Duncan and Duncan

Case [2014] FCCA 2729

FEDERAL CIRCUIT COURT OF AUSTRALIA

DUNCAN & DUNCAN [2014] FCCA 2729
Catchwords:
FAMILY LAW – Property – financial agreement – wife’s enforcement application – husband seeks to set aside agreement – whether there was an agreement – whether financial agreement should be set aside – whether impracticable or incapable of being performed.

Legislation:

Family Law Act 1975 (Cth), ss.4, 90B, 90C, 90D, 90G 90K & 90KA
Senior & Anderson (2011) FLC 93-470
Ruane & Bachmann-Ruan & Anor [2009] FamCA 1101
Saintclaire & Saintclaire [2013] FamCA 491
Hay & Hay [2014] FCCA 775
Sanger & Sanger [2011] FamCA 210
Twigg & Twigg (1994) FLC 92-456
Hughes & Hughes [2012] FamCA 198
Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337
Electricity Generation Corporation (trading as Verve Energy) v Woodside Energy Ltd [2014] HCA 7
Meehan & Jones (1982) 149 CLR 571
Upper Hunter County District Council v Australian Chilling and Freezing Co (1968) 118 CLR 429
La Rocca & La Rocca (1991) FLC 92-22
In the marriage of Rhode (1984) 10 FamLR 56; FLC 92-592
Hoult & Hoult [2011] FamCA 1023
Applicant: MS DUNCAN
Respondent: MR DUNCAN
File Number: MLC 10227 of 2012
Judgment of: Judge O’Sullivan
Hearing dates: 13 & 14 October 2014
Date of Last Submission: 14 October 2014
Delivered at: Melbourne
Delivered on: 22 December 2014

REPRESENTATION

Counsel for the Applicant: Ms M. Smallwood
Solicitors for the Applicant: Pearsons Lawyers Pty Ltd
The Respondent: By his solicitor Mr S. Rubera
Solicitors for the Respondent: Sebastian Rubera & Associates

ORDERS

  1. The hearing of the wife’s application for enforcement of the binding financial agreement dated 18 November 2009 be adjourned to Friday, 20 February 2015.

IT IS NOTED that publication of this judgment under the pseudonym Duncan & Duncan is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).

FEDERAL CIRCUIT COURT
OF AUSTRALIA

AT MELBOURNE

MLC 10227 of 2012

MS DUNCAN

Applicant

And

MR DUNCAN

Respondent

REASONS FOR JUDGMENT

Introduction

  1. Ms Duncan (“the wife”) and Mr Duncan (“the husband”) separated in 2009. The parties entered into an agreement dated 18 November 2009 which provided for the division of property between them. This agreement purported to be a financial agreement under s.90C of the Family Law Act 1975 (“the Act”) (“the Agreement”). The wife seeks to enforce the Agreement. The husband seeks the dismissal of that application and argues inter alia that the Agreement is unenforceable or alternatively that it should be set aside.

  2. These proceedings were commenced in 2012 when the wife faced demands from a financial institution for a property (which she was entitled to under the Agreement) to be sold because of a debt under a (omitted) Bank.  At the heart of the dispute between the parties is whether the husband was responsible for the (omitted) Bank under the Agreement.

  3. The wife commenced the proceedings in 2012. After a number of interlocutory hearings, where interim orders were made by consent including orders providing for the sale…

Continue reading Duncan and Duncan

Sign in free to access the full text

Details
AGLC
Duncan and Duncan [2014] FCCA 2729
Case
[2014] FCCA 2729
Decision Date

CaseChat Overview and Summary

In *Duncan and Duncan*, heard by Judge O’Sullivan, the wife sought to enforce a binding financial agreement dated 18 November 2009. The husband had tendered correspondence from the wife's former solicitors, McBain Lawyers, dated 26 February 2010, which stated that the husband was to remain responsible for mortgage payments on two properties, Property A and Property K. The wife relied on a letter from the bank dated 8 March 2013, which indicated that both home loans were secured by a mortgage over Property A.

The central legal issue before the court was the interpretation of the binding financial agreement, specifically concerning the parties' responsibilities for mortgage payments and the underlying loans. The court was required to determine whether the parties' intentions, as evidenced by surrounding circumstances and objective facts at the time the agreement was made, supported the wife's claim for enforcement. This involved considering admissible evidence to clarify any ambiguity in the agreement.

The court reasoned that while it could not look to the subjective intentions of the parties to interpret an order, it could examine admissible evidence of surrounding circumstances if the order was ambiguous. Applying this principle, the court considered the correspondence tendered by both parties. It noted that the bank had been used to purchase Property H, which the husband retained, but this loan was secured against the former matrimonial home, Property A, which the wife retained. The court found that, by reference to the tendered exhibits, it was clear the parties had agreed the husband was responsible for the mortgages, which necessarily included responsibility for the associated bank loans.

The hearing of the wife’s application for enforcement of the binding financial agreement was adjourned to 20 February 2015.

Orders

Orders of the court

1.

The hearing of the wife’s application for enforcement of the binding financial agreement dated 18 November 2009 be adjourned to Friday, 20 February 2015.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Also in the family law context and more recently, albeit when reviewing the authorities relating to the interpretation of consent orders, in Hughes & Hughes [2012] FamCA 198 MacMillan J said she could not:“in order to interpret the order, look to the subjective intention of the parties when that order was made. However, if the order is ambiguous…, when construing what is meant by that order, [the Court could] look to admissible evidence of surrounding circumstances.” (emphasis added) More generally it is said that the Court can look at the objective facts within which the contract came into existence, and to the parties presumed intention in this setting (see: Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337 and Electricity Generation Corporation (trading as Verve Energy) v Woodside Energy Ltd [2014] HCA 7 at [35]). The husband tendered a number of exhibits, including exhibit R4 which was a letter from McBain Lawyers (the wife’s (former) solicitors, who prepared the Agreement) addressed to the (omitted) Bank dated 26 February 2010 which stated:“ Re: Ms Duncan & Mr DuncanComplete Home Loan no. (omitted)Property –Property A, CT Volume (omitted) FolioProperty –Property K, CT Volume (omitted) Folio (omitted)We act for Ms Duncan in relation to this matter. Enclosed herewith are Transfers of Land related to the two above named properties.Both properties are subject to a mortgage from your bank…You should note that Mr Duncan is to remain responsible for making the payments in relation to the mortgages on both of the properties…”(emphasis added) The wife relied on a letter from the (omitted) Bank dated 8 March 2013 which was tendered in Court and marked exhibit A2. That letter provided:“…In response to your letter dated 5th of March 2013 from your Solicitor at Pearsons Barristers and Solicitors, we advise the following:1.Home Loan (omitted) & (omitted) Bank (omitted) in the names of Ms Duncan and Mr Duncan, are both secured by a registered mortgage with the (omitted) Bank, over residential property at Property A.2.In the event of the home loan repayments not being met, and/or the (omitted) Bank going over its agreed limit, the Bank will refer to its collections process. The Bank has an agreed collection process, which varies in every situation, but may end in foreclosure or realisation should either the Home Loan or the (omitted) Bank not be conducted within our Terms and Conditions as stated in our Credit Card Contract.3.As the property at Property H, is in the sole name of Mr Duncan, under privacy legislation we are unable to advise any information regarding this property.Yours sincerely” Counsel for the wife submitted the Court should be satisfied there was an agreement (contract) from the context at the time of the Agreement. A good gauge of the parties’ intention at the relevant time is found in the very correspondence the husband relied on. Importantly the following events illustrated the context at the time of the Agreement was made and what the parties understood. In this regard the (omitted) Bank was utilised to purchase the Property H property (which the husband retained) but was secured against the former matrimonial home (which the wife retained). However by reference to inter alia exhibits A2 & R4 it was clear the parties agreed the husband was responsible for the mortgages, and that could only be taken to include responsibility for the (omitted) Bank too.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.