Daily & Daily

Case [2023] FedCFamC1F 222

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA

(DIVISION 1)

Daily & Daily [2023] FedCFamC1F 222

File number(s): ADC 4606 of 2018
Judgment of: BERMAN J
Date of judgment: 31 March 2023
Catchwords:

 FAMILY LAW – FINANCIAL AGREEMENT – Where the husband seeks orders for the financial agreement to be binding on the parties – Where the wife seeks orders for the financial agreement to be set aside pursuant to s 90K(1)(d) and/or s 90K(1)(b) and/ or s 90K(1)(e) – Where agreement was entered into prior to marriage – Where the financial agreement does not provide clarity of the parties’ intention and the provisions are not capable of reasonable meaning or credible alternative interpretation – Where if the Court severed the uncertain provisions, the BFA would have no effect and purpose – Where the material terms of the financial agreement cannot be enforced and accordingly, the agreement is void for uncertainty and is set aside – Orders.

FAMILY LAW – PROPERTY SETTLEMENT – Where the interests’ of the parties are now to be considered pursuant to s 79 of the Act – Just and equitable – Where the Court finds the parties have made equal contributions – Where the parties’ legal fees are an addback – Consideration of s 75(2)(o) factors – Where the husband has expended significant funds post separation – Where the Court determines that superannuation should be dealt with separately to the non-superannuation assets – Where orders cannot be made until the determination of the damages claim.

FAMILY LAW – JURISDICTION – Accrued jurisdiction – Where the financial agreement was found not to be binding within the meaning of s 90k – Where the husband seeks damages for negligence and/ or breach of contract against the second respondent solicitors who advised him in relation to the financial agreement – Existence of a common substratum of facts and a single justiciable controversy – Where the Court has accrued jurisdiction to hear the husband’s claim – Orders.

FAMILY LAW – LIMITATIONS OF ACTIONS – Tort – Breach of contract & negligence – Consideration of whether the claim is statute barred – Consideration of when the cause of action accrued – Consideration of when the damage was first suffered – Consideration of the ‘damaged asset’ or ‘contingent loss’ argument – Consideration of Wardley Australia Ltd v Western Australia (1992) 175 CLR 514 and Burton v Thom [2009] 1 NZLR 437 – Consideration of s 48 of the Limitation of Actions Act 1958 – Consideration of how a damages claim might be brought to account in s 79 proceedings – Consideration of how the damages settlement sum should be categorised – Consideration as to the treatment of damages as property –Where the matter is listed for further submission on the question of quantum of damaged – Orders.

Legislation:

Family Law Act 1975 (Cth) ss 4(1), 75(2), 75(2)(o), 79, 79(2), 79(4), 79(4)(a), 79(4)(b), 79(4)(c), 79(4)(e), 90G, 90G(1A), 90G(1)(b), 90KA, 90K(1)(b),(d),(e),(d)

Civil Liability Act 1936 (SA) s 41

Limitation of Actions Act 1936 ss…

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Daily & Daily [2023] FedCFamC1F 222
Case
[2023] FedCFamC1F 222
Decision Date

CaseChat Overview and Summary

In the case of Daily & Daily, the husband sought orders for the financial agreement to be binding on the parties, while the wife sought orders for the financial agreement to be set aside. The agreement was entered into prior to the marriage, and the court had to determine if the agreement was void, voidable, or unenforceable. The court found that the financial agreement was not binding on the parties due to the lack of clarity in the provisions and the impossibility of severing the uncertain provisions without rendering the agreement ineffective.

The court also considered the interests of the parties pursuant to s 79 of the Act and found that the parties had made equal contributions. The court found that the husband's legal fees were an addback and considered the s 75(2)(o) factors. The court determined that superannuation should be dealt with separately to the non-superannuation assets and that orders could not be made until the determination of the damages claim.

The court had accrued jurisdiction to hear the husband's claim for damages for negligence and/or breach of contract against the second respondent solicitors who advised him in relation to the financial agreement. The court considered the limitations of actions for tort, breach of contract, and negligence and determined that the husband's claim was not statute-barred.

The court set aside the financial agreement entered into between the parties dated 21 July 2005 and listed the matter for further submissions on the question of the quantum of damages. The form of the order is subject to the entry in the Court’s records, and any minor typographical or grammatical errors may be reviewed and rectified. This copy of the Court’s Reasons for judgment may be subject to review to remedy such errors or to record a variation to the order. It is important to note that publishing proceedings that identify persons, associated persons, or witnesses involved in family law proceedings is an offence under s 121 of the Family Law Act 1975 (Cth), except in very limited circumstances.

Orders

Orders of the court

ADC 4606 of 2018

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)

BETWEEN:

MR DAILY

Applicant

AND:

MS DAILY

First Respondent

R LAWYERS

Second Respondent

ORDER MADE BY:

BERMAN J

DATE OF ORDER:

31 MARCH 2023

THE COURT ORDERS THAT:

1. Pursuant to s 90K(1)(d) and/or s 90KA of the Family Law Act 1975 (Cth), the financial agreement entered into between the parties dated 21 July 2005 be set aside.

2. The matter be listed for further submissions on the question of the quantum of damages on a date to be determined in consultation with the parties.

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

Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).

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

Background

Background to the litigation

If the claim for hardship fails and the financial agreement is binding on the parties, there would be no utility in the action as between the husband and the second respondents.BACKGROUND AND CHRONOLOGY The husband and wife met in 1996 and commenced cohabitation in 1997. The parties moved to South Australia in early 1999 whereupon they separated. The parties recommenced their relationship in late 1999 (as asserted by the wife) or in late 2001 (as considered by the husband). During their separation, the husband purchased a property in J Street, Suburb H and in late 2001, the wife purchased a property in K Street, Suburb H. The parties lived in the K Street property until mid-2003 and then moved to the husband’s J Street property until it was sold in early 2004. The parties then purchased a property in L Street, Suburb M. Following extensive renovations to the L Street property, it was sold in late 2005 with the parties agreeing to use the net proceeds of sale to purchase what was then the former matrimonial home in N Street, Suburb P in late 2005. It is uncontroversial that the parties had discussed a marriage and in those circumstances, the husband sought advice from Ms Q (“Ms Q”), a solicitor employed by the second respondent, to prepare a Binding Financial Agreement (“BFA”). The apparent intention of the husband, in anticipation of a possible marriage in 2003, was to enter into an agreement such that each party would retain their separate property, equally share jointly acquired property and that there be no spousal maintenance payable by one to the other. It is uncontroversial that the husband’s instructions resulted in a first and second draft of a document titled “Deed of Financial Agreement”. Following further amendments made by the husband, the agreement was signed by him on 11 November 2002 and whilst initially not accepted by the wife, the husband asserts that the wife was then given a copy of the signed amended document. The wife did not sign the first BFA and the husband concedes that his next contact with Ms Q was on 24 May 2005 when he requested that she send him a copy of the draft agreement that she had prepared in 2002/2003. There is some contention between the parties as to the extent of discussions between them concerning the husband’s requirement that marriage was conditional on the parties entering into a financial agreement that would be binding on them. I found that on 27 June 2005, it was likely that the wife contacted the second respondents and requested a copy of the unsigned and incomplete document referred to as “the first BFA”. The document was then taken by the wife to Ms S (“Ms S”), a solicitor employed by T Lawyers. The wife was advised that there were errors and omissions in the first BFA and that she should not sign it. Ms S was instructed to redraft the document referred to as “the second BFA” which was then provided to the husband and eventually by him, to Ms Q, on or about 9 July 2005.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

The second respondents filed a Response to Initiating Application on 13 December 2021, seeking the following orders:-1.In the event that this Honourable Court finds that the financial agreement between the [husband] and the [wife] on 21 July 2005 is not binding on the parties, a declaration that had the financial agreement been binding, this Honourable Court would have set aside the financial agreement pursuant to section 90K(1)(d) of the Family Law Act 1975 (Cth).2. That the [husband]’s claim against the Second Respondent is statue barred.3.That the [husband]’s Statement of Claim against the Second Respondent annexed to the [husband]’s Further Amended Initiating Application and marked with the letter “C” be dismissed.REASONS FOR JUDGMENT DELIVERED 17 JUNE 2020 Following a final hearing heard between 27 April 2020 to 1 May 2020, judgment was delivered on 17 June 2020 (“the 2020 judgment”). The proceedings were bifurcated and the only aspect for consideration was the status of a financial agreement entered into by the husband and the wife dated 21 July 2005. Consistent with the position promoted by the parties in the current tranche of the proceedings, the wife sought that the financial agreement entered into between the parties dated 21 July 2005 be set aside whereas the husband sought orders that the agreement entered into between the parties be enforced as an order of the Court. At [193] of the 2020 judgment I found as follows:-In circumstances where I cannot be satisfied that the wife received the advice as required under s 90G(1)(b) of the Act, there has not been compliance with the section and subject to a consideration of the provisions of s 90G(1A) of the Act I have determined that the agreement is not binding on the parties. For the reasons that appear at [194] to [220] of the 2020 judgment, I found that by application of the provisions of s 90G(1A) of the Act, it would be unjust and inequitable if the agreement was not binding. The wife then argued that pursuant to s 90K(1)(b),(d) and (e) of the Act, the financial agreement is void, voidable or unenforceable and that it be set aside. I did not find that the financial agreement should be set aside having regard to the common law and equitable principles, misrepresentation, undue influence, mistake, duress or unconscionable conduct. I did however consider there was merit in the wife’s further claim pursuant to s 90K(1)(d) of the Act, which states 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 (as defined in subsection (2)), a party to the agreement will suffer hardship if the court does not set the agreement aside; or In summary, in the 2020 judgment I found that:-(1)Since making the agreement, there had been a material change in the circumstances of a child of the parties;(2)That as a result of the material change, either a child or a person who has caring responsibilities for a child, will suffer hardship if the Court does not set the agreement aside; and(3)If the agreement is set aside, the Court may make such orders as it considers just and equitable for the purpose of preserving or adjusting the rights of persons who are parties to the financial agreement and any other interested persons.

Ratio Decidendi

Legal Principle Established

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