Daubert & Daubert
[2024] FedCFamC2F 1065
•12 August 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Daubert & Daubert [2024] FedCFamC2F 1065
File number(s): PAC 2904 of 2023 Judgment of: JUDGE MYERS Date of judgment: 12 August 2024 Catchwords: FAMILY LAW - Property Proceedings – Threshold Hearing – Binding Financial Agreement – Binding Financial Agreement Set Aside. Legislation: Family Law Act 1975 (Cth) ss 71A, 79, 90B, 90C, 90G, Part VIII, Part VIIIA
Federal Justice System Amendment (Efficiency Measures) Act (No. 1) 2009.
Cases cited: Abrum & Abrum [2013] FamCA 897
Aon Risk Services Australia Limited v Australian National University [2009] HCA 27
Black & Black [2006] FamCA 972
Black & Black [2008] FamCAFC 7
J & J (2006) FamCA 442
Kaimal & Kaimal [2020] FamCA 971
Stanford v Stanford [2012] HCA 52
Division: Division 2 Family Law Number of paragraphs: 35 Date of last submission/s: 6 August 2024 Date of hearing: 6 August 2024 Counsel for the Applicant: Mr Steward Solicitor for the Applicant: Michael Abboud & Co The Respondent: Self-represented litigant ORDERS
PAC 2904 of 2023 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MS DAUBERT
Applicant
AND: MR DAUBERT
Respondent
ORDER MADE BY:
JUDGE MYERS
DATE OF ORDER:
6 AUGUST 2024
THE COURT ORDERS THAT:
1.The Application in a Proceeding filed 31 July 2024 is hereby dismissed and the adjournment sought by the Respondent is hereby refused.
2.The Court finds and declares the Financial Agreement between the parties dated 1 September 2012 is not binding on the parties and the Agreement is set aside.
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 a pseudonym has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).
EX-TEMPORE REASONS FOR JUDGMENT
JUDGE MYERS:
This is an ex-tempore interlocutory decision in threshold proceedings between the Applicant Wife, Ms Daubert (‘the Wife’) and the Respondent Husband, Mr Daubert (‘the Husband’).
The Wife seeks an interlocutory order as contained in her Initiating Application filed on 8 June 2023 as follows:
(1)That the court set aside the financial agreement between Mr Daubert and Ms Daubert (date unknown).
The Wife also seeks final property orders.
(1)The Husband opposes the interlocutory order sought by the wife.
These proceedings relate to whether the Financial Agreement should or should not be set aside.
On 14 May 2024 the matter was listed for hearing where Judge Dunkley made the following orders:
(1)If either party seeks to rely on an affidavit not already filed by them, then they are to file and serve a single consolidated affidavit relevant to that person’s evidence by 28 June 2024.
(2)The case is listed for hearing into by the parties on 1 as to whether or not the Binding Financial Agreement entered September 2012 is to be set aside.
(3)The case is listed for a one (1) day Final Hearing at 10.00am on 6 August 2024 before Judge Myers for that purpose.
On 27 June 2024 the Husband filed an Application in a Proceeding where he sought orders that provided:
(1)I seek to vary or set aside the existing orders made on 14 May 2024 for reasons under r 10.13 as there has been a significant change of circumstance.
The Husband’s application was listed before the Court on 22 July 2024.
On 22 July 2024 the Court made the following orders noting that the Husband failed to appear before the Court, although the Court accepts that the Husband suggests that he was on the telephone and that the Court could not hear him:
(1)Compliance with orders 1 and 4 of Orders dated 14 May 2024 is extended to 10:00am on 5 August 2024.
(2)The Court confirms the Defended Hearing listed on 6 August 2024 commencing at 10:00am, in person at the Parramatta Registry.
On 31 July 2024 the Husband filed an Application in a Proceeding seeking to set aside and vary the orders made on 14 May 2024 and 22 July 2024. The Husband caused to be filed an Affidavit where he deposed that:
6. My previous legal representative appointed [Mr C] filed a notice to cease acting in the case since 9 May 2024
7. I am unable to afford legal representation due to financial constraints and receiving very limited income and cannot afford retaining a legal representative
8. The matter involved complex legal issues related to the case involved with family court
9. I applied to the legal Aid for legal assistance as essential for proper representation of the case specialised in this area of law to provide me with legal advice and representation as necessary and preserve my rights and deliver justice
10. Recently I contacted Legal Aid Office regarding my application but they advising me that they were taking time to process the application and I am still waiting to get the legal Aid to help me with my matter.
The Court today determined the Husband’s application for an adjournment taking into account the High Court decision in Aon Risk Services Australia Limited v Australian National University [2009] HCA 27 and refused the application.
By way of background the Wife and the Husband married in 2007 and divorced in 2022.
There is one child of the marriage, X, born in 2010. He is now 14 years old.
The parties initially separated at the start of January 2012 and resumed cohabitation in September 2012.
There is no dispute that the parties executed a section 90C Financial Agreement on the 1ˢᵗ of September 2012.
At the time of the first separation the Wife had the full-time care of five children, four were from her previous marriage and the youngest was from her marriage to the Husband.
The Wife deposes that she was living alone with her five children in a rented apartment in Suburb B; that she was unemployed and was in receipt of child support from Centrelink as well as other assistance to meet her daily living expenses.
The Wife deposes that she was invited to reconcile with the Husband on or about September 2012.
The Wife advanced her argument as to why the Financial Agreement ought to be set aside.
In terms of the Certificate of Advice provided to the Wife, the certificate is defective on its face. The agreement is purported to be pursuant to section 90C of the Family Law Act 1975 (Cth) (‘the Act’), however the certificate of advice appears to be in relation to a Financial Agreement pursuant to section 90B of the Act. For the reasons that will be discussed below this issue is one that is fatal to the Husband’s position.
Part VIII of the Act prescribes that parties to a marriage have a statutory right to seek orders from the Court for a property settlement that, in all the circumstances, is just and equitable. These rights and the manner in which the Court considers what order (if any) should be made in property settlement proceedings for spouse parties are set out at section 79 of the Act. However pursuant to section 71A of the Act, Part VIII does not apply to financial matters to which a financial agreement that is binding on the parties to the agreement applies; and financial resources to which a financial agreement that is binding on the parties to the agreement applies. In effect parties may by virtue of the provisions of section 71A of the Act contract out of their statutory rights found at Part VIII to a property settlement that is just and equitable.
In Stanford v Stanford [2012] HCA 52 at [41] the High Court recognised the effect of financial agreements on the powers of the Court to make an order for a property settlement stating:
If the parties have made a financial agreement about the property of one or both of the parties that is binding under Pt VIIIA of the Act, then, subject to that Part, a Court cannot make a property settlement order under s 79.
The giving away of a statutory right to a just and equitable property settlement should not be given away easily and for that reason the Legislature have included safeguards within the Act when determining whether an agreement is to be binding.
Historically the Courts have applied a rigid interpretation of section 90G. In Black & Black
[2008] FamCAFC 7 the Full Court considered the provisions of section 90G as it then existed and overturned the first instance decision of Benjamin J (Black & Black [2006] FamCA 972 (15 September 2006)) who had heard an application to set aside a financial agreement on 15 September 2006. When considering the application and interpretation of section 90G (as it then existed) Benjamin J suggested the Courts should not require parties to adhere to strict compliance in order for an agreement to be binding stating at [110]:
The intention of Part VIIIA is to enable ordinary people to enter into financial agreements which will deal with property and spousal maintenance and avoid the necessity of Court proceeding. The agreements can be made before marriage and after marriage, whilst the relationship subsists or they can be made following the breakdown of marriage. The explanatory memorandum observes that it is the legislative intent to encourage the use of financial agreements under this Part of the Act. To enable such agreements to be binding the legislation requires that each of the parties to the agreements must have independent legal advice. If Courts require strict interpretation of the legislation then this would have the effect of making such agreements less available to the broader community. It would positively discourage the use of financial agreements and it would limit the pool of legal practitioners who are equipped and willing to draft and/or advise in relation to such agreements. Such strict and inevitably narrow construction would add to the cost of such agreements and may put the cost to prepare and advise on them outside the financial means of the general community. That is not the legislative intent. The legislation does intend that the legal advice ought to be available Australia wide through the broad church of legal practitioners, whether specialist or not, whether in major capital cities, or in the suburbs or in the regions. Courts should not make the legal practitioners and the parties cross all of the “t’s” and dot all of the “I’s” to enter into and give effect to financial agreements. The form should not defeat the substance. The Act does not create a regime of strict compliance and there is a requirement on Courts to give purpose to legislation. Accordingly, I will not be adopting a strict interpretive approach in terms of both the construction of the legislation and construction of the terms of the agreement. I will adopt the objective approach.
The Full Court comprising Faulks DCJ, Kay & Penny JJ heard the Appeal against Benjamin J’s decision on 4 June, 2007 delivering the appeal judgement on 24 January 2008 (Black & Black [2008] FamCAFC 7). The Full Court rejected Benjamin J’s objective approach and instead considered the legislation from a safeguarding of rights perspective and in doing so allowed the Husband’s appeal setting aside the agreement stating at [45]:
Recital R and Clause 29 of the agreement … dealt predominantly with advice in relation to the legal implications of the agreement and each party’s rights and obligations. These statements did not meet all the requirements set out in sub-section 90G(1)(b), particularly there was no reference to advice in relation to whether the agreement was fair or prudent. In our view, such an omission meant that the agreement did not comply with the provisions of s.90G and was not binding upon the parties. It follows that we prefer the approach taken by Collier J in J & J (above) to that taken by the Trial Judge in this case. We are of the view that strict compliance with the statutory requirements is necessary to oust the Court’s jurisdiction to make adjustive orders under s.79.
The Full Court’s strict approach to requirements at section 90G of the Act came to the attention of the Legislature who then sought to make amendments to section 90G as set out in the Federal Justice System Amendment (Efficiency Measures) Act (No. 1) 2009.
The then Attorney-General and Member for Barton, being the Hon. Justice McClelland DCJ, in his Second Reading Speech to the House of Representatives made clear the government’s response to the Full Court’s decision in Black & Black while retaining the safeguard offered by the requirement for legal advice where he stated:
The bill responds to the decision of the Full Court of the Family Court of Australia in Black v Black. The bill amends the Family Law Act in particular to limit the technical requirements that people need to meet to enter into prenuptial agreements, while still providing necessary protections to parties, such as the requirement to obtain legal advice. It will restore confidence in the binding nature and enforceability of financial and termination agreements under the Family Law Act. (House of Representatives, Second Reading Speech, Hansard, Thursday, 5 February 2009, p.575).
The amendments to section 90G contained within Federal Justice System Amendment (Efficiency Measures) Act (No. 1) 2009 became effective on 4 January, 2010.
Section 90G now reads:
(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.
The significance of the safeguard protections afforded by the requirement to obtain particular legal advice pursuant to section 90G(1)(b) has been strongly affirmed by the Full Court where in Kaimal & Kaimal [2020] FamCA 971, Alstergren CJ set out at [16] and [17] that:
…the requirement for legal advice is an important legislative safeguard. An effective binding financial agreement ousts the Court’s jurisdiction to make orders under Part VIII of the Act, allowing parties to deal with their assets without interference from the Court. Accordingly… S 90G(1)(b) evidences an unambiguous legislative requirement that, in order for an executed agreement to be binding, each party to a financial agreement must be given clear, independent legal advice specifically in respect to each of the matters mentioned therein.
A statement of the precise nature and standard of legal advice that is required pursuant to section 90G(1)(b) is found in Abrum & Abrum [2013] FamCA 897 where Aldridge J noted at [40] that:
In order to give advice about the effect of an agreement on the rights of a party,… a legal practitioner must establish what those rights are at the time the advice is provided… A party must know more than that some unknown or undefined right is being given up. He or she must have some idea, at least in general, of his or her previous entitlements or rights […] with he or she may compare the provisions of the proposed financial agreement.
The construction of the legislation at section 90G (and also 90UJ) is important. The section is precisely worded and provides an instructive standard not otherwise prescribed in the Family Law Act where an agreement is only binding “if and only if” certain conditions are met. The importance of the wording “if and only if” was considered by Collier J in J & J (2006) FamCA 442 at [19] and [20] where he set out:
[19] To my mind, the words that appear in Section 90G(1) ‘if and only if’, are words of real significance. They have a meaning. They import a requirement for a level of compliance, if the agreement is to be binding, that is clearly a standard or level above and beyond what might be described as substantial compliance. Those words ‘if and only if’ make it clear that each of the parties must ensure that that which is required to be contained and dealt with in the agreement, and the annexures to it, is in fact contained, appropriately and completely. Compliance must therefore be a full compliance, satisfying the statutory requirements.
[20] ... Clearly, the legislation intended that if this method of parties resolving their differences was to be used without any supervisory power of a Court, in a situation where parties’ rights were to be affected, then that which was to be done had to be done fully in compliance with that which the statute set out and required.
While it is accepted that Collier J’s decision in J & J was delivered prior to the Federal Justice System Amendment (Efficiency Measures) Act (No. 1) 2009 becoming effective, it should be noted that at the time of the passing of the said Act the Legislature chose not to remove or amend the wording “if and only if”. As such it is the view of the Court Collier J’s position still has currency.
The certificate given to the Wife was one that specifically stated the wife was given legal advice in respect to a financial agreement made pursuant to section 90B of the Act.
The Court does not accept that the Wife was given legal advice about the effect of her entering into a financial agreement made pursuant to section 90C of the Act and in those circumstances finds that the financial agreement is not binding having regard to section 90G where the wife was not 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.
For the reasons set out above, the Court orders that the Financial Agreement between the parties dated 1 September 2012 is not binding on the parties and the Agreement is set aside.
I certify that the preceding thirty-five (35) numbered paragraphs are a true copy of the ex Tempore Reasons for Judgment of Judge Myers. Associate:
Dated: 12 August 2024
0
6
2