DELRIO & JINDRA
[2019] FCCA 1186
•12 June 2019
FEDERAL CIRCUIT COURT OF AUSTRALIA
| DELRIO & JINDRA | [2019] FCCA 1186 |
| Catchwords: FAMILY LAW – Property – application to set aside a Financial Agreement – declaration as to the Financial Agreement. |
| Legislation: Family Law Act 1975 (Cth), ss.79, 90G, 90K, 90KA |
| Cases cited: Annabel & Kelsey [2014] FamCA 110 Brewer v Brewer [1953] HCA 19 Daniels & Daniels [2009] FamCA 1152 Hoult & Hoult [2013] FamCAFC 109 In the Marriage of Schorel (1990) FLC 92-144 Parker & Parker [2012] FamCAFC 33 Thorne v Kennedy [2017] HCA 49 Waterford v Commonwealth [1987] HCA 25 |
| Applicant: | MR DELRIO |
| Respondent: | MS JINDRA |
| File Number: | WOC 1021 of 2017 |
| Judgment of: | Judge Altobelli |
| Hearing dates: | 28 – 29 March 2019 |
| Date of Last Submission: | 29 March 2019 |
| Delivered at: | Wollongong |
| Delivered on: | 12 June 2019 |
REPRESENTATION
| The Applicant appeared in person. |
| Counsel for the Respondent: | Mr Campton SC |
| Solicitors for the Respondent: | Delaney Lawyers |
ORDERS
Orders 1 and 2 of the Husband’s Further Amended Initiating Application filed 26 March 2018 be dismissed.
The remaining Orders sought by the Applicant Husband be stood over for directions on 17 September 2019 at 9:30am.
Orders 1 and 2 of the Wife’s Response to the Amended Application of the Husband filed in Court on 23 October 2018 be dismissed.
Any application for costs be provided by way of written submissions and evidence in support as follows:
(a)The Applicant for costs file and serve within 28 days written submissions not exceeding 500 words, together with any further evidence in support; and
(b)The Respondent to the costs application within a further 28 days file and serve written submissions not exceeding 500 words, together with any further evidence in support;
(c)The Applicant for costs file and serve within a further 14 days written submissions in reply not exceeding 250 words.
IT IS NOTED that publication of this judgment under the pseudonym Delrio & Jindra is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT WOLLONGONG |
WOC 1021 of 2017
| MR DELRIO |
Applicant
And
| MS JINDRA |
Respondent
REASONS FOR JUDGMENT
Introduction and Background
The Applicant Husband and Respondent Wife were in a relationship, married, and then separated. This litigation is about the document that purports to be a Financial Agreement dated … 2011 (“the agreement”) pursuant to Part VIIIA of the Family Law Act 1975 (Cth) (“the Act”). The Applicant Husband asks the Court to either declare that the agreement is not binding or alternatively set it aside or declare it void and to make orders under section 79 of the Act. The Respondent Wife seeks an order that the Husband’s application be dismissed, as well as a declaration that the agreement is binding on the parties.
The Applicant Husband describes himself as a tradesman, he is 44 years old and lives in the Region A region of New South Wales. The Respondent Wife is 44 years old, describes herself as a self-employed company director, and lives on the Region B of New South Wales. There is a dispute between the parties about when they met and commenced cohabitation. They married on … 2011. There is a dispute between the parties about separation, though it is clear that they were divorced on 16 August 2016, and that the divorce became absolute on 16 September 2016.
The Applicant Husband and Respondent Wife entered into a Financial Agreement on … 2011. The agreement is dated … 2011. The Wife contends that the Husband signed the agreement on … 2011. They married on … 2011.
The Financial Agreement
The Financial Agreement bears the date … 2011. It became exhibit A3. It was prepared by Antonys Lawyers of Sydney. One of the purposes of their agreement is expressed in recital G to be that: “The parties intend to express their intentions in relation to the distribution of their property.” Recital H states:
The parties are anxious to maintain a harmonious relationship between them and to provide a basis for an amicable resolution of matters in issue between them so as to reduce the likelihood of litigation between them in connection with any issues arising from their relationship.
The Court observes that the parties’ intentions have clearly not been realised in terms of recital H.
The parties agreed to a number of operative matters. These matters are set out at clauses 1 to 30 inclusive of the agreement. Only the relevant provisions will be reproduced in these reasons. Clause 1 states:-
In consideration of their mutual covenants herein and of their relationship the parties agree that all of their property, real and personal, owned when they commenced living together will remain their respective property notwithstanding their co-habitation. For greater clarity, the parties specifically agree clothing, jewellery and personal effects owned by each of them before they commenced to live with each other will remain the property of the party who owned them or received them as a gift.
The Court observes that in this critical provision the parties only agreed that; “all of their property, real and personal, owned when they commenced living together will remain their respective property notwithstanding their cohabitation.” The Court can only assume that they consciously agreed to limit the parameters of their agreement to the property they owned when they commenced living together and thus not property acquired by either of them after they commenced living together.
However, clause 2 states:-
Any clothing, jewellery and personal effects acquired by each of the parties during the period of co-habitation will be and remain the separate property of the party who purchased and paid for the item or received it as a gift.
The Court observes that the parties agreed in clause 2 that notwithstanding the provisions of clause 1, in relation to clothing, jewellery and personal effects only acquired by each of them during their cohabitation, this was to remain the separate property of the party who purchased the same. Clause 2 only relates to personal property, not real property. In clause 1 there is express reference to “real and personal” property. Clause 2 clearly does not cover real property.
Clause 3 states:-
All other purchases, except clothing, jewellery and personal effects referred to in clause 2 above, made jointly by the parties during the period of co-habitation including cars, furniture, electrical appliances, carpets and kitchenware, by agreement, will vest in and be owned by the parties as joint tenants.
The Court observes that whereas clause 2 covered personal property acquired by each of the parties individually during cohabitation, clause 3 covers all personal property acquired jointly during cohabitation. Clause 3, like clause 2, does not cover real estate.
It is apparent that, for whatever reason, the parties’ agreement was either not intended to, or certainly did not have the effect of, covering real estate acquired during the course of cohabitation, either individually or jointly.
At clauses 6 to 9 inclusive, each party makes a number of acknowledgements in the following terms:-
6.Mr Delrio specifically acknowledges and agrees that Ms Jindra owns or is beneficially entitled to the property listed in Schedule C hereto to which he has made no contribution and over which he will make no claim.
7. Mr Delrio specifically acknowledges and agrees that he is solely liable to the exclusion of Ms Jindra with regards to the liabilities listed in Schedule B hereto.
8. Ms Jindra specifically acknowledges and agrees that Mr Delrio owns or is beneficially entitled to the property listed in Schedule A hereto to which she has made no contribution and over which she will make no claim.
9.Ms Jindra specifically acknowledges and agrees that she is solely liable to the exclusion of Mr Delrio with regard to the liabilities listed in Schedule D hereto.
In order to make sense of these provisions, it necessary to set out the provisions of schedules A to D respectively:-
SCHEDULE A
List of property owned by Mr Delrio or property to which he is beneficially entitled or otherwise is a beneficiary subject to a discretionary trust
NilSCHEDULE B
List of liabilities solely the responsibility of Mr Delrio
Child support for [X]SCHEDULE C
List of property owned by Ms Jindra or property to which she is beneficially entitled or otherwise is a beneficiary subject to a discretionary trust
Real Estate
A one-third share in Street C, Suburb D, NSW
Street E, Suburb F, NSW
Street G, Suburb H, NSW
Street J, Suburb K, NSWMotor Vehicles
Motor Vehicle L or replacement …Bank Accounts
HSBC Bank Accounts
CMA account number …
Offset Account …
Bank M Managed Funds account number …
Jindra Nominees Pty. Ltd. ANZ business Extra account number …Jewellery
5 diamond gold rings
Georgian single and cluster ring
Sapphire ring
Any jewellery inherited from Ms Jindra’s motherPersonal Effects
Furniture, Artworks, computers and other electrical and personal effects located at Street C, Suburb D and in storage with some of Mr Delrio’s belongings at Suburb N Storage.Trusts and Wills
The Jindra Family Trust
Wills of parents Ms O and Mr PSCHEDULE D
List of liabilities solely the responsibility of Ms Jindra
Accounts
HSBC …
HSBC …
HSBC …
Commsec Margin Loan … (currently not drawn on)Credit Cards
HSBC Premium Credit Card …
Mastercard …
Mastercard …
ANZ Balance Card …
ANZ Frequent Flyer Card
Commsec Card …
What becomes apparent from the above is that the Applicant Husband had no property, whereas the Respondent Wife had substantial property. Moreover, the Applicant Husband accepted that he was solely responsible for any liability that he might have for child support for his daughter [X], and the Respondent Wife accepted responsibility for the liabilities identified in schedule D. It was, regrettably, impossible to establish the quantification of these liabilities because the Wife failed to comply with an order that she herself had consented to by not filing a Financial Statement.
In clause 10 the parties agreed:-
Mr Delrio further acknowledges that Ms Jindra is a director of the companies listed in Schedule C hereto and that she may have loan accounts with or receive share dividends, director’s fees or other emoluments from those or other companies in which she may become a director or shareholder or other trusts in which she may become a beneficiary and he will make no claim in relation thereto.
Schedule E to the agreement specifies that the only company relevant for the purposes of clause 10 is a company Jindra Nominees Pty Limited.
It is important to record at this juncture that an undisputed fact in the proceedings is that the Wife owns and occupies a property on the Region B of New South Wales that is not included in, or covered by, the Financial Agreement. This property was purchased in July 2016, before the parties separated according to the Husband, or after the parties separated according to the Wife, but apparently before the divorce was granted. The Husband contends that he made substantial contributions to this property (as well as the other properties). The Wife does not dispute the fact that the Husband made contributions but rather she contends that he “vastly over-states the extent of and value of works undertaken by him…” at these properties (paragraph 156.5 of the Wife’s Affidavit filed 22 October 2018).
Returning to the operative provisions of the agreement, the parties agreed at clause 12:-
12.At the time the parties separate with the intention to terminate the relationship or notice in writing is given by one party to the other with the intention to separate and terminate the relationship, each party warrants that they will not:
(a) Charge, dispose of or damage any jointly owned assets without the consent in writing of the other party; and
(b) Withdraw any more than one-half of the then current balance in any joint bank account.
Given the Wife’s failure to provide a Financial Statement it was not possible to explore compliance with this clause.
At clause 20 the parties acknowledge a number of matters:-
20. Before the making of this agreement each of the parties has had regard to the possibility that any or all of the following change of circumstances may apply to one or both of them:
(a) the loss or significant increase or decrease of any of a party’s assets referred to in Schedule A and/or C;
(b) serious injury;
(c) serious illness;
(d) death;
(e) receipt of an inheritance or windfall by either or both of the parties;
(f) a breakdown of the relationship;
(g) a reconciliation of the relationship.
For present purposes the parties agreed at clause 20(a) that, in effect, things could change and specifically that the property listed in schedule A and schedule C could change from time to time. Curiously, paragraph (a) does not refer to value, but rather to the loss, increase, or decrease of the assets themselves. It may well have been intended to also refer to increases or decreases of value, but the Court notes no values are stated either in the agreement, or anywhere else to the Court’s knowledge. Nonetheless, the fact is that both parties had actively turned their minds to the possibility of a change in the constitution of their assets and indeed liabilities. The Court can only infer that having turned their mind to this matter there would be some express provision governing the very contingency contemplated at clause 20. However as noted, the agreement does not specifically deal with property acquired by the Respondent Wife after cohabitation.
At paragraph 24 the parties record certain important acknowledgements about legal representation and legal advice:-
24. The parties acknowledge and agree that separate legal representatives, as certified in the certificates signed by each legal representative providing independent legal advice annexed to this agreement, have advised each party independently before executing this agreement concerning the following matters:
(a) the effect of the agreement on the rights of the parties to apply for an order under Part VIII and VIIIB of the Act.
(b) whether or not at the time when the advice was provided it was to the advantage or disadvantage financially or otherwise of the parties to make the agreement.
(c) whether or not at the time of giving the advice it was prudent for that party to make the agreement.
(d) whether or not at the time of giving the advice and in the light of such circumstances as were at that time reasonably foreseeable the provisions of the agreement were fair and reasonable.
The certificate for the purposes of clause 24 pertaining to the Husband is an annexure to the agreement and is reproduced below:-
CERTIFICATE FOR THE PURPOSE OF SECTION 90G OF THE FAMILY LAW ACT 1975
I, Chris Finn of Suite 505, Level 5, 22 Market Street, Sydney NSW 2000 solicitor, hereby certify that, in relation to an agreement in writing proposed to be entered into between Ms Jindra and Mr Delrio (hereafter called “the parties”), I advised Mr Delrio (hereafter called “my client”), independently of the other party and before the time at which my client signed the original agreement, as to the following matters:
1. The effect of the agreement on the rights of the parties to apply for an order pursuant to Part VIII of the Family Law Act 1975;
2. whether or not at the time the advice was provided it was to the advantage, financially or otherwise, of my client to enter into the agreement;
3. whether or not, at the time the advice was provided there was any disadvantage, financially or otherwise, to my client in entering into the agreement;
4. whether or not, at that time of providing the advice and in light of such circumstances as were, at that time, reasonably foreseeable, the provision of the agreement were fair and reasonable.
Dated this … 2011
The Court notes that the Husband contends that notwithstanding the provisions of clause 24 and the certificate referred to above, he did not receive independent legal advice for the purposes of section 90G(1)(b).
The Orders Sought
By way of the Applicant Husband’s further amended Initiating Application filed 26 March 2018 the Husband sought the following orders:-
1.A declaration that the financial agreement dated … 2011 executed by Mr Delrio and Ms Jindra is not binding on the parties pursuant to the provisions of Section 90G1(b) of the Family Law Act 1975 (Cth).
2. Further or in the alternative, an order that the Binding Financial Agreement dated … 2011 between the applicant and the respondent be set aside or declared void under the provisions of sections 90K 1 (e) and 90KA of the Family Law Act 1975 (Cth).
3. That the within 28 days of the date of these orders the respondent pay the applicant the sum of $1,500,000.
4.That within 28 days of the date of these Orders, the wife hand over possession of the dog known as [Q] to the husband.
5. That the respondent pay the applicant’s Costs incidental to the proceedings.
It is important to record that the parameters of the dispute initiated by the Husband is limited to the issues raised by him. These Reasons for Judgment explain why the Court has made the orders it has, based on the application made by the Husband. It deals with the case as presented, and not the case as it should have, or could have, been presented.
By way of the Wife’s Response filed in Court 23 October 2018 she sought the following orders:-
1. That the Applicant Husband’s Amended Initiating Application filed 4 October 2017 be dismissed.
2. A declaration that, pursuant to s.90G(1B), the Binding Financial Agreement dated … 2011 is binding on the parties.
3. That the Applicant Husband pay the Respondent Wife’s costs on an indemnity basis.
Preliminary Findings
Having regard to the matters set out above, namely the uncontested provisions of the agreement and the uncontested facts about the Wife’s property on the Region B of New South Wales acquired after cohabitation, it is possible to safely conclude that order 1 sought by the Respondent Wife in her Response cannot be granted. The most that the Respondent Wife would be able to achieve from the present proceedings is that the orders sought by the Husband in relation to the financial agreement be dismissed. The remainder of the Husband’s claim, presumably under section 79 of the Act and directed to property not covered by the financial agreement, cannot be dismissed at this stage.
The Evidence:-
In the Husband’s case, he relied on the following documents:
a)Further Amended Initiating Application filed 26 March 2018;
b)Affidavit of Mr Delrio filed 14 March 2019;
c)Affidavit of Mr Delrio filed 26 September 2017;
d)Affidavit of Mr R filed 14 March 2019;
e)Financial Statement of Mr Delrio filed 26 September 2017;
f)Case outline document prepared by Mr Delrio and filed 28 March 2019; and
g)Case information document (Family Court of Australia form) filed 11 March 2019.
In the Wife’s case, she relied on the following documents:
a)Response filed in Court on 23 October 2018;
b)Affidavit of Ms Jindra filed 22 October 2018;
c)Affidavit of Mr Christopher Finn made on 27 March 2019;
d)Affidavit of Mr Christopher Finn filed 18 December 2018;
e)Outlines of Submissions prepared on behalf of Ms Jindra received 28 March 2019; and
f)Case outline document prepared on behalf of Ms Jindra and filed 22 March 2019.
The following documents were tendered as evidence during the course of the proceedings:
a)Case outline of Ms Jindra dated 22 March 2019;
b)Exhibits to the Affidavit of Ms Jindra sworn 22 October 2018;
c)Divorce Order (outcome sheet) dated 16 August 2016;
d)Bundle of correspondence between the Wife’s Lawyers, the Husband and the Husband’s Lawyers dated March 2019 in relation to the notice to produce;
e)Case outline document of Mr Delrio received 28 March 2019;
f)Exhibits to Affidavit of Mr Delrio dated 15 September 2017;
g)Financial Agreement dated … 2011; and
h)Email exchange between the parties dated 19 March 2019.
The Applicable Law
Section 90G of the Family Law Act deals with when financial agreements are binding. It states:
90G When financial agreements are binding
(1) Subject to subsection (1A), a financial agreement is binding on the parties to the agreement if, and only if:
(a) the agreement is signed by all parties; and
(b) before signing the agreement, each spouseparty 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 spouseparty 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 spouseparty is given to the other spouseparty or to a legal practitioner for the other spouseparty; and
(d) the agreement has not been terminated and has not been set aside by a court.
Note: For the manner in which the contents of a financial agreement may be proved, see section 48 of the Evidence Act 1995 .
(1A) A financial agreement is binding on the parties to the agreement if:
(a) the agreement is signed by all parties; and
(b) one or more of paragraphs (1)(b), (c) and (ca) are not satisfied in relation to the agreement; and
(c) a court is satisfied that it would be unjust and inequitable if the agreement were not binding on the spouse parties to the agreement (disregarding any changes in circumstances from the time the agreement was made); and
(d) the court makes an order under subsection (1B) declaring that the agreement is binding on the parties to the agreement; and
(e) the agreement has not been terminated and has not been set aside by a court.
(1B) For the purposes of paragraph (1A)(d), a court may make an order declaring that a financial agreement is binding on the parties to the agreement, upon application (the enforcement application ) by a spouseparty seeking to enforce the agreement.
(1C) To avoid doubt, section 90KA applies in relation to the enforcement application.
(2) A court may make such orders for the enforcement of a financial agreement that is binding on the parties to the agreement as it thinks necessary.
Section 90K of the Act sets out the circumstances in which a Court may set aside a financial agreement:
90K Circumstances in which court may set aside a financial agreement or termination agreement
(1) A court may make an order setting aside a financial agreement or a termination agreement if, and only if, the court is satisfied that:
(a) the agreement was obtained by fraud (including non-disclosure of a material matter); or
(aa) a party to the agreement entered into the agreement:
(i) for the purpose, or for purposes that included the purpose, of defrauding or defeating a creditor or creditors of the party; or
(ii) with reckless disregard of the interests of a creditor or creditors of the party; or
(ab) a party (the agreement party ) to the agreement entered into the agreement:
(i) for the purpose, or for purposes that included the purpose, of defrauding another person who is a party to a de facto relationship with a spouseparty; or
(ii) for the purpose, or for purposes that included the purpose, of defeating the interests of that other person in relation to any possible or pending application for an order under section 90SM, or a declaration under section 90SL, in relation to the de facto relationship; or
(iii) with reckless disregard of those interests of that other person; or
(b) the agreement is void, voidable or unenforceable; or
(c) in the circumstances that have arisen since the agreement was made it is impracticable for the agreement or a part of the agreement to be carried out; or
(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 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 of a financial agreement--a party to the agreement engaged in conduct that was, in all the circumstances, unconscionable; or
(f) a payment flag is operating under Part VIIIB on a superannuationinterest covered by the agreement and there is no reasonable likelihood that the operation of the flag will be terminated by aflag lifting agreement under that Part; or
(g) the agreement covers at least one superannuation interest that is an unsplittableinterest for the purposes of Part VIIIB.
(1A) For the purposes of paragraph (1)(aa), creditor , in relation to a party to the agreement, includes a person who could reasonably have been foreseen by the party as being reasonably likely to become a creditor of the party.
(2) 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 parentalresponsibility for the child.
(3) A court may, on an application by a person who was a party to the financial agreement that has been set aside, or by any other interested person, make such order or orders (including an order for the transfer of property) as it considers just and equitable for the purpose of preserving or adjusting the rights of persons who were parties to that financial agreement and any other interested persons.
(4) An order under subsection (1) or (3) may, after the death of a party to the proceedings in which the order was made, be enforced on behalf of, or against, as the case may be, the estate of the deceased party.
(5) If a party to proceedings under this section dies before the proceedings are completed:
(a) the proceedings may be continued by or against, as the case may be, the legal personal representative of the deceased party and the applicable Rules of Court may make provision in relation to the substitution of the legal personal representative as a party to the proceedings; and
(b) if the court is of the opinion:
(i) that it would have exercised its powers under this section if the deceased party had not died; and
(ii) that it is still appropriate to exercise those powers;
the court may make any order that it could have made under subsection (1) or (3); and
(c) an order under paragraph (b) may be enforced on behalf of, or against, as the case may be, the estate of the deceased party.
(6) The court must not make an order under this section if the order would:
(a) result in the acquisition of property from a person otherwise than on just terms; and
(b) be invalid because of paragraph 51(xxxi) of the Constitution.
For this purpose, acquisition of property and just termshave the same meanings as in paragraph 51(xxxi) of the Constitution.
Finally, section 90KA refers to validity, enforcement and effects of financial agreements:
90KA Validity, enforceability and effect of financial agreements and termination agreements
The question whether a financial agreement or a termination agreement is valid, enforceable or effective is to be determined by the court according to the principles of law and equity that are applicable in determining the validity, enforceability and effect of contracts and purported contracts, and, in proceedings relating to such an agreement, the court:
(a) subject to paragraph (b), has the same powers, may grant the same remedies and must have the same regard to the rights of third parties as the High Court has, may grant and is required to have in proceedings in connection with contracts or purported contracts, being proceedings in which the High Court has original jurisdiction; and
(b) has power to make an order for the payment, by a party to the agreement to another party to the agreement, of interest on an amount payable under the agreement, from the time when the amount became or becomes due and payable, at a rate not exceeding the rate prescribed by the applicable Rules of Court; and
(c) in addition to, or instead of, making an order or orders under paragraph (a) or (b), may order that the agreement, or a specified part of the agreement, be enforced as if it were an order of the court.
The Husband’s case
The first limb of the Applicant Husband’s case was that he did not receive independent legal advice. Whilst the Husband’s case was originally expressly articulated on the basis of an attack on the independence of the advice he received, what became evident from his evidence, and the presentation of his case on the day, was that he was also contending that the advice received was deficient in its quality i.e. about the advantages and disadvantages of the Husband entering into the agreement.
The evidence before the Court, however, demonstrates that independent advice was, prima facie, given. Mr Christopher Finn, a solicitor located in Sydney, provided to the Applicant Husband the certificate under section 90G of the Family Law Act. The provision of the certificate is consistent with the acknowledgement of the Husband that he had received this advice, in the Financial Agreement itself. There was, therefore, a forensic obligation on the Husband to adduce evidence which would disprove, or at least throw into doubt the inference or conclusion to be drawn from the certificate: Hoult & Hoult [2013] FamCAFC 109 at paragraphs 62 and 261.
The other limb of the Husband’s case was based on section 90K(1)(e) of the Act. He contends that the Wife engaged in conduct that was, in all the circumstances, unconscionable. In Thorne v Kennedy [2017] HCA 49 the High Court discusses unconscionable conduct at paragraphs 37 to 40:-
[37] There was no controversy on this appeal concerning the principles of unconscionable conduct in equity. Those principles were recently restated by this Court in Kakavas v Crown Melbourne Ltd (2013) 250 CLR 392; [2013] HCA 25.
[38] A conclusion of unconscionable conduct requires the innocent party to be subject to a special disadvantage "which seriously affects the ability of the innocent party to make a judgment as to [the innocent party's] own best interests". The other party must also unconscientiously take advantage of that special disadvantage. This has been variously described as requiring "victimisation", "unconscientious conduct”, or "exploitation". Before there can be a finding of unconscientious taking of advantage, it is also generally necessary that the other party knew or ought to have known of the existence and effect of the special disadvantage.
[39] In Commercial Bank of Australia Ltd v Amadio, Deane J said that the equitable principles concerning relief against unconscionable conduct are closely related to those concerned with undue influence. The same circumstances can result in the conclusion that the person seeking relief (i) has been subject to undue influence, and (ii) is in a position of special disadvantage for the purposes of the doctrine concerned with unconscionable conduct. For instance, in Diprose v Louth (No 1) , the trial judge, King CJ, observed that both doctrines were satisfied where the defendant "was in a position of emotional dominance which gave her an influence over the [plaintiff] which she exercised unconscientiously to procure the gift of the house". Before the High Court in that case, Mr Diprose relied only upon the ground of unconscionable conduct.
[40] Although undue influence and unconscionable conduct will overlap, they have distinct spheres of operation. One difference is that although one way in which the element of special disadvantage for a finding of unconscionable conduct can be established is by a finding of undue influence, there are many other circumstances that can amount to a special disadvantage which would not establish undue influence. A further difference between the doctrines is that although undue influence cases will often arise from the assertion of pressure by the other party which might amount to victimisation or exploitation, this is not always required. In Commercial Bank of Australia Ltd v Amadio, Mason J emphasised the difference between unconscionable conduct and undue influence as follows:
"In the latter the will of the innocent party is not independent and voluntary because it is overborne. In the former the will of the innocent party, even if independent and voluntary, is the result of the disadvantageous position in which he is placed and of the other party unconscientiously taking advantage of that position."
Appearances
The Applicant Husband represented himself at the Hearing. It is clear that in the past he had both been legally represented and had received advice. It is possible, indeed likely, that he had received legal advice in relation to the Hearing itself, even though he represented himself. The Court found the Applicant Husband to be well meaning and of reasonable intelligence. It is clear that he did not understand the technicality of the law, or the complexity of the legal concepts that he sought to invoke. There was, understandably, an emotional underlay in the manner in which he presented his case. The strong impression formed is that he was seeking justice, and was hoping that the application of law would result in justice in his case. He did his best in the circumstances. He was unfailingly courteous and cooperative in Court.
The Respondent Wife was represented by highly experienced, well-established specialist family lawyers. Mr Campton SC appeared on the Respondent Wife’s behalf.
Credit Findings
This is a case where it is necessary to make credit findings. Credit findings are often difficult to make, but more so when the playing field is unequal. Mr Campton’s cross-examination of the Husband was thorough and effective. The Husband’s cross-examination of his former Wife was surprisingly effective once he focused on relevant issues. It is neither possible, nor warranted, to make general credit findings in this case. As will become apparent below, the Court will find in favour or against a particular party in relation to specific issues.
Some general observations may nonetheless be made. There was, perhaps understandably, an emotional overlay in the evidence that both the Husband and the Wife gave. The Husband was occasionally unresponsive in cross-examination. More often than not, however, he was disarmingly honest particularly as regards his evidence about his consumption of cocaine throughout the relationship and in particular the day before the wedding. The Husband was also quite frank with the Court about undisclosed income for tax purposes. There was both a transparency, and naivety, about the Husband’s evidence that permeated his testimony.
The Wife’s evidence contrasted to that of the Husband. The Court accepts that it must have been difficult for her to be cross-examined by her former Husband in the circumstances of this case. And yet even the Wife’s Senior Counsel conceded in closing submissions that, whilst it was important to remember the context of being cross-examined by her ex-Husband, she was nonetheless “extremely argumentative and, on occasions, certainly at the beginning, not terribly responsive…”. The Court accepts, as Mr Campton pointed out, that her evidence did improve once the Court had intervened and made some observations about the importance of answering questions. When the Wife’s evidence is examined carefully, the Court finds she was more likely to exaggerate and obfuscate about matters relating to contribution during the relationship, and on the issue of when the relationship came to an end, than on issues relating to the Financial Agreement.
The Cases Contrasted
There are critical differences between the Husband’s and the Wife’s case.
For example, the Husband contends that it was only on … 2011, the day before their wedding, that the Wife mentioned the Financial Agreement. In cross-examination the Husband insisted that this was the case. The Husband insisted that not only was the Financial Agreement first mentioned on … 2011, but it was on that day that he went to see Christopher Finn. The appointment to see him had been arranged by the Wife. The only evidence that the Husband gives about this issue is his own.
The Wife’s evidence is that she first spoke to her solicitor, Mary Antony, about what the Wife described as a “pre-nup” on 3 March 2011. The consultation with the solicitor is evidenced by a memorandum of account bearing that date, which refers to a “conference to discuss financial agreement issues”. The Wife contends that after that conference she told the Husband that she had sought the advice and that the Husband would himself need to get independent legal advice. At paragraph 49 of the Wife’s Affidavit she sets out her conversation with the Husband and in particular his response; “I’ve told you, I don't believe in prenups! We don't need a prenup, we will be together forever.”
This evidence of what the Husband said is entirely plausible, because it is consistent with the Husband’s own case in which he was so clearly optimistic about the future of their relationship and that they would be together forever. In his email to the Wife of 31 October 2018 (page 345 annexed to the Husband’s Affidavit of 14 March 2019) he makes his past feelings towards the Wife very clear: “I loved you so very dearly.” It is also quite plausible that the Wife, having obtained legal advice about what she described as a prenup, would then want to discuss it with the Husband. The Court accepts the Wife’s evidence about her obtaining advice on 3 March 2011, and discussing it with the Husband shortly thereafter.
The Wife’s evidence is that in the period of months after seeing Ms Antony, her concerns about the financial arrangements with the Husband increased. In effect, her case was that she was providing money to him for his own purposes, which was not being repaid. She contends that it was in the context of expressing her concerns about intermingling of her finances, that she once again raised the need for her to have a prenup. She contends that the Husband again said to her: “We don't need a prenup, baby!” This is entirely plausible. The Court accepts her evidence. The evidence of the financial transactions between the parties is consistent with the concerns the Wife expressed.
The Wife contends that on 15 April 2011 she once again communicated with her solicitor, Ms Antony, about a financial agreement. Indeed, the Wife’s email to Ms Antony dated Friday 15 April 2011 was in evidence. There is no need to reproduce that email in these Reasons for Judgment, but what is noticeable is the consistency between the concerns of the Wife deposed to in her Affidavit about intermingling of finances in the period March-April 2011, and the summary that she provides to Ms Antony in her email.
The Wife deposes that on 17 May 2011 she discovered a letter from the Husband’s Trustee in Bankruptcy which disclosed that he had been declared bankrupt in January 2010. She was unaware of this. In the discussion that followed with the Husband she once again raised the issue of a prenup. She contends that he said: “I told you a million times, we don't need a prenup!” The Husband denies saying these words and he denies that the Wife discovered that he was bankrupt. Rather, he contends that he told her about these things. An uncontested fact is that the Husband had been bankrupt and the Court observes that given this uncontested fact, and irrespective of whether the Wife discovered it or the Husband disclosed it, it makes the Wife’s case that she needed a prenup all the more plausible.
The Wife contends that on 18 May 2011 she had another conversation with the Husband in which she insisted that she needed a prenup. The Husband denies that this conversation took place. The Wife also contends that on the same day, and by way of an email sent at 1:19 pm, she instructed her solicitor to commence drafting the agreement. This fact is verified by the evidence. Indeed, on 18 May the Wife emailed the solicitor at 1:19 pm, the solicitor responded at 1:42 pm, and the Wife wrote again at 4:12 pm. There is no doubt that the Wife gave instructions to her solicitor to prepare an agreement on 18 May 2011. Interestingly, the Husband does not dispute this. Rather, he contends that the drafting of the agreement was “…made behind my back and … not done with my permission or knowledge.” (Husband’s Affidavit of 14 March 2019, page 12, point 9).
The Wife contends that later in the day on 18 May 2011 she told the Husband that she had instructed her solicitor to start working on a prenup. Indeed, she conceded that this made her feel much more comfortable about having a holiday to … with the Husband. The Husband disputes that the discussion took place, but accepts that the Wife may well have had discussions with her solicitor, but they were not disclosed to him on 18 May. The Court accepts the Wife’s evidence in this regard. Her evidence is consistent with earlier evidence.
The Wife’s evidence was that shortly after 21 June 2011 both the Husband and herself moved into an apartment at Suburb D. This led to a further discussion with the Husband about the prenup. The conversation in question is set out at paragraph 88 of the Wife’s Trial Affidavit. The Husband contends that this is “total fabrication”. He insists that he did not know who the Wife’s lawyer was. The Court accepts the Wife’s evidence. The Court accepts the Wife’s evidence.
The Wife deposes to contacting her solicitor, Ms Antony, on 14 July 2011 and providing further information to enable the preparation of the agreement. The correspondence between the Wife and her solicitor is consistent with her assertion. The Husband does not contend that the Wife did not contact her solicitor but insists that he had no knowledge of these matters at the time and, indeed, was unaware of these matters until reading the Wife’s Trial Affidavit. The Court does not accept the Husband’s evidence in this regard.
At paragraph 90 of the Wife’s Trial Affidavit, she concedes that even though she had given instructions to her solicitor to prepare an agreement, she did not pursue the matter with her solicitor in the period from 14 July 2011 to 17 October 2011. Notwithstanding this, her evidence is that by early October 2011 she still remained concerned about the need for a prenup and in fact had raised it with the Husband. The Husband denies that this conversation took place. It is more likely than not that the Wife’s evidence is correct.
At paragraph 97 the Wife gives evidence of the Husband formally proposing marriage to her on 23 September 2011. The fact of the proposal does not appear to be contentious. However, and somewhat strangely, the Wife contends at paragraph 97 that the Husband had agreed to a binding financial agreement. This is contrary to her own evidence. At no point does she record in her evidence that the Husband had agreed. The Husband confirms in his evidence that he had not agreed. It is highly unlikely that the Husband agreed.
The Wife deposes that in the fortnight following 23 September 2011, she had another discussion with the Husband about the wedding date but that she once again raised the issue of the prenup. The Husband disputes that they discussed a prenup. Indeed, he describes this as a “…made up fantasy”. The Court prefers the Wife’s evidence in this regard.
At paragraph 102 of the Wife’s Trial Affidavit she deposes to a discussion in early October 2011 with the Husband. They discussed wedding arrangements but, she contends, she told the Husband that she would chase up her solicitor so that the prenup can be signed prior to the wedding and that he said: “If you need me to sign it, I will.” The Husband denies this part of the conversation and contends that: “…it is all made up, all of it.” It is highly unlikely that the Husband agreed to sign a prenup as asserted by the Wife. The Court is satisfied, however, that she raised the issue.
The Wife deposes that on 17 October 2011 she, in effect, resumed her instructions to her solicitor to prepare the agreement. The email exchanges that took place between 17 October 2011 at 5:08pm, and 19 October 2011 at 11:08am are in evidence.
At Trial Affidavit paragraph 105 the Wife contends that on or about 26 October 2011 she and the Husband had a discussion about the need for him to obtain independent legal advice about the agreement. She contends that the Husband said to her:
As I told you, I will sign a prenup, but I’m not going to get independent legal advice on it. I’m too busy with work anyway, I can’t take any time off.
The Husband denies this conversation and insists that the first time he was informed about the existence of an agreement, and the need for him to obtain independent legal advice, was on … 2011 the day before the wedding.
It is unlikely, the Court finds, that the Wife would have had the discussion she contends occurred in circumstances where she not only did not have the agreement, but could not even be confident as to when it would be prepared. It is highly unlikely that the Husband said what she contends. The Court accepts the Husband’s denial of this conversation. The fact is that no agreement was in existence at the time, so it follows that he could not have been told of its existence.
There was clearly further correspondence between the Wife and her solicitor on 27 October 2011. The solicitor confirmed the need for the Husband to obtain independent legal advice. It is clear that as at the time of this email communication from the solicitor, that is 10.19 am on 27 October 2011, the financial agreement had not yet been prepared.
The Wife deposes at paragraph 107 of her Trial Affidavit that later in the morning of 27 October 2011 she had a further discussion with the Husband in which, in effect, she told him that her solicitor had confirmed that he needed independent legal advice, and that this could be obtained after hours if it clashed with his work commitments. She deposes that the Husband said:
Fine, whatever. If it’s so bloody important to you, I will go and see a lawyer, but I’m not going to listen to anything they say. Just organise it for me, I don't want to have anything to do with it.
The Husband contends that this conversation is a complete fabrication. The Court finds, it is more likely than not, that some conversation about the proposed agreement took place. It is highly unlikely that the Husband said what is attributed to him.
The Wife gives evidence that after that conversation she sought a recommendation about an independent lawyer, and was referred to Chris Finn. In relation to Chris Finn the Wife deposes at paragraph 111:-
As at that date, Chris Finn was known to me, in that I had heard Ms O talk about him in the context of being her friend’s husband. To my recollection, as at that date I had never met Chris Finn, although I concede I may have met him socially through my mother and Chris Finn’s Wife. As at that date, Chris Finn had never provided me with any legal advice or represented me in any capacity, nor had he provided me with advice or represented me at any time since. To the best of my knowledge, Chris Finn has never represented my family, nor provided any of them with legal advice either. To the best of my recollection, I have not had any significant conversations with Chris Finn other than those outlined in this affidavit.
As it turns out, the Court accepts the Wife’s evidence about Chris Finn, and indeed accepts that they had met socially through the Wife’s mother.
The Wife deposes at paragraph 113 to the conversation that she had with Chris Finn. There is no doubt, in this regard, that she initiated the contact with Mr Finn, and made the appointment. She deposes that the conversation was as follows:-
Me: | “Hello, is this Chris Finn?” |
Chris Finn: | “Hello, yes?” |
Me: | “Hi Chris, this is Ms Jindra, Ms O’s daughter.” |
Chris Finn: | “Oh hello, my wife told me you might call.” |
Me: | “I’m calling to talk to you because I’m engaged to be married to my fiancé, Mr Delrio. He proposed to me in …, and we’re due to get married on … 2011. I require a Binding Financial Agreement before I get married. Mr Delrio is being difficult about it, but he has agreed to sign one. I have asked my solicitor, Mary Antony, to draw up the agreement, but she advised me that Mr Delrio will need to be independently advised about the agreement, and whether it is in his interests to enter into that agreement.” |
Chris Finn: | “Yes, that’s correct, it’s a requirement under the Family Law Act.” |
Me: | “Mr Delrio has asked me to organise a solicitor for him. I was wondering if that’s something you’d be qualified to do, and whether you would be comfortable doing it?” |
Chris Finn: | “Yes, I am qualified to provide Mr Delrio with advice about the agreement, so long as he is willing to come and see me in person, and give me his instructions. I see no reason why I couldn’t do that. Whilst I know your parents through my wife, and I have socialised with your family on occasions, I have never undertaken any professional work on behalf of you or your family. However, independent advice is just that. It may be that I advise him not to sign the agreement.” |
Me: | “That’s alright, I understand. I will let Mr Delrio know that you are willing to provide independent advice. Can I make arrangements with you to make an appointment with Mr Delrio prior to the wedding for to provide him with that advice regarding the agreement?” |
Chris Finn: | “Yes, I look forward to meeting Mr Delrio.” |
It should be noted that she deposes that the conversation was prior to … 2011. The conversation probably took place as the Wife asserts, but that does not mean that the Court accepts that what she told Mr Finn was correct. It is highly unlikely that the Husband asked her to arrange the appointment.
The Wife then deposes that following the conversation with Mr Finn she spoke with the Husband and that, in effect, he agreed to see him about the agreement. This is highly unlikely.
The Husband’s evidence about these matters is to the following effect. He contends that Christopher Finn is the Wife’s family’s close family friend and that they had socialised together at least once. He denies the conversation in which the Wife told him about Chris Finn and, once again, insists that he knew nothing about an agreement before … 2011. The Husband’s evidence is only partly correct. They had socialised together at least once. The Wife probably did not tell him about Chris Finn on this date. The Husband did know something about the agreement at this time – namely that the Wife wanted one – but did not in fact see it before … 2011.
On … 2011 the Wife emailed her solicitor at 5:12 pm in the following terms:-
Hi Mary,
Hoping not to hand the prenup to Mr Delrio the week of the wedding (next week). We have a solicitor who has never done work for us that is prepared to be the independent advice on this, for Mr Delrio.
I know you are busy but if you think you do not have the time to poke this together in time, please let me know…
It is abundantly clear, therefore, that the agreement had not yet been drafted as at … 2011. The Wife was clearly keen to avoid handing the agreement to the Husband the week of the wedding.
The solicitor replied by email dated … 2011 at 4:48pm. The email was in evidence. She sought further information from the Wife. A draft financial agreement was attached to that email. The Wife deposes at Trial Affidavit paragraph 116 that at 4:48 pm on … 2011 her solicitor forwarded to her a copy of the first draft of the agreement and that she then printed a copy of the said document from her printer at home and placed the printed copy of the first draft of the agreement on the dining room table located in the Suburb D property. She also contends that on … at 5:15pm she forwarded to Chris Finn the first draft of the agreement.
Her email to Mr Finn says as follows:-
Hi Chris,
Hideous thing that must be done attached … Mr Delrio is bankrupt (I pick them :)) and I know the basics of that but doubt all … I just want to be covered for all I currently hold, asset wise and refuse to be a “meal ticket” for his daughter, parents etcetera as he is now a good but unlicensed tradie I do not want any of his client base to have a claim against me … I am a paranoid freak, once (almost) bitten, twice shy. Thank you so much for your help on this, once the blanks are filled in, Mr Delrio can discuss with you.
Kind regards,
Ms Jindra
The Court notes that this is an unusual email in at least two ways. Firstly, it is unclear why the Wife’s solicitor could not forward the draft agreement to Mr Finn directly. Second, the language used in the email to Mr Finn is somewhat inconsistent with disinterest and professional objectivity. If the Wife was not Mr Finn’s client then it was unusual for her to be forwarding an agreement in respect of which her Husband needs to obtain independent legal advice to her Husband’s solicitor, and in doing so communicate such personal information.
The Husband’s evidence is that he knows nothing about this. This is probably correct.
At paragraph 119 the Wife deposes to a discussion she had with the Husband sometime after 5:15 pm on … 2011. She deposes to the following conversation:-
Me: | “Mary Antony has just sent through the first draft of the pre-nup. I have shot it through to Chris Finn so that you and he can review it. Mary has asked me some questions about my finances, and I am going to start reviewing the document tonight.” |
Mr Delrio: | “OK.” |
Me: | “I have printed a copy of the draft and put it on the dining room table for you to read.” |
Mr Delrio: | “No, I’m not going to read it.” |
Me: | “I can’t force you to read it, but I think you should. It would be a good idea for you to be familiar with it when you meet Chris.” |
Mr Delrio: | “I’m too busy, I’ll just got through it with him on the day.” |
Curiously, the Husband provides no evidence in response to this paragraph of the Wife’s Affidavit. This is unusual because most of the other paragraphs in the Wife’s Trial Affidavit are responded to often in detail. At other times the Husband responds to the Wife’s evidence in peremptory terms such as “complete fabrication”, “this is laughable…”, “…this is a blatant lie…” In relation to paragraph 119 the Husband, notably, says nothing.
The Court finds that it is more likely than not that the conversation occurred as the Wife contends. Thus, the Husband probably had an opportunity to consider the terms of a draft agreement for the first time on … 2011, the Saturday before his wedding. The Wife’s evidence that the Husband said to her: “No, I’m not going to read it.”, is plausible.
At paragraph 120 of the Trial Affidavit the Wife deposes to reviewing her financial documents so that she could provide the further information requested by her solicitor. She says that she made handwritten notes on the draft of the financial agreement and inserted the requisite information. She says that she left the hand amended print copy on the dining room table. At paragraph 121 she says that on … 2011 she discussed with the Husband the handwritten amendments made, and the source documents used to make those changes. She asserts that she asked him to look over the changes and indeed invited him to check those changes against the documents relating to them. She says that the Husband said: “No, I’m not going to do it tonight. Maybe later.”
The Husband does not reply or otherwise deal with this conversation. The Court accepts that, more likely than not, the conversation took place as alleged.
The Wife deposes at paragraph 122 of her Trial Affidavit that at 4:37am on … she communicated with her solicitor in relation to the amendments. The email from the Wife to her solicitor is in evidence.
At Trial Affidavit paragraph 123 the Wife deposes to the conversation she had with the Husband after he woke up on … 2011. She contends that the Husband was non-cooperative in providing information about himself for inclusion in the agreement. She contends that he said:
And I’m not putting any of my assets or liabilities in this document. I’m just not doing it.
Once again, the Husband does not reply to this evidence and the Court finds that, more likely than not, the conversation occurred as contended by the Wife.
At about 2:04pm on … 2011 the Wife’s solicitor sent her the second draft of the agreement, but did ask for more information. The email in question is in evidence.
The Wife deposes that she printed out the second draft of the agreement, again placed it on the dining room table, and again discussed it with the Husband letting him know that it had been received, that he should read it and check the changes. She contends that he said: “I can’t, I’m too busy.” The Husband does not reply to this evidence. The Court accepts the Wife’s evidence in this regard.
At paragraphs 128 to 129 the Wife sets out what she did in reviewing the Financial Agreement, and providing supporting and verifying financial documents. She says she again placed those on the dining room table and again discussed it with the Husband, urging him to have a look at the same as well as inserting the details of his debtors. She says that the Husband said: “No, I’m not doing that. I told you, I’m not putting any details of my assets or liabilities.”
The Husband does not reply to this evidence. The Court accepts the Wife’s evidence.
At paragraphs 130 to 133 the Wife deposes to the further instructions she gave to her solicitor including that the Husband was represented by Mr Finn. It is clear from Ms Antony’s email to the Wife of 2011 at 2:26pm that this was the first time that the finalised financial agreement and accompanying certificates had been prepared and forwarded to the Wife. The email states:-
Dear Ms Jindra,
I attach the finalised financial agreement and the certificate to be given by Mr Delrio’s solicitor. You should print out two copies of the agreement and the certificate and get Mr Delrio to take both copies and the certificate to his solicitor. When Mr Delrio has signed and obtained the certificate (one copy for each copy of the agreement) he needs to give both copies to you and then I need to meet with you to sign the agreement. As time is getting quite tight with the wedding this weekend, if Mr Delrio at least gets his signed then we can sign your copy later, though it would be good to sign it beforehand. As for meeting up to sign it, I will be in Suburb S tomorrow morning but will be in the city on Friday although I have meetings all morning. I will wait to hear from you. Regards Mary.
On … 2011 at 2:32pm the Wife forwarded the above email, with its annexed financial agreement, to Mr Finn. She says that she reviewed the agreement herself, did not consider that it required any further amendments, printed it out and placed a copy on the dining room table, next to the piles of financial documents referred to earlier in her evidence. She says at paragraph 136 that that afternoon she and the Husband spoke. She told him that a printed copy was on the dining room table. She asked the Husband to review it but he declined. She explained that she had arranged an appointment for the Husband to meet with Mr Finn at 3:30pm tomorrow (i.e. …) and that he said: “Fine, I will go and see him.” The Husband does not respond to this evidence. The Court accepts the Wife’s evidence in this regard.
At paragraph 137 the Wife deposes to printing out two copies of the final draft of the agreement, giving both of those to the Husband before he left for work, and saying that he needed to take both copies to Mr Finn at 3:30pm to ask for advice about the prenup. The actual conversation is as follows:-
Here are two copies of the prenup. You need to take both of the copies to Chris Finn at his office at 3.30 pm this afternoon, and ask Chris Finn to give you his advice about the prenup and whether it is in your interests to sign it. Tell Chris Finn he can give Mary a call if he needs to ask her anything, or if you want to propose any changes to the prenup, including if you want to insert any details of your debtors.
She contends that the Husband replied; “Okay. I will be home after I’ve met with Chris.”
The Husband does not respond to this evidence. It is inconsistent with his evidence in the sense that the Husband contends that the first he saw of the agreement was at Mr Finn’s office.
The Wife deposes that she emailed her solicitor at 1:59pm on … 2011 advising her that the Husband was seeing Mr Finn this afternoon at 3:30pm. She clearly expected to have the signed documents shortly afterwards, and asked her solicitor whether she could drop in the following morning. The following morning, of course, was the morning of the wedding.
At 3:19pm on … 2011 the Wife’s solicitor emailed back:-
Hi Ms Jindra. Unfortunately I’m not going into the office and I will not be available until after lunch and then only for a short time in the city. Do I assume you are going away on honeymoon? If not perhaps we can meet up next week. Otherwise I could meet you in the office around say 1 pm as I think I should be back in the office by then. Regards Mary.
Notwithstanding this email, the Wife’s evidence was that on the afternoon of … 2011 prior to the wedding ceremony, she went to her solicitor’s offices, taking the copies of the agreement as signed by the Husband, signing them in front of her solicitor after she had provided her with the requisite advice. The Wife deposes that she saw her solicitor sign the certificate of advice and date the binding financial agreement.
The Wife deposes at Trial Affidavit paragraph 140 that at 3:30pm on … 2011 the Husband attended on Mr Finn. Indeed, she annexes a copy of Mr Finn’s file note dated … 2011 but signed … 2011.
The Husband’s evidence concedes that he attended the office of Mr Finn to discuss the agreement. However, he deposes at paragraph 40 of his Affidavit of 15 September 2017 that the Wife drove him to Mr Finn’s office, and dropped him off out the front. It is not possible to reconcile this inconsistency in the evidence.
The Wife contends that at 4:30pm on … the Husband arrived home, confirming that he had seen Mr Finn, and that they had talked for about 45 minutes. The file note from Mr Finn dated … 2011 confirms that it was a 45 minute conference. Nonetheless, the Husband describes the length of the conference as a “short meeting”. The conference with Mr Finn probably lasted 45 minutes.
Moreover, the Husband contends in his Affidavit of 14 March 2019 that both he and the Wife had consumed cocaine the previous day and night, i.e. … 2011. He contends that he was not in the proper state of mind to attend and, indeed, that he was in a “drug addled state”. The issue of the parties’ consumption of cocaine, and its potential relevance to this case, will be discussed shortly.
The Husband does not respond to the Wife’s evidence in paragraph 141 of her Trial Affidavit and, in the circumstances, the Court accepts her evidence. The conservation alleged by her that took place when the Husband returned from Mr Finn’s office, in paragraph 141, is as follows:-
Me: | “Did you see Chris?” |
Mr Delrio: | “Yeah, we talked for about forty-five minutes. Chris is a great guy, he gets everything. He has been through it all himself, his second wife supported him in the business. He explained the pre-nup really well, and why you need one in this day and age. He told me that due to our respective financial positions, I shouldn’t sign it, as it was against my interests to do so. I told him Iwould sign it anyway. I think the pre-nup is a waste of time. We’re going to be together forever, and I would like it torn up after we’re married.” |
Me: | “No Mr Delrio, it’s not going to be torn up after we’re married. I have told you that many times before. I need this agreement to secure my financial independence and to ensure that your debtors cannot make any claims on my assets or otherwise affect my ability to access credit. Did you and Chris make any changes to the agreement? Did you insert the details of your assets and liabilities?” |
Mr Delrio: | “No, I didn’t require any changes to the document, and I didn’t’ insert any details of my assets and liabilities. Here are two copies of the agreement signed by me.” … |
Me: | “Great, thank you Mr Delrio. I’ll organise the execution of these with Mary Antony.” |
At paragraph 142 the Wife deposes to ringing her solicitor at about 4:30pm on … 2011 about an appointment to sign the agreement. The signing of the agreement by the Wife is not controversial.
The Husband contends that on the evening of … 2011 both the Wife and himself consumed more cocaine. It is appropriate to consider the evidence about the parties’ consumption of cocaine.
In short, the Husband’s case was that they were both regular cocaine users commencing from their first date. Indeed, he contends that they have spent over $100,000 on cocaine during their relationship. He deposes to having gone into rehabilitation in … 2014 and that he is completely clean and has been since then. He deposes to his Wife ceasing cocaine use in 2013. The Wife makes a number of admissions about cocaine use in her Affidavit. For example, at paragraph 62 she concedes that in about May 2011 that “…we would go out almost every night, purchase expensive dinners, drugs and alcohol.”
At paragraph 78 she deposed:
During the period from 12 January 2011 to 9 June 2011, Mr Delrio and I had used cocaine together relatively frequently, sometimes as much as once a week.
Finally, at paragraph 148 she deposes that on the wedding day she observed the Husband to be:
…shaking and sweating, and his speech was slurred. Based on his physical absence, I knew that Mr Delrio was under the influence of drugs. I said to him words to the effect of:-
“You’ve got to be joking.”
It is clear that both the Husband and the Wife used cocaine during their relationship. The fact that the Wife observed the Husband to be under the influence of drugs on the day of their wedding is consistent with the Husband’s assertion that, at the very least, he used cocaine the night before the wedding.
In cross-examination the Wife specifically denied that she too used cocaine the night before the wedding. Given the concessions that she herself made about cocaine use throughout the relationship, the Husband’s contention that she used cocaine is a plausible one. The focus for present purposes is the relevance if any, of the Husband having used cocaine the night before he saw Mr Finn.
There are some other issues about the Wife’s credit that need to be briefly mentioned. For example, she denied in her evidence that the Husband ever gave her money in cash on any regular basis. It did not take long for the Husband’s cross-examination of the Wife to reveal that the Wife’s evidence was plainly overstated and exaggerated in this regard. The objective evidence suggested that the Husband regularly made payments of cash to her. The fact that these cash payments were in repayment of moneys that she had advanced to him was not the point. The Husband cross-examined the Wife about her denials in relation to the nature and extent of contributions he made during the course of the relationship. The relevance of this evidence was purely in relation to credit. Again, the Wife’s denials about the Husband’s contributions were overstated and exaggerated. She was simply not prepared to make reasonable concessions in relation to either of the above issues.
Another issue in respect of which the Court has concern about the Wife’s evidence is her contention that the parties separated on 17 March 2014. In cross-examination the Wife agreed that the Husband performed works at the Street G, Suburb H property after (indeed well after) the date of separation that she contended for. All that the Wife could say to provide a plausible explanation for why this was occurring after separation is that: “I asked you many times not to do those works.” (Transcript 29 March 19, page 138, line 9.)
Moreover, she agreed that their finances continued to be intermingled after separation because she was receiving the benefit of funds transferred or paid to her by the Husband. Even if, as the Wife contends, these were merely loans from her to him, and repayments by him to her, it is, at the very least, an unusual arrangement for separated partners. The evidence suggests that they continued to socialise after the Wife’s contended date of separation. The evidence suggests that the Husband consoled her during an unfortunate diagnosis of breast cancer. The text messages between the parties seem inconsistent with the Wife’s contended separation date.
When the Wife was cross-examined about the circumstances of the Husband consulting Mr Finn on … her affidavit deposed to the Husband having copies of the financial agreements that she had given him. Moreover, she did not depose to taking the Husband to see Mr Finn. In cross-examination she gave the impression of being far less confident about both assertions.
The final issue in respect of which the Court has concerns about the Wife’s evidence is in relation to her divorce application. Her own evidence in cross-examination was that on the date that the divorce application was served on the Husband they were sharing a bed. When one has regard to the divorce application it is clear that she was contending that they were separated, albeit under the same roof. Having regard to the evidence referred to above, that does not seem plausible. They were sleeping in the same bed. Her contention that “We weren’t having sex or anything…” is implausible (transcript 29 March 19, page 156, line 26).
Moreover, the Wife conceded that the divorce was undefended by the Husband and that at the time he was in hospital because of a suicide attempt and also, according to the Wife, after “he attempted to kill me”. (Transcript 29 March 2019, page 156, line 47.)
In the Wife’s Application for Divorce filed 20 May 2016 she asserted that the parties separated on 17 March 2014, that they lived together between April and June 2015 for eight weeks, and thereafter from November 2015. However, she contends that they did not live together as Husband and Wife. The Wife’s Affidavit in support of her Divorce Application was made on 13 May 2016. At no point in that Affidavit does she disclose that she and the Husband shared the same bed or that their finances continued to be intermingled.
The totality of the evidence before me, in the context of a fully Defended Hearing where the evidence could be and was tested, it is highly unlikely that the date of separation was 17 March 2014. The date of separation was much later, but it is not necessary for present purposes to establish when precisely it was. The significance of the issue is one of credit. But it does not follow that the Wife’s evidence about the agreement should not be accepted.
The Court does not accept that an issue estoppel arises in the context of an undefended divorce where the Applicant for that divorce gives evidence in subsequent defended proceedings that casts doubt on her original contention about the date of separation. Again, it does not follow that her evidence about the agreement should not be accepted.
Senior Counsel’s submission that an issue estoppel arises warrants specific discussion. Whereas the issue of the date of separation on the divorce application was a critical issue of fact that had significant legal ramifications, in the present proceedings the relevance of the date of separation merely went to the Wife’s credit. In other words the date of separation was irrelevant to the matters presently before the Court, except as to credit. No issue estoppel arises in these circumstances. (See Spencer Bower and Handley Res Judicata, 4th Ed, 2009, at 225 et seq.; Brewer v Brewer [1953] HCA 19; In the Marriage of Schorel (1990) FLC 92-144 at [29]; Daniels & Daniels [2009] FamCA 1152 at [17] – [32] and Annabel & Kelsey [2014] FamCA 110 at [48] – [54].)
It is important now to consider the evidence of the Husband, and that of Christopher Finn, the solicitor who signed the section 60G certificate.
Mr Finn’s evidence is contained in his Affidavit sworn 27 March 2019. It differs in many respects from the evidence of the Husband in relation to the circumstances of the signing of the Financial Agreement which commences from paragraph 39 onwards of his Affidavit of 15 September 2017. The Husband also deals with this in the closing paragraphs of his Affidavit of 14 March 2019. Mr Finn was cross‑examined by telephone.
Mr Finn’s Affidavit comprehensively sets out his recollection of his meeting with the Husband on the afternoon of … 2011. He annexes a copy of his file which includes his file note of the attendance of the Husband on … 2011, the emails he had received from the Wife and a copy of the Financial Agreement dated … 2011 signed by both parties. It is clear from this evidence that the only communication between Mr Finn and the Wife’s lawyers was his email to her on … 2011 at 5:37pm confirming that he had seen the Husband that afternoon, that the Husband had signed two copies of the document, and that he had signed the appropriate certificate. In this email he mentions that the originals are with the Husband. The closing line of the email is; “I trust it can all be finalised before the marriage tomorrow afternoon!”
The only correspondence from the Wife’s lawyer to Mr Finn was one dated … 2011 enclosing one of the original copies of the signed agreement.
What is missing from this Affidavit, and the evidence attached, is any reference to payment of fees. There is no invoice, or an account. There are no copy ledgers. Mr Finn does not say whether he issued an account, and if so for how much, and to whom. The Husband gives no evidence about this. The Wife gives no evidence about this. It could have been relevant.
Mr Finn’s recollection of the relevant events is that he met with the Husband in his office, but that he had met him before once or twice in a social context as the Wife was the daughter of friends of his. In other words, he knew the Wife’s parents. This is consistent with the evidence of both the Husband and the Wife. Both agree that they met Mr Finn socially on at least one occasion. The Husband’s contention that this social gathering occurred after the Wife had commenced communication with him about the Financial Agreement is not a contention established on the evidence.
In Mr Finn’s Affidavit he sets out in quite an amount of detail what took place at the meeting, what he said, and what the Husband said. In short, Mr Finn contends that he gave a succinct but nonetheless comprehensive explanation of the provisions of the agreement and specifically advised the Husband that it was to his financial disadvantage to sign the document because he would be better off, in the event of separation, without the agreement. He contends that the Husband said that he understood, and would sign it anyway.
Mr Finn explains that the evidence in his Affidavit is based upon his file note, which is relatively short (18 lines), as well as recollection of the advice provided. He recalls that the Husband appeared to be of sound mind in that he spoke with him and responded regarding the advice provided, asked questions, and made comments. He formed the impression that the Husband fully understood the nature and effect of the advice provided.
The Husband’s evidence contrasts starkly. He contends that Mr Finn gave him the agreement and said: “I just need you to initial at the bottom of each page and sign the end one”. The Husband contends there was no discussion about the contents, no warning about his rights being diminished, and no legal advice given at all. The Husband contends that most of the talk was small talk around the wedding. He denied that there was any serious conversation about the contents of the document. The Husband contends he just flicked through the pages and signed where he needed to sign.
These two versions of the same event cannot be reconciled.
The Husband cross-examined Mr Finn. The Husband put it to him that on arrival to Mr Finn’s office, the agreements were put on a coffee table in Mr Finn’s boardroom. He accepted the possibility that this was correct. It must be remembered that Mr Finn does not give evidence to the effect that the Husband brought the financial agreements with him. Indeed, there is a strong inference that Mr Finn must have had the agreement before the Husband arrived because he does not say that he read the agreement whilst the Husband was there and, indeed, the file note, as well as the Affidavit, suggests that Mr Finn was well aware of the contents of the agreement before the interview with the Husband.
This does not exclude the possibility, of course, that Mr Finn had read the copy of the Financial Agreement sent to him by the Wife by email, and that the Husband had also brought copies of the agreement for him for his signature. Nothing ultimately turns on this issue.
In cross-examination Mr Finn agreed that both he and his wife were friendly with the Wife’s parents and, thus, saw the Wife from time to time. Mr Finn agreed, however, that he had never spoken with the Husband about the Financial Agreement before … 2011.
Mr Finn was cross-examined about whether the Husband had had any input into the agreement insofar as it related to his assets and liabilities. Ultimately Mr Finn agreed that that information came from the Wife. He accepted that he did not know whether the Husband had had any input in the agreement.
In cross-examination Mr Finn seemed to recall “correspondence that came through from the solicitor” (transcript 29 March 19, page 166, line 29). The difficulty with this is that there is no such correspondence from the other solicitor on the file. Moreover, Mr Finn contended that:
…you read it, you refused to give any information about assets and liabilities apart from the child maintenance. There was some email about that, I recall, in the file.
(Transcript 29 March 2019, page 166, lines 25 to 27).
What is clear from the totality of the evidence is that this information came from the Wife, not the Wife’s solicitor, and certainly not from the Husband.
Mr Finn did explain in cross-examination that he had never represented the Wife’s parents and that they were merely friends. He explained, however, that after the wedding he did some work for the Wife in a property related issue. He explained that that was well after the marriage.
Finally, Mr Finn acknowledged that he had had no previous contact with the Husband in relation to the Financial Agreement before the meeting on ….
It is significant that the Husband did not challenge significant parts of Mr Finn’s evidence, and particularly the advice given. The Court, therefore, accepts Mr Finn’s evidence about the advice given, and rejects the Husband’s contentions that there was no discussion about the contents, that there was no warning about the rights being diminished, and that Mr Finn did not give legal advice on the document at all.
Critical Findings of Fact
Having regard to the evidence, a number of findings are possible.
Whilst the Respondent Wife first sought advice about a financial agreement on or about 3 March 2011, the final draft of the agreement was not completed until … 2011, which was the earliest date at which the Husband could conceivably have seen the document. As at this date, however, the Husband clearly knew that the Wife wanted a financial agreement to be entered into before the wedding, and he had the opportunity to view drafts of the financial agreement from … 2011 but declined to have any input into them.
The evidence the Husband gives that he had not seen the final version of the financial agreement before … is probably correct. The Court finds, however, that he could have inspected earlier drafts and was in fact invited to by the Wife. He declined to do so.
The Court finds that all communication with Mr Finn before … 2011 was through the Wife. The Husband had neither met him, nor communicated with him, in the context of the Financial Agreement before meeting him on ….
As from … 2011 when the Wife received the first draft of the agreement, the Court accepts that the Husband was aware that the Wife wanted him to sign the agreement. He was initially resistant, postponing any consideration of the agreement or the need to get advice, but ultimately, albeit reluctantly, accepted that the Wife wanted him to sign it before the wedding. The fact that he went to see Mr Finn evidences his acceptance of the fact that the Wife wanted him to sign the agreement before the wedding.
The Husband contends that on the evening of … 2011 the Wife said to him: “There will be no wedding if you don’t sign it”. This is consistent with the Wife’s own evidence at paragraph 99 of her Trial Affidavit where she deposes to making a similar statement twice, on 23 September 2011. The Court accepts, therefore, that it is more likely than not that the Wife did this statement.
Whether the threat of calling off the wedding was illusory or not falls to be determined by the facts. The Wife’s evidence was that the wedding was to be held at the home of a friend at no cost, and that the Wife’s mother was meeting the costs of the catering, the wedding dress, and her wedding ring. The ceremony, in fact, was a short one with a small celebration attended by a small group of family and friends. It was a casual garden party. The Husband conceded these matters in cross-examination. He gives no evidence as to any cost, or disadvantage to him, if the wedding was delayed or cancelled. The Court accepts that the threat of calling off the wedding was not illusory.
The Husband received the legal advice set out in Mr Finn’s Affidavit. In this regard, the Court prefers Mr Finn’s evidence to that of the Husband. Mr Finn is an experienced solicitor. Whilst his file note was brief, the evidence contained in his Affidavit is plausible.
Is the Agreement Binding Having Regard to Section 90G(1B)?
The Husband’s attack on the independence of the legal advice that he received is problematic. In the Waterford v Commonwealth [1987] HCA 25, Brennan J at [4] refers to advice being independent in the sense that the personal loyalties, duties or interests of the advisor should not influence the legal advice which he gives to the client. The Husband’s case was, in effect, that Mr Finn’s personal loyalty, duty or interest was at the very least divided. There is no evidence to suggest this. The fact that Mr Finn may well have been friends with the Wife’s parents does not suggest that he had a loyalty, duty, or interest in favour of the Wife. Likewise, the fact that the draft agreement was sent to him by the Wife, who had arranged the appointment, and provided some background information, likewise does not result in a conclusion that, somehow, Mr Finn’s loyalty, duty, or interests was divided between the Husband and the Wife. This conclusion would remain unchanged on the facts of this case, even if hypothetically either the Wife or her parents had paid Mr Finn’s fees.
The Husband’s contention is in any event fundamentally flawed given that the Court accepts Mr Finn’s evidence that he told the Husband of the disadvantage he would suffer by entering into the agreement. In those circumstances, it could be hardly said that Mr Finn’s loyalty was somehow divided. True it is that there is no evidence to suggest that Mr Finn advised the Husband not to sign the agreement. One wonders whether that would be the role of a lawyer, in any event. Having pointed out the financial disadvantage to the Husband of entering into the agreement, as well as the possible repercussions to him of doing so, Mr Finn had discharged all his relevant duties. The attack on Mr Finn’s independence on the facts of this case is without foundation.
Insofar as the Husband was contending that the legal advice from Mr Finn did not otherwise comply with the provisions of section 90G(1B), again his contention fails on the evidence. Mr Finn clearly gave advice to the Husband about the effect of the agreement on his rights. In this regard, he explained to the Husband that by signing the agreement: “…your future entitlement to the marriage assets would be severely diminished.” (Affidavit of 27 March 2019, paragraph 7.6). Moreover, Mr Finn advised the Husband about the disadvantages of the agreement including, for example, foregoing an entitlement: “to a substantial share of Ms Jindra’s assets if the marriage fails at some future time.” (Affidavit of 27 March 2019, paragraph 7.6).
Validity of the Agreement: Section 90K(1)(e)
Here, the Husband contends that the wife engaged in conduct that was, in all the circumstances, unconscionable.
The High Court in Thorne v Kennedy [2017] HCA 49 discussed the meaning of the equitable concept of unconscionable conduct. This is discussed by Kiefel CJ, Bell, Gageler, Keane and Edelmann JJ at paragraphs 37 to 40, which is reproduced earlier in these Reasons for Judgment at paragraph 37.
Nettle J, at paragraph 113, added:-
It is not possible to identify exhaustively what amounts to a special disadvantage. Relevant matters may include "illness, ignorance, inexperience, impaired faculties, financial need or other circumstances" that affect the weaker party's ability to protect their own interests. Those matters are illustrative, not exhaustive. A special disadvantage may also be discerned from the relationship between parties to a transaction; for instance, where there is "a strong emotional dependence or attachment". Whichever matters are relevant to a given case, it is not sufficient that they give rise to inequality of bargaining power: a special disadvantage is one that "seriously affects" the weaker party's ability to safeguard their interests.
What is clear from the law is that whilst the classes of cases that may constitute unconscionable conduct are by no means closed, fundamentally there is the need for the innocent party to establish that he was subject to a special disadvantage “which seriously affects the ability of the innocent party to make a judgment” as to their own best interests. Moreover, the other party must also unconscientiously take advantage of that special disadvantage.
What is the special disadvantage contended in the Husband’s case? It is by no means clear. Doing the best the Court can to understand the Husband’s case, there are a number of possibilities. Firstly, the Husband contends that his use of cocaine the night before he saw Mr Finn for the purposes of signing the Financial Agreement impaired his judgment in circumstances where the Wife (he contends) not only knew about his cocaine use, but was an active participant in it.
There are obvious difficulties in the evidence in accepting the Husband’s contention. Whilst the Court is prepared to accept that he did consume cocaine the night before meeting Mr Finn, the Court does not accept his evidence, at paragraph 40 that: “I did not feel well enough mentally or physically to go and see Chris.”
This is completely inconsistent with Mr Finn’s evidence about the Husband’s presentation. Moreover, the Husband adduces no evidence that cocaine consumption the night before would somehow affect his judgment, let alone establish that he was subject to a special disadvantage which seriously affected his ability to make a judgment about his own best interests. The Court accepts the Wife’s evidence that the Husband worked that day, and that he went to see Mr Finn after work. The Husband leads no evidence to suggest that he was unable to perform his normal duties as a tradesman. The Husband’s own evidence is that he was a long-term user of cocaine. Nowhere in his evidence does he depose to the adverse impact that this had on his ability to work or function rationally. Indeed the evidence he lead about the contributions he made is quite inconsistent with this.
Again, doing the best the Court can to understand this limb of the Husband’s case, insofar as he was contending that he was emotionally overborn by the Wife, there is no evidence of this. Even the Wife’s threat not to proceed with the wedding must be understood in context. She was not threatening to end the relationship, or even alter the nature of the relationship. At paragraph 99 of her Trial Affidavit she makes clear that what was important to her was “a happy, supportive relationship.”
When the totality of the evidence is considered, it is hard to see how a challenge based on unconscionability can succeed. The Husband had his own income and did not rely on the Wife for financial support. From at least … 2011 the Wife repeatedly encouraged the Husband to seek advice and asked him about amendments, thus suggesting that she was at least open to negotiating the terms of the agreement. The Husband was experienced in relationships, having had at least two prior relationships which broke down. He was not obliged to enter the marriage. Indeed, the Wife herself had raised the possibility of postponing the same to a later date.
The Husband received clear legal advice, including as to the disadvantages of entering into the agreement. He suffered no disadvantage because the documents were forwarded to Mr Finn by the Wife, or that the Wife arranged the interview, or that the Wife took him to the interview. The Husband neither had to go to the interview, nor did he have to see Mr Finn. These are choices he consciously made. There was no objective basis for him to believe that even if the Wife cancelled the wedding, that the relationship would be over. Insofar as the Husband purports to rely on his own diary entries for … 2011, the mere fact that he may have written: “no choice but to… No wedding otherwise…” does not mean that he was under some form of special disadvantage, or that his will was overborn. In any event, the forensic weight to be given to the diary entries needs to be assessed carefully, particularly as the original documents were not available to the Court.
The circumstances of the late preparation and submission of the agreement are hardly ideal. Whilst the production of the actual agreement occurred very shortly before the wedding, the concept of the agreement and the Wife’s need for it was something that the Husband had been told about months beforehand. Notwithstanding this, there is no evidence before the Court that enables it to conclude that the Husband was victimised, exploited, or subjected to some form of unconscientious conduct. The Husband did not lack free will. He was clearly in love with the Wife. He wanted to marry her, and he proposed. He also knew before the agreement was entered into that she wanted the agreement to protect her assets, given the Husband’s prior bankruptcy, his child support liabilities, and the issues concerning his work.
The Wife’s reasons for protecting her assets were reasoned, and reasonable. Instead, the evidence points to the Husband metaphorically burying his head in the sand every time that the Wife raised the issue. Having done so, he is hardly in a position, and with due respect to him, to finally face reality, but to somehow construe a special disadvantage to him from the circumstances. The Husband may well have been deprived of a better bargain, but that firstly does not establish special disadvantage and, secondly, it is quite possible that he retains rights under Part VIII of the Act, as there is property that may not be covered by the agreement.
In short, the Husband’s contention as to unconscionability is not established.
The Wife’s contention that she should have a declaration that the agreement is in compliance with the Act
At the Hearing, the Wife sought an order under section 90G(1B) of the Act to the effect that the agreement was binding on the parties. Section 90G(1B) states:
(1B) For the purposes of paragraph (1A)(d), a court may make an order declaring that a financial agreement is binding on the parties to the agreement, upon application (the enforcement application ) by a spouseparty seeking to enforce the agreement.
Subsection (1B) needs to be understood in the context of section 90G(1A).
(1A) A financial agreement is binding on the parties to the agreement if:
(a) the agreement is signed by all parties; and
(b) one or more of paragraphs (1)(b), (c) and (ca) are not satisfied in relation to the agreement; and
(c) a court is satisfied that it would be unjust and inequitable if the agreement were not binding on the spouse parties to the agreement (disregarding any changes in circumstances from the time the agreement was made); and
(d) the court makes an order under subsection (1B) declaring that the agreement is binding on the parties to the agreement; and
(e) the agreement has not been terminated and has not been set aside by a court.
The statutory scheme is complex. The declaration that is available under 90G(1B) seems only to be available for the purposes of paragraph (1A)(d). That sub-section, i.e. (1A)(d), states that a financial agreement is binding on the parties to the agreement if the Court makes an order under sub-section (1B) declaring that the agreement is binding on the parties to the agreement. However, on the face of it sub-section (1A)(d) is merely part of sub-section (1A), and thus all of the requirements of (1A) need to be met before the declaration can be made. On the facts of this case, paragraphs (b) and (c) of 90G(1A) are not established. Thus, 90G(1A) does not apply, and thus the declaration is not available.
The Court accepts, however, that the orders the Wife seeks are to be regarded as an enforcement application for the purposes of section 90G(1B); Parker & Parker [2012] FamCAFC 33.
On the evidence, section 90G(1) appears satisfied. Section 90G(1A) seems directed to the situation where one of the formal requirements in section 90G(1) have not been met, but the Court is satisfied that it would be unjust and inequitable if the agreement was not binding. It is in that context that section 90G(1A)(d) comes into effect. Thus, section 90G(1B) is not an independent source of power to make a declaration. Accordingly, the declaration sought by the Wife cannot be granted.
I certify that the preceding one hundred and sixty-four (164) paragraphs are a true copy of the reasons for judgment of Judge Altobelli
Date: 12 June 2019
7
2