Dragomirov & Dragomirov

Case [2024] FedCFamC1A 187

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA

(DIVISION 1) APPELLATE JURISDICTION

Dragomirov & Dragomirov [2024] FedCFamC1A 187

Appeal from: Dragomirov & Dragomirov [2024] FedCFamC2F 730
Appeal number: NAA 169 of 2024
File number: MLC 3857 of 2022
Judgment of: CAMPTON J
Date of judgment: 17 October 2024
Catchwords: FAMILY LAW – APPEAL – BINDING FINANCIAL AGREEMENT – Where the wife appeals from a declaration that the financial agreement entered between she and the husband be binding and enforceable – Whether the wife discharged the onus of proof as to the provision of advice to fulfill the requirements of s 90G(1)(b) of the Family Law Act 1975 (Cth) (“the Act”) – Consideration of the principles identified in Abrum & Abrum [2013] FamCA 897 – Where the incontrovertible facts lead to the conclusion that the necessary advice prescribed by s 90G(1)(b) of the Act was not given – Error established – Where the primary judge determined in the exercise of discretion pursuant to s 90G(1A) of the Act that nevertheless it would be unjust and inequitable if the agreement were not binding – Where the wife appeals from an alternative declaration pursuant to s 90G(1B) of the Act – Where the wife appeals from the dismissal of her relief for the agreement to be set aside pursuant to s 90K(1) of the Act for non-disclosure of a material matter, or as to the agreement being void or voidable vitiated by undue influence, or unconscionable conduct – Where the wife contended errors as to a failure to take into account relevant considerations, taking into account irrelevant considerations, conclusions being contrary to the weight of the evidence, and failing to give adequate reasons – Where such errors are not established – Appeal dismissed – Costs ordered in a fixed sum.
Legislation:

Family Law Act 1975 (Cth) ss 71A, 75, 79, 90C, 90G, 90K

Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) r 10.13
Cases cited:

Abrum & Abrum [2013] FamCA 897

Bar-Mordecai v Hillston [2004] NSWCA 65

Bennett & Bennett (1991) FLC 92-191; [1990] FamCA 148

Cusack & Cusack (No 3) [2024] FedCFamC1A 93

Daily & Daily (2020) 61 Fam LR 75; [2020] FamCA 486

Daily & Daily (No 2) (2023) FLC 94-151; [2023] FedCFamC1A 122

DL v The Queen (2018) 266 CLR 1; [2018] HCA 26

Edwards v Noble (1971) 125 CLR 296; [1971] HCA 54

Fox v Percy (2003) 214 CLR 118[ 2003] HCA 22

Garcia v National Australia Bank Ltd (1998) 194 CLR 395; [1998] HCA 48

Hedlund & Hedlund (2021) FLC 94-065; [2021] FedCFamC1A 84

Hoult & Hoult (2011) FLC 93-489; [2011] FamCA 1023

Hoult & Hoult (2013) FLC 93-546; [2013] FamCAFC 109

Johnson v Buttress (1936) 56 CLR 113; [1936] HCA 41

Kaimal & Kaimal [2020] FamCA 971

Koyroyshs & Koyroyshs [2021] FedCFamC1A 54

Lee v Lee (2019) 266 CLR 129; [2019] HCA 28

Logan & Logan (2013) FLC 93-555; [2013] FamCAFC 151

Parker & Parker (2012) FLC 93-499;

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AGLC
Dragomirov & Dragomirov [2024] FedCFamC1A 187
Case
[2024] FedCFamC1A 187
Decision Date

CaseChat Overview and Summary

Dragomirov & Dragomirov involves an appeal by the wife against a declaration that a financial agreement between her and her husband be binding and enforceable. The wife contended that the agreement should not be binding due to various alleged errors in the primary judge’s determination. The legal issues before the court included whether the wife had discharged the onus of proof as to the provision of advice under s 90G(1)(b) of the Family Law Act 1975 (Cth), and whether the primary judge had erred in determining that it would be unjust and inequitable if the agreement were not binding. The court also considered the wife’s appeal against the dismissal of her request for the agreement to be set aside for non-disclosure of a material matter or on grounds of undue influence, unconscionability, or vitiated by undue influence.

The court found that the wife had not discharged the onus of proof as to the provision of advice under s 90G(1)(b) of the Family Law Act. The court held that the necessary advice was not given, and that the wife had failed to show that the agreement was not binding. However, the court determined that it would be unjust and inequitable if the agreement were not binding, exercising its discretion under s 90G(1A) of the Act. The court also found that the wife had not established any errors in the primary judge's consideration of unconscionable conduct or undue influence, and dismissed her appeal on these grounds. The wife's appeal against the dismissal of her request for the agreement to be set aside was also dismissed.

The court ordered that the financial agreement entered between the parties on 19 May 2020 is binding on the parties and enforceable. The wife was ordered to pay the husband’s costs in a fixed sum of $15,000, and the costs of the second respondent in a fixed sum of $13,514. The wife's amended notice of appeal was dismissed.

Orders

Orders of the court

1. The declaration made on 7 June 2024 is amended to provide as follows:

The financial agreement entered between the Applicant and the Respondent on 19 May 2020 is binding on the parties and enforceable.

2. The Amended Notice of Appeal filed on 13 September 2024 be dismissed.

3. Within 28 days the appellant pay the first respondent’s costs fixed in the sum of $15,000.

4. Within 28 days the appellant pay the second respondent’s costs fixed in the sum of $13,514.

Background

Background to the litigation

On 7 August 2024 Order 2 made on 2 July 2024 was “vacated” pending the outcome of this appeal.BACKGROUND The husband is 55 years of age. The wife is 54 years of age. They commenced cohabitation in 1992, married in 1993, and had separated by March 2020. They have two adult children now aged 29 and 25 years. In early 1994 they acquired a real property at J Road, Suburb B Victoria (“the Suburb B property”). From about 2000 they operated a service business registered in the name of the wife from rental premises. The wife primarily worked in that enterprise. The husband assisted outside of his full-time employment. The husband accumulated his superannuation entitlement during the marriage. In 2020 the husband and the wife negotiated terms of a property settlement between them. The husband visited a solicitor, Mr C of D Law Firm, sometime in early 2020. D Law Firm prepared a draft financial agreement. The primary judge recorded at [18], unchallenged on appeal, that it was the wife’s evidence in her April 2022 and 23 February 2023 affidavits that in April 2020 the husband “put an envelope on the dining table which he said contained “documents from the lawyers that we’re using”, further said that she should read over them; [and] that this included a financial agreement”. On 5 May 2020 Mr C, as the husband’s solicitor, contacted Ms Wojda to take instructions from the wife in relation to the financial agreement. The “second draft” was sent by email from Mr C to Ms Wojda on 15 May 2020. On 18 May 2020 Mr C prepared a “third draft” of the financial agreement. A copy of the third draft was sent to Ms Wojda that same day. On 19 May 2020 the husband and the wife attended a meeting with Mr C and Ms Wojda at the offices of E Firm, an office space which Ms Wojda occasionally used to meet her clients. This was the first time the wife had met or directly communicated with Ms Wojda. On 19 May 2020, the wife then met with Ms Wojda in the absence of the husband and Mr C. The wife read the third draft of the agreement in private. She thought that it was a different version from one she had been provided by the husband in April 2020 as it did not contain a clause as to the husband performing future maintenance at the service business. During the meeting on 19 May 2020 Ms Wojda provided advice to the wife. The wife also read a letter of advice provided to her by Ms Wojda in private (at [34]). Ms Wojda then asked the wife if she had any questions, of which the wife did not (at [34]). The wife then affirmed that she had read the letter of advice, signed the letter, and said that she wanted to enter the financial agreement (at [36]). At the meeting on 19 May 2020 the financial agreement was signed by each of the parties and certificates pursuant to s 90G of the Act were signed by Ms Wojda for the wife and by Mr C for the husband. The financial agreement dated 19 May 2020 recorded the property of the parties: No formal valuations of any asset were obtained by the husband and the wife (at [59]).

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

The Summary of Argument records as to unconscionable conduct:56. As to unconscionable conduct, paragraph [184] of the Reasons appears to represent the entirety of the Court’s consideration of this argument. That paragraph lists four reasons why the Court concluded that the Wife was not subject to a special disadvantage. The conclusion is erroneous for two reasons:56.1. Firstly, it assumes that, to demonstrate ‘special disadvantage’, the Wife was required to show that she was completely and entirely bereft of any ability to participate in the business or negotiate matters with the Husband. That is not the law.56.2. Secondly, it ignores the factors advanced by the Wife in support of the contention of unconscionable conduct. The same factors in support of (1) a presumed relationship of influence, and (2) actual undue influence were advanced in support of the unconscionable conduct case. For the same reasons advanced above, the primary judge failed to consider these 18 factors either individually and/or cumulatively.(Emphasis added) (Footnote omitted) The opening of submissions of the wife in her Summary of Argument as to both categories of undue influence and as to unconscionability ignore a reading of the reasons as a whole. Paragraphs [12]–[16], [18], [28], [29], [31]–[35], [60], [91]–[99], [139], [141], [143], [146], [147], [149], [151]–[154], [158], [168], [171]–[175], [177]–[179] of the reasons canvass cogent evidence and findings that are of significance to the conclusions of the primary judge subject to complaint in Ground 7. The primary judge identified applicable principles and the differences between undue influence and unconscionable conduct (at [168]) by reference to the well traversed passages of the High Court in Thorne v Kennedy (2017) 263 CLR 85 (“Thorne v Kennedy”) at [38]–[40]. Importantly, the primary judge was alert to the High Court’s identification that:40Although 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."