Cusick & Cusick
[2024] FedCFamC1F 406
•25 June 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Cusick & Cusick [2024] FedCFamC1F 406
File number: MLC 5009 of 2023 Judgment of: MCGUIRE J Date of judgment: 25 June 2024 Catchwords: FAMILY LAW – PROPERTY – Binding Financial Agreement – Wife contends that Financial Agreement is non-binding pursuant to non-compliance with s 90G(1)(b) of the Family Law Act 1975 (Cth) – Alternatively that the Financial Agreement be set aside pursuant to s 90K(1)(d) and or that Financial Agreement is void, voidable or unenforceable – or that wife’s signature and execution of document was obtained by unconscionable conduct of the husband Legislation: Evidence Act 1995 (Cth) ss 48 and 140
Family Law Act 1975 (Cth) ss 90C(1) and (2), 90G(1), (1A), (1B), 90K
Cases cited: Daily & Daily (2020) 61 FR 75; [2020] FamCA 486
Hoult v Hoult (2013) FLC 93-546; [2013] FamCAFC 109
Kaimal & Kaimal [2020] FamCA 971
Parker & Parker (2012) FLC 93-499; [2012] FamCAFC 33
Wallace & Stelzer and Anor (2013) FLC 93-566; [2013] FamCAFC 199
Division: Division 1 First Instance Number of paragraphs: 83 Date of hearing: 2, 3 and 4 April 2024 Place: Melbourne Counsel for the Applicant: Mr Glezakos Solicitor for the Applicant: Elsum Family Law Counsel for the Respondent: Ms Borger Solicitor for the Respondent: M And K Lawyers Group Pty Ltd ORDERS
MLC 5009 of 2023 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS CUSICK
Applicant
AND: MR CUSICK
Respondent
ORDER MADE BY:
MCGUIRE J
DATE OF ORDER:
25 JUNE 2024
THE COURT ORDERS THAT:
1.IT IS DECLARED that the Financial Agreement signed by the husband, Mr Cusick, and the wife, Ms Cusick, on 10 April 2007 is not binding within the meaning of s 90G of the Family Law Act 1975 (Cth).
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
PART XIVB of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish an account of proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under the pseudonym of Cusick & Cusick has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
MCGUIRE J:
APPLICATIONS
In an Amended Initiating Application filed 29 August 2023 the wife seeks orders declaring as non-binding or setting aside a document executed by the parties on 10 April 2007 purporting to be a Financial Agreement (“the Financial Agreement”) under s 90 of the Family Law Act 1975 (Cth) (“the Act”).
The wife contends the Financial Agreement is not binding pursuant to s 90G(1)(b) and/or s 90G(1)(c) on the basis that she did not receive independent legal advice as required by s 90G(1)(b) or that she was not provided with a signed statement by a legal practitioner stating that the advice was provided to her.
In the alternative, should the Financial Agreement be found to be binding, then the wife seeks to have it set aside on the following grounds:
(a)that the Financial Agreement was obtained by fraud or non-disclosure of a material matter (s 90K(1)(a));
(b)that the Financial Agreement is void, voidable or unenforceable (s 90K(1)(b)); or
(c)that the wife’s signature and execution of the Financial Agreement was obtained in circumstances of unconscionable conduct by the husband.
The husband opposed the application. He seeks orders as follows:
(1)That the Financial Agreement dated 10 April 2007 be declared binding pursuant to s 90G(1) of the Act.
(2)In the alternative to order [1], the Court declare the Financial Agreement dated 10 April 2007 binding pursuant to s 90G(1A) of the Act.
(3)That the applicant's Initiating Application filed 29 August 2023 be dismissed.
BACKGROUND
The husband was born 1940 and is 84 years of age.
The wife was born 1956 and is 68 years of age.
The husband moved from Country B to Australia in 1969. He was married. His spouse died in 2005.
The husband has three adult children from his previous marriage. The wife has two adult children from her previous marriage.
In or about 2006 the parties were introduced by mutual family members.
In 2006 the husband travelled to Country B and the parties were married in Country B in 2006.
The husband returned to Australia in early 2007.
The wife and her two adult daughters moved to Australia in early 2007.
On 19 February 2007 the husband had attended upon his solicitors to give instructions for the preparation of a financial agreement pursuant to s 90C of the Act. The husband says, and it is not disputed, that the parties had previously had some discussions in Country B as to a form of agreement.
On 23 March 2007 a document purporting to be a Financial Agreement was created. The wife says she was not given a copy of an executed Financial Agreement at that time. A copy of that document is before the Court and is dated 23 March 2007. It purports to show the signatures of both parties and be witnessed. The wife’s signature is witnessed by Mr C, solicitor. This certificate of advice by the legal practitioner for the husband, Mr D, is dated 6 March 2007. The certificate of advice of the wife’s solicitor, Mr C, is dated 23 March 2007. The Schedule “A”, however, has handwritten amendments.
Relevantly, it is not argued that this document represents a Binding Financial Agreement by reasons of the amendments which chronologically must have been made after the certificate of legal advice signed by the husband’s lawyer. Such was confirmed by the evidence of Mr D himself.
A second document entitled Binding Financial Agreement in the form of a Deed made pursuant to s 90C of the Act is also before the Court. That document is shown as being executed by the husband on 10 April 2007 with his signature witnessed on the same day. That document also discloses the signature of the wife in the certificate of the legal practitioner, Mr C, dated 10 April 2007.
For the purposes of this litigation, the parties agree that the relevant document is that dated 10 April 2007.
The wife claims that she was not given a copy of this document.
The parties separated on 30 November 2022.
THE WIFE’S CONTENTIONS
The wife says that as of March and April 2007 she had a poor command of the English language, both spoken and written. The wife says that all documents required for her immigration to Australia were completed by the husband and signed by her at his request.
The wife says that she was first taken to lawyers (being the husband’s lawyers) on 23 March 2007, being shortly after her arrival in Australia, with the husband and on his advice that she “needed to sign some paperwork”.
The wife says (from her Statement of Contentions) that the Financial Agreement was executed by her on 10 April 2007 in circumstances where:
(a)the Financial Agreement was prepared by the solicitors for the husband;
(b)the parties and each of the solicitors, being Mr C for the wife and Mr D for the husband, were all present in the same room and at the same time;
(c)the wife had not previously met with, or spoken to, Mr C;
(d)the Financial Agreement was not read out to her or explained to her;
(e)the wife had an insufficient command of English to read the document or understand its content or ramifications;
(f)no interpreter was made available to the wife to read the Financial Agreement to her;
(g)the wife was not provided with any advice by Mr C prior to signing the Financial Agreement, or to the extent that any such advice was provided by Mr C, she was incapable of understanding it without an interpreter;
(h)the wife was presented with the Financial Agreement in its completed form, and had no opportunity to seek amendments thereto;
(i)the wife was not provided with a copy of the Financial Agreement after its execution; and
(j)the Financial Agreement bears no markings or text which suggest that it was read over to the wife in any other language understood by her.
THE HUSBAND’S CONTENTIONS
The husband contends that:
(a)the Financial Agreement dated 10 April 2007 is compliant with the requirements of s 90C of the Act;
(b)the requirements of s 90G of the Act have been complied with and that the Agreement is binding as evidenced by the signed certificates of advice annexed to the Financial Agreement dated 10 April 2007;
(c)to any extent that the Court may find that the advice provided to the wife was not sufficient pursuant to s 90G of the Act then the husband had no knowledge or ability to have known that the advice was deficient and in those circumstances he contends that the Court should exercise its discretion pursuant to s 90G(1A) to declare the Financial Agreement dated 10 April 2007 binding;
(d)at all times the wife had a good command of the English language;
(e)the wife does not establish that she was under any “special disadvantage” at the time of the signing of the Financial Agreement dated 10 April 2007; and
(f)he did not exert any pressure on the wife to sign the Financial Agreement dated 10 April 2007.
THE RELEVANT LAW
Section 90C(1) provides:
Financial agreements during marriage
(1) If:
(a)the parties to a marriage make a written agreement with respect to any of the matters mentioned in subsection (2); and
(aa)at the time of the making of the agreement, the parties to the marriage are not the spouse parties to any other binding agreement (whether made under this section or section 90B or 90D) with respect to any of those matters; and
(b)the agreement is expressed to be made under this section;
the agreement is a financial agreement. The parties to the marriage may make the financial agreement with one or more other people.
(2) The matters referred to in paragraph (1)(a) are the following:
(a)how, in the event of the breakdown of the marriage, all or any of the property or financial resources of either or both of the spouse parties at the time when the agreement is made, or at a later time and during the marriage, is to be dealt with;
(b)the maintenance of either of the spouse parties:
(i) during the marriage; or
(ii) after divorce; or
(iii) both during the marriage and after divorce.
Section 90G of the Act provides:
When financial agreements are binding
(1)Subject to subsection (1A), a financial agreement is binding on the parties to the agreement if, and only if:
(a)the agreement is signed by all parties; and
(b)before signing the agreement, each spouse party was provided with independent legal advice from a legal practitioner about the effect of the agreement on the rights of that party and about the advantages and disadvantages, at the time that the advice was provided, to that party of making the agreement; and
(c)either before or after signing the agreement, each spouse party was provided with a signed statement by the legal practitioner stating that the advice referred to in paragraph (b) was provided to that party (whether or not the statement is annexed to the agreement); and
(ca)a copy of the statement referred to in paragraph (c) that was provided to a spouse party is given to the other spouse party or to a legal practitioner for the other spouse party; and
(d)the agreement has not been terminated and has not been set aside by a court.
(1A) A financial agreement is binding on the parties to the agreement if:
(a)the agreement is signed by all parties; and
(b)one or more of paragraphs (1)(b), (c) and (ca) are not satisfied in relation to the agreement; and
(c)a court is satisfied that it would be unjust and inequitable if the agreement were not binding on the spouse parties to the agreement (disregarding any changes in circumstances from the time the agreement was made); and
(d)the court makes an order under subsection (1B) declaring that the agreement is binding on the parties to the agreement; and
(e)the agreement has not been terminated and has not been set aside by a court.
(1B)For the purposes of paragraph (1A)(d), a court may make an order declaring that a financial agreement is binding on the parties to the agreement, upon application (the enforcement application) by a spouse party seeking to enforce the agreement.
(1C)To avoid doubt, section 90KA applies in relation to the enforcement application.
(2)A court may make such orders for the enforcement of a financial agreement that is binding on the parties to the agreement as it thinks necessary.
Section 90K of the Act sets out the circumstances in which a court may set aside a financial agreement or terminate an agreement as follows:
(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
…
(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
…
(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
…
Section 48 of the Evidence Act 1995 (Cth) (“the Evidence Act”) provides generally for the prima facie proof of the contents of a document including a financial agreement. Notably, however, here the wife disputes the veracity of the contents and in particular, the solicitor’s certificate of advice.
Where issues of credit and disputed facts are to the fore then it is proper to note that a party making an assertion of fact carries an onus to prove that fact. The applicable standard of proof is on “on the balance of probabilities” as provided at s 140 of the Evidence Act as follows:
Civil proceedings: standard of proof
(1)In a civil proceeding, the court must find the case of a party proved if it is satisfied that the case has been proved on the balance of probabilities.
(2)Without limiting the matters that the court may take into account in deciding whether it is so satisfied, it is to take into account:
(a)the nature of the cause of action or defence; and
(b)the nature of the subject - matter of the proceeding; and
(c)the gravity of the matters alleged.
Consequently, and where the wife raises argument to s 90G(1)(b) of the Act, and again noting the provisions of s 48 of the Evidence Act, I am of the view that the solicitors certificate presents as prima facie evidence of compliance with the legal advice obligation of s 90G(1).
In dealing with this issue of the evidentiary status of the certificate, Thackray J in Hoult & Hoult[1] commented:
[97]Put another way, employing Windeyer J’s formulation in Purkess v Crittenden (supra at 171), the production of the certificate, read together with the recital, should have given rise to “an inference, a presumption of fact or a presumptio hominis” that the requisite advice had been given. The question that then should have been posed was whether the wife had adduced evidence, or elicited evidence in cross-examination, that was “sufficiently precise and definite to displace the inference” (to again quote Windeyer J at 171). The evidence required for this purpose was such as would raise “suspicions which counter-balance the presumptions”.
…
[98]… However, in my view, this fails to recognise that the production of the certificate (especially when read with the recital) had caused the evidentiary burden to pass to the wife. The inference properly to be drawn from the certificate (read with the recital) is that the advice required by s 90G had been given, even though there was no evidence of the content of that advice.
THE EVIDENCE
[1] [2013] FamCAFC 109.
THE WIFE
The wife provided a comprehensive affidavit sworn 12 March 2024. She was cross-examined at some length.
There are many and important issues of credit between the husband and the wife. Specifically, the wife says that she had a poor command of English as of her arrival in Australia in early 2007 also being the date of the purported Binding Financial Agreement. She gives evidence of soon thereafter taking courses in both written and spoken English.
The wife gives a chronology and version of events towards the signing of both the March and April documents factually different to that of the husband. In effect, she says that both parties and the solicitors met together. She says that she did not understand that she was signing a document of a financial type. She says that she received no independent legal advice as to the effect and ramifications of the document. She says that she was not provided with a copy of the document in its completed form showing certificates of legal advice prior to each party signing from separate legal practitioners.
The wife gave her evidence in a candid and an apparently genuine fashion. She did not retreat under cross-examination. As with the husband, however, her recollection must be considered against the passing of some 17 years.
Where there is a dispute as to the capacity in the English language of the wife as of March 2007, she did not adduce evidence from her two then adult daughters one of whom apparently sat for the duration of this trial with her in court. No satisfactory explanation was given for her failure to adduce this evidence where the husband adduced evidence from numerous witnesses deposing as to some considerable skill by the wife in English at or near the relevant time.
Specifically, as to the purported agreement the wife deposes:
[19]On 10 April 2007, [the husband] told me I had to sign a document with a solicitor. He said, “I need you to sign some paperwork”. He did not mention a Financial Agreement. I had assumed the paperwork was to do with the Australian Government requirements as we were married in [Country B]. [The husband] drove me to the law office of [Mr C] (“[Mr C]”), solicitor […]. [The husband] made the appointment with [Mr C] and did not tell me I could see a lawyer of my own. I did not know [Mr C] and had never met or spoken with him.
[20]When we arrived at [Mr C’s] office, I sat in a conference room with [the husband], his solicitor and with [Mr C]. We were all in the one room. [The husband] told me that the two people were both solicitors. The only person I knew was [the husband]. [The husband] and the solicitor spoke in English. I did not understand what they were saying. One of the solicitors handed a document to [the husband], who handed to me. [The husband] instructed me in [Country B language] that I need to sign the document and pointed to the places where I needed to sign. I trusted [the husband] and signed the document. I had no knowledge of what the content of the document was. [The husband] signed the same day, after me.
[21]I did not know what I was signing at the time, but now understand it was the Financial Agreement. I could not read the document and I could not speak with [Mr C] as I did not understand English. [Mr C] did not give me any advice about the document or its contents. An interpreter was not present or offered to me. I was not provided with a translated copy of the Financial Agreement. Once we signed the document, [the husband] and I left the office. The meeting was not long. I was not provided with a copy of the signed Financial Agreement after it had been signed. I did not pay [Mr C]. I assume [the husband] paid for his services.
THE HUSBAND
The husband also gave his evidence in a confident and genuine manner. Again, I consider the veracity of his evidence against the passing of some 17 years from the relevant events. He too was cross-examined at length and did not retreat in his evidence. The husband’s affidavit was sworn 19 March 2024.
The husband deposes to some prior discussions the with wife as to a Financial Agreement given that he owned a home at Suburb E in Australia that he had purchased with his late wife and that he had, or planned, a contemporaneous new Will leaving the Suburb E property to his children.
The husband deposes to some enquiries made of a solicitor in Country B during his time there but having received advice that it would be appropriate for any agreement to be made in Australia.
The husband gives a chronology of consulting his solicitor, Mr D, prior to the arrival of the wife in Australia in early 2007.
The husband deposes to discussions with the wife “after [the wife’s] arrival in Australia”. He says that she was still agreeable to signing a financial agreement.
At [32] the husband deposes:
[The wife] and I went to see the Lawyer together, and we were advised by the Lawyer that he could only represent one of us and we would both have to have a separate Lawyer represent us. Given that I had initially instructed him, it was determined, that he would represent me.
At [34] and following the husband deposes:
[34]I attended upon my Lawyer to sign the Financial Agreement on 27 March 2007. An amendment was made after signing to this Agreement to add in my [F Bank] account and amend the total. The agreement was then updated, and I then went to see the Lawyer on or about 10 April 2007 to sign a copy of the Financial Agreement.
[35][The wife] did not have a Lawyer in Australia, so I asked a Lawyer for recommendations of other lawyers that [the wife] could see. The Lawyer at [G Lawyers] gave me details of another lawyer, [Mr C], for [the wife] to obtain legal advice about the agreement.
[36][The wife] was happy to go to [Mr C’s] office, so I drove her there. [The wife] did not have an Australia license at the time. Once we arrived at [Mr C’s] office [the wife] went inside and I remained in the vehicle. I sat in the car for the duration of the appointment between [the wife] and her Lawyer. My Lawyer at [G Lawyers] had advised that I do not sit in on the meeting. My lawyer did not come with us or attend [Mr C’s] office.
[37]On the way home [the wife] told me what her Lawyer had said to her. He had told her that under the Financial Agreement, I would retain my house and other assets if we separated. He asked if she was (sic) wanted to sign the Financial Agreement and she stated that she wanted to do this.
[38][The wife] told me that the Lawyer asked her what she would do if I threw her out. The lawyer explained to her that she would need some money and he recommended to her that she get a job as she had no money from Centrelink.
[39]After an amendment was made to the Financial Agreement that was initially signed, I further attended upon my lawyer on 10 April 2007 to sign the Financial Agreement. He gave me some original versions of the document, which I provide (sic) to [the wife]. I then drove [the wife] back at her request to see [Mr C]. [The wife] went into the meeting alone. Neither my lawyer or I attended this meeting with her. I stayed in the car and waited for her.
[40]After what felt like an hour she came out with a copy of the Financial Agreement that she had signed with her Solicitor and a copy for me for my records.
[41][The wife] signed a copy of the Financial Agreement on 10 April 2007. I hereby attach a copy of this Financial Agreement …
[42]I neither received nor paid for an invoice from [Mr C’s] office.
[43]I kept a copy of the Financial Agreement. I did not provide a further copy of the Agreement dated 10 April 2007 to my Lawyers.
[44][The wife] had kept her own copy of the Financial Agreement until a few years later when she expressed concern about losing the copy of the Agreement. I offered to put it in my safety deposit box at Westpac […], which I did for her. A few years later she asked me to get her copy of the Financial Agreement from Westpac, which I did. I have not seen her copy of the Financial Agreement since that time.
There are chronological and credit issues remaining between the parties. These issues are important, if not crucial, to a number of the arguments raised by the wife and defended by the husband with reference to various subsections of s 90G(1) and s 90K(1). Again, where neither party retreated in their evidence under cross-examination, I accept that at least some of those discrepancies are due to perhaps honest but mistaken recollections due to the passing of time.
LAY WITNESSES – MS J, MS H, MR K, MS L, MR D, MS M AND MR N
The husband adduced evidence from each of the above witnesses primarily to suggest that the wife had a greater command of English as of the relevant time being March 2007 or shortly thereafter. Each witness generally gave evidence of being able to carry out conversations in English with the wife. The recollections of each of these witnesses must also be seen against the passing of some seventeen (17) years and, whilst generally creditable, it remains clear that English was not the first language of the wife and the relevant date for these purposes is in the few weeks after her arrival in Australia.
MR D
Mr D was the legal practitioner representing the husband. He provided an affidavit sworn 19 March 2024. He was at court for cross-examination.
Mr D deposes to having no independent recollection of this matter but accepts that he acted for the husband in relation to a s 90C Financial Agreement. He was able to retrieve his file from archived files.
Contrary to the wife’s evidence, Mr D deposes that he saw the husband alone at all times. He recognises his signature and concedes that he witnessed the husband’s execution of the Financial Agreement and provided the requisite certificate of legal practitioner.
Mr D deposes to there being two executed documents on his file both dated 23 March 2007. He says that both documents purport to carry the signature of the wife and of a local legal practitioner, Mr C, as witness to the wife’s signature and as providing the legal advice certification.
Mr D deposed to his standard practice being to explain to couples, if attending at a first interview, of the conflict of interest and that one of them would need to engage a separate solicitor and then continuing to interview in the absence of the one of the parties.
Mr D deposes to having no recollection of having contacted Mr C either in this matter or as a usual practice. Rather, his practice is to provide a list of solicitors for the other party’s choice.
Mr D deposes to having never sat in on any meeting with Mr C or any of his clients. Mr D says that he has no correspondence on his file from Mr C nor does he have a recollection of the return of the Financial Agreement to his office.
Mr D notes the handwritten amendments to Schedule A on the first in time Financial Agreement noting that they are not in his handwriting he notes then that he has a photocopy of a further and subsequent financial agreement signed by the parties on 10 April 2007. He says that he does not have an original or copy of that Agreement.
In cross-examination, Mr D confirmed that it would be his normal practice to make a file note if both parties originally came to see him and as to his advice for one or other of the parties to obtain independent legal advice. He confirmed that he was at no time provided with a countersigned copy of the original April 2007 Agreement.
MR C
The relevant Financial Agreement of 10 April 2007 purports to carry the signature of Mr C as providing the independent legal advice to the wife.
Mr C had attended court under subpoena on 2 April 2024. He signed an affidavit only on that day.
Mr C deposes to have been contacted on 24 February 2023 by the wife’s solicitors so as to provide a copy of his file in respect of the wife, Ms Cusick, for a financial agreement said to have been signed by her on 10 April 2007. He says he caused a search to be undertaken but could not find any record of any client by the name of Ms Cusick. He responded to the wife’s solicitors accordingly but noted that his firm’s files had been lost some years ago. He says he then received a subpoena on 1 March 2024 to give evidence at this hearing. He says that he spoke with the wife’s solicitors advising that he had no independent recollection of the wife or the matter referenced in the subpoena.
On 7 March 2024 Mr C advised the wife’s solicitors of his objection to giving evidence due presumably to his lack of independent recollection or firm records.
Mr C’s affidavit confirms that he has no recollection or record of meeting with Ms Cusick. He has no recollection or record of giving any advice to Ms Cusick. He has no recollection or record of any meeting with the husband, Mr Cusick. He has no recollection or record of acting in this matter in any capacity whatsoever. He says he has no record or recollection of receiving payment in this matter.
Mr C gave limited evidence in chief confirming the contents of his affidavit sworn just 20 minutes prior to him giving his evidence. He says that he was then given the opportunity to peruse and consider two documents being the Financial Agreements of March and April 2007. He identified and confirmed his signature appearing on those documents.
Mr C was cross-examined at some length. He firstly confirmed that he understood the nature of a certificate of legal advice in respect of the March Agreement.
A series of questions was then put to Mr C by counsel for the husband as follows together with Mr C’s responses:[2]
[2] Transcript of Proceedings dated 2 April 2024 page 3 lines 44 to 46, page 4 lines 4 to 9.
[MS BORGER]: And it would be your practice, wouldn’t it, to sign that certificate only after satisfying yourself that you had given that advice?
[MR C]:Absolutely.
[MS BORGER]: And that that advice had been understood by the client?
[MR C]: Absolutely.
…
[MS BORGER]: Again, it would be your practice, wouldn’t it, to only sign that certificate once you had satisfied yourself that you had given that advice?
[MR C]:Yes
…
[MS BORGER]: And that the advice had been understood by your client?
[MR C]:Yes. Yes.
That apparently being the end of cross-examination, the Court asked some questions of Mr C by way of clarification and firstly as to the practice of his firm keeping paper files for a period of some eight or nine years and as to whether or not Mr C had any record of any type as to the wife. He confirmed that the records had been lost or destroyed.
The Court then enquired of Mr C as to whether he had been able to identify the wife or whether anyone had asked him to identify her that day. He responded in the negative. The Court asked the wife to stand up. Mr C said that he did not recognise or recall the wife.
The Court then enquired as to the nature of Mr C’s legal practice. He responded that it is a general practice with “probably about 65 to 70 per cent conveyancing, and probably about 15 to 20 per cent of family law, and probate and wills”.[3]
[3] Transcript of Proceedings dated 2 April 2024 at page 7, lines 30 to 32.
The Court enquired as to how frequently Mr C would be requested to provide a certificate in respect of financial agreements. He responded variously as to “maybe a dozen – 10 – a dozen. Something like that. It’s not – it’s not a very … Once every couple of months… It’s not a large part of my practice”.[4]
[4] Transcript of Proceedings dated 2 April 2024 at page 7, lines 36 to 45.
The Court enquired as to whether Mr C himself draws financial agreements. He responded in the affirmative.
There followed further enquiry as to how frequently Mr C would deal with family law matters. He responded “roughly – roughly… Eight – eight to 12, 10 to 12 – something like that”.[5]
[5] Transcript of Proceedings dated 2 April 2024 at page 8, lines 15 to 16.
The Court then enquired as follows:[6]
Once every month, every – once a month, every four to six weeks. Can you tell me what the – what your requirements are if someone comes into your office for legal advice regarding a certificate for the legal advice of a document that you haven’t drawn yourself. What do you have to do?
[6] Transcript of Proceedings dated 2 April 2024 at page 8, lines 21 to 24.
Mr C responded:[7]
[7] Transcript of Proceedings dated 2 April 2024 at page 9 lines 1 to 5, 16 to 46 and page 10 lines 1 to 8.
I sit them down in my room, and I ask them whether they’ve read the document, and then I go through the document with them, and I look at the terms of the document to see whether it’s a fair and reasonable type agreement, and – and if – if I considered it to be fair and reasonable, I let them know that I’m prepared to give the advice. If I don’t think it’s fair and reasonable, then I send them away.
[THE COURT]: You send them away?
[MR C]:In terms of saying that it’s not fair and reasonable.
[THE COURT]: What if they want to do it anyway. Well, is fair and reasonable the same as just … and equitable. Are they the same things?
[MR C]:Yes. Yes. Yes. I – I’ve never had that situation, your Honour.
[THE COURT]: Well, you tell them anything else. Is there anything else you tell them. Do you tell them you don’t think it’s fair, or you do think it’s fair. Do you tell? …
[MR C]:Well, obviously, I’ve read the document, so I – I’m – I’m aware of, you know, their – their – their occupations, their ages, who’s – who’s bringing what into the relationship, if there was a – maybe a likelihood of children coming out of the relationship, depending on the ages of the parties. I would – I would touch on that. Yes. So…
[THE COURT]: Okay. Nothing else?
[MR C]:No.
[THE COURT]: Well, do you tell them what the document is?
[MR C]:Perhaps – perhaps…
[THE COURT]: Explain to them what a binding financial agreement is and what the effect of it is?
[MR C]:– Absolutely. Absolutely.
…
[THE COURT]: Okay?
[MR C]:It’s a – it’s an agreement that has been entered into between the parties.
[THE COURT]: Well, it’s a bit more than that, isn’t it?
[MR C]:Well, it’s an agreement that sets out the parties’ positions, their – their ages, and…
[THE COURT]: I’m not – I’m going to give you a lesson. I gave you the opportunity for you to tell me what you tell them, not what I would tell them, if it was me. So you sit down, you look at it, you read it, you tell them you think it’s fair, do you?
[MR C]:If I think it’s fair and… Yes. Yes.
[THE COURT]: And if it’s not fair, you send them away?
[MR C]:– Yes. I’m – I’m not going to sign off on something that isn’t fair and reasonable, and I point out if there is a particular issue that – I point out a number of things, work out the – the value of the assets that are coming in, and … what the expectations are… as far as the agreement is concerned…
[THE COURT]: Okay. And you say “If it goes to a judge, you’re likely to get $100,000 more”?
[MR C]:Well, it’s always… It’s always the $64 question.
[THE COURT]: Do you send them away if you think that, is that what you’re – I’m hearing you say?
[MR C]:If – if I don’t think it’s fair and reasonable… I will tell them I’m not going to sign up on the agreement and give them that advice. So they… They can go elsewhere unless they change the terms between the parties.
[THE COURT]: Okay?
[MR C]:There is usually another practitioner on the other side, obviously, if I’m not preparing it.
Mr C was then shown the relevant Financial Agreement and reference to the text of the legal representatives of requisite advice. The following continued between the Court and Mr C:[8]
[8] Transcript of Proceedings dated 2 April 2024 at page 10 lines 32 to 46 and page 11 line 1.
[THE COURT]: See the two sub paragraphs of what you’re supposed to have told them?
[MR C]:Yes.
[THE COURT]: One is the effect of signing the document, and the other is the disadvantages and advantages, isn’t it – advantages and disadvantages?
[MR C]:Yes. That’s what I meant by saying if it’s fair and reasonable…
[THE COURT]: Well you send them away.
[MR C]:If they don’t… want to change the document… If they don’t want to change the document, your Honour. … I’m not – you know, if I consider it’s not fair.
The discourse then relevantly continues:[9]
[9] Transcript of Proceedings dated 2 April 2024 at page 11 lines 9 to 28.
[THE COURT]: So you do about eight of these a year, and you’ve been doing it ever since the – it came into the Act, because you know what a binding…?
[MR C]:Well, yes.
[THE COURT]: … What a financial agreement is, don’t you?
[MR C]:Yes. I do, your Honour. Yes.
[THE COURT]: It means that you can, effectively, agree your way out of the provisions of section 79 of the Act, or whether it be fair or not fair, you know that, don’t you?
[MR C]:Well… It can be overturned by a judge. Yes.
[THE COURT]: Not talking about overturning it. This is – it’s just the opposite. I am saying that you – you’re aware that people can agree to reach an agreement outside of the provisions of the – of section 70 (sic) of the Family Law Act, you’re aware of that?
[MR C]:– I - Yes. Yes.
CONSIDERATION
Whilst the wife’s application is framed broadly and in the alternative and whilst there was much evidence as to the skills of the wife in the English language as of March and April 2007, in my view, the evidence as it panned out causes an initial focus on the mandatory requirement of the statute at s 90G(1)(b) as to the provision of independent legal advice and specifically as to “the effect of the agreement on the rights of that party and about the advantages and disadvantages, at the time that the advice was provided to that party of the making of the agreement” and hence as to the evidence of Mr C.
Where the effect of a Financial Agreement being binding is to oust the Court’s jurisdiction to make orders under Part VIIIA of the Act, then the requirement for independent legal advice, and the nature and effect of that advice, is a crucial legislative safeguard.[10]
[10] Parker & Parker (2012) FLC 93-499 at [208]; [2012] FamCAFC 33.
Relevantly and significantly, s 90G(1)(b) stipulates the requirement for independent legal advice separately to the requirement of the signed statement of legal advice at s 90G(1)(C). That is, evidence of the signed statement cannot of itself be intended to have constituted determinative evidence of the requirement under s 90G(1)(b).[11]
[11] Kaimal & Kaimal [2020] FamCA 971 at [18].
Where challenge is made, then the Court must be satisfied that the relevant party (the wife) receives such legal advice and whether it meets the requirements of s 90G(1)(b) specifically that advice must be as to the effect of the agreement on the rights of that party being clearly as to the rights under Part VIIIA of the Act and, secondly, as to the advantages and disadvantages of entering the agreement.
Crucially, the enquiry here is as to whether the advice was given and not necessarily as to the content of that advice.[12] Berman J in Daily & Daily[13] at [154] considered the requirements of s 90G(1)(b) in stating:
I consider that whilst the correctness of the advice may not be a relevant inquiry, if the evidence supported a finding that notwithstanding a certificate, there had either not been any advice given or that it was so cursory or only tangentially related to the agreement, that may well allow a finding that no advice was given.
[12] Wallace & Stelzer and Anor (2013) FLC 93-566; [2013] FamCAFC 199; Hoult & Hoult (2013) FLC 93-546; [2013] FamCAFC 109.
[13] (2020) 61 Fam LR 75; [2020] FamCA 486.
Factually, the wife specifically denies that she was given advice by Mr C as required by s 90G(1)(b). Mr C has neither record nor specific recollection of the wife and therefore of his advice, if any, to the wife. Mr C did, however, give evidence in general form as to his own understanding of the requirements of s 90G(1)(b). The tenor of his evidence, in my view, and on the balance of probabilities, is that he understood the requirement of the certifying legal representative to give advice as to whether the terms of the Agreement were “fair and reasonable”. Even with a deal of coaxing, he seemed oblivious to the dual requirements of advising, firstly, as to the effect of the Agreement on the rights of the party being essentially to contract out of the rights of the Part VIIIA of the Act, and secondly, as to the advantages and disadvantages of entering into the Agreement. Rather, Mr C’s evidence strongly suggests his advice being based on “fair and reasonable” where, of course, the very rationale of the making of a binding financial agreement is to allow properly informed and advised parties to contract out of what s 79 of the Act might ultimately determine as “fair and reasonable”.
Consequently, in the absence of specific independent recollection, solicitors records/notes, or any independent documentary evidence, where the wife specifically denies the receipt of advice, and where the certificate itself is not, in my view, evidence of the specificity of the advice given pursuant to s 90G(1)(b), the question for me falls on the evidence given in court by Mr C of his general practice. I can be satisfied, on the basis of that evidence, that his advice would be “cursory” at best, where I am not satisfied that Mr C displayed either an understanding of the rationale of binding financial agreements or of the specific requirements of the provision of independent legal advice.
Consequently, I do not find that the Financial Agreement complies with the provisions of s 90G(1) in being binding on the parties to that Agreement.
Counsel for the husband, in the event of the above findings, argues that the Court should, in any event, declare the Financial Agreement binding by reference to s 90G(1A)(c). That is, the husband urges the Court to exercise its discretion at s 90G(1B) to declare the Financial Agreement binding despite its non-compliance on the basis that the Court would be satisfied that it would be unjust and inequitable if the Agreement were not binding on the spouses. Specifically, counsel for the husband argues that the husband was not in any way a party to the statutory non-compliance found to sit with Mr C. The husband has continued for the past 17 years oblivious to the non-compliance. As such, a declaration of the Financial Agreement being not binding on the parties would be unjust and inequitable in all of the circumstances.
A determination of this issue requires a consideration and understanding of the very basis of the section. That is, where Part VIIIA permits parties to effectively contract out of the jurisdiction of the Court in altering property interests on a basis of “justice and equity” then mere technical errors should not be brought to play in negating such informed decisions and contracts. However, it is clear that the requirements of s 90G(1) provide fundamentals as safeguards in the exercise of contracting out of a statutory right. As such, the distinction between technical error and statutory non-compliance is a clear and important one. In this case, where I find that there has been non-compliance with the statutory requirement under s 90G(1)(b) then this could not be viewed as a “technical error” to be rectified under s 90G(1A). As such, I am not persuaded to exercise my discretion under s 90G(1B).
In conclusion where the initial focus of these Reasons is on the Court not being satisfied as to the mandatory requirement at s 90G(1)(b) for the Financial Agreement to be declared binding then it is not necessary for me to consider the other elements of the wife’s argument including the setting aside of the Financial Agreement pursuant to s 90K. That is, specifically, I am unable to find that the wife received the specific independent legal advice required by this section and it follows that I must declare that the Agreement is not binding.
I certify that the preceding eighty-three (83) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice McGuire. Associate:
Dated: 25 June 2024
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