DELAHEY & GARRA-MARSH
[2015] FCCA 84
•29 January 2015
FEDERAL CIRCUIT COURT OF AUSTRALIA
| DELAHEY & GARRA-MARSH | [2015] FCCA 84 |
| Catchwords: FAMILY LAW – Maintenance – spousal maintenance – binding financial agreement relating to spousal maintenance – application for declaration that binding financial agreement is void – application for declaration that financial agreement is of no force and effect – application to set aside binding financial agreement – whether agreement signed under duress – where agreement held not to be void, voidable or unenforceable – where no unconscionable conduct established – where no fraud established – where agreement not set aside. CHILD SUPPORT – Binding child support agreement – application for declaration that binding child support agreement is void – application for declaration that binding child support agreement is of no force and effect – application to set aside binding child support agreement – whether fraud or a failure to disclose material information – whether undue influence or duress – whether unconscionable or other conduct – whether exceptional circumstances relating to a party or a child – whether a party or a child will suffer hardship if the agreement is not set aside – application for lump sum child support – application for departure from administrative assessment of child support – where binding child support agreement not set aside. WORDS AND PHRASES – “exceptional circumstances” – “material change in circumstances” – whether “exceptional circumstances that have arisen” – imposes a higher threshold to establish than “material change in circumstances”. |
| Legislation: Child Support (Assessment) Act 1989 (Cth), ss.24, 25, 80C, 80D, 81, 82, 83, 84, 117, 123, 136 Family Law Act 1975 (Cth), ss.71A, 79, 90C, 90D, 90E, 90G, 90K |
| Cases cited: Black & Black [2008] FamCAFC 7; (2008) 38 Fam LR 503; FLC 93-357 Cameron & Cameron (1988) 12 Fam LR 265; FLC 91-946 Commercial Bank of Australia v Amadio [1983] HCA 14; (1983) 151 CLR 447; 46 ALR 402 Delahey & Garra-Marsh [2014] FCCA 499 Garra-Marsh & Garra-Marsh [2012] FMCAfam 277 Garra-Marsh & Garra-Marsh (No.2) [2012] FMCAfam 1135 Garra-Marsh & Garra-Marsh (No. 3) [2012] FMCAfam 1144 Kostres & Kostres [2009] FamCAFC 222; (2009) 42 Fam LR 336; FLC 93-420 |
| Applicant: | MS DELAHEY |
| Respondent: | MR GARRA-MARSH |
| File Number: | SYC 1541 of 2009 |
| Judgment of: | Judge Scarlett |
| Hearing dates: | 13-14 March 2014 |
| Date of Last Submission: | 14 March 2014 |
| Delivered at: | Sydney |
| Delivered on: | 29 January 2015 |
REPRESENTATION
| Applicant: | In person |
| Counsel for the Respondent: | Mr Levy |
| Solicitors for the Respondent: | Abrams Turner Whelan Family Lawyers (but now Pigdon Norgate Family Lawyers) |
ORDERS
The applications to set aside the binding financial support agreement made between the parties on 17 April 2009, the binding child support agreement made between the parties on 17 April 2009 and the binding financial agreement between the parties on 7 August 2009 contained in the Amended Response filed on 10 December 2012 are all dismissed.
The application for lump sum child support contained in the Amended Response filed on 10 December 2012 is dismissed.
The application for a departure from administrative assessment of child support contained in the Amended Response filed on 10 December 2012 is dismissed.
The application for an order for adjustment of property interests between the parties under the provisions of section 79 of the Family Law Act 1975 is dismissed.
All other Applications are dismissed.
If either party seeks an order for costs, that party must file and serve an Application in a Case and an affidavit in support setting out the amount of costs sought and the basis upon which those costs are claimed within six (6) weeks of the date of these Orders.
IT IS NOTED that publication of this judgment under the pseudonym Delahey & Garra-Marsh is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT SYDNEY |
SYC 1541 of 2009
| MS DELAHEY |
Applicant
And
| MR GARRA-MARSH |
Respondent
REASONS FOR JUDGMENT
Application
This is an Application by the (now) Applicant, the former wife of the (now) Respondent, to declare void and set aside two Binding Financial Agreements and a Child Support Agreement entered into by the parties and for orders by way of lump sum child support and property settlement in a sum representing 40% of the net property of the parties.
The Respondent seeks dismissal of the Application with costs.
Background
The Applicant was born on (omitted) 1977.
The Respondent was born on (omitted) 1967.
The parties commenced living together in the United Kingdom in either (omitted) 2004 (on the Applicant’s account) or (omitted) 2005 (on the Respondent’s account).
The parties were married on (omitted) 2006 in Sydney.
There is one child of the marriage, X, who was born on (omitted) 2007.
The parties separated on 5th March 2008. The Applicant brought the child to Australia and they have lived in Australia ever since. The Respondent has remained living in the United Kingdom.
On 17th April 2009 the parties entered into a Binding Child Support Agreement and a Financial Agreement relating to spousal maintenance.
The parties were divorced by Order of this Court on 5th May 2009.
On 7th August 2009 the parties entered into a Financial Agreement resolving the property issues between them.
The Respondent remarried on (omitted) 2010.
Procedural History
The Respondent Husband commenced parenting proceedings in this Court on 2nd September 2011.
The Applicant wife filed a Response on 17th February 2012 in which she not only opposed the Application for parenting orders but sought an order in these terms:
I seek permission/leave of the court to review financial support and settlement/s.
On 16th March 2012 the Court made interim parenting Orders.[1]
[1] Garra-Marsh & Garra-Marsh [2012] FMCAfam 277
On 12th July 2012 the Applicant filed an Application in a Case seeking interim orders varying the arrangements for spousal maintenance and child support. She also sought order for a lump sum of $100,000.00 spousal maintenance and a lump sum of $50,000.00 by way of a variation of the earlier child support order.
That Application was heard on 13th August 2012. At the hearing, the Applicant made an oral application to vary the amounts sought so as to provide that she sought a lump sum of $300,000.00 by way of spousal maintenance and a lump sum of $200,000.00 by way of child support.
The Court made final parenting Orders on 24th October 2012.[2]
[2] Garra-Marsh & Garra-Marsh (No.2) [2012] FMCAfam 1135
In a separate decision handed down on 24th October 2012,[3] I considered the Financial Agreement between the parties dated 17th April 2009 relating to spouse maintenance and the Child Support Agreement entered into the parties on that same date. Whilst the parties also entered into a Financial Agreement on 7th August 2009, this agreement was not immediately relevant to the Application in a Case and there was no need to consider it further.
[3] Garra-Marsh & Garra-Marsh (No.3) [2012] FMCAfam 1144
In respect of the Financial Agreement dated 17th April 2009, I made the following findings:
29.An examination of the Agreement shows that it complies with s. 90E of the Act as provided by sub-paragraphs 4(a) and (d).
30.The Agreement appears to have been signed by both parties. Their signatures appear to be essentially similar to the signatures of the parties on their affidavits filed in this proceeding. Part of the Agreement contains Certificates for the purposes of section 90G signed by the parties’ solicitors, Ms Gathercole and Ms Morris. On its face, the Agreement shows that the parties received independent legal advice.
31.The Agreement has not been terminated or set aside by a Court. True it is that the Applicant seeks a final order setting the Agreement aside, but no such order has yet been made.
32.The Agreement appears to comply with the requirements of Subsection 90G(1). On the evidence, therefore, it is a Binding Financial Agreement within the meaning of the Act.
33. It follows that the Court has no jurisdiction to make an Order for spousal maintenance because the jurisdiction of the Court has been ousted by the Binding Financial Agreement. Consequently, that part of the Application in a Case must fail for want of jurisdiction.[4]
[4] Ibid at [29]-[33]
I then considered the Child Support Agreement made between the parties on 17th April 2009 and held:
50.The agreement complies with the requirements for it to be a child support agreement as set out in s.81[5] in that:
[5] i.e. Child Support (Assessment) Act 1989 (Cth), s.81 at [50]-[51]
(a)It is made in relation to a child in relation to whom an application[for] administrative assessment [is] entitled to be made under s.24 of the Act, in that the child X was, on the day on which the agreement was entered into, namely 17th April 2009:
i) an eligible child;
ii) under 18 years of age, having been born on (omitted) 2007;
iii) not a member of a couple;
iv) present in Australia on the date of the Agreement; and
v) an Australian citizen.
b)It is made between the parents of the child as provided by s.25;
c)It contains a provision under which one party is to pay child support for the child to the other party in the form of periodic amounts (s.84(1)(a)).
51.What has to be decided is whether the child support agreement is binding on the parties under s.80C.[6]
[6] Garra-Marsh & Garra-Marsh (No.3) [2012] FMCAfam 1144 at
After a further consideration of the Agreement I held at [58]-[59]:
…I am satisfied that there has been strict compliance with the legislative requirements and the Agreement is a Binding Child Support agreement under s.80C of the Child Support (Assessment) Act.
59.Consequently, as the agreement deals with the question of child support between the parties, the Court has no jurisdiction to entertain the Application in a Case seeking provision of interim lump sum child support. The Application is therefore incompetent.[7]
[7] Ibid at [58]-[59]
As the parenting proceedings between the parties were finalised that same day, the only proceeding left on foot was the Wife’s Application to set aside the Financial Agreements and the Child Support Agreement. Accordingly, I directed that the Wife should henceforth be the Applicant.
I made the following orders:
(1)The Application in a Case filed on 12 July 2012 is dismissed.
(2)The Respondent is to file and serve an affidavit particularising the costs and disbursements sought in connection with the Application for costs filed on 2 August 2012.
(3)Within six (6) weeks from the date of these Orders the Applicant Ms Delahey is to file and serve an Amended Application for Final Orders fully particularising the legislative bases upon which she relies in seeking to set aside all or any of the following:
(a)Binding Financial Agreement entered into between the parties on 17 April 2009;
(b)Binding Child Support Agreement entered into between the parties on 17 April 2009; and
(c)Binding Financial Agreement entered into between the parties on 7 August 2009.
(4) Within six (6) weeks of the date of these orders the Applicant Ms Delahey is to file and serve an affidavit upon which she seeks to rely on the final hearing of the Application.
(5)Within six (6) weeks after the service upon him of the Amended Application and affidavit referred to in Orders (3) and (4) above the Respondent Mr Garra-Marsh is to file and serve an Amended Response and an affidavit setting out the facts upon which he seeks to rely.
(6)All affidavits filed in this proceeding must comply with the requirements of Rule 15.25 in that they must be divided into paragraphs numbered consecutively with each paragraph being as far as possible confined to a distinct part of the subject of the affidavit.
(7)The Application will be adjourned to a date to be fixed by the Court for further mention.
The Application was adjourned to 29th January 2013 for mention.
The Applicant, who had previously been self-represented, obtained legal representation from the firm of Turner Freeman Lawyers, who filed and served an Amended Response on 10th December 2012.
On 6th May 2013 the parties were ordered to attend a Conciliation Conference with a Registrar, which took place on 12th July 2013. No agreement was reached at the Conference.
The Applicant’s solicitors filed a Notice of Intention to Withdraw as Lawyer on 13th May 2013.
On 15th July 2013, after the Conciliation Conference had been held, the Application was set down for final hearing on 13th and 14th March 2014.
The hearing
The Applicant has previously referred to herself as Ms Garra-Marsh but has now chosen to refer to herself as Ms Delahey. She will be referred to by that name from now on.
The Respondent relied on the following documents:
a)his affidavit of 3rd March 2014;
b)the affidavits of his current wife, Ms J, of 24th May 2012 and 11 March 2014.
By comparison, the Applicant sought to rely on no fewer than 16 affidavits, dated from 17th February 2012 to 12th March 2014, as well as a Financial Statement dated 11th July 2012.
At the hearing, Counsel for the Respondent, Mr Levy, objected to these affidavits on the basis inadmissibility, prolixity and non-compliance with the Court’s Rules. The hearing of the objections took the entire first hearing day.
Due to the plethora of affidavits and the number of objections, and the effect of a decision about the admissibility of the material, I made the decision to deliver a separate judgment before the hearing proceeded the following day (Delahey & Garra- Marsh[8]). The effect of that decision was that the affidavits of the Applicant made on the following dates were held to be inadmissible in their entirety:
[8] [2014] FCCA 499
a)1st May 2012;
b)9th May 2012;
c)18th May 2012;
d)19th June 2012;
e)11th July 2012;
f)23rd July 2012;
g)2nd August 2012;
h)7th August 2012;
i)20th August 2012;
j)21st August 2012;
k)4th September 2012; and
l)5th October 2012.
In respect of the Applicant’s affidavits of 17th February 2012, 19th April 2012 , 4th March 2014 and 12th March 2014, the following Orders were made:
(1)The affidavit of the Applicant affirmed on 17 February 2012 is inadmissible save and except for:
(a)the first three paragraphs on the third page of the affidavit; and
(b)the paragraph numbered 56 on the forty-first page of the affidavit, commencing with the words “At no point” and ending with the words “remaining undisclosed” on the second line of the forty-second page.
(2)Paged 1 to 15 inclusive of the affidavit of the Applicant affirmed on 19 April 2012 are inadmissible.
(3)Pages 19 to 25 inclusive of the above affidavit are inadmissible, save and except for the final two paragraphs on page 25.
(4) Pages 33 to 35 of the above affidavit are inadmissible.
…
(17)The affidavit of the Applicant of 4 March 2014 is inadmissible as to the following paragraphs:
(a) [51] to [113] inclusive;
(b) [154] to [162] inclusive; and
(c) [169] to [197] inclusive.
(18)Paragraphs [114] to [122] and [163] to [174] of the affidavit of 4 March 2014 are scandalous and struck out under Rule 15.29.
(19) The affidavit of the Applicant of 12 March 2014 is inadmissible as to the following paragraphs:
(a) [1] to [23] inclusive; and
(b) [63] to [70] inclusive.
The Applicant’s Financial Statement of 12th July 2012 was held to be inadmissible.
The Applicant, the Respondent and the Respondent’s current wife all gave oral evidence.
Orders sought
The Orders sought by the Applicant are set out in the Amended Response filed by her then solicitors, Turner Freeman Lawyers, on 10th December 2012. The Orders sought are:
1.That the document purporting to be a Binding Financial [Agreement] between the parties dated 7 August 2009 be declared void.
2.That the document purporting to be a Binding Financial Agreement between the parties dated 7 August 2009 be declared as having no force and effect.
3.That the document purporting to be a Binding Financial [Agreement] between the parties dated 7 August 2009 be set aside.
4.That the document purporting to be a Binding Financial Agreement between the parties dated 17 April 2009 be declared void.
5.That the document purporting to be a Binding Financial Agreement between the parties dated 17 April 2009 be declared as having no force and effect.
6.That the document purporting to be a Binding Financial Agreement between the parties dated 17 April 2009 be set aside.
7.That the document purporting to be a Child Support Agreement between the parties dated 17 April 2009 be declared void.
8.That the document purporting to be a Child Support Agreement between the parties dated 17 April 2009 be declared as having no force and effect.
9.That the document purporting to be a Child Support Agreement between the parties dated 17 April 2009 be set aside.
10.That pursuant to s. 123(b) of the Child Support (Assessment) Act 1989, the applicant[9] pay to the respondent[10] the sum of $580,000 by way of lump sum child support with such sum to be credited against 100% of any amounts payable by the applicant under any administrative assessment made pursuant to the Child Support (Assessment) Act.
[9] Now the Respondent
[10] Now the Applicant
11.That in the alternative to Order 10, and consequent upon Orders 7, 8 and 9, hereof –
(i)pursuant to s. 117 of the Child Support (Assessment) Act 1989, there be a departure order from administrative assessment such that from 1 January 2013 the periodic rate of child support payable by the applicant to the respondent for the child X born (omitted) 2007 be varied by setting the annual rate of child support at $44,500 per year payable weekly, such sum to be adjusted on 1 July 2013 and on 1 July each year thereafter in accordance with the Consumer Price Index (All Groups) Sydney.
(ii)in addition to the child support prescribed by Order 11(1), the applicant pay to the respondent for the said child, the whole of the school fees, and in addition, uniforms, books, stationery, excursions and extra and co-curricular costs for the said child for her attendance at primary and secondary school;
(iii)in addition to the child support prescribed by Order 11(i) and (ii), the applicant privately insure the said child for hospital, medical and extras cover at the top rate with a health fund of his choosing as agreed by the respondent, and pay all necessary premiums thereof;
(iv)in addition to the child support prescribed by Order 11(i), (ii) and (iii), the applicant pay all medical, dental and orthodontic bills in respect of the said child which are not otherwise covered by Medicare or the private health insurance cover.
12.That by way of adjustment of property interests pursuant to s.79 of the Family Law Act 1975, the applicant pay to the respondent a sum representing 40% of the net property of the parties.
13.That the respondent have leave to further amend this Response upon the applicant making a full and frank financial disclosure pursuant to Rule 24.03 of the Federal Magistrates Court Rules 2001.[11]
14.That the applicant pay the respondent’s legal costs of and incidental to these proceedings.
[11] Now called the Federal Circuit Court Rules 2001
Whilst it was the case from the orders of 24th October 2012 that the party who was previously the Respondent in the parenting proceedings became the Applicant in the property, maintenance and child support proceedings, this information was apparently not conveyed to the Applicant’s then solicitor. However, the meaning is clear.
The Respondent seeks that the Applicant’s Application, as contained in her Amended Response, should be dismissed with costs.
Evidence
There was no affidavit filed in support of the Amended Response of 10th December 2012, but the Applicant had already filed a number of affidavits and filed several further affidavits after the Amended Response had been filed, right up to two days before the final hearing.
The Applicant’s evidence in respect of the three documents, as contained in her affidavits of 17th February and 19th April 2012, and 4th March and 12th March 2014, appears to go to her claims that:
a)She signed the documents under duress; and
b)The Respondent failed to make a full and frank disclosure of his financial situation.
The Applicant deposed in her affidavit of 17th February 2012 that in 2009 prior to her entering into those agreements she was in dire financial straits:
At this stage X[12] and I didn’t possess adequate white goods in our one bedroom apartment in Sydney and Mr Garra-Marsh was perfectly aware of our financial hardship; we had no washing machine and had only a desktop size refrigerator, which I used predominantly to store X’s food. I was effectively signing the financial agreement and child support agreement executed in 2009, under duress, having been told by my then legal representatives, that if I didn’t sign/agree to it before Mr Garra-Marsh returned to the UK, then I wasn’t likely to get anything at all.[13]
[12] The parties’ daughter X
[13] Affidavit of Ms Garra-Marsh (now Ms Delahey) 17.2.2012 at paragraph [1] (unnumbered)
The Applicant went on to state in her affidavit:
At no point since our separation, has Mr Garra-Marsh given full and frank financial disclosure. In response to my recent application to the UK courts, Mr Garra-Marsh communicated through his lawyers to the effect that he was unwilling to complete part E – financial disclosure. Mr Garra-Marsh also refused to turn up to court in the UK for our scheduled hearing date on the 14th November 2011…He also lied about the extent of his property investments as well as transferring significant sums of money out of his UK bank account, prior to “declaring” the content of his bank held assets. He did not reveal the destination of these afore mentioned money transfers. These have continued to remain undisclosed.[14]
[14] Affidavit of Ms Delahey 17.2.2012 at [56]
The subsequent paragraphs of the affidavit were ruled inadmissible.
In her affidavit of 19th April 2012, the Applicant set out her view of the events of April 2009 when a mediation took place that led to the preparation and signing of the Financial Agreement relating to spousal maintenance and the Child Support Agreement, both of which were signed on 17th April 2009. The Applicant deposed:
During this conference, which was mediated by Mr I, Mr Garra-Marsh was represented by Ms Gathercole and I was represented by Michael Conley Lawyers. Both Ms L Morris and Michael Conley were in attendance at the mediation (Ms Morris witnessed/signed the agreement).
…
A number of significant transactions were left unexplained and Mr Garra-Marsh was unwilling to elaborate further on his financial affairs…
It became so clear that Mr Garra-Marsh was unwilling to negotiate beyond a financial figure of his choosing, that Michael Conley, said to me, “Look, if you don’t agree to this, he won’t give you anything – and you can’t afford to take him to court in the UK.”
I was dismayed to realise that Mr Garra-Marsh would be able to assume such power, and in the absence of full and frank disclosure regarding his own affairs/status. Mr Garra-Marsh had been requested by my lawyers to provide full disclosure before the mediation. The limited financial disclosure that Mr Garra-Marsh did produce, was unconvincing to me. At the time, however, I did not then as yet possess the information on his financial/marital/family affairs, that I do now.
…
Mr Garra-Marsh’s personal status had changed dramatically since our separation, due to the new partner and child (who was born only a few months after this mediation). The financial implications of his union with this partner, have remained undisclosed. The date of the commencement of their relationship have remained undisclosed. The ongoing financial arrangement between Mr Garra-Marsh and Ms J, as their relationship progressed to de Facto and then legally married, have remained undisclosed. The impact of Ms J’s own income/s on Mr Garra-Marsh’s cash flow/greater financial picture, remains to date undisclosed.[15]
[15] Affidavit of Ms Delahey 19.4.2012 pages 16-18 (paragraphs unnumbered)
The Applicant also stated in her affidavit that when she and the Respondent purchased the former matrimonial home at (omitted), United Kingdom, the Respondent told her that they only way they could afford to do so was to sell the property in which they were living at (omitted), United Kingdom. She stated that he told her that a man called Mr R had agreed to purchase the (omitted), United Kingdom property for 460,000 pounds “and that this purchase would finalise on 1st August 2006”. However, she went on to state that she subsequently found out that the Respondent “did not sell (omitted) United Kingdom until precisely a year later than 1st August 2006 – on 1st August 2007 (see annexure marked R) and I do not know who he sold it to or how any transaction on that asset was carried out.”[16]
[16] Ibid pages 25 and 26 (paragraphs unnumbered)
Annexures “Q” and “R” to the Applicant’s affidavit are copies of printouts from a site called “(omitted)” showing estimated values of the properties at (omitted) and (omitted). Annexure “S” refers to (omitted) and shows previous sales, including “sold price 675000 (pounds) 01 Aug 06”. Annexure “R” refers to (omitted) and shows previous sales, including “sold price 460,000 (pounds) 01 Aug 07”.
The Applicant relies on this information to make this claim:
So, if Mr Garra-Marsh didn’t need the money from (omitted) to purchase (omitted) – he’s used/retained not only the sum of 460,000 pounds from whatever sale he completed on it on 1st August 2007, but also secretly pocketed any rental income Mr R paid him during the 12 months in between - if in fact Mr R was a (residential or commercial) tenant at all.[17]
[17] Ibid page 27
The Applicant goes on to depose that a company called (omitted) Ltd, of which Mr R was a director, was registered to the address in (omitted), United Kingdom. She states:
Alternatively (omitted) Ltd is a company that Mr Garra-Marsh is involved with, as it appears to have been registered at (omitted) sometime before Mr Garra-Marsh and I left the property and sometime before Mr R was supposed to have taken “occupancy”. The company has been in operation since 1998 – about a month after Mr Garra-Marsh bought the property across the road (omitted), (previously named (business omitted)) and continues to be active.
If this is the case, then the connection indicated that Mr R and Mr Garra-Marsh both have interests in (omitted) Ltd and that Mr R was not a tenant at all…
…
It would appear that in relation to this property alone, Mr Garra-Marsh has effectively kept for himself an additional sum of money amounting around 500 000 pounds (approximately $750 000 Australian Dollars).[18]
[18] Affidavit of Ms Delahey 19.4.2012 page 27
The Applicant also refers to the involvement of the Respondent in a limited liability partnership called (business omitted) Partnership and annexes to her affidavit a copy of the Annual Return dated 1st September 2009, which shows Mr Garra-Marsh of (omitted), United Kingdom as a member of the partnership. She says of this interest:
The directorship/investment in (business omitted) in March 2006 was another amount of capital Mr Garra-Marsh concealed from me and lied about.[19]
[19] Ibid
In her affidavit of 4th March 2014, the Applicant pursues the question of company directorships held by Mr R over a number of paragraphs which are quite incomprehensible, although at paragraph [41] she deposes:
I refer to Mr Garra-Marsh’s manifestations within the (employer omitted) and his ability to get a high profile “(employer omitted) affiliated financial (industry omitted), like Mr A, to play the part of “Mr R” in front of me.[20]
[20] Affidavit of Ms Delahey 4.3.2014 at paragraph [41]
The Applicant, in her affidavit of 12th March 2014, makes further reference to Mr R, and states that he did not sell his property at (omitted), United Kingdom before purchasing (omitted), United Kingdom. She states that the title to the property still remains in the name of Mr R. She also refers to a number of other people whom she claims are involved with the Respondent.
The Respondent denies in his affidavit of 3rd March 2014 that the Applicant was under duress or was in a grave financial situation. He denies the Applicant’s assertion about the quality of the legal advice that she received when she entered into the two agreements on 17 April 2009, saying:
…the Court made Orders on 29 March 2012 requiring Ms Delahey to arrange for her lawyer’s files to be disclosed to me. I am informed that my solicitors received the file from Michael Conley Lawyers (who previously acted for Ms Delahey) on Friday 25 May 2012. I am further informed that the file comprises three very large bundles of documents, the overall height of which stands in excess of 15 cms. My solicitor has reviewed those documents. I am advised by my solicitor and believe that there is no document in the file which supports Ms Delahey’s assertions. For example I am advised and believe that the file contains no document advising Ms Delahey that she will have no property rights once I return to the UK or otherwise suggesting to her that she must accept a grossly compromised settlement because of her limited legal options.[21]
[21] Affidavit of Ms J 3.3.2014 at [8]
The Respondent went on to depose:
The child support and spouse maintenance Agreements were formalised on 17 April 2009 prior to my departure from Australia. However, negotiations regarding our respective property entitlements continued after my return to the UK, during which Ms Delahey’s lawyers noted that in the event agreement was not reached Ms Delahey would be instituting proceedings in United Kingdom. Annexed hereto and marked “D” is a copy of her lawyer’s letter dated 1 June 2009 confirming her intentions in that regard.[22]
[22] Affidavit of Ms J 3.3.2014 at [11]
The Respondent denied in his affidavit that he failed to give full and frank disclosure, saying that he did so prior to the mediation and saying that, up until the formalisation of the property issues in August 2009, the Applicant sought no further financial disclosure from him, nor were there any material changes to his financial circumstances that would have obliged him to update his financial disclosure.
The Respondent denied that he owned any property, assets or financial resources that he did not disclose. He deposed:
I acknowledge that my interest in (business omitted) Limited did not form part of the balance sheet for my mediation with Ms Delahey but refer to my evidence later in this Affidavit under that heading.[23]
[23] Ibid at [20]
The Respondent had this to say about his investment in the (business omitted) Partnership:
34.(business omitted) Limited Liability partnership (“(business omitted)”) is a tax deferral scheme. In early 2006 I had an impending tax liability of approximately 45,000 (pounds). I did not have funds sufficient to meet that tax liability at the time. In January 2006, I spoke with a financial planner, Mr J, regarding a tax deferral scheme available for investments made in the (omitted) industry. The UK government, at the time, offered significant tax breaks as incentives for investors in the (omitted) industry…I had no input, knowledge or influence into the establishment of the partnership or the legal entity/structure through which the funding was raised. I also had no knowledge of the other investors in the partnership. As I understand it partnerships were put together with whichever investors were available at the time.
35.Investment into the scheme required me to borrow money from a bank and to use that money to invest in the (industry omitted) partnership. In that tax year (the 2006 tax year) the investment effectively offset my tax liability and I was not therefore required to pay any tax for that year. I borrowed 119,000 (pounds) and every penny of it was invested in the partnership; the amount of the investment was calculated by my financial planner in accordance with a formula widely used for such deferral schemes and in order to allow me to defer the whole of my tax liability. From that investment, I have received, and continue to receive, a set profit from the (industry omitted) partnership over a period of 15 years. This is not a share of profits actually made from the (industry omitted), or by the company making the (omitted), but a fixed amount. This fixed profit is in turn used to repay the loan from the bank. The profit is never actually deposited into my bank account, but is paid directly into my loan account…
…
41.I made no secret of my involvement with the (business omitted) partnership. Prior to our mediation in April 2009, Ms Delahey’s solicitors were provided with my 2005, 2006 and 2007 tax returns, under cover of my solicitor’s letter dated 30 March 2009….My tax returns clearly show that I was receiving profit from my involvement with a partnership.[24]
[24] Affidavit of Ms J 3.3.2014 at [34]-[35] & [41]
The Respondent conceded that he did not disclose his new relationship with his now wife in 2009 or the fact that they were expecting a baby in July 2009. He deposed that he and his current wife did not commence an intimate relationship until after he and the Applicant had separated. He stated:
Our relationship became more serious in august 2008. Ms J fell pregnant in (omitted) 2008. At the time she was living and working in the UK, as a (occupation omitted). Throughout our relationship and leading up to the birth of our child, Ms J remained living and working in the UK.[25]
[25] Ibid at [26]
The Respondent also deposed that he did not tell the Applicant about the fact that he had formed a new relationship and was expecting another child because:
a)He feared that the Applicant would react negatively to the news and would not facilitate his time with their daughter;
b)He had not formally commenced cohabitation with his current wife at the time of entering into the April or August agreements, although the child had been born by the time of the August agreement;
c)He and his current wife have always kept their finances separate and maintain separate bank accounts; she does not contribute to his mortgage or any household bills; and
d)He did not believe that “the financial circumstances of my impending cohabitation with Ms J materially improved my financial position or were relevant to either Ms Delahey or her ability to achieve a just and equitable property settlement with me.”[26]
[26] Affidavit of Ms J 3.3.2014 at [28]
The Respondent also in his affidavit at paragraphs [29] to [33] provided an account of the financial transactions involving the sale of the Flat at (omitted), United Kingdom and the purchase of the property at (omitted). He stated that:
a)He purchased the flat in 2003, with the assistance of a mortgage;
b)The flat was sold in August 2006 to help fund the purchase of the current home, with the balance of the purchase price being funded by another mortgage;
c)He denies that he had or has any relationship with the purchaser, Mr R;
d)He only learned from the Applicant’s affidavit that the transfer of the title to the (omitted) property was not registered until 1 August 2007, however, he sold the property on 1st August 2006 and he annexed to his affidavit copies of an email dated 6th June 2012 from his then solicitor to the Land Registry, a letter in reply from the Land Registry dated 8th June 2012 and an Official Copy of Register of Title.
The email from the solicitor, a Mr Warburton, states relevantly:
The sale completed on 1st August 2006. The purchaser, Mr R, did not apply for registration for just over a year, with the result that whoever effected the registration misread the transfer as having been made in 2007, not 2006. “007 appears as the transfer date in the register. This is causing our client difficulty in divorce proceedings because his ex wife is saying he has lied both about the date on which he sold and about his need to sell this property in order to buy the one he bought simultaneously with this one.
I should be grateful if someone could check the documents, correct the register and let me have up to date copies.[27]
[27] Affidavit of Ms J 3.3.2014 Annexure “Q”
The reply dated 8th June 2012 from the Land Registry (omitted) confirms that there had been a clerical error in the registration:
Please find enclosed official office copies of this amended register. I have also amended the date of the charge to 1 August 2006 as this was also registered incorrectly.[28]
[28] Ibid Annexure “R”
The Respondent’s current wife, Ms J, swore two affidavits, on 24th May 2012 and 11th March 2014. In her first affidavit, Ms J deposed that:
a)She first met the Respondent in or about (omitted) 2005;
b)She and the Respondent commenced a casual relationship in or about (omitted) 2008;
c)The relationship became more committed in (omitted) 2008;
d)She fell pregnant in (omitted) 2008;
e)At the time she was still living and working in (omitted), United Kingdom and the Respondent remained living in (omitted), United Kingdom; and
f)She did not formally cohabit with the Respondent until after the birth of their child on (omitted) 2009; and
g)She and the Respondent maintain separate bank accounts and she makes no direct contribution to his mortgage or household bills, nor does he to hers.[29]
[29] Affidavit of Ms J 24.5.2012 at [3]-[6] & [14]
In her later affidavit, sworn on 11th March 2014, Ms J denies that she owns properties at both (omitted) and (omitted), United Kingdom. She states that she only owns number (omitted) and number (omitted) is owned by another person.
The Respondent and Ms J were cross-examined by the applicant. They were unshaken in their evidence.
Submissions
For the Respondent, Mr Levy of Counsel submitted that there was no evidence to support an order setting aside either of the Financial Agreements between the parties or the Binding Child Support Agreement.
As to the former, there are no grounds under s. 90K of the Family Law Act 1975 that would warrant either agreement being set aside.
As to the Binding Child Support Agreement, it was submitted that there were no grounds under s.136 of the Child Support (Assessment) Act 1989 that would support that agreement being set aside.
It was submitted that to succeed in an allegation of fraud, the Applicant must establish that there had been some element of deceit on the part of the Respondent (Cameron & Cameron[30]).
[30] (1988) 12 Fam LR 265; FLC 91-946
The Applicant’s contentions about the sale of the property at (omitted), United Kingdom, have been dealt with by the Respondent in his affidavit evidence.
As to the Applicant’s allegations about the Respondent’s relationship with his present wife, it was submitted that:
a)cohabitation did not commence until August 2009;
b)whilst there was a non-disclosure, it was not a “material” non-disclosure, nor was there anything deceitful about it; and
c)the Respondent’s reasons for not disclosing his relationship with his new wife and the birth of their child were validly held, noting what subsequently occurred in the parenting proceedings.
Mr Levy submitted that the questions of enforceability and impracticability do not arise in circumstances where the Respondent has carried out all his obligations under the two Financial Agreements and there is no dispute as to his compliance with the Binding Child Support Agreement. There was no basis for an assertion that any of the agreements are void or voidable.
It was submitted that there was no evidence of any change in circumstances in respect of any of the three agreements. The change in circumstances must be shown to have occurred after the making of the agreement and must be a change in relation to the care, welfare and development of a child of the marriage.
In respect of the Child Support Agreement, s.136(2)(d) requires there to be exceptional circumstances relating to a party to the agreement or a child in respect of whom the agreement was made.
In each case, it was submitted, the evidence does not establish any material change in circumstances post the making of the agreement. The child was at the time living exclusively in the care of the Applicant in Australia and the Respondent was living in the United Kingdom. That situation remains unchanged.
As to unconscionable conduct, Mr Levy submitted that the conduct must be referable to the formation of the agreement (Commercial Bank of Australia v Amadio[31], followed by the Full Court of the Family Court in Kostres & Kostres[32]).
[31] [1983] HCA 14; (1983) 151 CLR 447; 46 ALR 402
[32] [2009] FamCAFC 222; (2009) 42 Fam LR 336; FLC 93-420
In this case, it was submitted, the Applicant was at all times legally represented and it is not suggested by the Applicant that she was not given the advice set out in the Agreements. If it is contended by the Applicant that there was negligent advice given to her by her solicitor or that there was some other serious fault in her legal representation, her remedy does not lie in these proceedings but elsewhere.
Further, it was submitted that to establish unconscionability the Applicant needs to show not only that she was under some sort of special disadvantage of which the other party was aware but that the other party also took advantage of the opportunity that presented itself.
Mr Levy submitted that in all the circumstances the Application has no merit and should be dismissed.
The Applicant submitted that she left the marriage as a victim of domestic violence. Her actions were those of someone under severe threat. At the time of signing the Binding Financial Agreements and the Child Support Agreement there was a threat. She was financially penalised.
She submitted that the Respondent did not disclose at the mediation that he had an interest and a directorship in (business omitted) which clearly indicates duplicitous administration of financial affairs. The Respondent’s interest in (business omitted) was not put appropriately in the paperwork.
The Applicant said that she was in financial hardship at the time and it was made clear to her by the people who were with her that the Respondent was getting on a plane in two days and if she did not sign the agreements she was unlikely to get another offer.
The Applicant also submitted that the relationship between the Respondent and Mr R was suspicious, and the evidence of this was more than speculative. She also said there was a doubt about the property transaction involving the sale of the flat at United Kingdom. She believed that the person who came to inspect the flat was not in fact Mr R, even though he claimed to be. She had met the man Mr A who, she claimed, had said he was Mr R.
The Applicant does not believe that the sale of United Kingdom property was in fact a genuine sale. There is a clear indication of some fraud on the part of the Respondent, in her view. Potentially, a figure of up to a million dollars was not accounted for by the Respondent, she submitted.
The Three Agreements
The Applicant and the Respondent entered into a Binding Financial Agreement relating to spousal maintenance and a Child Support Agreement on 17th April 2009. On 7 August 2009 they entered into a further Binding Financial Agreement dealing with property issues.
The two agreements made on 17th April 2009 were considered in some detail in the earlier decision of Garra-Marsh & Garra-Marsh (No.3)[33]. The agreement made between the parties on 7th August 2009 was not considered in that decision.
[33] [2012] FMCAfam 1144
The Binding Financial Agreement of 17 April 2009
This Agreement was entered into by the parties in contemplation of their divorce which was to take place at this Court on 5th May 2009.
The relevant paragraphs of the Agreement state:
2. This is a Financial Agreement under Section 90C of the Family Law Act and it is agreed by the parties to cover spousal maintenance.
3. It is intended that this Agreement shall exclude the power of the Court from having jurisdiction to make any Order relating to spousal maintenance of the parties to this Agreement other than by way of implementation or enforcement.
4. There is to be no spousal maintenance paid by Mr Garra-Marsh[34] to Ms Delahey[35] or by Ms Delahey to Mr Garra-Marsh other than as set out in this Clause:-
(a)Pursuant to Section 98E of the Family Law Act the parties for whose provision maintenance is made pursuant to this sub-clause is Ms Delahey and the amount provided by Mr Garra-Marsh to Ms Delahey for the maintenance of Ms Delahey shall be $600.00 per week commencing on the 1 May 2009 and to be paid by Mr Garra-Marsh monthly in advance on the first of each[36] until X turns five years of age on the (omitted) 2012;
(b)thereafter at no time in the future shall Ms Delahey make a claim for spousal maintenance against Mr Garra-Marsh;
(c)at no time in the future shall Mr Garra-Marsh make a claim for spousal maintenance against Ms Delahey.
(d)pursuant to Section 90E of the Family Law Act the party for whose provision maintenance is made pursuant to this sub-clause is Mr Garra-Marsh and the amount provided for the maintenance of Mr Garra-Marsh is $1.00;
(e)Taking into account the terms and effect of this Agreement, the parties agree that Mr Garra-Marsh and Ms Delahey would have been able to support himself and herself respectively without an income tested pension, allowance or benefit at the time this Agreement comes into effect;
[34] i.e. the Respondent
[35] i.e. the Applicant
[36] Sic – presumably “each month”
5.If any of the provisions of this Agreement shall be judged void, invalid, unlawful or unenforceable for any reason whatsoever by a Court of competent jurisdiction, such voidness, invalidity or unenforceability or illegality will not affect the operation, construction or interpretation of any other provisions of this Agreement to the extent that the void, invalid or unenforceable or illegal provisions will be treated for all purposes as severed from this Agreement.
…
8.Mr Garra-Marsh and Ms Delahey acknowledge that the provisions of this Agreement for spousal maintenance are equitable, fair, reasonable and satisfactory to them.
9.Mr Garra-Marsh and Ms Delahey acknowledge that each of them entered into this Agreement of his or her own free will and volition and that no coercion, force or undue influence has been used in the execution of this Agreement either by the other party or by any other person or persons.
10.Mr Garra-Marsh and Ms Delahey acknowledge that neither has relied upon any representation or promise in making this Agreement except those expressly stated in this Agreement.
11.This Agreement is intended to operate in substitution for the rights of either party to claim spousal maintenance order under the Family Law Act 1975 (Cth).
12.Mr Garra-Marsh and Ms Delahey acknowledge that each of them has sought, obtained and given due consideration to independent legal advice prior to entering into this Agreement including:-
(a) The effect of this Agreement on the rights of that party;
(b)the advantages and disadvantages at the time the advice was provided, to the party making the Agreement.
At paragraphs [23] to [32] of the earlier decision I considered whether the Agreement complied with the requirements of subsection 90G(1) of the Act and decided that it did. I therefore held that it is a Binding Financial Agreement within the meaning of the Act.
Subsection 90K(1) of the Family Law Act 1975 (Cth) sets out the circumstances in which a Court may set aside a Financial Agreement, if and only if, the Court is satisfied that (relevantly):
(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 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 a 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 a financial agreement – a party to the agreement engaged in conduct that was, in all the circumstances, unconscionable;
Subsection (2) of s.90K, which is referred to in s.90K(1)(d), provides as follows:
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.
Dealing first of all with the issue of fraud, including non-disclosure of a material matter, it has been held by Kay J in Cameron & Cameron[37] that “whatever view one takes of fraud, there must be some element of deceit before the court can act…”[38].
[37] supra
[38] (1988) 12 Fam LR 265 at 277; FLC 91-946 at 76,841
The Applicant’s allegations of fraud by the Respondent relate mainly, but not entirely, to three issues:
a)her belief that the sale of the property at (omitted) was a sham;
b)her contention that the Respondent’s interest in the (business omitted) Liability partnership had not been disclosed and was a vehicle for concealing assets of significant value; and
c)her contention that the Respondent’s failure to disclose his relationship with his now wife and the imminent birth of their child was a significant non-disclosure of both assets and income.
I am not satisfied that any of those contentions have been made out.
The Applicant has seized upon a discrepancy in the dates of registration of the transfer of the property to the purchaser, Mr R, to base a theory that there was some form of financial double-dealing with the property, but I am satisfied that the Respondent’s evidence that there was an error in dates is a complete answer to the Applicant’s claim. The Applicant’s claims about Mr R are wildly speculative, exemplified by her assertion at one point that the person who inspected the property prior to purchase was not Mr R at all, but a man named Mr A who was pretending to be a purchaser. What could be the reason for the Respondent procuring such a charade has not been satisfactorily explained.
Similarly, I accept the Respondent’s evidence about the purpose of his investment in the (business omitted) Partnership and reject the Applicant’s speculations about (business omitted).
The Respondent has given reasons about his decision not to disclose his relationship with his now wife and the imminent birth of their child, which are to the effect that he believed that the Applicant would react badly towards the news and limit his contact with their daughter. The subsequent conduct of the parenting proceedings, marked by the Applicant’s implacable opposition to the Respondent having any contact at all with his daughter (Garra-Marsh & Garra-Marsh[39] at [12] & [28]) demonstrates that his apprehension about the Applicant’s attitude was well-founded.
[39] [2012] FMCAfam 277
Both the Respondent and his current wife, Ms J, have given evidence on affidavit and have been subject to cross-examination. It is their evidence that, contrary to the Applicant’s suspicions, their relationship did not develop until after the Respondent and the Applicant had separated and that they maintained separate living arrangements until after their baby daughter was born in (omitted) 2009. They have also given evidence that they have maintained separate bank accounts and other financial arrangements. I found their evidence to be credible and I accept it.
In my view, there was, as the Respondent’s Counsel submitted, nothing deceitful about the Respondent’s decision not to disclose any details about his relationship to the Applicant. I am also of the view that nothing material was withheld from the Applicant.
The Applicant’s contentions of fraud by the Respondent have not been made out.
There is no evidence that either party entered into the agreement either for the purpose of defeating or defrauding a creditor or with reckless disregard of the interests of any creditor.
There is no evidence that would support a finding that the agreement is void or voidable.
There is no evidence that the agreement is unenforceable. The agreement provided that the Respondent was to pay to the Applicant the sum of $600.00 per week by way of spousal maintenance until the parties’ child attained the age of five years, on (omitted) 2012. It has not at any time been suggested that the Respondent did not make those payments.
For the same reasons, it cannot be said that the agreement, or a part of the agreement, is impracticable.
The Applicant has not led any evidence to show that since the making of the agreement a material change in circumstances has occurred relating to the care, welfare and development of the parties’ child and, as a result of that change, either the child or the Applicant will suffer hardship if the Court does not set the agreement aside.
As Counsel for the Respondent has submitted, at the time the parties entered into the agreement, the child was living exclusively with the Applicant and the Respondent was living in the United Kingdom. There has been no change in those arrangements.
There is no evidence, for example, to show that either the child or the Applicant have suffered any major illness or injury necessitating expensive medical or hospital bills or other ongoing unforeseen expenses.
There is no evidence of any material change in circumstances resulting in either the child or the Applicant potentially suffering hardship.
The Applicant has claimed that there was unconscionable conduct in the making of the agreement. It is clear that if a party wishes to rely on unconscionable conduct by a party to the agreement, the conduct must be shown to have taken place at the time the agreement was made. This was held to be the case by the Full Court of the Family Court in Kostres & Kostres[40], where their Honours held at [152]:
In Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447; 46 ALR 402 those justices of the High Court who determined the issue of the enforceability of a bank guarantee on the basis of unconscionable conduct (the plaintiffs by reason of lack of English and representations made by a bank representative were in a position of special disadvantage) referred to unconscionable conduct at the time of entering into the agreement. Our researches disclose that the question of unconscionable conduct is generally directed to conduct referable to the formation of the agreement itself.
[40] supra
With respect, that appears to accord with the wording of paragraph (1)(e) itself:
in respect of the making of a financial agreement – a party to the agreement engaged in conduct that was, in all the circumstances, unconscionable.
The Applicant claims that at the time she entered into the agreement in April 2009 she did so “under duress” because she was in a position of financial hardship and she was told by her legal representatives that if she did not enter into the agreement, and presumably the child support agreement, before the Respondent returned to the United Kingdom she was not likely to get anything at all.[41]
[41] See at [43] and [46] above
The evidence shows that she was legally represented and had in fact two solicitors from the one firm, Mr Conley and Ms Morris, advising her. The Respondent was also legally represented. It is clear that the Applicant was given independent legal advice before she entered into the agreement. As I held in Garra-Marsh & Garra-Marsh (No.3)[42] at [30]:
The Agreement appears to have been signed by both parties. Their signatures appear to be essentially similar to the signatures of the parties on their affidavits filed in this proceeding. Part of the Agreement contains Certificates for the purpose of Section 90G signed by the parties’ solicitors, Ms Gathercole and Ms Morris. On its face, the agreement shows that the parties received independent legal advice.
[42] supra
The Applicant has not provided any evidence of unconscionable conduct by the Respondent at the time of making the agreement. She had independent legal advice and, from her own evidence, her solicitors were involved in the negotiations that led to the making of the agreement.
There is no evidence that the Applicant was in a position of special disadvantage at the time. If she is now dissatisfied with the nature and quality of the legal advice that she received at the time of entering the agreement then she should take that up with her former solicitors.
The Respondent’s Counsel submitted that the Respondent was not and could not have been aware of the circumstances surrounding the Applicant’s legal representation and that there is no evidence that he did take any advantage of those circumstances (assuming, of course, that the Applicant’s legal advice was in fact deficient).
Mr Levy went on to submit that the relationship between the parties was very short, just over two years, and that the Respondent owned all the assets available for division. Further, the Applicant not only made no financial contribution whatsoever but also admitted that the Respondent paid the debt she had at the beginning.
It was further submitted that:
In those circumstances the agreement reached between the parties should be seen as one generous to the wife. In other words the court could not find that the result brought about by the agreement was anything but just and equitable and well within the range of results which may have occurred should the matter have gone to trial.[43]
[43] Respondent Husband’s Summary of Argument Document page 10
I am not satisfied that the Applicant has demonstrated that in the making of the agreement the Respondent engaged in conduct that was, in all the circumstances, unconscionable.
The agreement made between the parties on 17th April 2009 is a Binding Financial Agreement within the meaning of s.90G of the Family Law Act 1975.
It follows that the Applications by the Applicant contained at paragraphs 4, 5 and 6 of her Amended Response that:
a)the document be declared void;
b)the document be declared as having no force and effect; and
c)the document be set aside;
must fail.
The Binding Child Support Agreement of 17 April 2009
This Agreement was entered into by the parties in contemplation of their divorce which was to take place at this Court on 5th May 2009.
The preamble to the Agreement states, relevantly, that
a)the child X born (omitted) 2007 is an eligible child under the provisions of the Child Support (Assessment) Act 1989;
b)the Applicant and the Respondent are liable parents in relation to the child;
c)the Agreement is intended by the parties to constitute a Binding Child Support Agreement under s.80C of the Act; and
d)each of the parties was provided with independent legal advice by a legal practitioner before they signed the Agreement.
As I pointed out at paragraphs [36] and [37] of the earlier decision, there were drafting errors in paragraphs K and L of the preamble relating to the description of the Certificates of Independent Legal Advice annexed to the Agreement, but the annexed certificates themselves had been completed correctly. Those Certificates showed that they had been signed by the solicitors Ms Morris, who acted for the Applicant, and Ms Gathercole, who acted for the Respondent.
The preamble went on to say:
M.This agreement is intended by Ms Delahey and Mr Garra-Marsh to constitute a Child Support Agreement under Part 6 Division 2 of the said Act. There are no previous Assessments, Child Support Agreements accepted by the Registrar of the Child Support Agency and/or Court Orders in relation to the maintenance of the child X.
N.The parties intend by this Agreement that this Agreement will finalise all Child Support issues between them and to end, once and for all, all rights of each against the other in relation to child support.
O.It has been agreed by Ms Delahey and Mr Garra-Marsh that this Agreement be registered with the Child Support Agency.
P.The Child Support paid by Mr Garra-Marsh under the provisions of this Agreement is to be credited against Mr Garra-Marsh’s liability under any existing, or any future administrative assessment, and is intended to constitute and is to be credited as to one hundred percent (100%) of the annual Child Support payable under any relevant administrative assessment made pursuant to the Act for each year.
The operative parts of the Agreement state:
1.That Mr Garra-Marsh will pay or cause to be paid to Ms Delahey by way of periodic child support the sum of $350.00 per week for X, such sum to be paid monthly, first payment to commence on 1 May 2009 and be paid on the first of each month thereafter until X attains the age of 18 or completes her secondary education whichever is the latter.
2.The sum referred to in clause 1 and[44]will be adjusted annually with the first adjustment to be made on 1 May 2010 in accordance with the variation of the Consumer Price Index for Sydney as published by the Commonwealth of Australia Statistician as at the date of the year in question.
3.Mr Garra-Marsh and Ms Delahey enter into this Agreement pursuant to the provisions of Section 80C of the Act to the effect that the same will operate in relation to all child support matters dealt with herein in substitution for any rights that either Ms Delahey or Mr Garra-Marsh may have now or in the future as a payer or payee of child support under the Act.
[44] sic
The parties each acknowledged that they had been provided with independent legal advice.
At paragraphs [41] to [58] of the earlier decision I considered whether the Agreement complied with the requirements of ss.80C, 81, 82, 83 and 84 of the Child Support (Assessment) Act 1989 and decided that it did. I therefore held that it was a Binding Child Support Agreement under s.80C of the Act.
Subsection 80D(1) of the Act sets out the way in which a binding child support agreement may be terminated:
A binding child support agreement (the previous agreement) may be terminated only by:
(a)a provision being included in a new binding child support agreement made by the parties top the previous agreement to the effect that the previous agreement is terminated; or
(b)the parties to the previous agreement making a written agreement (a termination agreement):
(i) that is binding on the parties in accordance with subsection (2); and
(ii) to the effect that the agreement is terminated; or
(c)a court order setting aside the previous agreement under section 136.
The agreement has not been terminated in accordance with paragraphs (a) or (b) of subsection 80D(1) above.
The power of a court to set aside a child support agreement, whether it is a binding child support agreement or a limited child support agreement, is set out in s.136 of the Child Support (Assessment) Act 1989, which says relevantly:
(1)A party to either of the following agreements may apply to a court having jurisdiction under this Act for the court to set aside the agreement:
(a)a child support agreement that has been accepted by the Registrar under section 92 or 98U;
(b) a termination agreement, or a written agreement referred to in paragraph 80G(1)(b), that has been accepted by the Registrar under section 92.
(2)If a party has applied under subsection (1), the court may set aside the agreement in accordance with the application if the court is satisfied:
(a)that the party’s agreement was obtained by fraud or a failure to disclose material information; or
(b)that another party to the agreement, or someone acting for another party:
(i) exerted undue influence or duress in obtaining that agreement; or
(ii) engaged in unconscionable or other conduct;
to such an extent that it would be unjust not to set aside the agreement; or
(c)in the case of a limited child support agreement:(not applicable)[45]
[45] Not applicable, as the Agreement under consideration is a Binding Child Support Agreement
(d)in the case of a binding child support agreement – that because of exceptional circumstances, relating to a party to the agreement or a child in respect of whom the agreement is made, that have arisen since the agreement was made, the applicant or the child will suffer hardship if the agreement is not set aside.
(3)Subject to section 145 (Registrar may intervene in proceedings), the parties to a proceeding under subsection (1) are the parties to the agreement.
(4) If:
(a)the court sets aside a child support agreement under this section; and
(b)the court is satisfied as mentioned in paragraph 117(1)(b) (departure orders);
the court may make an order under Division 4 of Part 7 without an application having been made under section 116.
(5) If:
(a)the court sets aside a child support agreement under this section; and
(b)the court is not satisfied as mentioned in paragraph 117(1)(b) (departure orders); and
(c)the payee has received or will receive benefits pursuant to the agreement;
the court may still make an order that departs from the administrative assessment where it is just and equitable to do so, having regard to the benefits that the payee has already received pursuant to the agreement.
In short, the grounds for setting aside a binding child support agreement under s.136 are:
a)fraud or failure to disclose material information;
b)undue influence or duress;
c)unconscionable or other conduct; or
d)exceptional circumstances relating to a party or a child such that the party or the child would suffer hardship if the agreement were not set aside.
The circumstances of the making of this Binding Child Support Agreement on 17th April 2009 are identical to those relating to the making of the Binding Financial Agreement on the same day.
Fraud or failure to disclose material information.
I am not satisfied that the Applicant has demonstrated that her agreement to the Binding Child Support Agreement was obtained by fraud or a failure to disclose material information for the reasons set out in paragraphs [93] to [101] above.
Undue influence or duress in obtaining agreement
I am not satisfied that the Applicant has demonstrated that the Respondent or someone acting on the Respondent’s behalf exerted undue influence or duress on the Applicant in obtaining her agreement to the Binding Child Support Agreement for the reasons set out in paragraphs [112] and [113] above.
Unconscionable or other conduct
I am not satisfied that the Applicant has demonstrated unconscionable or other conduct by the Respondent in obtaining her agreement to the Binding Child Support Agreement for the reasons set out in paragraphs [110] to [116] inclusive above.
Exceptional circumstances relating to a party or a child
I am not satisfied that the Applicant has demonstrated exceptional circumstances relating to either the child or herself that have arisen since the agreement was made such that either she or the child would suffer hardship if the agreement were not set aside, for the reasons set out in paragraphs [106] to [109] above.
In my view, the requirement to demonstrate “exceptional circumstances” in paragraph (d) of subsection 136(2) of the Child Support (Assessment) Act 1989 sets a higher threshold than the requirement to show a “material change in circumstances” contained in paragraph (d) of subsection 90K(1) of the Family Law Act relating to financial agreements, although the learned author of “Australian Family Law” (Volume 2)[46] merely suggests that “This higher threshold is closer to that in s 90K of the Family Law Act relating to financial agreements, although that section refers to “material” change in circumstances.”[47]
[46] Lexis Nexis Butterworths
[47] Ibid page 12,393
In this case, however, it is immaterial, because the Applicant’s evidence was insufficient to satisfy the requirement of a material change in circumstances in s.90K(1)(d).
It follows that the Applicant has not established that the Binding Child Support Agreement entered into by the parties on 17th April 2009 should be set aside under the provisions of s.136 of the Child Support (Assessment) Act 1989. Her application contained in paragraphs 7, 8 and 9 of her Amended Response that:
a)the document be declared void;
b)the document be declared as having no force and effect; and
c)the document be set aside;
must all fail.
The Applicant also seeks, in paragraphs 10 and 11 of her Amended Response:
a)an order under s.123(b) of the Child Support (Assessment) Act 1989 that the Respondent pay to her the sum of $580,000.00 by way of lump sum child support; or
b)a departure order under s.117 of the Child Support (Assessment) Act 1989:
i)varying the periodic rate of child support payable to the Applicant to $44,500.00 per year;
ii)providing that the Respondent pay the whole of the child’s primary and secondary school fees and other educational expenses;
iii)requiring the Respondent to insure the child at the top rate in a health fund; and
iv)paying all of the child’s medical, dental and orthodontic bills not otherwise covered by Medicare or private health insurance cover.
However, as the Binding Child Support Agreement remains in force, the Court has no jurisdiction to make those orders and so the applications are incompetent.
The Binding Financial Agreement of 7 August 2009
On 7th August 2009, the parties entered into an agreement entitled “Binding Financial Agreement Pursuant to Part VIIIA of the Family Law Act 1975”. This agreement was not the subject of the decision of this Court made on 24th October 2012 (Garra- Marsh & Garra-Marsh[48] ).
[48] [2012] FMCAfam 1144
The Agreement contained a number of Recitals, including that:
a)The parties’ divorce became final on 6th June 2009;
b)The parties had received independent legal advice concerning their respective entitlement to make claims for property settlement;
c)The parties had reached agreement in respect of child maintenance and spousal maintenance;
d)The deed was a Financial Agreement made pursuant to section 90D of the Family Law Act 1975; and
e)There was no other binding Agreement in force between the parties in relation to the matters the subject of the Agreement.
There was also a specific Recital 2.7 concerning a gift made to the Respondent’s parents, which is quoted in full:
During the marriage Mr Garra-Marsh gifted to his parents the sum of 100,000 (pounds) as a result of a promise he made to them prior to the parties commencing cohabitation to assist them in the purchase of a home upon their retirement. Ms Delahey asserts that in or about July 2007 Mr Garra-Marsh drew down on the mortgage secured over (omitted) an amount of 100,000 (pounds) which he advanced by way of loan to his parents to enable them to complete the purchase of the property at (omitted), United Kingdom, which has not been repaid and which leads Ms Delahey to assert that Mr Garra-Marsh has an equitable interest in his parents’ property. Mr Garra-Marsh asserts this is not the case and that the monies he provided to his parents were a gift and should not be taken into account of in these property settlement proceedings. In order to resolve the matter Mr Garra-Marsh and Ms Delahey have agreed that they will notionally add into the asset pool the sum of 50,000 (pounds) in order to resolve this issue.
The operative part of the Agreement contained acknowledgements by each of the parties that they had received independent legal advice from a legal practitioner, which formed Annexures “C” and “D” to the document.
The Agreement provided (relevantly):
a)The Respondent would pay to the Applicant the sum of $172,500.00:
i)as to $5,000.00 within two weeks;
ii)a sum of $5,000.00 within a further two weeks;
iii)a sum of $5,000.00 within another period of two weeks; and
iv)the balance of $157,500.00 within 28 days of the settlement of the sale of a property at (omitted), United Kingdom.
b)The Respondent would do all acts and things necessary to place the (omitted) property on the market for sale by private treaty and ensure that it sold by 1 November 2009;
c)If the (omitted) property failed to sell by 1st November 2009 the Respondent would arrange finance to pay to the Applicant the balance of $157,500.00 by 28th November 2009;
d)The Respondent would ship certain items of personal property to the Applicant;
e)The parties agreed that they were to be the sole owners of the other assets they had in their possession.
The Respondent’s signature was witnessed by one Mr P. The Applicant’s signature was witnessed by Ms Morris, a solicitor acting for her. The parties’ signatures appear to be virtually identical to their signatures on the other Agreements into which they entered and their various affidavits.
Annexure “C” is a Certificate for the purposes of Section 90G(1)(b) of the Family Law Act signed by Ms Gathercole, solicitor, certifying that she advised the Respondent independently of the other party of:
a)the effect of the agreement on his rights; and
b)the advantages and disadvantages at the time the advice was provided to her client at the time of making the agreement.
Annexure “D” is a similar Certificate signed by Ms Morris, solicitor, certifying that she gave the same advice to her client, the Applicant.
Financial Agreements made after a Divorce Order is made are covered by s.90D of the Family Law Act 1975.
Subsection 90G(1) of the Act sets out the conditions required for a financial agreement to be binding on the parties:
Subject to subsection (1A)[49], a financial agreement is binding on the parties to the agreement if, and only if:
[49] Which does not apply in this case
(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.
If there is a binding financial agreement in existence, it will have the effect of ousting the jurisdiction of the Court (Family Law Act 1975, s.71A).
It was held by the Full Court of the Family Court in Black & Black[50] that, as a binding financial agreement removes the jurisdiction of the Court to determine those matters covered by the agreement:
Care must be taken in interpreting any provision of the Act that has the effect of ousting the jurisdiction of the court.[51]
[50] [2008] FamCAFC 7; (2008) 38 Fam LR 503; FLC 93-357
[51] Black & Black at [40] per Faulks DCJ, Kay and Penny JJ
Their Honours also held:
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.[52]
[52] Ibid at [45]
The Agreement between the parties complies with the requirements of s.90G(1). It has not been terminated or set aside by a court. I am satisfied that it is a binding financial agreement within the meaning of the Family Law Act 1975.
Again, the Court must consider the requirements of subsection 90K(1) of the Act, which sets out the circumstances in which the Court may set aside a financial agreement. I referred at paragraph [91] above to the provisions of paragraphs (a), (aa), (b), (c), (d) and (e) of s.90K(1) as being relevant to the Court’s consideration.
The circumstances are slightly different, in that the Respondent had in fact returned to the United Kingdom, although that fact did not preclude the making of a financial agreement between the parties to resolve the property issues between them. However, the same considerations apply.
In her affidavit of 4th March 2014, the Applicant sets out at paragraphs 198 to 207 a summary of the key points upon which she relies for setting aside the existing binding financial agreement(s) and the child support agreement.
They are, in summary:
a)Her lawyer at the time, Mr Conley, “was not of capacity to advise as to my interests at the time, due to the various conflicts implicit in his position; coupled with his own behaviours toward me.”[53]
b)“Secondly, I was under duress derived primarily from the domestic violence and lethal threat from Mr Garra-Marsh to me, which I was forced to suffer financial injustice for, in order to protect X from him.[54]
c)“Thirdly, Mr Garra-Marsh applied further unconscionable behaviour both deliberately and tactically, in choosing to not disclose the existence of his heavily pregnant partner Ms J, who was soon to give birth at the time of the Signing of the Financial Agreement, and who bore him a “second daughter” within only days of the child support agreement regarding X being signed”.[55]
d)“Fourth, there is[56] grounds due to the non-disclosure of the (business omitted) Partnership interests, which Mr Garra-Marsh purports is of insignificant financial value to him.”[57]
e)“Fifth, I identify grounds derived from non disclosure of Ms J’s property interests in (omitted) United Kingdom.”[58]
f)“Sixth, that the inclusion of fraudulently submitted 16 500 pounds debt was taken into account, resulting financial penalty to me, in the “negotiation” process that followed its acknowledgement by witnesses present at the conciliation conference. Mr Garra-Marsh may have been able to create crude looking photocopy of documentation showing my signature beneath this indicated sum, however I can guarantee there will be no sign of any such sum of funds, entering into any of my bank accounts.”[59]
g)“Seventh, that I believe I have outlined to the court, complete with documented evidence, sufficient cause to doubt the property sale of (omitted) between Mr Garra-Marsh and Mr R, and therefore significant doubt as to this asset…”[60]
h)“Eighth, on his disclosure of interest for the Binding Financial Agreement dated 17th April 2009, Mr Garra-Marsh failed to quantify his interest fully with regard to (omitted).”[61]
i)“Ninth, the reality is that I am contending with extended and immediate financial hardship and if I don’t get this Binding Financial Agreement set aside, and obtain urgent interim financial provision, X and I face grievous upheaval.”[62] And
j)“Tenth, being the mere premise that Mr Garra-Marsh prefers to allocate significant bankroll to financing solicitors both here and in the UK, rather than contribute a cent towards X’s school fees …If finances were as tight/limited as he has suggested over the years, I daresay Mr Garra-Marsh would be in a far more advantageous position than I am, to self litigate to his heart’s content in the Australian courts, without having to contend with a single solicitor’s invoice”.[63]
[53] Affidavit of Ms Delahey 4.3.2014 at [198]
[54] Ibid at [199]
[55] Affidavit of Ms Delahey 4.3.2014 at [200]
[56] sic
[57] Ibid at [201]
[58] Ibid at [202]
[59] Ibid at [203]
[60] Ibid at [204]
[61] Ibid at [205]
[62] Ibid at [206]
[63] Affidavit of Ms Delahey 4.3.2014 at [207]
I will deal with those points in order, and, for the sake of completeness, I note that some of them, at least appear to apply to the Binding Financial Agreement and the Binding Child Support Agreement which were both entered into on 17th April 2009.
Whilst the Applicant is critical of her former solicitor, Mr Conley, and the advice that he gave to her, I note that all three documents, the Financial Agreement of 7th August 2009 and the two earlier Agreements of 17th April 2009, were all witnessed not by Mr Conley but by another solicitor from his firm, Ms Morris. It was Ms Morris who signed the Certificates of Independent Legal Advice in respect of all three documents, not Mr Conley.
The Applicant makes no criticism of Ms Morris. If the Applicant has a complaint about the quality of the advice she received from Mr Conley, or his behaviour generally, this is not the forum to argue that issue.
It seems curious, to say the least, that if the Applicant had lost confidence in Mr Conley at the time she signed the Binding Financial Agreement and the Binding Child Support Agreement on 17th April 2009, why she continued to instruct him to act for her over the intervening months leading up to the signing of the second Binding Financial Agreement on 7th August.
The Applicant complains that she was under duress from domestic violence and “lethal threat” when she signed the various agreements. However, the Applicant had been living in Australia since the parties separated in March 2008 whilst the Respondent remained living in the United Kingdom, so it is unlikely to say the least that she could have been the subject of any domestic violence for well over a year when she entered into the two Agreements on 17th April 2009.
Furthermore, the Financial Agreement of 7th August 2009 was signed at a time when the Respondent was back in the United Kingdom whilst the Applicant remained living in Australia. It is hard to see how she could have been subjected to any domestic violence, let alone lethal threat, in those circumstances.
Whilst the Applicant complains of the Respondent’s unconscionable behaviour in not disclosing the existence of his pregnant fiancée, I have already dealt with this claim at [98]-[100] above.
I have already dealt with the Applicant’s claims about the (business omitted) Partnership at [97] above.
I have already dealt with the Applicant’s claims about Ms J’s property interests in United Kingdom at [65]-[66] above.
The Applicant’s allegation of a “fraudulently submitted” evidence of a debt of 16,500.00 pounds is, to say the least, astonishing, containing as it does an allegation of forgery of a document by the Respondent. These are serious allegations and the Applicant has not produced a shred of evidence to support them.
I have already dealt with the Applicant’s fanciful and groundless speculations concerning Mr R, the purchaser of (omitted) at [94]-[96] above.
It is hard to see how the Applicant has any case in respect of the property at (omitted). It is clear from the Binding Financial Agreement of 7th August 2009 that the Respondent intended to sell that property in order to fund the balance of $157,500.00 he was required to pay to the Applicant by 28th November 2009. The Applicant does not claim that the Respondent did not do so, nor was there any request for further particulars of the (omitted) property between 17th April and 7th August 2009.
There is no merit to this particular claim.
The Applicant reiterates her claim that she is suffering from financial hardship. I have already dealt with that claim at [106] to [109] and [137] to [139] above.
The Applicant seeks to make a point from the fact that the Respondent has expended considerable sums of money in legal expenses in prosecuting and defending the proceedings before this Court.
The Respondent has been involved in litigation with the Applicant in this Court since September 2011. The amount of money that he has incurred in legal expenses in these proceedings is entirely relevant to the circumstances of the signing of the Agreements between the parties on 17th April and 7th August 2009, when I note that both parties were legally represented.
All of the Applicant’s “key points for Setting Aside of the existing Binding Financial Agreement/Child Support Agreement” are without merit.
I have previously referred to subsection 90K(1) of the Family Law Act 1975, which sets out the circumstances in which the Court may set aside a Financial Agreement.
In respect of the Binding Financial Agreement entered into by the parties on 7th August 2009, I make the following findings:
a)There is no evidence that the agreement was obtained by fraud, including non-disclosure of a material matter;
b)There is no evidence, nor has it been alleged, that either party entered into the agreement for the purpose of defrauding a creditor or with reckless disregard for the interests of any creditor;
c)There is no evidence that the agreement is void, voidable or unenforceable, as it appears to have been completed;
d)There is no evidence that, in circumstances that have arisen since the agreement was made, it is impracticable for the agreement or part of the agreement to be carried out, as it appears to have been carried out completely;
e)There is no evidence that since the making of the agreement a material change has occurred relating to the care, welfare and development of the child, resulting in the child or the Applicant potentially suffering hardship if the Court does not set the agreement aside; and
f)There is no evidence that, in respect of the making of the financial agreement, either party engaged in conduct that was, in all the circumstances, unconscionable.
The agreement made between the parties on 7th August 2009 is a Binding Financial Agreement within the meaning of s.90G of the Family Law Act 1975.
It follows that the Applications by the Applicant contained at paragraphs 1, 2 and 3 of her Amended Response that:
a)the document be declared void;
b)the document be declared as having no force and effect; and
c)the document be set aside;
must all fail.
The Applicant also seeks, at paragraph 12 of the Amended Response, that by way of adjustment of property interests in accordance with s.79 of the Act the Respondent should pay to her a sum representing 40% of the net property of the parties.
As I said earlier, where there is a binding financial agreement in existence, it will have the effect of ousting the jurisdiction of the Court. Subsection 71A(1), which is found in Part VII of the Family Law Act 1975, provides that:
This Part does not apply to:
(a)financial matters to which a financial agreement that is binding on the parties to the agreement applies; or
(b)financial resources to which a financial agreement that is binding on the parties to the agreement applies.
It follows, therefore, that the application for an order for adjustment of property interests under s.79 of the Act is incompetent, as the Court has no jurisdiction to make the Order.
It can be seen that the Applicant has been wholly unsuccessful in her claims, which are entirely without merit.
Costs
If the Respondent wishes to seek an order for costs, he will need to file and serve an Application in a Case and an affidavit, which may be by his solicitor, setting out the amount of costs sought and how those costs are calculated. As the Respondent resides in the United Kingdom and his solicitors are located in Sydney, I will allow a period of six weeks for any costs application to be made.
I certify that the preceding one hundred and eighty-six (186) paragraphs are a true copy of the reasons for judgment of Judge Scarlett
Date: 29 January 2015
Key Legal Topics
Areas of Law
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Family Law
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Statutory Interpretation
Legal Concepts
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Procedural Fairness
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Remedies
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Costs
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