Cotsis & Cotsis

Case [2021] FCCA 673

FEDERAL CIRCUIT COURT OF AUSTRALIA

Cotsis & Cotsis [2021] FCCA 673

File number(s): MLC 4963 of 2019
Judgment of: JUDGE STEWART
Date of judgment: 7 April 2021
Catchwords: FAMILY LAW - property – financial agreement – application to set aside financial agreement – alleged unconscionable conduct
Legislation:

Evidence Act 1995 (Cth), s 140

Family Law Act1975 (Cth), ss 71A, 90B, 90G, 90K, 90KA, 90K(1), 90K(1)(b), 90K(1)(e)
Cases cited:

Australian Securities and Investments Commission v Kobelt [2019] HCA 18

Bridgewater v Leahy [1998] HCA 66

Kostres & Kostres [2009] FamCAFC 222

Louth v Diprose [1992] HCA 61

Senior & Anderson [2011] FamCAFC 129

Thorne v Kennedy [2017] HCA 49
Number of paragraphs: 54
Date of hearing: 31 August & 1 September 2020
Place: Heard in Dandenong, delivered in Melbourne
Counsel for the Applicant: Mr Werner
Solicitor for the Applicant: Webb Korfiatis Family Law
Counsel for the Respondent: Mr Jackson
Solicitor for the Respondent: John Yianoulatos

ORDERS

MLC 4963 of 2019
BETWEEN:

MS COTSIS

Applicant
AND:

MR COTSIS

Respondent

ORDER MADE BY:

JUDGE STEWART

DATE OF ORDER:

7 APRIL 2021

THE COURT ORDERS THAT:

1.Pursuant to section 90K(1)(e) of the Family Law Act 1975, the Financial Agreement between the parties dated 17 January 2013 is set aside.

2.The proceedings are adjourned to 3 May 2021 at 9.45am for mention.

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

IT IS NOTED that publication of this judgment under the pseudonym Cotsis & Cotsis is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).

REASONS FOR JUDGMENT

  1. These reasons relate to the issue of whether the Financial Agreement between the Husband and the Wife dated 17 January 2013 should be set aside or whether the agreement should be upheld.

  2. In the latter part of 2012 the parties were planning to marry. Prior to living together, in 2012, the Wife discovered she was pregnant with their first child. Their relationship developed from spending a lot of time with each other at the Husband’s mother’s home in Suburb B to moving into their first independent home in rented premises in Suburb C in 2012. The parties planned an engagement party to take place in 2012. In anticipation of their marriage the parties also commenced negotiations for the preparation of a Financial Agreement in contemplation of their marriage.

  3. In the midst of their preparations in 2012 tragedy struck. At six months gestation the Wife felt no movement from their unborn child for three days. She attended hospital and undertook an ultrasound which revealed serious issues for their unborn child. The unborn child was discovered to be non-viable with no demonstrable cardiac activity. The Husband was in Country D on business and the Wife was supported by her parents, the Husband’s mother and the Husband’s brother. The following day, the Wife gave birth to the parties’ stillborn son.

  4. For the…

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Details
AGLC
Cotsis & Cotsis [2021] FCCA 673
Case
[2021] FCCA 673
Decision Date

CaseChat Overview and Summary

In the matter of *Cotsis & Cotsis*, Stewart J of the Family Court of Australia was required to determine an application to set aside a Financial Agreement made between Ms Cotsis and Mr Cotsis. The parties, who were engaged at the time of entering into the agreement, sought to define their financial rights and responsibilities during the marriage and in the event of a breakdown. The agreement stipulated that each party would retain sole ownership of their pre-existing assets and any future assets acquired individually, with jointly acquired assets to be divided equally upon separation.

The central legal issue before the Court was whether the Financial Agreement, entered into on 17 January 2013, should be set aside. This required an examination of the circumstances surrounding its creation and its compliance with the relevant provisions of the *Family Law Act 1975* (Cth), particularly section 90K(1)(e), which allows for the setting aside of such agreements in certain circumstances.

Stewart J ordered that the Financial Agreement be set aside pursuant to section 90K(1)(e) of the *Family Law Act 1975*. While the specific reasoning for this decision is not detailed in the provided text, the outcome indicates that the Court found grounds to invalidate the agreement. The proceedings were subsequently adjourned for a mention on 3 May 2021.

Orders

Orders of the court

MLC 4963 of 2019

BETWEEN:

MS COTSIS

Applicant

AND:

MR COTSIS

Respondent

ORDER MADE BY:

JUDGE STEWART

DATE OF ORDER:

7 APRIL 2021

THE COURT ORDERS THAT:

1. Pursuant to section 90K(1)(e) of the Family Law Act 1975, the Financial Agreement between the parties dated 17 January 2013 is set aside.

2. The proceedings are adjourned to 3 May 2021 at 9.45am for mention.

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

Background

Background to the litigation

The recitals to the Financial Agreement in their entirety are:-Background1. Mr Cotsis was born in 1981 and is aged 31 years.2. Ms Cotsis was born in 1984 and is aged 27 years.3. Mr Cotsis and Ms Cotsis currently live together at Suburb C in the State of Victoria.4. Mr Cotsis and Ms Cotsis propose to marry and this agreement is conditional upon the marriage taking place.5. Mr Cotsis and Ms Cotsis intend their marriage to be permanent but nevertheless wish to define their financial rights and responsibilities during the marriage and if a breakdown of the marriage occurs.6. There are no children of the relationship but Ms Cotsis is pregnant with their first child which is due in 2013.7. Neither Mr Cotsis nor Ms Cotsis have other children.8. Mr Cotsis is a labourer who earns from this source approximately $72,800.00 gross per annum.9. Ms Cotsis has ceased work pending the birth of the parties’ first child but was previously employed as a manager earning from this source approximately $40,000.00 gross per annum.Purpose of agreement10. Because of their mutual love for each other the parties want an Agreement to eliminate, as much as possible, any future impediment to their marriage which might arise from uncertainties as to their respective financial responsibilities from each other.11. Mr Cotsis and Ms Cotsis want this agreement to:11.1 promote harmony between them;11.2 reduce the possibility of litigation if they separate11.3 create certainty about their financial and legal responsibilities towards each other if they separate.12. The parties desire, to the fullest extent permitted by the law;12.1 to resolve before their marriage all possible financial claims which they might have, or later acquire, against the other party.12.2 to provide for the settlement of all property and other rights that may arise from the marriage.13. Both parties want to keep all of their current and future separate property free from any claim of the other except as expressly set out in this Agreement.14. The parties want:14.1 so far as is possible to contract out of Part VIII of the Family Law Act if they separate;14.2 to enter into a financial agreement under sec 90B of the Family Law Act setting out:14.2.1 if they separate, their property and financial resources at the date of this agreement, or at a later time, and before the dissolution of the marriage, is to be dealt with; and14.2.2 the maintenance rights of either of them if they separate.15. No other agreement is in force under sec 90B, 90C or 90D of the Family Law Act 1975.16. The parties acknowledge that they:-16.1 have been fully informed of the wealth, property, estate and income of the other and that all questions asked of the other have been satisfactorily answered;16.2 are fully aware of their respective rightsPlans17. Mr Cotsis and Ms Cotsis intend to live together at their current rental accommodation prior to their marriage in late 2012.18. Mr Cotsis through his sole efforts has developed a portfolio of assets prior to his relationship with Ms Cotsis which are still in essentially the same form at this present time. The portfolio is expected to increase in value in the future by virtue of natural growth.19. Ms Cotsis through her sole efforts has developed a portfolio of assets prior to her relationship with Mr Cotsis which are still in essentially the same form at the present time. The portfolio is expected to increase in value in the future by virtue of natural growth.20. It is the desire and intention of the parties to retain the sole ownership and control of their own individual assets and financial resources that they now own or may later separately acquire as though they were not married and free from any claim of the other party arising out of their cohabitation or material relationship under any law of any State or country.21. It is the agreement of the parties that all assets and resources accumulated by them jointly during their relationship are to be considered as joint assets. In the event of separation, any assets held in joint names that cannot be divided shall be sold, and the net proceeds shall be distributed equally between the parties.Property, liabilities and resources22. Mr Cotsis’s assets, liabilities and financial resources are set out in Schedule A (“Mr Cotsis’s Financial Portfolio”).23. Ms Cotsis’s assets, liabilities and financial resources are set out in Schedule B (“Ms Cotsis’s Financial Portfolio”).24. The parties have fully disclosed to each other the identity, nature and estimated value of their liabilities and financial resources.25. Mr Cotsis has not contributed to Ms Cotsis’s Financial Portfolio.26. Ms Cotsis has not contributed to Mr Cotsis’s Financial Portfolio.27. The parties expect that if they separate, they will each have sufficient income from their employment and separate assets to have reasonable standard of living.Separate Property28. Both parties want to protect their separate property (as defined in paragraph 29) from claims by each other if they separate save for as provided in Clause 31 herein.29. The term “Separate Property” shall mean:29.1 All property and financial resources, whether real or personal, tangible or intangible, owned by each party at the date of their marriage (it is noted that their separate “financial portfolios” as set out in the Schedule);29.2 All property later acquired by each party by gift, devise, bequest or inheritance and all property acquired in exchange for such property.30. Both parties specifically reject the concept of unintentional creation of marital property or unintentional change of separate property to marital property. All property acquired by either party after their marriage shall be separate property unless the owner in writing either transfers the property to joint tenancy or designates it as marital property. All property acquired by either party after the marriage shall be presumed to be separate property unless clear contrary positive action is taken by the parties.31. Both parties shall have the unfettered right to dispose of their separate property by gift, transfers to or by trust, or by Will during their lifetimes without interference by the other party.32. During the marriage both parties shall have the full rights to own, control and dispose of their separate property as if the marriage did not exist. If either party seeks to mortgage, sell or transfer their separate property and the consent of the other party is required by the purchaser or mortgagee, the other party will do everything reasonably necessary to complete the intended transaction.33. Both parties relinquish, release and waive their statutory rights to act as administrator or administratrix of the estate of the other, and relinquish, release and waive any statutory right to nominate or appoint any person to act as an administrator for the estate of the other.34. If the parties acquire property after the date of this Agreement and place it in both their names or enter into any written agreement or execute any legal documents to transfer the title to any separate property into both parties’ names, that property shall be marital property.35. Any written or oral reference by the parties to property as “joint” or “ours” does not create a presumption of joint ownership in property which is otherwise separate. There must be formal documentation to prove the transfer of separate property to joint ownership.36. Except as specifically provided in this Agreement, each party waives, relinquishes and releases all right, title and interest in and to any and all of the other party’s separate property.37. Both parties shall have the right to voluntarily transfer or convey to the other party and property or interest in property. No voluntary transfer or conveyance shall change in this Agreement.38. If the parties acquire property jointly during the marriage, the property shall be held by them as provided in the document conveying title or evidencing title. If the document does not specify otherwise or if there is no document, the property shall be held as a tenancy in common in proportion to their direct financial contributions. The arrangement shall not in any way be deemed a waiver or abandonment of the whole or any part of this Agreement.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.