Eaves & Eaves (No. 2)
[2020] FamCA 863
•14 October 2020
FAMILY COURT OF AUSTRALIA
| EAVES & EAVES (NO. 2) | [2020] FamCA 863 |
| FAMILY LAW – PROPERTY SETTLEMENT – Financial agreements –Where the wife seeks that the financial agreement be set aside pursuant to s 90K of the Family Law Act 1975 (Cth) – Where the parties entered into a financial agreement in 2005 – Whether the agreement should be set aside on the application of the principles of duress, unconscionable conduct and undue influence –- Where the agreement was signed a couple of days before the marriage – Where the wife contends the husband informed her for the first time about the agreement the day before she signed the agreement – Where the wife claims she did not read the agreement before signing it - Where the wife concedes she knew what she was doing but had no other option but to sign the financial agreement – Where the wife concedes the husband did not say or do anything to indicate the marriage would not go ahead if she did not sign the agreement – Where each party received separate and independent legal advice - Where the wife was not in a position of special or significant disadvantage – Where the will of the wife was not overborne by the husband – Application dismissed. |
| Family Law Act 1975 (Cth) ss 54, 71A, 79, 90B, 90G, 90K |
| Commonwealth Bank of Australia Ltd v Amadio (1983) 151 CLR 447 Johnston v Buttress (1936) 56 CLR 113 Thorne v Kennedy (2017) 263 CLR 85 |
| APPLICANT: | Ms Eaves |
| RESPONDENT: | Mr Eaves |
| FILE NUMBER: | ADC | 848 | of | 2019 |
| DATE DELIVERED: | 14 October 2020 |
| PLACE DELIVERED: | Adelaide |
| PLACE HEARD: | Adelaide |
| JUDGMENT OF: | Berman J |
| HEARING DATE: | 27 to 29 J uly 2020 and 21 August 2020 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Stratton-Smith |
| SOLICITOR FOR THE APPLICANT: | David Burrell & Co |
| COUNSEL FOR THE RESPONDENT: | Mr Bartfeld QC with Mr Bullock |
| SOLICITOR FOR THE RESPONDENT: | Barnes Brinsley Shaw Lawyers |
Orders
That the application of the wife to set aside the financial agreement executed by the parties on 21 March 2005 be dismissed.
That the application of the wife for orders pursuant to s 79 of the Family Law Act 1975 (Cth) be dismissed.
That all applications for final orders be removed from the pending list of cases.
Note: The form of the order is subject to the entry of the order in the Court’s records.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Eaves & Eaves has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).
| FAMILY COURT OF AUSTRALIA AT ADELAIDE |
FILE NUMBER: ADC 848 of 2019
| Ms Eaves |
Applicant
And
| Mr Eaves |
Respondent
REASONS FOR JUDGMENT
Introduction
By Further Amended Initiating Application filed 25 May 2020, Ms Eaves (“the wife”) seeks an order pursuant to s 90K(1)(b) and/or (e) of the Family Law Act 1975 (Cth) (“the Act”) that the financial agreement made between the parties on 21 March 2005 be set aside.
If the wife is successful she then seeks orders pursuant to s 106B of the Act seeking to set aside transactions made after 1 January 2017 which she contends had the effect of altering the structure of any entity in which the husband has or had an interest at law or in equity and all transactions which diminished or otherwise affected the value of his assets and resources.
Thereafter, the wife seeks the following orders for settlement of property pursuant to s 79 of the Act:-
3.For such orders for settlement of property alteration of interests in property or declarations as to rights or entitlements as to property as are just and equitable including but not limited to the following orders:-
(a)That the husband transfer to the wife the property at C Street, Suburb B in the State of South Australia free of any mortgage or encumbrance.
(b)That the husband pay to the wife the net sum of $4,000,000 or such amount as is appropriate.
(c)That the wife retain her assets in her own name including her superannuation.
(d)Such further or other orders as are appropriate.[1]
[1] Further Amended Initiating Application filed 25 May 2020 at 2.
In addition to orders for settlement of property the wife seeks an order by way of lump sum and/or periodic spousal maintenance.
By Amended Response to Initiating Application filed 19 December 2019, Mr Eaves (“the husband”) seeks that the wife’s various applications be dismissed.
The proceedings have been bifurcated and the only application listed for hearing was whether the financial agreement executed on 21 March 2005 should be set aside. If unsuccessful it follows that the financial agreement is binding and there is no jurisdiction to hear the application for property settlement.
Background
The husband was born on … 1934 and is now 85 years of age. He is a retired company director and is currently a resident in an aged care facility. The husband has three children from his first marriage to Ms E Eaves, now deceased.
The husband’s son Mr F Eaves is the husband’s Attorney pursuant to an Enduring Power of Attorney dated 23 August 2018. He manages the husband’s financial and personal affairs. It is agreed that the husband no longer has legal capacity with Ms G, legal practitioner, being appointed as the husband’s Case Guardian.
The husband and his former wife operated a business commencing in 1960 in respect of land that the husband had purchased in the late 1950’s.
Following separation from his first wife and prior to his marriage to the applicant wife in 2005, the husband lived alone at H Street, Suburb J (“Suburb J property”) situate on land owned by Eaves Pty Ltd and adjoining the primary location.
The wife was born in New Zealand on … 1951 and relocated from New Zealand to Australia in 1998. She is now 68 years of age. The wife lists her usual occupation as home duties.
The wife married her first husband Mr D in 1975 and divorced in 1985 following a separation in 1983.
The wife has three children from her first marriage namely, Ms X, Ms Y and Mr Z.
The wife was employed as a secretarial clerk until shortly before the parties’ marriage.
The parties met in 1990 through their mutual church attendance.
A relationship developed in March 2004. After a proposal of marriage on 20 February 2005 the parties married on … 2005.
On 25 February 2005 the husband introduced the wife to his son Mr F.
The wife contends that on 20 March 2005 the husband informed her for the first time that he wanted her to enter into a financial agreement prior to marriage so that if the parties separated the wife would receive $1 million upon separation and a further $1 million upon his death.
The wife was taken to K Lawyers who the wife understood were solicitors representing the husband. The wife was then taken to the office of Ms L, a sole practitioner solicitor and following an introduction, the wife asserts that Ms L gave her advice that the husband was worth in the order of $20 million and that she would be ill-advised to sign the agreement. It is uncontroversial that the wife did not have any prior connection or communication with Ms L and that following her single appointment the wife had no further involvement with Ms L.
Following marriage the parties lived in the Suburb J property.
The parties separated in 2014 but effected a reconciliation in mid to late 2015.
Following reconciliation the husband purchased a property at C Street Suburb B (“the Suburb B property”).
Whilst there is some contention between the parties as to the level of finality that should attach to the parties separation, it seems that following unhappy differences the husband moved out of the Suburb B property on 19 June 2018, leaving the wife and her daughter Ms Y in occupation. On 6 July 2018 the husband received a letter from the wife’s then solicitors advising that the wife considered the parties had separated on 25 June 2018.
The wife commenced the proceedings on 4 March 2019 seeking that the financial agreement made between the parties on 21 March 2005 be set aside pursuant to s 90K(1)(b) and/or (e) of the Act.
Documents relied upon
The wife relies upon the following documents:-
·Further Amended Initiating Application filed 25 May 2020
·Trial affidavit of the wife filed 25 May 2020
·Affidavit of the wife in reply filed 20 July 2020
·Affidavit of the wife filed 5 March 2020
·Affidavit of Ms L filed 20 May 2020
·Amended Outline of Case of the wife dated 24 July 2020
·Written submissions of the wife filed 14 August 2020
The husband relies upon the following documents:-
·Amended Response to Initiating Application filed 19 December 2019
·Affidavit of Ms M filed 11 May 2020
·Affidavit of Ms N filed 14 May 2020
·Affidavit of Mr F Eaves filed 22 May 2020
·Affidavit of Ms O filed 19 May 2020
·Affidavit of Ms P filed 25 May 2020
·Further Affidavit of Mr F Eaves filed 10 July 2020
·Further Affidavit of Ms M filed 10 July 2020
·Affidavit of Ms Q filed 13 July 2020
·Respondent’s position regarding orders and evidence received 27 July 2020
·Written submissions of the husband filed 7 August 2020
·Written submissions in Reply filed 19 August 2020
Legislative pathway
Section 71A(1) of the Act provides:-
71A(1) [Matters in financial agreements] This Part does not apply to:
(a) financial matters to which a financial agreement that is binding on the parties to the agreement applies; or
(b) financial resources to which a financial agreement that is binding on the parties to the agreement applies.
Accordingly, property and spousal maintenance orders pursuant to s 79 of the Act are not able to be made if the parties enter into a financial agreement that is binding.
The consequence is that the Court does not have power to make orders for settlement of property pursuant to s 79 of the Act.
Pursuant to the definition of financial agreement in s 4 of the Act, a financial agreement means:
an agreement that is a financial agreement under section 90B, 90C or 90D, but does not include an Mr Z-nuptial or post-nuptial settlement to which section 85A applies.
Pursuant to s 4 of the Act, financial matters means:-
(a)in relation to the parties to a marriage – matters with respect to:
(i)the maintenance of one of the parties; or
(ii)the property of those parties or of either of them; or
(iii)the maintenance of children of the marriage; or
…
Part VIIIA of the Act provides for the provisions in respect of financial agreements.
Section 90B of the Act relates to financial agreements before marriage and provides:-
90B(1)If:
(a) people who are contemplating entering into a marriage with each other make a written agreement with respect to any of the matters mentioned in subsection (2); and
(aa) at the time of the making of the agreement, the people are not the spouse parties to any other binding agreement (whether made under this section or section 90C or 90D) with respect to any of those matters; and
(b)the agreement is expressed to be made under this section;
the agreement is a financial agreement. The people may make the financial agreement with one or more other people.
90B(2) The matters referred to in paragraph (1)(a) are the following:
(a) how, in the event of the breakdown of the marriage, all or any of the property or financial resources of either or both of the spouse parties at the time when the agreement is made, or at a later time and before divorce, is to be dealt with;
(b) the maintenance of either of the spouse parties:
(i)during the marriage; or
(ii)after divorce; or
(iii)both during the marriage and after divorce.
90B(3) A financial agreement made as mentioned in subsection (1) may also contain:
(a) matters incidental or ancillary to those mentioned in subsection (2); and
(b)other matters.
90B(4) …
Section 90G(1) of the Act provides for the circumstances when a financial agreement is binding. The present iteration of s 90G(1) provides:-
90G(1)[Requirements for binding agreement] Subject to subsection (1A), a financial agreement is binding on the parties to the agreement if, and only if:
(a) the agreement is signed by all parties; and
(b) before signing the agreement, each spouse party was provided with independent legal advice from a legal practitioner about the effect of the agreement on the rights of that party and about the advantages and disadvantages, at the time that the advice was provided, to that party of making the agreement; and
(c) either before or after signing the agreement, each spouse party was provided with a signed statement by the legal practitioner stating that the advice referred to in paragraph (b) was provided to that party (whether or not the statement is annexed to the agreement); and
(ca) a copy of the statement referred to in paragraph (c) that was provided to a spouse party is given to the other spouse party or to a legal practitioner for the other spouse party; and
(d) the agreement has not been terminated and has not been set aside by a court.
Note:For the manner in which the contents of a financial agreement may be proved, see section 48 of the Evidence Act 1995.
Whether a financial agreement is binding is to be considered pursuant to ss 90G(1A) and (1B) of the Act which provide:-
90G(1A) [Binding nature of financial agreement] 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.
90G(1B)[Declaration that financial agreement binding] 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 spouse party seeking to enforce the agreement.
The wife initially sought that the financial agreement be declared not to be binding on the basis that Ms L had provided the wife with no useful independent advice which was tantamount to a court finding that no advice was given as required pursuant to s 90G(1)(b) of the Act. If the Court were to find that the agreement was not binding on the parties then a further consideration is required under s 90G(1A) as to whether, in the circumstances of the case, the Court would find that it was unjust and inequitable if the agreement were not binding on the parties. The wife argued that evidence in respect of the adequacy of the advice given to the wife and a denial of an opportunity to reflect upon the agreement would weigh against a finding that it would be unjust and inequitable for the agreement to nonetheless be binding.
The contention of the husband was that the reference in the wife’s Case Outline document, filed 23 July 2020, was the first time that the wife gave notice of her intention to allege that the financial agreement was not binding on the basis that the wife had not received independent legal advice as to the effect of the financial agreement on the parties rights and the advantages and disadvantages of the agreement.
The issue was brought into focus by the husband’s Application in a Case filed 27 July 2020 seeking to vacate the trial listed to commence on that same day.
The wife then conceded that she would not pursue a declaration that the financial agreement dated 21 March 2005 was not binding pursuant to s 90G(1)(b) of the Act and that s 71A has application.
Circumstances in which a court may set aside a financial agreement
The wife seeks an order that pursuant to s 90K(1)(b) and/or (e) the financial agreement is void, voidable or unenforceable and that it should be set aside.
The relevant section provides:-
90K(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) …
(aa) …
(ab) …
(b) the agreement is void, voidable or unenforceable; or
(c) …
(d) …
(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) …
(g) …
The reference in s 90K(1)(b) to the agreement being void, voidable or unenforceable encapsulates the common law and equitable principles of misrepresentation, undue influence, mistake and duress.
The wife contends that the husband engaged in unconscionable conduct in respect of the making of the agreement. Moreover, it is argued that the wife’s consent to the agreement was obtained as a result of duress and/or the undue influence of the husband or the circumstances created or put in place by the husband.
The matters relied upon to support the wife’s proposition of unconsionability pursuant to s 90K(1)(b) and therefore encapsulating s 90K(1)(e) is set out at [24] of the wife’s closing submissions document as follows:-
a.It was the husband who proposed to the wife and who wanted an early wedding. He would have happily married the wife earlier but for the church’s requirement to wait a month;
b.20 was initially decided upon but changed to … March 2005. 21 March was initially decided upon but changed to … March 2005. No other later dates were contemplated or chosen. These facts are supported by the wife’s and the husband’s personal diaries from time [to] time;
c.The husband asked the wife to give up her job, which she did. The wife’s last day of work was Friday 4 March 2005 as evidenced by her personal diary;
d.The husband attended on his lawyer and accountant on 4 March 2005 while the wife was on her last day at her job. The fact that the husband attended alone without the wife is also supported by the K Lawyers detailed invoice;
e.On 9 March 2005, K Lawyers sent to the husband by way of letter the draft version of the financial agreement. The draft agreement records on page 2 that the wife and husband intended to marry on … March 2005. Notably, by then the wife had stopped working at the husband’s request and was recorded in the recitals of the draft financial agreement as a “Home Maker”. The letter of 9 March 2005 advised the husband the wife would need to complete the “enclosed form”. That advice was given in the context of making disclosure of assets and liabilities;
f.On or about 15 March 2005, the husband asked the wife about her then assets and liabilities including the value of her mortgage, superannuation and motor vehicle. That fact is supported by the husband’s notes on the 15 March entry of his diary. At that stage, the wife was completely unaware the husband proposed presenting a financial agreement to her for her to sign;
g.On 16 March 2005, K Lawyers wrote to the husband enclosing a Form 13 Financial Statement for the wife to complete. The letter also confirmed an appointment had been made for the wife with Ms L on 21 March 2005 at 4pm. The appointment with Ms L was made before it was communicated to the wife and before a financial agreement was even mentioned to her;
h.On the same day, the wife’s father, his wife and the wife’s sister arrived from New Zealand to attend the wedding;
i.On 17 March 2005, the draft version of the financial agreement was sent by K Lawyers to Ms L. The cover letter of 17 March 2005 is in the K Lawyers file. At that stage it was clear that Ms L was corresponding with K Lawyers without any instructions other than from the husband’s solicitors K Lawyers;
j.At this stage, the wife was unaware of the draft agreement and was unaware that Ms L was “her” lawyer;
k.On 19 March 2005, the wife’s daughter arrived from London to attend the wedding;
l.On 20 March 2005, the husband first raised the subject of a binding financial agreement; four days before the wedding and in circumstances where members of the wife’s family had already arrived from overseas and others were on their way. That the husband more than likely raised the topic then for the first time is supported by the entry in his diary of that date stating (at 9.30am) “Ms Eaves to read agreement”. The wife’s recollection was that she was told an appointment had been made for the next day for her to sign the agreement. Although the husband mentioned the agreement, he did not show it to the wife;
m.The wife did not meet Ms L or have any contact with her prior to the appointment on 21 March 2005. This fact is supported by the K Lawyers file. The correspondence shows that a referral was made only to Ms L. The wife was not invited to attend on any other lawyer;
n.On the morning of 21 March 2005, the day of the appointment with Ms L, the wife’s son and his partner arrived from New Zealand to attend the wedding and there was a wedding rehearsal;
o.Ms L’s account was sent to the husband on 29 March 2005 via K Lawyers. The absence of any explanation in the cover letter suggests it was always understood the husband would pay it.
The wife’s contention
The wife contends that the financial agreement should be set aside consequent upon the application of the principles of duress, unconscionable conduct and undue influence pursuant to ss 90K(1)(b) and (e) of the Act.
The wife considers that she was placed in the invidious, if not impossible position of the marriage not proceeding if she did not sign the financial agreement in circumstances where the wedding ceremony had been arranged and friends and family of the wife were to attend. Further, the wife was allegedly concerned that the husband’s family, in particular his son, considered that she was marrying the husband for his money.
It is conceded by the wife that she knew what she was doing but argues that so imminent was the marriage following the presentation of the financial agreement that she had no other option but to sign the financial agreement in circumstances where it was unconscionable for the husband to place the wife in that position, knowing that she was in a position of special disadvantage.
The husband’s contention
The husband rejects the wife’s contention of unconscionability, undue influence and duress and highlights that given the wife’s concession that she knew what the financial agreement was about and that she not only knew what she was doing but that she was likely to be bound by the agreement, there is no basis for the Court to find that the agreement was void, voidable or unenforceable. The husband argues that a consideration of the wife’s evidence reveals that at its highest she “felt a degree of pressure in relation to the timing of her entry into the financial agreement”.[2]
Evidence
[2] Husband’s written submissions filed 7 August 2020 at [3].
The Wife
The wife’s evidence as contained in her affidavit material was supplemented by further evidence adduced in examination in chief.
The wife was asked to consider the circumstances in which the financial agreement was first raised with her. It was her recollection that she arrived at the husband’s home in the midmorning of 20 March 2005. He invited the wife for lunch before attending a church meeting.
The wife was asked how the topic of the financial agreement was raised with her and she gave the following response:-
He said “I’ve got a document here, Mr R, that I’m – I would like to have signed. I’d like to have this signed”, and he said – he told me what was in the document. He said it was basically an agreement in case we separated – that I would get $1 million if we separated and another million on the – on his death. And he said he would like me to sign it tomorrow. Yes. He said he would like me to sign it tomorrow and that he would be able to pick me up and take me to the lawyer’s to do this.[3]
[3] Transcript of proceedings 27 July 2020 page 38 line 7.
When asked whether she responded to the husband’s request the wife responded:-
I did. I was pretty upset about it. I couldn’t believe he was doing this – a man that I’ve known for almost 20 years. I told him I thought it wasn’t a very good – a very Christian thing to do or a very good start to a marriage – with no trust. I was pretty upset about it actually.[4]
[4] Transcript of proceedings 27 July 2020 page 38 line 15.
In cross-examination the wife was questioned about the breakdown of her first marriage and whether there was litigation that involved aspects of property settlement. She agreed that she had gained some appreciation of the role of a court in determining marital disputes between parties where agreement is not able to be reached.
At the time that the husband raised the requirement that the wife enter a financial agreement he did not have the agreement with him but the wife agreed with the proposition that the husband explained she would receive a total of $2 million, comprising $1 million upon separation and a further $1 million on his death.
The wife was asked whether when presented with the notion of a financial agreement she told the husband that she was not prepared to enter such an agreement. The wife’s evidence is as follows:-
I didn’t tell him whether I was prepared or I wasn’t prepared to do that. I – we got into a discussion and I was very upset and I told him I didn’t think it was a very Christian thing – doing a prenup – and I didn’t feel – I was upset because a man I had known almost 20 years couldn’t trust me – didn’t trust me.[5]
[5] Transcript of proceedings 27 July 2020 page 45 line 10.
The wife confirmed that prior to the husband’s proposal in February 2005 there were no formal wedding plans although the wife concedes that she was hopeful and there had been some remarks exchanged raising marriage as a possibility.
The wife agreed that the husband was a generous person and that he was a gentleman. The wife did not hesitate in declaring that she loved the husband and wanted to marry him.
The wife was aware that the husband was likely to be wealthy. Her own financial circumstances were modest but she agreed that she was self-sufficient, had been looking after herself for a number of years and that she was keen to marry the husband out of love and not for the prospect of financial gain.
Exhibit “2” in the proceedings is an affidavit of Ms T, solicitor, filed 29 August 2019 which annexes the financial agreement made 21 March 2005.
The wife’s attention was drawn to the annexures to the agreement which set out the respective financial positions of the parties as at the date of the financial agreement.
The wife was asked to consider annexure “B” to the financial agreement, which is relevant to r 13.05 of the Family Law Rules 2004 (Cth) but in these circumstances used as a template to ascertain the financial circumstances of the wife.
The wife conceded that the information referencing property owned by her was accurate and in particular a statement from Super Fund A for the period 1 July 2004 to 31 December 2004 recording an account balance as at 30 June 2004 of $14,123.45, with a further contribution of $1,486.32 as at 31 December 2004.
The wife agreed that the document had come into her possession by being posted to her Suburb S home, but she could not remember how a copy of the record of her superannuation statement was provided to the solicitor who drew the agreement. The wife assumed that she had given it to the husband upon his request.
The relevance of the lacuna in the wife’s recollection is that her affidavit states that the issue of a financial agreement was discussed on 20 March 2005 and she went with the husband to the solicitors’ offices on 21 March 2005.
In the circumstances of the wife’s evidence as stated, it is likely that documents assisting to set out the wife’s financial circumstances had been provided and completed by the wife and incorporated as part of the financial agreement prior to the wife’s assertion that the first knowledge of the request for her to enter into a financial agreement was made on 20 March 2005.
The wife conceded that she did not remember very much and that her evidence was a matter of reconstruction rather than actual recollection.
The following exchange highlights the issue:-
Counsel:Yes. How is it that it came into possession of those who drew this agreement?
Wife:I have no idea because it’s actually after that date isn’t it? I have probably given it to Mr Eaves.
Counsel:Just like that. You kind of turned up and said “Here you are. Here’s my records of contribution for my superannuation fund”?
Wife:No. I honestly don’t know how it did, but Mr Eaves may have asked me for it and if he did, I would have given it to him.
Counsel:Yes?
Wife:Just like I gave him all the details of my mortgage and everything else. Because…
Counsel:You see, Ms Eaves, you really don’t remember very much?
Wife:No, I don’t.
Counsel:And such evidence as you give about this is a reconstruction of what you think happened and it’s not your actual memory of what happened. Can you understand the difference?
Wife:I do.
Counsel:So, there’s an element of reconstruction there, isn’t there, Ms Eaves?
Wife:I guess there is.[6]
[6] Transcript of proceedings 27 July 2020 page 48 line 37.
The wife was asked why she had not sought to take action at an earlier stage, either during the relationship or certainly after the parties’ first separation in 2014, to set aside the financial agreement or have it declared not binding. The wife’s evidence is that it was a matter of trust between the parties and that her current application was only brought because upon the reconciliation of the parties following their first separation, the wife alleges that the parties agreed the financial agreement should be terminated because part of the disagreement between the parties was to do with money and in particular a request by the wife that the husband purchase a property for her.
The wife’s position is that she had not read the financial agreement nor was she given any opportunity to do so in her discussions with Ms L. Her knowledge of the terms and conditions of the agreement was from the husband and whilst she was prepared to concede that she would be bound by the agreement if she signed it, she considered that the only advice received from Ms L was that she would be unwise to enter into the financial agreement.
The wife was emphatic that she had not received any advice in relation to the effect of the agreement on her rights. Having the opportunity to read the Certificate of Legal Representative RE: Independent Legal Advice as contained in the financial agreement, the wife was clear that the contents of the certificate was wrong in that Ms L did not explain anything to her at all.
The wife was asked to consider her signature to the annexure acknowledging the following:-
1.My legal representative has explained to me (in the absence of MR EAVES, the other party to the Agreement) the following matters:-
(a)The effect of the Agreement on my rights pursuant to the Family Law Act 1975 and the law generally.
(b)Whether or not, at the time that he provided the advice, that it was to my advantage, financially or otherwise, to make the Agreement.
(c)Whether or not, at the time that he provided the advice, that it was prudent for me to make the Agreement.
(d)Whether or not, at the time that he provided the advice and in light of such circumstances as were, at that time reasonably foreseeable, the provisions of the Agreement were fair and reasonable.
2.I have assured my legal representative that I am not acting under coercion or undue influence.[7]
[7] Annexure to financial agreement dated 21 March 2005 (annexed to the affidavit of Ms T filed 29 August 2018 which is Exhibit “2”).
The wife could not remember whether she read the annexure before she signed it.
She did concede that generally she is a person who tends to “skip over documents and sign them”[8] but in particular understands that there are legal consequences that are likely to flow from a signed document.
[8] Transcript of proceedings 27 July 2020 page 52 line 45.
The wife made an important concession when asked whether there was a direct threat from the husband that the marriage would not go ahead if the agreement was not entered into by the wife. The wife’s contention was that whilst she agreed the husband did not say anything that gave the wife an indication that he would walk away from the marriage, she believed that he would given that she had known him for 20 years.
Exhibit “3” in the proceedings is the husband’s diary for the 2005 calendar year. An entry on 22 January 2005 (in the husband’s handwriting) states “[Ms D] broke off”. The wife did not know that the husband had made such an entry in his diary but was aware of a heated discussion between the parties on that day concerning the husband’s proposition that he felt as if he was pursuing the relationship with the wife and she did not seem to reciprocate his affection.
The wife considered that the husband was overly emotional and that he was emotionally insecure. She told the husband that:-
if you’re going to continue to play emotional games with me, I said don’t call me any more. … I just asked him not to call me if he was playing emotional games with me.[9]
[9] Transcript of proceedings 28 July 2020 page 70 line 8.
The wife agreed that she did not have to put up with the husband’s behaviour if it was considered by her to be inappropriate but she did not intend to break off the relationship.
The diary entry on 20 February 2005 contains a red handwritten entry which reads:-
“[Mr Eaves] proposed to me”
The wife acknowledged that it is her handwriting and that she made the entry as an aide memoire to assist in the preparation of her trial affidavit.
The wife also agreed that she placed a red ring around the words “[the minister] re wedding” on the same page.
The wife explained that she was assisted by various diary entries to refresh her memory for the purposes of preparation of her trial affidavit. The diary was clearly used to assist the wife in the presentation of the wife’s evidence.
The wife also kept a diary for the 2005 calendar year (Exhibit “4”).
The February month planner includes an entry on 20 February 2005 that “[Mr Eaves] proposed”.
The wife confirmed that her diary was a mixture of entries made contemporaneously and some that were made after the event. The wife explained that it was an entry made after the event and that the pen used was the same red pen she used to add the entry into the husband’s diary of 20 February 2005.
The wife considered that the entry in the husband’s diary was a cross reference but denied any assertion that the entries were made of recent date rather than in 2005. She did concede that the words “[Mr Eaves] proposed to me” were made in her diary to assist in the preparation of her affidavit.
The wife’s main diary contained an entry on 20 February 2005 that “[Mr Eaves] proposed”. The entry was made with a blue pen and the wife acknowledged that the entry in the February month planner was retrospective.
The wife reflected on the manner in which she kept her diary and explained the various inconsistencies by conceding that she was not “an orderly diary writer”.[10]
[10] Transcript of proceedings 28 July 2020 page 77 line 15.
The wife was asked to look at the entries in the main diary for 19 and 20 March 2005. It is apparent from the diary that the words “marry [Mr Eaves]” and an arrow pointing to 19 March 2005 were written with a red or pink pen, but an attempt has been made to whiteout the entries on both dates.
The wife was not prepared to agree that the reference to “marry [Mr Eaves]” was intended to indicate an alternate date for the marriage but rather that it was at best, an entry as to a potential wedding date on either 19 or 20 March 2005.
The wife’s explanation as to why the entries were “whited out” was that at the time she had a whiteout applicator with her.
There is an entry on 21 March 2005 which says “5pm marry [Mr Eaves]”. The entry has been the subject of attempted deletion by the wife with the concession that 21 March 2005 was settled upon as a date for marriage but then it was changed, apparently to accommodate the attendance of certain guests to the ceremony.
The wife was asked to focus on the March monthly planner and in particular that entries on 19 March 2005 which said “getting married” and on 20 March 2005 which said “get married” both of which have been whited out. Similarly, the entry for 21 March 2005 namely, “5pm marry [Mr Eaves]” was also crossed out.
Initially the wife was not able to explain the basis upon which different days had been selected for the wedding but were then rejected ultimately in favour of a wedding date on … March 2005. It was put to the wife that the explanation for the change was that one of the days would have coincided with the date of the husband’s wedding to his former wife.
It was apparent from the wife’s evidence that her recollection of the events leading up to the marriage was poor and that she has relied upon other documents, in particular the diaries of the parties to reconstruct the events.
The wife was asked to reflect on the importance that the financial agreement had on her decision to marry the husband. She acknowledged that she was keen to be married and any event that would have stopped her marrying the husband after his proposal would have to have been drastic. She used a death as an example of a drastic event. When asked to consider whether the request to sign the financial agreement was “drastic” the wife considered that “it fell more into being pressured, I guess”.[11]
[11] Transcript of proceedings 28 July 2020 page 84 line 6.
The wife did not present as an impressive witness. Her recollection of events was poor and it was difficult to separate where her evidence was based upon her own recollection or whether it was a reconstruction relying upon other documents. I do not suggest that the wife was being untruthful but rather that her evidence is unreliable, particularly in respect of certain critical areas such as the discussions between the parties concerning the need for a financial agreement, the circumstances in which the wife’s financial information was conveyed to the husband and the wife’s contention that the advice she received from Ms L amounted to her receiving no advice.
Ms N
Ms N was a solicitor employed by K Lawyers Pty Ltd in 2005. In March 2005 she acted for the husband in relation to the preparation of a financial agreement. She was aware that the husband had formed a relationship with the wife, then known to her as Ms D.
The parties attended upon Ms N to discuss the preparation of a financial agreement. Ms N told the wife that she would need to obtain separate legal advice and was aware that she was then referred to see Ms L.
Ms N could not remember whether she gave the wife the names of other lawyers who also practiced from the same building as K Lawyers.
Thereafter, Ms N did not see the wife again but she confirms that she took initial instructions from the husband on 4 March 2005 and thereafter remembers that there was some negotiation with Ms L about the terms of the financial agreement but is not now able to recollect the detail. She emphasises that she considered:
that the process was thorough and not rushed. The Agreement was prepared promptly but my focus was upon ensuring that my client’s financial position was fully disclosed and known to [the wife].[12]
[12] Affidavit of Ms N filed 14 May 2020 at [16].
Under cross-examination Ms N agreed that her recollection of events was a “mish-mash”[13] but that there was more than one meeting with the husband, but does remember the first or “status meeting.”[14]
[13] Transcript of proceedings 28 July 2020 page 92 line 23.
[14] Ibid.
Ms N had the advantage of perusing the K Lawyers file. It confirmed that she forwarded correspondence to the husband dated 9 March 2005 telling him that the wife would need to seek independent legal advice, recommending that Ms L be instructed by the wife and enclosing a Form 13 Financial Statement for the wife to complete.
On 17 March 2005 Ms N forwarded correspondence to the husband and to Ms L enclosing a copy of the draft financial agreement. The letter to Ms L also confirmed that the wife had an appointment with her at 4.00 pm on Monday 21 March 2005.
Ms N was equivocal as to the purported attendance on the husband and the wife on 4 March 2005. Ms N conceded that whilst she was not sure, she had some recollection that she met with the parties in a meeting room and that thereafter she asked the wife to leave.
Mr F Eaves
The evidence of Mr F Eaves was contained in his trial affidavits filed 22 May 2020 and 10 July 2020. Mr F Eaves agreed with the proposition that when his father came to visit him in Melbourne and announced that he was to be married to the wife, his father was happy with his decision. He also agreed that his father had conveyed the impression that the wedding was to be sooner rather than later.
Mr F Eaves denied that he had any conversation with his father concerning the proposition that the wife may have been marrying him for his money. He considered that such a conversation was out of character. If the evidence of Mr F Eaves has any significant relevance I find him to be a reliable witness.
Ms M
Ms M is the husband’s daughter. Her evidence is contained in her affidavits filed 14 May 2020 and 10 July 2020.
The focus of her evidence concerned a telephone call to the husband in mid-June 2018. The husband was visiting his daughter for lunch and when the call had concluded the husband told his daughter that the wife had been persistent in her request to terminate the financial agreement. She observed the husband to be agitated and discussed the matter with him.
Ms P
Ms P is a daughter of Ms O. Her evidence is contained in her affidavit filed 25 May 2020 but its focus is her observations of an occasion when she was alone with the wife and congratulated her on her wedding. Ms P records the wife’s response in the following terms “I hit the jackpot”[15] and when queries as to whether the remark referred to the husband as a “nice guy”[16] her reply was “no, I now have money”.[17]
[15] Affidavit of Ms P filed 25 May 2020 at [9].
[16] Ibid.
[17] Ibid.
In cross-examination, Ms P confirmed that the conversation had occurred in the year of the parties’ marriage and when challenged as to whether she may have been mistaken in attributing the use of the word “jackpot” to the wife, her response was unequivocal and confirmed that her evidence reflected the actual words used.
Ms P was prepared to give more evidence as to the context in which the conversation with the wife took place but was not asked to do so.
Ms O
This witness relies on her affidavit filed 19 May 2020. She has known the wife since the early 1980’s through their mutual attendance at the same church. She moved to Queensland in 1992 and has had little or no contact with either of the parties.
She remembers an occasion in April 2006 when the parties visited the husband’s sister Ms Q in Queensland. The visit to Ms Q’s home occurred on either 8 or 9 April 2006.
This witness was able to recollect a conversation with the wife on the back patio of the house and remembers the wife using the expression “I’ve struck the jackpot”.[18]
[18] Affidavit of Ms O filed 19 May 2020 at [12].
Her evidence was not challenged in cross-examination.
Ms L
Ms L relied upon her affidavit filed 20 May 2020.
She confirmed that she had been provided with a copy of the financial agreement and its annexures dated 21 March 2005. She acknowledged that her signature appears on page 10 of the agreement and also on the Certificate of Independent Legal Advice.
Ms L no longer retains any file for the wife. The file has been destroyed.
At the time that the wife consulted Ms L she was practicing as a sole legal practitioner from the same building as K Lawyers.
Under cross-examination Ms L was asked why [6] of her affidavit which referred to her previous employment with K Lawyers in 2001 and 2002 was included. Her response was that it was at the request of the wife’s solicitors.
Ms L commenced her legal career in 1983. At the time that she was consulted by the wife she had been in practice for in excess of 20 years. The majority of that time had been practice in the area of family law.
Ms L agreed that from 2000, when the legislation was introduced enabling financial agreements to be entered into, she was working almost exclusively in the area of family law.
She was familiar with the legislation regulating financial agreements and in particular what was required for an agreement to be binding.
Ms L was shown the executed financial agreement and in particular the certificate evidencing that independent legal advice has been given. She confirmed that her signature appeared on the certificate.
Ms L could not remember signing the certificate but agreed that if the certificate was signed by her then she was confident that she had advised the wife of the legal implications of the financial agreement as was required pursuant to s 90G of the Act.
She was emphatic that she would not have signed the certificate if the contents were not correct and took her obligation as a legal practitioner seriously in that she would not sign documents that she understood to be false or misleading.
In particular, she would not have signed the certificate if she had not received a credible assurance from the wife that she was not acting under any coercion or undue influence.
Whilst not contained in her affidavit, she remembered that the wife referred to the sum of $1 million that she would receive upon separation as an amount that was more than she would likely ever have. The overall impression of Ms L was that the wife was happy to proceed.
Ms L agreed that she would not now recognise the wife and she cannot recall whether the wife read the financial agreement in her presence.
She does not have any independent recollection of communication or correspondence with the husband’s solicitor.
The evidence of Ms L is to be tempered by the efflux of time, however I find her to be a reliable witness and accept as credible her assurance that she was aware of the requirement for cogent advice to be given to a party contemplating entering into a financial agreement. Where the evidence of the wife and Ms L differ as to the extent and sufficiency of the legal advice given, I prefer the evidence of Ms L.
Undue influence
The High Court in Johnston v Buttress (1936) 56 CLR 113 concerned an illiterate man of low intelligence and diminished capacity who had transferred to his wife’s family his house and land. The transaction was sought to be set aside by his son asserting that his father had been the subject of undue influence.
At 119 Latham C.J. held as follows:-
The jurisdiction of a court of equity to set aside gifts inter vivos which have been procured by undue influence is exercised where undue influence is proved as a fact, or where, undue influence being presumed from the relations existing between the parties, the presumption has not been rebutted. Where certain special relations exist undue influence is presumed in the case of such gifts. These relations include those of a parent and child, guardian and ward, trustee and cestui que trust, solicitor and client, physician and patient and cases of religious influence. The relations mentioned, however, do not constitute an exhaustive list of the cases in which undue influence will be presumed from personal relations. Wherever the relation between donor and donee is such that the latter is in a position to exercise dominion over the former by reason of the trust and confidence reposed in the latter, the presumption of undue influence is raised.
(Citations omitted)
Forming the plurality with Evatt J, at 134 Dixon J held as follows:-
The basis of the equitable jurisdiction to set aside an alienation of property on the ground of undue influence is the prevention of an unconscientious use of any special capacity or opportunity that may exist or arise affecting the alienor’s will or freedom of judgment in reference to such a matter. The source of power to practise such a dominion may be found in no antecedent relation but in a particular situation, or in the deliberate contrivance of the party. If this be so, facts must be proved showing that the transaction was the outcome of such an actual influence over the mind of the alienor that it cannot be considered his free act. But the parties may antecendently stand in a relation that gives to one an authority or influence over the other from the abuse of which it is proper that he should be protected. When they stand in such a relation, the party in the position of influence cannot maintain his beneficial title to property of substantial value made over to him by the other as a gift, unless he satisfies the court that he took no advantage of the donor, but that the gift was the independent and well-understood act of a man in a position to exercise a free judgment based on information as full as that of the donee. This burden is imposed upon one of the parties to certain well-known relations as soon as it appears that the relation existed and that he has obtained a substantial benefit from the other.
In Commonwealth Bank of Australia Ltd v Amadio (1983) 151 CLR 447 at 461 Mason J considered the manner in which undue influence and unconscionable conduct are interrelated:-
Historically, courts have exercised jurisdiction to set aside contracts and other dealings on a variety of equitable grounds. They include fraud, misrepresentation, breach of fiduciary duty, undue influence and unconscionable conduct. In one sense they all constitute species of unconscionable conduct on the part of a party who stands to receive a benefit under a transaction which, in the eye of equity, cannot be enforced because to do so would be inconsistent with equity and good conscience. But relief on the grounds of ‘unconscionable conduct’ is usually taken to refer to the class of case in which a party makes unconscientious use of his superior position or bargaining power to the detriment of a party who suffers from some special disability or is placed in some special situation of disadvantage … Although unconscionable conduct in this narrow sense bears some resemblance to the doctrine of undue influence, there is a difference between the two. 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 disadvantageous position in which he is placed and of the other party unconscientiously taking advantage of that position.
The High Court in Thorne v Kennedy (2017) 263 CLR 85 summarised the relevant principles as follows:-
30.In Allcard v Skinner, Lindley LJ said that "no Court has ever attempted to define undue influence". One reason for the difficulty of defining undue influence is that the label "undue influence" has been used to mean different things. It has been used to include abuse of confidence, misrepresentation, and the pressure which amounts to common law duress. Each of those concepts is better seen as distinct. Nevertheless, the boundaries, particularly between undue influence and duress, are blurred. One reason why there is no clear distinction is that undue influence can arise from widely different sources, one of which is excessive pressure. Importantly, however, since pressure is only one of the many sources for the influence that one person can have over another, it is not necessary that the pressure which contributes to a conclusion of undue influence be characterised as illegitimate or improper.
31.…
32.The question whether a person's act is "free" requires consideration of the extent to which the person was constrained in assessing alternatives and deciding between them. Pressure can deprive a person of free choice in this sense where it causes the person substantially to subordinate his or her will to that of the other party. It is not necessary for a conclusion that a person's free will has been substantially subordinated to find that the party seeking relief was reduced entirely to an automaton or that the person became a "mere channel through which the will of the defendant operated". Questions of degree are involved. But, at the very least, the judgmental capacity of the party seeking relief must be "markedly sub-standard" as a result of the effect upon the person's mind of the will of another.
(Footnotes omitted)
It is contented that the wife was placed in an impossible position namely, that the wedding date had been set, without notice she had received a request from the husband to enter into a binding financial agreement and she considered that if she did not enter into the financial agreement the husband’s family, but in particular his son, would consider that she was marrying the husband for money.
The evidence does not support a finding that the wife was acting under the influence of the husband. Other than the request by the husband for the wife to enter into a financial agreement, the evidence fell significantly short of a finding that if the financial agreement was not signed by the wife the wedding would be off.
For her part, the wife considered that whilst the request for her to enter into a financial agreement was “unchristian” it was a matter of annoyance to her and not considered to be fundamental or a barrier to the marriage. The wife was candid in her concession that to a large degree the request for a financial agreement was irrelevant.
I found the wife’s evidence to be unreliable. Her affidavit was largely a reconstruction from documents and other sources rather than her own recollection of events.
The wife’s evidence as to the construct of her diary and the revelation of alternative dates for the marriage having been considered speak against the wife being placed in an “impossible position”.
The wife was aware of the content of the financial agreement that she signed. She had some experience with litigation arising from marital breakdown and understood that a document signed by her was likely to be of binding legal effect.
The wife’s case was predicated on receiving legal advice from Ms L which she considers effectively amounted to no advice at all. The wife’s recollection as set out in her trial affidavit was that she was not aware of the existence of Ms L until she was referred to her by the husband’s solicitor on 21 March 2005.
The evidence of Ms L was tempered by the elapse of time. She did however consider that given her experience in practising family law at the time of her appointment with the wife, the fact that she signed the lawyer’s certificate was sufficient for her to say that the advice as required pursuant to s 90G of the Act was given.
That position is to some extent reinforced by the wife’s concession that the discussion in respect of the financial agreement had commenced prior to 20 March 2005. The wife could not explain the basis by which detailed information concerning her financial circumstances, and in particular her then superannuation entitlement, had been obtained and included on a financial statement document if her first knowledge of the topic of a financial agreement was raised on 20 March 2005.
It is an important concession by the wife that the high watermark of her case was that the pressure she felt to enter into the financial agreement was not as a result of the husband’s conduct, either by word or deed, but rather an impression she had as to whether the marriage would go ahead if she declined to enter into the financial agreement.
At all times the wife had a viable alternative, namely that if she did not wish to enter into the financial agreement the marriage would not proceed. I do not doubt that the wife loved the husband and was keen to marry. I reject that the wife felt compelled to enter into the financial agreement because marriage plans were already on foot and members of her family were travelling from far afield to be guests at the ceremony. There was no evidence led as to the potential inconvenience and/or cost that would have been occasioned to the wife’s guests if the wedding had not proceeded.
It is a relevant consideration that if the marriage ceremony had not proceeded, the wife would have remained financially independent.
The wife’s claim of undue influence does not succeed.
Duress
In Thorne v Kennedy (supra) the plurality provide a convenient summary of the relevant principles of duress.
In relation to the factors necessary to establish duress the following is of assistance:-
26.The vitiating factor of duress focuses upon the effect of a particular type of pressure on the person seeking to set aside the transaction. It does not require that the person's will be overborne. Nor does it require that the pressure be such as to deprive the person of any free agency or ability to decide. The person subjected to duress is usually able to assess alternatives and to make a choice. The person submits to the demand knowing "only too well" what he or she is doing. As Holmes J said in Union Pacific Railroad Co v Public Service Commission of Missouri:
"It always is for the interest of a party under duress to choose the lesser of two evils. But the fact that a choice was made according to interest does not exclude duress. It is the characteristic of duress properly so called."
27.Historically, the primary constraint upon an action based on duress was the threats that were recognised as sufficient for an action. The early common law rule was that the duress which was necessary to set aside an agreement required an unlawful threat or conduct in relation to the person's body, such as loss of life or limb. Even duress in relation to a person's goods was not a basis upon which an agreement could be avoided at common law, although it was a basis for restitution of a payment of money. The abandonment of this common law restriction introduced a difficult question. This question is whether duress should be based on any unlawful threat or conduct or, alternatively, whether other illegitimate or improper, yet lawful, threats or conduct might suffice. In 1947, Dawson described that question as one "which has chiefly arrested the modern development of the law of duress".
(Footnotes omitted)
At [86] of Thorne v Kennedy (supra) Gordon J held as follows:-
The doctrine of undue influence is concerned with "the quality of the consent or assent of the weaker party". Although it is natural to speak of a person "exercising" undue influence over another, and although the conduct of the stronger party may fall for consideration as part of the fact-specific inquiry that the doctrine requires, the "critical element in the grant of relief" is the impairment of the will of the weaker party. In that respect, undue influence is distinct from the doctrine of unconscionable conduct, which is concerned with the conduct of the stronger party in unconscientiously taking advantage of some special disability or disadvantage of the weaker party. …
(Footnotes omitted)
Accordingly, a trial judge must examine the circumstances of each case and in particular focus on aspects of the manner in which the will of a party may be considered to be suborned.
It is argued that the decision of the wife to enter into the agreement was the “lesser of two evils”.[19] I do not find that the wife was at a special or significant disadvantage. She was neither overborne nor suborned by any unlawful threat or improper conduct of the husband, nor did the husband take advantage of, either unknowingly or unwittingly, any special disadvantage of the wife.
[19] Written closing submissions of the wife filed 14 August 2020 at [35].
In January 2005 the parties had a disagreement which resulted in the wife making it clear to the husband that he needed to be more emotionally resilient and not expect that she would reciprocate overt acts of affection in the manner as sought by the husband. The wife knew her own mind and was demonstrably confident and assertive in her dealings with the husband.
Neither party was at a disadvantage. The wife understood at all material times that the husband was a man of some wealth, but equally conceded to others that the financial provision in the financial agreement for her in the event of the parties separating was generous.
I accept the evidence of those witnesses who engaged in conversation with the wife at a social event in 2006 where the wife considered that she had “hit the jackpot”.
I consider that the wife’s claim in duress is without merit.
Unconscionability
The plurality of the High Court in Thorne v Kennedy (supra) discussed the relevant legal principles as follows:-
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."
(Footnotes omitted)
I have found that the wife was not placed in or found herself in a position of special disadvantage when dealing with the husband.
Each of the parties had received separate and independent legal advice. The tyranny of time makes it difficult for the parties and relevant witnesses to be confident in their recollection of events. I have found the wife to be an unreliable witness. Whilst it could not be said that it was ideal for the husband’s solicitors to assist the wife in seeking independent legal advice from Ms L, nonetheless I find that the integrity of the advice given to the wife was sound. The wife agreed that she had a good understanding of the nature of a legal document and that once signed she would be bound by its terms and conditions. I am not able to find that the wife read the financial agreement but equally I do not consider that she was denied the opportunity to do so.
I accept that Ms L was a legal practitioner with more than 20 years experience in family law at the time of her interview with the wife.
I accept the evidence of Ms L that her recognition of her signature on the lawyer’s certificate was such that she would not have signed the certificate if the proper advice had not been given to the wife.
At all material times, the wife was aware of the essential terms of the agreement and was satisfied with the financial provision as contained therein.
It is also a relevant finding that the wife would not have sought to set the financial agreement aside but for her evidence that there was a discussion with the husband that he wanted the agreement set aside. In those circumstances the wife’s case is that she was doing no more than respecting his wishes.
I do not have confidence in the wife’s evidence as to the purported discussion with the husband. Other evidence suggests that it was not the husband who sought to set the agreement aside in 2018 but rather the wife.
I am not able to make a finding on the balance of probabilities as to whether either party had expressed to the other a desire to terminate the financial agreement.
The wife had full information available to her in respect of the separate financial circumstances of the parties. Indeed, I have found that some considerable effort was expended by each of the parties to obtain information necessary that there be full and frank disclosure. The wife was very much her own person. She was not beholden to the husband either financially or emotionally.
The date of the marriage ceremony was not the unilateral decision of the husband. The parties considered the date in concert and the wife included the various potential dates in her monthly planner and main diary. She agreed that one date was changed to accommodate the sensitivities of the husband’s adult children given that the proposed date was also the date upon which the husband married his first wife.
Each of the parties well understood the position of the other. It appears that the husband and wife were both keen to marry borne of their long church association, friendship and eventually a committed relationship.
I do not find that the will of the wife was overborne by the husband to the extent that it was neither independent nor voluntary, nor do I find that the wife was in a disadvantageous position and that the husband consciously or unconsciously took advantage of her
Conclusion
The wife’s claim that it would be unconscionable for the agreement not to be set aside is not made out.
I make orders as appear at the commencement of these reasons.
I certify that the preceding one hundred and seventy three (173) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Berman delivered on 14 October 2020.
Associate:
Date: 14 October 2020
Key Legal Topics
Areas of Law
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Family Law
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Contract Law
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Equity & Trusts
Legal Concepts
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Contract Formation
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Reliance
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Remedies
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