded to the husband any contribution he has made to the purchase price, costs of purchase, mortgage repayments renovations and improvements together with interest to accumulate as and from the date of any such payments at seven per cent per annum calculated on a daily basis until completion of the sale,
ii)there be refunded to the wife any contribution she has made towards the purchase price, costs of purchase, mortgage payments, renovations and improvements with interest to accumulate as and from the date of any such payments seven per cent per annum calculated on a daily basis until completion of the sale,
iii)and that the remaining balance of the proceeds of sale be paid to the husband and wife in the proportion that monies refunded to each of them as provided for above bears to the total amount of such funds to be refunded.
c)(Clauses 50-54) That in the event that there are no children of the marriage a mutual release of any future spouse maintenance obligations.
Apart from joint property and furniture, there was no other entitlement of the wife under the agreement if the parties did not have any children notwithstanding the length of any cohabitation.
In the event that there were no children of the parties’ relationship and notwithstanding the significant disparity in their financial circumstances at the time of this proposed agreement the wife would appear to have little prospect of receiving anything under the terms of this draft by reason of the mathematical gymnastics referred to above.

The Second Draft

Subsequently and under cover of a letter dated 1 July 2010 the husband’s solicitor forwarded to the wife’s solicitor a second draft agreement: (Exh “K”). The correspondence does not suggest there had been any communication between the husband’s solicitor and the wife’s solicitor prior to this further draft being sent. How the amendments came about is unclear but the circumstances are suggestive of some discussion between the parties. Neither party adduced evidence from their solicitor as to how the amendments came about.
Otherwise, the letter provides a representation as to future child support as follows:
However our client will be most generous in the payment of child support should it become necessary in the event the parties separate and there are children of the marriage. He is prepared and wishes to confirm, that not only will he pay child support in a regular periodic payment but he will also pay medical expenses, private school fees (if necessary), uniforms, books et cetera and any additional extracurricular expenses as and when same fall due.
In the event that child support is required to be addressed in the future, please ensure (sic) your client that our client confirms by this letter that he will honour the above matters and would be prepared to enter into a binding child support agreement with your client, at that time if the necessity arose.
This second draft agreement inserted a replacement provision in circumstances where the parties separated and there are no children of the marriage. In substance the wife would be paid $20,000.00 for each year of cohabitation for the first 15 years of cohabitation up to 30 June 2025 being a maximum to that date of $300,000.00 (Clause 46.1). In the event that the parties separated after 30 June 2025 the agreement provided that the husband shall purchase a two-bedroom property for the wife in her name “of a comfortable design and equipped with comfortable facilities in the middle price bracket for an area similar to the area in which the parties were residing immediately prior to separation” (Clause 46.2)
Otherwise, the primary terms of the earlier draft were repeated.
On 21 July 2010 the husband and wife attended upon the wife’s general practitioner and it was confirmed that she was pregnant expecting the parties’ first child.
Sometime in July 2010 the husband’s solicitor reminded him that the wife had not yet signed the agreement.
On 27 July 2010 the husband’s solicitor forwarded to the wife’s solicitor an email seeking a response to the letter of 1 July 2010 as “the situation is now becoming urgent as the parties are due to marry next month”.
On 28 July 2010 the wife’s solicitor by email informed the husband’s solicitor that the wife was to attend upon him for an appointment the following day.
The wife attended upon her solicitor alone on 29 July 2010. The wife asserts that her solicitor spoke to her about proper disclosure and valuation before entering into the agreement. She says that she said to him “I don’t want to speak to [Mr Chaffin] about it. I can’t talk about it with him”.
The wife relied upon the evidence of her solicitor Mr F in the form of his affidavit sworn and filed on 25 January 2019. Whilst Mr F deposes as to having no notes from his conference with the wife and does not depose as to his memory of what may have transpired between himself and his client in this conference, he does depose that his client did not inform him at that time that she was pregnant. The wife says in her oral evidence that her solicitor in this conference suggested changes that were for the better.
It is the wife’s contention that she was under emotional pressure to enter into an agreement and was prepared to do so whatever the agreement provided by reason of her love for and wish to marry the husband. Her proposed marriage was imminent.
It is readily apparent that it was open to the wife to seek to have her solicitor give evidence on affidavit or with leave orally as to his observations of and conversations with the wife that touch upon her assertions as to the circumstances of the agreement in a much more fulsome manner as to what transpired in conference with him leading to the detailed email forwarded that same day to the husband’s solicitor and ultimately his advice to her not to sign the agreement.
In Commercial Union Insurance Company of Australia Ltd v Ferrcom Pty Ltd (1991) 22 NSWLR 389 Handley JA (with whom Kirby P agreed, Priestley JA not deciding) said at 418:
“There appears to be no Australian authority which extends the principles of Jones v Dunkel to a case where a party fails to ask questions of a witness in chief. However I can see no reason why those principles should not apply when a party by failing to examine a witness in chief on some topic, indicates “as the most natural inference that the party fears to do so”. This fear is then “some evidence” that such examination in chief “would have exposed facts unfavourable to the party”: see Jones v Dunkel (at 320-321) per Windeyer J. Moreover in Ex parte Harper; Re Rosenfield [1964-5] NSWR 58 at 62, Asprey J, citing Marks v Thompson 1 NYS 2d 215 (1937) at 218, held that inferences could not be drawn in favour of a party that called a witness who could have given direct evidence when that party refrained from asking the crucial questions.”
In Zaccadri v Caunt [2008] NSWCA 202 Campbell JA (with whom Allsop P and Bar J agreed) said at [27]:
In my view this is a situation where the variant of the principle in Jones v Dunkel [1959] HCA 8; (1959) 101 CLR 298 that was discussed by Handley JA in Commercial Union Assurance Co of Australia Ltd v Ferrcom Pty Ltd (1991) 22 NSWLR 389 at 418-419 is applicable. In accordance with that principle, when a party who called a witness who could have given direct evidence on some particular topic refrains from asking questions that would have elicited evidence on that topic that can in some circumstances be a legitimate reason for not drawing inferences in favour of that party. Just as Jones v Dunkel licenses but does not require certain inferences to be drawn when a witness is not called, this principle does not prohibit the drawing of inferences favourable to such a party, but merely provides one reason against doing so. The same principle applies when an affidavit is read, that says nothing about a relevant topic concerning which the deponent could have given evidence (emphasis added).
The solicitor asserts in his affidavit that he had no notes and no other recollection other than as set out in his affidavit. It would appear there was little utility in seeking to have the solicitor give further evidence in chief by leave. The solicitor was not required for cross examination and thus not tested as to his affidavit evidence.
As a consequence of that meeting on 29 July 2010 the wife’s solicitor by email on the afternoon of 29 July 2010 requested alterations to the draft agreement provided under cover of the letter of 1 July 2010. The alterations requested were as to various recitals in the agreement and to various significant primary operative provisions as the wife’s entitlements under the agreement. Relevantly, alterations were sought as follows:
a)(Cl 46.2) That in the event there are no children and the parties separated after 30 June 2025 the property to be purchased the “comparable in value and standard to the property the parties resided in as their principal place of residence immediately prior to separation and be a property of (the wife’s) choice”.
b)(Cl 47.1) That in the event that there are children of the marriage that the property to be purchased “be comparable in value and standard to the property the parties resided in as their principal place of residence immediately prior to separation and be a property of (the wife’s) choice. Notwithstanding same the home is to be situated in an area with a 50 kilometres radius of their former matrimonial home and unless agreed by both parties…” and (Cl 47.2) that pending transfer of such property to the wife upon the youngest child attaining 18 years of age “the husband will be solely responsible for the payment of council rates, water rates insurances and the like and the maintenance and upkeep of the property.”
c)(Cl 49.4, 49.5 and 49.6) That in the event of the sale of any real property in the names of both parties that the provision for interest to be calculated on a refund of their respective contributions be deleted and that the then remaining proceeds of sale be divided equally and not in such proportions as were previously provided.

The email from the wife’s solicitor curiously asserts “We are instructed that these minor alterations properly reflect the discussions and promises between the parties.”
This representation does not accord with the wife’s own evidence as to lack of any discussions with her husband as to the detail of the proposed agreement but are supportive of the husband’s contention as to an earlier discussion with the wife, although it was in very general terms.

After the Email of 29 July 2010

The wife asserts that the husband, presumably after becoming aware of the email, later phoned her, yelling and screaming, saying “What the fuck are you doing? You are supposed to sign it. We can’t get married without this, you fucking idiot”.
The wife says she was terrified and crying. The wife in her oral evidence accepts that she had yelled at him saying “I’m so sorry”.
The husband that evening returned home. She asserts he abused her again, stood over her and pointed his finger yelling at her. There was no discussion between the parties as to the detail of the agreement. Later that evening he apologised: “Look, I’m sorry. It has to be this way as that is what our family does. It doesn’t matter anyway as obviously I will always look after you”.
The wife, seemingly having calmed down, says she replied: “I was just concerned that I would end up by myself with the baby and no job if you decided to leave me”.
The wife asserts that she was “terrified and scared” that the husband would cancel their wedding if she did not enter into the agreement in the terms he required. She says she was crying, had difficulty sleeping that night and the following nights until she signed the agreement: “I was pregnant. I had no money”.
The husband rejects the wife’s assertions as to his conduct. He concedes that he said to the wife “What the hell, he could have raised them earlier – it’s all a bit tight now. What’s he doing?”
However, the wife in her oral evidence asserts that subsequent to this incident she spoke to her parents and told them “It’s just become a lot. We have got so much going on in this prenup. Basically, it’s just a bit of a nightmare and its coming in between [Mr Chaffin] and me”. She told them “I thought we wouldn’t get married if I didn’t sign it, I’m having difficulty sleeping”. She further asserts in her oral evidence that her parents observed her distress. Her father she says said to her “Well you’re not marrying him for his money. If he says he will look after you then he will” and then “Look [Ms Chaffin] you’re pregnant. You know, do you want to be with him forever……well just sign it.”
The wife accepted that her father and mother lived nearby to Sydney and were in good health. Again, the wife’s assertion as her emotional state could have been assisted by evidence from her parents particularly her father who was also present at the signing of the agreement a week or so later.
She subsequently spoke to the husband again and informed him that she was to see her solicitor. She was told: “Don’t bring up the baby. We’re not going to tell anybody about your pregnancy… He doesn’t need to know we got the wedding coming up and let’s focus on that.” The husband denies this assertion but concedes an agreement with the wife not to tell anyone but their parents of the pregnancy until after the honeymoon. In any event the wife’s solicitor knew of the forthcoming wedding by reason of the husband’s solicitor’s letter of 27 July 2010. The husband’s desire to keep the fact of the pregnancy from the wife’s solicitor is perhaps reflective of his fear that the agreement sought by him might unravel and not be in place before the wedding.

The Third draft

The husband’s solicitor responded by email on 2 August 2010 to the request for amendments by the wife’s solicitor. The response enclosed the further amended third financial agreement for signing. A copy of this draft is not in evidence.
Various changes to recitals were agreed or not agreed. Operative provisions were agreed to or not agreed to as follows:
46.2 Agreed as requested (See above).
47.1 Not Agreed (See above).
47.2 Agreed as requested (See above)
49.5, 49.5 and 49.6 Not Agreed (See above)
The letter noted that such amendments were “acceptable to our client” and invited the return of the executed agreement. The inference is that no further amendments were to be considered.
Whilst the husband’s agreement to a change to Cl 46.2 of the agreement was noted in the email from his solicitor of 2 August 2010, it appears that it was not incorporated into the draft agreement sent under cover of the email. Following a call from the wife’s solicitor of 6 August 2010, confirmed by a note of the husband’s solicitor’s file, the agreed amendment was incorporated into the amended agreement forwarded to the wife’s solicitor by email on 9 August 2010.
In her oral evidence the wife recalls that she spoke to her solicitor by phone sometime after 2 August 2010 and was told of some changes to the draft. He told him she did not care if he could not get exactly what “we were after”.
The wife’s solicitor appears to have prepared a letter of advice dated 6 August 2010 to the wife as to the financial agreement in readiness for its signing.

Signing the agreement

The wife attended upon her solicitor on 11 August 2010 “for the purpose of execution of the document”. She says she was going to sign the document no matter what. She was accompanied by her father, Mr W.
She asserts that the solicitor went through the changes to the agreement, repeated his earlier advices to her and informed her that the husband would not agree to “any changes” or maybe “some of the changes”. The latter words are more probable by reason of the nature of the email exchanges between solicitors.
She asserts that she said to her solicitor “I just want to sign it. I just want to get married.” Her solicitor, she says, expressed his reservations: “We need to be satisfied as to [Mr Chaffin’s] assets before you sign the agreement. If you sign this document he is always going to have the power and control. It is not an even relationship. I don’t think this is in your best interest. You don’t have any skills. What are you going to do if you have kids”. She asserts that she replied: “I don’t care. It’s easy if it’s just done and out of the way. I just want it finished”. She signed the financial agreement.
Again the solicitor’s evidence on behalf of the wife does not touch on what occurred during the conference but simply records her father was in attendance and the wife signed the solicitor’s letter of advice dated 6 August 2010.
Of some significance is the absence of evidence from the wife’s father who was at the conference and who had, it is asserted by the wife, previously been spoken to by her as to the conflict with the husband over the proposed financial agreement.
The solicitor’s letter to the wife, in summary, sets out:
a)that the financial agreement as presented did not provide adequate disclosure of the financial resources available to the husband;
b)that further investigations should be carried out;
c)that the wife did not wish her solicitor to raise the issue with the husband’s solicitors or have them provide any further evidence as to the husband’s financial resources;
d)that the wife did not wish her solicitor to carry out any investigations and that she wished to accept figures as stated, this being against the most strong advice of the solicitor that enquiries should be made as to proper disclosure of financial resources;
e)confirming that there had been some minor alterations to the agreement and that the husband through his solicitors had refused to make any substantial alterations to the agreement notwithstanding that the wife had advised her solicitor that the proposed agreement does not totally reflect the promises the husband had made to her;
f)that the wife cannot and did not wish to discuss the matter with the husband directly as it results in arguments;
g)that the wife just wanted to sign the agreement and get it out of the way;
h)the strong advice of the solicitor that the wife should not sign the agreement in its present form;
i)that the solicitor’s advice was that in all probability the wife would be entitled to more than she is agreeing to in the agreement especially if there are children of the marriage or the marriage is of a long duration;
j)that by reason of the terms of the agreement any assets acquired during the course of the marriage are likely to be regarded as the husband’s separate property;
k)that the wife is not employed at the request of the husband so that she would be available to travel with him but notwithstanding the wife was agreeing to forego spousal maintenance where there are no children of the marriage;
l)that the wife is asked to sign a copy of the letter:
i)as a record of the solicitor’s “most strong advice” not to enter into the agreement in its present form;
ii)as a record of the solicitor’s instructions not to ask for alterations or changes to the agreement;
iii)as a record of the wife’s instructions that she wishes to sign the agreement notwithstanding the solicitor’s advice not to enter into the agreement; and
iv)confirming that the solicitor has informed the wife of circumstances in which a court may set aside the financial agreement.
In her oral evidence the wife said she would have signed even if the husband was worth $100 million. She knew if she did not sign it “we wouldn’t get married, I knew that the document could have been better for me”.
The wife signed the solicitor’s letter in conference with the solicitor on 11 August 2010 and the financial agreement was signed by her and her solicitor that day. The wife, in oral evidence, describes herself as naïve and trusting in relation to the agreement.
Days later on the eve of her wedding the wife left a note for the husband expressing her gratitude and love for him. Much is sought to be made of the note as perhaps inconsistent with the wife’s evidence as to the circumstances of the agreement. Yet she says that at the time of the note she was “madly and deeply in love” with her husband to be. The agreement was no longer an issue, she did not care what was in it, she had secured her marriage, the cancellation of which would cost money and have been embarrassing.

Subsequent to marriage

Subsequent to the parties’ marriage the wife did not engage in paid employment.
The first child of the marriage was born in 2011 about seven months after marriage.
She fulfilled the role of homemaker and primary caregiver for the children of the parties’ relationship. She was assisted by domestic help from time to time.
She was solely reliant upon the husband for financial support and received income by way of salary from the husband’s company and/or distributions from his primary trust entity the AA Trust.
The husband’s Region K property owned by him at cohabitation was later sold and a block of land at Suburb E was purchased for about $600,000.00.
At the time of cohabitation the husband held a one third interest in Company C through Company L. That shareholding interest increased to 50 per cent in the early part of the party’s cohabitation in circumstances that are not clear.
In mid-2013 the husband acquired his siblings’ then 50 per cent interest in Company C. The shareholding was acquired through the husband’s company Company BB with the shares in the company held by a discretionary family trust, the AA Trust established by the husband in 2013: Exh “O”. Its corporate trustee was at that time Company CC with the husband as appointor of the Trust. The husband and wife were the only directors of the corporate trustee with the husband, wife and their children as primary beneficiaries. It appears that the shareholding of his siblings was acquired for about $1.634 million (Exh “S”) although the financing arrangements are somewhat unclear.
In May 2015 the trust acquired strata factory premises at FF Street, Suburb GG and a mortgage stamped to the value of $716,000.00 was secured over those premises in favour of the Westpac Bank: Exh “R” and Exh “U”. The wife signed the mortgage as director of the trustee company and provided her personal guarantee for the loan (Exh “U”). The property was purchased for about $1.433 million all up.
Various distributions of income were made through the trust. The wife signed various documents relating to the trust borrowings in her capacity as director of the corporate trustee and other documents relating to the trust activities that she is unable to identify. Exhibit “S” reveals that the wife was paid distributions in the 2014 year of $100,220.00 and in the 2015 year of $105,000.00. In the 2015 year the husband by way of “drawings” from the trust received $874,789.00. Exhibit “T” reveals that at the end of the 2016 year the trust held undistributed income of $462,795.00 with further undistributed income at the end of the 2017 year of $547,363.00 with consequent unpaid taxation liabilities totalling $288,633.00 leaving retained earnings as at 30 June 2017 of $721,503.00. As at 30 June 2017 the husband owed the trust $2.165 dollars in relation to “loans” advanced to him.
In the 2017 financial year the turnover of Company C was about $24.8 million.
In about mid 2014 a home at D Street, Suburb E was purchased in the name of the husband alone for $1.64 million. The purchase was funded by way of a housing loan “Portfolio Loan” facility with Bank HH for a total of $1.78 million (Exh “U”). The Suburb E block of land was also used as security for the borrowing but the land was later sold for about $700,000.00.
The wife after separation in December 2016 has continued to reside in the home at Suburb E with the husband vacating the home in January 2017.
During cohabitation the wife had little detailed knowledge of the husband’s business activities or income and financial resources. In oral evidence she says she gleaned some understanding in bits and pieces from what was told to her or his family discussed in her presence.
Since October 2017 the husband has spent no time with the children of the marriage.
Subsequent to the parties’ separation in late 2016, the husband made funds available to the wife with her having access to an ANZ credit card. That financial support ceased in late June 2017 with the husband thereafter reducing or ceasing the payment of other payments for and on behalf of the wife and/or children necessitating the wife making an application for spousal maintenance and interim costs: Chaffin & Chaffin [2017] FamCA 1179.
After separation and in October 2017 the husband purchased a home at Suburb JJ for the sum of $2.3 million fully funded by borrowings from a related family entity Company KK with mortgage payments of about $13,000.00 per month. He resides there with his new wife and their children.
Subsequent to separation the husband had been making voluntary payments of periodic child support in the sum of about $5,000.00 per month until October 2018. Subsequent to making of interim spousal maintenance orders, the husband’s voluntary child support payments reduced.
In October 2018 the husband obtained a child support assessment from the Child Support Agency for the period 3 September 2018 to 2 December 2019 in the sum of $2,711.00 per month. He pays nothing else for the children.
The wife borrowed $8,500.00 from her father to meet some expenses and sold her car for $12,000.00.

The nature of the relief sought by the wife

The Court’s powers under s 90K is set out above. The wife categorises her relief on the following grounds:
a)That the agreement is void, voidable or unenforceable; or
b)That 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, a party to the agreement will suffer hardship if the Court does not set the agreement aside; or
c)That in respect of the making of a financial agreement—the husband engaged in conduct that was, in all the circumstances, unconscionable.
Section 90KA provides:
Validity, enforceability and effect of financial agreements and termination agreements
The question whether a financial agreement or a termination agreement is valid, enforceable or effective is to be determined by the court according to the principles of law and equity that are applicable in determining the validity, enforceability and effect of contracts and purported contracts, and, in proceedings relating to such an agreement, the court:
(a)subject to paragraph (b), has the same powers, may grant the same remedies and must have the same regard to the rights of third parties as the High Court has, may grant and is required to have in proceedings in connection with contracts or purported contracts, being proceedings in which the High Court has original jurisdiction; and
(b)has power to make an order for the payment, by a party to the agreement to another party to the agreement, of interest on an amount payable under the agreement, from the time when the amount became or becomes due and payable, at a rate not exceeding the rate prescribed by the applicable Rules of Court; and
(c)in addition to, or instead of, making an order or orders under paragraph (a) or (b), may order that the agreement, or a specified part of the agreement, be enforced as if it were an order of the court.
It is common ground that agreements may be set aside by reason of the equitable remedies as to duress, undue influence and unconscionable conduct and common law remedies that may vitiate a contract.
The wife does not seek relief by reason of duress.

Undue Influence

In Thorne v Kennedy [2017] HCA 49 the plurality of the High Court considered the remedy of undue influence as follows (footnotes omitted):
30.In Allcard v Skinner Lindley LJ said that "no Court has ever attempted to define undue influence". One reason for the difficulty of defining undue influence is that the label "undue influence" has been used to mean different things. It has been used to include abuse of confidence, misrepresentation, and the pressure which amounts to common law duress. Each of those concepts is better seen as distinct. Nevertheless, the boundaries, particularly between undue influence and duress, are blurred. One reason why there is no clear distinction is that undue influence can arise from widely different sources, one of which is excessive pressure. Importantly, however, since pressure is only one of the many sources for the influence that one person can have over another, it is not necessary that the pressure which contributes to a conclusion of undue influence be characterised as illegitimate or improper.
31.In 1836, in a passage which was copied verbatim by Snell thirty years later, Story said that a person can be subjected to undue influence where the effect of factors such as pressure is that the person "has no free will, but stands in vinculis [in chains]". He explained that "the constant rule in Equity is, that, where a party is not a free agent, and is not equal to protecting himself, the Court will protect him". In 1866, this approach was applied in equity by the House of Lords, recognising undue influence in a case of pressure that deprived the plaintiff of "free agency". In 1868, in probate, Sir James Wilde also described undue influence as arising where a person is not a "free agent". In Johnson v Buttress, Dixon J described how undue influence could arise from the "deliberate contrivance" of another (which naturally includes pressure) giving rise to such influence over the mind of the other that the act of the other is not a "free act". And, in Bank of New South Wales v Rogers, McTiernan J characterised the absence of undue influence as a "free and well-understood act" and Williams J referred to "the free exercise of the respondent's will".
32.The question whether a person's act is "free" requires consideration of the extent to which the person was constrained in assessing alternatives and deciding between them. Pressure can deprive a person of free choice in this sense where it causes the person substantially to subordinate his or her will to that of the other party. It is not necessary for a conclusion that a person's free will has been substantially subordinated to find that the party seeking relief was reduced entirely to an automaton or that the person became a "mere channel through which the will of the defendant operated". Questions of degree are involved. But, at the very least, the judgmental capacity of the party seeking relief must be "markedly sub-standard" as a result of the effect upon the person's mind of the will of another.
33.…
34.There are different ways to prove the existence of undue influence. One method of proof is by direct evidence of the circumstances of the particular transaction. That was the approach relied upon by the primary judge in this case. Another way in which undue influence can be proved is by presumption. This presumption was relied upon by Ms Thorne in this Court as an alternative. A presumption, in the sense used here, arises where common experience is that the existence of one fact means that another fact also exists. Common experience gives rise to a presumption that a transaction was not the exercise of a person's free will if (i) the person is proved to be in a particular relationship, and (ii) the transaction is one, commonly involving a "substantial benefit" to another, which cannot be explained by "ordinary motives", or "is not readily explicable by the relationship of the parties". Although the classes are not closed, in Johnson v Buttress Latham CJ described the relationships that could give rise to the presumption as including parent and child, guardian and ward, trustee and beneficiary, solicitor and client, physician and patient, and cases of religious influence. Outside recognised categories, the presumption can also be raised by proof that the history of the particular relationship involved one party occupying a similar position of ascendency or influence, and the other a corresponding position of dependency or trust. In either case, the presumption is rebuttable by the other party proving that the particular transaction or transfer, in its particular circumstances, was nevertheless the result of the weaker party's free will.
35.Ms Thorne submitted that she was entitled to the benefit of a presumption of undue influence because the relationship of fiancé and fiancée should be recognised as one to which the presumption attaches. This submission was concerned with a presumption of undue influence (that a transaction was the result of a lack of free will) and not with the different doctrine concerning the possibility of an abuse of confidence in any relationship of intimacy. The submission should not be accepted.
36.Although the relationship of fiancé and fiancée was first seen as falling within the recognised categories by Lord Langdale MR in 1848, and although it was also recognised in this Court by Dixon J in 1936 and 1939, in 1961 in England Lord Evershed MR refused to apply the established presumption, saying that "this is 1961 and what might have been said of the position, independence, and the like, of women in 1848 would have to be seriously qualified to-day". In 1992 in Louth v Diprose Brennan J observed that it "may no longer be right to presume that a substantial gift made by a woman to her fiancé has been procured by undue influence". Common experience today of the wide variety of circumstances in which two people can become engaged to marry negates any conclusion that a relationship of fiancé and fiancée should give rise to a presumption that either person substantially subordinates his or her free will to the other.

It is contended by counsel for the wife that whilst the relationship of fiancé and fiancée does not give rise to a relationship presumption, the present factual matrix should give rise to recognition as a “special relationship” involving ascendancy or influence of the husband. It is contended that relevant factual matters are the existence of a de facto relationship since April 2009, the parties’ engagement in late 2009, the wife’s financial dependency after ceasing work, her reliance on the husband for emotional support, her dependency on and trust in him and her pregnancy, such that she under a “special disadvantage” and “lacking free will” in entering into the agreement. Such it is contended gives rise to an onus on the husband to show that the wife in entering into the impugned agreement was “nevertheless the result of the weaker party's free will”.
The Court is not satisfied that the circumstances of the parties’ “relationship” relied on are such as to give rise to a finding of a “special relationship” giving rise to a presumption of undue influence that casts the onus on the husband as contended.
As was said by Nettle J in Thorne v Kennedy (supra) at [96]:
“The bare fact of deep emotional commitment to securing a prospect of shared life together is not of itself a loss of will. Describing commitment as “infatuation” is rhetorically powerful but conclusory”.
This ground for relief is not made out.

Unconscionable conduct by the husband

The absence of a presumption of undue influence does not dispose of the contentions of the wife as to unconscionability; the different doctrine concerning the possibility of an abuse of confidence in any relationship of intimacy, using the words of the plurality in the High Court in Thorne (supra).
In Thorne v Kennedy (supra) the plurality of the High Court considered this remedy thus (footnotes omitted):
38.A conclusion of unconscionable conduct requires the innocent party to be subject to a special disadvantage "which seriously affects the ability of the innocent party to make a judgment as to [the innocent party's] own best interests". The other party must also unconscientiously take advantage of that special disadvantage. This has been variously described as requiring "victimisation", "unconscientious conduct", or "exploitation". Before there can be a finding of unconscientious taking of advantage, it is also generally necessary that the other party knew or ought to have known of the existence and effect of the special disadvantage.
39.In Commercial Bank of Australia Ltd v Amadio, Deane J said that the equitable principles concerning relief against unconscionable conduct are closely related to those concerned with undue influence. The same circumstances can result in the conclusion that the person seeking relief (i) has been subject to undue influence, and (ii) is in a position of special disadvantage for the purposes of the doctrine concerned with unconscionable conduct. For instance, in Diprose v Louth (No 1), the trial judge, King CJ, observed that both doctrines were satisfied where the defendant "was in a position of emotional dominance which gave her an influence over the [plaintiff] which she exercised unconscientiously to procure the gift of the house". Before the High Court in that case, Mr Diprose relied only upon the ground of unconscionable conduct.
40.Although undue influence and unconscionable conduct will overlap, they have distinct spheres of operation. One difference is that although one way in which the element of special disadvantage for a finding of unconscionable conduct can be established is by a finding of undue influence, there are many other circumstances that can amount to a special disadvantage which would not establish undue influence. A further difference between the doctrines is that although undue influence cases will often arise from the assertion of pressure by the other party which might amount to victimisation or exploitation, this is not always required. In Commercial Bank of Australia Ltd v Amadio, Mason J emphasised the difference between unconscionable conduct and undue influence as follows:
"In the latter the will of the innocent party is not independent and voluntary because it is overborne. In the former the will of the innocent party, even if independent and voluntary, is the result of the disadvantageous position in which he is placed and of the other party unconscientiously taking advantage of that position."
41.In Kakavas v Crown Melbourne Ltd, quoting with approval from the judgment of Dawson, Gaudron and McHugh JJ in Louth v Diprose, this Court described how the "proof of the interplay of a dominant and subordinate position in a personal relationship depends, 'in large part, on inferences drawn from other facts and on an assessment of the character of each of the parties'". As Rich J said, in the context of a claim to set aside a transaction, the advantage of the trial judge "of seeing the parties and estimating their characters and capacities is immeasurable". These matters led Toohey J, in Louth v Diprose, to say that the "formidable obstacles" involved in an attack on findings of fact by a trial judge "may be enhanced where issues of undue influence and unconscionability are involved".
42.…
43.Related to the fact finding advantage of the trial judge is the evaluative nature of the judgment involved in determining whether the vitiating factors have been established. For example, in undue influence there will be questions of evaluative judgment involved in assessing whether the extent to which a person's will has been subordinated to another's is sufficient to characterise the person as lacking free will. The same evaluative exercise was described by this Court in Kakavas v Crown Melbourne Ltd in relation to unconscionable conduct, quoting from Dixon CJ, McTiernan and Kitto JJ in a passage from Jenyns v Public Curator (Q) which emphasised how the application of these equitable principles:
"…calls for a precise examination of the particular facts, a scrutiny of the exact relations established between the parties and a consideration of the mental capacities, processes and idiosyncrasies of the [other party]. Such cases do not depend upon legal categories susceptible of clear definition and giving rise to definite issues of fact readily formulated which, when found, automatically determine the validity of the disposition. Indeed no better illustration could be found of Lord Stowell's generalisation concerning the administration of equity: 'A court of law works its way to short issues, and confines its views to them. A court of equity takes a more comprehensive view, and looks to every connected circumstance that ought to influence its determination upon the real justice of the case'".
Nettle J observed in Thorne v Kennedy (supra) (footnotes omitted):
[113]It is not possible to identify exhaustively what amounts to a special disadvantage. Relevant matters may include "illness, ignorance, inexperience, impaired faculties, financial need or other circumstances" that affect the weaker party's ability to protect their own interests. Those matters are illustrative, not exhaustive. A special disadvantage may also be discerned from the relationship between parties to a transaction; for instance, where there is "a strong emotional dependence or attachment”. Whichever matters are relevant to a given case, it is not sufficient that they give rise to inequality of bargaining power: a special disadvantage is one that "seriously affects" the weaker party's ability to safeguard their interests”.
Counsel for the wife contended that aspects of the evidence particularly as to the parties’ relationship provided indicia as to the “special disadvantage” that when combined seriously affected the ability of the wife to make a judgment as to her own best interests:
a)That the husband was the “stronger party”;
b)That the wife was financially (having stopped work) and emotionally dependent on her husband to be;
c)The husband made representations as to his future financial support for children of the relationship, particularly significant where the wife had just found out she was pregnant;
d)That the parties’ marriage plans were in place and the marriage imminent: her “emotional preparation for marriage”;
e)That the wife’s state of mind as evidenced by her solicitor’s written advice;
f)That the wife entered into the agreement against advice;
g)That the wife’s fear that she would be left with no money in circumstances where her pregnancy had only just been confirmed;
h)That the wife avoided dispute with the husband and that there was little engagement between them as to the agreement; and
i)That the husband aggressively sought that the agreement be signed before the marriage.
All of the above contentions are supported by the evidence detailed above.
Otherwise, it is proper to consider the formulation of and the final agreement itself in this context. As the plurality in Thorne (supra) said:
[56]The primary judge was correct to consider the unfair and unreasonable terms of the pre-nuptial agreement and the post-nuptial agreement as matters relevant to her consideration of whether the agreements were vitiated. Of course, the nature of agreements of this type means that their terms will usually be more favourable, and sometimes much more favourable, for one party. However, despite the usual financial imbalance in agreements of that nature, it can be an indicium of undue influence if a pre-nuptial or post-nuptial agreement is signed despite being known to be grossly unreasonable even for agreements of this nature. In other words, what the Full Court rightly recognised as the significant gap between Ms Thorne's understanding of Ms Harrison's strong advice not to sign the "entirely inappropriate" agreement and Ms Thorne's actions in signing the agreement was capable of being a circumstance relevant to whether an inference should be drawn of undue influence.
The first draft provided that:
a)That in the event that there is a child or children of the marriage the husband will purchase in the joint names of the husband and wife an appropriate home for the wife and child or children with the purchase price to be approximately $1 million and to be within a 50 kilometre radius of where the husband resides with such home to be the wife’s home until the youngest child attains 18 years of age and thereafter the husband will transfer to the wife his interest as joint tenant and that pending such transfer the husband and wife shall pay council rates in respect of the property equally.
b)That any real property acquired in the names of the parties jointly or as tenants-in-common during their relationship is to be sold and after selling costs and discharge of any mortgage:
i)there be refunded to the husband any contribution he has made to the purchase price, costs of purchase, mortgage repayments renovations and improvements together with interest to accumulate as and from the date of any such payments at seven per cent per annum calculated on a daily basis until completion of the sale;
ii)there be refunded to the wife any contribution she has made towards the purchase price, costs of purchase, mortgage payments, renovations and improvements with interest to accumulate as and from the date of any such payments seven per cent per annum calculated on a daily basis until completion of the sale;
iii)and that the remaining balance of the proceeds of sale be paid to the husband and wife in the proportion that monies refunded to each of them as provided for above bears to the total amount of such funds to be refunded.
c)That, otherwise, in the event of there being no children there be no obligation for spousal support and save for joint property (if any) the wife received nothing.
As can be seen, in the event of children, the wife was restrained in her living circumstances and her entitlement reflected nothing as to the length of the marriage or what may otherwise be significant non-financial contributions by her. In the event of no children then, save for joint property (of which there was none at the time of negotiations), the wife received nothing notwithstanding what may be a long marriage and significant contributions that would otherwise have been well recognised under the Act. As to joint property the provisions in reality meant that in the absence of financial contributions by her then her expectations would be minimal.
The second draft appears to be an attempt to ameliorate some of the above provisions and inserted a replacement provision in circumstances where the parties separated and there are no children of the marriage. In substance, the wife would be paid $20,000.00 (about $400.00 per week) for each year of cohabitation for the first 15 years of cohabitation up to 30 June 2025 being a maximum to that date of $300,000.00 (Clause 46.1). In the event that the parties separated after 30 June 2025 the agreement provided that the husband shall purchase a two-bedroom property for the wife in her name “of a comfortable design and equipped with comfortable facilities in the middle price bracket for an area similar to the area in which the parties were residing immediately prior to separation” (Clause 46.2). Otherwise, the primary terms of the earlier draft were repeated.
The wife was thus to receive for part or all of the first 15 years remuneration perhaps akin to that of a full time domestic servant. Thereafter, she was to receive a vaguely described cottage tied geographically to the last matrimonial home. There was no recognition of perhaps significant non-financial contributions. Spousal maintenance rights were again purported to be given up.
It was this second draft to which the wife’s solicitor sought amendments. The alterations requested were as to various recitals in the agreement and to various primary operative provisions. Relevantly, alterations were sought as follows:
a)(Cl 46.2) that in the event there are no children and the parties separated after 30 June 2025 the property to be purchased the “comparable in value and standard to the property the parties resided in as their principal place of residence immediately prior to separation and be a property of (the wife’s) choice”.
b)(Cl 47.1) that in the event that there are children of the marriage that the property to be purchased “be comparable in value and standard to the property the parties resided in as their principal place of residence immediately prior to separation and be a property of (the wife’s) choice. Notwithstanding same the home is to be situated in an area with a 50 kilometre radius of their former matrimonial home and unless agreed by both parties…” and (Cl 47.2) that pending transfer of such property to the wife upon the youngest child attaining 18 years of age “the husband will be solely responsible for the payment of council rates, water rates insurances and the like and the maintenance and upkeep of the property.”
c)Cl 49.4, 49.5 and 49.6) That in the event of the sale of any real property in the names of both parties that the provision for interest to be calculated on a refund of their respective contributions be deleted and that the then remaining proceeds of sale be divided equally and not in such proportions as were previously provided.
Operative provisions were agreed to or not agreed to by the husband through his solicitor as follows:
46.2 Agreed as requested, thus after 15 years providing a home of her own to the wife commensurate with the parties’ final matrimonial home and not tied geographically to same.
47.1 Not agreed, thus limiting the value of any such home and tying it geographically to the husband’s residence until the eldest child turns 18 years.
47.2 Agreed as requested, thus the husband to pay outgoings and maintenance until the property was transferred to the wife.
49.4, 49.5 and 49.6 Not agreed thus leaving the wife with the prospect of receiving little from the sale of any jointly owned property in the absence of a financial contribution from her.
The accompanying letter noted that such amendments were “acceptable to our client” and invited the return of the executed agreement. The inference is that no further amendments were to be considered.
There is circumspection as to the action of the wife in signing the agreement being a circumstance relevant to whether an inference should be drawn of undue influence or the present consideration of unconscionable conduct.
Ultimately the agreement was such that the wife’s solicitor’s “most strong advice” not to enter into the agreement in its present form as referred to above.
The plurality in Thorne (supra) said (footnote omitted):
60. In the particular context of pre-nuptial and post-nuptial agreements, some of the factors which may have prominence include the following:
(i)whether the agreement was offered on a basis that it was not subject to negotiation;
(ii)the emotional circumstances in which the agreement was entered including any explicit or implicit threat to end a marriage or to end an engagement;
(iii)whether there was any time for careful reflection;
(iv)the nature of the parties' relationship;
(v)the relative financial positions of the parties; and
(vi)the independent advice that was received and whether there was time to reflect on that advice.
Overall, the Court is comfortably satisfied that the wife was faced with no choice in light of her emotional investment in the parties’ relationship and the circumstances she found herself in but to sign the agreement. This is most starkly reflected in her doing so notwithstanding her solicitor’s advice. She was in a position of “special disadvantage”.
The husband knew of the wife’s emotional investment in their relationship, her desire for marriage and her concerns as to her security in circumstances where she was not working and expecting the parties’ first child. He sought to have the fact of the pregnancy concealed from the solicitors. He was most assertive in his demands for the agreement to be signed before their marriage. His concern in this regard is reflected in his solicitor’s correspondence. He professed his assurances as to his proposed future generous child support obligations clearly as an inducement to have the agreement signed. As such he unconscientiously took advantage of that special disadvantage of the wife.
The Court is comfortably satisfied that the husband’s conduct was unconscionable with the consequence that the agreement should be set aside and be declared non-binding. Such order will be made accordingly.
As the foundation for setting aside the agreement has been established the other grounds for relief will be considered briefly in the event that the Court is wrong as to the ground of unconscionability.

Other relief

Misrepresentation

Counsel for the wife described the wife’s grounds for relief as a “cascading foundation”.
The wife, otherwise, sought relief as to the agreement asserting misrepresentation by the husband. The wife asserts that by reason of the husband’s representation as to future financial child support arrangements and his subsequent withdrawal of such support following separation that the husband had inappropriately induced the wife to enter into the agreement.
The representation made was in the following terms:
However our client will be most generous in the payment of child support should it become necessary in the event the parties separate and there are children of the marriage. He is prepared and wishes to confirm, that not only will he pay child support in a regular periodic payment but he will also pay medical expenses, private school fees (if necessary), uniforms, books et cetera and any additional extracurricular expenses as and when same fall due.
In the event that child support is required to be addressed in the future, please ensure (sic) your client that our client confirms by this letter that he will honour the above matters and would be prepared to enter into a binding child support agreement with your client, at that time if the necessity arose.

It is clear that a remedy would lie in rescission of the agreement in the event of there being a fraudulent or innocent misrepresentation by the husband inducing the wife to enter into the agreement: Nocton v Lord Ashburn [1914] AC 932 at 955.
The husband’s representation at the time of the agreement could not be seen as such. It was a statement as to future intent indeed that for a time, was honoured.
The wife proffers no evidence that the representation was known to the husband at the time to be false. Nor that that it was one of the reasons she entered into the agreement: See Redgrave v Hurd [1881] 20 Ch D 1.
This ground of relief has not been established.

Implicit abandonment

The wife asserts that the conduct of the parties subsequent to the agreement leads to the conclusion that they had implicitly abandoned the agreement and thus it should be set aside.
In Sze Tu v Lowe [2014] NSWCA 462 the NSW Court of Appeal considered the remedy thus:
[303]Where it is plain from the conduct of parties to a contract that neither intends that the contract shall be further performed the parties will be regarded as having so conducted themselves as to abandon or abrogate the contract: DTR Nominees Pty Ltd v Mona Homes Pty Ltd [1978] HCA 12; 138 CLR 423 at 434; Summers v The Commonwealth [1918] HCA 33; 25 CLR 144 at 151-152 (Isaacs J).
[304]Whether there is abandonment or abrogation of a contract is a matter of fact to be inferred from objective assessment of the conduct of the parties: Ryder v Frohlich at [136] and the cases there cited.
[305]As McColl JA noted in Ryder v Frohlich at [137], the underlying premise of the abandonment cases is that a period of time elapses during which neither party to the contract manifests any intention to perform the contract, leading to the inference that the contract has been abandoned. Her Honour continued (at [137]) "it is clear that the question whether an 'inordinate' length of time has been allowed to elapse" is relative.
[306]The reference by McColl JA to "an 'inordinate' length of time", is taken from Fitzgerald v Masters [1956] HCA 53; 95 CLR 420 at 432. There Dixon CJ and Fullagar J considered that where neither party has attempted to perform a contract and where "an 'inordinate' length of time" has elapsed, it may be inferred that the contract has been abandoned. Their Honours (at 432) gave as an example the decision in Pearl Milco Ltd v Ivy Tannery Co Ltd (1919) 1 KB 78 at 82 (Rowlatt J). They continued:
What is really inferred in such a case is that the contract has been discharged by agreement, each party being entitled to assume from a long-continued ignoring of the contract on both sides that (in the words of Rowlatt J) 'the matter is off altogether'.
Counsel for the wife contends that the present indicia of abandonment include:
a)The lack of any reference by the parties during their marriage to the agreement regulating their financial affairs.
b)The establishment by the husband of his trust entity AA Trust with the parties as shareholders and directors of the trustee company, with the trust later acquiring property in its own right.
c)The “intermeddling” of funds particularly as to the trust borrowings guaranteed by the wife.
d)Distribution of trust income to the wife applied by the husband at his discretion.
e)The husband’s increased interest in Company L.
Yet the husband can be also seen to have retained control of finances to limit the wife’s entitlement under the agreement such as it relates to joint property.
The matters complained of cannot be seen as to abrogate or abandon the agreement and no submissions were made as to how such a conclusion could be arrived at.
This ground of relief has not been established.

Uncertainty

Otherwise, the wife contends that the agreement is void for uncertainty and thus must be set aside.
As to uncertainty Cronin J in Ruane & Bachmann-Ruane and Anor [2009] FamCA 1101 observed:
59.The certainty or completeness of an agreement is a matter of degree. The parties have to agree on all of the essential terms. (See Thornby v Goldberg [1964] HCA 41; (1964) 112 CLR 597 at 607). In a financial agreement under s 90C of the Act, certainty and completeness means that there can be no dispute about what the parties expected to happen in the event of breakdown of the relationship. It is hard to imagine any other intention here than to have each party conclude their disputes by reference only to the terms of the agreement.
60.It is possible for courts construing contracts to imply obligations relating to each step necessary to complete a particular agreement between parties (See Cavallari v Premier Refrigeration Co Pty Ltd [1952] HCA 26; (1952) 85 CLR 20 at 27) but there are other times where the complexity of the circumstances would cause a court to decline to imply the terms of a contract as for example, where there is a series of documents said to contain the terms (see Milne v Attorney-General (Tas) [1956] HCA 48; (1956) 95 CLR 460).
Counsel for the wife contends that the agreement must evidence an agreement as to its essential terms and the agreement is lacking in some respects. Yet he raises issues that appear to be not in the contemplation of the parties at the time of agreement. There is no doubt as to the “essential” or fundamental terms of the agreement. As observed by Cronin J above “It is possible for courts construing contracts to imply obligations relating to each step necessary to complete a particular agreement between parties”.
Thus this ground of relief has not been established.

Impracticability

The next ground on the cascading grounds for relief asserted by the wife is that the agreement is void for impracticability.
Counsel for the wife referred to Sanger & Sanger [2011] FamCAFC 210 where the Full Court observed:
86.As is not in doubt, the provisions of s 90K are not designed to, and do not facilitate a party escaping from what proves, or is perceived to be a “bad bargain”. The term “impracticable” is not defined in the Act. There do not appear to be any cases in which the meaning of impracticable has been discussed in the context of s 90K(1)(c). However, the meaning of “impracticability” has been considered in the context of s 79A(1)(b), which provides for the setting aside of s 79 orders on the basis of “impracticability” in substantially the same terms as s 90K(1)(c). “Impracticability” is similarly a relevant factor for reviewing maintenance agreements under s 78(8)(d) and for setting aside financial or termination agreements between de facto parties under s 90UM(1)(f).
The Full Court observed relevantly to this case that:
82.… there is a material distinction between an agreement which is unable to be put in practice, and is thus impracticable, and an agreement which, although producing a potentially different outcome to that for which a party hoped, is able to be implemented, or put into practice.
Counsel for the wife did not elucidate matters relied on to illustrate in this matter the asserted resultant impracticability or frustration of the agreement. On its face, the agreement is capable of implementation.
This ground has not been established.

Section 90K(1)(d)

The final ground asserted by the wife relies on s 90K(1)(d) that provides:
(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;
The Full Court in Fewster and Drake [2016] FamCAFC 214 considered this ground thus:
47.It is clear enough that s 90K(1)(d) follows the form of s 79A(1)(d) of the Act, which states:
(1)Where, on application by a person affected by an order made by a court under s 79 in property settlement proceedings, the court is satisfied that:
...
(d)in the circumstances that have arisen since the making of the order, being circumstances of an exceptional nature relating to the care, welfare and development of a child of the marriage, the child or, where the applicant has caring responsibility for the child (as defined in subsection (1AA)), the applicant, will suffer hardship if the court does not vary the order or set the order aside and make another order in substitution for the order...
48.There is, however, a crucial difference. Under s 79A(1)(d) the change in circumstances must be “of an exceptional nature” for the section to apply, whereas the change in circumstances under s 90K(1)(d) must be “material”. The threshold under s 90K(1)(d) would seem to be lower than that which applies to s 79A(1)(d).
….
50.…the critical words “as a result of that change”. Those words provide a necessary link between the changing circumstances and the hardship. According to the clear terms of the subsection, the hardship must result from the material change in circumstances, and not from some other cause.
As to the meaning of “material” the Full Court said:
53.In Sola Optical Australia Proprietary Limited v Mills [1987] HCA 57; (1987) 163 CLR 628 the High Court had to consider the phrase “facts material to the plaintiff’s case” that appeared in s 48 of the Limitation of Actions Act 1936 (SA). What the Court said there is relevant to the construction of the present section. The Court said at 636 - 637:
A fact is material to the plaintiff's case if it is both relevant to the issues to be proved if the plaintiff is to succeed in obtaining an award of damages sufficient to justify bringing the action and is of sufficient importance to be likely to have a bearing on the case. The Shorter Oxford English Dictionary defines the word “material”, inter alia, to mean “Of such significance as to be likely to influence the determination of a cause”. Although a definition attributed to the sixteenth century, in our opinion it provides an apt guide to the intention of the legislature in choosing to refer, without any elaboration, to “facts material to the plaintiff’s case”.
At the time of signing the agreement the wife was expecting the parties’ first child. There are now three children, one with special needs.
The Full Court in Fewster (supra) considered whether the birth of a child, of itself, engaged s 90K(1)(d):
60.The husband submitted that the birth of a child, of itself, cannot be a material change relating to the care, development and welfare of a child. Rather, he submits the material change in circumstance must be directed to the care, welfare and development of a child and not to his or her birth. This is said to be so because the ordinary expectation of married life is the birth of a child.
61.It may immediately be observed that if the birth of a child is within the ordinary realms of expectation of a marriage so is the care, welfare and development of a child.
62.The birth of a child leads inexorably to his or her care, development and welfare. We do not see why a birth cannot be a material change in circumstances for the purpose of s 90K(1)(d). Whether it in fact is such a change will depend on all of the circumstances.
63.The primary judge did not err in finding that the birth of the second child and the mother having the overwhelming care of the children physically and financially after separation constituted a material change in circumstances that had arisen since the agreement was entered into.
It would be in realm of normal expectation that both parents would share parenting obligations for their children. Such is not the case here. The birth of the parties’ three children, one with special needs, and the wife’s subsequent sole care of them in this matter is sufficient to amount to a material change in circumstances sufficient to enliven a consideration of the section.
As to “hardship” in the context of s 90K(1)(d) regard must be had to the Full Court observations in Fewster (supra):
65.It is the changed circumstances which must give rise to the hardship, and not the agreement itself. It is to be recalled that, subject to compliance with the statutory requirements, people are free to enter such binding financial agreements as they see fit. There is no statutory provision which enables a binding financial agreement to be set aside merely because it is unfair: Hoult & Hoult [2013] FamCAFC 109; (2013) FLC 93-546 at 87,283 and 87,296 - 87,298.
…
67.We turn now to the second aspect of this challenge. The concluding words of s 90K (1) (d) are “if the court does not set the agreement aside”. Logically and inevitably those words require the court to undertake some comparison between the position of the child, or the person with caring responsibility, if the agreement remains in place and the position of that child or person if the agreement is set aside. It is only by doing so that the court can place itself in a position to determine whether there will be hardship if the agreement is not set aside. The primary judge did not undertake such a comparison.
68.Finally, we accept the husband’s submission that the hardship required by the section is something more than unfairness. In In the Marriage of Whitford [1979] FamCA 3; (1979) FLC 90-612 (“Whitford”) at 78,144-78,145 the Court said that hardship is:
...akin to such concepts as hardness, severity, privation, that which is hard to bear or a substantial detriment ...
...
In ordinary parlance, hardship means something more burdensome than “any appreciable detriment'”. We consider that in subsec. 44(4) the word should have its usual, though not necessarily its most stringent, connotations.
69.Although Whitford was a case dealing with s 44(4) and applications for leave to institute property proceedings, these passages are relevant to s 90K(1)(d), as they discuss ‘hardship’ in the context of its ordinary meaning. There is nothing in the terms of s 90K that suggests a different approach should be taken.
Counsel for the wife contends that the wife has suffered hardship by reason of:
a)The wife’s sole care of the children since October 2017 and prospectively into the future.
b)One of the children having special needs.
c)The husband’s reduction in child support with his payments being now significantly less than as represented by him at the time of the agreement.
d)The wife’s financial circumstances where she is dependent on spousal maintenance of $1,000.00, some government benefits and periodic child support of about $625.00 per week for three children.
e)The clear and massive disparity in the parties’ property and financial resources.
The hardship must be suffered as a consequence of the agreement not being set aside.
The hardship if the agreement is not set aside must arise from the change of circumstances “relating to the care, welfare and development of a child of the marriage”.. The middle child has low average development and requires support for autism spectrum disorder. The wife now cares for the children without assistance from the husband. She has no respite from her childcare obligations. Previously he was to some extent engaged in parenting his children. He has remarried and has children of that new relationship. He has, it appears, turned his back on his children of the subject relationship.
Otherwise, the wife has spousal maintenance rights remaining as against the husband in periodic or lump sum form. The wife has her child support rights to seek a departure from the present assessment in appropriate circumstances. Her changed circumstances in this regard arise out of the marriage and separation.
The reality that if the agreement was set aside, the outcome of any s 79 application is “likely to be very different” to the outcome provided for in the agreement does not “establish hardship as it is correctly understood”: Fewster at [71].
Rather, the question is has the wife suffered “something more burdensome than “any appreciable detriment'”?
It is life experience that upon separating the primary obligation as to parenting will often fall upon one parent, in most cases the mother. It is also life experience that the other parent save for exigencies such as to risk etc. will play a significant if not substantial role in their child or children’s lives. Such a result imposes on the primary carer an obligation that can be regarded as “an appreciable detriment” in having to undertake a primary caring role when during cohabitation the household comprised both parents. Such a circumstance alone cannot amount to hardship in the context of s 90K(1)(d). It represents simply one of the expected exigencies of relationship breakdown.
The agreement presently provides, save for joint property as defined as to which there appears to be none, for:
a)The husband to purchase a property with sufficient bedrooms for each of the wife and children;
b)That the purchase price to be approximately $1 million;
c)For the property to be in an area similar to where the parties resided at separation and within a 50 kilometre radius of where the husband resides;
d)The property to be purchased by the parties as joint tenants;
e)The property to remain the wife’s home until the youngest child attains 18 years;
f)That after the youngest child attains 18 years the property is to be transferred to the wife’s name alone;
g)That pending transfer to the wife the husband is to pay council rates, water rates, insurances and the like and the maintenance and upkeep of the property.
The agreement sees the wife tied geographically to the husband who has no engagement with his children, she and the children are required to live in the property notwithstanding exigencies as to the children and their care, with no property of her own until the youngest child attains 18 years in 2032, and no ability to borrow against the property to meet her or the children’s needs.
Where the wife is left with all of the parenting obligations for three children, one with special needs, there has been imposed on her a hardship being something more burdensome than “any appreciable detriment'. She is obliged to do all for these children; the father has accepted no obligation for his children at all save for paying some money. She and the children are tied to the “property” until 2032 notwithstanding any exigencies as to the children that may dictate otherwise. In May 2032 and only then can the wife make any decision as to any independent living circumstances.
The wife will suffer hardship in the event that the agreement is not set aside. To hold otherwise would be to belittle her role and obligations as sole parent to her children.
This ground is made out.
The Financial Agreement is to be set aside.

A Footnote

Solicitors have a special role in the formulation of property agreements that seek to oust the jurisdiction of the court to otherwise make orders that are “just and equitable”. They provide a Certificate of Independent advice that must comply with the relevant statutory obligations. Such a Certificate can be seen as a “safeguard” in the making of such an agreement.
It is trite to say that agreements that seek to oust jurisdiction are entered into for many and varied reasons and involve a degree of bargaining and commerciality.
It must be said that the practice of solicitors in providing independent advice as to such agreements to their client and who notwithstanding their strong advice not to enter into an agreement proceed to sign the requisite certificate seems an abdication of their professional responsibility overall to the client. Such conduct in signing the Certificate mostly will shut the gate on any application to set an agreement aside.

Yet such agreements may be set aside for good grounds under s 90K of the Act. The existence of a Certificate cannot be relied on as an answer to the vitiating effect of the grounds available under s 90K, in particular, those grounds that give rise to issues of undue influence or unconscionable conduct. As was said by Nettle J in Thorne (supra):
123.It is not a sufficient response to the conclusion of unconscionable conduct to point to the fact that Ms Thorne received independent legal advice about the two agreements and chose to reject her solicitor's recommendation on each occasion. The fact that Ms Thorne was willing to sign both agreements despite being advised that they were "terrible" serves to underscore the extent of the special disadvantage under which Ms Thorne laboured, and to reinforce the conclusion that in these circumstances, which Mr Kennedy had substantially created, it was unconscientious for Mr Kennedy to procure or accept her assent.
The solicitor must surely have regard to the proper interest of the client, notwithstanding comity between solicitor and client, and consider other influences on the client to sign an agreement that are adverse to the client’s interest. It is imperative that any misgivings the solicitor has should be set out clearly in the accompanying letter of advice where the client insists of signing the agreement notwithstanding the solicitor’s advice.
Such fulsome advice may well be a relevant consideration in seeking to set the agreement aside: Thorne (supra) at [1] and [55]-[56].
In appropriate circumstances the solicitor should be prepared to say to the client that the Certificate will not be provided.

I certify that the preceding one hundred and ninety-eight (198) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Foster delivered on 26 April 2019.

Associate:

Date: 26 April 2019